##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended May 31, 2008.
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to .
 Commission file number 1-7806
 FEDERAL EXPRESS CORPORATION
 (Exact Name of Registrant as Specified in its Charter)
 Delaware
    
    71-0427007(State or Other Jurisdiction of 
Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)3610 Hacks Cross Road, Memphis, Tennessee(Address of Principal Executive Offices)
    
    38125(ZIP Code)
 (901) 369-3600
  Title of each class
    
    Name of each exchange on which registeredNone
    
    None
   o þ
  o þ
  þ o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ
  The Registrant meets the conditions set forth in General Instruction I(1)(a) and (b) of Form
10-K and is therefore filing this Form with the reduced disclosure format permitted by General
Instruction I(2).




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##### 



TABLE OF CONTENTS
 PagePART IITEM 1. Business
    
    
    3ITEM 1A. Risk Factors
    
    
    10ITEM 1B. Unresolved Staff Comments
    
    
    10ITEM 2. Properties
    
    
    11ITEM 3. Legal Proceedings
    
    
    14ITEM 4. Submission of Matters to a Vote of Security Holders
    
    
    15PART IIITEM 5. Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    15ITEM 6. Selected Financial Data
    
    
    15ITEM 7. Managements Discussion and Analysis
of Results of Operations and Financial Condition
    
    
    15ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    15ITEM 8. Financial Statements and Supplementary Data
    
    
    15ITEM 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure
    
    
    15ITEM 9A. Controls and Procedures
    
    
    16ITEM 9B. Other Information
    
    
    16PART IIIITEM 10. Directors, Executive Officers and Corporate Governance
    
    
    16ITEM 11. Executive Compensation
    
    
    16ITEM 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    16ITEM 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    16ITEM 14. Principal Accounting Fees and Services
    
    
    17PART IVITEM 15. Exhibits, Financial Statement Schedules
    
    
    18FINANCIAL SECTIONTable of Contents
    
    
    21Managements Discussion and Analysis
    
    
    22Consolidated Financial Statements
    
    
    35Other Financial Information
    
    
    65EXHIBITSExhibit Index
    
    
    E-1Exhibit 23Exhibit 24Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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PART I
 
 ITEM 1. BUSINESS
 Overview
     Services
    3




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fedex.com
 International Expansion
  
    
    FedEx acquired ANC Holdings Ltd. (now rebranded as FedEx UK), a United Kingdom domestic
express transportation company, and subsequently transferred its stock to us. The acquisition
of FedEx UK has allowed us to establish a domestic service in the United Kingdom and better
serve the U.K. international market, which we previously served primarily through independent
agents.
    
    We acquired Prakash Air Freight Pvt. Ltd. (PAFEX), our primary service provider in India.
The acquisition of PAFEX extends our operations in the global express industry with a wholly
owned company in one of the worlds fastest growing markets.
    
    We acquired Tianjin Datian W. Group Co., Ltd.s (DTW Group) fifty percent share of the
FedEx-DTW International Priority express joint venture and assets relating to DTW Groups
domestic network in China. The acquisition converted our joint venture with DTW Group, formed
in 1999, into a wholly owned subsidiary. The acquisition increases our presence in China in
the international market and establishes our presence in the domestic market.
  
    
    In 2006, we broke ground on a new Asia-Pacific hub at the Guangzhou Baiyun International
Airport in Southern China. The new Asia-Pacific hub is expected to assume and expand the
current activities of our existing hub in Subic Bay, Philippines, in 2009. We believe the new
hub will better serve our global customers doing business in and with the fast-growing China
and Asia-Pacific markets.
    
    In 2007, we initiated next-morning domestic delivery service in China, which is available
in more than 40 cities and counties throughout the country. The new China domestic service is
supported by a money-back guarantee and real-time package status tracking. Our China domestic
network relies on a hub-and-spoke system centered at the Hangzhou Xiaoshan International
Airport, located in East Chinas Zhejiang Province.
  4




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Technology
   fedex.com fedex.com fedex.com fedex.com
 fedex.com
   5




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Marketing
  
    
    The National Football League (NFL), as its Official Delivery Service Sponsor
    
    FedExField, home of the NFLs Washington Redskins
    
    FedEx Orange Bowl, host of one of college footballs Bowl Championship Series games
    
    The #11 Joe Gibbs Racing Toyota Camry driven by Denny Hamlin in the NASCAR Sprint Cup
Series
    
    PGA TOUR and the Champions Tour golf organizations, as the Official Shipping Company
    
    FedExCup, a season-long points competition for PGA TOUR players
    
    Pebble Beach Golf Resorts, as the official shipping company
    
    National Basketball Association (NBA), as its official delivery service sponsor
    
    FedExForum, home of the NBAs Memphis Grizzlies
    
    Vodafone McLaren Mercedes Formula One team
    
    French Open tennis tournament
    
    The China National Badminton Team
 U.S. Postal Service Agreement
  Pricing
  fedex.com
  6




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Operations
     Fuel Supplies and Costs
   Total Cost
    
    
    Percentage of TotalFiscal Year
    
    (in millions)
    
    
    Revenues2008
    
    $
    3,396
    
    
    
    14.0
    %2007
    
    
    2,639
    
    
    
    11.72006
    
    
    2,497
    
    
    
    11.72005
    
    
    1,780
    
    
    
    9.22004
    
    
    1,160
    
    
    
    6.7
   7




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Competition
  Employees
   Trademarks
  Regulation
 Air .
   8




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Ground .
  International .
   9




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Communication .
 Environmental .
  
 ITEM 1A. RISK FACTORS
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
   10




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ITEM 2. PROPERTIES
  Aircraft and Vehicles
  Maximum OperationalRevenue PayloadDescription
    
    Owned
    
    
    Leased
    
    
    Total
    
    
    (Pounds per Aircraft)(1)Boeing MD11
    
    
    32
    
    
    
    26
    
    
    
    58
    
    
    
    164,200Boeing MD10-30(2)
    
    
    6
    
    
    
    2
    
    
    
    8
    
    
    
    114,200Boeing DC10-30
    
    
    5
    
    
    
    7
    
    
    
    12
    (3)
    
    
    114,200Boeing MD10-10(2)
    
    
    58
    
    
    
    
    
    
    
    58
    
    
    
    113,100Boeing DC10-10
    
    
    5
    
    
    
    
    
    
    
    5
    (4)
    
    
    113,100Airbus A300-600
    
    
    32
    
    
    
    36
    
    
    
    68
    (5)
    
    
    85,600Airbus A310-200/300
    
    
    50
    
    
    
    16
    
    
    
    66
    
    
    
    61,900Boeing B757-200
    
    
    12
    
    
    
    
    
    
    
    12
    (6)
    
    
    45,800Boeing B727-200
    
    
    81
    
    
    
    9
    
    
    
    90
    
    
    
    38,200ATR 72-202/212
    
    
    29
    
    
    
    
    
    
    
    29
    
    
    
    14,660ATR 42-300/320
    
    
    13
    
    
    
    
    
    
    
    13
    
    
    
    10,880Fokker F27-500
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    10,100Fokker F27-600
    
    
    4
    
    
    
    
    
    
    
    4
    
    
    
    9,850Cessna 208B
    
    
    243
    
    
    
    
    
    
    
    243
    
    
    
    2,500Cessna 208A
    
    
    10
    
    
    
    
    
    
    
    10
    
    
    
    1,900Total
    
    
    581
    
    
    
    96
    
    
    
    677
 
 (1)
    
    Maximum operational revenue payload is the lesser of the net volume-limited payload and the
net maximum structural payload.(2)
    
    The MD10-30s and MD10-10s are DC10-30s and DC10-10s, respectively, that have been converted
to an MD10 configuration.(3)
    
    Includes two aircraft not currently in operation and awaiting conversion to MD10
configuration.(4)
    
    Includes three aircraft not currently in operation and awaiting conversion to MD10
configuration.(5)
    
    Includes four aircraft not currently in operation  three awaiting completion of
passenger-to-freighter modification and one in storage.(6)
    
    Includes 12 aircraft not currently in operation  six awaiting completion of
passenger-to-freighter modification and six in storage.  11




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
    
    The MD11s are three-engine, wide-bodied aircraft that have a longer range and larger capacity
than DC10s.
    
    The DC10s are three-engine, wide-bodied aircraft that have been specially modified to meet
our cargo requirements. We operate two models, the DC10-10 and the DC10-30. The DC10-30 has
a longer range and higher weight capacity than the DC10-10.
    
    The MD10s are three-engine, wide-bodied DC10 aircraft that have received an Advanced Common
Flightdeck (ACF) modification, which includes a conversion to a two-pilot cockpit, as well as
upgrades of electrical and other systems.
    
    The A300s and A310s are two-engine, wide-bodied aircraft that have a longer range and more
capacity than B757s and B727s.
    
    The B757s are two-engine aircraft configured for cargo service.
    
    The B727s are three-engine aircraft configured for cargo service.
    
    The ATR, Fokker F27 and Cessna 208 turbo-prop aircraft are leased to independent operators
to support our operations in areas where demand does not justify use of a larger aircraft.
    Aircraft Purchase Commitments
  A300
    
    
    B757
    
    
    B777F
    
    
    MD11
    
    
    Total2009
    
    
    4
    
    
    
    16
    
    
    
    
    
    
    
    2
    
    
    
    222010
    
    
    
    
    
    
    6
    
    
    
    6
    
    
    
    
    
    
    
    122011
    
    
    
    
    
    
    5
    
    
    
    9
    
    
    
    
    
    
    
    142012
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    22013
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Thereafter
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    4
    
    
    
    29
    
    
    
    15
    
    
    
    2
    
    
    
    50
   12




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Sorting and Handling Facilities
  Sorting
    
    
    
    
    LeaseSquare
    
    
    Capacity
    
    
    
    
    ExpirationLocation
    
    Acres
    
    
    Feet
    
    
    (per hour)(1)
    
    
    Lessor
    
    YearNationalMemphis, Tennessee
    
    
    518
    
    
    
    3,450,000
    
    
    
    465,000
    
    
    Memphis-Shelby County Airport Authority
    
    
    2036Indianapolis, Indiana
    
    
    262
    
    
    
    1,895,000
    
    
    
    192,000
    
    
    Indianapolis Airport Authority
    
    
    2028RegionalFort Worth, Texas
    
    
    168
    
    
    
    948,000
    
    
    
    76,000
    
    
    Fort Worth Alliance Airport Authority
    
    
    2021Newark, New Jersey
    
    
    70
    
    
    
    595,000
    
    
    
    154,000
    
    
    Port Authority of New York and New Jersey
    
    
    2010Oakland, California
    
    
    74
    
    
    
    320,000
    
    
    
    65,000
    
    
    City of Oakland
    
    
    2011MetropolitanChicago, Illinois
    
    
    51
    
    
    
    419,000
    
    
    
    52,000
    
    
    City of Chicago
    
    
    2018Los Angeles, California
    
    
    34
    
    
    
    305,000
    
    
    
    57,000
    
    
    City of Los Angeles
    
    
    2009/2025
    (5)InternationalAnchorage, Alaska(2)
    
    
    64
    
    
    
    332,000
    
    
    
    24,000
    
    
    Alaska Department of Transportation and Public Facilities
    
    
    2023Paris, France(3)
    
    
    87
    
    
    
    861,000
    
    
    
    54,000
    
    
    Aeroports de Paris
    
    
    2029Subic Bay, Philippines(4)
    
    
    18
    
    
    
    316,000
    
    
    
    22,000
    
    
    Subic Bay Metro-politan Authority
    
    
    2010
 
 (1)
    
    Documents and packages.(2)
    
    Handles international express package and freight shipments to and from Asia, Europe and
North America.(3)
    
    Handles intra-Europe express package and freight shipments, as well as international express
package and freight shipments to and from Europe.(4)
    
    Handles intra-Asia express package and freight shipments, as well as international express
package and freight shipments to and from Asia.(5)
    
    Property is held under two separate leases  lease for sorting and handling facility (23
acres) expires in 2009, and lease for ramp expansion (11 acres) expires in 2025.  13




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Administrative and Other Properties and Facilities
    
 ITEM 3. LEGAL PROCEEDINGS
   14




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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 PART II
 
 ITEM 5.

    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND  ISSUER PURCHASES OF
EQUITY SECURITIES
  
 ITEM 6. SELECTED FINANCIAL DATA
  
 ITEM 7.

    MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL  CONDITION
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9.

    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL  DISCLOSURE
   15




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ITEM 9A. CONTROLS AND PROCEDURES
 Managements Evaluation of Disclosure Controls and Procedures
  Assessment of Internal Control Over Financial Reporting
 Form
10-K.
 Changes in Internal Control Over Financial Reporting
  
 ITEM 9B. OTHER INFORMATION
  
 PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
   16




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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
  2008
    
    
    2007Audit fees
    
    $
7,848

    
    
    $
    8,030Audit-related fees
    
    
327
    
    
    
    426Tax fees
    
    
172
    
    
    
    597All other fees
    
    
9
    
    
    
    9Total
    
    $
8,356
    
    
    $
    9,062
 
    
    Audit Fees.Represents fees for professional services provided for the audit of FedEx
Expresss annual financial statements and review of FedEx Expresss quarterly financial
statements, for the audit of FedEx Expresss internal control over financial reporting and
for audit services provided in connection with other statutory or regulatory filings.
    
    Audit-Related Fees.Represents fees for assurance and other services related to the
audit of FedEx Expresss financial statements. The fees for 2008 and 2007 include fees
primarily for benefit plan audits.
    
    Tax Fees.Represents fees for professional services provided primarily for domestic and
international tax compliance and advice. Tax compliance and preparation fees totaled
$21,000 in 2008 and $15,000 in 2007.
    
    All Other Fees.Represents fees for products and services not otherwise included in the
categories above. The amounts shown for 2008 and 2007 include fees for online technical
resources.
 http://ir.fedex.com/documentdisplay.cfm?DocumentID=122
    17




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PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 (a)(1) and (2) Financial Statements; Financial Statement Schedules
  (a)(3) Exhibits
   18




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SIGNATURES
  FEDERAL EXPRESS CORPORATIONDated:  July 16, 2008
    By:
    /s/ DAVID J. BRONCZEKDavid J. BronczekPresident and Chief Executive Officer  Signature
    
    Capacity
    
    Date/s/ DAVID J. BRONCZEK

David J. Bronczek
    
    President, Chief Executive Officer
and Director
(Principal Executive Officer)
    
    July 16, 2008/s/ CATHY D. ROSS

Cathy D. Ross
    
    Senior Vice President and Chief
Financial Officer
(Principal Financial Officer)
    
    July 16, 2008/s/ J. RICK BATEMAN

J. Rick Bateman
    
    Vice President and Worldwide
Controller
(Principal Accounting Officer)
    
    July 16, 2008/s/ FREDERICK W. SMITH*

Frederick W. Smith
    
    Chairman of the Board of Directors
    
    July 16, 2008/s/ ROBERT B. CARTER*

Robert B. Carter
    
    Director
    
    July 16, 2008/s/ MICHAEL L. DUCKER*

Michael L. Ducker
    
    Executive Vice President and 
President  International and
Director
    
    July 16, 2008/s/ T. MICHAEL GLENN*

T. Michael Glenn
    
    Director
    
    July 16, 2008/s/ ALAN B. GRAF, JR.*

Alan B. Graf, Jr.
    
    Director
    
    July 16, 2008
  19




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Signature
    
    Capacity
    
    Date/s/ WILLIAM J. LOGUE*

William J. Logue
    
    Executive Vice
President  U.S.
Operations and Systems
Support and Director
    
    July 16, 2008/s/ CHRISTINE P. RICHARDS*

Christine P. Richards
    
    Director
    
    July 16, 2008
 * By:
    
    /s/ J. RICK BATEMAN

J. Rick Bateman
Attorney-in-Fact
    
    
    
    July 16, 2008
  20




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FINANCIAL SECTION TABLE OF CONTENTS
 PAGEManagements Discussion and AnalysisOverview of Financial Section
    
    
    22Results of Operations
    
    
    24New Accounting Pronouncements
    
    
    30Risk Factors
    
    
    31Forward-Looking Statements
    
    
    34
 Consolidated Financial Statements
 Managements Report on Internal Control over Financial Reporting
    
    
    35Reports of Independent Registered Public Accounting Firm
    
    
    36Consolidated Balance Sheets 
May 31, 2008 and 2007
    
    
    38Consolidated Statements of Income 
Years Ended May 31, 2008, 2007 and 2006
    
    
    40Consolidated Statements of Cash Flows 
Years Ended May 31, 2008, 2007 and 2006
    
    
    41Consolidated Statements of Changes in Owners Equity and Comprehensive Income 
Years Ended May 31, 2008, 2007 and 2006
    
    
    42Notes to Consolidated Financial Statements
    
    
    43
 Other Financial Information
 Quantitative and Qualitative Disclosures about Market Risk
    
    
    65Report of Independent Registered Public Accounting Firm
    
    
    66Schedule II  Valuation and Qualifying Accounts
    
    
    67Computation of Ratio of Earnings to Fixed Charges
    
    
    68
  21




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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
 
 OVERVIEW OF FINANCIAL SECTION
  DESCRIPTION OF BUSINESS
      22




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
    
    the overall customer demand for our various services;
 
    
    the volume of shipments transported through our network, as measured by our average daily
volume and shipment weight;
 
    
    the mix of services purchased by our customers;
 
    
    the prices we obtain for our services, as measured by average revenue per package (yield);
 
    
    our ability to manage our cost structure (capital expenditures and operating expenses) to
match shifting volume levels; and
 
    
    the timing and amount of fluctuations in fuel prices and our ability to recover incremental
fuel costs through our fuel surcharges.
    23




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RESULTS OF OPERATIONS
  Percent Change2008
    
    
    2007
    
    
    2006
    
    
    2008/2007
    
    
    2007/2006Revenues:Package:U.S. overnight box
    
    $
    6,578
    
    
    $
    6,485
    
    
    $
    6,422
    
    
    
    1
    
    
    
    1U.S. overnight envelope
    
    
    2,012
    
    
    
    1,990
    
    
    
    1,974
    
    
    
    1
    
    
    
    1U.S. deferred
    
    
    2,995
    
    
    
    2,883
    
    
    
    2,853
    
    
    
    4
    
    
    
    1Total U.S. domestic package
revenue
    
    
    11,585
    
    
    
    11,358
    
    
    
    11,249
    
    
    
    2
    
    
    
    1International Priority (IP)
    
    
    7,666
    
    
    
    6,722
    
    
    
    6,139
    
    
    
    14
    
    
    
    9International domestic(1)
    
    
    663
    
    
    
    370
    
    
    
    199
    
    
    
    79
    
    
    
    86Total package revenue
    
    
    19,914
    
    
    
    18,450
    
    
    
    17,587
    
    
    
    8
    
    
    
    5Freight:U.S.
    
    
    2,398
    
    
    
    2,412
    
    
    
    2,218
    
    
    
    (1
    )
    
    
    9International Priority freight
    
    
    1,243
    
    
    
    1,045
    
    
    
    840
    
    
    
    19
    
    
    
    24International airfreight
    
    
    406
    
    
    
    394
    
    
    
    434
    
    
    
    3
    
    
    
    (9
    )Total freight revenue
    
    
    4,047
    
    
    
    3,851
    
    
    
    3,492
    
    
    
    5
    
    
    
    10Other
    
    
    285
    
    
    
    226
    
    
    
    217
    
    
    
    26
    
    
    
    4Total revenues
    
    
    24,246
    
    
    
    22,527
    
    
    
    21,296
    
    
    
    8
    
    
    
    6Operating expenses:Salaries and employee benefits
    
    
    8,262
    
    
    
    8,051
    (2)
    
    
    7,861
    
    
    
    3
    
    
    
    2Purchased transportation
    
    
    1,194
    
    
    
    1,097
    
    
    
    969
    
    
    
    9
    
    
    
    13Rentals and landing fees
    
    
    1,658
    
    
    
    1,598
    
    
    
    1,684
    (3)
    
    
    4
    
    
    
    (5
    )Depreciation and amortization
    
    
    933
    
    
    
    845
    
    
    
    792
    
    
    
    10
    
    
    
    7Fuel
    
    
    3,785
    
    
    
    2,946
    
    
    
    2,786
    
    
    
    28
    
    
    
    6Maintenance and repairs
    
    
    1,508
    
    
    
    1,440
    
    
    
    1,340
    
    
    
    5
    
    
    
    7Intercompany charges
    
    
    2,129
    
    
    
    2,076
    
    
    
    1,538
    
    
    
    3
    
    
    
    35Other
    
    
    2,920
    
    
    
    2,561
    
    
    
    2,596
    
    
    
    14
    
    
    
    (1
    )Total operating expenses
    
    
    22,389
    
    
    
    20,614
    
    
    
    19,566
    
    
    
    9
    
    
    
    5Operating income
    
    $
    1,857
    
    
    $
    1,913
    
    
    $
    1,730
    
    
    
    (3
    )
    
    
    11Operating margin
    
    
    7.7
    %
    
    
    8.5
    %
    
    
    8.1
    %
    
    
    (80
    )bp
    
    
    40
    bpOther income (expense):Interest, net
    
    
    152
    
    
    
    173
    
    
    
    50
    
    
    
    (12
    )
    
    NMOther, net
    
    
    (163
    )
    
    
    (102
    )
    
    
    (46
    )
    
    
    60
    
    
    
    122(11
    )
    
    
    71
    
    
    
    4
    
    
    
    (115
    )
    
    NMIncome before income taxes
    
    
    1,846
    
    
    
    1,984
    
    
    
    1,734
    
    
    
    (7
    )
    
    
    14Provision for income taxes
    
    
    721
    
    
    
    733
    
    
    
    648
    
    
    
    (2
    )
    
    
    13Net income
    
    $
    1,125
    
    
    $
    1,251
    
    
    $
    1,086
    
    
    
    (10
    )
    
    
    15
 (1)
    
    International domestic revenues include our international domestic operations, primarily in the United Kingdom, Canada, India and China. We reclassified the prior
period international domestic revenues previously included within other revenues to conform to
the current period presentation.(2)
    
    Includes a $143 million charge for signing bonuses and other upfront
compensation associated with the new four-year labor contract with our pilots.(3)
    
    Includes a $75 million one-time, noncash charge to adjust the accounting
for certain facility leases.  24




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##### Table of Contents



Percent Change2008
    
    
    2007
    
    
    2006
    
    
    2008/2007
    
    
    2007/2006Package StatisticsAverage daily package volume (ADV):U.S. overnight box
    
    
    1,151
    
    
    
    1,174
    
    
    
    1,203
    
    
    
    (2
    )
    
    
    (2
    )U.S. overnight envelope
    
    
    677
    
    
    
    706
    
    
    
    713
    
    
    
    (4
    )
    
    
    (1
    )U.S. deferred
    
    
    895
    
    
    
    898
    
    
    
    901
    
    
    
    
    
    
    
    Total U.S. domestic ADV
    
    
    2,723
    
    
    
    2,778
    
    
    
    2,817
    
    
    
    (2
    )
    
    
    (1
    )IP
    
    
    517
    
    
    
    487
    
    
    
    466
    
    
    
    6
    
    
    
    5International domestic(1)
    
    
    296
    
    
    
    134
    
    
    
    46
    
    
    
    121
    
    
    
    191Total ADV
    
    
    3,536
    
    
    
    3,399
    
    
    
    3,329
    
    
    
    4
    
    
    
    2Revenue per package (yield):U.S. overnight box
    
    $
    22.40
    
    
    $
    21.66
    
    
    $
    20.94
    
    
    
    3
    
    
    
    3U.S. overnight envelope
    
    
    11.66
    
    
    
    11.06
    
    
    
    10.86
    
    
    
    5
    
    
    
    2U.S. deferred
    
    
    13.12
    
    
    
    12.59
    
    
    
    12.42
    
    
    
    4
    
    
    
    1U.S. domestic composite
    
    
    16.68
    
    
    
    16.04
    
    
    
    15.66
    
    
    
    4
    
    
    
    2IP
    
    
    58.11
    
    
    
    54.13
    
    
    
    51.64
    
    
    
    7
    
    
    
    5International domestic(1)
    
    
    8.80
    
    
    
    10.77
    
    
    
    16.69
    
    
    
    (18
    )
    
    
    (35
    )Composite package yield
    
    
    22.08
    
    
    
    21.28
    
    
    
    20.72
    
    
    
    4
    
    
    
    3Freight StatisticsAverage daily freight pounds:U.S.
    
    
    8,648
    
    
    
    9,569
    
    
    
    9,374
    
    
    
    (10
    )
    
    
    2International Priority freight
    
    
    2,220
    
    
    
    1,878
    
    
    
    1,634
    
    
    
    18
    
    
    
    15International airfreight
    
    
    1,817
    
    
    
    1,831
    
    
    
    2,126
    
    
    
    (1
    )
    
    
    (14
    )Total average daily freight pounds
    
    
    12,685
    
    
    
    13,278
    
    
    
    13,134
    
    
    
    (4
    )
    
    
    1Revenue per pound (yield):U.S.
    
    $
    1.09
    
    
    $
    0.99
    
    
    $
    0.93
    
    
    
    10
    
    
    
    6International Priority freight
    
    
    2.20
    
    
    
    2.18
    
    
    
    2.02
    
    
    
    1
    
    
    
    8International airfreight
    
    
    0.88
    
    
    
    0.84
    
    
    
    0.80
    
    
    
    5
    
    
    
    5Composite freight yield
    
    
    1.25
    
    
    
    1.14
    
    
    
    1.04
    
    
    
    10
    
    
    
    10
 (1)
    
    International domestic revenues include our international
domestic operations, primarily in the United Kingdom, Canada, India and China. Revenues
    25




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2008
    
    
    2007
    
    
    2006U.S. Domestic and Outbound Fuel Surcharge:Low
    
    
    13.50
    %
    
    
    8.50
    %
    
    
    10.50
    %High
    
    
    25.00
    
    
    
    17.00
    
    
    
    20.00Weighted-Average
    
    
    17.06
    
    
    
    12.91
    
    
    
    13.69International Fuel Surcharges:Low
    
    
    12.00
    
    
    
    8.50
    
    
    
    10.00High
    
    
    25.00
    
    
    
    17.00
    
    
    
    20.00Weighted-Average
    
    
    16.11
    
    
    
    12.98
    
    
    
    12.73
  26




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Operating Income
  Percent of Revenue2008
    
    
    2007
    
    
    2006Operating expenses:Salaries and employee benefits
    
    
    34.1
    %
    
    
    35.7
    %(1)
    
    
    36.9
    %Purchased transportation
    
    
    4.9
    
    
    
    4.9
    
    
    
    4.6Rentals and landing fees
    
    
    6.8
    
    
    
    7.1
    
    
    
    7.9
    (2)Depreciation and amortization
    
    
    3.9
    
    
    
    3.7
    
    
    
    3.7Fuel
    
    
    15.6
    
    
    
    13.1
    
    
    
    13.1Maintenance and repairs
    
    
    6.2
    
    
    
    6.4
    
    
    
    6.3Intercompany charges
    
    
    8.8
    
    
    
    9.2
    
    
    
    7.2Other
    
    
    12.0
    
    
    
    11.4
    
    
    
    12.2Total operating expenses
    
    
    92.3
    
    
    
    91.5
    
    
    
    91.9Operating income (margin)
    
    
    7.7
    %
    
    
    8.5
    %
    
    
    8.1
    %
 (1)
    
    Includes a $143 million charge for signing bonuses and other upfront
compensation associated with the new four-year labor contract with our pilots (0.6% of revenue).(2)
    
    Includes a $75 million one-time, noncash charge to adjust the accounting for
certain facility leases (0.4% of revenue).     27




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Employees Under Collective Bargaining Arrangements
  Lease Accounting Charge
  Other Income and Expense and Income Taxes
   28




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Business Acquisitions
  Purchase PriceBusiness Acquired
    
    Rebranded
    
    Date Acquired
    
    (in millions)ANC Holdings Ltd.
    
    FedEx U.K.
    
    December 16, 2006
    
    $
    241Tianjin Datian W. Group Co., Ltd.
(DTW Group)
    
    N/A
    
    March 1, 2007
    
    
    427
    Outlook
     29




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Seasonality of Business
  
 NEW ACCOUNTING PRONOUNCEMENTS
      30




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RISK FACTORS
  Our business depends on our strong reputation and the value of the FedEx brand.
 We rely heavily on technology to operate our transportation network, and any disruption to FedExs
technology infrastructure or the Internet could harm our operations and our reputation among
customers.
  31




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Our business may be impacted by the price and availability of fuel.
 Our business is capital intensive, and we must make capital expenditures based upon projected
volume levels.
 We face intense competition.
 If we do not effectively operate, integrate, leverage and grow acquired businesses, our financial
results and reputation may suffer.
 Increased security requirements could impose substantial costs on us.
 The regulatory environment for global aviation rights may impact our air operations.
  32




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We may be affected by global climate change or by legal, regulatory or market responses to such
change.
 We are also subject to risks and uncertainties that affect many other businesses, including:
 
    
    the impact of any international conflicts or terrorist activities on the United States and
global economies in general, the transportation industry or us in particular, and what effects
these events will have on our costs or the demand for our services;
 
    
    any impacts on our business resulting from new domestic or international government laws
and regulation, including tax, accounting, trade, labor, environmental or postal rules;
 
    
    our ability to manage our cost structure for capital expenditures and operating expenses,
and match it to shifting and future customer volume levels;
 
    
    changes in foreign currency exchange rates, especially in the euro, Chinese yuan, Canadian
dollar, British pound and Japanese yen, which can affect our sales levels and foreign currency
sales prices;
 
    
    our ability to maintain good relationships with our employees and prevent attempts by labor
organizations to organize groups of our employees, which could significantly increase our
operating costs and reduce our operational flexibility;
 
    
    a shortage of qualified labor and our ability to mitigate this shortage through recruiting
and retention efforts and productivity gains;
 
    
    increasing costs, the volatility of costs and legal mandates for employee benefits,
especially pension and healthcare benefits;
 
    
    significant changes in the volumes of shipments transported through our network, customer
demand for our various services or the prices we obtain for our services;
 
    
    market acceptance of our new service and growth initiatives;
 
    
    any liability resulting from and the costs of defending against class-action litigation,
such as wage-and-hour and discrimination and retaliation claims, and any other legal
proceedings;
 
    
    the impact of technology developments on our operations and on demand for our services;
 
    
    adverse weather conditions or natural disasters, such as earthquakes and hurricanes, which
can damage our property, disrupt our operations, increase fuel costs and adversely affect
shipment levels;
  33




---



##### Table of Contents




    
    widespread outbreak of an illness or any other communicable disease, or any other public
health crisis; and
 
    
    availability of financing on terms acceptable to FedEx and FedExs ability to maintain its
current credit ratings, especially given the capital intensity of our operations, and the
current volatility of credit markets.
 We are directly affected by the state of the economy.
 
 FORWARD-LOOKING STATEMENTS
    34




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35




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36




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37




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ASSETS
 May 31,2008
    
    
    2007CURRENT ASSETSCash and cash equivalents
    
    $
    298
    
    
    $
    257Receivables, less allowances of $69 and $61
    
    
    1,619
    
    
    
    1,429Spare parts, supplies and fuel, less
allowances of $163 and $156
    
    
    352
    
    
    
    269Deferred income taxes
    
    
    392
    
    
    
    404Due from other FedEx subsidiaries
    
    
    532
    
    
    
    432Prepaid expenses and other
    
    
    112
    
    
    
    125Total current assets
    
    
    3,305
    
    
    
    2,916PROPERTY AND EQUIPMENT, AT COSTAircraft and related equipment
    
    
    10,165
    
    
    
    9,593Package handling and ground support
equipment
    
    
    2,106
    
    
    
    2,008Vehicles
    
    
    1,777
    
    
    
    1,729Computer and electronic equipment
    
    
    731
    
    
    
    654Facilities and other
    
    
    3,329
    
    
    
    2,92118,108
    
    
    
    16,905Less accumulated depreciation and amortization
    
    
    9,588
    
    
    
    8,988Net property and equipment
    
    
    8,520
    
    
    
    7,917OTHER LONG-TERM ASSETSDue from parent company
    
    
    
    
    
    
    3,832Goodwill
    
    
    936
    
    
    
    901Intangible and other assets
    
    
    696
    
    
    
    466Total other long-term assets
    
    
    1,632
    
    
    
    5,199$
    13,457
    
    
    $
    16,032
   38




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##### Table of Contents



LIABILITIES AND OWNERS EQUITY
 May 31,2008
    
    
    2007CURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    1
    
    
    $
    88Accrued salaries and employee benefits
    
    
    730
    
    
    
    824Accounts payable
    
    
    1,505
    
    
    
    1,329Accrued expenses
    
    
    954
    
    
    
    931Due to parent company and other FedEx subsidiaries
    
    
    369
    
    
    
    265Total current liabilities
    
    
    3,559
    
    
    
    3,437LONG-TERM DEBT, LESS CURRENT PORTION
    
    
    744
    
    
    
    745OTHER LONG-TERM LIABILITIESDeferred income taxes
    
    
    941
    
    
    
    705Pension, postretirement healthcare and
other benefit obligations
    
    
    669
    
    
    
    669Self-insurance accruals
    
    
    575
    
    
    
    569Deferred lease obligations
    
    
    606
    
    
    
    606Deferred gains, principally related to
aircraft transactions
    
    
    313
    
    
    
    341Other liabilities
    
    
    136
    
    
    
    55Total other long-term liabilities
    
    
    3,240
    
    
    
    2,945COMMITMENTS AND CONTINGENCIESOWNERS EQUITYCommon stock, $0.10 par value; 1,000 shares
authorized, issued and outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    476
    
    
    
    484Retained earnings
    
    
    5,273
    
    
    
    8,373Accumulated other comprehensive income
    
    
    165
    
    
    
    48Total owners equity
    
    
    5,914
    
    
    
    8,905$
    13,457
    
    
    $
    16,032
   39




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##### Table of Contents



Years ended May 31,2008
    
    
    2007
    
    
    2006REVENUES
    
    $
    24,246
    
    
    $
    22,527
    
    
    $
    21,296OPERATING EXPENSES:Salaries and employee benefits
    
    
    8,262
    
    
    
    8,051
    
    
    
    7,861Purchased transportation
    
    
    1,194
    
    
    
    1,097
    
    
    
    969Rentals and landing fees
    
    
    1,658
    
    
    
    1,598
    
    
    
    1,684Depreciation and amortization
    
    
    933
    
    
    
    845
    
    
    
    792Fuel
    
    
    3,785
    
    
    
    2,946
    
    
    
    2,786Maintenance and repairs
    
    
    1,508
    
    
    
    1,440
    
    
    
    1,340Intercompany charges
    
    
    2,129
    
    
    
    2,076
    
    
    
    1,538Other
    
    
    2,920
    
    
    
    2,561
    
    
    
    2,59622,389
    
    
    
    20,614
    
    
    
    19,566OPERATING INCOME
    
    
    1,857
    
    
    
    1,913
    
    
    
    1,730OTHER INCOME (EXPENSE):Interest expense
    
    
    (19
    )
    
    
    (40
    )
    
    
    (54
    )Interest income
    
    
    171
    
    
    
    213
    
    
    
    104Other, net
    
    
    (163
    )
    
    
    (102
    )
    
    
    (46
    )(11
    )
    
    
    71
    
    
    
    4INCOME BEFORE INCOME TAXES
    
    
    1,846
    
    
    
    1,984
    
    
    
    1,734PROVISION FOR INCOME TAXES
    
    
    721
    
    
    
    733
    
    
    
    648NET INCOME
    
    $
    1,125
    
    
    $
    1,251
    
    
    $
    1,086
   40




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##### Table of Contents



Years ended May 31,2008
    
    
    2007
    
    
    2006OPERATING ACTIVITIESNet income
    
    $
    1,125
    
    
    $
    1,251
    
    
    $
    1,086Adjustments to reconcile net income
to cash provided by operating activities:Depreciation and amortization
    
    
    933
    
    
    
    845
    
    
    
    790Provision for uncollectible accounts
    
    
    87
    
    
    
    80
    
    
    
    82Deferred income taxes and other noncash items
    
    
    237
    
    
    
    (59
    )
    
    
    108Lease accounting charge
    
    
    
    
    
    
    
    
    
    
    75Changes in operating assets and liabilities:Receivables
    
    
    (175
    )
    
    
    1,446
    
    
    
    (191
    )Other current assets
    
    
    (188
    )
    
    
    (476
    )
    
    
    (48
    )Accounts payable and other liabilities
    
    
    226
    
    
    
    (132
    )
    
    
    340Other, net
    
    
    (39
    )
    
    
    4
    
    
    
    (31
    )Cash provided by operating activities
    
    
    2,206
    
    
    
    2,959
    
    
    
    2,211INVESTING ACTIVITIESCapital expenditures
    
    
    (1,709
    )
    
    
    (1,667
    )
    
    
    (1,402
    )Proceeds from asset dispositions and other
    
    
    28
    
    
    
    25
    
    
    
    31Business acquisitions, net of cash acquired
    
    
    (4
    )
    
    
    (347
    )
    
    
    Collection on loan to parent company
    
    
    4,225
    
    
    
    
    
    
    
    Cash provided by (used in) investing activities
    
    
    2,540
    
    
    
    (1,989
    )
    
    
    (1,371
    )FINANCING ACTIVITIESPrincipal payments on debt
    
    
    (88
    )
    
    
    (147
    )
    
    
    (108
    )Net payments to parent company
    
    
    (392
    )
    
    
    (783
    )
    
    
    (772
    )Dividend paid to parent company
    
    
    (4,225
    )
    
    
    
    
    
    
    Cash used in financing activities
    
    
    (4,705
    )
    
    
    (930
    )
    
    
    (880
    )CASH AND CASH EQUIVALENTSNet increase (decrease) in cash and cash equivalents
    
    
    41
    
    
    
    40
    
    
    
    (40
    )Cash and cash equivalents at beginning of period
    
    
    257
    
    
    
    217
    
    
    
    257Cash and cash equivalents at end of period
    
    $
    298
    
    
    $
    257
    
    
    $
    217
   41




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AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    TotalStock
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Owners EquityBalance at May 31, 2005
    
    $
    
    
    
    $
    298
    
    
    $
    6,036
    
    
    $
    (15
    )
    
    $
    6,319Net income
    
    
    
    
    
    
    
    
    
    
    1,086
    
    
    
    
    
    
    
    1,086Foreign currency translation adjustment,
net of deferred taxes of $1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22
    
    
    
    22Minimum pension liability adjustment,
net of deferred taxes of $3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    5Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,113Balance at May 31, 2006
    
    
    
    
    
    
    298
    
    
    
    7,122
    
    
    
    12
    
    
    
    7,432Net income
    
    
    
    
    
    
    
    
    
    
    1,251
    
    
    
    
    
    
    
    1,251Foreign currency translation adjustment,
net of deferred taxes of $6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27
    
    
    
    27Minimum pension liability adjustment,
net of deferred taxes of $3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11
    )
    
    
    (11
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,267Retirement plans liability adjustment in
connection with the adoption of SFAS
158, net of deferred taxes of $14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    20Contribution by parent company of
acquisition of ANC Holdings Ltd.
    
    
    
    
    
    
    198
    
    
    
    
    
    
    
    
    
    
    
    198Dividend to parent company associated
with the formation of FCIS
    
    
    
    
    
    
    (12
    )
    
    
    
    
    
    
    
    
    
    
    (12
    )Balance at May 31, 2007
    
    
    
    
    
    
    484
    
    
    
    8,373
    
    
    
    48
    
    
    
    8,905Net income
    
    
    
    
    
    
    
    
    
    $
    1,125
    
    
    
    
    
    
    $
    1,125Foreign currency translation adjustment,
net of deferred taxes of $13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97
    
    
    
    97Retirement plans liability adjustments,
net of deferred taxes of $6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    20Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,242Dividends to parent company
    
    
    
    
    
    
    (8
    )
    
    
    (4,225
    )
    
    
    
    
    
    
    (4,233
    )Balance at May 31, 2008
    
    $
    
    
    
    $
    476
    
    
    $
    5,273
    
    
    $
    165
    
    
    $
    5,914
   42




---



##### Table of Contents



DESCRIPTION OF BUSINESS.
 FISCAL YEARS
 PRINCIPLES OF CONSOLIDATION
 REVENUE RECOGNITION
  ACCOUNTS RECEIVABLE ARRANGEMENT.
 CREDIT RISK
 ADVERTISING
 CASH EQUIVALENTS
  43




---



##### Table of Contents



SPARE PARTS, SUPPLIES AND FUEL
 PROPERTY AND EQUIPMENT
  Net Book Value at May 31,Range

    
    2008
    
    
    2007Wide-body aircraft and related equipment
    
    15 to 25 years
    
    $
    5,550
    
    
    $
    5,391Narrow-body and feeder aircraft and related equipment
    
    
    5 to 15 years
    
    
    
    452
    
    
    
    352Package handling and ground support equipment
    
    
    5 to 30 years
    
    
    
    461
    
    
    
    435Vehicles
    
    
    5 to 10 years
    
    
    
    422
    
    
    
    423Computer and electronic equipment
    
    
    3 to 10 years
    
    
    
    163
    
    
    
    148Facilities and other
    
    
    2 to 30 years
    
    
    
    1,472
    
    
    
    1,168
  CAPITALIZED INTEREST
 IMPAIRMENT OF LONG-LIVED ASSETS.
  44




---



##### Table of Contents



PENSION
AND POSTRETIREMENT HEALTHCARE PLANS.
  GOODWILL.
 INCOME TAXES
    45




---



##### Table of Contents



SELF-INSURANCE ACCRUALS
 LEASES
 DEFERRED GAINS
 FOREIGN CURRENCY TRANSLATION
 EMPLOYEES UNDER COLLECTIVE BARGAINING ARRANGEMENTS.
 STOCK-BASED COMPENSATION.
  46




---



##### Table of Contents



USE OF ESTIMATES
      47




---



##### Table of Contents



Total purchaseBusiness acquired
    
    Rebranded
    
    Date acquired
    
    price (in millions)ANC Holdings Ltd.
    
    FedEx U.K.
    
    December 16, 2006
    
    $
    241Tianjin Datian W.
Group Co., Ltd. (DTW Group)
    
    N/A
    
    March 1, 2007
    
    
    427
    FedEx U.K.
    
    
    DTW GroupCurrent assets
    
    $
    68
    
    
    $
    54Property and equipment
    
    
    20
    
    
    
    16Intangible assets
    
    
    49
    
    
    
    17Goodwill
    
    
    168
    
    
    
    348Other assets
    
    
    2
    
    
    
    10Current liabilities
    
    
    (56
    )
    
    
    (18
    )Long-term liabilities
    
    
    (10
    )
    
    
    Total purchase price
    
    $
    241
    
    
    $
    427
   48




---



##### Table of Contents



Purchase
    
    
    
    
    
    
    PurchaseGoodwill
    
    
    Adjustments
    
    
    
    
    
    
    AdjustmentsMay 31, 2006
    
    
    Acquired
    
    
    and Other
    
    
    May 31, 2007
    
    
    and Other
    
    
    May 31, 2008Goodwill
    
    $
    343
    
    
    $
    549
    (1)
    
    $
    9
    
    
    $
    901
    
    
    $
    35
    (2)
    
    $
    936
 (1)
    
    Primarily FedEx U.K. and DTW Group acquisitions.(2)
    
    Primarily currency translation adjustments.  May 31, 2008
    
    
    May 31, 2007Gross Carrying
    
    
    Accumulated
    
    
    Net Book
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    Net BookAmount
    
    
    Amortization
    
    
    Value
    
    
    Amount
    
    
    Amortization
    
    
    ValueCustomer relationships
    
    $
    51
    
    
    $
    (14
    )
    
    $
    37
    
    
    $
    51
    
    
    $
    (5
    )
    
    $
    46Contract related
    
    
    73
    
    
    
    (62
    )
    
    
    11
    
    
    
    73
    
    
    
    (57
    )
    
    
    16Technology related and other
    
    
    19
    
    
    
    (10
    )
    
    
    9
    
    
    
    19
    
    
    
    (2
    )
    
    
    17$
    143
    
    
    $
    (86
    )
    
    $
    57
    
    
    $
    143
    
    
    $
    (64
    )
    
    $
    79
  2009
    
    $
    202010
    
    
    132011
    
    
    72012
    
    
    52013
    
    
    4
   May 31,2008
    
    
    2007Accrued Salaries and Employee BenefitsSalaries
    
    $
    123
    
    
    $
    184Employee benefits
    
    
    199
    
    
    
    256Compensated absences
    
    
    408
    
    
    
    384$
    730
    
    
    $
    824Accrued ExpensesSelf-insurance accruals
    
    $
    360
    
    
    $
    354Taxes
other than income taxes
    
    
    275
    
    
    
    253Other
    
    
    319
    
    
    324$
    954
    
    
    $
    931
  49




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##### Table of Contents



May 31,2008
    
    
    2007Senior unsecured debtInterest rate of 9.65%, due in 2013
    
    $
    300
    
    
    $
    300Interest rate of 7.60%, due in 2098
    
    
    239
    
    
    
    239539
    
    
    
    539Capital lease obligations
    
    
    206
    
    
    
    294745
    
    
    
    833Less current portion
    
    
    1
    
    
    
    88$
    744
    
    
    $
    745
  2009
    
    $
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    300
       50




---



##### Table of Contents



May 31,2008
    
    
    2007Aircraft
    
    $
    
    
    
    $
    115Package handling and ground support
equipment
    
    
    165
    
    
    
    165Vehicles
    
    
    20
    
    
    
    20Other, principally facilities
    
    
    133
    
    
    
    133318
    
    
    
    433Less accumulated amortization
    
    
    283
    
    
    
    301$
    35
    
    
    $
    132
  For years ended May 31,2008
    
    
    2007
    
    
    2006Minimum rentals
    
    $
    1,261
    
    
    $
    1,226
    
    
    $
    1,270Contingent rentals(1)
    
    
    182
    
    
    
    171
    
    
    
    190$
    1,443
    
    
    $
    1,397
    
    
    $
    1,460
 (1)
    
    Contingent rentals are based on equipment usage.  Operating LeasesCapital
    
    
    Aircraft and Related
    
    
    Facilities and
    
    
    TotalLeases
    
    
    Equipment
    
    
    Other
    
    
    Operating Leases2009
    
    $
    12
    
    
    $
    555
    
    
    $
    602
    
    
    $
    1,1572010
    
    
    95
    
    
    
    544
    
    
    
    538
    
    
    
    1,0822011
    
    
    6
    
    
    
    526
    
    
    
    476
    
    
    
    1,0022012
    
    
    6
    
    
    
    504
    
    
    
    413
    
    
    
    9172013
    
    
    118
    
    
    
    499
    
    
    
    362
    
    
    
    861Thereafter
    
    
    
    
    
    
    2,931
    
    
    
    3,674
    
    
    
    6,605Total
    
    $
    237
    
    
    $
    5,559
    
    
    $
    6,065
    
    
    $
    11,624Less amount representing interest
    
    
    31Present value of net minimum lease payments
    
    $
    206
    51




---



##### Table of Contents



2008
    
    
    2007
    
    
    2006Current provisionDomestic:Federal
    
    $
    223
    
    
    $
    493
    
    
    $
    374State and local
    
    
    26
    
    
    
    33
    
    
    
    29Foreign
    
    
    235
    
    
    
    164
    
    
    
    126484
    
    
    
    690
    
    
    
    529Deferred provisionDomestic:Federal
    
    
    186
    
    
    
    5
    
    
    
    81State and local
    
    
    20
    
    
    
    4
    
    
    
    17Foreign
    
    
    31
    
    
    
    34
    
    
    
    21237
    
    
    
    43
    
    
    
    119$
    721
    
    
    $
    733
    
    
    $
    648
   2008
    
    
    2007
    
    
    2006Statutory U.S. income tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Increase resulting from:Allocation of FedEx Office operating costs
    
    
    2.5
    
    
    
    
    
    
    
    State and local income taxes, net of
federal benefit
    
    
    1.5
    
    
    
    1.2
    
    
    
    1.7Other, net
    
    
    0.1
    
    
    
    0.7
    
    
    
    0.7Effective tax rate
    
    
    39.1
    %
    
    
    36.9
    %
    
    
    37.4
    %
   52




---



##### Table of Contents



2008
    
    
    2007Deferred
    
    
    Deferred
    
    
    Deferred
    
    
    DeferredTax Assets
    
    
    Tax Liabilities
    
    
    Tax Assets
    
    
    Tax LiabilitiesProperty, equipment,
leases and intangibles
    
    $
    281
    
    
    $
    1,220
    
    
    $
    307
    
    
    $
    1,065Employee benefits
    
    
    327
    
    
    
    38
    
    
    
    333
    
    
    
    36Self-insurance accruals
    
    
    275
    
    
    
    
    
    
    
    275
    
    
    
    Other
    
    
    351
    
    
    
    538
    
    
    
    300
    
    
    
    462Net operating loss/credit
carryforwards
    
    
    89
    
    
    
    
    
    
    
    112
    
    
    
    Valuation allowance
    
    
    (76
    )
    
    
    
    
    
    
    (65
    )
    
    
    $
    1,247
    
    
    $
    1,796
    
    
    $
    1,262
    
    
    $
    1,563
  2008
    
    
    2007Current deferred tax asset
    
    $
    392
    
    
    $
    404Noncurrent deferred tax liability
    
    
    (941
    )
    
    
    (705
    )$
    (549
    )
    
    $
    (301
    )
      53




---



##### Table of Contents



Balance at June 1, 2007
    
    $
    59Increases for tax positions taken in the current year
    
    
    10Increases for tax positions taken in prior years
    
    
    8Settlements
    
    
    (4
    )Balance at May 31, 2008
    
    $
    73
   RETIREMENT PLANS SPONSORED BY FEDEX
    54




---



##### Table of Contents



2008
    
    
    2007
    
    
    2006Pension plans sponsored by FedEx
    
    $
    159
    
    
    $
    308
    
    
    $
    305Other U.S. domestic and international
pension plans
    
    
    34
    
    
    
    26
    
    
    
    26U.S. domestic and international defined
contribution plans
    
    
    135
    
    
    
    104
    
    
    
    94Postretirement healthcare plans
    
    
    66
    
    
    
    46
    
    
    
    64$
    394
    
    
    $
    484
    
    
    $
    489
 PENSION PLANS.
 DEFINED CONTRIBUTION PLANS
  May 31,2008
    
    
    2007Projected benefit obligation (PBO)
    
    $
    10,684
    
    
    $
    11,358Fair value of plan assets
    
    
    11,497
    
    
    
    11,175Funded status
    
    $
    813
    
    
    $
    (183
    )
  55




---



##### Table of Contents



Pension Plans2008
    
    
    2007
    
    
    2006Discount rate used to determine benefit obligation(1)
    
    
    6.96
    %
    
    
    6.01
    %
    
    
    5.91
    %Discount rate used to determine net periodic benefit cost
    
    
    6.01
    
    
    
    5.91
    
    
    
    6.29Rate of increase in future compensation levels
used to determine benefit obligation
    
    
    4.51
    
    
    
    4.47
    
    
    
    3.46Rate of increase in future compensation levels
used to determine net periodic benefit cost(2)
    
    
    4.47
    
    
    
    3.46
    
    
    
    3.15Expected long-term rate of return on assets
    
    
    8.50
    
    
    
    9.10
    
    
    
    9.10
 (1)
    
    The assumed interest rate used to discount the estimated future benefit payments
that have been accrued to date (the PBO) to their net present value.(2)
    
    Average future salary increases based on age and years of service.    FEDEX EXPRESS SPONSORED RETIREMENT PLANS
 PENSION PLANS.
  56




---



##### Table of Contents



POSTRETIREMENT HEALTHCARE PLANS
 NEW ACCOUNTING PRONOUNCEMENT.
   57




---



##### Table of Contents



Pension Plans
    
    
    Postretirement Healthcare Plans2008
    
    
    2007
    
    
    2008
    
    
    2007Accumulated Benefit Obligation (ABO)
    
    $
    366
    
    
    $
    336Changes in Projected Benefit Obligation (PBO) and Accumulated
Postretirement Benefit Obligation (APBO)PBO / APBO at the beginning of year
    
    $
    416
    
    
    $
    330
    
    
    $
    452
    
    
    $
    424Service cost
    
    
    23
    
    
    
    17
    
    
    
    28
    
    
    
    25Interest cost
    
    
    21
    
    
    
    16
    
    
    
    27
    
    
    
    24Actuarial loss (gain)
    
    
    2
    
    
    
    37
    
    
    
    (46
    )
    
    
    9Benefits paid
    
    
    (16
    )
    
    
    (13
    )
    
    
    (39
    )
    
    
    (39
    )Settlements
    
    
    (1
    )
    
    
    (3
    )
    
    
    (23
    )
    
    
    Amendments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Participant contributions
    
    
    2
    
    
    
    1
    
    
    
    19
    
    
    
    16Other
    
    
    16
    
    
    
    31
    
    
    
    
    
    
    
    (12
    )PBO / APBO at the end of year
    
    $
    463
    
    
    $
    416
    
    
    $
    418
    
    
    $
    452Change in Plan AssetsFair value of plan assets at beginning of year
    
    $
    207
    
    
    $
    161
    
    
    $
    
    
    
    $
    Actual return on plan assets
    
    
    (6
    )
    
    
    7
    
    
    
    
    
    
    
    Company contributions
    
    
    31
    
    
    
    27
    
    
    
    63
    
    
    
    23Benefits paid
    
    
    (16
    )
    
    
    (16
    )
    
    
    (39
    )
    
    
    (39
    )Other
    
    
    2
    
    
    
    28
    
    
    
    (24
    )
    
    
    16Fair value of plan assets at end of year
    
    $
    218
    
    
    $
    207
    
    
    $
    
    
    
    $
    Funded Status of the Plans
    
    $
    (245
    )
    
    $
    (209
    )
    
    $
    (418
    )
    
    $
    (452
    )Employer contributions after measurement date
    
    
    8
    
    
    
    5
    
    
    
    5
    
    
    
    4Net amount recognized
    
    $
    (237
    )
    
    $
    (204
    )
    
    $
    (413
    )
    
    $
    (448
    )Amount Recognized in the Balance Sheet
at May 31:Current pension, postretirement healthcare
and other benefit obligations
    
    $
    (7
    )
    
    $
    (7
    )
    
    $
    (27
    )
    
    $
    (28
    )Noncurrent pension, postretirement healthcare and other benefit obligations
    
    
    (230
    )
    
    
    (197
    )
    
    
    (386
    )
    
    
    (420
    )Net amount recognized
    
    $
    (237
    )
    
    $
    (204
    )
    
    $
    (413
    )
    
    $
    (448
    )Amounts Recognized in AOCI and not yet reflected in
Net Periodic Benefit
Cost:Net actuarial loss (gain) and other
    
    $
    113
    
    
    $
    94
    
    
    $
    (123
    )
    
    $
    (86
    )Prior service cost
    
    
    3
    
    
    
    3
    
    
    
    3
    
    
    
    3Total
    
    $
    116
    
    
    $
    97
    
    
    $
    (120
    )
    
    $
    (83
    )Amounts Recognized in
AOCI and not yet
reflected in
Net Periodic Benefit
Cost expected to be
amortized
in next years net
periodic benefit cost:Net actuarial loss (gain)
    
    $
    6
    
    
    
    
    
    
    $
    (6
    )Prior service cost
    
    
    1
    
    
    
    
    
    
    
    Total
    
    $
    7
    
    
    
    
    
    
    $
    (6
    )
  58




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##### Table of Contents



PBO Exceeds the Fair Value ofPlan Assets2008
    
    
    2007Pension BenefitsPBO
    
    $
    463
    
    
    $
    416Fair Value of Plan Assets
    
    
    218
    
    
    
    207
 ABO Exceeds the Fair Value ofPlan Assets2008
    
    
    2007Pension BenefitsPBO
    
    $
    462
    
    
    $
    416ABO
    
    
    365
    
    
    
    336Fair Value of Plan Assets
    
    
    217
    
    
    
    207
   Pension Plans
    
    
    Postretirement Healthcare Plans2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006Service cost
    
    $
    23
    
    
    $
    17
    
    
    $
    17
    
    
    $
    28
    
    
    $
    25
    
    
    $
    35Interest cost
    
    
    21
    
    
    
    16
    
    
    
    14
    
    
    
    27
    
    
    
    24
    
    
    
    29Expected return on plan assets
    
    
    (15
    )
    
    
    (10
    )
    
    
    (8
    )
    
    
    
    
    
    
    
    
    
    
    Recognized actuarial losses
(gains) and other
    
    
    5
    
    
    
    3
    
    
    
    3
    
    
    
    11
    
    
    
    (3
    )
    
    
    Net periodic benefit cost
    
    $
    34
    
    
    $
    26
    
    
    $
    26
    
    
    $
    66
    
    
    $
    46
    
    
    $
    64
  Pension Plans
    
    
    Postretirement Healthcare PlansGross
    
    
    Net of tax
    
    
    Gross
    
    
    Net of taxamount
    
    
    amount
    
    
    amount
    
    
    amountNet gain (loss) and other, arising
during period
    
    $
    22
    
    
    $
    10
    
    
    $
    (52
    )
    
    $
    (36
    )Gain from settlements
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    6Amortizations:Actuarial (losses) gains and other
    
    
    (5
    )
    
    
    (3
    )
    
    
    3
    
    
    
    3Total recognized in OCI
    
    $
    17
    
    
    $
    7
    
    
    $
    (43
    )
    
    $
    (27
    )
  59




---



##### Table of Contents



Pension Plans
    
    
    Postretirement Healthcare Plans2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006Discount rate used to determine benefit obligation(1)
    
    
    5.14
    %
    
    
    5.01
    %
    
    
    4.86
    %
    
    
    6.81
    %
    
    
    6.08
    %
    
    
    6.08
    %Discount rate used to determine net periodic benefit cost
    
    
    5.01
    
    
    
    4.86
    
    
    
    4.98
    
    
    
    6.08
    
    
    
    6.08
    
    
    
    6.16Rate of increase in future compensation levels
used to determine benefit obligation
    
    
    4.55
    
    
    
    4.28
    
    
    
    3.47
    
    
    
    
    
    
    
    
    
    
    
    Rate of increase in future compensation levels
used to determine net periodic benefit cost(2)
    
    
    4.28
    
    
    
    3.47
    
    
    
    3.49
    
    
    
    
    
    
    
    
    
    
    
    Expected long-term rate of return on assets(3)
    
    
    6.73
    
    
    
    5.83
    
    
    
    6.29
    
    
    
    
    
    
    
    
    
    
    
    
 (1)
    
    The assumed interest rate used to discount the estimated future benefit payments
that have been accrued to date (the PBO) to their net present value.(2)
    
    Average future salary increases based on age and years of service.(3)
    
    The expected future long-term rate of earnings on plan assets.  PostretirementPension Plans
    
    
    Healthcare Plans2009
    
    $
    16
    
    
    $
    272010
    
    
    15
    
    
    
    272011
    
    
    15
    
    
    
    292012
    
    
    15
    
    
    
    302013
    
    
    16
    
    
    
    312014-2018
    
    
    98
    
    
    
    187
      60




---



##### Table of Contents



2008
    
    
    2007
    
    
    2006REVENUE BY SERVICE TYPEPackage:U.S. overnight box
    
    $
    6,578
    
    
    $
    6,485
    
    
    $
    6,422U.S. overnight
envelope
    
    
    2,012
    
    
    
    1,990
    
    
    
    1,974U.S. deferred
    
    
    2,995
    
    
    
    2,883
    
    
    
    2,853Total domestic
package revenue
    
    
    11,585
    
    
    
    11,358
    
    
    
    11,249International
Priority (IP)
    
    
    7,666
    
    
    
    6,722
    
    
    
    6,139International domestic(1)
    
    
    663
    
    
    
    370
    
    
    
    199Total package
revenue
    
    
    19,914
    
    
    
    18,450
    
    
    
    17,587Freight:U.S.
    
    
    2,398
    
    
    
    2,412
    
    
    
    2,218International priority freight
    
    
    1,243
    
    
    
    1,045
    
    
    
    840International
airfreight
    
    
    406
    
    
    
    394
    
    
    
    434Total freight
revenue
    
    
    4,047
    
    
    
    3,851
    
    
    
    3,492Other
    
    
    285
    
    
    
    226
    
    
    
    217$
    24,246
    
    
    $
    22,527
    
    
    $
    21,296GEOGRAPHICAL INFORMATION(2)Revenues:U.S.
    
    $
    14,009
    
    
    $
    13,790
    
    
    $
    13,471International
    
    
    10,237
    
    
    
    8,737
    
    
    
    7,825$
    24,246
    
    
    $
    22,527
    
    
    $
    21,296Noncurrent assets:U.S.
    
    $
    6,764
    
    
    $
    10,003
    
    
    $
    8,543International
    
    
    3,388
    
    
    
    3,113
    
    
    
    2,357$
    10,152
    
    
    $
    13,116
    
    
    $
    10,900
 (1)
    
    International domestic revenues include our international domestic operations, primarily in the United Kingdom, Canada, India and China. We reclassified the prior
period international domestic revenues previously included within other revenues to conform to the
current period presentation.(2)
    
    International revenue includes shipments that either originate in or are destined to
locations outside the United States. Noncurrent assets include property and equipment, goodwill
and other long-term assets. Flight equipment is allocated between geographic areas based on usage.   2008
    
    
    2007
    
    
    2006Interest (net of capitalized interest)
    
    $
    19
    
    
    $
    41
    
    
    $
    54Income taxes
    
    
    450
    
    
    
    708
    
    
    
    519
  61




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##### Table of Contents



Aircraft-Aircraft
    
    
    Related(1)
    
    
    Other(2)
    
    
    Total2009
    
    $
    965
    
    
    $
    178
    
    
    $
    37
    
    
    $
    1,1802010
    
    
    919
    
    
    
    132
    
    
    
    13
    
    
    
    1,0642011
    
    
    665
    
    
    
    9
    
    
    
    11
    
    
    
    6852012
    
    
    31
    
    
    
    
    
    
    
    9
    
    
    
    402013
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    8Thereafter
    
    
    
    
    
    
    
    
    
    
    99
    
    
    
    99
 (1)
    
    Primarily aircraft modifications.(2)
    
    Primarily advertising and promotion contracts.   62




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##### Table of Contents



A300
    
    
    B757
    
    
    B777F
    
    
    MD11
    
    
    Total2009
    
    
    4
    
    
    
    16
    
    
    
    
    
    
    
    2
    
    
    
    222010
    
    
    
    
    
    
    6
    
    
    
    6
    
    
    
    
    
    
    
    122011
    
    
    
    
    
    
    5
    
    
    
    9
    
    
    
    
    
    
    
    142012
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    22013
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Thereafter
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    4
    
    
    
    29
    
    
    
    15
    
    
    
    2
    
    
    
    50
  Wage-and-Hour.
 Other.
  63




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##### Table of Contents



First
    
    
    Second
    
    
    Third
    
    
    Fourth(in millions)
    
    Quarter
    
    
    Quarter(1)
    
    
    Quarter
    
    
    Quarter2008Revenues
    
    $
    5,851
    
    
    $
    5,993
    
    
    $
    6,090
    
    
    $
    6,312Operating income
    
    
    509
    
    
    
    516
    
    
    
    417
    
    
    
    415Net income
    
    
    310
    
    
    
    306
    
    
    
    249
    
    
    
    2602007Revenues
    
    $
    5,601
    
    
    $
    5,653
    
    
    $
    5,486
    
    
    $
    5,787Operating income
    
    
    456
    
    
    
    489
    
    
    
    384
    
    
    
    584Net income
    
    
    289
    
    
    
    318
    
    
    
    270
    
    
    
    374
 (1)
    
    Results for the second quarter of 2007 include a $143 million charge associated
with upfront compensation and benefits under the new pilot labor contract.  64




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##### Table of Contents



QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 INTEREST RATES.
 FOREIGN CURRENCY.
  COMMODITY.
 OTHER.
  65




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##### Table of Contents



66




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##### Table of Contents



ADDITIONSBALANCE
    
    
    
    
    
    
    CHARGED
    
    
    
    
    
    
    BALANCEAT
    
    
    CHARGED
    
    
    TO
    
    
    
    
    
    
    ATBEGINNING
    
    
    TO COSTS AND
    
    
    OTHER
    
    
    
    
    
    
    END OFDESCRIPTION
    
    OF YEAR
    
    
    EXPENSES
    
    
    ACCOUNTS
    
    
    DEDUCTIONS
    
    
    YEARAccounts
Receivable Reserves:Allowance for Doubtful Accounts2008
    
    $
    27
    
    
    $
    87
    
    
    $
    
    
    
    $
    87
    (b)
    
    $
    272007
    
    $
    52
    
    
    $
    80
    
    
    $
    
    
    
    $
    105
    (b)
    
    $
    272006
    
    $
    50
    
    
    $
    82
    
    
    $
    15
    (a)
    
    $
    95
    (b)
    
    $
    52Allowance for Revenue Adjustments2008
    
    $
    34
    
    
    $
    
    
    
    $
    345
    (c)
    
    $
    337
    (d)
    
    $
    422007
    
    $
    53
    
    
    $
    
    
    
    $
    320
    (c)
    
    $
    339
    (d)
    
    $
    342006
    
    $
    42
    
    
    $
    
    
    
    $
    397
    (c)
    
    $
    386
    (d)
    
    $
    53Inventory
Valuation Allowance:2008
    
    $
    156
    
    
    $
    10
    
    
    $
    
    
    
    $
    3
    
    
    $
    1632007
    
    $
    150
    
    
    $
    9
    
    
    $
    
    
    
    $
    3
    
    
    $
    1562006
    
    $
    142
    
    
    $
    10
    
    
    $
    
    
    
    $
    2
    
    
    $
    150
 (a)
    
    Transfers related to FedEx Ground factoring agreement.(b)
    
    Uncollectible accounts written off,net of recoveries.(c)
    
    Principally charged against revenue.(d)
    
    Service failures, rebills and other.  67




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##### Table of Contents



Years Ended May 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Earnings:Income before income taxes
    
    $
    1,846
    
    
    $
    1,984
    
    
    $
    1,734
    
    
    $
    1,305
    
    
    $
    541Add back:Interest expense, net of capitalized
interest
    
    
    19
    
    
    
    40
    
    
    
    54
    
    
    
    73
    
    
    
    64Amortization of debt issuance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Portion of rent expense representative
of interest factor
    
    
    587
    
    
    
    580
    
    
    
    630
    
    
    
    600
    
    
    
    583Earnings as adjusted
    
    $
    2,452
    
    
    $
    2,604
    
    
    $
    2,418
    
    
    $
    1,978
    
    
    $
    1,188Fixed Charges:Interest expense, net of capitalized
interest
    
    $
    19
    
    
    $
    40
    
    
    $
    54
    
    
    $
    73
    
    
    $
    64Capitalized interest
    
    
    46
    
    
    
    32
    
    
    
    27
    
    
    
    13
    
    
    
    7Amortization of debt issuance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Portion of rent expense representative
of interest factor
    
    
    587
    
    
    
    580
    
    
    
    630
    
    
    
    600
    
    
    
    583$
    652
    
    
    $
    652
    
    
    $
    711
    
    
    $
    686
    
    
    $
    654Ratio of Earnings to Fixed Charges
    
    
    3.8
    
    
    
    4.0
    
    
    
    3.4
    
    
    
    2.9
    
    
    
    1.8
  68




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EXHIBIT INDEX
 ExhibitNumber
    
    Description of ExhibitCertificate of Incorporation and Bylaws3.1
    
    
    Restated Certificate of Incorporation of FedEx Express, as amended. (Filed
as Exhibit 3.1 to FedEx Expresss FY98 Third Quarter Report on Form 10-Q,
and incorporated herein by reference.)3.2
    
    
    By-laws of FedEx Express. (Filed as Exhibit 3.2 to FedEx Expresss FY93
Annual Report on Form 10-K, and incorporated herein by reference.)Facility Lease Agreements10.1
    
    
    Composite Lease Agreement dated May 21, 2007 (but effective as of January
1, 2007) between the Memphis-Shelby County Airport Authority (the
Authority) and FedEx Express. (Filed as Exhibit 10.1 to FedExs FY07
Annual Report on Form 10-K, and incorporated herein by reference.)10.2
    
    
    Special Facility Lease Agreement dated as of August 1, 1979 between the
Authority and FedEx Express. (Filed as Exhibit 10.15 to FedEx Expresss
FY90 Annual Report on Form 10-K, and incorporated herein by reference.)10.3
    
    
    First Special Facility Supplemental Lease Agreement dated as of May 1, 1982
between the Authority and FedEx Express. (Filed as Exhibit 10.25 to FedEx
Expresss FY93 Annual Report on Form 10-K, and incorporated herein by
reference.)10.4
    
    
    Second Special Facility Supplemental Lease Agreement dated as of November
1, 1982 between the Authority and FedEx Express. (Filed as Exhibit 10.26
to FedEx Expresss FY93 Annual Report on Form 10-K, and incorporated herein
by reference.)10.5
    
    
    Third Special Facility Supplemental Lease Agreement dated as of December 1,
1984 between the Authority and FedEx Express. (Filed as Exhibit 10.25 to
FedEx Expresss FY95 Annual Report on Form 10-K, and incorporated herein by
reference.)10.6
    
    
    Fourth Special Facility Supplemental Lease Agreement dated as of July 1,
1992 between the Authority and FedEx Express. (Filed as Exhibit 10.20 to
FedEx Expresss FY92 Annual Report on Form 10-K, and incorporated herein by
reference.)10.7
    
    
    Fifth Special Facility Supplemental Lease Agreement dated as of July 1,
1997 between the Authority and FedEx Express. (Filed as Exhibit 10.35 to
FedEx Expresss FY97 Annual Report on Form 10-K, and incorporated herein by
reference.)10.8
    
    
    Sixth Special Facility Supplemental Lease Agreement dated as of December 1,
2001 between the Authority and FedEx Express. (Filed as Exhibit 10.28 to
FedExs FY02 Annual Report on Form 10-K, and incorporated herein by
reference.)10.9
    
    
    Seventh Special Facility Supplemental Lease Agreement dated as of June 1,
2002 between the Authority and FedEx Express. (Filed as Exhibit 10.3 to
FedExs FY03 First Quarter Report on Form 10-Q, and incorporated herein by
reference.)10.10
    
    
    Special Facility Lease Agreement dated as of July 1, 1993 between the
Authority and FedEx Express. (Filed as Exhibit 10.29 to FedEx Expresss
FY93 Annual Report on Form 10-K, and incorporated herein by reference.)
  E-1




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit10.11
    
    
    Special Facility Ground Lease Agreement dated as of July 1, 1993 between
the Authority and FedEx Express. (Filed as Exhibit 10.30 to FedEx
Expresss FY93 Annual Report on Form 10-K, and incorporated herein by
reference.)Aircraft-Related Agreement10.12
    
    
    Boeing 777 Freighter Purchase Agreement dated as of November 7, 2006
between The Boeing Company and FedEx Express. Confidential treatment has
been granted for confidential commercial and financial information,
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended. (Filed as Exhibit 10.1 to FedExs FY07 Second Quarter Report on
Form 10-Q, and incorporated herein by reference.)10.13
    
    
    Supplemental Agreement No. 1 dated as of June 16, 2008 to the Boeing 777
Freighter Purchase Agreement dated as of November 7, 2006 between The
Boeing Company and FedEx Express. (Filed as Exhibit 10.13 to FedExs FY08
Annual Report on Form 10-K, and incorporated herein by reference.)U.S. Postal Service Agreement10.14
    
    
    Transportation Agreement dated July 31, 2006 between the United States
Postal Service and FedEx Express. Confidential treatment has been granted
for confidential commercial and financial information, pursuant to Rule
24b-2 under the Securities Exchange Act of 1934, as amended. (Filed as
Exhibit 10.2 to FedExs FY07 First Quarter Report on Form 10-Q, and
incorporated herein by reference.)10.15
    
    
    Amendment dated November 30, 2006 to the Transportation Agreement dated
July 31, 2006 between the United States Postal Service and FedEx Express.
Confidential treatment has been granted for confidential commercial and
financial information, pursuant to Rule 24b-2 under the Securities Exchange
Act of 1934, as amended. (Filed as Exhibit 10.2 to FedExs FY07 Second
Quarter Report on Form 10-Q, and incorporated herein by reference.)10.16
    
    
    Letter Agreement dated March 8, 2007 and Letter Agreement dated May 14,
2007, each amending the Transportation Agreement dated July 31, 2006, as
amended, between the United States Postal Service and FedEx Express.
Confidential treatment has been granted for confidential commercial and
financial information, pursuant to Rule 24b-2 under the Securities Exchange
Act of 1934, as amended. (Filed as Exhibit 10.15 to FedExs FY07 Annual
Report on Form 10-K, and incorporated herein by reference.)10.17
    
    
    Amendment dated June 20, 2007 and Amendment dated July 31, 2007, each
amending the Transportation Agreement dated July 31, 2006, as amended,
between the United States Postal Service and FedEx Express. Confidential
treatment has been granted for confidential commercial and financial
information, pursuant to Rule 24b-2 under the Securities Exchange Act of
1934, as amended. (Filed as Exhibit 10.1 to FedExs FY08 First Quarter
Report on Form 10-Q, and incorporated herein by reference.)10.18
    
    
    Amendment dated December 4, 2007 to the Transportation Agreement dated July
31, 2006, as amended, between the United States Postal Service and FedEx
Express. Confidential treatment has been granted for confidential
commercial and financial information, pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. (Filed as Exhibit 10.1 to
FedExs FY08 Third Quarter Report on Form 10-Q, and incorporated herein by
reference.)
  E-2




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##### Table of Contents



ExhibitNumber
    
    Description of ExhibitFinancing Agreement10.19
    
    
    Five-Year Credit Agreement dated as of July 20, 2005 among FedEx, JPMorgan
Chase Bank, N.A., individually and as administrative agent, and certain
lenders. (Filed as Exhibit 99.1 to FedExs Current Report on Form 8-K
dated July 20, 2005, and incorporated herein by reference.)FedEx Express is not filing any other instruments evidencing any
indebtedness because the total amount of securities authorized under any
single such instrument does not exceed 10% of the total assets of FedEx
Express and its subsidiaries on a consolidated basis. Copies of such
instruments will be furnished to the Securities and Exchange Commission
upon request.Other Exhibits*12
    
    
    Statement re Computation of Ratio of Earnings to Fixed Charges (presented
on page 68 of this Annual Report on Form 10-K).*23
    
    
    Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.*24
    
    
    Powers of Attorney.*31.1
    
    
    Certification of Principal Executive Officer Pursuant to Rules 13a-14(a)
and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    
    Certification of Principal Financial Officer Pursuant to Rules 13a-14(a)
and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    
    Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    
    Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith.  E-3