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FedEx Ground Contractor Ruling Statement

November 10, 2009

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We are gratified with the IRS audit team’s decision not to assess any tax or penalty with respect to any of FedEx Ground’s independent contractors, including our FedEx Home Delivery independent contractors for the years 2004 to 2006. This follows the Oct. 30th IRS audit team decision that said they would not assess any tax or penalty with respect to any of FedEx Ground’s independent contractors, including our FedEx Home Delivery independent contractors for the year 2002.

While similar issues may be audited for calendar years 2007 and 2008, we believe the Audit Team should reach the same conclusion on these issues for each of those years, as well.

FedEx Ground’s independent contractor model has been tremendously successful for our customers, the hard-working independent contractors and FedEx Ground for more than 20 years. It is clear that the IRS decision today further validates this business model and we look forward to continue growing the model for many decades to come.

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