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					                                                                              MORGAN            STANLEY               RESEARCH
                                                                              NORTH          AMERICA


                                                                              Morgan Stanley & Co. Incorporated   William J. Greene, CFA
                                                                                                                  William.Greene@morganstanley.com
                                                                                                                  +1 (1)212 761 8017

                                                                                                                  Adam Longson, CFA, CPA
                                                                                                                  Adam.Longson@morganstanley.com
                                                                                                                  +1 (1)212 761 4061


                July 27, 2010


Stock Rating    FedEx Corporation
Equal-weight

Industry View
                Airfreight Cycle Still Going
Attractive
                Strong                                                        Key Ratios and Statistics
                                                                              Reuters: FDX.N Bloomberg: FDX US
                                                                              Freight Transportation / United States of America
                Another positive data point for airfreight-related            Shr price, close (Jul 26, 2010)                                    $83.39
                stocks. FDX’s announcement is a positive read for             Mkt cap, curr (mm)                                                $26,270
                UPS, AAWW and the freight forwarders and suggests             52-Week Range                                                $97.73-63.47
                international airfreight and global trade remain strong.
                At 14.9X our revised F2011 EPS, FDX is not expensive,         Fiscal Year ending                      05/09    05/10    05/11e     05/12e
                and we see notable value for long-term investors.             EPS ($)**                                3.76    3.76       5.60        7.12
                Conservative guidance may also support add’l positive         Prior EPS ($)**                             -       -       5.12        6.60
                EPS revisions, but as a levered play on the global            P/E**                                    14.7    22.2       14.9        11.7
                recovery, demand must continue to surprise for the            EBITDA ($mm)**                          3,926   3,956      4,970       5,869
                                                                              EV/EBITDA                                 5.1     6.2        5.3         4.6
                stock to outperform. The next big catalyst for FDX is
                                                                              Return on avg NOA (%)                     6.6     7.4        9.3        10.4
                likely to revolve around holiday demand, inventories and
                                                                              Div yld (%)                               0.8     0.5        0.6         0.7
                the potential for another airfreight capacity crunch.         Consensus EPS ($)§                       3.76    3.76       4.98        6.05
                What’s New: Just a month after issuing disappointing          P/E, consensus                           14.7    22.2       16.8        13.8
                guidance on the F4Q10 earnings call, FDX announced            ModelWare EPS ($)                        4.11    3.95       5.63        6.99
                                                                              Prior ModelWare EPS ($)                     -       -       5.15        6.47
                positive revisions to F1Q and FY11 guidance. F1Q              Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare
                guidance was revised to $1.05-1.25 from $0.85-1.05            framework (please see explanation later in this note).
                                                                              § = Consensus data is provided by FactSet Estimates.
                while FY11 was raised to $4.60-5.20 from 4.40-5.20.           ** = Based on consensus methodology
                                                                              e = Morgan Stanley Research estimates
                The key drivers of the raise were improving yields and
                stronger volume growth in ground and int’l. FDX noted
                                                                              Quarterly EPS
                that growth rates remain at F4Q levels. In other words,
                the 2nd derivative on int’l has not turned negative despite                                           2010     2010     2011e      2011e
                tougher Y/Y comps. We’re raising our FY11 to $5.60.           Quarter                     2009        Prior Current       Prior Current
                                                                              Q1                           1.23           -     0.58       1.02       1.25
                Guidance still looks conservative. While positive for         Q2                           1.58           -     1.10       1.32       1.53
                global demand trends, we view this revision as partly a       Q3                           0.31           -     0.76       1.14       1.14
                FDX specific case of conservative guidance. This new          Q4                           0.64           -     1.33       1.64       1.68
                                                                              e = Morgan Stanley Research estimates
                guidance also seems conservative as FDX only
                adjusted for the F1Q revision. Historically, F1Q
                represents 22-23% of full year EPS. If this holds, the top
                end of F1Q guidance suggests FY11 EPS of $5.45-5.70.
                Too early to assess potential for holiday crunch. If
                inventories remain lean and ocean capacity is tight
                heading into peak season, FDX could benefit from
                another holiday capacity crunch. Thus far, we’ve seen         Morgan Stanley does and seeks to do business with
                                                                              companies covered in Morgan Stanley Research. As
                limited restocking, but it’s too early to assess holiday
                                                                              a result, investors should be aware that the firm may
                trends. Moreover, we are starting to hear anecdotes of        have a conflict of interest that could affect the
                shippers shifting to ocean and looking to order early to      objectivity of Morgan Stanley Research. Investors
                avoid another capacity crunch. European airfreight also       should consider Morgan Stanley Research as only a
                seems to be cooling and efforts by steamships have            single factor in making their investment decision.
                temporarily alleviated the ocean capacity shortage.           For analyst certification and other important
                                                                              disclosures, refer to the Disclosure Section,
                                                                              located at the end of this report.
                                                                                          MORGAN           STANLEY        RESEARCH

                                                                                          July 27, 2010
                                                                                          FedEx Corporation




Risk-Reward Snapshot: FedEx Corp. (FDX, Equal-weight)
Levered Play on Global Trade and JIT Inventory Trends                                                              Investment Thesis
 $ 120                                                                                                             Although guidance is conservative, FDX is a
                                                                                             $106 (+27%)           levered play on recovery, so demand must
   100                                                                                                             continue to surprise for the stock to work.
                                                                                             $97 (+16%)
                                                                                       $ 83.39                     We see some signs of holiday restocking, but
    80                                                                                                             if inventories remain lean and ocean capacity
                                                                                                                   is tight heading into peak season, FDX could
                                                                                               $67 (-20%)
    60                                                                                                             see upside from another holiday capacity
                                                                                                                   crunch. Near-term cost headwinds could
                                                                                                                   also mute the op. leverage, but many of
    40
                                                                                                                   these challenges are temporary. Margins
                                                                                                                   should improve in F2H/11.
    20
                                                                                                                   Investment Positives
      0                                                                                                            1. Cost headwinds are temporary. Many
      Jul-08         Jan-09                     Jul-09            Jan-10              Jul-10                          will fade in F2H/11 and even reverse in
        Base Case (Dec-10)                 Historical Stock Performance           Current Stock Price
                                                                                                                      F2012.
Source: FactSet, Morgan Stanley Research (above and below)

                                                                                           2. History of conservative guidance and
  Bull Case $106                            15.5x Bull Case CY2011e EPS of $6.83*             revisions suggests we will see more
  Rapid return to new peak.                 Assumptions F2009A F2010E F2011E F2012E F2013E    beats and raise.
  Stronger recovery & lean                  Express Pkg         -4.6%      3.1%      5.1%       3.5%        2.4%
  inventories drive another air             Express Margin       4.7%      5.2%      7.1%       8.6%        9.7%   3. Yield mgmt initiatives and DHL's US exit
  capacity crunch. Fading one-              Ground Pkg           6.3%     12.2%      9.0%       7.6%        6.0%      could drive better pricing trends in 2010+
  time capacity costs and fuel              Freight - Wt/Day    -7.6%     11.3%     15.8%      -3.9%        0.5%
  economy gains drive strong                                                                                       4. Cost cutting efforts, yield mgmt, and mix
                                            Op. Margin           5.5%      5.8%      7.8%       9.3%       10.2%
  incremental margins. LTL                                                                                            shift should support higher peak margins
  recovery supports rapid margin            EPS                 $3.76     $3.77     $5.90      $7.50       $8.79
  expansion.                                  YoY % Chg        -35.5%      0.2%     56.6%      27.0%       17.2%   Investment Risks
  Base Case $97                             15.0x Base Case CY2011e EPS of $6.48*                               1. Near-term cost headwinds and growth
  Strong int'l recovery, Modest             Assumptions        F2009A F2010E F2011E F2012E F2013E                  investments could mute operating
  domestic rebound. Strong int'l            Express Pkg         -4.6%      3.1%      3.7%       2.2%       2.1%    leverage.
  growth, yield mgmt, and cost              Express Margin       4.7%      5.2%      7.1%       9.0%       10.0%
  initiatives more than offset loss         Ground Pkg           6.3%     12.2%      7.5%       5.8%        5.5%
                                                                                                                   2. Signs of slowing airfreight demand &
  of DHL benefits. Op leverage              Freight - Wt/Day    -7.6%     11.3%     13.3%      -4.4%        0.5%      ocean-led restocking could limit holiday
  drives large EPS growth, but                                                                                        demand
                                            Op. Margin           5.5%      5.8%      7.6%       9.2%       10.2%
  recovery in premium products is
                                            EPS                 $3.76     $3.76     $5.60      $7.12       $8.30
  more muted. LTL rates begin to                                                                                   3. Leverage works both ways. If the global
  recover in late 2010                        YoY % Chg        -35.5%      0.0%     48.8%      27.2%       16.6%
                                                                                                                      recovery falters, FDX is at risk.
  Bear Case $67                             13.5x Bear Case CY2011e EPS of $4.99*                               4. Continued growth investments could lead
  Longer road to recovery.                  Assumptions        F2009A F2010E F2011E F2012E F2013E                  to excess capacity and disappointing
  Sovereign concerns slow global            Express Pkg         -4.6%      3.1%      1.1%       0.1%       2.1%    FCF
  trade. Trade down limits                  Express Margin       4.7%      5.2%      5.8%       6.8%        8.1%
  recovery in premium products.             Ground Pkg           6.3%     12.2%      4.8%       5.5%        6.3%
  Capacity additions and                    Freight - Wt/Day    -7.6%     11.3%      9.8%      -6.4%        1.5%
  restocking weigh on air demand.
                                            Op. Margin           5.5%      5.8%      6.5%       7.5%        8.6%
  Return of temporary cost and
  reinvestment limit op. leverage.          EPS                 $3.76     $3.76     $4.54      $5.32       $6.33
                                              YoY % Chg        -35.5%      0.0%     20.5%      17.3%       19.0%


*Calendar earnings; E = Morgan Stanley Research Estimates; Source: Company Data, Morgan Stanley Research




                                                                                                                                                            2
                                                                                       MORGAN           STANLEY       RESEARCH

                                                                                       July 27, 2010
                                                                                       FedEx Corporation




Exhibit 1
Parcel Historical Valuation Multiples
                                                     Price-to-earnings                         Relative P/E                            EV / EBITDA
                                                      10-Yr Hist. Avg. Absolute               10-Yr Hist. Avg. Absolute              10-Yr Hist. Avg. Absolute
Parcel                      Ticker         Current    Trough Median         Peak    Current   Trough Median         Peak   Current   Trough Median         Peak
FedEx                       FDX               16.0         9.9      16.9     23.6     129%       61%      105%     158%       5.4       3.3        6.0      7.8
UPS                         UPS               17.1       12.1       21.3     27.3     139%       88%      128%     174%       8.9       6.5       10.0     14.1
Deutsche Post               DPWN              11.4         6.7      10.8     17.3      92%       50%       67%     156%
TNT                         TNT               12.6         7.2      11.7     25.4     102%       53%       77%     111%       7.7       4.1      6.9      12.8
Industry Average                              14.3         9.0      15.2     23.4     116%       63%       94%     150%       7.3       4.6      7.6      11.6
Median                                        14.3         8.6      14.3     24.5     116%       57%       91%     157%       7.7       4.1      6.9      12.8

S&P 500                     SPX               17.0       10.2      16.1     24.1


                                                        EV / Sales                             Price-to-Book
                                                      10-Yr Hist. Avg. Absolute               10-Yr Hist. Avg. Absolute
Parcel                      Ticker         Current    Trough Median         Peak    Current   Trough Median         Peak
FedEx                       FDX              0.67        0.37      0.80     1.06      1.90      0.86       2.48     3.37
UPS                         UPS              1.37        0.98      1.82     2.40      8.53      4.38       5.75     9.01
Deutsche Post               DPWN
TNT                         TNT              0.98       0.49      0.88      1.95
Industry Average                              1.01       0.62      1.17      1.80      5.21      2.62      4.12    6.19
Median                                        0.98       0.49      0.88      1.95      5.21      2.62      4.12    6.19

                                                         EV / FCF                                FCF Yield
                                                      10-Yr Hist. Avg. Absolute               10-Yr Hist. Avg. Absolute
Parcel                      Ticker         Current    Trough Median         Peak    Current   Trough Median         Peak
FedEx                       FDX              34.0        16.8      32.0     46.6      3.9%      0.5%       3.0%     4.1%
UPS                         UPS              19.7        11.5      20.8     47.9      5.5%      0.9%       4.8%   10.4%
Deutsche Post               DPWN                                                      4.9%      0.3%       8.5%   16.2%
TNT                         TNT              21.2        9.6      19.7      27.0      6.5%      5.1%       7.9%   13.9%
Industry Average                              25.0       12.6      24.1      40.5     5.2%      1.7%       6.0%   11.2%
Median                                        21.2       11.5      20.8      46.6     5.2%      0.7%       6.3%   12.1%
Source: Factset, Morgan Stanley Research




                                                                                                                                                          3
                                                                                                                                                      MORGAN                         STANLEY                RESEARCH

                                                                                                                                                      July 27, 2010
                                                                                                                                                      FedEx Corporation




Exhibit 2
UPS, FDX, and S&P500 Absolute P/E Ratios on 12-Month Forward Earnings vs. Real GDP:

                                     34                        Real GDP Growth (right axis)                                                    MS GDP Forecast (right axis)                                                   UPS TMF P/E                         10%
                                                               FDX TMF P/E                                                                     S&P 500 TMF P/E
                                     32
                                                                                                                                                                                                                                                                  8%
                                     30
    Absolute P/E Ratio on 12-Month




                                     28                                                                                                                                                                                                                           6%




                                                                                                                                                                                                                                                                        Change in Real GDP
                                     26
                                                                                                                                                                                                                                                                  4%
          Forward Earnings




                                     24
                                     22                                                                                                                                                                                                                           2%
                                     20                                                                                                                                                                                                                           0%
                                     18
                                                                                                                                                                                                                                                                  -2%
                                     16
                                     14                                                                                                                                                                                                                           -4%
                                     12
                                                                                                                                                                                                                                                                  -6%
                                     10
                                     8                                                                                                                                                                                                                            -8%
                                          Jan-97
                                                   Jul-97
                                                            Jan-98
                                                                     Jul-98
                                                                              Jan-99
                                                                              Jul-99
                                                                                       Jan-00
                                                                                                Jul-00
                                                                                                         Jan-01
                                                                                                                  Jul-01
                                                                                                                           Jan-02
                                                                                                                                    Jul-02
                                                                                                                                             Jan-03
                                                                                                                                             Jul-03
                                                                                                                                                      Jan-04
                                                                                                                                                               Jul-04
                                                                                                                                                                        Jan-05
                                                                                                                                                                                 Jul-05
                                                                                                                                                                                          Jan-06
                                                                                                                                                                                          Jul-06
                                                                                                                                                                                                   Jan-07
                                                                                                                                                                                                            Jul-07
                                                                                                                                                                                                                     Jan-08
                                                                                                                                                                                                                              Jul-08
                                                                                                                                                                                                                                       Jan-09
                                                                                                                                                                                                                                                Jul-09
                                                                                                                                                                                                                                                Jan-10
                                                                                                                                                                                                                                                         Jul-10
Source: Factset, Morgan Stanley Research




Valuation
FDX: Equal-weight
Our FDX YE10 fair value of $97.00 per share is derived from a
residual income analysis assuming a required return of 10.00%
(we assume a 4.50% equity risk premium on top of the
company's 5.50% average cost of debt). This valuation implies
a 15.0X P/E multiple on our calendar 2011 EPS estimate of
$6.48.




                                                                                                                                                                                                                                                                    4
                                                                                  MORGAN        STANLEY             RESEARCH

                                                                                  July 27, 2010
                                                                                  FedEx Corporation




Exhibit 3
FedEx Income Statement (FY2007A – FY2012E)
Fiscal Year Ending May 31                        2007A     2008A     2009A      1QA      2QA      3QA        4QA     2010A      1QE      2QE      3QE        4QE     2011E     2012E
Working Days                                       255       255       254       65       63          62      65       255       65       63       62          65      255       255
FedEx Express
U.S. Overnight Package (Env. & Box)
   Average Daily Volume (000)                     1,879     1,829     1,754    1,745    1,760    1,791      1,788     1,771    1,767    1,796    1,826    1,821       1,802     1,828
   Year-to-Year % Change                         -1.9%     -2.7%     -4.1%     0.8%     3.7%    -0.4%       0.0%      1.0%     1.3%     2.0%     2.0%     1.9%        1.8%      1.4%
  Revenue per Piece                              $17.68    $18.42    $17.80   $15.33   $15.94   $16.33     $16.55    $16.04   $16.54   $16.63   $16.79   $16.85      $16.70    $17.04
   Year-to-Year % Change                          2.9%      4.2%     -3.4%    -24.0%   -19.1%    0.8%       8.1%     -9.9%     7.9%     4.3%     2.8%     1.8%        4.1%      2.0%
  U.S. Overnight Package Revenue ($M)            $8,475    $8,590    $7,929   $1,739   $1,767   $1,813     $1,923    $7,242   $1,900   $1,881   $1,901   $1,995      $7,677    $7,944
   Year-to-Year % Change                          0.9%      1.4%     -7.7%    -22.2%   -16.1%   -1.3%       9.8%     -8.7%     9.2%     6.5%     4.8%     3.7%        6.0%      3.5%
U.S. Deferred Package
  Average Daily Volume (000)                       898       895       849      823      858      949        843       867      831      865      954        862       877       890
   Year-to-Year % Change                         -0.2%     -0.3%     -5.2%     -0.6%    3.1%     4.6%       1.7%      2.2%     1.0%     0.8%     0.5%     2.2%        1.1%      1.5%
  Revenue per Piece                              $12.59    $13.12    $12.94   $11.23   $11.58   $11.76     $12.23    $11.71   $12.17   $12.18   $12.22   $12.49      $12.27    $12.51
   Year-to-Year % Change                          1.3%      4.2%     -1.4%    -21.9%   -18.0%   -1.5%       7.2%     -9.5%     8.3%     5.1%     3.9%     2.2%        4.8%      2.0%
  U.S. Deferred Package Revenue ($M)             $2,883    $2,995    $2,789    $601     $626     $692       $670     $2,589    $658     $663     $723        $700    $2,743    $2,840
   Year-to-Year % Change                          1.1%      3.9%     -6.9%    -21.1%   -15.4%    1.5%      10.7%     -7.2%     9.4%     6.0%     4.5%     4.4%        6.0%      3.5%
US Airfreight (Incl. Postal Service)
  Avg U.S. Daily Freight Pounds (000)             9,569     8,648     7,287    6,584    7,193    7,906      6,916     7,141    6,782    7,337    7,827    7,054       7,242     7,351
   Year-to-Year % Change                          1.0%     -9.6%    -15.7%     -9.8%    -1.9%    3.2%       0.8%     -2.0%     3.0%     2.0%    -1.0%     2.0%        1.4%      1.5%
  Average Freight Revenue/Lb                      $0.99     $1.09     $1.17    $1.05    $1.08    $1.07      $1.15     $1.09    $1.16    $1.18    $1.17    $1.17       $1.17     $1.20
   Year-to-Year % Change                          7.7%     10.0%      7.6%    -18.1%   -15.9%   -1.1%      12.0%     -7.0%    10.3%     8.7%     9.1%     2.1%        7.5%      2.5%
Domestic Air Freight Revenue ($M)                $2,412    $2,398    $2,165    $449     $490     $525       $516     $1,980    $510     $544     $567        $537    $2,158    $2,245
   Year-to-Year % Change                          8.7%     -0.6%     -9.7%    -24.9%   -17.5%    0.4%      14.7%     -8.5%    13.6%    10.9%     8.0%     4.1%        9.0%      4.0%
Total Domestic Revenue $M)                      $13,770   $13,983   $12,883   $2,789   $2,883   $3,030     $3,109   $11,811   $3,067   $3,088   $3,191   $3,232     $12,578   $13,030
   Year-to-Year % Change                          2.2%      1.5%     -7.9%    -22.4%   -16.2%   -0.4%      10.8%     -8.3%    10.0%     7.1%     5.3%     4.0%        6.5%      3.6%
Source: Company data, Morgan Stanley Research




                                                                                                                                                         5
                                                                             MORGAN        STANLEY            RESEARCH

                                                                             July 27, 2010
                                                                             FedEx Corporation

Exhibit 4
FedEx Income Statement (FY2007A – FY2012E)
Fiscal Year Ending May 31                  2007A     2008A     2009A      1QA      2QA      3QA       4QA      2010A      1QE       2QE      3QE      4QE     2011E     2012E
International Priority
 Average Daily Volume (000)                  487       517       475      475      529       530       560       523       580      614      599      594       596       626
   Year-to-Year % Change                    4.5%      6.2%     -8.1%     -4.0%    5.8%    17.8%     22.8%      10.1%    22.0%     16.0%    13.0%     6.0%     13.9%      5.0%
 Revenue per Piece                         $54.15    $58.13    $57.81   $51.63   $52.90   $53.20    $54.45     $53.10   $55.09    $55.08   $54.41   $56.16    $55.19    $56.41
   Year-to-Year % Change                    4.8%      7.4%     -0.6%    -20.0%   -13.7%    0.1%      6.2%      -8.1%     6.7%      4.1%     2.3%     3.1%      3.9%      2.2%
 Int'l Priority Revenue ($M)               $6,722    $7,665    $6,978   $1,594   $1,763   $1,748    $1,982     $7,087   $2,075    $2,129   $2,020   $2,167    $8,392    $9,005
   Year-to-Year % Change                    9.5%     14.0%     -9.0%    -22.0%    -8.7%   16.0%     32.4%       1.6%    30.2%     20.8%    15.6%     9.3%     18.4%      7.3%
International Domestic
 Average Daily Volume (000)                  135       295       297      293      338       317       323       318       328      343      327      334       333       345
   Year-to-Year % Change                            119.0%      0.6%     -4.6%    8.7%    12.8%     11.8%       6.9%     12.0%     1.5%     3.0%     3.5%      4.9%      3.5%
 Revenue per Piece                         $10.73     $8.82     $7.49    $7.04    $7.09    $7.22     $7.19      $7.14    $7.30     $7.35    $7.39    $7.38     $7.35     $7.52
   Year-to-Year % Change                            -17.8%    -15.0%    -18.7%   -12.1%    9.3%     10.9%      -4.7%     3.7%      3.6%     2.3%     2.6%      3.0%      2.3%
 Int'l Domestic Revenue ($M)                $369      $664      $565     $134     $151      $142      $151      $578      $156     $159     $150     $160      $624      $661
   Year-to-Year % Change                             79.9%    -14.9%    -21.2%    -4.4%   21.4%     25.8%       2.3%     16.2%     5.2%     5.4%     6.2%      8.0%      5.9%
International Priority Freight
 Avg Int'l Daily Freight Pounds (000)       1,878     2,220     1,959    2,142    2,571    2,577     2,889      2,544    2,999     3,265    3,067    3,062     3,097     3,206
   Year-to-Year % Change                   14.9%     18.2%    -11.8%     -7.4%   16.0%    62.1%     68.5%      29.9%    40.0%     27.0%    19.0%     6.0%     21.7%      3.5%
 Average Freight Revenue/Lb                 $2.18     $2.20     $2.22    $1.87    $1.98    $2.06     $2.09      $2.01    $2.13     $2.14    $2.14    $2.14     $2.14     $2.18
   Year-to-Year % Change                    8.3%      0.6%      1.1%    -18.7%   -14.3%    -6.7%     4.4%      -9.5%     14.2%     7.7%     4.0%     2.3%      6.4%      1.9%
 International Priority Freight Revenue    $1,045    $1,243    $1,104    $260     $321      $329      $393     $1,303     $416     $439     $407     $426     $1,688    $1,781
   Year-to-Year % Change                   24.4%     18.9%    -11.2%    -23.5%    -0.6%   48.9%     78.6%      18.0%    59.9%     36.8%    23.7%     8.4%     29.6%      5.5%
International Airfreight
 Avg Int'l Daily Freight Pounds (000)       1,864     1,817     1,475    1,297    1,207    1,184     1,198      1,222    1,239     1,273    1,243    1,240     1,249     1,268
   Year-to-Year % Change                  -12.4%     -2.5%    -18.8%    -30.5%   -24.8%    -5.4%     1.7%     -17.2%     -4.5%     5.5%     5.0%     3.5%      2.2%      1.5%
 Average Freight Revenue/Lb                 $0.83     $0.88     $0.98    $0.72    $0.83    $0.83     $0.85      $0.81    $0.86     $0.86    $0.86    $0.87     $0.86     $0.88
   Year-to-Year % Change                    3.7%      5.7%     12.4%    -34.0%   -24.5%    -5.1%    10.2%     -18.2%     19.4%     4.2%     3.2%     2.9%      7.2%      1.3%
 International Air Freight Revenue          $394      $406      $369      $61      $63       $61       $66      $251       $70      $69      $66      $70      $275      $283
   Year-to-Year % Change                   -9.2%      3.0%     -9.1%    -53.4%   -43.2%   -11.6%    13.8%     -32.0%     14.0%     9.9%     8.4%     6.5%      9.6%      2.8%
Total International Revenue                $8,530    $9,978    $9,016   $2,049   $2,298   $2,280    $2,592     $9,219   $2,716    $2,797   $2,643   $2,824   $10,980   $11,730
   Year-to-Year % Change                   15.1%     17.0%     -9.6%    -23.7%    -8.9%   19.1%     36.8%       2.3%    32.6%     21.7%    15.9%     8.9%     19.1%      6.8%
Other Express Revenue                       $381      $460      $465      $86     $133      $130      $176      $525      $171     $177     $176     $183      $707      $742
   Year-to-Year % Change                  -32.7%     20.7%      1.1%    -37.7%    -2.9%   36.8%     85.3%      12.9%    99.0%     33.0%    35.0%     4.0%     34.6%      5.0%
FedEx Express Summary
Express Revenue                           $22,681   $24,421   $22,364   $4,924   $5,314   $5,440    $5,877    $21,555   $5,955    $6,062   $6,009   $6,239   $24,264   $25,502
   Year-to-Year % Change                    5.8%      7.7%     -8.4%    -23.3%   -12.9%    7.7%     22.5%      -3.6%    20.9%     14.1%    10.5%     6.2%     12.6%      5.1%
Express Expenses                          $20,593   $22,520   $21,310   $4,820   $4,969   $5,175    $5,464    $20,428   $5,594    $5,565   $5,651   $5,737   $22,547   $23,216
   Year-to-Year % Change                    5.0%      9.4%     -5.4%    -20.6%   -10.6%    3.4%     16.9%      -4.1%    16.1%     12.0%     9.2%     5.0%     10.4%      3.0%
Express Operating Income                   $2,088    $1,901    $1,054    $104     $345      $265      $413     $1,127     $360     $497     $359     $502     $1,717    $2,285
   Year-to-Year % Change                   13.3%     -8.9%    -44.6%    -69.9%   -36.1%   488.9%    233.1%      6.9%    246.3%    44.1%    35.3%    21.5%     52.4%     33.0%
Express Operating Ratio                    90.8%     92.2%     95.3%    97.9%    93.5%     95.1%     93.0%     94.8%     94.0%    91.8%    94.0%    92.0%     92.9%     91.0%
  Year-to-Year Point Change                  -0.6       1.4       3.1      3.3      2.4      -4.0      -4.4      -0.5      -3.9     -1.7     -1.1     -1.0      -1.8      -1.9
Source: Company data, Morgan Stanley Research


                                                                                                                                                     6
                                                                               MORGAN         STANLEY          RESEARCH

                                                                               July 27, 2010
                                                                               FedEx Corporation

Exhibit 5
FedEx Income Statement (FY2007A – FY2012E)
Fiscal Year Ending May 31                       2007A    2008A    2009A      1QA      2QA      3QA      4QA     2010A      1QE      2QE      3QE      4QE      2011E    2012E
FedEx Ground
Ground Working Days                               255      255      254        65      63       62       65       255       65        63      62         65      255      255
Average Daily Package Volume (000s)              3,126    3,365    3,404    3,311    3,602    3,674    3,516     3,523    3,526    3,826    3,858    3,692      3,723    3,879
   Year-to-Year % Change                        11.0%     7.6%     1.2%     -0.8%    3.7%     4.6%     6.6%      3.5%     6.5%     6.2%     5.0%     5.0%       5.7%     4.2%
Revenue per Package                              $7.22    $7.48    $7.70    $7.60    $7.54    $7.75    $8.04     $7.73    $8.04    $7.95    $8.09    $8.25      $8.08    $8.26
   Year-to-Year % Change                         2.9%     3.6%     3.0%     -3.4%    -2.1%    1.7%     5.4%      0.4%     5.9%     5.5%     4.4%     2.6%       4.5%     2.2%
Ground Package Revenue                          $5,752   $6,416   $6,660   $1,634   $1,711   $1,765   $1,837    $6,948   $1,844   $1,917   $1,935   $1,980     $7,674   $8,171
   Year-to-Year % Change                        14.2%    11.5%     3.8%     -2.7%    1.6%     4.7%    14.1%      4.3%    12.8%    12.0%     9.6%     7.8%      10.5%     6.5%
FedEx SmartPost
SmartPost Working Days                            253      254      252        65      63       60       65       253       65        63      62         65      255      255
Average Daily Package Volume (000s)               599      615      827     1,009    1,265    1,489    1,150     1,222    1,190    1,442    1,637    1,265      1,380    1,518
   Year-to-Year % Change                                  2.6%    34.3%    72.6%    62.7%    46.0%    23.2%     47.9%    18.0%    14.0%    10.0%    10.0%      12.9%    10.0%
Revenue per Package                              $1.89    $2.09    $1.81    $1.41    $1.57    $1.59    $1.63     $1.56    $1.60    $1.65    $1.65    $1.66      $1.64    $1.67
   Year-to-Year % Change                                 10.9%    -13.5%   -33.9%   -24.0%    -4.8%    6.1%    -13.9%    13.4%     5.1%     3.6%     2.1%       5.5%     1.7%
SmartPost Revenue                                $286     $327     $377       $93    $125     $142     $122      $482     $124      $150    $167     $137       $578     $647
   Year-to-Year % Change                                 14.2%    15.4%    15.9%    23.6%    36.7%    32.7%     27.8%    33.8%    19.8%    17.7%    12.4%      20.0%    11.9%
Other Ground Revenue                               $5       $8      $11        $3      $1       $3       $3        $9       $2        $2      $1         $1       $6       $7
   Year-to-Year % Change                        -98.2%   63.1%    34.3%    107.3%   -75.8%   -27.8%   28.0%    -11.5%    -28.0%   168.8%   -62.1%   -68.5%     -35.7%   16.7%
Total Fedex Ground Revenue                      $6,043   $6,751   $7,047   $1,730   $1,837   $1,910   $1,962    $7,439   $1,970   $2,068   $2,103   $2,118     $8,258   $8,825
   Year-to-Year % Change                        13.9%    11.7%     4.4%     -1.8%    2.7%     6.5%    15.1%      5.6%    13.9%    12.6%    10.1%     7.9%      11.0%     6.9%
FedEx Ground Summary
Fedex Ground Revenue                            $6,043   $6,751   $7,047   $1,730   $1,837   $1,910   $1,962    $7,439   $1,970   $2,068   $2,103   $2,118     $8,258   $8,825
   Year-to-Year % Change                        13.9%    11.7%     4.4%     -1.8%    2.7%     6.5%    15.1%      5.6%    13.9%    12.6%    10.1%     7.9%      11.0%     6.9%
Fedex Ground Expense                            $5,221   $6,015   $6,240   $1,521   $1,599   $1,652   $1,643    $6,415   $1,675   $1,765   $1,812   $1,773     $7,024   $7,544
   Year-to-Year % Change                        13.5%    15.2%     3.7%     -2.8%    1.4%     3.4%     9.5%      2.8%    10.1%    10.4%     9.7%     7.9%       9.5%     7.4%
Fedex Ground Operating Income                    $822     $736     $807      $209    $238     $258     $319     $1,024    $295      $304    $291     $344      $1,234   $1,281
   Year-to-Year % Change                        16.3%    -10.5%    9.6%     6.6%    12.3%    31.6%    57.1%     26.9%    41.1%    27.6%    12.8%     7.9%      20.5%     3.8%
Fedex Ground Operating Ratio                    86.4%    89.1%    88.5%     87.9%   87.0%    86.5%    83.7%     86.2%    85.0%     85.3%   86.2%    83.7%      85.1%    85.5%
 YoY Point Change                                 -0.3      2.7     -0.5     -1.0     -1.1     -2.6     -4.3      -2.3     -2.9     -1.7     -0.3        0.0     -1.2      0.4
Source: Company data, Morgan Stanley Research




                                                                                                                                                     7
                                                                               MORGAN         STANLEY          RESEARCH

                                                                               July 27, 2010
                                                                               FedEx Corporation

Exhibit 6
FedEx Income Statement (FY2007A – FY2012E)
Fiscal Year Ending May 31                       2007A    2008A    2009A      1QA      2QA      3QA      4QA     2010A      1QE      2QE      3QE       4QE      2011E    2012E
FedEx Freight
Working Days                                       254      253     252        65       62       61       65      253        65       62       62          65      254      253
Shipments per Day                               78,352   79,691   74,370   71,384   82,928   83,426   91,523    82,315   91,371   94,123   88,015    88,320     90,457   87,291
   Year-to-Year % Change                        17.4%     1.7%     -6.7%   -13.7%    3.3%    26.4%    33.7%     10.7%    28.0%    13.5%     5.5%      -3.5%      9.9%     -3.5%
Revenue per Hundredweight (CWT)                 $18.65   $19.64   $19.09   $17.87   $17.09   $16.82   $16.69    $17.10   $17.08   $17.15   $17.33    $17.40     $17.24   $18.01
   Year-to-Year % Change                        10.7%     5.3%     -2.8%   -12.6%   -12.1%    -7.6%    -6.2%    -10.4%    -4.4%    0.3%     3.0%      4.3%       0.8%     4.5%
Other Revenue                                     $396     $434    $388       $62      $77      $70      $80     $289       $74      $84      $77         $86     $322     $350
   Year-to-Year % Change                         3.8%     9.4%    -10.4%   -47.7%   -32.6%   -10.9%    4.7%    -25.5%    19.0%     9.0%    10.0%      8.0%      11.1%     9.0%
Total FedEx Freight Revenue                     $4,586   $4,934   $4,415     $982   $1,068   $1,040   $1,231    $4,321   $1,256   $1,252   $1,181    $1,254     $4,943   $4,947
   Year-to-Year % Change                        25.8%     7.6%    -10.5%   -27.4%   -11.0%   13.8%    29.9%      -2.1%   27.9%    17.2%    13.5%      1.9%      14.4%     0.1%
FedEx Freight Summary
Fedex Freight Revenue                           $4,586   $4,934   $4,415     $982   $1,068   $1,040   $1,231    $4,321   $1,256   $1,252   $1,181    $1,254     $4,943   $4,947
   Year-to-Year % Change                        25.8%     7.6%    -10.5%   -27.4%   -11.0%   13.8%    29.9%      -2.1%   27.9%    17.2%    13.5%      1.9%      14.4%     0.1%
Fedex Freight Expense                           $4,123   $4,605   $4,359     $980   $1,080   $1,147   $1,267    $4,474   $1,253   $1,253   $1,223    $1,219     $4,948   $4,769
   Year-to-Year % Change                        30.6%    11.7%     -5.3%   -22.5%    -7.5%   17.9%    32.8%      2.6%    27.8%    16.0%     6.7%      -3.8%     10.6%     -3.6%
Fedex Freight Operating Income                    $463     $329     $56        $2     -$12    -$107     -$36     -$153       $3      -$1     -$43         $35      -$5     $178
   Year-to-Year % Change                         -4.9%   -28.9%   -83.0%   -97.8% -137.5%    81.4%    500.0% -373.2%     49.3%    -95.5%   -60.2%   -197.4%     -96.7% -3611.5%
Fedex Freight Operating Ratio                   89.9%    93.3%    98.7%    99.8%    101.1%   110.3%   102.9%   103.5%    99.8%    100.0%   103.6%    97.2%      100.1%   96.4%
 YoY Point Change                                  3.3      3.4      5.4      6.4      3.8      3.8      2.3       4.8      0.0     -1.1     -6.7      -5.7       -3.4     -3.7


Fiscal Year Ending May 31                       2007A    2008A    2009A      1QA      2QA      3QA      4QA     2010A      1QE      2QE      3QE       4QE      2011E    2012E
FedEx Services
Services Revenue                                $2,137   $2,138   $1,977     $451     $465     $406     $448    $1,770     $427     $442     $391     $431      $1,692   $1,694
   Year-to-Year % Change                         2.3%     0.0%     -7.5%   -12.1%   -11.9%   -11.4%    -6.3%    -10.5%    -5.2%    -4.9%    -3.7%     -3.7%      -4.4%    0.1%
Services Expense                                $2,137   $2,138   $1,943     $451     $465     $406     $448    $1,770     $427     $442     $391     $431      $1,692   $1,694
   Year-to-Year % Change                         5.2%     0.0%     -9.1%   -12.1%   -11.9%   -11.4%    0.9%      -8.9%    -5.2%    -4.9%    -3.7%     -3.7%      -4.4%    0.1%
Services Operating Income                           $0       $0     $34        $0       $0       $0       $0       $0        $0       $0       $0          $0       $0       $0
   Year-to-Year % Change
Services Operating Ratio                        100.0%   100.0%   98.3%    100.0%   100.0%   100.0%   100.0%   100.0%    100.0%   100.0%   100.0%   100.0%      100.0%   100.0%
 YoY Point Change                                  2.7
Source: Company data, Morgan Stanley Research




                                                                                                                                                      8
                                                                                     MORGAN         STANLEY            RESEARCH

                                                                                     July 27, 2010
                                                                                     FedEx Corporation

Exhibit 7
FedEx Income Statement (FY2007A – FY2012E)
Fiscal Year Ending May 31                        2007A     2008A     2009A        1QA       2QA      3QA        4QA     2010A      1QE      2QE      3QE      4QE        2011E     2012E
Eliminations/Other Summary
Eliminations/Other Revenue                        -$233     -$291     -$306        -$78     -$88     -$95       -$90     -$351     -$89     -$89     -$89     -$90        -$357     -$368
Eliminations/Other Expenses                       -$233     -$291     -$306        -$78     -$88     -$95       -$90     -$351     -$89     -$89     -$89     -$90        -$357     -$368
Eliminations/Other Operating Income                 $0        $0        $0          $0        $0         $0       $0       $0        $0      $0       $0          $0        $0        $0
TOTAL FEDEX CORP
Total FedEx Revenue                             $35,214   $37,953   $35,497   $8,009      $8,596   $8,701     $9,428   $34,734   $9,519   $9,736   $9,595   $9,952      $38,801   $40,599
   Year-to-Year % Change                          9.0%      7.8%     -6.5%    -19.7%       -9.9%    6.9%       20.1%    -2.1%    18.8%    13.3%    10.3%     5.6%        11.7%      4.6%
Total FedEx Expense                             $31,841   $34,987   $33,546   $7,694      $8,025   $8,285     $8,732   $32,736   $8,860   $8,935   $8,988   $9,071      $35,854   $36,855
   Year-to-Year % Change                          9.0%      9.9%     -4.1%    -17.6%       -8.3%    4.1%       16.5%    -2.4%    15.2%    11.3%     8.5%     3.9%         9.5%      2.8%
Total FedEx Operating Income                     $3,373    $2,966    $1,951       $315      $571     $416       $696    $1,998     $658    $800     $607     $881        $2,946    $3,744
   Year-to-Year % Change                          9.1%    -12.1%    -34.2%    -50.0%      -27.2%   128.6%     96.1%      2.4%    108.9%   40.2%    45.9%    26.6%        47.5%     27.1%
Total FedEx Operating Ratio                      90.4%     92.2%     94.5%    96.1%       93.4%     95.2%      92.6%    94.2%     93.1%   91.8%    93.7%    91.1%        92.4%     90.8%
 YoY Point Change                                   0.0       1.8       2.3         2.4      1.6     -2.5       -2.9      -0.3     -3.0     -1.6     -1.5        -1.5      -1.8      -1.6
Total Interest (Expense)/Income                    -$53      -$54      -$59        -$18     -$15     -$19       -$19      -$71     -$18     -$17     -$17     -$17         -$69      -$50
   Year-to-Year % Change                        -49.0%      1.9%      9.3%    100.0%      50.0%     0.0%       -9.5%    20.3%     0.0%    13.3%    -10.5%   -10.5%       -2.8%    -27.5%
Other Income (Expense)                              -$8       -$5      -$11         -$3      -$9     -$16        -$5      -$33      -$5      -$7      -$9        -$4       -$25      -$30
   Year-to-Year % Change                          0.0%      0.0%      0.0%           0        $0         $0       $0     0.0%        0       $0       $0          $0      0.0%      0.0%
Total Other Expenses, Net                          -$61      -$59      -$70        -$21     -$24     -$35       -$24     -$104     -$23     -$24     -$26     -$21         -$94      -$80
   Year-to-Year % Change                        -47.0%     -3.3%     18.6%    75.0%       140.0%    52.2%      -4.0%    48.6%     9.5%     0.0%    -25.7%   -12.5%       -9.6%    -14.9%
Pretax Income                                    $3,312    $2,907    $1,881       $294      $547     $381       $672    $1,894     $635    $776     $581     $860        $2,852    $3,664
   Year-to-Year % Change                         11.2%    -12.2%    -35.3%    -52.4%      -29.3%   139.6%     103.6%     0.7%    116.0%   41.9%    52.5%    28.0%        50.6%     28.5%
Tax Rate                                         37.6%     37.4%     37.6%    38.4%       36.9%     37.3%      37.6%    37.5%    38.0%    38.0%    38.0%    38.0%        38.0%     38.0%
Provision for Taxes                              $1,245    $1,086     $707        $113      $202     $142       $253     $710      $241    $295     $221     $327        $1,084    $1,392
Net Income                                       $2,067    $1,821    $1,174       $181      $345     $239       $419    $1,184     $394    $481     $360     $533        $1,769    $2,272
   Year-to-Year % Change                         11.4%    -11.9%    -35.5%    -52.9%      -30.0%   146.4%     109.5%     0.9%    117.6%   39.5%    50.7%    27.3%        49.4%     28.5%
Earnings Per Share                                $6.65     $5.83     $3.76       $0.58    $1.10    $0.76      $1.33     $3.76    $1.25    $1.53    $1.14    $1.68        $5.60     $7.12
   Year-to-Year % Change                         11.0%    -12.3%    -35.5%    -52.7%      -30.4%   144.4%     106.5%     0.0%    115.8%   38.7%    49.9%    26.6%        48.8%     27.2%
Average Shares Outstanding-Diluted                310.8     312.2     312.0 312            313.8    314.5      315.5     314.6    314.6    315.6    316.4    317.1        315.9     319.1
Dividends per Share                               $0.36     $0.41     $0.44       $0.11    $0.11    $0.11      $0.11     $0.44    $0.11    $0.11    $0.13    $0.13        $0.48     $0.62
Source: Company data, Morgan Stanley Research




                                                                                                                                                             9
                                                                MORGAN          STANLEY       RESEARCH

                                                                July 27, 2010
                                                                FedEx Corporation




Exhibit 8
FedEx Statement of Cash Flows (FY2005A – FY2012E)
Statement of Cash Flows                          2005A     2006A       2007A         2008A     2009A     2010A     2011E     2012E
Cash Flow From Operations
Adjusted Net Earnings                           $1,449    $1,807      $2,016        $1,125       $98    $1,184    $1,769    $2,272
  Depreciation                                  $1,462    $1,548      $1,742        $1,742     $1,975   $1,958    $2,024    $2,125
  Total D&A                                     $1,462    $1,548      $1,742        $1,742     $1,975   $1,958    $2,024    $2,125
  Deferred Taxes                                   $63      $187         $37          $124      $299      $180       $71       $55
  Net Changes in Working Capital                    $6     -$127       -$447         -$847    -$1,002    -$578      $223     -$337
  Other CFFO, net                                 $137      $261        $209          $439      $280      $376      $103       $46
Cash From Operations                            $3,117    $3,676      $3,557        $3,465     $2,753   $3,138    $4,190    $4,160


Cash Flow From Investing
  Purchases of Property and Equipment           -$2,236   -$2,518     -$2,882       -$2,947   -$2,459   -$2,816   -$3,237   -$3,190
  Proceeds from Sales                              $12       $64         $68           $54       $79       $35       $35       $35
  Acquisitions of Businesses                     -$122        $0      -$1,310           -$4       -$3       $0        $0     -$500
  Other                                             -$2       $0          $0            $0        $0        $0        $0        $0
Cash From Investing                             -$2,348   -$2,454     -$4,124       -$2,897   -$2,383   -$2,781   -$3,202   -$3,655
Free Cash Flow                                    $769    $1,222       -$567          $568      $370      $357      $988      $505


Cash Flow From Financing
  Dividends                                       -$84      -$97       -$110         -$124      -$137    -$138     -$151     -$199
  Change in Equity (buybacks and issuance)         $99      $144        $115          $108       $41        $0        $0        $0
  Change in Debt                                 -$791     -$369        $148         -$639      $499     -$653     -$250        $0
  Other, net                                        $0        -$2        $40           $38        -$3      $99        $0        $0
Cash From Financing                              -$776     -$324        $193         -$617      $400     -$692     -$401     -$199


Cash provided by (used in) operations               -$7     $898       -$368          -$30      $753     -$340      $587      $307
Cash used in discontinued operations                $0        $0          $0            $0        $0        $0        $0        $0
Beginning Cash                                  $1,046    $1,039      $1,937        $1,569     $1,539   $2,292    $1,952    $2,539
Ending Cash                                     $1,039    $1,937      $1,569        $1,539     $2,292   $1,952    $2,539    $2,846
Source: Company data, Morgan Stanley Research




                                                                                                                      10
                                                                                 MORGAN         STANLEY        RESEARCH

                                                                                 July 27, 2010
                                                                                 FedEx Corporation




Exhibit 9
FedEx Balance Sheet (FY2005A – FY2012E)
Balance Sheet                                                     2005A     2006A      2007A          2008A     2009A     2010A     2011E     2012E
Assets
Current Assets
  Cash & Cash Equivalents                                         $1,039    $1,937     $1,569         $1,539    $2,292    $1,952    $2,539    $2,846
  Accounts Receivable                                             $3,297    $3,516     $3,942         $4,359    $3,391    $4,163    $4,419    $4,669
  Inventories                                                      $250      $308        $338          $435      $367      $389      $442      $472
  Deferred Income Taxes                                            $510      $539        $536          $544      $511      $529      $566      $566
  Other Current Assets                                             $173      $164        $244          $367      $555      $251      $280      $293
Total Current Assets                                              $5,269    $6,464     $6,629         $7,244    $7,116    $7,284    $8,246    $8,845
Net Property & Equipment                                          $9,643   $10,770    $12,636        $13,478   $13,417   $14,385   $15,563   $17,093
Goodwill                                                          $2,835    $2,825     $3,497         $3,165    $2,229    $2,200    $2,200    $2,200
Prepaid Pension Asset                                             $1,272    $1,349         $0          $827      $311        $0        $0        $0
Other Long-Term Assets                                            $1,385    $1,282     $1,238          $919     $1,171    $1,033    $1,154    $1,207
Total Assets                                                     $20,404   $22,690    $24,000        $25,633   $24,244   $24,902   $27,163   $29,346


Liabilities
Current Liabilities
  Short-Term Debt                                                    $0        $0          $0            $0        $0        $0        $0        $0
  Current Portion of Long-Term Debt                                $369      $850        $639          $502      $653      $262      $262      $262
  Accounts Payable                                                $1,739    $1,908     $2,016         $2,195    $1,372    $1,522    $1,849    $2,026
  Accrued salaries and employee benefits                          $1,275    $1,325     $1,354         $1,118     $861     $1,146    $1,245    $1,273
  Accrued expenses                                                $1,351    $1,390     $1,419         $1,553    $1,638    $1,715    $1,890    $1,750
Total Current Liabilities                                         $4,734    $5,473     $5,428         $5,368    $4,524    $4,645    $5,246    $5,311
Long-Term Debt, Less Current Portion                              $2,427    $1,592     $2,007         $1,506    $1,930    $1,668    $1,418    $1,418
  Deferred Income Taxes                                           $1,206    $1,367       $897         $1,264    $1,071     $891      $962     $1,017
  Pension, postretirement healthcare and other benefit obligat     $828      $944      $1,164          $989      $934     $1,705    $1,702    $1,593
  Self-insurance accruals                                          $621      $692        $759          $804      $904      $960     $1,072    $1,122
  Deferred gains, principally related to aircraft transactions     $400      $373        $343          $315      $289      $267      $267      $267
  Other                                                            $600      $738        $746          $861      $966      $955     $1,067    $1,116
Total Liabilities                                                $10,816   $11,179    $11,344        $11,107   $10,618   $11,091   $11,735   $11,844


Shareholders' Equity
Common Stock                                                        $30       $31         $31           $31       $31       $31       $31       $31
Additional Paid-In Capital                                        $1,213    $1,438     $1,689         $1,922    $2,053    $2,261    $2,261    $2,261
Retained Earnings                                                 $8,363   $10,068    $11,970        $13,002   $12,919   $13,966   $15,583   $17,657
Accumulated Other Comprehensive Inc.                                -$17      -$24    -$1,030          -$425   -$1,373   -$2,440   -$2,440   -$2,440
Treasury Stock                                                       -$1       -$2        -$4            -$4       -$4       -$7       -$7       -$7
Total Shareholders' Equity                                        $9,588   $11,511    $12,656        $14,526   $13,626   $13,811   $15,428   $17,502
Total Liabilities and Equity                                     $20,404   $22,690    $24,000        $25,633   $24,244   $24,902   $27,163   $29,346
Source: Company data, Morgan Stanley Research




                                                                                                                                        11
                                                                               MORGAN         STANLEY         RESEARCH

                                                                               July 27, 2010
                                                                               FedEx Corporation




                                                      Morgan Stanley ModelWare is a proprietary analytic framework that helps clients
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                                                      basis. ModelWare also emphasizes the separation of operating performance of a company
                                                      from its financing for a more complete view of how a company generates earnings.



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                                                                                                                                                   12
                                                                                              MORGAN            STANLEY           RESEARCH

                                                                                              July 27, 2010
                                                                                              FedEx Corporation




                              Coverage Universe    Investment Banking Clients (IBC)
                                             % of                   % of % of Rating
Stock Rating Category            Count       Total     Count Total IBC Category
Overweight/Buy                   1086           42%            362         43%           33%
Equal-weight/Hold                1114           43%            391         46%           35%
Not-Rated/Hold                       14           1%              4          0%          29%
Underweight/Sell                   348          14%             94         11%           27%
Total                            2,562                         851

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                                                                                                                                                                              13
                                                                                             MORGAN           STANLEY            RESEARCH

                                                                                             July 27, 2010
                                                                                             FedEx Corporation




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                                                                                                                                                                            14
                                                                                          MORGAN    STANLEY            RESEARCH




The Americas                                   Europe                                       Japan                           Asia/Pacific
1585 Broadway                                  20 Bank Street, Canary Wharf                 4-20-3 Ebisu, Shibuya-ku        1 Austin Road West
New York, NY 10036-8293                        London E14 4AD                               Tokyo 150-6008                  Kowloon
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Tel: +1 (1) 212 761 4000                       Tel: +44 (0) 20 7 425 8000                   Tel: +81 (0) 3 5424 5000        Tel: +852 2848 5200




Industry Coverage:Freight Transportation

Company (Ticker)                              Rating (as of) Price* (07/26/2010)


William J. Greene, CFA
Atlas Air Worldwide Holdings                  E (03/19/2010)                        $60
(AAWW.O)
C.H. Robinson Worldwide Inc.                  E (06/11/2009)                   $62.1
(CHRW.O)
CSX Corporation (CSX.N)                      O (06/11/2009)                   $53.86
Canadian National Railway Co.                E (10/31/2008)                   $62.73
(CNI.N)
Canadian Pacific Railway Ltd.                 E (03/09/2010)                  $59.38
(CP.N)
Echo Global Logistics Inc                    O (11/11/2009)                   $11.68
(ECHO.O)
Expeditors International of                   U (03/22/2010)                  $42.36
Washington I (EXPD.O)
FedEx Corporation (FDX.N)                    E (07/30/2008)                   $83.39
Genesee & Wyoming Inc. (GWR.N)               E (11/23/2009)                   $41.26
Heartland Express Inc. (HTLD.O)              E (06/11/2009)                   $16.31
J.B. Hunt Transport Services Inc.            O (06/11/2009)                   $36.12
(JBHT.O)
Kansas City Southern (KSU.N)                 O (05/10/2010)                   $39.45
Knight Transportation Inc. (KNX.N)           E (06/11/2009)                   $22.18
Norfolk Southern Corp. (NSC.N)               E (01/15/2008)                   $57.16
Railamerica, Inc. (RA.N)                     O (11/23/2009)                      $11
UTi Worldwide (UTIW.O)                       E (03/22/2010)                   $14.34
Union Pacific Corp. (UNP.N)                  O (05/07/2007)                   $75.46
United Parcel Service (UPS.N)                E (04/28/2010)                   $64.88
Werner Enterprises (WERN.O)                  U (06/11/2009)                   $24.04

Stock Ratings are subject to change. Please see latest research for each company.
* Historical prices are not split adjusted.




© 2010 Morgan Stanley

				
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