FedEx Corporation Annual Report 2007
Introduction

Financial Highlights

Message from the Chairman

FedEx Overview

Possibility Speaks
Message from the CFO

Board of Directors

Senior Officers

Corporate Information

Financials & PDF's

MESSAGE FROM THE CHIEF FINANCIAL OFFICER


To Our Shareowners:

FedEx delivered solid financial performance for our shareowners despite increasingly challenging economic conditions in fiscal 2007. Our results benefited from the continued strong growth of our ground and international express businesses and from our investments to expand our portfolio of service offerings, drive revenue growth and increase productivity.

We completed strategic acquisitions in three dynamic international markets - China, India and the United Kingdom - and began offering domestic time-definite service to customers throughout China. In the United States, we absorbed the acquisition and network integration costs associated with our new FedEx National LTL business. We also made investments in technology and network infrastructure at FedEx Ground, which have resulted in faster delivery lanes and increased productivity. Finally, we continued to expand the FedEx Kinko's retail network with 226 new store openings in FY07.

During the year, we also announced our intentions to modernize our employee retirement plans in response to a changing regulatory landscape and shifting demographic trends. The recently adopted and proposed accounting rules presented an unacceptable level of risk and volatility to the future of the company. Under our new programs, we expect our retirement plan costs to become more predictable. In addition, we were able to reduce the impact on shareholder equity of the adoption of SFAS 158 by $1 billion. We feel these changes balance our responsibilities to remain competitive in the future, to provide our employees with a comfortable retirement and to maintain our fiscal responsibility to our shareowners.

In FY08, we will continue to be challenged by a soft economic environment; however, we will continue to make significant investments in our global networks. These investments will position our company to continue to achieve our long-term financial goals of improving earnings, margins, cash flows and returns for our shareowners. We have an excellent track record in this regard. Over the last 10 years, our revenues have grown more than 11 percent on a compounded annual basis while net income has increased more than 18 percent. Equally as important, our shareholders have earned more than 15 percent annually on their investment during that time.

Thank you for your continued support as a FedEx shareowner. I hope you share my confidence that we will deliver on our long-term financial goals for our investors.

Alan B. Graf, Jr.
Executive Vice President and Chief Financial Officer

* Shows the value, at the end of each of the last five fiscal years, of $100 invested in FedEx Corporation common stock or the relevant index on May 31, 2002, and assumes reinvestment of dividends. Fiscal year ended May 31.