<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C 20549
-------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: MARCH 14, 1996
(DATE OF EARLIEST EVENT REPORTED)
-------------------
FEDERAL EXPRESS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OF INCORPORATION)
1-7806 71-0427007
(COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
2005 CORPORATE AVENUE, MEMPHIS, TENNESSEE 38132
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(901) 369-3600
<PAGE>
ITEM 5. OTHER EVENTS
On March 14, 1996, Federal Express Corporation (the "Registrant") announced
its financial results for the fiscal quarter ended February 29, 1996 by the
press release attached as Exhibit 20.1 to this report and incorporated herein
by reference.
Registrant also recently prepared Appendix A to a Preliminary Official
Statement with respect to the Alliance Airport Authority, Inc., Special
Facilities Revenue Bonds, Series 1996 (Federal Express Corporation Project).
Appendix A, attached to this report as Exhibit 20.2 and incorporated herein
by reference, contains summaries of the Registrant's operating results and
financial position and certain operating statistics for the past five fiscal
years and for the third fiscal quarter ended February 29, 1996.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
20.1 Registrant's press release, dated March 14, 1996.
20.2 Appendix A to a Preliminary Official Statement prepared with
respect to the Alliance Airport Authority, Inc., Special Facilities
Revenue Bonds, Series 1996 (Federal Express Corporation Project).
2
<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FEDERAL EXPRESS CORPORATION
By: /s/ JAMES S. HUDSON
-----------------------
James S. Hudson
Vice President & Controller
(PRINCIPAL ACCOUNTING OFFICER)
Dated: March 25, 1996
3
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION OF EXHIBIT
- ------- ----------------------
20.1 Registrant's press release, dated March 14, 1996.
20.2 Appendix A to a Preliminary Official Statement prepared with
respect to the Alliance Airport Authority, Inc., Special
Facilities Revenue Bonds, Series 1996 (Federal Express Corporation
Project).
4
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EXHIBIT 20.1
<PAGE>
[ C O M P A N Y L E T T E R H E A D ]
FEDERAL EXPRESS CORPORATION
THIRD QUARTER FISCAL 1996
FINANCIAL RESULTS
FOR IMMEDIATE RELEASE
MEMPHIS, March 14, 1996 ... Federal Express Corporation today reported net
income for the quarter ended February 29 of $27.2 million, or $0.47 per
share, compared to net income of $63.1 million or $1.12 per share in last
year's third quarter.
Revenues for the quarter rose 9% to $2,535.5 million from $2,332.6 million a
year ago. Operating income was $78.0 million compared to $97.7 million, and
pretax income fell to $52.7 million from $110.7 million last year.
Commenting on the quarter's results, Chairman and Chief Executive Officer
Frederick W. Smith said, "As we had announced in a January 12, 1996, press
release, unprecedented winter storms and weaker than expected international
airfreight revenues combined for quarterly results that were well below our
plans.
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<PAGE>
"During January, major snowstorms closed numerous airports and businesses
throughout the Northeast. These closures significantly affected revenue, as
this region accounts for over a quarter of our worldwide package volume. The
unusually harsh weather in the U.S. during the quarter lowered our operating
profit by more than $30 million.
"The quarter's results were also adversely affected by the continuing
weakness in the international airfreight market. Our International Priority
(IP) package volume continued its strong growth in the quarter, increasing
16% year-over-year. However, non-express international airfreight pounds
decreased at the same time we were adding airlift capacity, including our new
intra-Asian flights which began in September. While a down-turn in the
international airfreight market has coincided with this expansion, we'll
continue to invest in our unparalleled global express network to maximize the
long-term benefit to our shareholders."
With respect to the company's U.S. domestic operations, Executive Vice
President and Chief Financial Officer Alan B. Graf, Jr. said, "We did have
some good news in our U.S. domestic business. The U.S. yield and cost trends
are more in-line than they have been for many quarters. Our U.S. package
yield increased 2.1% due to the efforts we began in January 1995 to better
manage our U.S. yield and the recent expiration of the excise tax on packages
shipped by air. Excluding the benefit from the excise tax expiration, U.S.
domestic yields increased 1.1%, year-over-year. At the same time, our
per-package costs
- more -
<PAGE>
increased by 1.9%, but were inflated by weather-related expenses and lower
than anticipated volume in January."
The U.S. package growth rate averaged 4% for the quarter, rising 4% in
December, 2% in January and 7% in February.
The company's U.S. domestic operating profit was $90.7 million on revenues of
$1,874.4 million, compared to an operating profit of $71.9 million on
revenues of $1,718.5 million in last year's third quarter.
The international segment reported an operating loss for the third quarter of
$12.7 million on revenues of $661.1 million. In last year's third quarter,
the international segment reported an operating profit of $25.8 million on
revenues of $614.1 million.
"Until our IP packages have fully grown into the capacity we added this
fiscal year," said Graf, "our international results will be subject to the
cyclical nature of the non-express airfreight market to help cover the cost
of this additional capacity."
This quarter's operating results include $19 million attributable to the
December 31, 1995, expiration of the federal excise tax on the transportation
of property by air. Also, compared to last year's third quarter, sales of
aircraft noise-reduction kits contributed an incremental $9 million to the
company's operating income.
- more -
3
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Last year's third quarter non-operating income included a $36 million gain on
the sale of two dedicated warehousing and contract distribution companies in
the United Kingdom.
***
During the quarter, FedEx announced FedEx International First-SM-, a new
service that provides customs cleared door-to-door delivery service by 8 a.m.
from 18 countries to the U.S. FedEx also announced that the company received
an operating permit by the Civil Aviation Administration of China to operate
a U.S./China all-cargo route.
Federal Express is the world's largest express transportation company,
providing fast and reliable services for important documents, packages and
freight. The company delivers more than 2.5 million items each working day.
It employs more than 119,000 people, and operates 541 aircraft and almost
37,000 vehicles in its integrated system. Federal Express reported revenues
of $9.4 billion for its fiscal year ended May 31, 1995.
###
Contact: Tom Martin 901-395-3490 or Shirlee Clark 901-395-3463
Worldwide Web Home Page: http://www.fedex.com
031496
4
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FEDERAL EXPRESS CORPORATION FINANCIAL HIGHLIGHTS
(Unaudited; Current year data is preliminary)
THIRD QUARTER FISCAL 1996
(In millions, except earnings per share and operating data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
FINANCIAL RESULTS FEBRUARY 29 FEBRUARY 29
- ----------------- ----------------------- -----------------------
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $2,535.5 $2,332.6 $7,535.9 $6,922.5
Operating Expenses:
Salaries and benefits 1,164.5 1,133.2 3,433.1 3,300.9
Rentals and landing fees 251.1 211.7 711.1 599.7
Depreciation and amortization 182.3 165.1 535.1 483.6
Fuel 150.3 127.5 420.0 372.6
Maintenance and repairs 153.7 128.1 440.3 397.5
Other 555.6 469.3 1,598.2 1,351.2
--------- --------- --------- ---------
2,457.5 2,234.9 7,137.8 6,505.5
--------- --------- --------- ---------
Operating Income 78.0 97.7 398.1 417.0
Operating Income (Expense):
Interest, net (24.9) (27.0) (72.9) (90.4)
Other, net (0.4) 40.0 12.3 42.5
--------- --------- --------- ---------
(25.3) 13.0 (60.6) (47.9)
--------- --------- --------- ---------
Pretax Income 52.7 110.7 337.5 369.1
Provision for Income Taxes 25.5 47.6 145.1 158.7
--------- --------- --------- ---------
Net Income $27.2 $63.1 $192.4 $210.4
Earnings Per Share $0.47 $1.12 $3.37 $3.73
Common and Common Equivalent Shares 57.258 58.374 57.069 56.458
OPERATING DATA
- --------------
Operating Weekdays 63 62 191 190
AVERAGE DAILY EXPRESS VOLUME
- ----------------------------
Priority Overnight (PO) 1,069,244 993,271 1,050,019 964,177
Standard Overnight (SO) 619,688 569,939 594,395 527,900
2Day (E2) 634,973 665,792 570,464 562,071
Overnight/2Day Freight (OFS/F2) 4,094 3,413 3,317 3,198
--------- --------- --------- ---------
Total U.S.A. Express Volume 2,327,999 2,232,415 2,218,195 2,057,346
International Priority (IP) 191,972 165,538 187,486 158,785
--------- --------- --------- ---------
Total Avg Daily Express Volume 2,519,971 2,397,953 2,405,681 2,216,131
YIELD PER EXPRESS PACKAGE
- -------------------------
Priority Overnight (PO) $ 15.21 $ 15.49 $ 15.26 $ 15.83
Standard Overnight (SO) 10.36 9.87 10.32 10.01
2Day (E2) 8.94 8.44 9.26 8.91
Overnight/2Day Freight (OFS/F2) 138.07 150.97 150.51 159.31
--------- --------- --------- ---------
Total U.S.A. Express Yield $ 12.42 $ 12.16 $ 12.60 $ 12.67
International Priority (IP) 40.52 40.52 40.64 40.14
--------- --------- --------- ---------
Total Composite Yield $ 14.57 $ 14.12 $ 14.78 $ 14.64
Avg Pounds per Express Package 6.4 6.3 6.5 6.4
Avg Revenue per Express Pound $2.29 $2.25 $2.29 $2.30
INT'L AIRFREIGHT (IXF/ATA)
- --------------------------
Millions of Pounds 120.4 130.3 405.7 412.2
Revenue per Pound $0.97 $1.05 $1.04 $1.05
</TABLE>
<PAGE>
EXHIBIT 20.2
<PAGE>
APPENDIX A
FEDERAL EXPRESS CORPORATION
Federal Express Corporation (hereinafter the "Company") was incorporated in
Delaware on June 24, 1971 and began operations in 1972. The Company offers a
wide range of express services for the time-definite transportation of
documents, packages and freight throughout the world using an extensive fleet
of aircraft and vehicles and leading-edge information technologies.
Corporate headquarters are located at 2005 Corporate Avenue, Memphis,
Tennessee 38132, telephone (901) 369-3600.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission
(the "Commission") in accordance with the provisions of the Securities
Exchange Act of 1934, as amended, are incorporated herein by reference and
made a part hereof.
1. The Company's Annual Report on Form 10-K for the fiscal year ended
May 31, 1995 filed August 4, 1995.
2. The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended August 31, 1995 and November 30, 1995, respectively, filed
October 13, 1995 and January 12, 1996, respectively.
3. The Company's Current Reports on Form 8-K dated August 14, 1995,
August 16, 1995, September 14, 1995, October 17, 1995, October 25,
1995, October 26, 1995, January 12, 1996 and March 14, 1996,
respectively, filed August 15, 1995, August 18, 1995, September 19,
1995, October 18, 1995, October 27, 1995, October 30, 1995, January
16, 1996 and March 26, 1996, respectively.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Preliminary Official
Statement and before the termination of the offering of the Bonds by this
Preliminary Official Statement shall be deemed to be incorporated by
reference in this Preliminary Official Statement and to be a part hereof from
the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Preliminary Official Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this Preliminary Official Statement.
The Company will furnish without charge to each person to whom this
Preliminary Official Statement is delivered, on written or oral request of
such person, a copy of any or all of the documents incorporated by reference
in this Preliminary Official Statement without exhibits to such documents
(unless such exhibits are specifically incorporated by reference into such
documents). Requests for such copies should be directed to: Shirlee M.
Clark, Manager - Media Relations, Federal Express Corporation, by mail at
Box 727, Memphis, Tennessee 38194-1850 or by telephone at (901) 395-3490.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files reports
and other information with the Commission. Reports, proxy and information
statements and other information filed by the Company with the Commission can
be inspected, and copies may be obtained at prescribed rates, at the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, as well as at the following Regional Offices of the Commission: New
York Regional Office, 7 World Trade Center, New York, New York 10048 and
Chicago Regional Office, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Such materials can also be inspected at the offices of
the New York Stock Exchange, 20 Broad Street, New York, New York 10005.
A-1
<PAGE>
SELECTED OPERATING STATISTICS
(UNAUDITED)
Set forth below are selected operating statistics of the express package and
airfreight services of the Company for the periods indicated. Beginning in
fiscal year 1994, U.S. domestic express airfreight is reported as package
volume in express package operating data rather than as pounds in airfreight
operating data. Data for 1991 through 1993 has been restated to conform to
this presentation. Beginning in fiscal year 1995, Average Revenue Per Pound
and Average Revenue Per Package include service fee revenues previously
classified as other revenues. Data for 1991 through 1994 has been restated
to conform to this presentation.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED MAY 31 FEBRUARY 28 FEBRUARY 29
----------------------------------------------------------------- -------------------------
1991 1992 1993 1994 1995 1995 1996
--------- --------- --------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
EXPRESS PACKAGE:
Average daily
package volume 1,310,890 1,472,642 1,710,561 1,925,105 2,247,594 2,216,131 2,405,681
Average pounds
per package 5.6 5.7 5.8 6.0 6.3 6.4 6.5
Average revenue
per pound $ 3.08 $ 2.90 $ 2.62 $ 2.51 $ 2.31 $ 2.30 $ 2.29
Average revenue
per package $17.33 $16.38 $15.30 $15.12 $14.62 $14.64 $14.78
AIRFREIGHT:
Average daily
pounds 2,650,204 2,258,303 2,050,033 1,844,270 2,153,041 2,169,474 2,124,244
Average revenue
per pound $ 1.20 $ 1.22 $ 1.09 $ 1.06 $ 1.06 $ 1.05 $ 1.04
RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
NINE MONTHS ENDED
YEAR ENDED MAY 31 FEBRUARY 28 FEBRUARY 29
----------------------------------------------------------------- -------------------------
1991 1992 1993 1994 1995 1995 1996
--------- --------- --------- --------- --------- ----------- -----------
Ratio of Earnings to
Fixed Charges (a) 1.0x (b) 1.4x 1.7x 2.0x 2.0x 1.8x
</TABLE>
- --------------------
(a) Earnings included in the calculation of the ratio of earnings to fixed
charges represent income before income taxes plus fixed charges (other
than capitalized interest). Fixed charges include interest expense,
capitalized interest, amortization of debt issuance costs and a portion
of rent expense representative of interest.
(b) Earnings were inadequate to cover fixed charges by $173.4 million for the
year ended May 31, 1992.
A-2
<PAGE>
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION
The following is a summary of the Company's operating results and financial
position for the periods indicated (in millions):
OPERATING RESULTS
- -----------------
<TABLE>
<CAPTION>
NINE MONTHS ENDED
FEBRUARY 28 FEBRUARY 29
YEAR ENDED MAY 31 -------------------------
-------------------------------------------------- (UNAUDITED)
1991 1992 1993 1994 1995 1995 1996
------ ------ ------ ------ ------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues $7,688 $7,550 $7,808 $8,479 $9,392 $6,922 $7,536
Operating Income 252 23 377 531 591 417 398
Income (Loss)
Before Income
Taxes 41 (147) 204 378 522 369 337
Income (Loss)
Before Cumulative
Effect of Change
in Accounting
Principle 6 (114) 110 204 298 210 192
Net Income (Loss 6 (114) 54 204 298 210 192
</TABLE>
FINANCIAL POSITION
- ------------------
<TABLE>
<CAPTION>
MAY 31 FEBRUARY 29, 1996
-------------------------------------------------- -----------------
1991 1992 1993 1994 1995 (UNAUDITED)
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Current Assets $1,283 $1,206 $1,440 $1,762 $1,869 $1,751
Property and
Equipment, Net 3,624 3,411 3,476 3,449 3,715 4,053
Total Assets 5,672 5,463 5,793 5,992 6,433 6,693
Current Liabilities 1,424 1,385 1,449 1,536 1,779 1,776
Long-Term Debt 1,827 1,798 1,882 1,632 1,325 1,327
Common
Stockholders'
Investment 1,669 1,580 1,671 1,925 2,246 2,452
</TABLE>
A-3
