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UNITED STATES
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
FOR THE FISCAL YEAR ENDED MAY 31, 1998.
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________________ TO _________________.
COMMISSION FILE NUMBER 333-39483
FDX CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 62-1721435
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6075 POPLAR AVENUE, MEMPHIS, TENNESSEE 38119
(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
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Common Stock, par value $.10 per share New York Stock Exchange
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 ((S) 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 August 3, 1998, 147,449,762 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 average bid and asked prices of such
stock on the New York Stock Exchange) was approximately $8,173,200,549.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Stockholders for the fiscal year ended
May 31, 1998 are incorporated by reference into Parts I, II and IV.
Portions of the Proxy Statement for the Annual Meeting of Stockholders to
be held September 28, 1998 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........................................................................ 14
ITEM 3. Legal Proceedings................................................................. 18
ITEM 4. Submission of Matters to a Vote of Security Holders............................... 19
Executive Officers of the Registrant.............................................. 20
PART II
ITEM 5. Market for the Registrant's Common Stock and Related Stockholder Matters.......... 22
ITEM 6. Selected Financial Data........................................................... 23
ITEM 7. Management's Discussion and Analysis.............................................. 23
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk........................ 23
ITEM 8. Financial Statements and Supplementary Data....................................... 23
ITEM 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.......................................... 23
PART III
ITEM 10. Directors and Executive Officers of the Registrant................................ 24
ITEM 11. Executive Compensation............................................................ 24
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.................... 24
ITEM 13. Certain Relationships and Related Transactions.................................... 24
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K................... 24
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
PART I
ITEM 1. BUSINESS
FDX CORPORATION
INTRODUCTION
FDX Corporation ("FDX" or the "Company") was incorporated in Delaware on
October 2, 1997. On January 27, 1998, Federal Express Corporation ("FedEx") and
Caliber System, Inc. ("Caliber") became wholly-owned subsidiaries of the
Company. In this transaction, which was accounted for as a pooling of
interests, Caliber shareholders received 0.8 shares of FDX common stock for each
share of Caliber common stock. Each share of FedEx's common stock was
automatically converted into one share of FDX common stock.
FDX is a $16 billion global transportation and logistics enterprise that
offers customers a one-stop source for global shipping and logistics solutions.
Services offered by FDX companies include worldwide express delivery, ground
small-parcel delivery, less-than-truckload freight delivery and global logistics
and electronic commerce solutions. These services are offered through a
"family" of operating companies: FedEx (the Company's largest subsidiary),
RPS, Inc. ("RPS"), Viking Freight, Inc. ("Viking Freight"), Roberts Express,
Inc. ("Roberts Express") and Caliber Logistics, Inc. ("Caliber Logistics").
FedEx is the world leader in global express distribution, offering time-
certain delivery within 24-48 hours among markets that comprise more than 90
percent of the world's gross domestic product. RPS is North America's second
largest provider of business-to-business ground small package delivery. Viking
Freight is a leading less-than-truckload freight carrier in the western United
States. Roberts Express is the world's leading surface-expedited carrier for
time-critical shipments requiring special handling. Caliber Logistics provides
customized, integrated logistics and warehousing solutions worldwide.
For financial information concerning the Company's business segments, refer
to Note 12 of Notes to Consolidated Financial Statements contained in the
Company's 1998 Annual Report to Stockholders, which Note is incorporated herein
by reference.
PURPOSE OF FDX
The purpose of FDX is to provide strategic direction and coordination to
the FDX family of companies. Sales and marketing activities, financial planning
and reporting, legal and regulatory compliance, communications and information
systems development are functions that must be coordinated across subsidiary
lines. The Company intends to use advanced information systems to connect the
FDX companies. These aligned information systems will be designed to make it
easy and convenient for customers to use the full range of FDX services.
For each one of the FDX companies, the Company's management will focus on
making appropriate investments in the technology and transportation assets
necessary to optimize the Company's earnings performance and cash flow. Strict
yield management programs should continue to support profitable volume growth.
The Company will manage the business as a portfolio. As a result, decisions on
capital investment, expansion of delivery and information technology networks,
and service additions or enhancements will be based on achieving the highest
overall return on capital. The Company's management believes that a
collaborative selling process should increase revenues for the operating
companies through a targeted program focusing on high-yielding business.
STRATEGY
The Company's strategy is to use leading-edge technology, networks and
information to enhance its position as the world's leading transportation,
logistics and supply chain management company. The Company's management is
focused on three primary growth strategies: 1) a collaborative sales process
that leverages the Company's shared customer relationships; 2) aggressive global
marketing of the broad FDX portfolio to targeted prospective customers; and 3)
strategic application of information systems to reduce costs and improve
customer access and connectivity.
The Company desires to take advantage of such global business trends as
"just-in-time" shipping, the rapid growth of electronic commerce and the
proliferation of sourcing and selling across markets. FDX's management believes
that, with the combination of FedEx and the Caliber companies, the Company is
better able to take advantage of a global transportation market that - with the
express, ground small-parcel and less-than-truckload segments combined - is
projected to grow from $75 billion currently to nearly $400 billion over the
next twenty years. The Company intends to execute its strategy by providing
total distribution and logistics solutions, using dedicated delivery networks
and capitalizing on the sales synergies that exist between FedEx and the Caliber
companies.
Total Distribution and Logistics Solutions
Increasingly, the Company's competitors are "bundling" express delivery and
non-express ground small package services at attractive prices to large
customers who need both services. This is a strategic weapon that neither FedEx
nor the Caliber companies alone possessed. FDX, through its operating companies,
can offer its customers a full range of distribution and logistics options. The
Company's management believes that its business customers seek from a single
supplier strategic, cost-effective ways to manage their supply chains - the
series of transportation and information exchanges required to convert parts and
raw materials into finished, delivered products. These customers can use the
Company as a strategic competitive weapon by squeezing time, mass and cost from
their supply chains, while maintaining or improving their customer service.
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Dedicated Delivery Networks
The Company's management believes that simply layering the unique resource
and operating requirements of a time-definite, global, express-delivery network
onto a day-definite, ground, small-package network results in diminished service
quality and increased costs. The Company's management also believes that
operating independent delivery networks, each focused on its own respective
markets, results in optimal service quality, reliability and profitability from
each of the Company's businesses. All of the FDX subsidiaries are free to focus
exclusively on the market segment in which they have the most expertise.
Sales Synergies
Although FDX companies operate discrete, specialized delivery networks, the
Company's management seeks to align sales and marketing initiatives across all
FDX companies. FDX management believes that many of FedEx's and RPS' customers
will take the opportunity to obtain the best of both services from the same
family of companies - the world's leading express delivery network, plus North
America's second largest ground small-parcel service.
The following describes in more detail the business of each of the five FDX
operating companies:
FEDERAL EXPRESS CORPORATION
INTRODUCTION
FedEx was incorporated in Delaware on June 24, 1971 and began operations in
1973. On January 27, 1998, FedEx became a wholly-owned subsidiary of the
Company. FedEx offers a wide range of express services, providing rapid,
reliable, time-definite delivery of documents, packages and freight to more than
210 countries. FedEx connects areas of the world that generate 90 percent of the
world's gross domestic product through door-to-door, customs-cleared service,
with a money-back guarantee. FedEx's extensive air route authorities and
transportation infrastructure, combined with its use of leading-edge information
technologies, make FedEx the world's largest express-distribution company,
providing fast, reliable service for nearly three million shipments each
business day.
RECENT DEVELOPMENTS
During fiscal year 1997, FedEx announced plans to develop an 89-acre
site in suburban Memphis, Tennessee comprising nine separate buildings with more
than 1.1 million square feet of space. The office campus is designed to
consolidate many administrative and training functions currently spread
throughout the Memphis metropolitan area. When completed by late fall of 2001,
the office campus will bring together approximately 3,700 employees from more
than 100 work groups.
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In October 1997, FedEx achieved re-certification of ISO 9001 registration
for its global operations. ISO 9001 is currently the most rigorous international
standard for Quality Management and Assurance. FedEx is the only express
transportation company to receive worldwide certification of its systems. The
ISO 9000 quality standards were developed by the International Organization for
Standardization in Geneva, Switzerland to promote and facilitate international
trade. More than 90 countries, including European Union members, the United
States and Japan, recognize ISO 9000.
Also in October 1997, FedEx announced that it had selected Miami
International Airport as the site for a new $50 million hub for its Latin
America and Caribbean operations. Construction on the 189,000 square foot
facility began in spring 1998. The Miami hub will include the proprietary FedEx
Expressclear/(SM)/ system which facilitates the customs clearance of most
inbound shipments prior to a flight's arrival. When completed, the Miami hub
will allow FedEx to offer expanded next business day service between the major
markets of Latin America, the United States, Canada and Mexico, as well as two
business day service to Europe and Asia.
In the first quarter of 1998, FedEx announced the only next business day
10:30 a.m. express cargo service from Asia to the United States. The company
introduced a direct flight from Osaka, Japan to Memphis, Tennessee. The nonstop
daily flight cut transit times across the Pacific in half for FedEx customers --
from 48 to 24 hours -- who ship from Asia to North America. The FedEx
International Priority/(R)/ service is backed by FedEx's money-back guarantee.
The new flight schedule also enabled the company to offer its Asian customers
later pickup times for connections through the company's AsiaOne/(R)/ hub in
Subic Bay, The Philippines, to 13 major Asian markets. Also in first quarter
1998, FedEx announced three new international service enhancements: a flat-rate
box for shipping by FedEx International Priority, an expansion of FedEx
International Economy/(R)/ service, and lower rates from the United States to
major Canadian markets.
In March 1998, FedEx expanded its services by offering customers a Sunday
delivery option. FedEx Priority Overnight service now provides delivery by 3:00
p.m. on Sunday to select zip codes in 50 top United States metropolitan areas.
FEDEX SERVICES
Detailed information about all of FedEx's services can be found on FedEx's
Internet web site at www.fedex.com. FedEx offers four U.S. domestic overnight
delivery services: FedEx First Overnight/(R)/, FedEx Priority Overnight, FedEx
Standard Overnight/(R)/ and FedEx Overnight Freight/(R)/. 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 FedEx
couriers or are dropped off by shippers at FedEx facilities, FedEx World Service
Centers/(R)/, FedEx/(R)/ Drop Boxes, FedEx ShipSites/(R)/ or FedEx Authorized
ShipCenters/(R)/ strategically located throughout the country.
Four U.S. domestic deferred services are available for less urgent
shipments: FedEx 2Day/(R)/, FedEx 2Day Freight/(R)/, FedEx Express Saver/(R) /
and FedEx Express Saver/(R)/ Freight. FedEx SameDay/(R)/ service is for urgent
shipments to virtually any U.S. destination.
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. FedEx employees handle virtually every shipment from origin to
destination.
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In addition to the services discussed above, FedEx offers various
international package and document delivery services and international freight
services, including: FedEx International First/(SM)/, FedEx International
Priority ("IP"), FedEx International Priority DirectDistribution/(SM)/, FedEx
International Economy/(R)/, FedEx International Priority Freight/(R)/, FedEx
International Economy/(R)/ Freight, FedEx Expressclear/(SM)/ Electronic Customs
Clearance, FedEx International Broker Select/(R)/, FedEx International Priority
Plus/(R)/, FedEx International Express Freight/(R)/, FedEx International
MailService/(R)/, and FedEx International Airport-to-Airport./(SM)/
CHARTER SERVICES AND CRAF PARTICIPATION
FedEx offers commercial and military charter services which supplement the
utilization of aircraft capacity when not needed in FedEx's scheduled
operations. In addition to providing these charter services, FedEx participates
in the Civil Reserve Air Fleet ("CRAF") program. Under this program, the
Department of Defense may requisition for military use certain of FedEx's wide-
bodied aircraft in the event of a declared need, including a national emergency.
FedEx 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,
FedEx is entitled to bid on peacetime military cargo charter business. FedEx,
together with a consortium of other carriers, currently contracts with the
United States Government for charter flights. FedEx, 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.
FedEx offers commercial and military charter services which supplement the
utilization of aircraft capacity when not needed in FedEx's scheduled
operations. During fiscal 1998, revenues from charter operations accounted for
approximately 0.7% of FedEx's total revenues and approximately 0.6% and 0.9% of
total revenues during fiscal 1997 and 1996, respectively.
LOGISTICS AND ELECTRONIC COMMERCE
Logistics and Electronic Commerce ("LEC"), formerly Logistics, Electronic
Commerce and Catalog, is a division of FedEx which offers information-rich,
technology-based products and services which facilitate the movement of goods
throughout the order management process. LEC focuses on markets where
delivering high-speed, time-definite, information-intensive solutions provide
significant customer value. In 1998, LEC further expanded its information
systems focus to solutions that enable customers to do business electronically -
- - ranging from order-entry to after-sales support. The combination of these
electronic commerce capabilities and FedEx's global transportation and
information network allow FedEx's customers to create or redesign their supply
chains to reduce cost and improve service to their customers.
LEC offers FedEx customers several products and services. FedEx
interNetShip/(SM)/ provides shipment processing capability within the United
States on the World Wide Web. From FedEx's World Wide Web page (www.fedex.com),
shippers can retrieve precise details on the status of their shipments any time
of day from anywhere in the world. FedEx also offers FedEx Ship/(R)/ 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. FedEx PowerShip/(R)/ 2, is a
stand-alone automated shipping 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,
FedEx offers FedEx PowerShip Plus/(R)/ software, which performs the same
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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/(R)/ is an automated
shipping system which is automatically updated with FedEx's system information,
such as routing codes and rates. FedEx PowerShip 3/(R)/ enables customers who
ship as few as three packages per day to enjoy the advantage of automated
shipping.
PRICING
FedEx periodically publishes list prices in its Service Guides for the
majority of its services. In general, during fiscal 1998, U.S. domestic shipping
rates were based on the service selected, weight, size, any ancillary service
charge and whether or not the shipment is picked up by a FedEx courier or
dropped off by the customer at a FedEx location. International rates are based
on the type of service provided and vary with size, weight and destination.
FedEx offers its customers volume discounts generally based on actual or
potential average daily revenue produced. Discounts are determined by reference
to several local and national revenue bands developed by FedEx. In general, the
more revenue a particular customer produces, the greater the discount. Of the
more than two million current FedEx customers, a significant portion
participates in FedEx's discount program.
To more closely align FedEx's rates with its transportation costs, FedEx
introduced distance-based pricing effective July 1, 1997 for U.S. shipments. The
rates are based on the weight and size of shipment, the distance between the
shipper and the recipient and the service commitment.
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):
1998 1997 1996
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FedEx Priority Overnight $ 4,852,164 $ 4,485,317 $ 4,170,254
FedEx Standard Overnight 1,958,047 1,758,462 1,616,538
FedEx 2Day 2,179,188 1,621,643 1,365,430
U.S. domestic freight services 337,098 207,729 132,122
International priority services 2,731,140 2,351,096 1,996,827
International freight services 597,861 604,472 554,143
Charter 87,902 72,330 92,389
LEC and other* 511,441 418,701 345,916
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Total $13,254,841 $11,519,750 $10,273,619
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*Includes revenues generated by the specialized services summarized above under
"Logistics and Electronic Commerce." Also includes revenues from sales of
aircraft engine noise-reduction kits and non-U.S. intra-country operations.
6
SEASONALITY OF BUSINESS
FedEx's express package business and international airfreight business are
both seasonal in nature. Historically, the U.S. 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
U.S. domestic holiday sales. The latter part of FedEx'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
FedEx's global transportation and distribution services are provided
through an extensive worldwide network consisting of numerous aviation and
ground transportation operating rights and authorities, 615 aircraft,
approximately 40,900 vehicles, sorting facilities, FedEx World Service Centers,
FedEx Drop Boxes, FedEx ShipSites, FedEx Authorized ShipCenters and
sophisticated package tracking, billing and communications systems.
FedEx's primary U.S. domestic sorting facility, the SuperHub located in
Memphis, serves as the center of FedEx's multiple hub-and-spokes U.S. domestic
system. A second national hub is located in Indianapolis. In addition to these
national hubs, FedEx operates regional hubs in Newark, Oakland and Fort Worth
and major metropolitan sorting facilities in Los Angeles and Chicago.
Facilities in Anchorage, Alaska and Subic Bay, 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 Tokyo, Charles de Gaulle Airport in Paris, Stansted
Airport outside London and Pearson Airport in Toronto.
Throughout its worldwide network, FedEx 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, FedEx operates
FedEx World Service Centers which are staffed, store-front facilities located in
high-traffic, high-density areas. Unmanned FedEx Drop Boxes provide customers
the opportunity to drop off packages at locations in office buildings, shopping
centers and corporate or industrial parks. FedEx has also formed alliances with
certain retailers to extend this customer convenience network to over 11,000
drop-off sites in retail stores. In international regions where low package
traffic makes FedEx's direct presence less economical, Global Service
Participants have been selected to complete deliveries.
FedEx has an advanced package tracking and billing system, FedEx
COSMOS/(R)/, 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 FedEx's system. For international shipments, FedEx 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.
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FUEL SUPPLIES AND COSTS
During fiscal 1998, FedEx purchased aviation fuel from various suppliers
under contracts which vary in length from 12 to 36 months and which provide for
specific amounts of fuel to be delivered. The fuel represented by these
contracts is purchased at market prices which may fluctuate daily. Management
believes that, barring a substantial disruption in supplies of crude oil, these
agreements will ensure the availability of an adequate supply of fuel for
FedEx's needs for the immediate future. 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 FedEx.
In the past three years, FedEx has entered into contracts which are
designed to limit its exposure to fluctuations in jet fuel prices. Under these
contracts, FedEx 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. FedEx hedges
its exposure to jet fuel price market risk only on a conservative, limited
basis. No such contracts were outstanding as of May 31, 1998. See Note 14 to
Notes to Consolidated Financial Statements set forth in the Company's 1998
Annual Report to Stockholders, which Note is incorporated herein by reference.
The following table sets forth FedEx'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
----------- -------------- -----------------
1998 $570,959 4.6%
1997 557,533 5.2
1996 461,401 4.8
1995 394,225 4.5
1994 374,561 4.7
Approximately 20% of FedEx's requirement for vehicle fuel is purchased in
bulk. The remainder of FedEx's requirement is satisfied by retail purchases
with various discounts. 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 U.S. domestic express market is highly competitive and sensitive to
both price and service. Competitors in this market include other express package
concerns, principally United Parcel Service of America, Inc. ("UPS") and
Airborne Express, passenger airlines offering package express services, regional
express delivery concerns, airfreight forwarders and the United States Postal
Service.
The international express package and freight markets are also highly
competitive. The ability to compete effectively internationally depends upon
price, frequency and capacity of scheduled service, extent of geographic
coverage and reliability. FedEx 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
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principal all-cargo competitors. This international route system, combined with
an integrated air and ground network, enables FedEx to offer international
customers more extensive single-carrier service to a greater number of U.S.
domestic points than can be provided currently by competitors. However, many of
FedEx'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
FedEx. FedEx's principal competitors in the international market are foreign
national air carriers, United States passenger airlines and all-cargo airlines
and other express package companies including UPS and DHL Worldwide Express.
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 FedEx. The DOT's authority relates primarily to
economic aspects of air transportation. The DOT's jurisdiction extends to
aviation route authority and to other regulatory matters, including the transfer
of route authority between carriers. FedEx holds various certificates issued by
the DOT, authorizing FedEx to engage in U.S. domestic and international air
transportation of property and mail on a worldwide basis. FedEx's international
authority permits it to carry cargo and mail from several points in its U.S.
domestic route system to numerous points throughout the world. The DOT
regulates international routes and practices and is authorized to investigate
and take action against discriminatory treatment of United States air carriers
abroad. The right of a United States carrier to serve foreign points is subject
to the DOT's approval and generally requires a bilateral agreement between the
United States and the foreign government. The carrier must then be granted the
permission of such foreign government to provide specific flights and services.
The regulatory environment for global aviation rights may from time to time
impair the ability of FedEx to operate its air network in the most efficient
manner.
The FAA's regulatory authority relates primarily to safety and operational
aspects of air transportation, including aircraft standards and maintenance,
personnel and ground facilities, which may from time to time affect the ability
of FedEx to operate its aircraft in the most efficient manner. FedEx 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 FedEx maintains its standards of safety and meets the
operational requirements of the regulations.
Ground
The ground transportation performed by FedEx is integral to its air
transportation services. Prior to January 1996, FedEx conducted its interstate
motor carrier operations pursuant to common and contract carrier authorities
issued by the Interstate Commerce Commission ("ICC"). The ICC Termination Act
of 1995 abolished the ICC and transferred responsibility for interstate motor
carrier registration to the DOT.
The enactment of the Federal Aviation Administration Authorization Act of
1994 abrogated the authority of states to regulate the rates, routes or services
of intermodal all-cargo air carriers and most motor carriers. States may now
only exercise jurisdiction over safety and insurance. FedEx is registered in
those states that require registration.
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Communication
Because of the extensive use of radio and other communication facilities in
its aircraft and ground transportation operations, FedEx is subject to the
Federal Communications Commission Act of 1934, as amended. Additionally, the
Federal Communications Commission regulates and licenses FedEx'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. FedEx's present aircraft fleet is in compliance with current
noise standards of the Federal Aviation Regulations. FedEx'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 FedEx's aircraft operations in some of the localities
where they apply but do not have a material effect on any of FedEx's significant
markets. Congress' passage of the Airport Noise and Capacity Act of 1990
established a National Noise Policy which enabled FedEx 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 FedEx's operations. FedEx 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 FedEx.
EMPLOYEES
At June 30, 1998, FedEx employed approximately 88,000 permanent full-time
and 50,000 permanent part-time employees, of which approximately 21% are
employed in Memphis. Employees of FedEx's international branches and
subsidiaries in the aggregate comprise approximately 12% of all employees. FedEx
believes its relationship with its employees is excellent.
Negotiations between the FedEx Pilots Association ("FPA") and FedEx led to
a tentative collective bargaining agreement in December 1997. By a vote of 56%
to 44%, the FPA rejected that agreement on March 11, 1998. In the months
following the rejection of the tentative agreement, the FPA installed a new
negotiating committee and the FPA president resigned. Formal negotiations aimed
at achieving a comprehensive collective bargaining agreement resumed in late
July 1998.
Attempts by other labor organizations to organize certain other groups of
employees have been initiated. Although FedEx cannot predict the outcome of
these labor activities or their effect on FedEx or its employees, if any, FedEx
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, 1998, 1997 and 1996,
refer to Note 12 of Notes to Consolidated Financial Statements contained in the
Company's 1998 Annual Report to Stockholders, which Note is incorporated herein
by reference.
10
RPS, INC.
By focusing on high volume business-to-business customers, maintaining a
low cost structure and using appropriate, efficient information technology, RPS
has become the second-largest ground small package carrier in the United States.
RPS serves customers in the small-package market in North America and between
North America and Europe, focusing primarily on the business-to-business
delivery of packages weighing up to 150 pounds. RPS provides ground service to
100% of the United States population and overnight service to 66% of the United
States population. Through its subsidiary, RPS, Ltd., service is provided to
100% of the Canadian population. Additionally, RPS provides service to Mexico
through an alliance with Estefeda Mexicana, S.A. de C.V. RPS service extends to
28 European countries through an alliance with General Parcel Logistics, GmbH.
RPS also offers service offshore to Puerto Rico, Alaska and Hawaii via a
ground/air network operation in cooperation with other transportation providers.
RPS provides other specialized transportation services to meet specific
customer requirements in the small-package market. RPS conducts its operations
primarily with 8,500 owner-operated vehicles and, in addition, owns over 8,700
trailers. Competition for high volume, profitable shipping business focuses
largely on providing economical pricing and dependable service. Beginning July
1998, RPS initiated a money-back guarantee on all business-to-business ground
deliveries within the continental United States.
RPS utilizes shipping-automation technology to streamline the handling of
more than 1.3 million daily packages. RPS also utilizes software systems and
Internet-based applications to offer its customers new ways to connect internal
shipment information with external delivery information. In 1998, RPS added
multiple-carrier shipment tracing and proof-of-delivery signature functionality
to its web site (www.shiprps.com).
Like FedEx, RPS utilizes a hub-and-spokes sorting and distribution system.
The role of an RPS hub is to service its satellite terminals by receiving
mainline loads to and from RPS facilities throughout the United States and
Canada. The capacity of the hub helps ensure timely delivery of packages moving
through the RPS network.
RPS hubs are equipped with overhead scanners to scan the RPS bar code
labels as they travel through the hub network and are automatically routed to
ensure the correct destination. The entire package handling process has minimal
human intervention, ensuring packages are handled carefully and sorted
correctly.
RPS is headquartered in Pittsburgh, Pennsylvania. Daniel J. Sullivan is the
President and Chief Executive Officer of the company. RPS has approximately
23,000 employees. RPS' primary competitors are UPS (non-express services) and
the United States Postal Service.
VIKING FREIGHT, INC.
Viking Freight specializes in one- and two-day less-than-truckload ("LTL")
service throughout the western United States. Service is also available to
Alaska and Hawaii. Viking Freight's management focuses on achieving high levels
of on-time delivery, easy-to-use information technology and responsive customer
service.
11
With next- and second-business day regional freight service, plus direct
ocean service to Alaska and Hawaii, Viking Freight's 4,700 employees handle
approximately 12,000 shipments per day, achieving an award-winning on-time
delivery performance exceeding that of most other LTL carriers. Consistent with
its "Easy To Do Business With" service philosophy, Viking Freight has recently
created two customer advisory boards -- one for corporate accounts, the other
for smaller shippers -- to better anticipate and meet customers' needs. Viking
Freight has enhanced its customer service and today responds to most inquiries
within seconds. Viking Freight's web sites (www.vikingfreight.com and
www.eztdbw.com) let customers conduct business electronically with convenience
and confidence.
In 1998, for the third time, the National Small Shipments Traffic
Conference (NASSTRAC) named Viking Freight its regional LTL carrier of the year.
In addition, readers of Logistics Management and Distribution magazine voted
Viking Freight "Quality Carrier for 1998," the seventh year Viking Freight has
received this award.
Viking Freight is headquartered in San Jose, California. Rodger G. Marticke
is the President and Chief Executive Officer of the company. Viking Freight's
primary regional competitors are ConWay Western Express, Inc., USF Bestway, Inc.
and USF Reddaway Truck Line, Inc. Viking Freight also competes with other
regional and long-haul carriers.
ROBERTS EXPRESS, INC.
Roberts Express is the world's largest surface-expedited carrier. Roberts
Express offers one service -- time-specific, non-stop, door-to-door delivery for
critical shipments anytime, anywhere. Each shipper has exclusive vehicle usage,
eliminating freight handling since operations are free from freight
consolidation. A network of over 2,000 vehicles assures the customer of time-
specific service anywhere within the United States and Canada, with pickup in
less than ninety minutes within twenty-five miles of any of Roberts Express' 145
ExpressCenters. Customer Link, Roberts Express' integrated two-way satellite
communications system, enables the customer to immediately trace his shipment to
determine its status and to-the-minute delivery time.
Service is available 24 hours a day, 365 days a year, including weekends
and holidays, at no extra cost. If at any time during transport Roberts Express
is more than 15 minutes late, both the shipper and the consignee are notified.
If Roberts Express is more than two hours late on delivery, the company will
refund the customer 25% of the freight charges. If Roberts Express is more than
four hours late on delivery, the company will refund the customer 50% of the
freight charges. In many cases, Roberts Express offers (with guaranteed delivery
times) a faster and less expensive alternative to heavyweight airfreight.
To promote even higher levels of productivity and service, Roberts Express
recently installed a "dynamic vehicle allocation system." As customer orders
are received, the system lets dispatchers evaluate at least 20 load and traffic
variables, to help ensure that delivery vehicles are where they need to be, when
they need to be, for optimum customer service and fleet utilization.
12
Roberts Express is headquartered in Akron, Ohio. R. Bruce Simpson is the
President of the company. Roberts Express has approximately 500 employees and
1,500 owner-operators. Daily volume approximates 1,000 shipments. The company's
primary competitors are ConWay NOW, Inc., CTX, Emery Expedite, Inc., Landstar
Express America, Inc., TNT Expedite and Tri-State Expediting Service, Inc.
CALIBER LOGISTICS, INC.
Caliber Logistics is a contract logistics provider with expertise across
the entire supply chain, from inbound materials management through distribution
to the final consumer. Services provided include transportation management,
dedicated transportation, warehouse operations and management, just-in-time
delivery programs, customer order processing, returnable container management,
freight bill payment and auditing and other management services outsourced by
its customers.
An important element in the company's overall value to customers is
improved information exchange. Caliber Logistics' transportation management
programs use advanced electronic data interchanges to speed communications
between customers and their suppliers. Faster communication translates into more
cost-effective logistics and competitive advantages. Caliber Logistics manages
over 100 logistics contracts, three million shipments per year and over six
million square feet of warehouse space.
Caliber Logistics headquarters is located in Hudson, Ohio. Its European
headquarters is located in Leiden, The Netherlands. Thomas I. Escott is the
President of the company. Caliber Logistics has approximately 2,900 employees
and 600 owner-operators.
RPS, VIKING FREIGHT, ROBERTS EXPRESS - REGULATION
Prior to January 1996, RPS, Viking Freight and Roberts Express conducted
their operations pursuant to common and contract carrier authorities issued by
the ICC. The ICC Termination Act of 1995 abolished the ICC and transferred
responsibility for interstate motor carrier registration to the DOT.
The operations of RPS, Viking Freight and Roberts Express in interstate
commerce are currently regulated by the DOT and the Federal Highway
Administration, which retain limited oversight authority over motor carriers.
Federal legislation has been enacted that preempted regulation by the states of
rates and service in intrastate freight transportation.
Like other interstate motor carriers, RPS, Viking Freight and Roberts
Express are subject to certain DOT safety requirements governing interstate
operations. In addition, vehicle weight and dimensions remain subject to both
federal and state regulations.
RPS, Viking Freight and Roberts Express are subject to federal, state and
local environmental laws and regulations relating to, among other things,
contingency planning for spills of petroleum products and the disposal of waste
oil. Additionally, RPS, Viking Freight and Roberts Express are subject to
numerous regulations dealing with underground fuel storage tanks and each
company has environmental management programs to conform with these regulations.
13
RPS, VIKING FREIGHT, ROBERTS EXPRESS - SEASONALITY
The transportation and logistics industry is affected directly by the state
of the overall economy. Seasonal fluctuations affect tonnage, revenues and
earnings. Normally, the fall of each year is the busiest shipping period for
each of the three companies; the months of December and January of each year are
the slowest. Shipment levels, operating costs and earnings can also be adversely
affected by inclement weather.
ITEM 2. PROPERTIES
FDX CORPORATION
The Company does not own any real property. The Company leases two
facilities in the Memphis area for its corporate headquarters and administrative
offices.
FEDERAL EXPRESS CORPORATION
FedEx's principal owned or leased properties include its aircraft,
vehicles, national, regional and metropolitan sorting facilities, administration
buildings, FedEx World Service Centers, FedEx Drop Boxes and data processing and
telecommunications equipment.
AIRCRAFT AND VEHICLES
FedEx's aircraft fleet at June 30, 1998 consisted of the following:
MAXIMUM GROSS
STRUCTURAL PAYLOAD
DESCRIPTION NUMBER (POUNDS PER AIRCRAFT)*
- ----------- ------ ----------------------
McDonnell Douglas MD11 26** 198,500
McDonnell Douglas DC10-30 22** 172,000
McDonnell Douglas DC10-10 47** 142,000
Airbus A300-600 25** 117,700
Airbus A310-200 39** 74,200
Boeing B727-200 95** 59,500
Boeing B727-100 68** 38,000
Fokker F27-500 24 14,000
Fokker F27-600 8 12,500
Cessna 208B 251 3,500
Cessna 208A 10 3,000
---
Total 615
_________________________
*Maximum gross structural payload includes revenue payload and container
weight.
**25 MD11, 17 DC10-30, four DC10-10, 25 A300, 16 A310, 13 B727-200 and five
B727-100 aircraft are subject to operating leases.
14
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 DC10s. The
DC10s are three-engine, wide-bodied aircraft which have been specially modified
to meet FedEx's cargo requirements. The B727s are three-engine aircraft
configured for cargo service. FedEx's Fokker F27 and Cessna 208 turbo-prop
aircraft are leased to unaffiliated operators to support FedEx 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, FedEx "wet leases" approximately 21 smaller piston-engine and
turbo-prop aircraft which feed packages to and from airports served by FedEx'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. FedEx's wet lease agreements are for
terms not exceeding one year and are generally cancelable upon 30 days notice.
At June 30, 1998, FedEx operated approximately 40,900 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, 1998, FedEx was committed under various contracts to purchase
11 Airbus A300, 34 MD11 and 50 Ayers ALM 200 aircraft to be delivered through
2007.
During 1997, FedEx entered into agreements with two airlines to acquire 53
DC10s, spare parts, aircraft engines and other equipment, and maintenance
services in exchange for a combination of aircraft engine noise reduction kits
and cash. Delivery of these aircraft began in 1997 and will continue through
2001. Additionally, these airlines may exercise put options through December
31, 2003, requiring FedEx to purchase up to 29 additional DC10s along with
additional aircraft engines and equipment.
15
SORTING AND HANDLING FACILITIES
At July 1, 1998, FedEx operated the following sorting and handling
facilities:
SORTING LEASE
SQUARE CAPACITY EXPIRATION
LOCATION ACRES FEET (PER HOUR)* LESSOR YEAR
-------- ----- ---- ----------- ------ ----
NATIONAL
- --------
Memphis, Tennessee 479 3,074,440 465,000 Memphis-Shelby County 2012
Airport
Authority
Indianapolis, Indiana 120 645,000 153,000 Indianapolis Airport 2016
Authority
REGIONAL
- --------
Fort Worth, Texas 168 641,000 74,000 Fort Worth Alliance Airport 2014
Authority
Newark, New Jersey 56 503,800 142,000 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 15,000 City of Chicago 2018
Anchorage, Alaska+ 42 208,000 4,200 Alaska Department of 2013
Transportation and Public
Facilities
INTERNATIONAL
- -------------
Subic Bay, 18 300,000 16,000 Subic Bay Metropolitan 2002
The 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.
16
FedEx's facilities at the Memphis International Airport also consist of
aircraft hangars, flight training and fuel facilities, administrative offices
and warehouse space. FedEx leases these facilities from the Memphis-Shelby
County Airport Authority under several leases. The leases cover land, the
administrative and sorting buildings, other facilities, ramps and certain
related equipment. FedEx 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 FedEx to maintain and
insure the leased property and to pay all related taxes, assessments and other
charges. The leases are subordinate to, and FedEx'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, FedEx has major international
sorting and freight handling facilities located at Narita Airport in Tokyo,
Japan, Charles de Gaulle Airport in Paris, France, Stansted Airport outside
London, England and Pearson Airport in Toronto, Canada. During 1997,
construction began on FedEx's new European sorting hub at Charles de Gaulle
Airport which is expected to open in 2000. The Fort Worth hub became
operational in September 1997. Also, new, larger facilities were opened in 1998
at the new Chek Lap Kok airport in Hong Kong, CKS International Airport in
Taiwan and Dubai Airport, United Arab Emirates.
ADMINISTRATIVE AND OTHER PROPERTIES AND FACILITIES
FedEx 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 FedEx. FedEx also leases approximately 90
facilities in the Memphis area for its corporate headquarters, warehouse
facilities and administrative offices. During fiscal year 1997, FedEx began
construction on an office campus in Collierville, Tennessee for its information
and telecommunications division, and announced plans to build a headquarters
office campus in East Shelby County, Tennessee. See also Item 1, "Business -
Federal Express Corporation - Recent Developments."
FedEx owns 13 and leases 707 facilities for city station operations in the
United States. In addition, 159 city stations are owned or leased throughout
FedEx's international network. The majority of these leases are for terms of
five to ten years. FedEx believes that suitable alternative facilities are
available in each locale on satisfactory terms, if necessary. As of July 1,
1998, FedEx leased space for 391 FedEx World Service Centers in the United
States and had placed approximately 31,000 Drop Boxes. FedEx also owns stand-
alone mini-centers located on leaseholds in parking lots adjacent to office
buildings, shopping centers and office parks of which 189 were operating at July
1, 1998. Internationally, FedEx leases space for 46 FedEx World Service Centers
and has approximately 964 FedEx Drop Boxes.
FedEx 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 FedEx's vehicles. FedEx
also leases space on C-Band and Ku-Band satellite transponders for use in its
telecommunications network.
17
RPS, INC.
As of June 30, 1998, RPS operated 365 facilities, including 25 hubs.
Fifty-three of the facilities, 22 of which are hubs, are owned; 312 facilities
are leased, generally for terms of three years or less. Twelve of the
facilities, three of which are hubs, are operated by RPS, Ltd., RPS' subsidiary
operating in Canada. The 25 hub facilities are strategically located to cover
the geographic area served by RPS. These facilities average 109,000 square feet
and range in size from 26,000 to 236,000 square feet.
RPS' corporate offices and information and data centers are located in the
Pittsburgh, Pennsylvania area in an approximately 350,000 square foot building
owned by a subsidiary of RPS.
VIKING FREIGHT, INC.
As of June 30, 1998, Viking operated 43 terminals, 31 of which are owned.
The terminals are strategically located to cover the geographic area served by
Viking. These facilities range in size from 1,800 to 72,000 square feet of
office and dock space, and are located on sites ranging from 1.5 to 21.6 acres.
The company's corporate headquarters is located in leased facilities in San
Jose, California.
ROBERTS EXPRESS, INC.
Roberts Express' corporate headquarters is located in Akron, Ohio in owned
facilities. Roberts does not use terminal facilities in its business.
CALIBER LOGISTICS, INC.
Caliber Logistics' corporate headquarters is located in Hudson, Ohio in
leased facilities.
ITEM 3. LEGAL PROCEEDINGS
FEDERAL EXPRESS CORPORATION
Customers of FedEx have filed four separate class-action lawsuits against
FedEx generally alleging that FedEx has breached its contract with the
plaintiffs in transporting packages shipped by them. These lawsuits allege that
FedEx continued to collect a 6.25% federal excise tax on the transportation of
property shipped by air after the tax expired on December 31, 1995, until it was
reinstated in August of 1996. The plaintiffs seek certification as a class
action, damages, an injunction to enjoin FedEx from continuing to collect the
excise tax referred to above, and an award of attorneys' fees and costs. Three
of those cases were consolidated in Minnesota Federal District Court. That court
stayed the consolidated cases in favor of a case filed in Circuit Court of
Greene County, Alabama. The stay was lifted in July 1998. The complaint in the
Alabama case also alleges that FedEx continued to collect the excise tax on the
transportation of property shipped by air after the tax expired again on
December 31, 1996.
A fifth case, filed in the Supreme Court of New York, New York County,
containing allegations and requests for relief substantially similar to the
other four cases was dismissed with prejudice on FedEx's motion on October 7,
1997. The Court found that there was no breach of contract and that the other
causes of action were preempted by federal law. The plaintiffs have appealed.
This case originally alleged that FedEx continued to collect the excise tax on
the transportation of property shipped by air
18
after the tax expired on December 31, 1996. The New York complaint was later
amended to cover the first expiration period of the tax (December 31, 1995
through August 27, 1996) covered in the original Alabama complaint.
The air transportation excise tax expired on December 31, 1995, was
reenacted by Congress effective August 27, 1996, and expired again on December
31, 1996. The excise tax was then reenacted by Congress effective March 7, 1997.
The expiration of the tax relieved FedEx of its obligation to pay the tax during
the periods of expiration. The Taxpayer Relief Act of 1997, signed by President
Clinton in August 1997, extended the tax for 10 years through September 30,
2007.
FedEx intends to vigorously defend itself in these cases. No amount has
been reserved for these contingencies.
In November 1987, The Flying Tiger Line Inc. ("Flying Tigers"), a company
acquired by FedEx 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 0.1% 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
FedEx to the partial-settlement escrow account. All outstanding issues are not
expected to be resolved for several years. Due to several variables which are
beyond FedEx's control, it is impossible to accurately estimate FedEx's
potential share of the remaining costs, but based on Flying Tigers' relatively
insignificant contribution of waste to the site, FedEx believes that its
remaining liability will not be material.
THE COMPANY
The Company and its subsidiaries are 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 Company's financial position or results
of operations.
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, 1998.
19
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 53 Chairman, President and Chief Executive Officer of the Company since
1971 January 1998; Chairman of FedEx since 1975; Chairman, President and Chief
Executive Officer of FedEx from April 1993 to January 1998; Chief Executive
Officer of FedEx from 1977 to January 1998; and President of FedEx from June
1971 to February 1975.
DAVID J. BRONCZEK 44 Executive Vice President and Chief Operating Officer of FedEx since January
1987 1998; Senior Vice President - Europe, Middle East and Africa of FedEx from
June 1995 to January 1998; Senior Vice President - Europe, Africa and
Mediterranean of FedEx from June 1993 to June 1995; Vice President -
Canadian Operations of FedEx from February 1987 to March 1993; and several
sales and operations managerial positions at FedEx from 1976 to 1987.
T. MICHAEL GLENN 42 Executive Vice President - Market Development and Corporate Communications
1985 of the Company since January 1998; Senior Vice President - Marketing,
Customer Service and Corporate Communications of FedEx from June 1994 to
January 1998; Senior Vice President - Marketing and Corporate
Communications of FedEx from December 1993 to June 1994; Senior Vice
President - Worldwide Marketing Catalog Services and Corporate
Communications of FedEx from June 1993 to December 1993; Senior Vice
President - Catalog and Remail Services of FedEx from September 1992 to
June 1993; Vice President - Marketing of FedEx from August 1985 to
September 1992; and various management positions in sales and marketing and
senior sales specialist of FedEx from 1981 to 1985.
ALAN B. GRAF, JR. 44 Executive Vice President and Chief Financial Officer of the Company since
1987 January 1998; Executive Vice President and Chief Financial Officer of FedEx
from February 1996 to January 1998; Senior Vice President and Chief
Financial Officer of FedEx from December 1991 to February 1996; Vice
President and Treasurer of FedEx from August 1987 to December 1991; and
various management positions in finance and a senior financial analyst of
FedEx from 1980 to 1987.
20
OFFICER, YEAR FIRST
ELECTED AS OFFICER AGE POSITIONS HELD WITH COMPANY
------------------ --- ---------------------------
JAMES S. HUDSON 49 Corporate Vice President - Strategic Financial Planning and Control and
1992 Principal Accounting Officer since January 1998; Vice President - Corporate
Financial Planning and Control of FedEx from January 1997 to January 1998;
Vice President, Controller and Chief Accounting Officer of FedEx from
December 1994 to January 1997; Vice President - Finance - Europe, Africa
and Mediterranean of FedEx from July 1992 to December 1994; and various
management positions in finance at FedEx from 1974 to 1992.
DENNIS H. JONES 46 Executive Vice President and Chief Information Officer of the Company since
1986 January 1998; Senior Vice President and Chief Information Officer of FedEx
from December 1991 to January 1998; Vice President - Customer Automation
and Invoicing of FedEx from December 1986 to December 1991; and various
management positions in finance and a financial analyst of FedEx from 1975
to 1986.
KENNETH R. MASTERSON 54 Executive Vice President, General Counsel and Secretary of the Company
1980 since January 1998; Executive Vice President, General Counsel and Secretary
of FedEx from February 1996 to January 1998; Senior Vice President, General
Counsel and Secretary of FedEx from September 1993 to February 1996; Senior
Vice President and General Counsel of FedEx from February 1981 to September
1993; and Vice President - Legal of FedEx from January 1980 to February
1981.
DANIEL J. SULLIVAN 52 President and Chief Executive Officer of RPS, Inc. since January 1998;
1998 Chairman, President and Chief Executive Officer of Caliber System, Inc.
from January 1996 to January 1998; Chairman, President and Chief Executive Officer of
Roadway Services, Inc. from October 1995 to January 1996; President and Chief
Executive Officer of Roadway Services, Inc. from August 1995 to October 1995;
President and Chief Operating Officer of Roadway Services, Inc. from January 1994 to
August 1995; Senior Vice President and President of National Carrier Group of Roadway
Services, Inc. during 1993; Vice President and President -National Carrier Group of
Roadway Services, Inc. during 1992; Vice President and Group Executive of Roadway
Services, Inc. from July 1990 through 1991; and President of RPS through June 1990.
21
OFFICER, YEAR FIRST
ELECTED AS OFFICER AGE POSITIONS HELD WITH COMPANY
------------------ --- ---------------------------
THEODORE L. WEISE 54 President and Chief Executive Officer of FedEx since January 1998;
1977 Executive Vice President - Worldwide Operations of FedEx from February 1996
to January 1998; Senior Vice President - Air Operations of FedEx from
August 1991 to February 1996; Senior Vice President - United States and
Canada of FedEx from June 1990 to August 1991; Senior Vice President -
Domestic Ground Operations of FedEx from March 1987 to June 1990; Senior
Vice President - Central Support Services of FedEx 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 of FedEx from March 1979 to March 1983; Vice President -
Operations Resource and Corporate Planning of FedEx from September 1978 to
March 1979; Vice President - Special Projects and Advanced Planning of
FedEx from April 1977 to September 1978; and Director of Special Projects
of FedEx from 1972 to 1977.
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 or of any of
its subsidiaries 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 or of any of
its subsidiaries. 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
1998 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 1998 Annual
Report to Stockholders, on page 56 under the headings, "Stock listing,"
"Stockholders" and "Market information" and is incorporated herein by reference.
As of August 3, 1998, the closing price of the Company's common stock on the New
York Stock Exchange was $60.3125 per share.
No cash dividends have been declared. The Company has never declared a
dividend on its shares because its policy has been to reinvest earnings in the
Company's businesses.
22
There are no material restrictions on the Company's ability to declare
dividends, nor are there any material restrictions on the ability of the
Company's subsidiaries to transfer funds to the Company in the form of cash
dividends, loans or advances. See Note 4 to Notes to Consolidated Financial
Statements set forth in the Company's 1998 Annual Report to Stockholders, which
Note is incorporated herein by reference.
PAGE IN ANNUAL REPORT
TO STOCKHOLDERS
ITEM 6. SELECTED FINANCIAL DATA
Financial Highlights on a Like-Calendar Basis........ 25
Financial Highlights................................. 26
Selected Consolidated Financial Data................. 54
See Management's Discussion and Analysis of Results of Operations and
Financial Condition set forth in the Company's 1998 Annual Report to
Stockholders for a discussion of factors such as accounting changes, business
combinations or dispositions of business operations, that may materially affect
the comparability of the information reflected in selected financial data.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 27
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK............................... 33
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated Statements of Income.................... 34
Consolidated Balance Sheets.......................... 35
Consolidated Statements of Cash Flows................ 36
Consolidated Statements of Changes in
Common Stockholders' Investment...................... 37
Notes to Consolidated Financial Statements........... 38
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
23
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," "Compensation of Directors," and
"Transactions with Management and Others" on pages 2 through 8 and on page 16 of
the Definitive Proxy Statement for the Company's 1998 Annual Meeting of
Stockholders which will be held September 28, 1998 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 for Items 11 through 13 of this Report appears in the
Definitive Proxy Statement for the Company's 1998 Annual Meeting of Stockholders
to be held on September 28, 1998, as indicated in the following table and is
incorporated herein by reference.
PAGE IN PROXY
STATEMENT
---------
ITEM 11. EXECUTIVE COMPENSATION
Compensation Information............................. 9
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.............. 16
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
(a) 1. FINANCIAL STATEMENTS
The consolidated financial statements of the Company, together with the
Notes to Consolidated Financial Statements, and the report thereon of Arthur
Andersen LLP, dated July 8, 1998, are presented on pages 34 through 53 of the
Company's 1998 Annual Report to Stockholders and are incorporated herein by
reference. The Report of Independent Auditors on the consolidated financial
statements of Caliber System, Inc. (not presented separately herein) as of
December 31, 1996 and for the two years in the period then ended is included as
Exhibit 99 to this Report. With the exception of the aforementioned information
and the information incorporated by reference in Items 1, 5, 6, 7, 7A and 8
hereof, the Company's 1998 Annual Report to Stockholders is not to be deemed as
filed as part of this Report.
24
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 1998
Annual Report to Stockholders and incorporated herein by reference.
3. EXHIBITS
Exhibits 2.1, 2.2, 3.1, 3.2, 4.1 through 4.30, 10.1 through 10.98, 12, 13,
21, 23.1, 23.2, 24, 27 and 99 are being filed in connection with this Report and
incorporated herein by reference.
The Exhibit Index on pages E-1 through E-15 is incorporated herein by
reference.
(b) REPORTS ON FORM 8-K
No reports were filed on Form 8-K for the fourth quarter of the Company's
fiscal year.
25
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.
FDX CORPORATION
(Registrant)
BY: /s/ JAMES S. HUDSON
---------------------------------
James S. Hudson
Corporate Vice President -
Strategic Financial Planning and
Control
(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 and Director
(Principal Executive Officer)
/s/ ALAN B. GRAF, JR.* Executive Vice President and
------------------------------- Chief Financial Officer
Alan B. Graf, Jr. (Principal Financial Officer)
/s/ JAMES S. HUDSON Corporate Vice President - August 14, 1998
------------------------------- Strategic Financial Planning and Control
James S. Hudson (Principal Accounting Officer)
/s/ ROBERT H. ALLEN * Director
-------------------------------
Robert H. Allen
/s/ ROBERT L. COX * Director
-------------------------------
Robert L. Cox
/s/ RALPH D. DENUNZIO * Director
-------------------------------
Ralph D. DeNunzio
26
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/ PAUL S. WALSH* Director
-------------------------------
Paul S. Walsh
/s/ PETER S. WILLMOTT * Director
-------------------------------
Peter S. Willmott
*By: /s/ JAMES S. HUDSON August 14, 1998
-------------------------------
James S. Hudson
Attorney-in-Fact
27
S-1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To FDX Corporation:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in FDX Corporation's 1998 Annual
Report to Stockholders incorporated by reference in this Form 10-K, and have
issued our report thereon dated July 8, 1998. 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,
July 8, 1998
S-2
SCHEDULE II
FDX CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED MAY 31, 1998, 1997 AND 1996
(In thousands)
ADDITIONS
CHARGED CHARGED BALANCE
BALANCE AT TO TO AT
BEGINNING COSTS AND OTHER END OF
DESCRIPTION OF YEAR EXPENSES ACCOUNTS DEDUCTIONS(A) YEAR
----------- ---------- --------- -------- ------------- ---------
Accounts
Receivable Allowances
- ---------------------
1998................. $ 86,154 $ 95,634 $ - $ 120,379 $ 61,409
========= ========= ======== ========= =========
1997................. $ 43,395 $ 76,150 $ - $ 51,415 $ 68,130
========= ========= ======== ========= =========
1996................. $ 40,812 $ 51,700 $ 1,700 $ 50,817 $ 43,395
========= ========= ======== ========= =========
(A) Write-offs, net of recoveries.
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
2.1 Agreement and Plan of Merger dated as of October 5, 1997 among
the Registrant (formerly known as Fast Holding Inc.), Federal
Express Corporation ("FedEx"), Caliber System, Inc., Fast Merger
Sub Inc. and Tires Merger Sub Inc. (Filed as Annex A to Joint
Proxy Statement/Prospectus contained in Amendment No. 1 to
Registrant's Registration Statement on Form S-4, Commission File
No. 333-39483, and incorporated herein by reference.)
2.2 Amendment No. 1, dated as of January 21, 1998, to Agreement and
Plan of Merger dated October 5, 1997 among the Registrant, FedEx,
Caliber System, Inc. Fast Merger Sub Inc. and Tires Merger Sub
Inc. (Filed as Exhibit 2.2 to Registrant's Current Report on Form
8-K dated January 27, 1998, Commission File No. 333-39483, and
incorporated herein by reference.)
3.1 Amended and Restated Certificate of Incorporation of Registrant
(Filed as Exhibit 3.1 to Amendment No. 1 to Registrant's
Registration Statement on Form S-4, Commission File No.
333-39483, and incorporated herein by reference.)
3.2 Amended and Restated By-laws of Registrant (Filed as Exhibit 3.2
to Amendment No. 1 to Registrant's Registration Statement on Form
S-4, Commission File No. 333-39483, and incorporated herein by
reference.)
4.1 Indenture dated as of April 1, 1987 between FedEx and The Bank of
New York ("BONY"), as Trustee, relating to FedEx's 10% Senior
Notes due April 15, 1999. (Filed as Exhibit 10.36 to FedEx's FY88
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
FedEx and BONY, relating to FedEx's 10% Senior Notes due April
15, 1999. (Filed as Exhibit 4(a) to FedEx'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
FedEx and BONY and form of note relating to FedEx's 10% Senior
Notes due April 15, 1999. (Filed as Exhibit 4(b) to FedEx'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 FedEx and BONY
relating to FedEx's unsecured debt securities. (Filed as an
exhibit to FedEx's Registration Statement No. 33-28796 on Form
S-3 and incorporated herein by reference.)
4.5 Supplemental Indenture No. 2 dated as of August 11, 1989 between
FedEx and BONY. (Filed as Exhibit 4.2 to FedEx's Registration
Statement No. 33-30415 on Form S-3 and incorporated herein by
reference.)
E-1
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
4.6 Supplemental Indenture No. 3 dated as of October 15, 1989 between
FedEx and BONY relating to FedEx's 9 5/8% Sinking Fund Debentures
due October 15, 2019. (Filed as Exhibit 4.2 to FedEx's Current
Report on Form 8-K dated October 16, 1989, Commission File No. 1-
7806, and incorporated herein by reference.)
4.7 Supplemental Indenture No. 5 dated as of August 15, 1990 between
FedEx and BONY. (Filed as Exhibit 4(c) to FedEx's Current Report
on Form 8-K dated August 28, 1990, Commission File No. 1-7806,
and incorporated herein by reference.)
4.8 Indenture dated May 15, 1989 including Supplemental Indenture
Nos. 2, 3 and 5 dated as described above, between FedEx and BONY,
relating to FedEx's Medium-Term Notes, Series B, the last of
which is due August 15, 2006, FedEx's 9 7/8% Notes due April 1,
2002, FedEx's 9.65% Notes due June 15, 2012 and FedEx's 6 1/4%
Notes due April 15, 1998. (Filed as described above.)
4.9 Form of Fixed Rate Medium-Term Note, Series B, the last of which
is due August 15, 2006. (Filed as Exhibit 4.4 to FedEx's
Registration Statement No. 33-40018 on Form S-3 and incorporated
herein by reference.)
4.10 Form of Floating Rate Medium-Term Note, Series B, the last of
which is due August 15, 2006. (Filed as Exhibit 4.5 to FedEx's
Registration Statement No. 33-40018 on Form S-3 and incorporated
herein by reference.)
4.11 Form of 9 7/8% Note due April 1, 2002. (Filed as Exhibit 4.1 to
FedEx's Current Report on Form 8-K dated March 23, 1992,
Commission File No. 1-7806, and incorporated herein by
reference.)
4.12 Form of 9.65% Note due June 15, 2012. (Filed as Exhibit 4.1 to
FedEx's Current Report on Form 8-K dated June 18, 1992,
Commission File No. 1-7806, and incorporated herein by
reference.)
4.13 Form of 6 1/4% Note due April 15, 1998. (Filed as Exhibit 4.1 to
FedEx's Current Report on Form 8-K dated April 21, 1993,
Commission File No. 1-7806, and incorporated herein by
reference.)
4.14 Indenture dated as of July 1, 1996 between FedEx and The First
National Bank of Chicago, as Trustee, relating to FedEx's
unsecured debt securities. (Filed as Exhibit 4.14 to FedEx's FY96
Annual Report on Form 10-K, Commission File No. 1-7806, and
incorporated herein by reference.)
4.15 Supplemental Indenture No. 1 dated as of July 1, 1997 between
FedEx and The First National Bank of Chicago relating to FedEx's
7.60% Notes due July 1, 2097. (Filed as Exhibit 4.1 to FedEx's
Current Report on Form 8-K dated July 7, 1997, Commission File
No. 1-7806, and incorporated herein by reference.)
4.16 Form of 7.60% Note due July 1, 2097. (Filed as Exhibit 4.2 to
FedEx's Current Report on Form 8-K dated July 7, 1997, Commission
File No. 1-7806, and incorporated herein by reference.)
E-2
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
4.17 Pass Through Trust Agreement dated as of February 1, 1993, as
amended and restated as of October 1, 1995, between FedEx and
BONY, as Pass Through Trustee, relating to FedEx's 1993 Pass
Through Certificates, Series A1, A2, B1, B2, C1 and C2, 1995 Pass
Through Certificates, Series A1, A2, B1, B2 and B3 and 1996 Pass
Through Certificates, Series A1 and A2. (Filed as Exhibit 4.a.1
to FedEx's Current Report on Form 8-K dated October 26, 1995,
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 FedEx'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 FedEx'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 FedEx's Current Report on Form 8-K
dated December 2, 1993, Commission File No. 1-7806, and
incorporated herein by reference.)
4.21 Form of 7.63% and 8.06% 1995 Pass Through Certificates, Series A1
and A2 due January 5, 2014 and January 5, 2016, respectively.
(Filed as Exhibit 4.a.2 to FedEx's Current Report on Form 8-K
dated August 16, 1995, Commission File No. 1-7806, and
incorporated herein by reference.)
4.22 Form of 6.05%, 7.11% and 7.58% 1995 Pass Through Certificates,
Series B1, B2 and B3 due March 19, 1996, January 2, 2014 and July
2, 2019, respectively. (Filed as Exhibit 4.a.2 to FedEx's Current
Report on Form 8-K dated October 26, 1995, Commission File No. 1-
7806, and incorporated herein by reference.)
4.23 Form of 7.85% and 8.17% 1996 Pass Through Certificates, Series A1
and A2 due January 30, 2015 and January 30, 2018, respectively.
(Filed as Exhibit 4.a.2 to FedEx's Current Report on Form 8-K
dated June 5, 1996, Commission File No. 1-7806, and incorporated
herein by reference.)
4.24 Pass Through Trust Agreement dated as of March 1, 1994 between
FedEx and BONY, as Pass Through Trustee, relating to FedEx's 1994
Pass Through Certificates, Series A310-A1, A310-A2 and A310-A3.
(Filed as Exhibit 4.a.1 to FedEx's Current Report on Form 8-K
dated March 16, 1994, Commission File No. 1-7806, and
incorporated herein by reference.)
4.25 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 FedEx's Current Report on Form 8-K dated March
16, 1994, Commission File No. 1-7806, and incorporated herein by
reference.)
E-3
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
4.26 Pass Through Trust Agreement dated as of June 1, 1996 between
FedEx and State Street Bank and Trust Company, as Pass Through
Trustee, relating to FedEx's 1996 Pass Through Certificates,
Series B1 and B2. (Filed as Exhibit 4(a)(1) to FedEx's
Registration Statement No. 333-07691 on Form S-3 and incorporated
herein by reference.)
4.27 Form of 7.39% and 7.84% 1996 Pass Through Certificates, Series B1
and B2 due January 30, 2013 and January 30, 2018, respectively.
(Filed as Exhibit 4.a.2 to FedEx's Current Report on Form 8-K
dated October 17, 1996, Commission File No. 1-7806, and
incorporated herein by reference.)
4.28 Pass Through Trust Agreement dated as of May 1, 1997 between
FedEx and First Security Bank, National Association, as Pass
Through Trustee. (Filed as Exhibit 4.a.3 to FedEx's Form 8-K
dated May 12, 1997, Commission File No. 1-7806, and incorporated
herein by reference.)
4.29 Form of 7.50%, 7.52% and 7.65% 1997-1 Pass Through Certificates,
Class A, B and C due January 15, 2018, January 15, 2018 and
January 15, 2014, respectively. (Filed as Exhibit 4.a.2 to
FedEx's Current Report on Form 8-K dated May 22, 1997, Commission
File No. 1-7806, and incorporated herein by reference.)
4.30 Form of 6.72%, 6.845% and 7.02% 1998-1 Pass Through Certificates,
Class A, B and C due January 15, 2022, January 15, 2019 and
January 15, 2016, respectively. (Filed as Exhibit 4.a.3 to
FedEx's Current Report on Form 8-K dated June 30, 1998,
Commission File No. 1-7806, and incorporated herein by
reference.)
10.1 Indenture dated as of August 1, 1979 between the Memphis-Shelby
County Airport Authority (the "Authority") and BONY, as Trustee.
(Refiled as Exhibit 10.1 to FedEx's FY90 Annual Report on
Form 10-K, Commission File No. 1-7806, and incorporated herein by
reference.)
10.2 Second Supplemental Indenture dated as of May 1, 1982 between the
Authority and BONY. (Refiled as Exhibit 10.2 to FedEx's FY93
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 BONY. (Refiled as Exhibit 10.3 to FedEx's FY93
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 BONY relating to 7 7/8% Special
Facilities Revenue Bonds, Series 1984 due September 1, 2009.
(Refiled as Exhibit 10.4 to FedEx's FY95 Annual Report on
Form 10-K, Commission File No. 1-7806, and incorporated herein by
reference.)
10.5 Fifth Supplemental Indenture dated as of July 1, 1992 between the
Authority and BONY relating to 6 3/4% Special Facilities Revenue
Bonds, Refunding Series 1992 due September 1, 2012. (Filed as
Exhibit 10.5 to FedEx's FY92 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by
reference.)
E-4
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
10.6 Sixth Supplemental Indenture dated as of July 1, 1997 between the
Authority and BONY relating to 5.35% Special Facilities Revenue
Bonds, Refunding Series 1997 due September 1, 2012. (Filed as
Exhibit 10.6 to FedEx's FY97 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by
reference.)
10.7 Guaranty dated as of August 1, 1979 from FedEx to BONY. (Refiled
as Exhibit 10.5 to FedEx's FY90 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by
reference.)
10.8 Reaffirmation of Guaranty dated as of May 1, 1982 from FedEx to
BONY. (Refiled as Exhibit 10.7 to FedEx's FY93 Annual Report on
Form 10-K, Commission File No. 1-7806, and incorporated herein by
reference.)
10.9 Reaffirmation of Guaranty dated as of December 1, 1984 from FedEx
to BONY relating to Special Facilities Revenue Bonds, Series
1984. (Refiled as Exhibit 10.10 to FedEx's FY93 Annual Report on
Form 10-K, Commission File No. 1-7806, and incorporated herein by
reference.)
10.10 Reaffirmation of Guaranty dated as of July 30, 1992 from FedEx to
BONY relating to Special Facilities Revenue Bonds, Refunding
Series 1992. (Filed as Exhibit 10.11 to FedEx's FY92 Annual
Report on Form 10-K, Commission File No. 1-7806, and incorporated
herein by reference.)
10.11 Reaffirmation of Guaranty dated as of July 1, 1997 from FedEx to
BONY relating to Special Facilities Revenue Bonds, Refunding
Series 1997. (Filed as Exhibit 10.11 to FedEx's FY97 Annual
Report on Form 10-K, Commission File No. 1-7806, and incorporated
herein by reference.)
10.12 Consolidated and Restated Lease Agreement dated as of August 1,
1979 between the Authority and FedEx. (Refiled as Exhibit 10.12
to FedEx's FY90 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
10.13 First Supplemental Lease Agreement dated as of April 1, 1981
between the Authority and FedEx. (Filed as Exhibit 10.13 to
FedEx's FY92 Annual Report on Form 10-K, Commission File No. 1-
7806, and incorporated herein by reference.)
10.14 Second Supplemental Lease Agreement dated as of May 1, 1982
between the Authority and FedEx. (Refiled as Exhibit 10.14 to
FedEx's FY93 Annual Report on Form 10-K, Commission File No. 1-
7806, and incorporated herein by reference.)
10.15 Third Supplemental Lease Agreement dated November 1, 1982 between
the Authority and FedEx. (Filed as Exhibit 28.22 to FedEx's FY93
Second Quarter Report on Form 10-Q, Commission File No. 1-7806,
and incorporated herein by reference.)
E-5
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
10.16 Fourth Supplemental Lease Agreement dated July 1, 1983 between
the Authority and FedEx. (Filed as Exhibit 28.23 to FedEx's FY93
Second Quarter Report on Form 10-Q, Commission File No. 1-7806,
and incorporated herein by reference.)
10.17 Fifth Supplemental Lease Agreement dated February 1, 1984 between
the Authority and FedEx. (Filed as Exhibit 28.24 to FedEx's FY93
Second Quarter Report on Form 10-Q, Commission File No. 1-7806,
and incorporated herein by reference.)
10.18 Sixth Supplemental Lease Agreement dated April 1, 1984 between
the Authority and FedEx. (Filed as Exhibit 28.25 to FedEx's FY93
Second Quarter Report on Form 10-Q, Commission File No. 1-7806,
and incorporated herein by reference.)
10.19 Seventh Supplemental Lease Agreement dated June 1, 1984 between
the Authority and FedEx. (Filed as Exhibit 28.26 to FedEx's
FY93 Second Quarter Report on Form 10-Q, Commission File No. 1-
7806, and incorporated herein by reference.)
10.20 Eighth Supplemental Lease Agreement dated July 1, 1988 between
the Authority and FedEx. (Filed as Exhibit 28.27 to FedEx's FY93
Second Quarter Report on Form 10-Q, Commission File No. 1-7806,
and incorporated herein by reference.)
10.21 Ninth Supplemental Lease Agreement dated July 12, 1989 between
the Authority and FedEx. (Filed as Exhibit 28.28 to FedEx's FY93
Second Quarter Report on Form 10-Q, Commission File No. 1-7806,
and incorporated herein by reference.)
10.22 Tenth Supplemental Lease Agreement dated October 1, 1991 between
the Authority and FedEx. (Filed as Exhibit 28.29 to FedEx's FY93
Second Quarter Report on Form 10-Q, Commission File No. 1-7806,
and incorporated herein by reference.)
10.23 Eleventh Supplemental Lease Agreement dated as of July 1, 1994
between the Authority and FedEx. (Filed as Exhibit 10.21 to
FedEx's FY96 Annual Report on Form 10-K, Commission File No. 1-
7806, and incorporated herein by reference.)
10.24 Twelfth Supplemental Lease Agreement dated July 1, 1993 between
the Authority and FedEx. (Filed as Exhibit 10.23 to FedEx's FY93
Annual Report on Form 10-K, Commission File No. 1-7806, and
incorporated herein by reference.)
10.25 Thirteenth Supplemental Lease Agreement dated as of June 1, 1995
between the Authority and FedEx. (Filed as Exhibit 10.23 to
FedEx's FY96 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
10.26 Fourteenth Supplemental Lease Agreement dated as of January 1,
1996 between the Authority and FedEx. (Filed as Exhibit 10.24 to
FedEx's FY96 Annual Report on Form 10-K, Commission File No. 1-
7806, and incorporated herein by reference.)
E-6
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
10.27 Fifteenth Supplemental Lease Agreement dated as of January 1,
1997 between the Authority and FedEx. (Filed as Exhibit 10.1 to
FedEx's FY97 Third Quarter Report on Form 10-Q, Commission File
No. 1-7806, and incorporated herein by reference.)
10.28 Sixteenth Supplemental Lease Agreement dated as of April 1, 1997
between the Authority and FedEx (Filed as Exhibit 10.28 to
FedEx's FY97 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
10.29 Seventeenth Supplemental Lease Agreement dated as of May 1, 1997
between the Authority and FedEx. (Filed as Exhibit 10.29 to
FedEx's FY97 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
10.30 Special Facility Lease Agreement dated as of August 1, 1979
between the Authority and FedEx. (Refiled as Exhibit 10.15 to
FedEx's FY90 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
10.31 First Special Facility Supplemental Lease Agreement dated as of
May 1, 1982 between the Authority and FedEx. (Filed as Exhibit
10.25 to FedEx's FY93 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
10.32 Second Special Facility Supplemental Lease Agreement dated as of
November 1, 1982 between the Authority and FedEx. (Filed as
Exhibit 10.26 to FedEx's FY93 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by
reference.)
10.33 Third Special Facility Supplemental Lease Agreement dated as of
December 1, 1984 between the Authority and FedEx. (Refiled as
Exhibit 10.25 to FedEx's FY95 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by
reference.)
10.34 Fourth Special Facility Supplemental Lease Agreement dated as of
July 1, 1992 between the Authority and FedEx. (Filed as Exhibit
10.20 to FedEx's FY92 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
10.35 Fifth Special Facility Supplemental Lease Agreement dated as of
July 1, 1997 between the Authority and FedEx. (Filed as Exhibit
10.35 to FedEx's FY97 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
10.36 Special Facility Lease Agreement dated as of July 1, 1993 between
the Authority and FedEx. (Filed as Exhibit 10.29 to FedEx's FY93
Annual Report on Form 10-K, Commission File No. 1-7806, and
incorporated herein by reference.)
10.37 Special Facility Ground Lease Agreement dated as of July 1, 1993
between the Authority and FedEx. (Filed as Exhibit 10.30 to
FedEx's FY93 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
E-7
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
10.38 Indenture dated as of July 1, 1993 between the Authority and
BONY, as Trustee, relating to 6.20% Special Facility Revenue
Bonds, Series 1993, due July 1, 2014. (Filed as Exhibit 10.31 to
FedEx's FY93 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
10.39 Guaranty dated as of July 1, 1993 from FedEx to BONY relating to
6.20% Special Facility Revenue Bonds, Series 1993. (Filed as
Exhibit 10.32 to FedEx's FY93 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by
reference.)
10.40 Lease Agreement dated as of May 7, 1985 between the City of
Oakland and FedEx. (Filed as Exhibit 28.5 to FedEx's FY93 Second
Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.41 Affirmative Action Agreement dated as of May 14, 1985, to Lease
Agreement dated May 7, 1985, between the City of Oakland and
FedEx. (Filed as Exhibit 28.6 to FedEx's FY93 Second Quarter
Report on Form 10-Q, Commission File No. 1-7806, and incorporated
herein by reference.)
10.42 First Supplemental Agreement dated August 5, 1986, to Lease
Agreement dated May 7, 1985, between the City of Oakland and
FedEx. (Filed as Exhibit 28.7 to FedEx's FY93 Second Quarter
Report on Form 10-Q, Commission File No. 1-7806, and incorporated
herein by reference.)
10.43 Second Supplemental Agreement dated February 17, 1987, to Lease
Agreement dated May 7, 1985, between the City of Oakland and
FedEx. (Filed as Exhibit 28.8 to FedEx's FY93 Second Quarter
Report on Form 10-Q, Commission File No. 1-7806, and incorporated
herein by reference.)
10.44 Third Supplemental Agreement dated February 1989, to Lease
Agreement dated May 7, 1985, between the City of Oakland and
FedEx. (Filed as Exhibit 28.9 to FedEx's FY93 Second Quarter
Report on Form 10-Q, Commission File No. 1-7806, and incorporated
herein by reference.)
10.45 Amendment dated August 1, 1989, to Lease Agreement dated May 7,
1985, between the City of Oakland and FedEx. (Refiled as Exhibit
10.40 to FedEx's FY95 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
10.46 Lease and First Right of Refusal Agreement dated July 22, 1988
between the State of Alaska, Department of Transportation and
Public Facilities and FedEx. (Filed as Exhibit 28.10 to FedEx's
FY93 Second Quarter Report on Form 10-Q, Commission File
No. 1-7806, and incorporated herein by reference.)
10.47 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
FedEx. (Filed as Exhibit 28.11 to FedEx's FY93 Second Quarter
Report on Form 10-Q, Commission File No. 1-7806, and incorporated
herein by reference.)
E-8
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
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10.48 Supplement No. 1 dated May 19, 1989, to Development Agreement
dated July 22, 1988, between the State of Alaska, Department of
Transportation and Public Facilities and FedEx. (Filed as Exhibit
28.12 to FedEx's FY93 Second Quarter Report on Form 10-Q,
Commission File No. 1-7806, and incorporated herein by
reference.)
10.49 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
FedEx. (Filed as Exhibit 28.13 to FedEx's FY93 Second Quarter
Report on Form 10-Q, Commission File No. 1-7806, and incorporated
herein by reference.)
10.50 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 FedEx. (Filed as Exhibit 28.14 to FedEx's FY93
Second Quarter Report on Form 10-Q, Commission File No. 1-7806,
and incorporated herein by reference.)
10.51 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
FedEx. (Filed as Exhibit 28.15 to FedEx's FY93 Second Quarter
Report on Form 10-Q, Commission File No. 1-7806, and incorporated
herein by reference.)
10.52 Lease Agreement dated October 1, 1983 between The Port Authority
of New York and New Jersey and FedEx. (Filed as Exhibit 28.16 to
FedEx's FY93 Second Quarter Report on Form 10-Q, Commission File
No. 1-7806, and incorporated herein by reference.)
10.53 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 FedEx. (Filed as Exhibit 28.17 to FedEx's FY93 Second
Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.54 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 FedEx. (Filed as Exhibit 28.18 to FedEx's FY93 Second
Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.55 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 FedEx. (Filed as Exhibit 28.19 to FedEx's FY93 Second
Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.56 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 FedEx. (Filed as Exhibit 10.51 to FedEx's FY95 Annual
Report on Form 10-K, Commission File No. 1-7806, and incorporated
herein by reference.)
E-9
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
10.57 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 FedEx. (Filed as Exhibit 10.52 to FedEx's FY95 Annual
Report on Form 10-K, Commission File No. 1-7806, and incorporated
herein by reference.)
10.58 Amended and Restated Land Lease Agreement dated August 1993
between FedEx and the Indianapolis Airport Authority. (Filed as
Exhibit 10.52 to FedEx's FY94 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by
reference.)
10.59 Indenture dated as of September 1, 1993 between the City of
Indianapolis, Indiana and NBD Bank, N.A., as Trustee, relating to
the City of Indianapolis Airport Facility Revenue Refunding
Bonds, Series 1994, due April 1, 2017. (Filed as Exhibit 10.1 to
FedEx's FY94 First Quarter Report on Form 10-Q, Commission File
No. 1-7806, and incorporated herein by reference.)
10.60 Loan Agreement between the City of Indianapolis and FedEx. (Filed
as Exhibit 10.2 to FedEx's FY94 First Quarter Report on
Form 10-Q, Commission File No. 1-7806, and incorporated herein by
reference.)
10.61 Form of Promissory Note to the City of Indianapolis. (Filed as
Exhibit 10.3 to FedEx's FY94 First Quarter Report on Form 10-Q,
Commission File No. 1-7806, and incorporated herein by
reference.)
10.62 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 FedEx's FY95 Second Quarter
Report on Form 10-Q, Commission File No. 1-7806, and incorporated
herein by reference.)
10.63 Guaranty dated as of October 1, 1994 from FedEx 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 FedEx's FY95
Second Quarter Report on Form 10-Q, Commission File No. 1-7806,
and incorporated herein by reference.)
10.64 Land and Special Facilities Lease Agreement dated as of October
1, 1994 between FedEx 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 FedEx's FY95
Second Quarter Report on Form 10-Q, Commission File No. 1-7806,
and incorporated herein by reference.)
10.65 Lease Agreement dated October 9, 1994 between FedEx and Subic Bay
Metropolitan Authority. (Filed as Exhibit 10.62 to FedEx's FY95
Annual Report on Form 10-K, Commission File No. 1-7806, and
incorporated herein by reference.)
E-10
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
10.66 Indenture dated as of April 1, 1996 between Alliance Airport
Authority, Inc. and The First National Bank of Chicago, as
Trustee, relating to AllianceAirport Authority, Inc. Special
Facilities Revenue Bonds, Series 1996 (Federal Express
Corporation Project) due April 1, 2021. (Filed as Exhibit 10.66
to FedEx's FY96 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
10.67 Guaranty dated as of April 1, 1996 from Registrant to The First
National Bank of Chicago relating to AllianceAirport Authority,
Inc. Special Facilities Revenue Bonds, Series 1996 (Federal
Express Corporation Project) due April 1, 2021. (Filed as Exhibit
10.67 to FedEx's FY96 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
10.68 Land and Special Facilities Lease Agreement dated as of April 1,
1996 between FedEx and AllianceAirport Authority, Inc. relating
to AllianceAirport Authority, Inc. Special Facilities Revenue
Bonds, Series 1996 (Federal Express Corporation Project) due
April 1, 2021. (Filed as Exhibit 10.68 to FedEx's FY96 Annual
Report on Form 10-K, Commission File No. 1-7806, and incorporated
herein by reference.)
10.69 Assignment and Assumption Agreement dated April 10, 1996 between
AllianceAirport Authority, Inc. and the City of Fort Worth, Texas
relating to AllianceAirport Authority, Inc. Special Facilities
Revenue Bonds, Series 1996 (Federal Express Corporation Project)
due April 1, 2021. (Filed as Exhibit 10.69 to FedEx's FY96 Annual
Report on Form 10-K, Commission File No. 1-7806, and incorporated
herein by reference.)
10.70 1980 Stock Incentive Plan and Form of Stock Option Agreement
pursuant to 1980 Stock Incentive Plan, as amended. (Filed as
Exhibit 10.59 to FedEx's FY93 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by
reference.)
10.71 1983 Stock Incentive Plan and Form of Stock Option Agreement
pursuant to 1983 Stock Incentive Plan, as amended. (Filed as an
exhibit to FedEx's Registration Statement No. 2-95720 on Form S-8
and incorporated herein by reference.)
10.72 1984 Stock Incentive Plan and Form of Stock Option Agreement
pursuant to 1984 Stock Incentive Plan, as amended. (Filed as an
exhibit to FedEx's Registration Statement No. 2-95720 on Form S-8
and incorporated herein by reference.)
10.73 1987 Stock Incentive Plan and Form of Stock Option Agreement
pursuant to 1987 Stock Incentive Plan, as amended. (Filed as an
exhibit to FedEx's Registration Statement No. 33-20138 on
Form S-8 and incorporated herein by reference.)
10.74 1989 Stock Incentive Plan and Form of Stock Option Agreement
pursuant to 1989 Stock Incentive Plan, as amended. (Filed as
Exhibit 10.26 to FedEx's FY90 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by
reference.)
E-11
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
10.75 1993 Stock Incentive Plan and Form of Stock Option Agreement
pursuant to 1993 Stock Incentive Plan, as amended. (1993 Stock
Incentive Plan was filed as Exhibit A to FedEx's FY93 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 FedEx's FY94 Annual Report on
Form 10-K, Commission File No. 1-7806, and incorporated herein by
reference.)
10.76 Amendment to FedEx's 1980, 1983, 1984, 1987 and 1989 Stock
Incentive Plans. (Filed as Exhibit 10.27 to FedEx's FY90 Annual
Report on Form 10-K, Commission File No. 1-7806, and incorporated
herein by reference.)
10.77 Amendment to FedEx's 1983, 1984, 1987, 1989 and 1993 Stock
Incentive Plans. (Filed as Exhibit 10.63 to FedEx's FY94 Annual
Report on Form 10-K, Commission File No. 1-7806, and incorporated
herein by reference.)
10.78 1995 Stock Incentive Plan and Form of Stock Option Agreement
pursuant to 1995 Stock Incentive Plan. (1995 Stock Incentive Plan
was filed as Exhibit A to FedEx's FY95 Definitive Proxy
Statement, Commission File No. 1-7806, and incorporated herein by
reference, and the form of stock option agreement was filed as
Exhibit 99.2 to FedEx's Registration Statement No. 333-03443 on
Form S-8, and incorporated herein by reference.)
10.79 Amendment to FedEx's 1980, 1983, 1984, 1987, 1989, 1993 and 1995
Stock Incentive Plans. (Filed as Exhibit 10.79 to FedEx's FY97
Annual Report on Form 10-K, Commission File No. 1-7806, and
incorporated herein by reference.)
10.80 1997 Stock Incentive Plan and Form of Stock Option Agreement
pursuant to 1997 Stock Incentive Plan. (1997 Stock Incentive Plan
was filed as Annex E to Joint Proxy Statement/Prospectus
contained in Amendment No. 1 to Registrant's Registration
Statement on Form S-4, Commission File No. 333-39483, and
incorporated herein by reference, and the form of stock option
agreement was filed as Exhibit 99.2 to FedEx's Registration
Statement No. 333-03443 on Form S-8, and incorporated herein by
reference.)
10.81 1986 Restricted Stock Plan and Form of Restricted Stock Agreement
pursuant to 1986 Restricted Stock Plan. (Filed as Exhibit 10.28
to FedEx's FY90 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
10.82 1995 Restricted Stock Plan and Form of Restricted Stock Agreement
pursuant to 1995 Restricted Stock Plan. (1995 Restricted Stock
Plan filed as Exhibit B to FedEx's FY95 Definitive Proxy
Statement, Commission File No. 1-7806, and incorporated herein by
reference, and the Form of Restricted Stock Agreement was filed
as Exhibit 10.80 to FedEx's FY96 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by
reference.)
10.83 1997 Restricted Stock Plan and Form of Restricted Stock Agreement
pursuant to 1997 Restricted Stock Plan. (Filed as Exhibit 10.82
to FedEx's FY97 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
E-12
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
10.84 FedEx's Amended and Restated Retirement Parity Pension Plan.
(Filed as Exhibit 10.83 to FedEx's FY97 Annual Report on
Form 10-K, Commission File No. 1-7806, and incorporated herein by
reference.)
10.85 Management Performance Bonus Plan. (Description of the
performance bonus plan contained in the Definitive Proxy
Statement for Registrant's 1998 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.)
10.86 Long-Term Performance Bonus Plan. (A description of each long-
term performance bonus plan is contained in the Definitive Proxy
Statement for Registrant's 1998 Annual Meeting of Stockholders,
under the heading "Long-Term Incentive Plans - Awards in Last
Fiscal Year" and is incorporated herein by reference.)
10.87 Purchase Agreement between AVSA and FedEx 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 FedEx's FY91 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by
reference.)
10.88 Amendment Nos. 1 through 4 to Purchase Agreement dated July 3,
1991 between AVSA and FedEx. Confidential treatment has been
granted for confidential commercial and financial information
contained in this exhibit pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. (Filed as Exhibits
10.1 through 10.5 to FedEx's FY97 Second Quarter Report on Form
10-Q, Commission File No. 1-7806, and incorporated herein by
reference.)
10.89 Sales Agreement dated April 7, 1995 between FedEx and American
Airlines, Inc. for the purchase of MD11 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 10.79 to
FedEx's FY95 Annual Report on Form 10-K, Commission File
No. 1-7806, and incorporated herein by reference.)
10.90 Amendment No. 1, dated September 19, 1996, to Sales Agreement
dated April 7, 1995 between FedEx and American Airlines, Inc.
(Filed as Exhibit 10.93 to FedEx's FY97 Annual Report on
Form 10-K, Commission File No. 1-7806, and incorporated herein by
reference.)
E-13
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
10.91 Modification Services Agreement dated September 16, 1996 between
McDonnell Douglas Corporation and FedEx. Confidential treatment
has been granted for confidential commercial and financial
information contained in this exhibit pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended. (Filed as
Exhibit 10.6 to FedEx's FY97 Second Quarter Report on Form 10-Q,
Commission File No. 1-7806, and incorporated herein by
reference.)
10.92 Letter Agreement No. 3 dated July 15, 1997, amending the
Modification Services Agreement dated September 16, 1996, between
McDonnell Douglas and FedEx. Confidential treatment has been
granted for confidential commercial and financial information
contained in this exhibit pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. (Filed as Exhibit
10.1 to FedEx's FY98 First Quarter Report on Form 10-Q,
Commission File No. 1-7806, and incorporated herein by
reference.)
10.93 Letter Agreement Nos. 5-7 dated January 12, 1998, March 16, 1998
and February 26, 1998, respectively, amending the Modification
Services Agreement dated September 16, 1996, between McDonnell
Douglas Corporation and FedEx. 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 Exhibits 10.1 through 10.3 to FedEx's FY98 Second
Quarter Report on Form 10-Q, Commission File No. 1-7806, and
incorporated herein by reference.)
10.94 Aircraft Sales Agreement dated as of April 21, 1998 between
Flightlease, Ltd. and FedEx. Confidential treatment has been
requested for certain confidential portions of this Exhibit
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934,
as amended. In accordance with Rule 24b-2, these confidential
portions have been omitted from the exhibit and filed separately
with the Commission.
10.95 Credit Agreement dated January 15, 1998 among Registrant and The
First National Bank of Chicago, individually and as agent, and
certain lenders. (Filed as Exhibit 10.1 to Registrant's FY98
Third Quarter Report on Form 10-Q, Commission File No. 333-39483,
and incorporated herein by reference.)
10.96 Registrant's Retirement Plan for Outside Directors. (Filed as
Exhibit 10.85 to Fedex's FY97 Annual Report on Form 10-K,
Commission File No. 1-7806, and incorporated herein by
reference.)
10.97 First Amendment to Registrant's Retirement Plan for Outside
Directors. (Filed as Exhibit 10.86 to Fedex's FY97 Annual Report
on Form 10-K, Commission File No. 1-7806, and incorporated herein
by reference.)
10.98 Registrant's Amended and Restated Retirement Plan for Outside
Directors. (Filed as Exhibit 10.87 to Fedex's FY97 Annual Report
on Form 10-K, Commission File No. 1-7806, and incorporated herein
by reference.)
E-14
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
12 Statement re Computation of Ratio of Earnings to Fixed Charges.
13 Registrant's Annual Report to Stockholders for the fiscal year
ended May 31, 1998.
21 Subsidiaries of Registrant.
23.1 Consent of Independent Public Accountants.
23.2 Consent of Independent Auditors.
24 Powers of Attorney.
27 Financial Data Schedule.
99 Report of Independent Auditors.
E-15