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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, 2010.
 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(State or Other Jurisdiction of 
Incorporation or Organization)
    
    71-0427007(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
  Yes o No þ
 Yes o No þ
 þ o
 Yes o No 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)
 Yes o No 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. Reserved
    
    
    14PART 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 Accountant Fees and Services
    
    
    17PART IVITEM 15. Exhibits, Financial Statement Schedules
    
    
    18FINANCIAL
SECTIONTable of Contents
    
    
    20Managements Discussion and Analysis
    
    
    21Consolidated
Financial Statements
    
    
    32Other
Financial Information
    
    
    61EXHIBITSExhibit 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
  
    
    We have agreed, subject to certain conditions, to purchase a total of 38 Boeing 777 Freighter
(B777F) aircraft, a new high-capacity, long-range airplane, six of which have already been
delivered. We also hold an option to purchase an additional 15 B777F aircraft. The B777F
enables us to fly between major world markets with lower operating
costs, more freight
and in less time than before, allowing later cut-off times for customers in these markets to
drop off their shipments.
 
    
    In 2010, we enhanced our overnight services between Asia and Europe, with the introduction
of a new next-business-day service connecting mainland China, Hong Kong and Singapore with
France and Germany, and expanded FedEx International Economy and FedEx International Economy
Freight services to more parts of the world.
  
    
    In 2009, we began operations at our new Asia-Pacific hub at the Guangzhou Baiyun
International Airport in Southern China. The new hub assumed and expanded the activities of
our previous hub in Subic Bay, Philippines. The new hub better serves our global customers
doing business in and with the China and Asia-Pacific markets.
 
    
    In 2007, we initiated time-certain domestic delivery service in mainland China. 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, and an extensive ground
network.
   -4-




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Technology
   fedex.com fedex.com fedex.com fedex.com
    Marketing
  
    
    The National Football League (NFL), as its Official Delivery Service Sponsor
 
    
    FedExField, home of the NFLs Washington Redskins
 
    
    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
  -5-




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
    
    FedExCup, a season-long points competition for PGA TOUR players
 
    
    Pebble Beach Golf Resorts, as the official shipping company
 
    
    FedExForum, home of the NBAs Memphis Grizzlies
 
    
    Vodafone McLaren Mercedes Formula One team
    
    French Open tennis tournament
 U.S. Postal Service Agreement
  Pricing
  fedex.com
 Operations
    -6-




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Fuel Supplies and Costs
   Total Cost
    
    
    Percentage of TotalFiscal Year
    
    (in millions)
    
    
    Revenues2010
    
    $
    2,342
    
    
    
    11.0
    %2009
    
    
    2,932
    
    
    
    13.22008
    
    
    3,396
    
    
    
    14.02007
    
    
    2,639
    
    
    
    11.72006
    
    
    2,497
    
    
    
    11.7
  Competition
    -7-




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Employees
    Trademarks
  Regulation
 Air .
     -8-




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Ground .
  International .
  Communication .
 Environmental .
  -9-




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Labor.
  Form 10-K (Risk Factors).
 
 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 B777F
    
    
    6
    
    
    
    0
    
    
    
    6
    (2)
    
    
    178,000Boeing MD11
    
    
    33
    
    
    
    26
    
    
    
    59
    
    
    
    164,200Boeing MD10-30 (3)
    
    
    10
    
    
    
    5
    
    
    
    15
    
    
    
    114,200Boeing DC10-30
    
    
    0
    
    
    
    2
    
    
    
    2
    (4)
    
    
    114,200Boeing MD10-10 (3)
    
    
    58
    
    
    
    0
    
    
    
    58
    
    
    
    108,700Airbus A300-600
    
    
    35
    
    
    
    36
    
    
    
    71
    
    
    
    85,600Airbus A310-200/300
    
    
    43
    
    
    
    6
    
    
    
    49
    
    
    
    61,900Boeing B757-200
    
    
    36
    
    
    
    0
    
    
    
    36
    (5)
    
    
    45,800Boeing B727-200
    
    
    75
    
    
    
    2
    
    
    
    77
    
    
    
    38,200ATR 72-202/212
    
    
    13
    
    
    
    0
    
    
    
    13
    
    
    
    14,660ATR 42-300/320
    
    
    26
    
    
    
    0
    
    
    
    26
    
    
    
    10,880Cessna 208B
    
    
    242
    
    
    
    0
    
    
    
    242
    
    
    
    2,500Cessna 208A
    
    
    10
    
    
    
    0
    
    
    
    10
    
    
    
    1,900Total
    
    
    587
    
    
    
    77
    
    
    
    664
 
 (1)
    
    Maximum operational revenue payload is the lesser of the net volume-limited payload and the
net maximum structural payload.(2)
    
    Includes two aircraft not currently in operation and awaiting completion of modification.(3)
    
    The MD10-30s and MD10-10s are DC10-30s and DC10-10s, respectively, that have been converted
to an MD10 configuration.(4)
    
    Not currently in operation and awaiting conversion to MD10 configuration.(5)
    
    Includes 14 aircraft not currently in operation and awaiting completion of modification. 
    
    The B777s are two-engine, wide-bodied cargo aircraft that have a longer range and
larger capacity than any aircraft we operate.
 
    
    The MD11s are three-engine, wide-bodied aircraft that have a longer range and larger
capacity than DC10s or MD10s.
 
    
    The DC10s are three-engine, wide-bodied aircraft that have been specially modified to meet
FedEx Expresss cargo requirements.
 
    
    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, narrow-bodied aircraft configured for cargo service.
 
    
    The B727s are three-engine, narrow-bodied aircraft configured for cargo service.
 
    
    The ATR and Cessna 208 turbo-prop aircraft are leased to independent operators to support
FedEx Express operations in areas where demand does not justify use of a larger aircraft.
  -11-




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Aircraft Purchase Commitments
  B757
    
    
    B777F(1)
    
    
    ATR 72
    
    
    Total2011
    
    
    16
    
    
    
    4
    
    
    
    8
    
    
    
    282012
    
    
    8
    
    
    
    5
    
    
    
    
    
    
    
    132013
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    52014
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    32015
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    3Thereafter
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    10Total
    
    
    24
    
    
    
    30
    
    
    
    8
    
    
    
    62
 (1)
    
    Our obligation to purchase 15 of these aircraft is conditioned upon there being
no event that causes FedEx Express or its employees not to be covered by the
RLA. Also, subsequent to May 31, 2010, we entered into an agreement replacing
the previously disclosed non-binding letter of intent with another party to
acquire two additional B777Fs and expect to take delivery of these aircraft in
2011. These aircraft are not included in the table above.   -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
    
    
    335
    
    
    
    2,509,000
    
    
    
    212,000
    
    
    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
    
    
    2011Oakland, California
    
    
    75
    
    
    
    320,000
    
    
    
    54,000
    
    
    City of Oakland
    
    
    2031Greensboro, N. Carolina
    
    
    165
    
    
    
    593,000
    
    
    
    29,000
    
    
    Piedmont Triad Airport Authority
    
    
    2031MetropolitanChicago, Illinois
    
    
    51
    
    
    
    419,000
    
    
    
    52,000
    
    
    City of Chicago
    
    
    2028Los Angeles, California
    
    
    34
    
    
    
    305,000
    
    
    
    57,000
    
    
    City of Los Angeles
    
    
    Month-to-month/2025(5)InternationalAnchorage, Alaska (2)
    
    
    64
    
    
    
    332,000
    
    
    
    24,000
    
    
    Alaska Department of Transportation and Public Facilities
    
    
    2023Paris, France (3)
    
    
    87
    
    
    
    861,000
    
    
    
    63,000
    
    
    Aeroports de Paris
    
    
    2029Guangzhou, China (4)
    
    
    155
    
    
    
    882,000
    
    
    
    61,000
    
    
    Guangdong Airport Management Corp.
    
    
    2029
 
 (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) is month-to-month, 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
    
 ITEM 4. RESERVED
  -14-




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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
 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 ACCOUNTANT FEES AND SERVICES
  2010
    
    
    2009Audit fees
    
    $
    7,924
    
    
    $
    7,927Audit-related fees
    
    
    666
    
    
    
    586Tax fees
    
    
    322
    
    
    
    186All other fees
    
    
    56
    
    
    
    10Total
    
    $
    8,968
    
    
    $
    8,709
 
    
    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 2010 and 2009 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
$169,000 in 2010 and $111,000 in 2009.
 
    
    All Other Fees.Represents fees for products and services not otherwise included in the
categories above. The amounts shown for 2010 and 2009 include fees for information
technology risk advisory and 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 15, 2010
    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 15, 2010/s/ CATHY D. ROSS

Cathy D. Ross
    
    Senior Vice President and Chief
Financial Officer(Principal Financial Officer)
    
    July 15, 2010/s/ J. RICK BATEMAN

J. Rick Bateman
    
    Vice President and Worldwide
Controller
(Principal Accounting Officer)
    
    July 15, 2010/s/ FREDERICK W. SMITH*

Frederick W. Smith
    
    Chairman of the Board of Directors
    
    July 15, 2010/s/ ROBERT B. CARTER*

Robert B. Carter
    
    Director
    
    July 15, 2010/s/ MICHAEL L. DUCKER*

Michael L. Ducker
    
    Executive Vice President and
Chief Operating Officer and
Director
    
    July 15, 2010/s/ T. MICHAEL GLENN*

T. Michael Glenn
    
    Director
    
    July 15, 2010/s/ ALAN B. GRAF, JR.*

Alan B. Graf, Jr.
    
    Director
    
    July 15, 2010/s/ CHRISTINE P. RICHARDS*

Christine P. Richards
    
    Director
    
    July 15, 2010
 *By:
    /s/ J. RICK BATEMAN
    
    July 15, 2010J. Rick BatemanAttorney-in-Fact  -19-




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FINANCIAL SECTION TABLE OF CONTENTS
 PAGEManagements Discussion and AnalysisOverview of Financial Section
    
    
    21Results of Operations
    
    
    23New Accounting Guidance
    
    
    27Risk Factors
    
    
    27Forward-Looking Statements
    
    
    31Consolidated Financial StatementsManagements Report on Internal Control over Financial Reporting
    
    
    32Reports of Independent Registered Public Accounting Firm
    
    
    33Consolidated Balance Sheets

May 31, 2010 and 2009
    
    
    35Consolidated Statements of Income 

Years Ended May 31, 2010, 2009 and 2008
    
    
    37Consolidated Statements of Cash Flows 
Years Ended May 31, 2010, 2009 and 2008
    
    
    38Consolidated Statements of Changes in Stockholders Investment and Comprehensive Income 

Years Ended May 31, 2010, 2009 and 2008
    
    
    39Notes to Consolidated Financial Statements
    
    
    40Other Financial InformationQuantitative and Qualitative Disclosures about Market Risk
    
    
    61Report of Independent Registered Public Accounting Firm
    
    
    62Schedule II  Valuation and Qualifying Accounts
    
    
    63Computation of Ratio of Earnings to Fixed Charges
    
    
    64
  -20-




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MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
 
 OVERVIEW OF FINANCIAL SECTION
  DESCRIPTION OF BUSINESS
     -21-




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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.
    -22-




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RESULTS OF OPERATIONS
  Percent Change2010
    
    
    2009
    
    
    2008
    
    
    2010/2009
    
    
    2009/2008Revenues:Package:U.S. overnight box
    
    $
    5,602
    
    
    $
    6,074
    
    
    $
    6,578
    
    
    
    (8
    )
    
    
    (8
    )U.S. overnight envelope
    
    
    1,640
    
    
    
    1,855
    
    
    
    2,012
    
    
    
    (12
    )
    
    
    (8
    )U.S. deferred
    
    
    2,589
    
    
    
    2,789
    
    
    
    2,995
    
    
    
    (7
    )
    
    
    (7
    )Total U.S. domestic package revenue
    
    
    9,831
    
    
    
    10,718
    
    
    
    11,585
    
    
    
    (8
    )
    
    
    (7
    )International priority
    
    
    7,087
    
    
    
    6,978
    
    
    
    7,666
    
    
    
    2
    
    
    
    (9
    )International domestic(1)
    
    
    578
    
    
    
    565
    
    
    
    663
    
    
    
    2
    
    
    
    (15
    )Total package revenue
    
    
    17,496
    
    
    
    18,261
    
    
    
    19,914
    
    
    
    (4
    )
    
    
    (8
    )Freight:U.S.
    
    
    1,980
    
    
    
    2,165
    
    
    
    2,398
    
    
    
    (9
    )
    
    
    (10
    )International priority
    
    
    1,303
    
    
    
    1,104
    
    
    
    1,243
    
    
    
    18
    
    
    
    (11
    )International airfreight
    
    
    251
    
    
    
    369
    
    
    
    406
    
    
    
    (32
    )
    
    
    (9
    )Total freight revenue
    
    
    3,534
    
    
    
    3,638
    
    
    
    4,047
    
    
    
    (3
    )
    
    
    (10
    )Other
    
    
    213
    
    
    
    268
    
    
    
    285
    
    
    
    (21
    )
    
    
    (6
    )Total revenues
    
    
    21,243
    
    
    
    22,167
    
    
    
    24,246
    
    
    
    (4
    )
    
    
    (9
    )Operating expenses:Salaries and employee benefits
    
    
    8,177
    
    
    
    8,031
    
    
    
    8,262
    
    
    
    2
    
    
    
    (3
    )Purchased transportation
    
    
    1,058
    
    
    
    1,063
    
    
    
    1,194
    
    
    
    
    
    
    
    (11
    )Rentals and landing fees
    
    
    1,557
    
    
    
    1,598
    
    
    
    1,658
    
    
    
    (3
    )
    
    
    (4
    )Depreciation and amortization
    
    
    1,005
    
    
    
    952
    
    
    
    933
    
    
    
    6
    
    
    
    2Fuel
    
    
    2,652
    
    
    
    3,281
    
    
    
    3,785
    
    
    
    (19
    )
    
    
    (13
    )Maintenance and repairs
    
    
    1,127
    
    
    
    1,348
    
    
    
    1,508
    
    
    
    (16
    )
    
    
    (11
    )Impairment and other charges
    
    
    
    
    
    
    258
    (2)
    
    
    
    
    
    NM
    
    
    NMIntercompany charges
    
    
    1,918
    
    
    
    2,093
    
    
    
    2,129
    
    
    
    (8
    )
    
    
    (2
    )Other
    
    
    2,623
    
    
    
    2,778
    
    
    
    2,920
    
    
    
    (6
    )
    
    
    (5
    )Total operating expenses
    
    
    20,117
    
    
    
    21,402
    
    
    
    22,389
    
    
    
    (6
    )
    
    
    (4
    )Operating income
    
    $
    1,126
    
    
    $
    765
    
    
    $
    1,857
    
    
    
    47
    
    
    
    (59
    )Operating margin
    
    
    5.3
    %
    
    
    3.5
    %
    
    
    7.7
    %
    
    
    180
    bp
    
    
    (420
    )bpOther income (expense):Interest, net
    
    
    15
    
    
    
    4
    
    
    
    152
    
    
    
    275
    
    
    
    (97
    )Other, net
    
    
    (82
    )
    
    
    (37
    )
    
    
    (163
    )
    
    
    122
    
    
    
    (77
    )(67
    )
    
    
    (33
    )
    
    
    (11
    )
    
    
    103
    
    
    
    200Income before income taxes
    
    
    1,059
    
    
    
    732
    
    
    
    1,846
    
    
    
    45
    
    
    
    (60
    )Provision for income taxes
    
    
    408
    
    
    
    301
    
    
    
    721
    
    
    
    36
    
    
    
    (58
    )Net income
    
    $
    651
    
    
    $
    431
    
    
    $
    1,125
    
    
    
    51
    
    
    
    (62
    )
 (1)
    
    International domestic revenues include our international domestic operations, primarily in the United Kingdom, Canada, China, India and Mexico.(2)
    
    Represents charges associated with aircraft-related asset impairments and other charges primarily associated with aircraft-related lease and contract termination costs and employee severance.  -23-




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Percent of Revenue(1)2010
    
    
    2009
    
    
    2008Operating expenses:Salaries and employee benefits
    
    
    38.5
    %
    
    
    36.2
    %
    
    
    34.1
    %Purchased transportation
    
    
    5.0
    
    
    
    4.8
    
    
    
    4.9Rentals and landing fees
    
    
    7.3
    
    
    
    7.2
    
    
    
    6.8Depreciation and amortization
    
    
    4.7
    
    
    
    4.3
    
    
    
    3.9Fuel
    
    
    12.5
    
    
    
    14.8
    
    
    
    15.6Maintenance and repairs
    
    
    5.3
    
    
    
    6.1
    
    
    
    6.2Impairment and other charges
    
    
    
    
    
    
    1.2
    (2)
    
    
    Intercompany charges
    
    
    9.0
    
    
    
    9.4
    
    
    
    8.8Other
    
    
    12.4
    
    
    
    12.5
    
    
    
    12.0Total operating expenses
    
    
    94.7
    
    
    
    96.5
    
    
    
    92.3Operating margin
    
    
    5.3
    %
    
    
    3.5
    %
    
    
    7.7
    %
 (1)
    
    Given the fixed-cost structure of our network, the year-over-year comparison of our operating expenses as a percentage of revenue has been affected by a
number of factors, including the impact of lower fuel surcharges, weak economic conditions and our cost-containment activities. Collectively, these factors have distorted
the comparability of certain of our operating expense captions on a relative basis.(2)
    
    Includes a charge of $258 million related to aircraft-related asset impairments and other charges primarily associated with aircraft-related lease and contract
termination costs and employee severance.  Percent Change2010
    
    
    2009
    
    
    2008
    
    
    2010/2009
    
    
    2009/2008Package StatisticsAverage daily package volume (ADV):U.S. overnight box
    
    
    1,157
    
    
    
    1,127
    
    
    
    1,151
    
    
    
    3
    
    
    
    (2
    )U.S. overnight envelope
    
    
    614
    
    
    
    627
    
    
    
    677
    
    
    
    (2
    )
    
    
    (7
    )U.S. deferred
    
    
    867
    
    
    
    849
    
    
    
    895
    
    
    
    2
    
    
    
    (5
    )Total U.S. domestic ADV
    
    
    2,638
    
    
    
    2,603
    
    
    
    2,723
    
    
    
    1
    
    
    
    (4
    )International priority
    
    
    523
    
    
    
    475
    
    
    
    517
    
    
    
    10
    
    
    
    (8
    )International domestic(1)
    
    
    318
    
    
    
    298
    
    
    
    296
    
    
    
    7
    
    
    
    1Total ADV
    
    
    3,479
    
    
    
    3,376
    
    
    
    3,536
    
    
    
    3
    
    
    
    (5
    )Revenue per package (yield):U.S. overnight box
    
    $
    19.00
    
    
    $
    21.21
    
    
    $
    22.40
    
    
    
    (10
    )
    
    
    (5
    )U.S. overnight envelope
    
    
    10.47
    
    
    
    11.65
    
    
    
    11.66
    
    
    
    (10
    )
    
    
    U.S. deferred
    
    
    11.70
    
    
    
    12.94
    
    
    
    13.12
    
    
    
    (10
    )
    
    
    (1
    )U.S. domestic composite
    
    
    14.61
    
    
    
    16.21
    
    
    
    16.68
    
    
    
    (10
    )
    
    
    (3
    )International priority
    
    
    53.10
    
    
    
    57.81
    
    
    
    58.11
    
    
    
    (8
    )
    
    
    (1
    )International domestic(1)
    
    
    7.14
    
    
    
    7.50
    
    
    
    8.80
    
    
    
    (5
    )
    
    
    (15
    )Composite package yield
    
    
    19.72
    
    
    
    21.30
    
    
    
    22.08
    
    
    
    (7
    )
    
    
    (4
    )Freight StatisticsAverage daily freight pounds:U.S.
    
    
    7,141
    
    
    
    7,287
    
    
    
    8,648
    
    
    
    (2
    )
    
    
    (16
    )International priority
    
    
    2,544
    
    
    
    1,959
    
    
    
    2,220
    
    
    
    30
    
    
    
    (12
    )International airfreight
    
    
    1,222
    
    
    
    1,475
    
    
    
    1,817
    
    
    
    (17
    )
    
    
    (19
    )Total average daily freight pounds
    
    
    10,907
    
    
    
    10,721
    
    
    
    12,685
    
    
    
    2
    
    
    
    (15
    )Revenue per pound (yield):U.S.
    
    $
    1.09
    
    
    $
    1.17
    
    
    $
    1.09
    
    
    
    (7
    )
    
    
    7International priority
    
    
    2.01
    
    
    
    2.22
    
    
    
    2.20
    
    
    
    (9
    )
    
    
    1International airfreight
    
    
    0.81
    
    
    
    0.99
    
    
    
    0.88
    
    
    
    (18
    )
    
    
    13Composite freight yield
    
    
    1.27
    
    
    
    1.34
    
    
    
    1.25
    
    
    
    (5
    )
    
    
    7
 (1)
    
    International domestic statistics include our international domestic operations, primarily in the United Kingdom, Canada, China, India and Mexico.  -24-




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Revenues
      2010
    
    
    2009
    
    
    2008U.S. Domestic and Outbound Fuel
Surcharge:Low
    
    
    1.00
    %
    
    
    
    %
    
    
    13.50
    %High
    
    
    8.50
    
    
    
    34.50
    
    
    
    25.00Weighted-average
    
    
    6.20
    
    
    
    17.45
    
    
    
    17.06International Fuel Surcharges:Low
    
    
    1.00
    
    
    
    
    
    
    
    12.00High
    
    
    13.50
    
    
    
    34.50
    
    
    
    25.00Weighted-average
    
    
    9.47
    
    
    
    16.75
    
    
    
    16.11
  Operating Income
   -25-




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Other Income and Expense and Income Taxes
    -26-




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Outlook
     Seasonality of Business
  Contractual Cash Obligations
  
 NEW ACCOUNTING GUIDANCE
  
 RISK FACTORS
  Our business depends on our strong reputation and the value of the FedEx brand.
  -27-




---



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Labor organizations attempt to organize groups of our employees from time to time, and potential
changes in labor laws could make it easier for them to do so.
 We rely heavily on technology to operate our network, and any disruption to FedExs technology
infrastructure or the Internet could harm our operations and our reputation among customers.
 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.
  -28-




---



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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.
 We may be affected by global climate change or by legal, regulatory or market responses to such
change.
  -29-




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We will soon be negotiating a new collective bargaining agreement with the union that represents
our pilots.
 We are also subject to risks and uncertainties that affect many other businesses, including:
 
    
    increasing costs, the volatility of costs and funding requirements and other legal mandates
for employee benefits, especially pension and healthcare benefits;
 
    
    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;
 
    
    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;
 
    
    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, and
FedExs ability to continue to identify and eliminate unnecessary information technology
redundancy and complexity throughout the FedEx organization;
 
    
    adverse weather conditions or natural disasters, such as earthquakes, volcanoes, and
hurricanes, which can disrupt our electrical service, damage our property, disrupt our
operations, increase our fuel costs and adversely affect our shipment levels;
 
    
    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.
 We are directly affected by the state of the economy.
  -30-




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FORWARD-LOOKING STATEMENTS
    -31-




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-32-




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-33-




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-34-




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May 31,2010
    
    
    2009ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    512
    
    
    $
    360Receivables, less allowances of $71 and $80
    
    
    1,455
    
    
    
    1,162Spare parts, supplies and fuel, less
allowances of $170 and $175
    
    
    317
    
    
    
    294Deferred income taxes
    
    
    360
    
    
    
    355Due from parent company and other FedEx subsidiaries
    
    
    839
    
    
    
    841Prepaid expenses and other
    
    
    80
    
    
    
    82Total current assets
    
    
    3,563
    
    
    
    3,094PROPERTY AND EQUIPMENT, AT COSTAircraft and related equipment
    
    
    11,640
    
    
    
    10,118Package handling and ground support equipment
    
    
    2,291
    
    
    
    2,214Vehicles
    
    
    1,681
    
    
    
    1,729Computer and electronic equipment
    
    
    754
    
    
    
    751Facilities and other
    
    
    3,446
    
    
    
    3,39019,812
    
    
    
    18,202Less accumulated depreciation and amortization
    
    
    10,511
    
    
    
    9,840Net property and equipment
    
    
    9,301
    
    
    
    8,362OTHER LONG-TERM ASSETSGoodwill
    
    
    958
    
    
    
    903Other assets
    
    
    776
    
    
    
    947Total other long-term assets
    
    
    1,734
    
    
    
    1,850$
    14,598
    
    
    $
    13,306
   -35-




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##### Table of Contents



May 31,2010
    
    
    2009LIABILITIES AND OWNERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    12
    
    
    $
    153Accrued salaries and employee benefits
    
    
    779
    
    
    
    646Accounts payable
    
    
    952
    
    
    
    835Accrued expenses
    
    
    1,080
    
    
    
    1,029Due to other FedEx subsidiaries
    
    
    146
    
    
    
    144Total current liabilities
    
    
    2,969
    
    
    
    2,807LONG-TERM DEBT, LESS CURRENT PORTION
    
    
    655
    
    
    
    667OTHER LONG-TERM LIABILITIESDeferred income taxes
    
    
    1,500
    
    
    
    1,185Pension, postretirement healthcare and
other benefit obligations
    
    
    786
    
    
    
    596Self-insurance accruals
    
    
    609
    
    
    
    607Deferred lease obligations
    
    
    723
    
    
    
    725Deferred gains, principally related to
aircraft transactions
    
    
    265
    
    
    
    286Other liabilities
    
    
    102
    
    
    
    114Total other long-term liabilities
    
    
    3,985
    
    
    
    3,513COMMITMENTS AND CONTINGENCIESOWNERS EQUITYCommon stock, $0.10 par value; 1,000 shares
authorized, issued and outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    608
    
    
    
    492Retained earnings
    
    
    6,376
    
    
    
    5,689Accumulated other comprehensive income
    
    
    5
    
    
    
    138Total owners equity
    
    
    6,989
    
    
    
    6,319$
    14,598
    
    
    $
    13,306
   -36-




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##### Table of Contents



Years ended May 31,2010
    
    
    2009
    
    
    2008REVENUES
    
    $
    21,243
    
    
    $
    22,167
    
    
    $
    24,246OPERATING EXPENSES:Salaries and employee benefits
    
    
    8,177
    
    
    
    8,031
    
    
    
    8,262Purchased transportation
    
    
    1,058
    
    
    
    1,063
    
    
    
    1,194Rentals and landing fees
    
    
    1,557
    
    
    
    1,598
    
    
    
    1,658Depreciation and amortization
    
    
    1,005
    
    
    
    952
    
    
    
    933Fuel
    
    
    2,652
    
    
    
    3,281
    
    
    
    3,785Maintenance and repairs
    
    
    1,127
    
    
    
    1,348
    
    
    
    1,508Impairment and other charges
    
    
    
    
    
    
    258
    
    
    
    Intercompany charges
    
    
    1,918
    
    
    
    2,093
    
    
    
    2,129Other
    
    
    2,623
    
    
    
    2,778
    
    
    
    2,92020,117
    
    
    
    21,402
    
    
    
    22,389OPERATING INCOME
    
    
    1,126
    
    
    
    765
    
    
    
    1,857OTHER INCOME (EXPENSE):Interest expense
    
    
    
    
    
    
    (4
    )
    
    
    (19
    )Interest income
    
    
    15
    
    
    
    8
    
    
    
    171Other, net
    
    
    (82
    )
    
    
    (37
    )
    
    
    (163
    )(67
    )
    
    
    (33
    )
    
    
    (11
    )INCOME BEFORE INCOME TAXES
    
    
    1,059
    
    
    
    732
    
    
    
    1,846PROVISION FOR INCOME TAXES
    
    
    408
    
    
    
    301
    
    
    
    721NET INCOME
    
    $
    651
    
    
    $
    431
    
    
    $
    1,125
   -37-




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##### Table of Contents



Years ended May 31,2010
    
    
    2009
    
    
    2008Operating Activities:Net income
    
    $
    651
    
    
    $
    431
    
    
    $
    1,125Adjustments
to reconcile net income to cash provided by operating activities:Depreciation and amortization
    
    
    1,005
    
    
    
    952
    
    
    
    933Provision for uncollectible accounts
    
    
    75
    
    
    
    116
    
    
    
    87Deferred income taxes and other noncash items
    
    
    274
    
    
    
    259
    
    
    
    237Noncash impairment charges
    
    
    
    
    
    
    199
    
    
    
    Changes in operating assets and liabilities:Receivables
    
    
    (369
    )
    
    
    316
    
    
    
    (175
    )Other current assets
    
    
    32
    
    
    
    (248
    )
    
    
    (188
    )Accounts payable and other liabilities
    
    
    444
    
    
    
    (603
    )
    
    
    226Other, net
    
    
    23
    
    
    
    (34
    )
    
    
    (60
    )Cash provided by operating activities
    
    
    2,135
    
    
    
    1,388
    
    
    
    2,185Investing Activities:Capital expenditures
    
    
    (1,851
    )
    
    
    (1,345
    )
    
    
    (1,709
    )Proceeds from asset dispositions and other
    
    
    26
    
    
    
    50
    
    
    
    24Collection on loan to parent company
    
    
    
    
    
    
    
    
    
    
    4,225Cash (used in) provided by investing activities
    
    
    (1,825
    )
    
    
    (1,295
    )
    
    
    2,540Financing Activities:Principal payments on debt
    
    
    (152
    )
    
    
    (1
    )
    
    
    (88
    )Payment on loan from parent company
    
    
    
    
    
    
    (17
    )
    
    
    Net payments to parent company
    
    
    
    
    
    
    
    
    
    
    (392
    )Dividend paid to parent company
    
    
    
    
    
    
    
    
    
    
    (4,225
    )Cash used in financing activities
    
    
    (152
    )
    
    
    (18
    )
    
    
    (4,705
    )Effect of exchange rate changes on cash
    
    
    (6
    )
    
    
    (13
    )
    
    
    21Net increase in cash and cash equivalents
    
    
    152
    
    
    
    62
    
    
    
    41Cash and cash equivalents at beginning of period
    
    
    360
    
    
    
    298
    
    
    
    257Cash and cash equivalents at end of period
    
    $
    512
    
    
    $
    360
    
    
    $
    298
   -38-




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##### Table of Contents



AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    TotalCommon
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    OwnersStock
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    EquityBalance at May 31, 2007
    
    $
    
    
    
    $
    484
    
    
    $
    8,373
    
    
    $
    48
    
    
    $
    8,905Net income
    
    
    
    
    
    
    
    
    
    
    1,125
    
    
    
    
    
    
    
    1,125Foreign currency translation adjustment,
net of tax of $13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97
    
    
    
    97Retirement
plans adjustments,
net of tax 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
    
    
    
    5,914Adjustment to opening balances for
retirement plans measurement date
transition, net of tax benefit of $8 and
expense of $7, respectively
    
    
    
    
    
    
    
    
    
    
    (15
    )
    
    
    11
    
    
    
    (4
    )Balance at June 1, 2008
    
    
    
    
    
    
    476
    
    
    
    5,258
    
    
    
    176
    
    
    
    5,910Net income
    
    
    
    
    
    
    
    
    
    
    431
    
    
    
    
    
    
    
    431Foreign currency translation adjustment,
net of tax of $25
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (106
    )
    
    
    (106
    )Retirement
plans adjustments,
net of tax of $39
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68
    
    
    
    68Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    393Contribution by parent company
    
    
    
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    16Balance at May 31, 2009
    
    
    
    
    
    
    492
    
    
    
    5,689
    
    
    
    138
    
    
    
    6,319Net income
    
    
    
    
    
    
    
    
    
    
    651
    
    
    
    
    
    
    
    651Foreign currency translation adjustment,
net of tax of $3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27
    )
    
    
    (27
    )Retirement
plans adjustments,
net of tax of $61
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (106
    )
    
    
    (106
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    518Transfer from other FedEx subsidiaries
    
    
    
    
    
    
    116
    
    
    
    36
    
    
    
    
    
    
    
    152Balance at May 31, 2010
    
    $
    
    
    
    $
    608
    
    
    $
    6,376
    
    
    $
    5
    
    
    $
    6,989
   -39-




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##### Table of Contents



DESCRIPTION OF BUSINESS.
 FISCAL YEARS
 PRINCIPLES OF CONSOLIDATION
 REVENUE RECOGNITION
  ACCOUNTS RECEIVABLE ARRANGEMENT
 CREDIT RISK
 ADVERTISING
 CASH EQUIVALENTS
 SPARE
PARTS, SUPPLIES AND FUEL
  -40-




---



##### Table of Contents



PROPERTY AND EQUIPMENT
  Net Book Value at May 31,Range
    
    2010
    
    
    2009Wide-body aircraft and related equipment
    
    15 to 30 years
    
    $
    5,897
    
    
    $
    5,139Narrow-body and feeder aircraft and related equipment
    
    5 to 18 years
    
    
    1,049
    
    
    
    709Package handling and ground support equipment
    
    3 to 30 years
    
    
    516
    
    
    
    515Vehicles
    
    2 to 10 years
    
    
    299
    
    
    
    365Computer and electronic equipment
    
    2 to 10 years
    
    
    130
    
    
    
    156Facilities and other
    
    2 to 30 years
    
    
    1,410
    
    
    
    1,478
  CAPITALIZED INTEREST
 IMPAIRMENT OF LONG-LIVED ASSETS.
   -41-




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##### Table of Contents



PENSION AND POSTRETIREMENT HEALTHCARE PLANS.
  GOODWILL.
 INTANGIBLE ASSETS.
 INCOME TAXES
    -42-




---



##### Table of Contents



SELF-INSURANCE ACCRUALS
 LEASES
 DEFERRED GAINS
 FOREIGN CURRENCY TRANSLATION
 EMPLOYEES UNDER COLLECTIVE BARGAINING ARRANGEMENTS.
 STOCK-BASED COMPENSATION.
  USE OF ESTIMATES
  -43-




---



##### Table of Contents



-44-




---



##### Table of Contents



Goodwill acquired prior to
May 31, 2008
    
    $
    936Balance as of May 31, 2008
    
    
    936Purchase adjustments and other(1)
    
    
    (33
    )Balance as of May 31, 2009
    
    
    903Purchase adjustments and other(1)
    
    
    (11
    )Transfer between segments(2)
    
    
    66Balance as of May 31, 2010(3)
    
    $
    958
 (1)
    
    Primarily currency translation adjustments.(2)
    
    Transfer of goodwill related to the merger of Caribbean Transportation
Services into us effective June 1, 2009.(3)
    
    We do not have any accumulated impairment losses associated with our goodwill.  May 31, 2010
    
    
    May 31, 2009Gross
    
    
    
    
    
    
    
    
    
    
    GrossCarrying
    
    
    Accumulated
    
    
    Net Book
    
    
    Carrying
    
    
    Accumulated
    
    
    Net BookAmount
    
    
    Amortization
    
    
    Value
    
    
    Amount
    
    
    Amortization
    
    
    ValueCustomer relationships
    
    $
    55
    
    
    $
    (36
    )
    
    $
    19
    
    
    $
    52
    
    
    $
    (28
    )
    
    $
    24Other
    
    
    92
    
    
    
    (91
    )
    
    
    1
    
    
    
    92
    
    
    
    (83
    )
    
    
    9$
    147
    
    
    $
    (127
    )
    
    $
    20
    
    
    $
    144
    
    
    $
    (111
    )
    
    $
    33
 
   May 31,2010
    
    
    2009Accrued Salaries and Employee BenefitsSalaries
    
    $
    149
    
    
    $
    137Employee benefits, including
variable compensation
    
    
    209
    
    
    
    97Compensated absences
    
    
    421
    
    
    
    412$
    779
    
    
    $
    646Accrued ExpensesSelf-insurance accruals
    
    $
    385
    
    
    $
    374Taxes other than income taxes
    
    
    263
    
    
    
    265Other
    
    
    432
    
    
    
    390$
    1,080
    
    
    $
    1,029
  -45-




---



##### Table of Contents



May 31,2010
    
    
    2009Senior unsecured debtInterest rate of 9.65%, due in 2013
    

    $
    300
    
    
    $
    300Interest rate of 7.60%, due in 2098
    
    
    239
    
    
    
    239539
    
    
    
    539Capital lease obligations
    
    
    128
    
    
    
    281667
    
    
    
    820Less current portion
    
    
    12
    
    
    
    153$
    655
    
    
    $
    667
   
    May 31,2010
    
    
    2009Aircraft
    
    $
    15
    
    
    $
    50Package handling and ground support equipment
    
    
    165
    
    
    
    165Vehicles
    
    
    17
    
    
    
    17Other, principally facilities
    
    
    129
    
    
    
    130326
    
    
    
    362Less accumulated amortization
    
    
    304
    
    
    
    293$
    22
    
    
    $
    69
  -46-




---



##### Table of Contents



2010
    
    
    2009
    
    
    2008Minimum rentals
    
    $
    1,229
    
    
    $
    1,252
    
    
    $
    1,261Contingent rentals(1)
    
    
    122
    
    
    
    143
    
    
    
    182$
    1,351
    
    
    $
    1,395
    
    
    $
    1,443
 (1)
    
    Contingent rentals are based on equipment usage.  Operating LeasesAircraft
    
    
    
    
    
    
    TotalCapital
    
    
    and Related
    
    
    Facilities
    
    
    OperatingLeases
    
    
    Equipment
    
    
    and Other
    
    
    Leases2011
    
    $
    18
    
    
    $
    526
    
    
    $
    591
    
    
    $
    1,1172012
    
    
    6
    
    
    
    504
    
    
    
    520
    
    
    
    1,0242013
    
    
    118
    
    
    
    499
    
    
    
    448
    
    
    
    9472014
    
    
    
    
    
    
    473
    
    
    
    388
    
    
    
    8612015
    
    
    
    
    
    
    455
    
    
    
    375
    
    
    
    830Thereafter
    
    
    
    
    
    
    2,003
    
    
    
    3,055
    
    
    
    5,058Total
    
    
    142
    
    
    $
    4,460
    
    
    $
    5,377
    
    
    $
    9,837Less amount representing interest
    
    
    14Present value of net minimum lease
payments
    
    $
    128
   
  -47-




---



##### Table of Contents



2010
    
    
    2009
    
    
    2008Current provision (benefit)Domestic:Federal
    
    $
    (160
    )
    
    $
    (150
    )
    
    $
    223State and local
    
    
    7
    
    
    
    (17
    )
    
    
    26Foreign
    
    
    205
    
    
    
    208
    
    
    
    23552
    
    
    
    41
    
    
    
    484Deferred provision (benefit)Domestic:Federal
    
    
    348
    
    
    
    241
    
    
    
    186State and local
    
    
    18
    
    
    
    14
    
    
    
    20Foreign
    
    
    (10
    )
    
    
    5
    
    
    
    31356
    
    
    
    260
    
    
    
    237$
    408
    
    
    $
    301
    
    
    $
    721
   2010
    
    
    2009
    
    
    2008Statutory U.S. income tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Increase resulting from:Allocation of FedEx Office operating costs
    
    
    1.9
    
    
    
    5.3
    
    
    
    2.5State and local income taxes, net of
federal benefit
    
    
    1.5
    
    
    
    (0.3
    )
    
    
    1.5Other, net
    
    
    0.1
    
    
    
    1.1
    
    
    
    0.1Effective tax rate
    
    
    38.5
    %
    
    
    41.1
    %
    
    
    39.1
    %
   -48-




---



##### Table of Contents



2010
    
    
    2009Deferred Tax
    
    
    Deferred Tax
    
    
    Deferred Tax
    
    
    Deferred TaxAssets
    
    
    Liabilities
    
    
    Assets
    
    
    LiabilitiesProperty, equipment,
leases and intangibles
    
    $
    306
    
    
    $
    1,577
    
    
    $
    344
    
    
    $
    1,342Employee benefits
    
    
    413
    
    
    
    35
    
    
    
    306
    
    
    
    37Self-insurance accruals
    
    
    309
    
    
    
    
    
    
    
    293
    
    
    
    Other
    
    
    311
    
    
    
    877
    
    
    
    357
    
    
    
    757Net operating loss/credit
carryforwards
    
    
    94
    
    
    
    
    
    
    
    74
    
    
    
    Valuation allowances
    
    
    (84
    )
    
    
    
    
    
    
    (68
    )
    
    
    $
    1,349
    
    
    $
    2,489
    
    
    $
    1,306
    
    
    $
    2,136
  2010
    
    
    2009Current deferred tax asset
    
    $
    360
    
    
    $
    355Noncurrent deferred tax liability
    
    
    (1,500
    )
    
    
    (1,185
    )$
    (1,140
    )
    
    $
    (830
    )
      -49-




---



##### Table of Contents



2010
    
    
    2009
    
    
    2008Balance at beginning of year
    
    $
    52
    
    
    $
    73
    
    
    $
    59Increases for tax positions taken in the current year
    
    
    3
    
    
    
    1
    
    
    
    10Increases for tax positions taken in prior years
    
    
    8
    
    
    
    5
    
    
    
    13Decreases for tax positions taken in prior years
    
    
    (3
    )
    
    
    (24
    )
    
    
    (8
    )Settlements
    
    
    (1
    )
    
    
    (3
    )
    
    
    (1
    )Balance at end of year
    
    $
    59
    
    
    $
    52
    
    
    $
    73
 
  RETIREMENT PLANS SPONSORED BY FEDEX
      -50-




---



##### Table of Contents



2010
    
    
    2009
    
    
    2008Pension plans sponsored by FedEx
    
    $
    158
    
    
    $
    48
    
    
    $
    159Other U.S. domestic and international pension plans
    
    
    41
    
    
    
    36
    
    
    
    34U.S. domestic and international defined
contribution plans
    
    
    110
    
    
    
    161
    
    
    
    135Postretirement healthcare plans
    
    
    35
    
    
    
    47
    
    
    
    66$
    344
    
    
    $
    292
    
    
    $
    394
 PENSION PLANS.
  May 31,2010
    
    
    2009Projected benefit obligation (PBO)
    
    $
    13,331
    
    
    $
    10,126Fair value of plan assets
    
    
    12,790
    
    
    
    10,437Funded status
    
    $
    (541
    )
    
    $
    311
  Pension Plans2010
    
    
    2009
    
    
    2008Discount rate used to determine benefit obligation(1)
    
    
    6.37
    %
    
    
    7.68
    %
    
    
    6.96
    %Discount rate used to determine net periodic benefit cost
    
    
    7.68
    
    
    
    7.15
    
    
    
    6.01Rate of increase in future compensation levels
used to determine benefit obligation(2)
    
    
    4.63
    
    
    
    4.42
    
    
    
    4.51Rate of increase in future compensation levels
used to determine net periodic benefit cost(2)
    
    
    4.42
    
    
    
    4.49
    
    
    
    4.47Expected long-term rate of return on assets
    
    
    8.00
    
    
    
    8.50
    
    
    
    8.50
 (1)
    
    The assumed interest rate used to discount the estimated future benefit payments that have been accrued to date (the PBO) to their present value.(2)
    
    Average future salary increases based on age and years of service.    -51-




---



##### Table of Contents



DEFINED CONTRIBUTION PLANS
 FEDEX EXPRESS SPONSORED RETIREMENT PLANS
 PENSION PLANS.
 POSTRETIREMENT HEALTHCARE PLANS
 RECENT ACCOUNTING GUIDANCE.
   -52-




---



##### Table of Contents



Pension Plans
    
    
    Postretirement Healthcare Plans2010
    
    
    2009
    
    
    2010
    
    
    2009Accumulated Benefit Obligation (ABO)
    
    $
    397
    
    
    $
    328Changes in Projected Benefit Obligation (PBO) and
Accumulated Postretirement Benefit Obligation (APBO)PBO/APBO at the beginning of year
    
    $
    416
    
    
    $
    463
    
    
    $
    365
    
    
    $
    418Adjustments due to change in measurement dateService cost plus interest cost during gap period
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    13Additional experience during gap period
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    (15
    )Changes due to gap period cash flow
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    (5
    )Service cost
    
    
    22
    
    
    
    22
    
    
    
    19
    
    
    
    25Interest cost
    
    
    23
    
    
    
    21
    
    
    
    26
    
    
    
    28Actuarial loss (gain)
    
    
    88
    
    
    
    (64
    )
    
    
    82
    
    
    
    (78
    )Benefits paid
    
    
    (14
    )
    
    
    (17
    )
    
    
    (44
    )
    
    
    (41
    )Settlements
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    Amendments
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    Participant contributions
    
    
    3
    
    
    
    1
    
    
    
    21
    
    
    
    20Other
    
    
    (26
    )
    
    
    (19
    )
    
    
    
    
    
    
    PBO/APBO at the end of year
    
    $
    513
    
    
    $
    416
    
    
    $
    469
    
    
    $
    365Change in Plan AssetsFair value
of plan assets at the beginning of year
    
    $
    204
    
    
    $
    218
    
    
    $
    
    
    
    $
    Adjustments due to change in measurement dateAdditional experience during gap period
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    Changes due to gap period cash flow
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    Actual return on plan assets
    
    
    37
    
    
    
    (31
    )
    
    
    
    
    
    
    Company contributions
    
    
    30
    
    
    
    37
    
    
    
    23
    
    
    
    21Benefits paid
    
    
    (14
    )
    
    
    (17
    )
    
    
    (44
    )
    
    
    (41
    )Other
    
    
    (20
    )
    
    
    (6
    )
    
    
    21
    
    
    
    20Fair value
of plan assets at the end of year
    
    $
    237
    
    
    $
    204
    
    
    $
    
    
    
    $
    Funded Status of the Plans
    
    $
    (276
    )
    
    $
    (212
    )
    
    $
    (469
    )
    
    $
    (365
    )Amount Recognized in the Balance Sheet at May 31:Current pension, postretirement healthcare and other
benefit obligations
    
    $
    (7
    )
    
    $
    (5
    )
    
    $
    (25
    )
    
    $
    (24
    )Noncurrent pension, postretirement healthcare and other
benefit obligations
    
    
    (269
    )
    
    
    (207
    )
    
    
    (444
    )
    
    
    (341
    )Net amount recognized
    
    $
    (276
    )
    
    $
    (212
    )
    
    $
    (469
    )
    
    $
    (365
    )Amounts Recognized in AOCI and not yet reflected in
Net Periodic Benefit Cost:Net actuarial loss (gain)
    
    $
    119
    
    
    $
    69
    
    
    $
    (117
    )
    
    $
    (209
    )Prior service cost and other
    
    
    3
    
    
    
    3
    
    
    
    2
    
    
    
    2Total
    
    $
    122
    
    
    $
    72
    
    
    $
    (115
    )
    
    $
    (207
    )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
    
    
    $
    4
    
    
    $
    (4
    )
    
    $
    (10
    )Prior service cost and other
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    7
    
    
    $
    4
    
    
    $
    (4
    )
    
    $
    (10
    )
  -53-




---



##### Table of Contents



PBO Exceeds the Fair Value ofPlan Assets2010
    
    
    2009Pension BenefitsFair value of plan assets
    
    $
    237
    
    
    $
    204PBO
    
    
    (513
    )
    
    
    (416
    )Net funded status
    
    $
    (276
    )
    
    $
    (212
    )
 ABO Exceeds the Fair Value ofPlan Assets2010
    
    
    2009Pension BenefitsABO(1)
    
    $
    372
    
    
    $
    (288
    )Fair value of plan assets
    
    $
    208
    
    
    $
    154PBO
    
    
    (474
    )
    
    
    (361
    )Net funded status
    
    $
    (266
    )
    
    $
    (207
    )
 (1)
    
    ABO not used in determination of funded status.   Pension Plans
    
    
    Postretirement Healthcare Plans2010
    
    
    2009
    
    
    2008
    
    
    2010
    
    
    2009
    
    
    2008Service cost
    
    $
    22
    
    
    $
    22
    
    
    $
    23
    
    
    $
    19
    
    
    $
    25
    
    
    $
    28Interest cost
    
    
    24
    
    
    
    21
    
    
    
    21
    
    
    
    26
    
    
    
    28
    
    
    
    27Expected return on plan assets
    
    
    (14
    )
    
    
    (14
    )
    
    
    (15
    )
    
    
    
    
    
    
    
    
    
    
    Recognized actuarial losses (gains) and other
    
    
    9
    
    
    
    7
    
    
    
    5
    
    
    
    (10
    )
    
    
    (6
    )
    
    
    11Net periodic benefit cost
    
    $
    41
    
    
    $
    36
    
    
    $
    34
    
    
    $
    35
    
    
    $
    47
    
    
    $
    66
  -54-




---



##### Table of Contents



2010
    
    
    2009Postretirement Healthcare
    
    
    
    
    
    
    
    
    
    
    Postretirement HealthcarePension Plans
    
    
    Plans
    
    
    Pension Plans
    
    
    PlansGross
    
    
    Net of Tax
    
    
    Gross
    
    
    Net of Tax
    
    
    Gross
    
    
    Net of Tax
    
    
    Gross
    
    
    Net of TaxAmount
    
    
    Amount
    
    
    Amount
    
    
    Amount
    
    
    Amount
    
    
    Amount
    
    
    Amount
    
    
    AmountNet gain (loss) and other
arising during period
    
    $
    59
    
    
    $
    39
    
    
    $
    101
    
    
    $
    59
    
    
    $
    (19
    )
    
    $
    (13
    )
    
    $
    (91
    )
    
    $
    (59
    )Gain from settlements and
curtailments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    1
    
    
    
    
    
    
    
    Amortizations:Actuarial (losses) gains
and other
    
    
    (4
    )
    
    
    (3
    )
    
    
    11
    
    
    
    11
    
    
    
    (5
    )
    
    
    (3
    )
    
    
    6
    
    
    
    6Total recognized in OCI
    
    $
    55
    
    
    $
    36
    
    
    $
    112
    
    
    $
    70
    
    
    $
    (22
    )
    
    $
    (15
    )
    
    $
    (85
    )
    
    $
    (53
    )
  Pension Plans
    
    
    Postretirement Healthcare Plans2010
    
    
    2009
    
    
    2008
    
    
    2010
    
    
    2009
    
    
    2008Discount rate used to determine benefit obligation(1)
    
    
    4.76
    %
    
    
    5.70
    %
    
    
    5.14
    %
    
    
    6.11
    %
    
    
    7.27
    %
    
    
    6.81
    %Discount rate used to determine net periodic benefit cost
    
    
    5.70
    
    
    
    5.16
    
    
    
    5.01
    
    
    
    7.27
    
    
    
    7.13
    
    
    
    6.08Rate of increase in future compensation levels
used to determine benefit obligation(2)
    
    
    4.08
    
    
    
    3.86
    
    
    
    4.55
    
    
    
    
    
    
    
    
    
    
    
    Rate of increase in future compensation levels
used to determine net periodic benefit cost(2)
    
    
    3.86
    
    
    
    4.59
    
    
    
    4.28
    
    
    
    
    
    
    
    
    
    
    
    Expected long-term rate of return on assets
    
    
    6.64
    
    
    
    7.16
    
    
    
    6.73
    
    
    
    
    
    
    
    
    
    
    
    
 (1)
    
    The assumed interest rate used to discount the estimated future benefit payments that have been accrued to date (the PBO) to their present value.(2)
    
    Average future salary increases based on age and years of service.  PostretirementPension Plans
    
    
    Healthcare Plans2011
    
    $
    16
    
    
    $
    252012
    
    
    15
    
    
    
    272013
    
    
    17
    
    
    
    282014
    
    
    17
    
    
    
    282015
    
    
    19
    
    
    
    292016-2020
    
    
    114
    
    
    
    174
  
  -55-




---



##### Table of Contents



2010
    
    
    2009
    
    
    2008REVENUE BY SERVICE TYPEPackage:U.S. overnight box
    
    $
    5,602
    
    
    $
    6,074
    
    
    $
    6,578U.S. overnight envelope
    
    
    1,640
    
    
    
    1,855
    
    
    
    2,012U.S. deferred
    
    
    2,589
    
    
    
    2,789
    
    
    
    2,995Total domestic package revenue
    
    
    9,831
    
    
    
    10,718
    
    
    
    11,585International Priority (IP)
    
    
    7,087
    
    
    
    6,978
    
    
    
    7,666International domestic(1)
    
    
    578
    
    
    
    565
    
    
    
    663Total package revenue
    
    
    17,496
    
    
    
    18,261
    
    
    
    19,914Freight:U.S.
    
    
    1,980
    
    
    
    2,165
    
    
    
    2,398International priority freight
    
    
    1,303
    
    
    
    1,104
    
    
    
    1,243International airfreight
    
    
    251
    
    
    
    369
    
    
    
    406Total freight revenue
    
    
    3,534
    
    
    
    3,638
    
    
    
    4,047Other
    
    
    213
    
    
    
    268
    
    
    
    285$
    21,243
    
    
    $
    22,167
    
    
    $
    24,246GEOGRAPHICAL INFORMATION(2)Revenues:U.S.
    
    $
    11,830
    
    
    $
    12,903
    
    
    $
    14,009International
    
    
    9,413
    
    
    
    9,264
    
    
    
    10,237$
    21,243
    
    
    $
    22,167
    
    
    $
    24,246Noncurrent assets:U.S.
    
    $
    6,818
    
    
    $
    6,702
    
    
    $
    6,764International
    
    
    4,217
    
    
    
    3,510
    
    
    
    3,388$
    11,035
    
    
    $
    10,212
    
    
    $
    10,152
 (1)
    
    International domestic revenues include our international domestic operations, primarily in the United Kingdom,
Canada, China, India and Mexico. 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.  -56-




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##### Table of Contents



2010
    
    
    2009
    
    
    2008Cash payments for:Interest (net of capitalized interest)
    
    $
    
    
    
    $
    5
    
    
    $
    19Income taxes
    
    $
    250
    
    
    $
    421
    
    
    $
    526Income tax refunds received
    
    
    (207
    )
    
    
    (313
    )
    
    
    (76
    )Cash tax payments, net
    
    $
    43
    
    
    $
    108
    
    
    $
    450
    
  -57-




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##### Table of Contents



Aircraft-Aircraft(1)
    
    
    Related(2)
    
    
    Other(3)
    
    
    Total2011
    
    $
    824
    
    
    $
    104
    
    
    $
    28
    
    
    $
    9562012
    
    
    839
    
    
    
    10
    
    
    
    14
    
    
    
    8632013
    
    
    622
    
    
    
    19
    
    
    
    11
    
    
    
    6522014
    
    
    480
    
    
    
    
    
    
    
    10
    
    
    
    4902015
    
    
    493
    
    
    
    
    
    
    
    8
    
    
    
    501Thereafter
    
    
    1,431
    
    
    
    
    
    
    
    84
    
    
    
    1,515
 (1)
    
    Our obligation to purchase 15 of these aircraft (Boeing 777
Freighters, or B777Fs) is conditioned upon there being no event that
causes us or our employees not to be covered by the Railway Labor
Act of 1926, as amended. Also, subsequent to May 31, 2010, we
entered into an agreement replacing the previously disclosed
non-binding letter of intent with another party to acquire two
additional B777Fs and expect to take delivery of these aircraft in
2011. These aircraft are not included in the table above.(2)
    
    Primarily aircraft modifications.(3)
    
    Primarily advertising and promotions contracts.   B757
    
    
    B777F(1)
    
    
    ATR 72
    
    
    Total2011
    
    
    16
    
    
    
    4
    
    
    
    8
    
    
    
    282012
    
    
    8
    
    
    
    5
    
    
    
    
    
    
    
    132013
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    52014
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    32015
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    3Thereafter
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    10Total
    
    
    24
    
    
    
    30
    
    
    
    8
    
    
    
    62
 (1)
    
    Our obligation to purchase 15 of these aircraft is
conditioned upon there being no event that causes us or our
employees not to be covered by the Railway Labor Act of
1926, as amended. Also, subsequent to May 31, 2010, we
entered into an agreement replacing the previously
disclosed non-binding letter of intent with another party
to acquire  two additional B777Fs and expect to take
delivery of these aircraft in 2011. These aircraft are not
included in the table above.  -58-




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##### Table of Contents



Wage-and-Hour. Bibo v. FedEx Express Foster Foster
 ATA Airlines.
 Other.
       -59-




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##### Table of Contents



First
    
    
    Second
    
    
    Third
    
    
    Fourth(in millions)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter2010Revenues
    
    $
    4,882
    
    
    
    5,235
    
    
    $
    5,365
    
    
    $
    5,761Operating income
    
    
    100
    
    
    
    344
    
    
    
    270
    
    
    
    412Net income
    
    
    50
    
    
    
    201
    
    
    
    153
    
    
    
    2472009 (1)Revenues
    
    $
    6,360
    
    
    $
    6,040
    
    
    $
    5,010
    
    
    $
    4,757Operating income (loss)
    
    
    334
    
    
    
    527
    
    
    
    45
    
    
    
    (141
    )Net income (loss)
    
    
    197
    
    
    
    327
    
    
    
    (1
    )
    
    
    (92
    )
 (1)
    
    Operating expenses for the fourth quarter of 2009 include a
charge of $258 million primarily related to
aircraft-related asset impairments.  -60-




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##### Table of Contents



QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 INTEREST RATES.
 FOREIGN CURRENCY.
 COMMODITY.
  OTHER.
  -61-




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##### Table of Contents



-62-




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##### Table of Contents



ADDITIONSBALANCE
    
    
    
    
    
    
    CHARGED
    
    
    
    
    
    
    BALANCEAT
    
    
    CHARGED
    
    
    TO
    
    
    
    
    
    
    ATBEGINNING
    
    
    TO COSTS
    
    
    OTHER
    
    
    
    
    
    
    END OFDESCRIPTION
    
    OF YEAR
    
    
    EXPENSES
    
    
    ACCOUNTS
    
    
    DEDUCTIONS
    
    
    YEARAccounts Receivable Reserves:Allowance for Doubtful
Accounts2010
    
    $
    43
    
    
    $
    75
    
    
    $
    
    
    
    $
    84
    (a)
    
    $
    342009
    
    
    27
    
    
    
    116
    
    
    
    
    
    
    
    100
    (a)
    
    
    432008
    
    
    27
    
    
    
    87
    
    
    
    
    
    
    
    87
    (a)
    
    
    27Allowance for Revenue
Adjustments2010
    
    $
    37
    
    
    $
    
    
    
    $
    291
    (b)
    
    $
    291
    (c)
    
    $
    372009
    
    
    42
    
    
    
    
    
    
    
    311
    (b)
    
    
    316
    (c)
    
    
    372008
    
    
    34
    
    
    
    
    
    
    
    345
    (b)
    
    
    337
    (c)
    
    
    42Inventory Valuation
Allowance:2010
    
    $
    175
    
    
    $
    12
    
    
    $
    
    
    
    $
    17
    
    
    $
    1702009
    
    
    163
    
    
    
    15
    
    
    
    
    
    
    
    3
    
    
    
    1752008
    
    
    156
    
    
    
    10
    
    
    
    
    
    
    
    3
    
    
    
    163
 (a)
    
    Uncollectible accounts written off, net of recoveries.(b)
    
    Principally charged against revenue.(c)
    
    Service failures, rebills and other.  -63-




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##### Table of Contents



Year Ended May 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006Earnings:Income before income taxes
    
    $
    1,059
    
    
    $
    732
    
    
    $
    1,846
    
    
    $
    1,984
    
    
    $
    1,734Add back:Interest expense, net of capitalized interest
    
    
    
    
    
    
    4
    
    
    
    19
    
    
    
    40
    
    
    
    54Portion of rent expense representative of
interest factor
    
    
    572
    
    
    
    576
    
    
    
    587
    
    
    
    580
    
    
    
    630Earnings as adjusted
    
    $
    1,631
    
    
    $
    1,312
    
    
    $
    2,452
    
    
    $
    2,604
    
    
    $
    2,418Fixed Charges:Interest expense, net of capitalized interest
    
    $
    
    
    
    $
    4
    
    
    $
    19
    
    
    $
    40
    
    
    $
    54Capitalized interest
    
    
    65
    
    
    
    58
    
    
    
    46
    
    
    
    32
    
    
    
    27Portion of rent expense representative of
interest factor
    
    
    572
    
    
    
    576
    
    
    
    587
    
    
    
    580
    
    
    
    630$
    637
    
    
    $
    638
    
    
    $
    652
    
    
    $
    652
    
    
    $
    711Ratio of Earnings to Fixed Charges
    
    
    2.6
    
    
    
    2.1
    
    
    
    3.8
    
    
    
    4.0
    
    
    
    3.4
  -64-




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##### Table of Contents



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
    
    
    First Amendment dated December 29, 2009 (but effective as of
September 1, 2008) to the Composite Lease Agreement dated May 21,
2007 (but effective as of January 1, 2007) between the Authority
and FedEx Express. (Filed as Exhibit 10.1 to FedExs FY10 Third
Quarter Report on Form 10-Q, and incorporated herein by
reference.)10.3
    
    
    Second Amendment dated March 30, 2010 (but effective as of June 1,
2009) and Third Amendment dated April 27, 2010 (but effective as
of July 1, 2009), each amending the Composite Lease Agreement
dated May 21, 2007 (but effective as of January 1, 2007) between
the Authority and FedEx Express. (Filed as Exhibit 10.3 to
FedExs FY10 Annual Report on Form 10-K, and incorporated herein
by reference.)10.4
    
    
    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.)10.5
    
    
    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.)10.6
    
    
    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.)10.7
    
    
    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.)10.8
    
    
    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.)10.9
    
    
    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.)
  E-1




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit10.10
    
    
    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.)10.11
    
    
    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.)10.12
    
    
    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.)10.13
    
    
    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.)10.14
    
    
    First Amendment dated December 29, 2009 (but effective as of
September 1, 2008) to the Special Facility Ground Lease Agreement
dated as of July 1, 1993 between the Authority and FedEx Express.
(Filed as Exhibit 10.2 to FedExs FY10 Third Quarter Report on
Form 10-Q, and incorporated herein by reference.)Aircraft-Related Agreement10.15
    
    
    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.)10.16
    
    
    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.)10.17
    
    
    Supplemental Agreement No. 2 dated as of July 14, 2008 to the
Boeing 777 Freighter Purchase Agreement dated as of November 7,
2006 between The Boeing Company and FedEx Express. (Filed as
Exhibit 10.3 to FedExs FY09 Second Quarter Report on Form 10-Q,
and incorporated herein by reference.)10.18
    
    
    Supplemental Agreement No. 3 dated as of December 15, 2008 (and
related side letters) to the 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 10.4 to FedExs FY09 Second Quarter Report on
Form 10-Q, and incorporated herein by reference.)10.19
    
    
    Supplemental Agreement No. 4 dated as of January 9, 2009 (and
related side letters) to the 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 FY09 Third Quarter Report on
Form 10-Q, and incorporated herein by reference.)
  E-2




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit10.20
    
    
    Side letters dated May 29, 2009 and May 19, 2009, amending the
Boeing 777 Freighter Purchase Agreement dated as of November 7,
2006 between The Boeing Company and FedEx Express. Confidential
treatment has been requested for confidential commercial and
financial information, pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. (Filed as Exhibit 10.17 to
FedExs FY09 Annual Report on Form 10-K, and incorporated herein
by reference.)10.21
    
    
    Supplemental Agreement No. 5 dated as of January 11, 2010 to the
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 10.3 to
FedExs FY10 Third Quarter Report on Form 10-Q, and incorporated
herein by reference.)10.22
    
    
    Supplemental Agreement No. 6 dated as of March 17, 2010,
Supplemental Agreement No. 7 dated as of March 17, 2010, and
Supplemental Agreement No. 8 (and related side letters) dated as
of April 30, 2010, each amending the Boeing 777 Freighter Purchase
Agreement dated as of November 7, 2006 between The Boeing Company
and FedEx Express. Confidential treatment has been requested for
confidential commercial and financial information, pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
(Filed as Exhibit 10.22 to FedExs FY10 Annual Report on Form
10-K, and incorporated herein by reference.)U.S. Postal Service Agreement10.23
    
    
    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.)10.24
    
    
    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.)10.25
    
    
    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.)10.26
    
    
    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.)
  E-3




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##### Table of Contents



ExhibitNumber
    
    Description of Exhibit10.27
    
    
    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.)10.28
    
    
    Letter Agreement dated October 23, 2008 and Amendment dated
October 23, 2008, each amending 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 10.1 to FedExs FY09 Second Quarter Report on Form 10-Q,
and incorporated herein by reference.)10.29
    
    
    Letter Agreement dated March 4, 2009, amending the Transportation
Agreement dated July 31, 2006 between the United States Postal
Service and FedEx Express. (Filed as Exhibit 10.24 to FedExs
FY09 Annual Report on Form 10-K, and incorporated herein by
reference.)10.30
    
    
    Letter Agreement dated September 29, 2009, amending 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 10.1 to FedExs FY10
Second Quarter Report on Form 10-Q, and incorporated herein by
reference.)10.31
    
    
    Amendment dated December 8, 2009 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 10.4 to FedExs FY10 Third Quarter Report on
Form 10-Q, and incorporated herein by reference.)Financing Agreement10.32
    
    
    Three-Year Credit Agreement dated as of July 22, 2009 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 22, 2009, 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.
  E-4




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##### Table of Contents



ExhibitNumber
    
    Description of ExhibitOther Exhibits*12
    
    
    Statement re Computation of Ratio of Earnings to Fixed Charges (presented
on page
64

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-5