Back to GetFilings.com
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE FISCAL YEAR ENDED MAY 31, 1994 COMMISSION FILE NUMBER 1-7806
FEDERAL EXPRESS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 71-0427007
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2005 CORPORATE AVENUE, MEMPHIS, TENNESSEE 38132
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (901) 369-3600
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- ------------------------------------------
Common Stock, Par Value New York Stock Exchange
$.10 per share
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. / /
As of July 29, 1994, 55,906,097 shares of the Registrant's Common Stock
were outstanding and the aggregate market value of the voting stock held by
non-affiliates of the Registrant (based on the closing price of such stock on
the New York Stock Exchange) was approximately $3,346,046,518.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Stockholders for the fiscal year ended May
31, 1994 are incorporated by reference into Parts II and IV.
Portions of the Proxy Statement for the Annual Meeting of Stockholders on
September 26, 1994 are incorporated by reference into Part III.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
----
PART I
ITEM 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ITEM 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ITEM 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 11
ITEM 4. Submission of Matters to a Vote of Security Holders. . . . . . 12
Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . 12
PART II
ITEM 5. Market for the Registrant's Common Stock and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ITEM 6. Selected Financial Data. . . . . . . . . . . . . . . . . . . . 15
ITEM 7. Management's Discussion and Analysis . . . . . . . . . . . . . 15
ITEM 8. Financial Statements and Supplementary Data. . . . . . . . . . 15
ITEM 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure . . . . . . . . . . . . 15
PART III
ITEM 10. Directors and Executive Officers of the Registrant . . . . . . 15
ITEM 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . 15
ITEM 12. Security Ownership of Certain Beneficial Owners and Management 15
ITEM 13. Certain Relationships and Related Transactions . . . . . . . . 16
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 16
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
FINANCIAL STATEMENT SCHEDULES INDEX
Report of Independent Public Accountants on Financial Statement Schedules S-1
SCHEDULE II Amounts Receivable from Related Parties . . . . . . . . . S-2
SCHEDULE V Property and Equipment. . . . . . . . . . . . . . . . . . S-3
SCHEDULE VI Accumulated Depreciation and Amortization . . . . . . . . S-4
SCHEDULE VIII Valuation and Qualifying Accounts . . . . . . . . . . . . S-5
SCHEDULE IX Short-Term Borrowings . . . . . . . . . . . . . . . . . . S-6
SCHEDULE X Supplementary Income Statement Information. . . . . . . . S-7
EXHIBIT INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
PART I
ITEM 1. BUSINESS
INTRODUCTION AND RECENT DEVELOPMENTS
Federal Express Corporation (the "Company") was incorporated in Delaware on
June 24, 1971 and began operations in 1972. The Company offers a wide range of
express services for the time-definite transportation of documents, packages and
freight throughout the world using an extensive fleet of aircraft and vehicles
and leading-edge information technologies.
During fiscal year 1994, the Company continued to improve its global
network of aviation, ground and information links between the major trading
centers of the Americas, Europe and Asia. The Company added new Airbus A300
aircraft, for example, and unveiled new services and innovative technologies
aimed at enhancing service and improving customer satisfaction. The Company
also updated its corporate identity by adopting "FedEx" as its new brand name.
DOMESTIC SERVICES
The Company offers three domestic overnight delivery services: FedEx
Priority Overnight Service, FedEx Standard Overnight Service and FedEx Overnight
Freight Service. Overnight document and package service extends to virtually
the entire United States population and overnight freight service covers all
major and most medium-size metropolitan areas. Packages and documents are
either picked up from shippers by Company couriers or are dropped off by
shippers at Company facilities, including city stations, Business Service
Centers, Mini-Centers or Drop Boxes strategically located throughout the
country.
FedEx Priority Overnight Service, scheduled for delivery in most
communities no later than 10:30 a.m. local time the following business day, is
designed for packages weighing up to 150 pounds with a maximum combined length
and girth of 165 inches and a maximum length of 119 inches. Also available are
Saturday delivery service and Saturday pick-up for delivery the following
Monday. FedEx Standard Overnight Service is similar to, though more economical
than, Priority Overnight Service with delivery scheduled no later than
3:00 p.m. local time the following business day in most communities.
Company-provided packaging (FedEx Letter envelope, FedEx Pak, FedEx Large,
Medium and Small Boxes, FedEx Tube and FedEx Diagnostic Specimen Envelope) is
provided as part of these overnight services. FedEx Overnight Freight Service
is scheduled for delivery by noon or 4:30 p.m. the following business day,
depending on the recipient's location, and is designed for individual shipments
weighing 151 to 750 pounds. Shipments exceeding 750 pounds will be accepted if
advance approval is obtained.
Two domestic second-day services are available for less urgent shipments:
FedEx Economy Two-Day Service and FedEx Two-Day Freight Service. Economy
Two-Day Service is designed for packages weighing up to 150 pounds, 165 inches
in combined length and girth and a maximum length of 119 inches. Economy
Two-Day Service shipments are scheduled for delivery in most communities no
later than 4:30 p.m. the second business day following pick-up. Two-Day Freight
Service is a time-definite domestic freight service for individual shipments
weighing 151 to 1500 pounds. Shipments exceeding 1500 pounds will be accepted
if advance approval is obtained. Shipments are scheduled for delivery no later
than 4:30 p.m. the second business day in all major and most medium-size
metropolitan areas.
Domestic overnight and second-day services are primarily used by customers
for shipment of time-sensitive documents and goods, high-value machines and
machine parts, computer parts, software and consumer items from manufacturers,
distributors and retailers and to retailers, manufacturers and consumers.
Company employees handle virtually every shipment from origin to destination.
The Company's Collect On Delivery (C.O.D.) service provides the fastest
payment return in the express industry. C.O.D. payments are returned to
shippers within one or two business days compared to competitors' services which
can take as long as 45 days. Like the Company's other domestic services, C.O.D.
service offers money-back guarantees on timely delivery and on the Company's
ability to track and locate any package in its system.
INTERNATIONAL SERVICES
The Company offers five international document and package delivery
services and two international freight services.
International Priority ("IP") Service is a time-definite service for
documents and packages weighing up to 150 pounds. Customs clearance is included
as part of this service. The broker selection option for IP Service permits
customers to designate their own customs broker for clearance. Pick-up and
delivery are provided from any point in the Company's domestic and international
network around the world. Delivery is generally scheduled within one to three
business days depending on the destination of the shipment and commodity
limitations imposed by authorities in the destination country. Size, weight and
commodity limitations vary according to destination.
International Priority Freight Service is an expansion of IP Service and is
a time-definite service for international shipments exceeding 150 pounds or 250
inches in length and girth combined. Customs clearance is included as part of
this service and customers are permitted to designate their own customs broker
for clearance. Pick-up and delivery are provided from many points in the
Company's domestic and international network around the world. Delivery is
generally scheduled within one to three business days depending on the
destination of the shipment and commodity limitations imposed by authorities in
the destination country. Size, weight and commodity limitations vary according
to destination.
International Priority Plus is an overnight service for packages (up to 70
pounds) and documents shipped from New York City to Amsterdam, Brussels,
Frankfurt (documents only), Geneva, London, Madrid (documents only), Milan
(documents only), Paris, Rio De Janeiro, Rome, Sao Paulo (documents only) and
Zurich and from Washington, D.C. to London and Paris. IP Plus shipments must
be picked up or dropped off by 3:00 p.m. for delivery the next business day.
EXPRESSfreighter routing, discussed below, allows overnight service from major
locations in Europe and Asia to be scheduled for 10:30 a.m. delivery on the
next business day to most United States destinations and to major business
centers in Canada, Mexico and the Caribbean.
More economical than IP Service, International Priority Distribution
Service is a time-definite service for bulk shipments destined to several
different recipients in one country. Once the bulk shipment arrives in the
destination country, the individual packages are separated and delivered to the
recipients. Weight and size restrictions are the same as for IP Service, with
transit time one or two days longer.
FedEx International MailService provides for the pick-up, transportation
and sorting of nondutiable, printed material and certain low-value, dutiable
items which are tendered for delivery to postal services throughout the world.
Generally, material sent by International MailService for premium service is
delivered to recipients within three to six days, while receipt of material sent
by International MailService for standard service takes four to ten days.
FedEx International Express Freight Service, a freight service for
shipments of nearly any weight, size or shape, is available between major
markets in North America, Asia, Australia, Europe and South America. This
service, providing scheduled delivery from one to three business days depending
on destination, is designed for shippers desiring time-definite, committed
delivery with the option of customs clearance provided by the Company. Commodity
limitations vary according to destination.
FedEx International Airport-to-Airport Cargo Service is an international
airfreight service designed for freight forwarders and agents who do not require
a time-definite, committed delivery. Space-available service is offered to and
from virtually any airport around the world for airfreight shipments of nearly
any weight, size or
2
shape, with arrival at the destination airport from two to four days after
tender of the shipment. If the Company's aircraft do not serve the destination
airport, another carrier's services are used pursuant to an "interline"
agreement or other arrangement with such carrier. Commodity limitations vary
according to destination.
CHARTER SERVICES AND CRAF PARTICIPATION
The Company offers commercial and military charter services which
supplement the utilization of aircraft capacity when not needed in the Company's
scheduled operations. In addition to providing these charter services the
Company participates in the Civil Reserve Air Fleet ("CRAF") program. Under
this program, the Department of Defense may requisition for military use certain
of the Company's wide-bodied aircraft in the event of a declared need, including
a national emergency. The Company is compensated for the operation of any
aircraft requisitioned under the CRAF program at standard contract rates
established each year in the normal course of awarding contracts. Through its
participation in the CRAF program, the Company is entitled to bid on peacetime
military cargo charter business. The Company, together with a consortium of
other carriers, currently contracts with the U.S. Government for charter
flights. The Company, while continuing to participate in the CRAF program and
continuing to bid on military charters with respect to the carriage of cargo,
discontinued military passenger flights at the end of September 1992.
During fiscal 1994, revenues from charter operations accounted for
approximately 1.3% of the Company's total revenues and approximately 1.4% and
2.5% of total revenues during fiscal 1993 and 1992, respectively. Charter
results for the first quarter of 1992 were positively affected by elevated
charter activity related to Operation Desert Storm.
FEDEX LOGISTICS SERVICES
FedEx Logistics Services ("FLS") is a division of the Company which offers
a full range of global and regional logistics solutions, including
transportation and logistics management as well as other innovative services.
FLS also offers an extensive array of services for catalogers and direct
marketers, including customized promotional strategies, telemarketing training,
operational support and international mailing services. FLS has offices in
Memphis and other key U.S. sites, the United Kingdom, Belgium, the Netherlands,
Singapore and Hong Kong to serve its more than 2,000 clients.
PRICING
The Company periodically publishes list prices in its Service Guides for
the majority of its services. In general, domestic shipping rates are based on
the service selected, weight, size, any ancillary service charge and whether or
not the shipment is picked up by a Company courier or dropped off by the
customer at a Company location. International rates are based on the type of
service provided and vary with size, weight and destination. The Company offers
its customers volume discounts based on actual or potential average daily
revenue produced. Discounts are determined by reference to several local and
national revenue bands developed by the Company. In general, the more revenue a
particular customer produces, the greater the discount. Of the more than two
million current customers of the Company, a significant portion participates in
its discount program.
3
SERVICE REVENUES
The following table shows the amount of revenues generated for each class
of service offered for the fiscal years ending May 31 (amounts in thousands):
1994 1993 1992
---- ---- ----
Priority Overnight Services $3,707,974 $3,433,106 $3,342,956
Standard Overnight Services 1,166,808 1,013,076 841,439
Economy Two-Day Service 1,091,511 968,780 786,837
Domestic Freight Services 113,939 87,365 74,284
International Priority Services 1,317,856 1,116,589 1,039,337
International Freight Services 504,738 570,154 699,939
Charter 113,446 112,416 188,165
FedEx Logistics Services and Other* 463,184 506,557 577,103
---------- ---------- -----------
Total $8,479,456 $7,808,043 $7,550,060
---------- ---------- -----------
---------- ---------- -----------
*Includes revenues generated by the specialized services summarized above
under "FedEx Logistics Services" and does not include express and freight
service revenue generated by FLS clients. In addition, includes revenues from
non-U.S. intra-country operations (a portion of the U.K. and all continental
Europe intra-country operations were discontinued on May 4, 1992), Warren
Transport, Inc. (sold September 1993), aircraft noise-reduction kit sales and
fees paid by customers for additional casualty coverage and C.O.D. Service.
SEASONALITY OF BUSINESS
The Company's express package business and international airfreight
business are both seasonal in nature. Historically, the domestic package
business experiences an increase in late November and December. International
business, particularly in the Asia to U.S. markets, peaks in October and
November due to domestic holiday sales. The latter part of the Company's third
fiscal quarter and late summer, being post-winter holiday and summer vacation
seasons, have historically exhibited lower volumes relative to other periods.
OPERATIONS
The Company's global transportation and distribution services are provided
through an extensive international network consisting of numerous aviation and
ground transportation operating rights and authorities, 462 aircraft,
approximately 30,900 vehicles, sorting facilities, city stations, Business
Service Centers, Mini-Centers, Drop Boxes and sophisticated package tracking,
billing and communications systems.
The Company's primary domestic sorting facility, the SuperHub located in
Memphis, serves as the center of the Company's multiple hub-and-spokes domestic
system. A second national hub is located in Indianapolis. In addition to these
national hubs, the Company operates regional hubs in Newark and Oakland and
major metropolitan sorting facilities in Los Angeles and Chicago. A facility in
Anchorage serves as a sorting facility for express package and freight traffic
moving to and from Asia, Europe and North America. Major sorting and freight
handling facilities are located at Narita Airport in Japan, Charles de Gaulle
Airport in Paris and Stansted Airport outside London. The Company trucks some
shipments point-to-point, utilizing national, regional and metropolitan sorting
facilities.
In January 1991, the Company implemented EXPRESSfreighter flights which
provide faster international service through direct flights between major
markets in Asia, Europe and North America. For example, EXPRESSfreighter
flights from Hong Kong, Osaka, Singapore, Taipei and Tokyo to the Company's
facility in Anchorage and from there to the SuperHub in Memphis allow for next
business day delivery by 10:30 a.m. in the United States and to major business
centers in Canada, Mexico and the Caribbean. Cargo on those EXPRESSfreighter
flights bound for Europe is flown for next-day delivery to sixteen European
cities. Westbound
4
from Europe, EXPRESSfreighter service is available from Amsterdam, Antwerp,
Basel, Brussels, Frankfurt, London, Luxembourg, Milan, Paris and Zurich for
10:30 a.m. next-day delivery in most of North America.
Throughout its worldwide network, the Company operates city stations and
employs a staff of customer service agents, cargo handlers and couriers who pick
up and deliver shipments in the station's service area. In some cities, the
Company operates Business Service Centers which are staffed, store-front
facilities located in high-traffic, high-density areas. Manned or unmanned
Mini-Centers and unmanned Drop Boxes provide customers the opportunity to drop
off packages at locations in office buildings, shopping centers and corporate or
industrial parks. In 1994, the Company formed alliances with certain retailers
to extend this customer convenience network to new drop-off sites in such
retailers' locations. In international regions where low package traffic makes
our direct presence less economical, Global Service Participants have been
selected to complete deliveries.
The Company has an advanced package tracking and billing system, COSMOS,
that utilizes hand-held electronic scanning equipment and computer terminals.
This system provides proof of delivery information, an electronically reproduced
airbill for the customer and information regarding the location of a package
within the Company's system. For international shipments, the Company has
developed ExpressClear, a worldwide electronic customs clearance system, which
speeds up customs clearance by allowing customs agents in destination countries
to review information about shipments before they arrive. The Company has 16
computerized telephone customer service centers in the United States which
handle thousands of customer calls daily. In general, the Company's
international locations handle customer calls locally.
The Company provides many of its customers POWERSHIP 2, an automated
computer system, which provides package tracking, produces shipping labels,
calculates shipping charges, invoices the customer daily and produces customized
reports. For customers that ship 100 or more packages a day, the Company offers
POWERSHIP Plus software, which performs the same functions as POWERSHIP 2 but
can be integrated with the customer's own computer systems for customer service,
accounting, inventory control and financial analysis purposes. POWERSHIP
PassPort is an automated shipping system which is automatically updated with the
Company's system information, such as routing codes and rates. POWERSHIP 3
enables customers who ship as few as three packages per day to enjoy the
advantage of automated shipping. In 1994, the Company began offering FEDEX
Tracking Software, free of charge, that can be used on a customer's own
personal computer.
FUEL SUPPLIES AND COSTS
The Company's aviation fuel is purchased from various suppliers under
contracts which vary in length from three to twenty-one months and which provide
for specific amounts of fuel to be delivered. Approximately 60% of the fuel
represented by these contracts is prepriced, i.e., preset or "price not to
exceed." The remainder is purchased at market price which may fluctuate daily.
The Company believes that, barring a substantial disruption in supplies of crude
oil, these agreements will ensure the availability of an adequate supply of fuel
for the Company's needs for the immediate future, as well as provide fuel-cost
stability for the term of the contracts. However, a substantial reduction of oil
supplies from oil producing regions or refining capacity, or other events
causing a substantial reduction in the supply of aviation fuel, could have a
significant adverse effect on the Company.
The Company has also entered into contracts which are designed to limit its
exposure to fluctuations in jet fuel prices. The contracts extend through May
1995. These agreements are based on a notional sum of 10 million gallons per
month, which is approximately 20 to 25% of the Company's monthly consumption of
jet fuel. As of the date of this Report, the Company had neither received nor
made any payments related to these contracts.
5
The following table sets forth the Company's costs for aviation fuel and
its percentage of total operating expense for the previous five fiscal years:
Total Cost Percentage of Total
Fiscal Year (in thousands) Operating Expense
----------- -------------- -------------------
1994 $374,561 4.7%
1993 $403,597 5.4%
1992 $414,481 5.5%
1991 $554,637 7.5%
1990 $431,601 6.5%
Approximately 40% of the Company's requirement for vehicle fuel is
purchased in bulk under fixed-price agreements. The remainder of the Company's
requirement is satisfied by retail purchases, discounted from 1% to 3%. The
percentage of total operating expense for vehicle fuel purchases for each of the
last five fiscal years has not exceeded 1.5%.
COMPETITION
The overnight express market is highly competitive and sensitive to both
price and service. Competitors in this market include passenger airlines
offering package express services, regional express delivery concerns,
airfreight forwarders and other express package concerns, principally United
Parcel Service and Airborne Express.
The international express package and freight markets are also highly
competitive. Ability to compete effectively internationally depends principally
upon price, frequency and capacity of scheduled service, extent of geographic
coverage and reliability. The Company currently holds certificates of authority
to serve more foreign countries than any other United States all-cargo carrier
and its extensive, scheduled international route system allows it to offer
single-carrier service to many points not offered by its principal all-cargo
competitors. This international route system, combined with an integrated air
and ground network, enables the Company to offer international customers more
extensive single-carrier service to a greater number of domestic points than can
be provided currently by competitors. However, many of the Company's competitors
in the international market are government owned, controlled, or subsidized
carriers which may have greater resources, lower costs, less profit sensitivity
and more favorable operating conditions than the Company. The Company's
principal competitors in the international freight market are foreign national
air carriers, United States passenger airlines and all-cargo airlines and other
express package companies including United Parcel Service and DHL.
REGULATION
AIR
Under the Federal Aviation Act of 1958, as amended, both the Department of
Transportation ("DOT") and the Federal Aviation Administration ("FAA") exercise
regulatory authority over the Company. The DOT's authority relates primarily to
economic aspects of air transportation. The DOT's jurisdiction extends to
aviation route authority, pricing oversight and to other of the Company's
business practices, including interlocking relations, competitive practices and
cooperative agreements. The Company holds an all-cargo certificate and air
carrier certificate to carry cargo and mail. The Company's international
authority permits it to carry cargo and mail from several points in its domestic
route system to numerous points throughout the world. The DOT regulates
international routes, fares, rates and practices and is authorized to
investigate and take action against discriminatory treatment of United States
air carriers abroad. The right of a United States carrier to serve foreign
points is subject to the DOT's approval and generally requires a bilateral
agreement between the United States and the foreign government. The carrier must
then be granted the permission of such foreign government to provide specific
flights and services. The FAA's regulatory authority relates primarily to safety
aspects of air transportation, including aircraft standards and maintenance,
personnel and ground facilities. The Company holds an operating
6
certificate granted by the FAA pursuant to Part 121 of the Federal Aviation
Regulations. This certificate is of unlimited duration and remains in effect so
long as the Company maintains its standards of safety and meets the operational
requirements of the regulations.
GROUND
Much of the ground transportation performed by the Company is integral to
its air transportation services and is exempt from regulation by the Interstate
Commerce Commission ("ICC") under the Motor Carrier Act of 1980. The Company is
required to register as an exempt ICC operator in each of the states in which it
operates. In addition, the Bureau of Motor Carrier Safety of the Federal Highway
Administration of the DOT regulates the safety aspects of the Company's motor
vehicle operations. The Company also holds nationwide motor carrier common and
contract carrier authorities issued by the ICC which authorizes the express
carriage of general commodities between points in the United States. In addition
to federal regulation of ground transportation, certain states have local
regulations which restrict the use of ground transportation. The Company has
attempted through legislative and judicial avenues to eliminate these
intrastate transportation regulations. Though some success has been achieved,
significant regulatory barriers still exist that prevent the maximum use of the
Company's ground transportation network.
COMMUNICATION
Because of the extensive use of radio and other communication facilities in
its aircraft and ground transportation operations, the Company is subject to the
Federal Communications Commission Act of 1934, as amended. Additionally, the
Federal Communications Commission regulates and licenses the Company's
activities pertaining to satellite communications.
ENVIRONMENTAL
Pursuant to the Federal Aviation Act, the FAA with the assistance of the
Environmental Protection Agency is authorized to establish standards governing
aircraft noise. The Company's present aircraft fleet is in compliance with
current noise standards contained in Part 36, Part 91 and Part 161 of the
Federal Aviation Regulations. The Company's aircraft are also subject to, and
are in compliance with, the regulations limiting the level of engine smoke
emissions. In addition to federal regulation of aircraft noise, certain
airport operators have local noise regulations which limit aircraft operations
by type of aircraft and time of day. These regulations have had a restrictive
effect on the Company's aircraft operations in some of the localities where they
apply but do not have a material effect on any of the Company's significant
markets. Congress' passage of the Airport Noise and Capacity Act of 1990
established a National Noise Policy which enabled the Company to plan for noise
reduction and better respond to local noise constraints.
Under the Clean Air Act Amendments of 1990, many states will be required to
implement alternative fuel programs for fleet vehicles operating in certain
nonattainment areas. As states begin to implement their clean fuel fleet
programs, the Company anticipates acquiring new delivery vehicles or modifying
its existing delivery vehicles in order to comply with the regulations.
Additionally, facility modifications may be required to accommodate the use of
alternative fuels at the Company stations and ramps. The Company believes these
new alternative fuel programs will impose additional expenditures on the
Company; however, the magnitude of the impact has not yet been determined nor
has the Company decided what steps to take in response to any new regulations
enacted.
Two other aspects of the Clean Air Act Amendments are also expected to have
an impact on the Company. The Amendments require the Company to develop an
emissions inventory for its facilities which emit prescribed levels of
pollutants. In addition, the Amendments mandate that the Company explore
alternatives to reduce the number of vehicles transporting its employees to and
from work at certain facilities during certain time periods. The Company is in
the process of developing the emissions inventory in anticipation of an October
1995 deadline and is also studying ways to comply with the trip reduction
mandates of the Amendments. Though
7
additional expenditures will be required to accomplish these tasks, the
anticipated impact is not expected to be material.
The states, in response to the requirements contained in the Clean Water
Act, are implementing programs related to the capture and treatment of aircraft
deicing fluids and the capture and treatment of aircraft and vehicle wash water
discharge. During periods of cold weather flying, the Company is required to
deice its aircraft by applying fluids which dissolve and inhibit the formation
of ice on the body and wings of the aircraft. These fluids may be applied to the
aircraft while it is on the runway or in the ramp area next to the terminal. In
either case, various states and airport authorities have begun to regulate the
discharge and disposal of such fluids. In some cases, the airport authorities
are splitting the cost of containment systems among all of the airlines using
the airport authorities' deicing facilities. In other cases, each individual
carrier is required to pay the cost of its own deicing facilities and the
cost of the disposal of its own discharge. Capture and disposal of vehicle wash
discharge is also required by the Clean Water Act. In this case, the Company is
exploring ways to reduce the amount of contaminants contained in the discharge
as well as treat the discharge itself to comply with state and local pollution
control requirements.
For both aircraft deicing and vehicle washing, the Company cannot
accurately predict the precise amount of future costs associated with
compliance with the Clean Water Act given the developing nature of the
regulations, the variety of local responses to the requirements and the multiple
solutions being considered by the Company to the requirements. Increased
expenditures will be necessary to comply in the short and long term, but the
Company does not expect these expenditures to be material.
EMPLOYEES
At June 30, 1994, the Company employed approximately 66,000 permanent
full-time and 35,000 permanent part-time employees, of which approximately 22%
are employed in Memphis. Employees of the Company's international branches and
subsidiaries in the aggregate comprise approximately 12% of all employees. The
Company believes its relationship with its employees is excellent.
Following the Company's flight crewmembers' decision to form a collective
bargaining unit, the Company and the Air Line Pilots Association ("ALPA") began
negotiations on certain interim issues on August 26, 1993 in preparation for a
comprehensive collective bargaining agreement. In March 1994, the Company
and ALPA entered into two agreements, one creating a dispute resolution system
for certain disciplinary matters, the other permitting ALPA crewmembers to be
excused from flying to perform ALPA related duties in exchange for ALPA's
agreement to reimburse the Company for the loss of those crewmembers.
Negotiations toward a comprehensive collective bargaining agreement began in
May 1994 and are continuing.
Attempts by other labor organizations to organize certain other groups of
employees have been initiated. Although the Company cannot predict the outcome
of these labor activities or their effect on the Company or its employees, if
any, the Company is vigorously opposing these organization attempts.
FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS
For information concerning financial results for domestic and international
operations for the three years ended May 31, 1994, 1993 and 1992, refer to Note
10 of Notes to Consolidated Financial Statements contained in the Company's 1994
Annual Report to Stockholders, which Note is incorporated herein by reference.
ITEM 2. PROPERTIES
The Company's principal owned or leased properties include its aircraft,
vehicles, national, regional and metropolitan sorting facilities, administration
buildings, city stations, Service Centers, Mini-Centers, Drop Boxes and data
processing and telecommunications equipment.
8
AIRCRAFT AND VEHICLES
The Company's operating jet fleet at July 31, 1994 consisted of Airbus
A300-600, A310-200, McDonnell Douglas MD-11, DC-10-10, DC-10-30 and Boeing
B727-100, B727-200 and B747-200 aircraft. The A300s and A310s are two-engine,
wide bodied aircraft which have a longer range and more capacity than B727s. The
MD- 11s are three-engine, wide-bodied aircraft which have a longer range and
larger capacity than DC-10s. The DC- 10s are three-engine, wide-bodied aircraft
which have been specially modified to meet the Company's cargo requirements. The
B747s are four-engine, wide-bodied aircraft. The B727s are three-engine aircraft
configured for cargo service. At July 31, 1994, the Company also owned 32 Fokker
F-27 and 216 Cessna 208 turbo-prop aircraft which, in general, are leased to
unaffiliated operators to support Company operations in remote areas. An
inventory of spare engines and parts is maintained for each aircraft type.
The Company's fleet at July 31, 1994 consisted of the following aircraft:
Approximate
Revenue Payload
Description Number (Pounds per Aircraft)
- ----------- ------ ---------------------
Boeing B747-200 6* 250,000
McDonnell Douglas MD-11 13* 198,500
McDonnell Douglas DC-10-30 20* 172,000
Airbus A300-600 4* 117,700
McDonnell Douglas DC-10-10 11* 105,000
Airbus A310-200 1* 74,200
Boeing B727-200 90* 59,500
Boeing B727-100 69* 46,000
Fokker F-27-500 24 14,000
Fokker F-27-600 8 12,500
Cessna 208B 206 3,460
Cessna 208A 10 2,960
---
Total 462
---
---
___________________________
*Four A300, one A310, 13 MD-11, two DC-10-10, 15 DC-10-30, six B747-200, five
B727-100 and 13 B727-200 aircraft are subject to operating leases.
In addition, the Company "wet leases" approximately 30 smaller
piston-engine and turbo-prop aircraft which feed packages to and from airports
served by the Company's larger jet aircraft. The wet lease agreements call for
the owner-lessor to provide flight crews, insurance and maintenance, as well as
fuel and other supplies required to operate the aircraft. The Company's wet
lease agreements are for terms not exceeding one year and are generally
cancelable upon 30 to 60 days notice.
At July 31, 1994, the Company operated approximately 30,900 ground
transport vehicles, including pick-up and delivery vans, larger trucks called
container transport vehicles and over-the-road tractors and trailers.
AIRCRAFT PURCHASE COMMITMENTS
Under various contracts, the Company is committed to purchase 21 Airbus
A300 and 25 Cessna 208B aircraft to be delivered through 1999. The Company also
has options to purchase up to 46 additional A300 aircraft for delivery beginning
in 1997.
9
SORTING AND HANDLING FACILITIES
At June 30, 1994, the Company was operating the following sorting and
handling facilities:
SORTING LEASE
SQUARE CAPACITY EXPIRATION
LOCATION ACRES FEET (per hour)* LESSOR YEAR
- -------- ----- ------ ----------- ------ ----------
NATIONAL
Memphis, Tennessee 510 1,828,000 491,000 Memphis-Shelby County 2014
Airport Authority
Indianapolis, Indiana 170 645,000 153,000 Indianapolis Airport 2016
Authority
REGIONAL
Newark, New Jersey 60 374,000 85,000 Port Authority of New 2010
York and New Jersey
Oakland, California 36 191,000 50,000 City of Oakland 2011
METROPOLITAN
Los Angeles, California 25 130,000 53,000 City of Los Angeles 2009
Chicago, Illinois 35 286,000 45,000 City of Chicago 2018
Anchorage, Alaska** 42 208,000 16,000 Alaska Department of 1998
Transportation and Public
Facilities
________________________
* Documents and packages
** Handles international express package and freight shipments to and from
Asia, Europe and North America.
The Company's facilities at the Memphis International Airport also consist
of aircraft hangars, flight training and fuel facilities, administrative offices
and warehouse space. The Company leases these facilities from the Memphis-Shelby
County Airport Authority under several leases. The leases cover land, the
administrative and sorting buildings, other facilities, hangars and ramps and
certain related equipment. The Company has the option to purchase certain
equipment (but not buildings or improvements to real estate) leased under such
leases at the end of the lease term for a nominal sum. The leases obligate the
Company to maintain and insure the leased property and to pay all related taxes,
assessments and other charges. The leases are subordinate to, and the Company's
rights thereunder could be affected by, any future lease or agreement between
the Authority and the United States Government.
In addition to the facilities noted above, the Company has major
international sorting and freight handling facilities located at Narita Airport
in Japan, Charles de Gaulle Airport in Paris, France and Stansted Airport
outside London, England. The Company is also developing a transloading facility
in Subic Bay, The Philippines which is expected to become operational in 1995.
ADMINISTRATIVE AND OTHER PROPERTIES AND FACILITIES
The Company has facilities housing administrative and technical operations
on approximately 200 acres adjacent to the Memphis International Airport. Of
the seven buildings located on this site, four are subject to long-
10
term leases and the other three are owned by the Company. The Company also
leases 64 facilities in the Memphis area for its corporate headquarters,
warehouse facilities and administrative offices.
The Company owns 14 and leases 762 facilities for city station operations
in the United States. In addition, 161 city stations are owned or leased
throughout the Company's international network. The majority of the leases are
for terms of five to ten years. The Company believes that suitable alternative
facilities are available in each locale on satisfactory terms, if necessary. As
of June 30, 1994, the Company leased space for 406 Service Centers in the United
States and had placed approximately 29,676 Drop Boxes. The Company also owns
stand- alone Mini-Centers located on leaseholds in parking lots adjacent to
office buildings, shopping centers and office parks of which 285 were operating
at June 30, 1994. Internationally, the Company leases space for 31 Business
Service Centers and has approximately 733 Drop Boxes.
The Company leases central processing units and most of the disk drives,
printers and terminals used for data processing. Owned equipment consists
primarily of Digitally Assisted Dispatch Systems ("DADS") terminals used in
communications between dispatchers and couriers, computerized routing, tracing
and billing equipment used by customers and mobile radios used in the Company's
vehicles. The Company also leases space on C-Band and Ku-Band satellite
transponders for use in its telecommunications network.
ITEM 3. LEGAL PROCEEDINGS
The Company has reached a tentative settlement of the shareholder
class-action lawsuit filed in 1990 against it, Frederick W. Smith, Chairman and
Chief Executive Officer, and James L. Barksdale, the Company's former Executive
Vice President and Chief Operating Officer. The settlement, which still must be
approved by the United States District Court for the Western District of
Tennessee, is for an immaterial amount (the Company's portion of which has been
recorded in the 1994 financial statements). The Company's insurance carrier will
pay a majority of the settlement amount.
The Company currently believes that the Court will approve or disapprove
the settlement agreement before the end of its current fiscal year. Prior to the
Court's decision, the purchasers of the Company's Common Stock affected by the
settlement agreement must be notified of the terms of the settlement and a
hearing must be held in the District Court.
The Internal Revenue Service ("IRS") issued an Examination Report on
October 31, 1991 asserting the Company underpaid federal excise taxes for the
calendar quarters ended December 31, 1983 through March 31, 1987. The
Examination Report contains a primary position and a mutually exclusive
alternative position asserting the Company underpaid federal excise taxes by
$54,000,000 and $26,000,000, respectively. Disagreeing with essentially all of
the proposed adjustments contained in the Examination Report, the Company filed
a Protest on March 16, 1992 which set forth the Company's defenses to both IRS
positions and a claim for refund of overpaid federal excise taxes of
$23,500,000. On March 19, 1993, the IRS issued another Examination Report to the
Company asserting the Company underpaid federal excise taxes by $105,000,000 for
the calendar quarters ended June 30, 1987 through March 31, 1991. On June 17,
1993, the Company filed a Protest contesting the March 19 Examination Report
which set forth the Company's defenses to the IRS position and a claim for
refund of overpaid federal excise taxes of $46,500,000. Interest would be
payable on the amount of any refunds by the IRS to the Company or underpaid
federal excise taxes payable by the Company to the IRS at statutorily determined
rates. The interest rates payable by the Company for underpaid taxes are higher
than the rates payable by the IRS on refund amounts.
The Company plans to vigorously pursue its Protests administratively with
the IRS Appeals Division. If it is unsuccessful with the IRS Appeals Division,
the Company intends to pursue its position in court. Pending resolution of this
matter, the IRS can be expected to take positions similar to those taken in
their Examination Reports for periods after March 31, 1991.
Given the inherent uncertainties in the excise tax matter referred to
above, management is currently unable to predict with certainty the outcome of
this matter or the ultimate effect, if any, its resolution would have
11
on the Company's financial condition or results of operations. No amounts have
been reserved for this contingency.
In November 1987, The Flying Tiger Line Inc. ("Flying Tigers"), a company
acquired by the Company in 1989, received a notice from the United States
Environmental Protection Agency ("EPA") identifying Flying Tigers as a
potentially responsible party ("PRP") in connection with a "Superfund" site
located in Monterey Park, California. The site is a 190-acre landfill which
operated from 1948 through 1984. In June 1985, the EPA began a remedial
investigation of the site to identify the extent of soil, air and water
contamination. The EPA estimates that approximately .1% of the waste disposed at
the site is attributable to Flying Tigers. Flying Tigers participated in a
partial settlement relating to remedial actions for management of leaching
contamination and site control. Partial consent decrees were entered in the
United States District Court for the Central District of California in 1989 and
1992, which provided, in part, for payments of $109,000 and $230,000,
respectively, by Flying Tigers and Federal Express to the partial-settlement
escrow account. However, the Company does not expect all outstanding issues to
be resolved for several years. Due to several variables which are beyond the
Company's control, it is impossible to accurately estimate the Company's
potential share of the remaining costs, but based on Flying Tigers' relatively
insignificant contribution of waste to the site, the Company believes that its
remaining liability will not be material. However, if negotiations with the EPA
are not successful, it could decide to issue a unilateral remedial order which
could name one or more PRP as responsible for the entire liability. Any PRP
named in such an order would, however, be expected to seek contribution from the
unnamed PRPs.
The Company is subject to other legal proceedings and claims which arise in
the ordinary course of its business. In the opinion of management, the aggregate
liability (if any) with respect to these other actions will not materially
adversely affect the financial position or results of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
fourth quarter of the fiscal year ended May 31, 1994.
EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding executive officers of the Company is as follows
(included herein pursuant to General Instruction G(3) of Form 10-K):
Officer, Year First
Elected as Officer Age Positions with Company
- -------------------- --- ----------------------
Frederick W. Smith 49 Chairman, President and Chief Executive
1971 Officer since April 1983; Chief Executive
Officer since April 1977; Chairman since
February 1975; and President from June 1971
to February 1975. Founder of the Company.
William J. Razzouk 46 Executive Vice President - Worldwide Customer
1983 Operations since June 1993; Senior Vice
President - Sales and Customer Service from
October 1991 to June 1993; Senior Vice
President - Sales and Customer Information
from September 1990 to October 1991; Vice
President - U.S. Sales from 1988 to
September 1990; Vice President - Field Sales
from 1986 to 1988; and Vice President -
Electronic Product Sales from August 1983 to
1986.
David J. Bronczek 40 Senior Vice President - Europe, Africa and
1987 Mediterranean since March 1993; Vice
President - Canadian Operations from March
1987 to March 1993; and several sales and
operations managerial positions from 1976 to
1987.
12
T. Michael Glenn 38 Senior Vice President - Worldwide Marketing,
1985 Customer Service and Corporate Communications
since June 1994; Senior Vice President -
Marketing and Corporate Communications from
December 1993 to June 1994; Senior Vice
President - Worldwide Marketing, Catalog
Services and Corporate Communications from
June 1993 to December 1993, Senior Vice
President - Catalog and Remail Services from
September 1992 to June 1993; Vice President -
Marketing from August 1985 to September 1992,
various management positions in sales and
marketing and senior sales specialist from
1981 to 1985.
Alan B. Graf, Jr. 40 Senior Vice President and Chief Financial
1987 Officer since November 1991; Vice President
and Treasurer from July 1987 to November
1991; and various management positions in
finance and a senior financial analyst from
1980 to 1987.
Dennis H. Jones 42 Senior Vice President and Chief Information
1986 Officer since November 1991; Vice President -
Customer Automation and Invoicing from
December 1986 to November 1991; and various
management positions in finance and a
financial analyst from 1975 to 1986.
Kenneth R. Masterson 50 Senior Vice President and General
1980 Counsel since February 1981; Secretary since
September 1993; and Vice President - Legal
from January 1980 to February 1981.
Joseph C. McCarty, III 49 Senior Vice President - Asia, Pacific and
1983 Middle East since October 1991; Vice
President - International Legal from March
1987 to October 1991; Vice President -
Properties & Facilities from November 1984 to
March 1987; and Vice President - Legal from
February 1983 to November 1984.
James A. McKinney 49 Senior Vice President, President FedEx
1989 Logistics Services since December 1993; Vice
President - Business Logistics Services -
North America from October 1992 to December
1993; Vice President - Information Systems
from July 1992 to October 1992; Vice
President - Operations - FEDEX Aeronautics
Corporation from January 1992 to July 1992;
Vice President - Flight Operations from
June 1989 to January 1992; and various
managerial positions from 1984 to 1989.
Kenneth R. Newell 56 Senior Vice President - Retail Service
1983 Operations since June 1993; Senior Vice
President - Europe, Mediterranean and Africa
Operations from October 1991 to June 1993;
Vice President - United Kingdom/Ireland from
1990 to October 1991; Vice President -
Domestic Ground Operations, Central Region;
Vice President - Business Service Centers; &
Service Systems; Vice President - Business
Service Operations & Sales from September
1983 to 1987; and various managerial
positions from 1975 to 1983.
James A. Perkins 50 Senior Vice President and Chief Personnel
1979 Officer since June 1979 and various personnel
managerial positions from 1974 to 1979.
David F. Rebholz 41 Senior Vice President - Sales and Customer
1988 Services since June 1993; Vice President of
the Central Region for the Americas and
Caribbean from October 1991 to June 1993;
Vice President of Customer Service from
December 1988 to October 1991; and Regional
Sales Director-Western Region and various
operating management positions from 1976 to
1988.
13
Jeffrey R. Rodek 40 Senior Vice President - Americas and
1986 Caribbean since July 1991; Senior Vice
President - Central Support Services from
December 1989 to July 1991; President of The
Flying Tiger Line Inc. from June 1989 to
August 1989; Vice President - Financial
Planning and Control from January 1986 to
December 1989; and various management
positions in finance and an operations
research analyst from 1978 to 1986.
Tracy G. Schmidt 37 Senior Vice President - Air Ground Terminal
1990 and Transportation since July 1994; Vice
President - Corporate Financial Planning from
January 1990 to July 1994; and various
management positions in financial planning
and reporting from 1980 to 1990.
Mary Alice Taylor 44 Senior Vice President - Central Support
1985 Services since September 1991; Regional Vice
President - Ground Operations - Southern
Region from May 1988 to September 1991; Vice
President - Logistics and Publishing Services
from November 1985 to May 1988. Various
management positions in Finance and
management information consultant from 1980
to 1985.
Theodore L. Weise 50 Senior Vice President - Air Operations since
1978 July 1991; Senior Vice President - United
States and Canada from June 1990 to July
1991; Senior Vice President - Domestic Ground
Operations from 1987 to June 1990; Senior
Vice President - Central Support Services
from 1985 to 1987; Senior Vice President/
General Manager - Business Service Centers
from 1983 to 1985; Senior Vice President -
Operations Planning from 1979 to 1983; Vice
President - Operations Resource and Corporate
Planning from 1978 to 1979; Vice President
Special Projects and Advanced Planning from
April 1977 to 1978; and Director of Special
Projects from 1972 to 1977.
14
GRAHAM R. SMITH 46 Vice President and Controller since September
1988 1990; Vice President-International Finance from
December 1988 to September 1990; and various management
positions in finance from 1977 to 1988.
Officers are elected by, and serve at the discretion of, the Board of
Directors. There is no arrangement or understanding between any officer and any
person, other than a director or executive officer of the Company acting in his
or her official capacity, pursuant to which any officer was selected. There are
no family relationships between any executive officer and any other executive
officer or director of the Company. There has been no event involving any
executive officer under any bankruptcy act, criminal proceeding, judgment or
injunction during the past five years.
PART II
Information for Items 5 through 8 of this Report appears in the Company's
1994 Annual Report to Stockholders as indicated in the following table and is
incorporated herein by reference.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
Information regarding market information, stockholders and dividends is
contained in the Corporate Information Section of the 1994 Annual Report to
Stockholders, on page 56 under the headings, "Stock Listing," "Stockholders" and
"Market Information" and is incorporated herein by reference.
No cash dividends have been declared.
PAGE(S) IN ANNUAL
REPORT TO STOCKHOLDERS
----------------------
ITEM 6. SELECTED FINANCIAL DATA
Selected Consolidated Financial Data.................. 52 - 53
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.............. 26 - 32
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated Statements of Operations............ 33
Consolidated Balance Sheets...................... 34 - 35
Consolidated Statements of Cash Flows............ 36
Consolidated Statements of Changes in
Common Stockholders' Investment................. 37
Notes to Consolidated Financial Statements....... 38 - 50
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE........... Not Applicable
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding members of the Company's Board of Directors is
presented in Sections "Voting Securities and Principal Holders Thereof -
Security Ownership of Management and Certain Beneficial Owners," "Election of
Directors," "Meetings and Committees," "Transactions with Management and Others"
and
15
"Compensation of Directors" on pages 1 through 5 and 11 through 12 of the
Definitive Proxy Statement for the Company's 1994 Annual Meeting of Stockholders
which will be held September 26, 1994 and is incorporated herein by reference.
Information regarding executive officers of the Company is included above in
Part I of this Form 10-K under the caption "Executive Officers of the
Registrant" pursuant to Instruction 3 to Item 401(b) of Regulation S-K and
General Instruction G(3) of Form 10-K. Information required by Item 405 of
Regulation S-K is presented in "Section 16 Filings" on page 12 of the
Definitive Proxy Statement and is incorporated herein by reference.
Information for Items 11 through 13 of this Report appears in the
Definitive Proxy Statement for the Company's 1994 Annual Meeting of Stockholders
to be held on September 26, 1994 and, as indicated in the following table, is
incorporated herein by reference.
PAGE IN PROXY
STATEMENT
-------------
ITEM 11. EXECUTIVE COMPENSATION
Compensation Information........................... 6 - 11
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Voting Securities and Principal Holders Thereof...... 1 - 3
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Management and Others.............. 11
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. FINANCIAL STATEMENTS
The consolidated financial statements of the Company, together with the
report thereon of Arthur Andersen & Co., dated June 29, 1994, are presented on
pages 33 through 51 of the Company's 1994 Annual Report to Stockholders and are
incorporated herein by reference. With the exception of the aforementioned
information and the information incorporated by reference in Items 5, 6, 7 and 8
hereof, the Company's 1994 Annual Report to Stockholders is not to be deemed as
filed as part of this Report.
2. FINANCIAL STATEMENT SCHEDULES
PAGE NUMBER IN
FORM 10-K
--------------
Report of Independent Public Accountants on Financial
Statement Schedules.................................... S-1
Schedule II - Amounts Receivable from Related Parties and
Underwriters, Promoters and Employees Other
than Related Parties................................... S-2
Schedule V - Property and Equipment.............................. S-3
Schedule VI - Accumulated Depreciation and Amortization of
Property and Equipment................................. S-4
Schedule VIII - Valuation and Qualifying Accounts................ S-5
Schedule IX - Short-Term Borrowings.............................. S-6
16
Schedule X - Supplementary Income Statement Information.......... S-7
All other financial statement schedules have been omitted because they are not
applicable or the required information is included in the consolidated financial
statements, or the notes thereto, contained in the Company's 1994 Annual Report
to Stockholders and incorporated herein by reference.
3. EXHIBITS
The documents attached hereto as Exhibits 3.1, 3.2, 4.1 through 4.25, 10-1
through 10.71, 11.1, 12.1, 13.1, 21.1, 23.1 and 24.1 are being filed in
connection with and incorporated by reference herein.
The Exhibit Index on pages E-1 through E-9 is hereby incorporated herein
by reference.
(b) REPORTS ON FORM 8-K
During the last quarter of the period covered by this Report on Form 10-K,
the Registrant filed two Current Reports on Form 8-K.
The first Current Report was dated March 11, 1994 and contained
Registrant's press release dated March 11, 1994.
The second Current Report was dated March 16, 1994 and contained documents
relating to Registrant's 1994 Pass Through Certificates, Series A310-A1, A310-A2
and A310-A3.
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
FEDERAL EXPRESS CORPORATION
(Registrant)
BY: /s/ GRAHAM R. SMITH
-----------------------------------
Graham R. Smith
Vice President and Controller
(Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Registrant in the capacities and on the dates indicated.
SIGNATURE CAPACITY DATE
--------- -------- ----
/s/ FREDERICK W. SMITH * Chairman, President
- -------------------------- and Chief Executive Officer
Frederick W. Smith (Principal Executive Officer)
/s/ WILLIAM J. RAZZOUK * Executive Vice President
- -------------------------- Worldwide Customer
William J. Razzouk Operations
/s/ ALAN B. GRAF, JR.* Senior Vice President and
- -------------------------- Chief Financial Officer
Alan B. Graf, Jr. (Principal Financial Officer)
/s/ GRAHAM R. SMITH Vice President and Controller
- --------------------------- (Principal Accounting Officer) August 5, 1994
Graham R. Smith
/s/ ROBERT H. ALLEN * Director
- ---------------------------
Robert H. Allen
/s/ HOWARD H. BAKER, JR. * Director
- ---------------------------
Howard H. Baker, Jr.
/s/ ANTHONY J.A. BRYAN * Director
- ---------------------------
Anthony J.A. Bryan
/s/ ROBERT L. COX * Director
- ---------------------------
Robert L. Cox
/s/ RALPH D. DENUNZIO * Director
- ---------------------------
Ralph D. DeNunzio
18
SIGNATURE CAPACITY DATE
--------- -------- ----
/s/ JUDITH L. ESTRIN * Director
- ---------------------------
Judith L. Estrin
/s/ PHILIP GREER * Director
- ---------------------------
Philip Greer
/s/ J. R. HYDE, III * Director
- ---------------------------
J. R. Hyde, III
/s/ CHARLES T. MANATT * Director
- ---------------------------
Charles T. Manatt
/s/ JACKSON W. SMART, JR. * Director
- ---------------------------
Jackson W. Smart, Jr.
/s/ JOSHUA I. SMITH * Director
- ---------------------------
Joshua I. Smith
/s/ PETER S. WILLMOTT * Director
- ---------------------------
Peter S. Willmott
*By:/s/ GRAHAM R. SMITH August 5, 1994
------------------------
Graham R. Smith
Attorney-in-Fact
19
S-1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULES
To Federal Express Corporation:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in Federal Express Corporation's 1994
Annual Report to Stockholders incorporated by reference in this Form 10-K, and
have issued our report thereon dated June 29, 1994. Our audit was made for the
purpose of forming an opinion on those statements taken as a whole. The
financial statement schedules on pages S-2 through S-7 are the responsibility of
the Company's management and are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. The financial statement schedules have been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, fairly state in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
/s/ ARTHUR ANDERSEN & CO.
---------------------------------
ARTHUR ANDERSEN & CO.
Memphis, Tennessee,
June 29, 1994.
S-2
SCHEDULE II
FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES
AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS AND EMPLOYEES OTHER THAN RELATED PARTIES
FOR THE YEARS ENDED MAY 31, 1994, 1993 AND 1992
BALANCE AT END
DEDUCTIONS OF YEAR
------------------- ------------------
BALANCE AT AMOUNTS
NAME OF BEGINNING AMOUNTS WRITTEN NOT
DEBTOR(A) OF YEAR ADDITIONS COLLECTED OFF CURRENT CURRENT
--------- ---------- --------- --------- ------- ------- -------
1994
- ----
Thomas R. Oliver(B) $1,775,817 - $1,775,817 - - -
William J. Razzouk - $ 350,007 350,007 - - -
Theodore L. Weise 619,031 - - - - $ 619,031
Ronald D. Wickens 242,790 - 223,103 - - 19,687
1993
- ----
Larry W. McMahan $ 101,690 - $ 101,690 - - -
Thomas R. Oliver(B) 400,997 $1,374,820 - - - $1,775,817
William J. Razzouk - 199,803 199,803 - - -
Theodore L. Weise 619,031 - - - - 619,031
Ronald D. Wickens 242,790 - - - - 242,790
1992
- ----
David C. Anderson(C) $ 482,802 - $ 482,802 - - -
A. Doyle Cloud 70,874 - 70,874 - - -
John M. Dauernheim 122,203 - 122,203 - - -
Larry W. McMahan 101,690 - - - - $ 101,690
Thomas R. Oliver 400,997 - - - - 400,997
Ron J. Ponder(C) 636,832 - 636,832 - - -
William J. Razzouk - $ 160,138 160,138 - - -
Michael A. Staunton 113,218 - 113,218 - - -
Theodore L. Weise 619,031 - - - - 619,031
Ronald D. Wickens 242,790 - - - - 242,790
(A) Consists of loans to certain key employees for the purchase of Common Stock
under the Company's stock incentive plans. Loans are non-interest bearing
and are due on demand or when the individual leaves the employment of the
Company.
(B) Mr. Oliver, the Company's former Executive Vice President-Worldwide
Customer Operations, resigned from the Company effective July 31, 1993.
(C) Mr. Anderson, the Company's former Chief Financial Officer, and Mr. Ponder,
the Company's former Senior Vice President and Chief Information Officer,
resigned from the Company during 1992.
S-3
SCHEDULE V
FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES
PROPERTY AND EQUIPMENT
FOR THE YEARS ENDED MAY 31, 1994, 1993 AND 1992
(In thousands)
BALANCE AT BALANCE
BEGINNING ADDITIONS AT END
DESCRIPTION OF YEAR AT COST RETIREMENTS OTHER (E) OF YEAR
- ----------- ---------- --------- ----------- --------- -------
1994
- ----
Flight equipment . . . . . . . . . . . . $2,843,253 $ 582,477(A) $(597,422)(D) $ (287) $2,828,021
Package handling and ground
support equipment . . . . . . . . . . . 1,413,793 221,859(B) (49,387) (2,837) 1,583,428
Computer and electronic equipment. . . . 947,913 181,417(C) (160,903) (1,521) 966,906
Other property and equipment . . . . . . 1,501,250 103,622 (90,815) (2,187) 1,511,870
---------- ------------ --------- ------------ ----------
$6,706,209 $ 1,089,375 $(898,527) $ (6,832) $6,890,225
---------- ------------ ---------- -------- ----------
---------- ------------ --------- -------- ----------
1993
- ----
Flight equipment . . . . . . . . . . . . $2,540,350 $ 571,639(A) $(268,343)(D) $ (393) $2,843,253
Package handling and ground
support equipment . . . . . . . . . . . 1,352,659 79,104 (69) (17,901) 1,413,793
Computer and electronic equipment. . . . 851,686 126,465(C) (32,951) 2,713 947,913
Other property and equipment . . . . . . 1,433,212 89,779 (22,838) 1,097 1,501,250
---------- ---------- --------- --------------- ----------
$6,177,907 $ 866,987 $(324,201) $(14,484) $6,706,209
---------- ---------- --------- -------- ----------
---------- ---------- --------- -------- ----------
1992
- ----
Flight equipment . . . . . . . . . . . . $2,394,326 $ 538,544(A) $(392,966)(D) $ 446 $2,540,350
Package handling and ground
support equipment. . . . . . . . . . . . 1,296,706 53,440 (30,048) 32,561 1,352,659
Computer and electronic equipment. . . . 756,638 110,993(C) (16,987) 1,042 851,686
Other property and equipment . . . . . . 1,447,501 67,793 (85,060) 2,978 1,433,212
---------- ---------- --------- -------- ----------
$5,895,171 $ 770,770 $(525,061) $ 37,027 $6,177,907
---------- ---------- --------- -------- ----------
---------- ---------- --------- -------- ----------
(A) Additions to flight equipment primarily relate to the purchase of
aircraft and related equipment as follows: five MD-11 and three B727-
200 in 1994; 19 B727-200 and four MD-11 in 1993; and two B727-100, nine
B727-200, three MD-11, six F-27 and 24 Cessna 208B in 1992.
(B) Additions to package handling and ground support equipment in 1994
primarily relate to the acquisition of pick-up and delivery vehicles,
container transport vehicles and expansion of the Company's national and
regional sorting and package handling facilities.
(C) Additions to computer and electronic equipment relate primarily to
computer mainframe expansion and upgrades and expansions of the Company's
customer automation systems (POWERSHIP) and, with respect to 1993 and
1992, the Company's advance package tracking and billing systems
(COSMOS).
(D) Retirements of flight equipment primarily relate to sale-leasebacks of
six MD-11 aircraft in 1994; three MD-11 aircraft in 1993; and five
B727-100, two DC-10-10 and three MD-11 aircraft in 1992.
(E) Includes foreign currency translation adjustments and reclassifications.
S-4
SCHEDULE VI
FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES
ACCUMULATED DEPRECIATION AND AMORTIZATION OF
PROPERTY AND EQUIPMENT
FOR THE YEARS ENDED MAY 31, 1994, 1993 AND 1992
(In thousands)
ADDITIONS
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND AT END
DESCRIPTION OF YEAR EXPENSES RETIREMENTS OTHER (B) OF YEAR
- ----------- ---------- ---------- ----------- --------- -------
1994
- ----
Flight equipment . . . . . . . . . . . . $1,097,985 $234,086 $ (68,609)(A) $ (94) $ 1,263,368
Package handling and ground
support equipment . . . . . . . . . . . 851,739 135,408 (48,998) (1,923) 936,226
Computer and electronic equipment. . . . 677,567 120,736 (158,963) (925) 638,415
Other property and equipment . . . . . . 602,650 92,432 (90,634) (1,325) 603,123
---------- -------- --------- -------- -----------
$3,229,941 $582,662 $(367,204) $ (4,267) $ 3,441,132
---------- -------- --------- -------- -----------
---------- -------- --------- -------- -----------
1993
- ----
Flight equipment . . . . . . . . . . . . $ 899,993 $221,088 $ (22,890) $ (206) $ 1,097,985
Package handling and ground
support equipment . . . . . . . . . . . 746,730 124,120 - (19,111) 851,739
Computer and electronic equipment. . . . 601,582 111,299 (32,854) (2,460) 677,567
Other property and equipment . . . . . . 518,305 105,302 (16,147) (4,810) 602,650
---------- -------- ---------- -------- -----------
$2,766,610 $561,809 $ (71,891) $(26,587) $ 3,229,941
---------- -------- ---------- -------- -----------
---------- -------- ---------- -------- -----------
1992
- ----
Flight equipment . . . . . . . . . . . . $ 741,256 $204,262 $ (45,820)(A) $ 295 $ 899,993
Package handling and ground
support equipment . . . . . . . . . . . 594,896 133,171 (11,953) 30,616 746,730
Computer and electronic equipment. . . . 503,853 104,970 (7,241) - 601,582
Other property and equipment . . . . . . 431,140 114,410 (26,995) (250) 518,305
---------- -------- ---------- -------- -----------
$2,271,145 $556,813 $ (92,009) $ 30,661 $ 2,766,610
---------- -------- ---------- -------- -----------
---------- -------- ---------- -------- -----------
(A) Retirements of flight equipment relate primarily to sale-leasebacks of
aircraft.
(B) Includes foreign currency translation adjustments and reclassifications.
S-5
SCHEDULE VIII
FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED MAY 31, 1994, 1993 AND 1992
(In thousands)
ADDITIONS
---------------------------
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING COSTS AND OTHER END OF
DESCRIPTION OF YEAR EXPENSES ACCOUNTS DEDUCTIONS(A) YEAR
- ----------- ---------- ---------- ---------- ------------- ----------
Allowance for
Doubtful Accounts
-----------------
1994 . . . . . . . . . . . $31,308 $45,763 - $43,138 $33,933
------- ------- --------- ------- -------
------- ------- --------- ------- -------
1993 . . . . . . . . . . . $32,074 $33,552 - $34,318 $31,308
------- ------- --------- ------- -------
------- ------- --------- ------- -------
1992 . . . . . . . . . . . $37,694 $31,670 $ 4,596 $41,886 $32,074
------- ------- --------- ------- -------
------- ------- --------- ------- -------
(A) Accounts written off net of recoveries.
S-6
SCHEDULE IX
FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES
SHORT-TERM BORROWINGS
FOR THE YEARS ENDED MAY 31, 1994, 1993 AND 1992
(In thousands, except percentages)
MAXIMUM AVERAGE WEIGHTED
WEIGHTED AMOUNT AMOUNT AVERAGE
BALANCE AVERAGE OUTSTANDING OUTSTANDING INTEREST
CATEGORY OF AGGREGATE AT END INTEREST DURING DURING RATE DURING
SHORT-TERM BORROWINGS OF YEAR RATE THE YEAR THE YEAR THE YEAR(C)
- --------------------- ------- -------- ----------- ----------- -----------
1994 (A)
- ----
Commercial paper . . . . . . . . - - $ 95,000 $ 1,781 3.8%
Revolving credit agreement . . . - - 45,000 1,082 6.0%
1993 (A)
- ----
Commercial paper . . . . . . . . - - $202,328 $ 43,058 4.2%
Revolving credit agreement . . . - - 125,000 13,075 6.2%
1992 (B)
- ----
Commercial paper . . . . . . . . $120,413 4.7% $277,771 $185,455 5.9%
Revolving credit agreements. . . 75,000 6.5% 530,000 245,413 6.6%
(A) The Company has a revolving credit agreement with domestic and foreign
banks at May 31, 1994, which was also in place at May 31, 1993.
International borrowings with foreign banks are denominated in U.S.
dollars. During 1993 there were certain international borrowings with
foreign banks denominated in currencies other than U.S. dollars. Those
borrowings were translated based on the foreign currency rates of exchange
in effect for the period. The average amount outstanding during the year
was computed by dividing the sum of daily outstanding principal balances by
365 for commercial paper and revolving credit borrowings.
(B) The Company had revolving credit agreements with domestic and foreign
banks. International borrowings with foreign banks denominated in
currencies other than U.S. dollars were translated based on the foreign
currency rates of exchange in effect for the period. The average amount
outstanding during the year was computed by dividing the sum of daily
outstanding principal balances by 365 for commercial paper and domestic
revolving credit borrowings and by dividing the sum of the month-end
outstanding principal balances by 13 for international revolving credit
borrowings.
(C) The weighted average interest rate was computed by dividing actual interest
expense by average short-term borrowings outstanding during the year. The
weighted average interest rates for domestic and international borrowings
under revolving credit agreements were both approximately 6% for 1993, and
6% and 11%, respectively, for 1992. There were no international borrowings
under the revolving credit agreement in 1994.
S-7
SCHEDULE X
FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED MAY 31, 1994, 1993 AND 1992
(In thousands)
1994 1993 1992
---------- ---------- ----------
Maintenance and repairs (A). . . $554,301 $527,856 $530,566
Advertising. . . . . . . . . . . 122,002 109,323 123,592
(A) The above amounts include salaries and employee benefits and other expenses
associated with the Company's internal maintenance and repair functions for
aircraft and vehicle fleets, facilities and sort equipment.
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
3.1 Restated Certificate of Incorporation of Registrant (Filed as
Exhibit 3.1 to Registrant's 1993 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by reference.)
3.2 By-laws of Registrant (Filed as Exhibit 3.2 to Registrant's 1993
Annual Report on Form 10-K, Commission File No. 1-7806, and
incorporated herein by reference.)
4.1 Indenture dated as of April 1, 1987 between Registrant and
NationsBank of Tennessee, National Association ("NationsBank"), as
Trustee, relating to Registrant's 10% Senior Notes due April 15,
1999. (Filed as Exhibit 10.36 to Registrant's 1988 Annual Report on
Form 10-K, Commission File No. 1-7806, and incorporated herein by
reference.)
4.2 Supplemental Indenture No. 2 dated as of April 18, 1989 between
Registrant and NationsBank, relating to Registrant's 10% Senior
Notes due April 15, 1999. (Filed as Exhibit 4(a) to Registrant's
Current Report on Form 8-K dated April 25, 1989, Commission File
No. 1-7806, and incorporated herein by reference.)
4.3 Supplemental Indenture No. 3 dated as of April 21, 1989 between
Registrant and NationsBank and form of note relating to
Registrant's 10% Senior Notes due April 15, 1999. (Filed as
Exhibit 4(b) to Registrant's Current Report on Form 8-K dated April
25, 1989, Commission File No. 1-7806, and incorporated herein by
reference.)
4.4 Indenture dated as of May 15, 1989 between Registrant and
NationsBank, relating to Registrant's 9-3/4% Senior Notes due May
15, 1996. (Filed as an exhibit to Registrant's Registration
Statement No. 33-28796 on Form S-3 and incorporated herein by
reference.)
4.5 Supplemental Indenture No. 1 dated as of May 22, 1989 between
Registrant and NationsBank and form of note relating to
Registrant's 9-3/4% Senior Notes due May 15, 1996. (Filed as
Exhibit 4 to Registrant's Current Report on Form 8-K dated May 24,
1989, Commission File No. 1-7806, and incorporated herein by
reference.)
4.6 Supplemental Indenture No. 2 dated as of August 11, 1989 between
Registrant and NationsBank, relating to Registrant's 9 5/8% Sinking
Fund Debentures due October 15, 2019. (Filed as Exhibit 4.2 to
Registrant's Registration Statement No. 33-30415 on Form S-3 and
incorporated herein by reference.)
4.7 Supplemental Indenture No. 3 dated as of October 15, 1989 between
Registrant and NationsBank, relating to Registrant's 9 5/8% Sinking
Fund Debentures due October 15, 2019. (Filed as Exhibit 4.2 to
Registrant's Current Report on Form 8-K dated October 16, 1989,
Commission File No. 1-7806, and incorporated herein by reference.)
4.8 Supplemental Indenture No. 4 dated as of November 15, 1989 between
Registrant and NationsBank, relating to Registrant's 9.20% Senior
Notes due November 15, 1994. (Filed as Exhibit 4.1 to Registrant's
Current Report on Form 8-K dated November 13, 1989, Commission File
No. 1-7806, and incorporated herein by reference.)
4.9 Form of 9.20% Senior Note due November 15, 1994. (Filed as Exhibit
4.2 to Registrant's Current Report on Form 8-K dated November 13,
1989, Commission File No. 1-7806, and incorporated herein by
reference.)
E-1
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
4.10 Supplemental Indenture No. 5 dated as of August 15, 1990 between
Registrant and NationsBank, relating to Registrant's Medium-Term
Notes, Series A, the last of which is due November 20, 1995. (Filed
as Exhibit 4(c) to Registrant's Current Report on Form 8-K dated
August 28, 1990, Commission File No. 1-7806, and incorporated
herein by reference.)
4.11 Form of Fixed Rate Medium-Term Note, Series A, the last of which is
due November 20, 1995. (Filed as Exhibit 4(a) to Registrant's
Current Report on Form 8-K dated August 28, 1990, Commission File
No. 1-7806, and incorporated herein by reference.)
4.12 Form of Floating Rate Medium-Term Note, Series A, the last of which
is due November 20, 1995. (Filed as Exhibit 4(b) to Registrant's
Current Report on Form 8-K dated August 28, 1990, Commission File
No. 1-7806, and incorporated herein by reference.)
4.13 Indenture dated May 15, 1989 including Supplemental Indentures Nos.
1 through 5 dated as described above, between Registrant and
NationsBank, relating to Registrant's Medium-Term Notes, Series B,
the last of which is due August 15, 2006, Registrant's 9 7/8% Notes
due April 1, 2002, Registrant's 9.65% Notes due June 15, 2012 and
Registrant's 6 1/4% Notes due April 15, 1998. (Filed as described
above.)
4.14 Form of Fixed Rate Medium-Term Note, Series B, the last of which is
due August 15, 2006. (Filed as Exhibit 4.4 to Registrant's
Registration Statement No. 33-40018 on Form S-3 and incorporated
herein by reference.)
4.15 Form of Floating Rate Medium-Term Note, Series B, the last of which
is due August 15, 2006. (Filed as Exhibit 4.5 to Registrant's
Registration Statement No. 33-40018 on Form S-3 and incorporated
herein by reference.)
4.16 Form of 9 7/8% Note due April 1, 2002. (Filed as Exhibit 4.1 to
Registrant's Current Report on Form 8-K dated March 23, 1992,
Commission File No. 1-7806, and incorporated herein by reference.)
4.17 Form of 9.65% Note due June 15, 2012. (Filed as Exhibit 4.1 to
Registrant's Current Report on Form 8-K dated June 18, 1992,
Commission File No. 1-7806, and incorporated herein by reference.)
4.18 Form of 6 1/4% Note due April 15, 1998. (Filed as Exhibit 4.1 to
Registrant's Current Report on Form 8-K dated April 21, 1993,
Commission File No. 1-7806, and incorporated herein by reference.)
4.19 Pass Through Trust Agreement dated as of February 1, 1993 between
Registrant and NationsBank of South Carolina, National Association,
as Pass Through Trustee, relating to Registrant's 1993 Pass Through
Certificates, Series A1 and A2, Series B1 and B2 and Series C1 and
C2. (Filed as Exhibit 4.19 to Registrant's 1993 Annual Report on
Form 10-K, Commission File No. 1-7806, and incorporated herein by
reference.)
4.20 Form of 1993 Pass Through Certificates, Series A1 and A2. (Filed as
Exhibit 4(a)(2) to Registrant's Current Report on Form 8-K dated
February 4, 1993, Commission File No. 1-7806, and incorporated
herein by reference.)
4.21 Form of 1993 Pass Through Certificates, Series B1 and B2. (Filed as
Exhibit 4.a.2 to Registrant's Current Report on Form 8-K dated
September 23, 1993, Commission File No. 1-7806, and incorporated
herein by reference.)
E-2
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
4.22 Form of 1993 Pass Through Certificates, Series C1 and C2. (Filed as
Exhibit 4.a.2 to Registrant's Current Report on Form 8-K dated
December 2, 1993, Commission File No. 1-7806, and incorporated
herein by reference.)
4.23 Pass Through Trust Agreement dated as of March 1, 1994 between
Registrant and NationsBank of South Carolina, National Association,
as Pass Through Trustee, relating to Registrant's 1994 Pass Through
Certificates, Series A310-A1, A310-A2 and A310-A3. (Filed as
Exhibit 4.a.1 to Registrant's Current Report on Form 8-K dated
March 16, 1994, Commission File No. 1-7806, and incorporated herein
by reference.)
4.24 Form of 1994 Pass Through Certificates, Series A310-A1, A310-A2 and
A310-A3. (Filed as Exhibit 4.a.2 to Registrant's Current Report on
Form 8-K dated March 16, 1994, Commission File No. 1-7806, and
incorporated herein by reference.)
4.25 Loan Agreement dated July 15, 1992, between Registrant and
Kreditanstalt Fur Wiederaufbau relating to the financing of
predelivery payments on Airbus A300 aircraft. Confidential
treatment has been granted for confidential commercial and
financial information pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934. (Filed as Exhibit 4.2 to Registrant's 1993
Second Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.1 Indenture between the Memphis Shelby County Airport Authority (the
"Authority") and NationsBank, as Trustee, dated as of August 1,
1979. (Refiled as Exhibit 10.1 to Registrant's 1990 Annual Report
on Form 10-K, Commission File No. 1-7806, and incorporated herein
by reference.)
10.2 Second Supplemental Indenture dated as of May 1, 1982 between
NationsBank and the Authority relating to 8.30% Special Facilities
Revenue Bonds, Series 1982B due September 1, 2012. (Refiled as
Exhibit 10.2 to Registrant's 1993 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by reference.)
10.3 Third Supplemental Indenture dated as of November 1, 1982 between
the Authority and NationsBank. (Refiled as Exhibit 10.3 to
Registrant's 1993 Annual Report on Form 10-K, Commission File No.
1-7806, and incorporated herein by reference.)
10.4 Fourth Supplemental Indenture dated as of December 1, 1984 between
the Authority and NationsBank, relating to 7 7/8% Special
Facilities Revenue Bonds, Series 1984 due September 1, 2009. (Filed
as Exhibit 10.18 to Registrant's 1985 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by reference.)
10.5 Fifth Supplemental Indenture dated as of July 1, 1992 between the
Authority and NationsBank, relating to 6 3/4% Special Facilities
Revenue Bonds, Refunding Series 1992 due July 1, 2012. (Filed as
Exhibit 10.5 to Registrant's 1992 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by reference.)
10.6 Guaranty dated as of August 1, 1979 between Registrant and
NationsBank. (Refiled as Exhibit 10.5 to Registrant's 1990 Annual
Report on Form 10-K, Commission File No. 1-7806, and incorporated
herein by reference.)
10.7 Reaffirmation of Guaranty dated as of May 1, 1982 between
NationsBank and Registrant relating to Special Facilities Revenue
Bonds, Series 1982B. (Refiled as Exhibit 10.7 to Registrant's 1993
Annual Report on Form 10-K, Commission File No. 1-7806, and
incorporated herein by reference.)
E-3
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
10.8 Reaffirmation of Guaranty dated as of December 1, 1984 between
NationsBank and Registrant relating to Special Facilities Revenue
Bonds, Series 1984. (Refiled as Exhibit 10.10 to Registrant's 1993
Annual Report on Form 10-K, Commission File No. 1-7806, and
incorporated herein by reference.)
10.9 Reaffirmation of Guaranty dated as of July 30, 1992 between
NationsBank and Registrant relating to Special Facilities Revenue
Bonds, Refunding Series 1992. (Filed as Exhibit 10.11 to
Registrant's 1992 Annual Report on Form 10-K, Commission File No.
1-7806, and incorporated herein by reference.)
10.10 Consolidated and Restated Lease Agreement dated as of August 1,
1979 between the Authority and Registrant. (Refiled as Exhibit
10.11 to Registrant's 1990 Annual Report on Form 10-K, Commission
File No. 1-7806, and incorporated herein by reference.)
10.11 First Supplemental Lease Agreement dated as of April 1, 1981
between Registrant and the Authority. (Filed as Exhibit 10.13 to
Registrant's 1992 Annual Report on Form 10-K, Commission File No.
1-7806, and incorporated herein by reference.)
10.12 Second Supplemental Lease Agreement dated as of May 1, 1982 between
the Authority and Registrant. (Refiled as Exhibit 10.14 to
Registrant's 1993 Annual Report on Form 10-K, Commission File No.
1-7806, and incorporated herein by reference.)
10.13 Third Supplemental Lease Agreement dated November 1, 1982 between
the Authority and Registrant. (Filed as Exhibit 28.22 to
Registrant's 1993 Second Quarter Report on Form 10-Q, Commission
File No. 1-7806, and incorporated herein by reference.)
10.14 Fourth Supplemental Lease Agreement dated July 1, 1983 between the
Authority and Registrant. (Filed as Exhibit 28.23 to Registrant's
1993 Second Quarter Report on Form 10-Q, Commission File No. 1-
7806, and incorporated herein by reference.)
10.15 Fifth Supplemental Lease Agreement dated February 1, 1984 between
the Authority and Registrant. (Filed as Exhibit 28.24 to
Registrant's 1993 Second Quarter Report on Form 10-Q, Commission
File No. 1-7806, and incorporated herein by reference.)
10.16 Sixth Supplemental Lease Agreement dated April 1, 1984 between the
Authority and Registrant. (Filed as Exhibit 28.25 to Registrant's
1993 Second Quarter Report on Form 10-Q, Commission File No. 1-
7806, and incorporated herein by reference.)
10.17 Seventh Supplemental Lease Agreement dated June 1, 1984 between the
Authority and the Registrant. (Filed as Exhibit 28.26 to
Registrant's 1993 Second Quarter Report on Form 10-Q, Commission
File No. 1-7806, and incorporated herein by reference.)
10.18 Eighth Supplemental Lease Agreement dated July 1, 1988 between the
Authority and Registrant. (Filed as Exhibit 28.27 to Registrant's
1993 Second Quarter Report on Form 10-Q, Commission File No. 1-
7806, and incorporated herein by reference.)
10.19 Ninth Supplemental Lease Agreement dated July 12, 1989 between the
Authority and Registrant. (Filed as Exhibit 28.28 to Registrant's
1993 Second Quarter Report on Form 10-Q, Commission File No. 1-
7806, and incorporated herein by reference.)
E-4
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
10.20 Tenth Supplemental Lease Agreement dated October 1, 1991 between
the Authority and Registrant. (Filed as Exhibit 28.29 to
Registrant's 1993 Second Quarter Report on Form 10-Q, Commission
File No. 1-7806, and incorporated herein by reference.)
10.21 Twelfth Supplemental Lease Agreement dated July 1, 1993 between the
Authority and Registrant. (Filed as Exhibit 10.23 to Registrant's
1993 Annual Report on Form 10-K, Commission File No. 1-7806, and
incorporated herein by reference.)
10.22 Special Facility Lease Agreement between the Authority and
Registrant dated as of August 1, 1979. (Refiled as Exhibit 10.15 to
Registrant's 1990 Annual Report on Form 10-K, Commission File No.
1-7806, and incorporated herein by reference.)
10.23 First Special Facility Supplemental Lease Agreement dated as of May
1, 1982 between the Authority and Registrant. (Filed as Exhibit
10.25 to Registrant's 1993 Annual Report on Form 10-K, Commission
File No. 1-7806, and incorporated herein by reference.)
10.24 Second Special Facility Supplemental Lease Agreement dated as of
November 1, 1982 between the Authority and Registrant. (Filed as
Exhibit 10.26 to Registrant's 1993 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by reference.)
10.25 Third Special Facility Supplemental Lease Agreement dated as of
December 1, 1984 between the Authority and Registrant. (Filed as
Exhibit 10.14 to Registrant's 1985 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by reference.)
10.26 Fourth Special Facility Supplemental Lease Agreement dated as of
July 1, 1992 between the Authority and Registrant. (Filed as
Exhibit 10.20 to Registrant's 1992 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by reference.)
10.27 Special Facility Lease Agreement between the Authority and
Registrant dated as of July 1, 1993. (Filed as Exhibit 10.29 to
Registrant's 1993 Annual Report on Form 10-K, Commission File No.
1-7806, and incorporated herein by reference.)
10.28 Special Facility Ground Lease Agreement between the Authority and
Registrant dated as of July 1, 1993. (Filed as Exhibit 10.30 to
Registrant's 1993 Annual Report on Form 10-K, Commission File No.
1-7806, and incorporated herein by reference.)
10.29 Indenture between the Authority and NationsBank, as Trustee, dated
as of July 1, 1993 relating to 6.20% Special Facility Revenue
Bonds, Series 1993, due July 1, 2014. (Filed as Exhibit 10.31 to
Registrant's 1993 Annual Report on Form 10-K, Commission File No.
1-7806, and incorporated herein by reference.)
10.30 Guaranty dated as of July 1, 1993 between Registrant and
NationsBank, relating to 6.20% Special Facility Revenue Bonds,
Series 1993. (Filed as Exhibit 10.32 to Registrant's 1993 Annual
Report on Form 10-K, Commission File No. 1-7806, and incorporated
herein by reference.)
10.31 Ground Lease dated as of February 27, 1979 between the City of Los
Angeles and The Flying Tiger Line Inc. ("FTL") covering acreage at
the Los Angeles International Airport. (Filed as Exhibit 28.1 to
Registrant's 1993 Second Quarter Report on Form 10-Q, Commission
File No. 1-7806, and incorporated herein by reference.)
E-5
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
10.32 First Amendment dated September 18, 1979, to Ground Lease, dated
February 27, 1979, between the City of Los Angeles and FTL covering
acreage at the Los Angeles International Airport. (Filed as Exhibit
28.2 to Registrant's 1993 Second Quarter Report on Form 10-Q,
Commission File No. 1-7806, and incorporated herein by reference.)
10.33 Second Amendment dated March 9, 1983 to Ground Lease, dated
February 27, 1979, between the City of Los Angeles and FTL covering
acreage at the Los Angeles International Airport. (Filed as Exhibit
28.3 to Registrant's 1993 Second Quarter Report on Form 10-Q,
Commission File No. 1-7806, and incorporated herein by reference.)
10.34 Interim Exchange Agreement dated as of September 11, 1990 between
the City of Los Angeles and Registrant relating to the Los Angeles
International Airport. (Filed as Exhibit 28.4 to Registrant's 1993
Second Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.35 Lease Agreement dated as of May 7, 1985 between the City of Oakland
and Registrant. (Filed as Exhibit 28.5 to Registrant's 1993 Second
Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.36 Affirmative Action Agreement dated as of May 14, 1985, to Lease
Agreement dated May 7, 1985, between the City of Oakland and
Registrant. (Filed as Exhibit 28.6 to Registrant's 1993 Second
Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.37 First Supplemental Agreement dated August 5, 1986, to Lease
Agreement dated May 7, 1985, between the City of Oakland and
Registrant. (Filed as Exhibit 28.7 to Registrant's 1993 Second
Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.38 Second Supplemental Agreement dated February 17, 1987 to Lease
Agreement dated May 7, 1985, between the City of Oakland and
Registrant. (Filed as Exhibit 28.8 to Registrant's 1993 Second
Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.39 Third Supplemental Agreement dated February 1989 to Lease Agreement
dated May 7, 1985, between the City of Oakland and Registrant.
(Filed as Exhibit 28.9 to Registrant's 1993 Second Quarter Report
on Form 10-Q, Commission File No. 1-7806, and incorporated herein
by reference.)
10.40 Lease and First Right of Refusal Agreement dated July 22, 1988
between the State of Alaska, Department of Transportation and
Public Facilities and Registrant. (Filed as Exhibit 28.10 to
Registrant's 1993 Second Quarter Report on Form 10-Q, Commission
File No. 1-7806, and incorporated herein by reference.)
10.41 Development Agreement dated July 22, 1988 to Lease and First Right
of Refusal Agreement, dated July 22, 1988, between the State of
Alaska, Department of Transportation and Public Facilities and
Registrant. (Filed as Exhibit 28.11 to Registrant's 1993 Second
Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.42 Supplement No. 1 dated May 19, 1989 to Development Agreement
between the State of Alaska, Department of Transportation and
Public Facilities and Registrant. (Filed as Exhibit 28.12 to
Registrant's 1993 Second Quarter Report on Form 10-Q, Commission
File No. 1-7806, and incorporated herein by reference.)
E-6
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
10.43 Supplement No. 1 dated July 19, 1989 to Lease and First Right of
Refusal Agreement, dated July 22, 1988, between the State of
Alaska, Department of Transportation and Public Facilities and
Registrant. (Filed as Exhibit 28.13 to Registrant's 1993 Second
Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.44 Right-of-Way Agreement dated September 19, 1989 to Lease and First
Right of Refusal Agreement, dated July 22, 1988, between the State
of Alaska, Department of Transportation and Public Facilities and
Registrant. (Filed as Exhibit 28.14 to Registrant's 1993 Second
Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.45 Supplement No. 2 dated April 23, 1991 to Lease and First Right of
Refusal Agreement dated July 22, 1988, between the State of Alaska,
Department of Transportation and Public Facilities and the
Registrant. (Filed as Exhibit 28.15 to Registrant's 1993 Second
Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.46 Lease Agreement dated October 1, 1983 between The Port Authority of
New York and New Jersey and Registrant. (Filed as Exhibit 28.16 to
Registrant's 1993 Second Quarter Report on Form 10-Q, Commission
File No. 1-7806, and incorporated herein by reference.)
10.47 Supplement No. 1, dated October 1, 1983 to Lease Agreement dated
October 1, 1983 between The Port Authority of New York and New
Jersey and Registrant. (Filed as Exhibit 28.17 to Registrant's 1993
Second Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.48 Supplement No. 2 dated September 1, 1985 to Lease Agreement dated
October 1, 1983 between the Port Authority of New York and New
Jersey and Registrant. (Filed as Exhibit 28.18 to Registrant's 1993
Second Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.49 Supplement No. 3 dated June 1, 1992 to Lease Agreement dated
October 1, 1983 between The Port Authority of New York and New
Jersey and Registrant. (Filed as Exhibit 28.19 to Registrant's 1993
Second Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.50 Amended and Restated Airport Use Agreement and Terminal Facilities
Lease dated as of January 1, 1985 between the City of Chicago and
FTL. (Filed as Exhibit 28.20 to Registrant's 1993 Second Quarter
Report on Form 10-Q, Commission File No. 1-7806, and incorporated
herein by reference.)
10.51 Cargo Building Site Lease dated September 23, 1987 between the City
of Chicago and FTL. (Filed as Exhibit 28.21 to Registrant's 1993
Second Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.52 Amended and Restated Land Lease Agreement dated August 1993 between
Registrant and the Indianapolis Airport Authority.
10.53 Indenture between the City of Indianapolis and Indiana and National
Bank of Detroit, as Trustee, dated as of September 1, 1993 relating
to the City of Indianapolis Airport Facility Revenue Refunding
Bonds, Series 1994, due April 1, 2017. (Filed as Exhibit 10.1 to
Registrant's 1994 First Quarter Report on Form 10-Q, Commission
File No. 1-7806, and incorporated herein by reference.)
E-7
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
10.54 Loan Agreement between the City of Indianapolis and Registrant.
(Filed as Exhibit 10.2 to Registrant's 1994 First Quarter Report on
Form 10-Q, Commission File No. 1-7806, and incorporated herein by
reference.)
10.55 Form of Promissory Note to the City of Indianapolis. (Filed as
Exhibit 10.3 to Registrant's 1994 First Quarter Report on Form 10-
Q, Commission File No. 1-7806, and incorporated herein by
reference.)
10.56 1980 Stock Incentive Plan and Form of Stock Option Agreement
pursuant to 1980 Stock Incentive Plan, as amended. (Filed as
Exhibit 10.59 to Registrant's 1993 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by reference.)
10.57 1983 Stock Incentive Plan and Form of Stock Option Agreement
pursuant to 1983 Stock Incentive Plan, as amended. (Filed as an
exhibit to Registrant's Registration Statement No. 2-95720 on Form
S-8 and incorporated herein by reference.)
10.58 1984 Stock Incentive Plan and Form of Stock Option Agreement
pursuant to 1984 Stock Incentive Plan, as amended. (Filed as an
exhibit to Registrant's Registration Statement No. 2-95720 on Form
S-8 and incorporated herein by reference.)
10.59 1987 Stock Incentive Plan and Form of Stock Option Agreement
pursuant to 1987 Stock Incentive Plan, as amended. (Filed as an
exhibit to Registrant's Registration Statement No. 33-20138 on Form
S-8 and incorporated herein by reference.)
10.60 1989 Stock Incentive Plan and Form of Stock Option Agreement
pursuant to 1989 Stock Incentive Plan, as amended. (Filed as
Exhibit 10.26 to Registrant's 1990 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by reference.)
10.61 1993 Stock Incentive Plan and Form of Stock Option Agreement
pursuant to 1993 Stock Incentive Plan. (1993 Stock Incentive Plan
was filed as Exhibit A to Registrant's 1993 Definitive Proxy
Statement, Commission File No. 1-7806, and incorporated herein by
reference.)
10.62 Amendment to Registrant's 1980, 1983, 1984, 1987 and 1989 Stock
Incentive Plans. (Filed as Exhibit 10.27 to Registrant's 1990
Annual Report on Form 10-K, Commission File No. 1-7806, and
incorporated herein by reference.)
10.63 Amendment to Registrant's 1983, 1984, 1987, 1989 and 1993 Stock
Incentive Plans.
10.64 1986 Restricted Stock Plan and Form of Restricted Stock Agreement
pursuant to 1986 Restricted Stock Plan. (Filed as Exhibit 10.28 to
Registrant's 1990 Annual Report on Form 10-K, Commission File No.
1-7806, and incorporated herein by reference.)
10.65 Registrant's Retirement Parity Pension Plan. (Filed as Exhibit
10.67 to Registrant's 1993 Annual Report on Form 10-K, Commission
File No. 1-7806, and incorporated herein by reference.)
10.66 Management Performance Bonus Plan. (Description of the performance
bonus plan contained in the Definitive Proxy Statement for
Registrant's 1994 Annual Meeting of Stockholders, under the heading
"Report on Executive Compensation of the Compensation Committee of
the Board of Directors" is incorporated herein by reference.)
E-8
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
10.67 Registrant's Retirement Plan for Outside Directors. (Filed as
Exhibit 10.30 to Registrant's 1990 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by reference.)
10.68 Long-term Performance Bonus Plan. (Description of the long-term
performance bonus plan contained in the Definitive Proxy Statement
for Registrant's 1994 Annual Meeting of Stockholders, under the
heading "Report on Executive Compensation of the Compensation
Committee of the Board of Directors" is incorporated herein by
reference.)
10.69 Credit Agreement dated May 7, 1993 among Registrant and The First
National Bank of Chicago; Bank of America National Trust and
Savings Association; The Chase Manhattan Bank, N.A.; Citibank,
N.A.; Morgan Guaranty Trust Company of New York with Morgan Bank
(Delaware); NationsBank of Georgia; The Bank of New York; The Bank
of Tokyo Trust Company; CIBC, Inc.; Commerzbank A.G., Atlanta
Agency; Credit Suisse; Societe Generale Bank, Southwest Agency;
Kredietbank N.V., Grand Cayman Branch; The Long-Term Credit Bank of
Japan, LTD.; Mellon Bank, N.A.; National Westminister Bank PLC;
Union Bank of Switzerland New York Branch and The Toronto-Dominion
Bank. (Filed as Exhibit 10.70 to Registrant's 1993 Annual Report on
Form 10-K, Commission File No. 1-7806, and incorporated herein by
reference.)
10.70 Amendment dated as of December 1, 1993 to Credit Agreement dated
May 7, 1993 among the Registrant and the parties listed in Exhibit
10.69 above.
10.71 Purchase Agreement between AVSA and Registrant for purchase of
Airbus A300 aircraft. Confidential treatment has been granted for
confidential commercial and financial information, pursuant to Rule
24b-2 under the Securities Exchange Act of 1934. (Filed as Exhibit
10.36 to Registrant's 1991 Annual Report on Form 10-K, Commission
File No. 1-7806, and incorporated herein by reference.)
11.1 Statement re Computation of Earnings Per Share.
12.1 Statement re Computation of Earnings to Fixed Charges.
13.1 Registrant's Annual Report to Stockholders for the fiscal year
ended May 31, 1994.
21.1 Subsidiaries of Registrant.
23.1 Consent of Independent Public Accountants.
24.1 Powers of Attorney.
E-9