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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(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, 1995 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 31, 1995, 56,181,384 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 $3,453,894,270
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Stockholders for the fiscal year ended May
31, 1995 are incorporated by reference into Parts II and IV.
Portions of the Proxy Statement for the Annual Meeting of Stockholders to
be held September 25, 1995 are incorporated by reference into Part III.
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TABLE OF CONTENTS
PAGE
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PART I
ITEM 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ITEM 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ITEM 7. Management's Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . 14
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 . . . . . . . . . . . . . . . . . . . . 15
PART IV
ITEM 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K . . . . . . . . . . . . 16
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
FINANCIAL STATEMENT SCHEDULE INDEX
Report of Independent Public Accountants on Financial Statement Schedule . . . . . . . . . . . . . . S-1
SCHEDULE II Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . S-2
EXHIBIT INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
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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 1995, the Company continued to expand and improve
its global network of aviation, ground and information links between the major
trading centers of the Americas, Europe and Asia. The Company established a
new regional sorting facility in the Philippines, reached an agreement, pending
governmental approval, to acquire route authorities to serve the People's
Republic of China, broke ground on another regional sorting hub in Texas, and
unveiled a new international economy service which enhances the Company's
ability to serve Canadian customers. The Company also added new Airbus A300
aircraft and introduced new innovative technologies aimed at improving customer
satisfaction while reducing the resources required to serve customer needs.
FEDEX SERVICES
The Company offers three U.S. domestic overnight delivery services:
FedEx Priority Overnight, FedEx Standard Overnight and FedEx Overnight Freight.
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, FedEx World Service Centers, FedEx Mini-Centers, FedEx Drop Boxes
and FedEx authorized shipping centers strategically located throughout the
country.
FedEx Priority Overnight, 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. Also available are Saturday delivery
service and Saturday pick-up for delivery the following Monday. FedEx Standard
Overnight is similar to, though more economical than, FedEx Priority Overnight
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 Box, FedEx Tube and FedEx Diagnostic Specimen
Envelope) is provided as part of these overnight services. FedEx Overnight
Freight 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 U.S. domestic second-day services are available for less urgent
shipments: FedEx 2Day and FedEx 2Day Freight. FedEx 2Day is designed for
packages weighing up to 150 pounds. FedEx 2Day shipments are scheduled for
delivery in most communities no later than 4:30 p.m. (7:00 p.m. for shipments
destined for private residences) the second business day following pick-up.
FedEx 2Day Freight is a time-definite U.S. 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.
U.S. 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.
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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 provide the status of any package in its system.
On June 1, 1995, the Company introduced FedEx SameDay for urgent
shipments to virtually any U.S. destination. This service is available seven
days a week, 24 hours a day, where available, and is designed for packages
weighing up to 70 pounds that cannot wait until the next day to be delivered.
In addition to the services discussed above, the Company offers
various international document and package delivery services and international
freight services. FedEx International Priority ("IP") 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
global network. Delivery is generally scheduled within one to three business
days depending on the origin and destination of the shipment and commodity
limitations imposed by authorities in the destination country. Size, weight
and commodity limitations vary according to destination.
FedEx International Priority Freight is an expansion of IP service and
is a time-definite service for international shipments exceeding 150 pounds.
Customs clearance is included as part of this service and customers are
permitted to designate their own customs broker for clearance where not
prohibited by destination country laws. 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 origin and destination of the shipment and commodity
limitations imposed by authorities in the destination country. Size, weight
and commodity limitations vary according to destination.
FedEx 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 (documents only), Rome (documents
only), 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 in most
locations 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 many United States destinations and to major business centers in Canada
and Mexico.
More economical than IP service, FedEx International Priority
Distribution 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 to 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 FedEx International
MailService for premium service is delivered to recipients within three to six
days, while receipt of material sent by FedEx International MailService for
standard service takes four to ten days.
FedEx International Economy, a deferred, customs-cleared service for
shipments of unlimited weight (except individual boxes within the shipment may
not exceed 150 pounds) was introduced in 1995. This service is available
Monday through Friday only between the United States and Canada with a delivery
commitment of two to three business days by 5:00 p.m. This service offers
customers cost-effective rates, customs clearance, package tracking and the
Company's money-back guarantee on service commitments.
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FedEx International Express Freight, 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 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 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 1995, revenues from charter operations accounted for
approximately 1.2% of the Company's total revenues and approximately 1.3% and
1.4% of total revenues during fiscal 1994 and 1993, respectively.
FEDEX LOGISTICS SERVICES
FedEx Logistics Services ("FLS") is a division of the Company which
offers a full range of global and regional logistics, information and marketing
solutions as well as other innovative services. FLS focuses on markets where
delivering high-speed, time-definite, information-intensive solutions provide
significant customer value. FLS services include PartsBank, an inventory
management and warehouse service with access to the Company's global
transportation network. PartsBank customers warehouse their time-sensitive
goods in the Company's distribution facilities, and the Company in turn accepts
and fills customer orders and delivers the goods to the end user.
Other FLS services include EMerge and Integrated Repair and Return.
EMerge is designed for customers that source components in multiple locations.
EMerge consolidates shipments en route so that components from different U.S.
locations are delivered the same day. Integrated Repair and Return is a
domestic door-to-door, fast cycle repair service where the Company manages the
pickup, repair and return of defective computers and other electronics
products. 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. cities, the United Kingdom, Belgium,
France, the Netherlands, Singapore and Hong Kong to serve its more than 2,000
customers.
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
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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.
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):
1995 1994 1993
---- ---- ----
FedEx Priority Overnight $3,908,837 $3,737,022 $3,459,374
FedEx Standard Overnight 1,374,440 1,178,628 1,022,319
FedEx 2Day 1,284,297 1,110,543 985,068
Domestic freight services 132,672 115,365 88,693
International priority services 1,679,830 1,338,795 1,116,589
International freight services 580,315 504,738 570,154
Charter 115,062 113,446 112,416
FedEx Logistics Services and other* 316,620 380,919 453,430
---------- ---------- ----------
Total $9,392,073 $8,479,456 $7,808,043
========== ========== ==========
*Includes revenues generated by the specialized services summarized
above under "FedEx Logistics Services." Also, includes revenues from non-U.S.
intra-country operations, Warren Transport, Inc. (sold September 1993) and
aircraft noise-reduction kit sales. Certain service fee revenues previously
included in this caption are now classified as package-related revenues, which
have been restated for prior years where applicable.
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 worldwide network consisting of numerous aviation
and ground transportation operating rights and authorities, 501 aircraft,
approximately 35,900 vehicles, sorting facilities, FedEx World Service Centers,
FedEx Mini-Centers, FedEx Drop Boxes and sophisticated package tracking,
billing and communications systems.
The Company's primary U.S. domestic sorting facility, the SuperHub
located in Memphis, serves as the center of the Company's multiple
hub-and-spokes U.S. 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. Facilities in Anchorage, Alaska and The
Philippines serve as sorting facilities 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's EXPRESSfreighter flights provide faster international
service through direct flights between major markets in Asia, Europe and North
America. For example, EXPRESSfreighter flights from Hong
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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 EXPRESSfreighter flights bound for Europe
is flown for second-day delivery to sixteen European cities. Westbound 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 FedEx World Service Centers which are staffed, store-front
facilities located in high-traffic, high-density areas. Manned or unmanned
FedEx Mini-Centers and unmanned FedEx Drop Boxes provide customers the
opportunity to drop off packages at locations in office buildings, shopping
centers and corporate or industrial parks. The Company has also formed
alliances with certain retailers to extend this customer convenience network to
over 5,000 new drop-off sites in retail stores. 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, FedEx
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 FedEx 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 FedEx PowerShip 2, a
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 FedEx PowerShip Plus software, which performs the same functions
as FedEx PowerShip 2 but can be integrated with the customer's own computer
systems for customer service, accounting, inventory control and financial
analysis purposes. FedEx PowerShip PassPort is an automated shipping system
which is automatically updated with the Company's system information, such as
routing codes and rates. FedEx PowerShip 3 enables customers who ship as few
as three packages per day to enjoy the advantage of automated shipping. In
1995, the Company began offering FedEx Ship software, free of charge, that can
be used on a personal computer. FedEx Ship allows customers to generate
plain-paper airbills on a laser printer, track shipments, order FedEx pickups
and maintain a database of shipping addresses and activity using modems and
their own personal computers.
FUEL SUPPLIES AND COSTS
During 1995 the Company purchased aviation fuel from various suppliers
under contracts which vary in length from three to twenty-four months and which
provide for specific amounts of fuel to be delivered. Certain of these
contracts extend through May 1997. Approximately 65% 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. Under these contracts,
the Company makes (or receives) payments based on the difference between a
specified lower (or upper) limit and the market price of jet fuel, as
determined by an index of spot market prices representing various geographic
regions. The difference is recorded as an increase or decrease in fuel
expense. At
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May 31, 1995, the Company had contracts with various financial institutions
covering a total notional volume of 97.4 million gallons (approximately 16% of
the Company's annual jet fuel consumption), with some contracts extending
through August 1996. As of May 31, 1995, the Company had neither received nor
made any payments related to these contracts.
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
----------- -------------- -------------------
1995 $394,225 4.5%
1994 374,561 4.7
1993 403,597 5.4
1992 414,481 5.5
1991 554,637 7.5
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 air 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 airfreight 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 regulatory matters, including the transfer of route authority between
carriers. The Company holds various certificates of public convenience and
necessity issued by the DOT, authorizing the Company to engage in domestic and
international air transportation of property and mail on a worldwide basis.
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
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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 regulatory environment for global aviation
rights may from time to time impair the ability of the Company to operate its
air network in the most efficient manner. 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 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
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. 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 authorize the express
carriage of general commodities in interstate commerce between points in the
United States. As a result of the enactment of the Federal Aviation
Administration Authorization Act in July 1994, which abrogated the authority of
states to regulate the rates, routes or prices of intermodal all-cargo air
carriers and most motor carriers, states may now exercise jurisdiction over
safety and insurance only. The Company has applied for registration for these
limited purposes in those states that require registration. Deregulation of
intrastate trucking will provide the Company the flexibility to maximize the
integration of its transportation system.
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 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.
Certain regulations under the Clean Water Act, the Clean Air Act and
the Resource Conservation and Recovery Act impact the Company's operations.
The Company is most directly affected by regulations pertaining to underground
storage tanks, hazardous waste handling, vehicle and equipment emissions and
the discharge of effluents from properties and equipment owned or operated by
the Company. The costs of complying with these regulations cannot be
accurately determined because of the evolving nature of the regulations, but in
any case are not expected to be material.
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EMPLOYEES
At June 30, 1995, the Company employed approximately 69,000 permanent
full-time and 38,000 permanent part-time employees, of which approximately 21%
are employed in Memphis. Employees of the Company's international branches and
subsidiaries in the aggregate comprise approximately 10% 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. In October 1994, ALPA petitioned the National
Mediation Board (the "NMB") to provide mediation to assist in contract
negotiations, and the NMB appointed two mediators. While negotiations have
continued, the core financial issues remain unresolved.
In July 1995, a union representation election was held involving the
Company's Global Operations Control Specialists. The Transport Workers Union
received less than half of the votes needed for certification as the
representative of this group, and the NMB dismissed the union's application.
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 responding to these organization attempts.
FINANCIAL INFORMATION ABOUT FOREIGN AND U.S. DOMESTIC OPERATIONS
For information concerning financial results for U.S. domestic and
international operations for the three years ended May 31, 1995, 1994 and 1993,
refer to Note 10 of Notes to Consolidated Financial Statements contained in the
Company's 1995 Annual Report to Stockholders, which Note is incorporated herein
by reference.
8
11
ITEM 2. PROPERTIES
The Company's principal owned or leased properties include its
aircraft, vehicles, national, regional and metropolitan sorting facilities,
administration buildings, FedEx World Service Centers, FedEx Mini-Centers,
FedEx Drop Boxes and data processing and telecommunications equipment.
AIRCRAFT AND VEHICLES
The Company's aircraft fleet at June 30, 1995 consisted of the
following:
MAXIMUM GROSS
STRUCTURAL PAYLOAD
DESCRIPTION NUMBER (POUNDS PER AIRCRAFT)**
----------- ------ ----------------------
Boeing B747-200 5* 250,000
McDonnell Douglas MD11 13* 198,500
McDonnell Douglas DC10-30 22* 172,000
McDonnell Douglas DC10-10 13* 142,000
Airbus A300-600 9* 117,700
Airbus A310-200 17* 74,200
Boeing B727-200 90* 59,500
Boeing B727-100 68* 38,000
Fokker F27-500 24 14,000
Fokker F27-600 8 12,500
Cessna 208B 222 3,500
Cessna 208A 10 3,000
---
Total 501
- -------------------------
*Five B747-200, 13 MD11, 17 DC10-30, four DC10-10, nine A300, 11 A310, 13
B727-200 and five B727-100 aircraft are subject to operating leases.
**Maximum gross structural payload includes revenue payload and container
weight.
The A300s and A310s are two-engine, wide-bodied aircraft which have a
longer range and more capacity than B727s. The MD11s 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. The Company's Fokker F27 and Cessna 208 turbo-prop aircraft are
leased to unaffiliated operators to support Company operations in areas where
demand does not justify use of a larger aircraft. An inventory of spare
engines and parts is maintained for each aircraft type.
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 days notice.
At June 30, 1995, the Company operated approximately 35,900 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
At June 30, 1995, the Company was committed under various contracts to
purchase 16 Airbus A300, two Airbus A310, 12 McDonnell Douglas MD11 and 32
Cessna 208B aircraft to be delivered through 2000. The Company also had
options to purchase up to 44 additional A300 aircraft for delivery beginning in
1999. In
9
12
addition, the Company may be required to purchase seven MD11 aircraft for
delivery beginning no later than 2000 under a put option agreement.
SORTING AND HANDLING FACILITIES
At June 30, 1995, the Company operated the following sorting and
handling facilities:
SORTING LEASE
SQUARE CAPACITY EXPIRATION
LOCATION ACRES FEET (PER HOUR)* LESSOR YEAR
-------- ----- ---- ----------- ------ ----------
NATIONAL
--------
Memphis, Tennessee 395 2,742,196 491,000 Memphis-Shelby County 2014
Airport Authority
Indianapolis, Indiana 120 645,000 153,000 Indianapolis Airport 2016
Authority
REGIONAL
--------
Newark, New Jersey 56 554,000 108,000 Port Authority of New 2010
York and New Jersey
Oakland, California 21 191,000 50,000 City of Oakland 2011
METROPOLITAN
------------
Los Angeles, California 25 130,000 53,000 City of Los Angeles 2009
Chicago, Illinois 55 419,000 47,000 City of Chicago 2018
Anchorage, Alaska+ 42 208,000 3,600 Alaska Department of 2013
Transportation and
Public Facilities
Subic Bay, The 9 166,000 16,000 Subic Bay Metropolitan 2002
Philippines++ Authority
- ------------------------
* Documents and packages
+ Handles international express package and freight shipments to and from
Asia, Europe and North America.
++ Handles intra-Asia express package and freight shipments.
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 regional sorting hub
in Fort Worth, Texas which is expected to become operational in 1997.
10
13
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-term leases and the other three are owned by the Company. The Company
also leases 65 facilities in the Memphis area for its corporate headquarters,
warehouse facilities and administrative offices.
The Company owns 14 and leases 795 facilities for city station
operations in the United States. In addition, 177 city stations are owned or
leased throughout the Company's international network. The majority of these
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, 1995, the Company leased space for 425 FedEx World
Service Centers in the United States and had placed approximately 31,900 Drop
Boxes. The Company also owns stand-alone FedEx Mini-Centers located on
leaseholds in parking lots adjacent to office buildings, shopping centers and
office parks of which 254 were operating at June 30, 1995. Internationally,
the Company leases space for 48 FedEx World Service Centers and has
approximately 777 FedEx 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 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 is vigorously pursuing 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, management
is currently unable to predict with certainty the outcome of this matter or the
ultimate effect, if any, its resolution would have 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 contamination. The EPA
estimates that approximately
11
14
.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 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.
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, 1995.
EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding executive officers of the Company is as follows
(included herein pursuant to Instruction 3 to Item 401(b) of Regulation S-K and
General Instruction G(3) of Form 10-K):
OFFICER, YEAR FIRST
ELECTED AS OFFICER AGE POSITIONS HELD WITH COMPANY
------------------ --- ---------------------------
FREDERICK W. SMITH 50 Chairman, President and Chief Executive Officer since April 1983; Chief
1971 Executive Officer since April 1977; Chairman since February 1975; and
President from June 1971 to February 1975. Founder of the Company.
WILLIAM J. RAZZOUK 47 Executive Vice President - Worldwide Customer Operations since June
1983 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
October 1986 to 1988; and Vice President - Electronic Product Sales from
August 1983 to October 1986.
DAVID J. BRONCZEK 41 Senior Vice President - Europe, Middle East and Africa since June 1995;
1987 Senior Vice President - Europe, Africa and Mediterranean from June 1993
to June 1995; Vice President - Canadian Operations from February 1987 to
March 1993; and several sales and operations managerial positions from
1976 to 1987.
T. MICHAEL GLENN 39 Senior Vice President - Marketing, Customer Service and Corporate
1985 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.
12
15
ALAN B. GRAF, JR. 41 Senior Vice President and Chief Financial Officer since December 1991;
1987 Vice President and Treasurer from August 1987 to December 1991; and
various management positions in finance and a senior financial analyst
from 1980 to 1987.
DENNIS H. JONES 43 Senior Vice President and Chief Information Officer since December 1991;
1986 Vice President - Customer Automation and Invoicing from December 1986 to
December 1991; and various management positions in finance and a
financial analyst from 1975 to 1986.
KENNETH R. MASTERSON 51 Senior Vice President and General Counsel since February 1981; Secretary
1980 since September 1993; and Vice President - Legal from January 1980 to
February 1981.
JOSEPH C. MCCARTY, III 50 Senior Vice President - Asia Pacific since June 1995; Senior Vice
1983 President - Asia, Pacific and Middle East from November 1991 to June
1995; Vice President - International Legal from March 1987 to November
1991; Vice President - Properties & Facilities from November 1984 to
March 1987; and Vice President - Legal from February 1983 to November
1984.
JAMES A. MCKINNEY 50 Senior Vice President, President FedEx Logistics Services since December
1989 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.
GILBERT D. MOOK 52 Senior Vice President - Central Support Services since November 1994;
1985 Vice President - Properties and Facilities from March 1988 to November
1994; Vice President - Satellite Systems from June 1985 to March 1988;
Director - Satellite Systems from 1983 to 1985.
JAMES A. PERKINS 51 Senior Vice President and Chief Personnel Officer since June 1979 and
1979 various personnel managerial positions from 1974 to 1979.
DAVID F. REBHOLZ 42 Senior Vice President - Global Sales and Trade Services since June 1993;
1988 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.
TRACY G. SCHMIDT 38 Senior Vice President - Air Ground Terminals and Transportation since
1990 July 1994; Vice President - Corporate Financial Planning from January
1990 to July 1994; and various management positions in finance from 1980
to 1990.
13
16
MARY ALICE TAYLOR 45 Senior Vice President - Americas and Caribbean since October 1994;
1985 Senior Vice President - Central Support Services from September 1991 to
October 1994; 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 51 Senior Vice President - Air Operations since August 1991; Senior Vice
1977 President - United States and Canada from June 1990 to August 1991;
Senior Vice President - Domestic Ground Operations from March 1987 to
June 1990; Senior Vice President - Central Support Services from October
1986 to March 1987; Senior Vice President/General Manager - FedEx World
Service Centers from March 1983 to October 1986; Senior Vice President -
Operations Planning from March 1979 to March 1983; Vice President -
Operations Resource and Corporate Planning from September 1978 to March
1979; Vice President - Special Projects and Advanced Planning from April
1977 to September 1978; and Director of Special Projects from 1972 to
1977.
JAMES S. HUDSON 46 Vice President, Controller and Chief Accounting Officer since December
1992 1994; Vice President - Finance - Europe, Africa and Mediterranean from
July 1992 to December 1994; various management positions in finance from
1974 to 1992.
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 1995 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 Company's 1995 Annual
Report to Stockholders, on page 48 under the headings, "Stock Listing,"
"Stockholders" and "Market Information" and is incorporated herein by
reference.
No cash dividends have been declared.
PAGE IN ANNUAL
REPORT TO STOCKHOLDERS
----------------------
ITEM 6. SELECTED FINANCIAL DATA
Selected Consolidated Financial Data . . . . . . . . . . . . . . . . . . . . . . 44
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . 18
14
17
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . 25
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . 28
Consolidated Statements of Changes in
Common Stockholders' Investment . . . . . . . . . . . . . . . . . . . 29
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . 30
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 "Compensation of Directors" on pages 1 through 6 and 13
through 14 of the Definitive Proxy Statement for the Company's 1995 Annual
Meeting of Stockholders which will be held September 25, 1995 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 18 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 1995 Annual Meeting of
Stockholders to be held on September 25, 1995, as indicated in the following
table and is incorporated herein by reference.
PAGE IN PROXY
STATEMENT
-------------
ITEM 11. EXECUTIVE COMPENSATION
Compensation Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Voting Securities and Principal Holders Thereof . . . . . . . . . . . . . . . . 2
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Management and Others . . . . . . . . . . . . . . . . . . . . 13
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
(A) 1. FINANCIAL STATEMENTS
15
18
The consolidated financial statements of the Company, together with
the report thereon of Arthur Andersen LLP, dated June 29, 1995, are presented
on pages 25 through 43 of the Company's 1995 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 1995 Annual Report to Stockholders is not to be deemed
as filed as part of this Report.
2. FINANCIAL STATEMENT SCHEDULE PAGE NUMBER IN
FORM 10-K
---------------
Report of Independent Public Accountants on Financial Statement Schedule . . . . . . . . S-1
Schedule II - Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . S-2
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 1995
Annual Report to Stockholders and incorporated herein by reference.
3. EXHIBITS
The documents attached hereto as Exhibits 3.1, 3.2, 4.1 through 4.24,
10.1 through 10.79, 11.1, 12.1, 13.1, 21.1, 23.1 and 24.1 are being filed in
connection with this Report and incorporated herein by reference.
The Exhibit Index on pages E-1 through E-10 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 no Current Reports on Form 8-K.
16
19
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/ JAMES S. HUDSON
-----------------------------------
James S. Hudson
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/ JAMES S. HUDSON Vice President and Controller August 4, 1995
------------------------------ (Principal Accounting Officer)
James S. Hudson
/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
17
20
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/ GEORGE J. MITCHELL* Director
-----------------------------
George J. Mitchell
/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/ JAMES S. HUDSON August 4, 1995
-----------------------
James S. Hudson
Attorney-in-Fact
18
21
S-1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To Federal Express Corporation:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in Federal Express Corporation's
1995 Annual Report to Stockholders incorporated by reference in this Form 10-K,
and have issued our report thereon dated June 29, 1995. Our audit was made for
the purpose of forming an opinion on those statements taken as a whole. The
financial statement schedule on page S-2 is the responsibility of the Company's
management and is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not part of the basic financial statements.
The financial statement schedule has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion,
fairly states 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 LLP
-----------------------------
ARTHUR ANDERSEN LLP
Memphis, Tennessee,
June 29, 1995.
19
22
S-2
SCHEDULE II
FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED MAY 31, 1995, 1994 AND 1993
(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
-----------------
1995. . . . . . . . . . . . $33,933 $36,334 - $39,094 $31,173
======= ======= ========= ======= =======
1994. . . . . . . . . . . . $31,308 $45,763 - $43,138 $33,933
======= ======= ========= ======= =======
1993. . . . . . . . . . . . $32,074 $33,552 - $34,318 $31,308
======= ======= ========= ======= =======
(A) Accounts written off net of recoveries.
20
23
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
3.1 Restated Certificate of Incorporation of Registrant as amended (Filed as Exhibit 3.1 to
Registrant's 1995 Third Quarter Report on Form 10-Q, 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. 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.)
4.9 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.)
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4.10 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.)
4.11 Indenture dated May 15, 1989 including Supplemental Indenture Nos. 1, 2, 3 and 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.)
4.12 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.)
4.13 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.)
4.14 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.)
4.15 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.)
4.16 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.)
4.17 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.)
4.18 Form of 8.04% and 8.76% 1993 Pass Through Certificates, Series A1 and A2 due November 22, 2007
and May 22, 2015, respectively. (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.)
4.19 Form of 6.68% and 7.63% 1993 Pass Through Certificates, Series B1 and B2 due January 1, 2008 and
January 1, 2015, respectively. (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.)
4.20 Form of 7.15% and 7.96% 1993 Pass Through Certificates, Series C1 and C2 due September 28, 2012
and March 28, 2017, respectively. (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.)
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4.21 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.)
4.22 Form of 7.53%, 7.89% and 8.40% 1994 Pass Through Certificates, Series A310-A1, A310-A2 and
A310-A3 due September 23, 2006, September 23, 2008 and March 23, 2010, respectively. (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.)
4.23 Loan Agreement dated March 27, 1995, between Registrant and certain lenders relating to the
financing of Airbus A310 aircraft. A copy of this loan agreement will be furnished to the
Commission upon request pursuant to Regulation S-K Item 601(4)(iii)(A).
4.24 Loan Agreement dated as of April 1, 1995 between Registrant and The Chase Manhattan Bank,
National Association, as agent. Confidential treatment has been requested for confidential
commercial and financial information, pursuant to Rule 24b-2 under the Securities Exchange Act
of 1934.
10.2 Second Supplemental Indenture dated as of May 1, 1982 between the Authority and NationsBank
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.
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 September 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.)
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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 the Authority and
Registrant. (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.)
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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.
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.)
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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 Amendment dated August 1, 1989 to Lease Agreement dated May 7, 1985 between the City of Oakland and
Registrant.
10.41 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.)
10.42 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.)
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10.43 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.)
10.44 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.)
10.45 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.)
10.46 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.)
10.47 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.)
10.48 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.)
10.49 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.)
10.50 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.)
10.51 Supplement No. 4 dated March 1, 1993 to Lease Agreement dated October 1, 1983 between The Port Authority of
New York and New Jersey and Registrant.
10.52 Supplement No. 5 dated February 1, 1994 to Lease Agreement dated October 1, 1983 between The Port Authority of
New York and New Jersey and Registrant.
10.53 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.)
10.54 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.)
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10.55 Amended and Restated Land Lease Agreement dated August 1993 between Registrant and the Indianapolis Airport
Authority. (Filed as Exhibit 10.52 to Registrant's 1994 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
10.56 Indenture between the City of Indianapolis, 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.)
10.57 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.)
10.58 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.)
10.59 Indenture dated as of October 1, 1994 between Indianapolis Airport Authority and NBD Bank, N. A., as Trustee,
relating to 7.10% Special Facilities Revenue Bonds, Series 1994 due January 15, 2017. (Filed as Exhibit 10.1
to Registrant's 1995 Second Quarter Report on Form 10-Q, Commission File No. 1-7806, and incorporated herein
by reference.)
10.60 Guaranty dated as of October 1, 1994 from Registrant to NBD Bank, N.A. relating to 7.10% Special Facilities
Revenue Bonds, Series 1994 due January 15, 2017. (Filed as Exhibit 10.2 to Registrant's 1995 Second Quarter
Report on Form 10-Q, Commission File No. 1-7806, and incorporated herein by reference.)
10.61 Land and Special Facilities Lease Agreement dated as of October 1, 1994 between Registrant and the Indianapolis
Airport Authority relating to 7.10% Special Facilities Revenue Bonds, Series 1994 due January 15, 2017.
(Filed as Exhibit 10.3 to Registrant's 1995 Second Quarter Report on Form 10-Q, Commission File No. 1-7806,
and incorporated herein by reference.)
10.62 Lease Agreement dated October 9, 1994 between the Registrant and Subic Bay Metropolitan Authority.
10.63 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.)
10.64 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.)
10.65 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.)
10.66 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.)
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10.67 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.)
10.68 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, and the form of stock option agreement was filed as
Exhibit 10.61 to Registrant's 1994 Annual Report on Form 10-K, Commission File No. 1-7806, and incorporated
herein by reference.)
10.69 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.)
10.70 Amendment to Registrant's 1983, 1984, 1987, 1989 and 1993 Stock Incentive Plans. (Filed as Exhibit 10.63 to
Registrant's 1994 Annual Report on Form 10-K, Commission File No. 1-7806, and incorporated herein by reference.)
10.71 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.)
10.72 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.)
10.73 First Amendment to Registrant's Retirement Parity Pension Plan. (Filed as Exhibit 10.1 to Registrant's 1995
First Quarter Report on Form 10-Q, Commission File No. 1-7806, and incorporated herein by reference.)
10.74 Management Performance Bonus Plan. (Description of the performance bonus plan contained in the Definitive
Proxy Statement for Registrant's 1995 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.)
10.75 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.)
10.76 Long-term Performance Bonus Plans. (Description of the long-term performance bonus plans contained in the
Definitive Proxy Statement for Registrant's 1995 Annual Meeting of Stockholders, under the heading
"Long-term Incentive Plans - Awards in Last Fiscal Year" is incorporated herein by reference.)
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10.77 Amended and Restated Credit Agreement dated May 12, 1995 among Registrant and The First National Bank of
Chicago, individually and as agent, and certain lenders.
10.78 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.)
10.79 Sales Agreement dated April 7, 1995 between Registrant and American Airlines, Inc. for the purchase of MD11
aircraft. Confidential treatment has been requested for confidential commercial and financial information,
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.
11.1 Statement re Computation of Earnings Per Share.
12.1 Statement re Computation of Ratio of Earnings to Fixed Charges.
13.1 Registrant's Annual Report to Stockholders for the fiscal year ended May 31, 1995.
21.1 Subsidiaries of Registrant.
23.1 Consent of Independent Public Accountants.
24.1 Powers of Attorney.
27.1 Financial Data Schedule (for SEC use only).
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