UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended: December 31, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number: [ ]
CALIBER SYSTEM, INC.
401(k)
SAVINGS PLAN
(AMENDED AND RESTATED)
(Full title of the Plan)
FDX CORPORATION
(Name of issuer of the securities held pursuant to the Plan)
6075 Poplar Avenue, Suite 300, Memphis, TN 38119
(Address of principal executive offices and zip code)
CALIBER SYSTEM, INC.
401(k) SAVINGS PLAN (AMENDED AND RESTATED)
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998 AND 1997
TOGETHER WITH REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS
<PAGE>
CALIBER SYSTEM, INC.
401(k) SAVINGS PLAN (AMENDED AND RESTATED)
DECEMBER 31, 1998 AND 1997
TABLE OF CONTENTS
Page
----
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Benefits as of December 31, 1998 1
Statement of Net Assets Available for Benefits as of December 31, 1997 2
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1998 3
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1997 4
NOTES TO FINANCIAL STATEMENTS 6
SUPPLEMENTAL SCHEDULES:
Item 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1998 Schedule I
Item 27d - Schedule of Reportable Transactions for
the Year Ended December 31, 1998 Schedule II
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Retirement Plan Investment Board of FDX Corporation
Caliber System, Inc. 401(k) Savings Plan (Amended and Restated)
We have audited the accompanying statements of net assets available for benefits
of the Caliber System, Inc. 401(k) Savings Plan (Amended and Restated) as of
December 31, 1998 and 1997, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1998. These financial
statements and the schedules referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1998 and 1997, and the changes in its net assets available for
benefits for the year ended December 31, 1998, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes as of December 31, 1998, and reportable transactions for
the year then ended, are presented for purposes of additional analysis and are
not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The Fund Information in the statements of net assets available for
benefits and the statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for Plan benefits and changes in net assets available for Plan
benefits of each fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
May 28, 1999
<PAGE>
CALIBER SYSTEM, INC.
401(k) SAVINGS PLAN (AMENDED AND RESTATED)
STATEMENTS OF NET ASSETS AVAILABLE FOR
BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1998
<TABLE>
Participant Directed
--------------------------------------------------------------------------------------
Roadway Franklin
Company Express Mutual Bond Asset Income
Stock Stock Beacon Index Allocation Accumulation
Fund Fund Fund Fund Fund Fund
------------ ------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash and temporary cash investments $ 999,136 $ 29,811 $ - $ - $ - $ -
Investments, at fair value-
FDX Corporation common stock 113,906,829 - - - - -
Roadway Express, Inc. common stock - 2,940,122 - - - -
Registered investment companies-
collective investment funds - - 9,332,014 6,567,111 36,315,950 34,737,857
Participant notes receivable - - - - - -
----------- --------- --------- --------- ---------- -----------
Total investments 113,906,829 2,940,122 9,332,014 6,567,111 36,315,950 34,737,857
Receivables-
Employers' contributions (16) - 26 53 95 330
Participants' contributions (2,162) (29) 122 339 421 2,515
----------- --------- --------- --------- ---------- -----------
Total receivables (2,178) (29) 148 392 516 2,845
----------- --------- --------- --------- ---------- -----------
TOTAL ASSETS $114,903,787 $ 2,969,904 $ 9,332,162 $ 6,567,503 $36,316,466 $34,740,702
=========== ========= ========= ========= ========== ===========
NET ASSETS AVAILABLE FOR BENEFITS $114,903,787 $ 2,969,904 $ 9,332,162 $ 6,567,503 $36,316,466 $34,740,702
=========== ========= ========= ========= ========== ===========
<PAGE>
<CAPTION>
Participant Directed
----------------------------------------------------------------------------------------
S&P 500 AIM Templeton Vanguard
Stock Constellation Foreign LifePath Primecap Loan
Fund Fund Fund Funds Fund Fund
------------ ------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash and temporary cash investments $ - $ - $ - $ - $ 61,387 $ -
Investments, at fair value-
FDX Corporation common stock - - - - - -
Roadway Express, Inc. common stock - - - - - -
Registered investment companies-
collective investment funds 56,137,363 14,739,658 3,687,847 14,968,293 6,732,182 -
Participant notes receivable - - - - - 15,889,809
----------- ----------- ---------- ---------- ---------- -----------
Total investments 56,137,363 14,739,658 3,687,847 14,968,293 6,732,182 15,889,809
Receivables-
Employers' contributions 133 244 19 72 17 -
Participants' contributions 838 1,107 160 443 110 -
----------- ----------- ---------- ---------- ---------- -----------
Total receivables 971 1,351 179 515 127 -
----------- ----------- ---------- ---------- ---------- -----------
TOTAL ASSETS $56,138,334 $14,741,009 $3,688,026 $14,968,808 $6,793,696 $15,889,809
=========== =========== ========== =========== ========== ===========
NET ASSETS AVAILABLE FOR BENEFITS $56,138,334 $14,741,009 $3,688,026 $14,968,808 $6,793,696 $15,889,809
=========== =========== ========== =========== ========== ===========
<PAGE>
<CAPTION>
Participant Directed
--------------------
Other Total
------------ -------------
<S> <C> <C>
ASSETS:
Cash and temporary cash investments $ 681,282 $ 1,771,616
Investments, at fair value-
FDX Corporation common stock - 113,906,829
Roadway Express, Inc. common stock - 2,940,122
Registered investment companies-
collective investment funds - 183,218,275
Participant notes receivable - 15,889,809
--------- -----------
Total investments - 315,955,035
Receivables-
Employers' contributions 3,176,158 3,177,131
Participants' contributions - 3,864
--------- -----------
Total receivables 3,176,158 3,180,995
--------- -----------
TOTAL ASSETS $ 3,857,440 $ 320,907,646
========== ============
NET ASSETS AVAILABLE FOR BENEFITS $ 3,857,440 $ 320,907,646
========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
CALIBER SYSTEM, INC.
401(k) SAVINGS PLAN (AMENDED AND RESTATED)
STATEMENTS OF NET ASSETS AVAILABLE FOR
BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1997
<TABLE>
Participant Directed
------------------------------------------------------------------------------------------
Roadway Franklin Mutual Income
Company Express Mutual Benefit Bond Asset Accumu-
Stock Stock Beacon Life Index Allocation lation
Fund Fund Fund GIC Fund Fund Fund
------------ ----------- ----------- ---------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash and temporary cash investments $ 890,863 $ 49,736 $ - $ - $ - $ - $ -
Investments, at fair value-
Caliber System, Inc. common stock 88,088,833 222,551 - - - - -
Roadway Express, Inc. common stock - 5,594,690 - - - - -
Registered investment companies-
collective investment funds - - 9,034,362 - 4,725,134 28,552,486 24,082,637
Guaranteed investment contracts
(restricted) - - - 4,848,233 - - -
Participant notes receivable - - - - - - -
---------- ---------- ---------- ---------- ----------- ----------- -----------
Total investments 88,088,833 5,817,241 9,034,362 4,848,233 4,725,134 28,552,486 24,082,637
Receivables-
Employers' contributions 39,261 - - - - - -
Participants' contributions 24,926 - 13,517 - 2,253 6,471 12,468
----------- ---------- ---------- ---------- ----------- ----------- -----------
Total receivables 64,187 - 13,517 - 2,253 6,471 12,468
----------- ---------- ---------- ---------- ----------- ----------- -----------
TOTAL ASSETS $89,043,883 $5,866,977 $9,047,879 $4,848,233 $ 4,727,387 $28,558,957 $24,095,105
=========== ========== ========== ========== =========== =========== ===========
LIABILITIES:
Accrued expenses and other excess
contributions $ - $ - $ - $ 122,425 $ - $ - $ -
=========== ========== ========== ========== =========== =========== ===========
NET ASSETS AVAILABLE FOR BENEFITS $89,043,883 $5,866,977 $9,047,879 $4,725,808 $ 4,727,387 $28,558,957 $24,095,105
=========== ========== ========== ========== =========== =========== ===========
<PAGE>
<CAPTION>
Participant Directed
----------------------------------------------------------------------------------------
S&P 500 AIM Templeton Vanguard
Stock Constellation Foreign LifePath Primecap Loan
Fund Fund Fund Funds Fund Fund
------------ ------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash and temporary cash investments $ - $ - $ - $ - $ 16,758 $ -
Investments, at fair value-
Caliber System, Inc. common stock - - - - - -
Roadway Express, Inc. common stock - - - - - -
Registered investment companies-
collective investment funds 38,955,496 10,868,394 3,366,697 9,232,391 4,124,262 -
Guaranteed investment contracts
(restricted) - - - - - -
Participant notes receivable - - - - - 13,774,792
----------- ----------- ---------- ---------- ---------- -----------
Total investments 38,955,496 10,868,394 3,366,697 9,232,391 4,124,262 13,774,792
Receivables-
Employers' contributions - - - - - -
Participants' contributions 12,616 9,839 4,112 9,693 8,235 6,702
----------- ----------- ---------- ---------- ---------- -----------
Total receivables 12,616 9,839 4,112 9,693 8,235 6,702
----------- ----------- ---------- ---------- ---------- -----------
TOTAL ASSETS $38,968,112 $10,878,233 $3,370,809 $9,242,084 $4,149,255 $13,781,494
=========== =========== ========== ========== ========== ===========
LIABILITIES:
Accrued expenses and other excess
contributions $ - $ - $ - $ - $ - $ -
----------- ----------- ---------- ---------- ---------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $38,968,112 $10,878,233 $3,370,809 $9,242,084 $4,149,255 $13,781,494
=========== =========== ========== ========== ========== ===========
<PAGE>
<CAPTION>
Participant Directed
--------------------
Other Total
------------ -------------
<S> <C> <C>
ASSETS:
Cash and temporary cash investments $ 646,101 $ 1,603,458
Investments, at fair value-
Caliber System, Inc. common stock - 88,311,384
Roadway Express, Inc. common stock - 5,594,690
Registered investment companies-
collective investment funds - 132,941,859
Guaranteed investment contracts
(restricted) - 4,848,233
Participant notes receivable - 13,774,792
--------- -----------
Total investments - 245,470,958
Receivables-
Employers' contributions 3,045,809 3,085,070
Participants' contributions - 110,832
--------- -----------
Total receivables 3,045,809 3,195,902
--------- -----------
TOTAL ASSETS $ 3,691,910 $ 250,270,318
========= ===========
LIABILITIES:
Accrued expenses and other excess
contributions $ - $ 122,425
--------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $ 3,691,910 $ 250,147,893
========= ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
CALIBER SYSTEM, INC.
401(k) SAVINGS PLAN (AMENDED AND RESTATED)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS, WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1998
<TABLE>
Participant Directed
--------------------------------------------------------------------------------------
Roadway Franklin
Company Express Mutual Mutual Bond Asset
Stock Stock Beacon Benefit Life Index Allocation
Fund Fund Fund GIC Fund Fund
------------ ------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED
TO:
Investment income (loss)-
Net appreciation (depreciation)
in fair value of investments $ 38,205,010 $ (1,743,635) $ (580,201) $ 423,590 $ 130,642 $ 3,212,360
Interest - - 855,893 - 326,733 4,068,227
Dividends - 44,726 - - - -
---------- --------- --------- --------- -------- ----------
38,205,010 (1,698,909) 275,692 423,590 457,375 7,280,587
Contributions-
Participants 4,337,635 433 2,031,210 - 506,288 2,343,855
Employers 1,762,769 129 734,261 - 165,031 816,774
---------- --------- --------- --------- -------- ----------
6,100,404 562 2,765,471 - 671,319 3,160,629
---------- --------- --------- --------- -------- ----------
Total additions 44,305,414 (1,698,347) 3,041,163 423,590 1,128,694 10,441,216
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Benefits paid to participants 9,739,853 507,309 1,247,871 12,231 1,183,002 2,439,985
Expenses 32,615 1,031 3,832 - 3,050 15,510
---------- --------- --------- --------- -------- ----------
Total deductions 9,772,468 508,340 1,251,703 12,231 1,186,052 2,455,495
---------- --------- --------- --------- -------- ----------
Net increase (decrease) prior to
interfund transfers 34,532,946 (2,206,687) 1,789,460 411,359 (57,358) 7,985,721
INTERFUND TRANSFERS, net (8,673,042) (690,386) (1,505,177) (5,137,167) 1,897,474 (228,212)
---------- --------- --------- --------- -------- ----------
Net increase (decrease) in net 25,859,904 (2,897,073) 284,283 (4,725,808) 1,840,116 7,757,509
assets
NET ASSETS AVAILABLE FOR BENEFITS,
beginning of year 89,043,883 5,866,977 9,047,879 4,725,808 4,727,387 28,558,957
---------- --------- --------- --------- -------- ----------
NET ASSETS AVAILABLE FOR BENEFITS,
end of year $114,903,787 $ 2,969,904 $ 9,332,162 $ - $ 6,567,503 $ 36,316,466
=========== ========= ========= ========= ========= ==========
<PAGE>
<CAPTION>
Participant Directed
----------------------------------------------------------------------------------------
Income S&P 500 AIM Templeton Vanguard
Accumulation Stock Constellation Foreign LifePath Primecap
Fund Fund Fund Fund Funds Fund
------------ ------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED
TO:
Investment income (loss)-
Net appreciation (depreciation)
in fair value of investments $ - $ 8,434,757 $ 1,816,090 $ (541,069) $ 1,308,372 $ 1,184,701
Interest 1,532,140 3,158,197 353,014 373,369 902,656 -
Dividends - - - - - -
---------- ---------- --------- --------- --------- ---------
1,532,140 11,592,954 2,169,104 (167,700) 2,211,028 1,184,701
Contributions-
Participants 5,267,562 4,557,204 2,568,756 884,290 2,474,040 1,346,209
Employers 1,279,531 1,474,510 843,540 291,833 776,470 435,747
---------- ---------- --------- --------- --------- ---------
6,547,093 6,031,714 3,412,296 1,176,123 3,250,510 1,781,956
---------- ---------- --------- --------- --------- ---------
Total additions 8,079,233 17,624,668 5,581,400 1,008,423 5,461,538 2,966,657
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Benefits paid to participants 3,991,516 3,873,235 1,622,328 300,944 1,361,826 1,278,826
Expenses 22,723 22,829 7,965 1,923 7,525 2,173
---------- ---------- --------- --------- --------- ---------
Total deductions 4,014,239 3,896,064 1,630,293 302,867 1,369,351 1,280,999
---------- ---------- --------- --------- --------- ---------
Net increase (decrease) prior to
interfund transfers 4,064,994 13,728,604 3,951,107 705,556 4,092,187 1,685,658
INTERFUND TRANSFERS, net 6,580,603 3,441,618 (88,331) (388,339) 1,634,537 958,783
---------- ---------- --------- --------- --------- ---------
Net increase (decrease) in net 10,645,597 17,170,222 3,862,776 317,217 5,726,724 2,644,441
assets
NET ASSETS AVAILABLE FOR BENEFITS,
beginning of year 24,095,105 38,968,112 10,878,233 3,370,809 9,242,084 4,149,255
---------- ---------- --------- --------- --------- ---------
NET ASSETS AVAILABLE FOR BENEFITS,
end of year $34,740,702 $ 56,138,334 $14,741,009 $ 3,688,026 $14,968,808 $ 6,793,696
========== ========== ========== ========= ========== =========
<PAGE>
<CAPTION>
Participant Directed
------------------------------
Loan
Fund Other Total
------------ ------------- -----------
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED
TO:
Investment income (loss)-
Net appreciation (depreciation)
in fair value of investments $ - $ - $ 51,850,617
Interest 1,453,355 34,445 13,058,029
Dividends - - 44,726
---------- ---------- -----------
1,453,355 34,445 64,953,372
Contributions-
Participants (6,932) (367,401) 25,943,149
Employers - (19,217) 8,561,378
---------- ---------- -----------
(6,932) (386,618) 34,504,527
---------- ---------- -----------
Total additions 1,446,423 (352,173) 99,457,899
---------- ---------- -----------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Benefits paid to participants 1,499,325 (487,224) 28,571,027
Expenses - 5,943 127,119
Total deductions 1,499,325 (481,281) 28,698,146
Net increase (decrease) prior to
interfund transfers (52,902) 129,108 70,759,753
INTERFUND TRANSFERS, net 2,161,217 36,422 -
---------- ---------- -----------
Net increase (decrease) in net 2,108,315 165,530 70,759,753
assets
NET ASSETS AVAILABLE FOR BENEFITS,
beginning of year 13,781,494 3,691,910 250,147,893
---------- ---------- -----------
NET ASSETS AVAILABLE FOR BENEFITS,
end of year $ 15,889,809 $ 3,857,440 $ 320,907,646
========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
CALIBER SYSTEM, INC.
401(k) SAVINGS PLAN (AMENDED AND RESTATED)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS, WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1997
<TABLE>
Participant Directed
--------------------------------------------------------------------------------------------
Roadway Franklin
Company Express Mutual Mutual Bond Asset
Stock Stock Growth Beacon Benefit Life Index Allocation
Fund Fund Fund Fund GIC Fund Fund
------------ ----------- ----------- ------------ ------------ ------------ -----------
<S> <C> C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED
TO:
Investment income (loss)-
Net appreciation
(depreciation) in fair
value of investments $53,260,235 $1,245,227 $ 318,916 $ 254,386 $ 409,867 $ 131,682 $ 1,932,645
Interest - - - 1,031,622 - 2,624,586 3,641,123
Dividends 989,142 62,861 - - - - -
----------- ----------- ---------- ----------- ---------- ----------- -----------
54,249,377 1,308,088 318,916 1,286,008 409,867 2,756,268 5,573,768
Contributions-
Participants 6,221,164 - 919,790 1,615,964 - 1,542,996 2,470,143
Employers 5,540,018 - 67 15,486 - 620,772 661,754
----------- ---------- ---------- ----------- ---------- ----------- -----------
11,761,182 - 919,857 1,631,450 - 2,163,768 3,131,897
----------- ---------- ---------- ----------- ---------- ----------- -----------
Total additions 66,010,559 1,308,088 1,238,773 2,917,458 409,867 4,920,036 8,705,665
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Benefits paid to participants 9,760,857 1,410,207 184,600 940,590 - 6,030,346 3,291,717
Expenses 28,016 1,806 669 2,510 - 9,328 15,178
----------- ---------- ---------- ----------- ---------- ----------- -----------
Total deductions 9,788,873 1,412,013 185,269 943,100 - 6,039,674 3,306,895
----------- ---------- ---------- ----------- ---------- ----------- -----------
Net increase (decrease) prior
to interfund transfers 56,221,686 (103,925) 1,053,504 1,974,358 409,867 (1,119,638) 5,398,770
TRANSFER OF ASSETS TO PLAN OF
FORMER SUBSIDIARY (2,142,475) - - (234,184) - (49,864,515) (458,678)
INTERFUND TRANSFERS, net 3,165,264 (1,500,501) (7,257,006) 7,307,705 (88,226) (10,235,595) (3,319,384)
----------- ---------- ---------- ----------- ---------- ----------- -----------
Net increase (decrease) in net
assets 57,244,475 (1,604,426) (6,203,502) 9,047,879 321,641 (61,219,748) 1,620,708
NET ASSETS AVAILABLE FOR BENEFITS,
beginning of year 31,799,408 7,471,403 6,203,502 - 4,404,167 65,947,135 26,938,249
----------- ---------- ---------- ----------- ---------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS,
end of year $89,043,883 $5,866,977 $ - $ 9,047,879 $4,725,808 $ 4,727,387 $28,558,957
=========== ========== ========== =========== ========== =========== ===========
<PAGE>
<CAPTION>
Participant Directed
----------------------------------------------------------------------------------------
Income S&P 500 AIM Templeton Vanguard
Accumulation Stock Constellation Foreign LifePath Primecap
Fund Fund Fund Fund Funds Fund
------------ ------------- ------------ ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED
TO:
Investment income (loss)-
Net appreciation
(depreciation) in fair
value of investments $ - $ 13,338,867 $ 547,073 $ (134,741) $ 1,229,785 $ 6,444,992
Interest 1,707,176 1,586,591 777,032 364,363 530,146 -
Dividends - - - - - -
----------- ------------ ----------- ---------- ----------- ------------
1,707,176 14,925,458 1,324,105 229,622 1,759,931 $ 6,444,992
Contributions-
Participants 3,773,786 4,263,532 2,524,599 987,321 2,004,682 1,440,704
Employers 1,146,452 1,229,609 503,269 173,930 494,165 247,219
----------- ------------ ----------- ---------- ----------- ------------
4,920,238 5,493,141 3,027,868 1,161,251 2,498,847 1,687,923
----------- ------------ ----------- ---------- ----------- ------------
Total additions 6,627,414 20,418,599 4,351,973 1,390,873 4,258,778 8,132,915
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Benefits paid to participants 7,461,434 6,815,278 1,419,289 485,431 1,734,980 1,879,354
Expenses 19,902 20,855 6,385 1,737 5,681 2,930
----------- ------------ ----------- ---------- ----------- ------------
Total deductions 7,481,336 6,836,133 1,425,674 487,168 1,740,661 1,882,284
----------- ------------ ----------- ---------- ----------- ------------
Net increase (decrease) prior
to interfund transfers (853,922) 13,582,466 2,926,299 903,705 2,518,117 6,250,631
TRANSFER OF ASSETS TO PLAN OF
FORMER SUBSIDIARY (6,758,726) (24,225,747) (957,756) (464,902) (2,320,314) (21,249,314)
INTERFUND TRANSFERS, net 495,960 401,339 (744,168) 82,584 653,211 2,548,619
----------- ------------ ----------- ---------- ----------- ------------
Net increase (decrease) in net
assets (7,116,688) (10,241,942) 1,224,375 521,387 851,014 (12,450,064)
NET ASSETS AVAILABLE FOR BENEFITS,
beginning of year 31,211,793 49,210,054 9,653,858 2,849,422 8,391,070 16,599,319
----------- ------------ ----------- ---------- ----------- ------------
NET ASSETS AVAILABLE FOR BENEFITS,
end of year $24,095,105 $ 38,968,112 $10,878,233 $3,370,809 $ 9,242,084 $ 4,149,255
========== ============ =========== ========== =========== ============
<PAGE>
<CAPTION>
Participant Directed
------------------------------
Loan
Fund Other Total
------------ ------------- ------------
<S> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED
TO:
Investment income (loss)-
Net appreciation
(depreciation) in fair
value of investments $ - $ - $ 78,978,934
Interest 1,697,749 26,175 13,986,563
Dividends - - 1,052,003
----------- ---------- ------------
1,697,749 26,175 94,017,500
Contributions-
Participants 6,702 207,071 27,978,454
Employers - (2,045,191) 8,587,550
----------- ---------- ------------
6,702 (1,838,120) 36,566,004
----------- ---------- ------------
Total additions 1,704,451 (1,811,945) 130,583,504
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Benefits paid to participants 13,732,850 967,046 56,113,979
Expenses - 15,275 130,272
----------- ---------- ------------
Total deductions 13,732,850 982,321 56,244,251
----------- ---------- ------------
Net increase (decrease) prior
to interfund transfers (12,028,399) (2,794,266) 74,339,253
TRANSFER OF ASSETS TO PLAN OF
FORMER SUBSIDIARY 2,166 (555) (108,675,000)
INTERFUND TRANSFERS, net 7,156,708 1,333,490 -
----------- ---------- ------------
Net increase (decrease) in net
assets (4,869,525) (1,461,331) (34,335,747)
NET ASSETS AVAILABLE FOR BENEFITS,
beginning of year 18,651,019 5,153,241 284,483,640
----------- ---------- ------------
NET ASSETS AVAILABLE FOR BENEFITS,
end of year $13,781,494 $3,691,910 $250,147,893
=========== ========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
CALIBER SYSTEM, INC.
401(k) SAVINGS PLAN (AMENDED AND RESTATED)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. DESCRIPTION OF THE PLAN:
The following description of the Caliber System, Inc. 401(k) Savings Plan
(Amended and Restated) (the "Plan"), provides only general information. The Plan
consists of four subplans (the "Subplans") each of which contains different
provisions, principally related to contributions. Participants should refer to
the Plan document for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan covering eligible employees of Caliber
System, Inc. ("Caliber") and participating domestic subsidiaries (the
"Employers") not covered by a collective bargaining agreement. On January 27,
1998, Federal Express Corporation and Caliber became wholly-owned subsidiaries
of a newly formed holding company FDX Corporation (the "Company"). The Plan was
amended on May 20, 1998, to change the oversight of the Plan to the Retirement
Plan Investment Board appointed by the Company.
The Plan was established to encourage eligible employees to save on a regular
basis through payroll deductions. Participation is available to eligible
employees who have completed 1,000 hours during twelve months of employment and
have attained the age of 21 years. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
Sale of Former Division
On September 6, 1997, assets with a fair value of approximately $109 million,
representing account balances for participants who were employees at June 28,
1997, of a division of a subsidiary of Caliber were transferred from the Plan to
a plan sponsored by the new owners of the division.
Contributions
The Plan is funded by combined contributions from the Plan's participants and
their employers to a trust fund maintained by the Plan's trustee, Merrill Lynch
Trust Company, FSB (the "Trustee"). Prior to January 1, 1998, all of the Plan
assets were held by Barclays Global Investors, N.A., the Plan's former trustee.
The Subplans provide for participants to make before and after tax contributions
up to 15% of their annual compensation subject to Internal Revenue Service
limitations.
Employers match 50% of participant's contributions up to a maximum of 6% or 7%
of the participant's annual compensation depending on the Subplan. Each Subplan
allows participants to direct matching contributions to any of the investment
options, with the exception of the Roadway Express Stock Fund and effective
September 1998 the FDX Stock Fund.
Certain Subplans also provide for additional contributions at the discretion of
the participants' employer. There were no discretionary contributions made for
the 1998 plan year.
Vesting
6
<PAGE>
Participants are immediately vested in their contributions and generally in the
employers' contributions, plus actual earnings thereon. Vesting for employer
contributions of certain Subplans ranges from five to seven years.
Participant Accounts
Each participant's account is credited with the participant's contribution,
their employer's contribution, an allocation of Plan earnings and forfeitures of
terminated participants' nonvested accounts for those Subplans with a vesting
schedule. The benefit to which a participant is entitled is the benefit that can
be provided from the participant's account.
Investment Options
The assets of the Plan are invested primarily in the following investment funds
(unless otherwise indicated, the fair value of the shares/units owned by the
Plan are based upon quoted redemption values on the last business day of the
plan year):
Company Stock Fund
The assets of this fund are invested primarily in common stock of the
Company. On January 27, 1998, Caliber shareholders received 0.8 shares of
Company common stock for each share of Caliber stock. The fund keeps
approximately 1% of its assets in short-term investments to allow
participants to transfer money out of the fund at any time. Effective
September 1998, this fund is not available for additional participant
contributions; participants may only transfer their investments out of this
fund.
Roadway Express Stock Fund
In connection with Caliber's spin-off of Roadway Express, Inc. ("REX"),
1,360,861 common shares of REX were distributed to the Plan during January
1996. The fund keeps approximately 1% of its assets in short-term
investments to allow participants to transfer money out of the fund at any
time. This fund is not available for additional participant contributions;
participants may only transfer their investments out of this fund. The fund
will be eliminated effective September 30, 1999. Participants have until
September 30, 1999 to reallocate their balance in this fund to the remaining
investments available. Any amounts remaining in the fund after September 30,
1999 will be transferred to the Income Accumulation Fund.
Franklin Mutual Beacon Fund
The assets of this fund are invested in common stock, preferred stock and
corporate debt securities which are available at prices less than their
intrinsic value. The fund will tend to invest in securities of issuers with
market capitalization in excess of $1 billion.
Mutual Benefit Life GIC
The assets of this fund were invested in a guaranteed investment contract
with Mutual Benefit Life. The reported value of the units owned by the Plan
was based upon the issue price of the investment contract adjusted for
interest earned and any actual proceeds received by the Plan with respect to
the guaranteed investment contract through December 31, 1997.
During November 1998, all assets invested in the Mutual Benefit Life GIC
were transferred to the Income Accumulation Fund.
Bond Index Fund
The assets of this fund are invested in the MasterWorks Bond Index Fund
which invests in U.S. Government and Corporate bonds with medium-term
maturities.
Asset Allocation Fund
7
<PAGE>
The assets of this fund are invested in the MasterWorks Asset Allocation
Fund, of which investments are allocated among common stock, U.S. Treasury
bonds and money market instruments.
Income Accumulation Fund
The assets of this fund are invested in the Merrill Lynch Income
Accumulation Fund which invests in investment contracts, U.S. government
securities and short-term money market instruments.
S&P 500 Stock Fund
The assets of this fund are invested in the MasterWorks S&P 500 Stock Fund
which invests daily in the same stocks and substantially the same
percentages as the S&P 500 Index.
AIM Constellation Fund
The assets of this fund are invested in the AIM Constellation Fund which
seeks capital appreciation by investing in the common stock of principally
medium sized and smaller emerging growth companies.
8
<PAGE>
Templeton Foreign Fund
The assets of this fund are invested in the Templeton Foreign Fund which
seeks long-term capital growth by investing in stock and debt obligations of
companies and governments outside the United States.
LifePath Funds
The assets of this fund are invested in the LifePath Funds offered by
MasterWorks which invest their assets in a separate series of
MasterInvestment Portfolio, an open-end management investment company
including: LifePath 2000, LifePath 2010, LifePath 2020, LifePath 2030 and
LifePath 2040. Each LifePath fund invests in a combination of domestic and
foreign equity, fixed income and other securities to provide a risk-managed
rate of return to maximize assets based on planned retirement in the decade
indicated in the fund name.
Vanguard Primecap Fund
The assets of this fund are invested primarily in the Vanguard/Primecap Fund
which seeks long-term growth by investing in the common stock of principally
large and medium-sized U.S. companies. The fund also maintains a small
investment in money market securities in order to provide liquidity for
participant trades.
Participant Notes Receivable
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum of $50,000 reduced by the highest outstanding balance of any other
loan or 50% of their account balance. Loan terms range from 1 to 5 years up
to a maximum of 10 years for the purchase of a primary residence. The loans
are secured by the balance in the participant's account and bear interest at
a rate 1% above the prime rate as determined by the Trustee at the time a
loan is processed.
2. SUMMARY OF ACCOUNTING POLICIES:
Investment Valuation and Administrative Fees
The Plan's investments are stated at fair value with the exception of the Loan
Fund and the Mutual Benefit Life GIC which are valued at cost which does not
differ materially from fair value.
Substantially all administrative fees are paid by the Company.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Retirement Plan Investment Board to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
9
<PAGE>
3. INVESTMENTS:
The net asset value per share/unit at December 31 for the primary investments of
the respective investment funds was as follows:
1998 1997
--------- ---------
FDX Corporation common stock $ 89.00 $ -
Caliber System, Inc. common stock - 48.69
Roadway Express, Inc. common stock 14.53 22.375
Franklin Mutual Beacon Fund 13.12 14.12
Mutual Benefit Life guaranteed investment contract - 1.00
MasterWorks Bond Index Fund 10.01 9.74
MasterWorks Asset Allocation Fund 14.14 12.74
Merrill Lynch Income Accumulation Fund 14.81 13.95
MasterWorks S&P 500 Stock Fund 24.61 20.39
AIM Constellation Fund 30.52 26.38
Templeton Foreign Fund 8.39 9.95
MasterWorks LifePath Funds-
LifePath 2000 Fund 11.64 11.27
LifePath 2010 Fund 14.40 13.30
LifePath 2020 Fund 16.48 14.82
LifePath 2030 Fund 18.73 16.23
LifePath 2040 Fund 20.33 17.31
Vanguard Primecap Fund 47.66 39.57
4. PLAN TERMINATION:
Although it has not expressed any intent to do so, the Employers have the right
under the Plan to discontinue their contributions at any time and the Company
has the right to terminate the Plan subject to the provisions of ERISA. In the
event of Plan termination, participants will become fully vested in their
accounts. The Plan shall pay all expenses chargeable against the Plan and shall
then distribute all assets to the participants in proportion to the amounts
credited to their accounts at the date of such termination.
5. INCOME TAX STATUS:
The Internal Revenue Service ruled on April 15, 1996, that the Plan qualifies
under Section 401(a) of the Internal Revenue Code (IRC); therefore, the related
trust is not subject to tax under present income tax law. The Plan is required
to operate in conformity with the IRC to maintain its qualification. The
Internal Revenue Service is currently conducting an examination of the Plan, and
the Company continues its discussions with the Examiner regarding the
appropriate correction of certain defects which Caliber identified prior to the
commencement of the examination. However, the Retirement Plan Investment Board
does not expect that this or any course of action or series of events that have
occurred will adversely affect the Plan's qualified status.
10
<PAGE>
SCHEDULE I
CALIBER SYSTEM, INC. 401(k)
SAVINGS PLAN (AMENDED AND RESTATED)
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
<TABLE>
Description of Investment,
Including Maturity Date,
Identity of Issuer, Borrower, Rate of Interest, Collateral, Current
Lessor or Similar Party Par or Maturity Value Cost Value
- ------------------------------------ ---------------------------------------- ----------------- ---------------
<S> <C> <C> <C>
FDX Corporation.* 1,279,852 shares of common stock $ 58,606,016 $ 113,906,829
Roadway Express, Inc. 202,331 shares of common stock 4,011,630 2,940,122
Franklin Mutual Beacon Fund 711,282 units of collective investment
fund 9,873,980 9,332,014
MasterWorks* 656,055 units of collective investment
Bond Index Fund fund 6,388,991 6,567,111
MasterWorks* 2,568,313 units of collective investment
Asset Allocation Fund fund 32,962,070 36,315,950
Merrill Lynch* 2,345,109 units of collective investment
Income Accumulation Fund fund 34,737,857 34,737,857
MasterWorks* 2,281,079 units of collective equity
S&P 500 Stock Fund investment fund 42,004,057 56,137,363
AIM Constellation Fund 482,951 units of collective investment
fund 13,175,984 14,739,658
Templeton Foreign Fund 439,553 units of collective investment
fund 4,300,225 3,687,847
MasterWorks* LifePath Funds: Collective investment funds:
LifePath 2000 Fund 58,264 units 671,147 678,197
LifePath 2010 Fund 192,464 units 2,552,218 2,771,479
LifePath 2020 Fund 233,587 units 3,363,216 3,849,512
LifePath 2030 Fund 167,427 units 2,735,027 3,135,905
LifePath 2040 Fund 222,981 units 4,046,579 4,533,200
------------------ ------------------
13,368,187 14,968,293
Vanguard Primecap Fund 141,254 units of collective investment
fund 5,385,499 6,732,182
Loan Fund Maturing at various dates through 2008
at interest rates ranging from 8.00%
to 13.00% 15,889,809 15,889,809
------------------ ------------------
$ 240,704,305 $ 315,955,035
================== ==================
* Indicates party-in-interest to the Plan.
</TABLE>
<PAGE>
SCHEDULE II
CALIBER SYSTEM, INC. 401(k)
SAVINGS PLAN (AMENDED AND RESTATED)
SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
Net
Gain
Purchase Selling Cost of Current or
Identity of Party Involved Description of Asset Price Price Asset Value (Loss)
- -------------------------- ----------------------------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Category (iii)-Series of Transactions in Excess of 5% of the Current Value of Plan Assets
** FDX Corporation* $31,939,805 $ - $31,939,805 $31,939,805 $ -
Common stock - 43,930,587 29,068,672 43,930,587 14,861,915
** Merrill Lynch * Income Accumulation 23,827,602 - 23,827,602 23,827,602 -
Fund - 14,709,355 14,709,355 14,709,355 -
** MasterWorks* 19,423,559 - 19,423,559 19,423,559 -
S&P 500 Stock Fund - 10,676,446 8,230,392 10,676,446 2,446,054
* Indicates party-in-interest to the Plan.
** Transactions made on the market.
</TABLE>
There were no category (i), (ii) or (iv) reportable transactions during 1998.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee
benefit plan) have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
Caliber System, Inc.
401(k) Savings Plan
Date 6/30/99 /s/ Donald C. Brown
- ------------ -----------------------------------
Donald C. Brown
President
Exhibit 23.1
Consent of Independent Auditors
As independent public accountants, we hereby consent to the incorporation of our
report dated May 28, 1999 included in this Form 11-K, into Caliber System,
Inc.'s previously filed Registration Statement on Form S-8 (Registration No.
333-28163).
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
June 28, 1999
