It shows your "Local Folders" that include your "Inbox" (where your emails are received), your "Outbox" (where your emails are temorarily stored until they are sent), your "Sent Items" (a list of emails you have sent), "Deleted Items" (any emails you have deleted), and "Drafts" (any email you choose to write and save for later).

The picture also shows an example of a folder I created called "Unused". You can create folders to separate and organize your email messages if you want.