Fedex Annual Report

Dear ShareownerS:

You Ain’t Seen nothing Yet.

AnnuAl report 2010

Letter from the chairman

This pasT year, we did whaT sTrong companies should do in a downTurn: emerge sTronger Than ever.

I have never been more proud of our FedEx team. Why? Because today, I can look to the future of FedEx and say, like the old ’70s rock song, “You ain’t seen nothing yet.” Coming through the toughest economic contraction since World War II, we stuck to our strategy, to our long view of the future. Despite the downturn, we kept making smart investments that put us far ahead of any competitor. We kept breaking technological ground to give our customers better service and to make our operations more sustainable. We worked as a team to keep our Purple Promise — to make every FedEx experience outstanding. The greatest thanks for these achievements go to more than a quarter million FedEx team members around the world.

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Letter from the chairman

They are Fedex. Their dedicaTion To service, To innovaTion, and To responsibiliTy broughT us To where we are Today.

As we moved through the downturn, we cut billions in costs to adjust to the “new normal.” Every FedEx team member was asked to share in that sacrifice. But today, I’m pleased to report that we’ve restored many compensation programs and 401(k) matching contributions. By sticking to our long-term strategy, combined with our cost-reduction efforts, we finished FY10 with positive momentum. In the first half of the fiscal year, earnings were down year over year, but in the second half, major global economies began emerging from the recession, and our volumes grew accordingly. We finished the year strong with net income of $1.2 billion. Our share price rose by more than 50 percent over the course of the fiscal year, outpacing the S&P 500, the Dow Jones Industrial Average, and the Dow Jones Transportation Average. Over the years, we have built a business model that allowed us to adjust shipping capacity to...