<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: June 30, 1997
(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 June 30, 1997, Federal Express Corporation (the "Registrant") announced
its financial results for the fiscal year ended May 31, 1997 by the press
release attached as Exhibit 20.1 to this report and incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
20.1 Registrant's press release, dated June 30, 1997.
20.2 Ratio of Earnings to Fixed Charges.
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/ MICHAEL W. HILLARD
-----------------------------------
Michael W. Hillard
Vice President & Controller
(PRINCIPAL ACCOUNTING OFFICER)
Dated: July 7, 1997
3
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION OF EXHIBIT
- ------- ----------------------
20.1 Registrant's press release, dated June 30, 1997.
20.2 Ratio of Earnings to Fixed Charges.
4
<PAGE>
[LETTERHEAD]
FEDERAL EXPRESS CORPORATION
FISCAL 1997 AND FOURTH QUARTER
FINANCIAL RESULTS
FOR IMMEDIATE RELEASE
MEMPHIS, Tenn., June 30, 1997 ... Federal Express Corp. today announced that
net income for the quarter ended May 31 was $132.6 million, a 15% increase
over last year's fourth quarter net income of $115.4 million. Earnings per
share rose to $1.14 per share from $1.01 per share last year.
Revenues for the quarter were $3,068.3 million, 12% higher than last year's
$2,737.7 million. Operating income increased to $251.3 million from
$225.7 million, and pretax income rose to $230.6 million from $202.5 million a
year ago.
"We closed the year with record quarterly earnings that were bolstered by
strong performance in our international segment," said Executive Vice
President and Chief Financial Officer Alan B. Graf, Jr. "Fourth quarter
international operating profit increased 60% year-over-year, primarily due to
continued healthy growth in our premium International Priority -Registered
Servicemark- (IP) service. IP volume rose 19% in the quarter, marking four
consecutive years of double-digit growth for this express service."
-more-
1
<PAGE>
International operating income for the fourth quarter was $59.4 million on
international segment revenues of $854.9 million. In last year's fourth
quarter, the international segment reported operating income of $37.2 million
on revenues of $745.3 million.
The company's U.S. domestic operating income was $191.9 million on revenues
of $2,213.4 million, compared to operating income of $188.5 million on
revenues of $1,992.4 million in last year's fourth quarter.
"In the U.S., package volumes increased 10% year-over-year in the fourth
quarter," said Graf. "This strong volume growth was accompanied by a
1.1% rise in our underlying revenue per package--excluding any benefit from
the excise tax expiration in last year's fourth quarter and the fuel surcharge
in this year's fourth quarter. At the same time, U.S. cost per package rose
2.4%, primarily due to increased fuel and contract trucking expenses."
Compared to last year's fourth quarter, sales of aircraft noise-reduction
kits contributed an incremental $14 million to the company's operating income.
FISCAL YEAR RESULTS
For the full fiscal year, revenues were $11,519.8 million, a 12% increase
over last year's $10,273.6 million. Fiscal 1997 net income was
$361.2 million or $3.12 per share. Fiscal 1996 net income was $307.8 million
or $2.69 per share.
Fiscal 1997 operating income for the company's international segment was
$141.0 million on international revenues of $3,197.7 million compared to
international operating income of $81.6 million in fiscal 1996 on revenues of
$2,807.3 million.
-more-
2
<PAGE>
U.S. domestic operating income for the year was $558.0 million on U.S. domestic
revenues of $8,322.1 million compared to U.S. domestic operating income of
$542.2 million in fiscal 1996 on revenues of $7,466.3 million.
"Our high performance team of employees around the world deserves credit for
successfully delivering another year of improved earnings for our stockholders,"
said Graf. "We achieved a 16% increase in earnings per share while
strategically investing in our integrated global network. Our fiscal 1997
results clearly demonstrate that FedEx's corporate vision is accurately
focused."
***
Federal Express is the world's largest express transportation company, providing
fast and reliable services for more than 2.8 million items in 212 countries each
working day. The company employs approximately 130,000 people, has nearly
43,000 drop-off locations, and operates more than 580 aircraft and
38,000 vehicles in its integrated global network. FedEx maintains electronic
connections with more than 650,000 users via FedEx PowerShip -Registered
Trademark-, FedEx Ship -Registered Trademark- and FedEx interNetShip -SM-.
Federal Express reported revenues of $11.5 billion for its fiscal year
ended May 31, 1997.
###
Media Contacts: Greg Rossiter 901-395-4440 or Shirlee Clark 901-395-3463
Investor Contact: Becky Halvorson 901-395-3468
Worldwide Web Home Page: http://www.fedex.com
3
<PAGE>
FEDERAL EXPRESS CORPORATION FINANCIAL HIGHLIGHTS
(Unaudited; Current year data is preliminary)
FOURTH QUARTER FISCAL 1997
(In millions, except earnings per share and operating data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
MAY 31 MAY 31
------------------ -------------------
FINANCIAL RESULTS 1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $3,068.3 $2,737.7 $11,519.8 $10,273.6
Operating Expenses:
Salaries and benefits 1,318.1 1,186.9 5,095.5 4,620.0
Rentals and landing fees 272.3 248.0 1,070.7 959.0
Depreciation and amortization 200.5 184.5 777.4 719.6
Fuel 173.0 158.6 690.4 578.6
Maintenance and repairs 178.0 177.3 724.4 617.7
Other 675.1 556.7 2,462.4 2,154.9
--------- --------- --------- --------
2,817.0 2,512.0 10,820.8 9,649.8
--------- --------- --------- --------
Operating Income 251.3 225.7 699.0 623.8
Other Income (Expense):
Interest, net (24.6) (22.7) (90.6) (95.6)
Other, net 3.9 (0.5) 19.8 11.8
--------- --------- --------- --------
(20.7) (23.2) (70.8) (83.8)
--------- --------- --------- --------
Pretax Income 230.6 202.5 628.2 540.0
Provision for Income Taxes 98.0 87.1 267.0 232.2
--------- --------- --------- --------
Net Income $132.6 $115.4 $361.2 $307.8
========= ========= ========= ========
Earnings Per Share $1.14 $1.01 $3.12 $2.69
========= ========= ========= ========
Common and Common Equivalent Shares 116.649 114.691 115.641 114.276
OPERATING DATA
Operating Weekdays 64 65 254 256
AVERAGE DAILY EXPRESS VOLUME
Priority Overnight -Registered Servicemark- 1,223,070 1,118,285 1,178,822 1,067,352
Standard Overnight -Registered Servicemark- 635,818 643,486 629,828 606,860
2Day -SM- 690,040 559,897 675,501 567,781
Overnight Freight-Registered Servicemark-/
2Day Freight -SM- 6,838 3,919 5,469 3,470
--------- --------- --------- ---------
Total U.S.A. Express Volume 2,555,766 2,325,587 2,489,620 2,245,463
International Priority -Registered Servicemark- 244,935 206,049 226,274 192,199
--------- --------- --------- ---------
Total Avg Daily Express Volume 2,800,701 2,531,636 2,715,894 2,437,662
========= ========= ========= =========
YIELD PER EXPRESS PACKAGE
Priority Overnight -Registered Servicemark- $15.08 $15.27 $14.98 $15.26
Standard Overnight -Registered Servicemark- 11.34 10.64 10.99 10.41
2DaySM 9.68 9.78 9.45 9.39
Overnight Freight -Registered Servicemark-/
2Day Freight -SM- 145.36 144.29 149.54 148.73
--------- --------- --------- ---------
Total U.S.A. Express Yield $13.04 $12.89 $12.77 $12.67
International Priority -Registered Servicemark- 40.75 40.43 40.91 40.58
--------- --------- --------- ---------
Total Composite Yield $15.46 $15.13 $15.11 $14.87
========= ========= ========= =========
Avg Pounds per Express Package 7.5 6.4 7.2 6.4
Avg Revenue per Express Pound $2.06 $2.36 $2.11 $2.31
INT'L AIRFREIGHT (IXF/ATA)
Millions of Pounds 167.1 143.2 645.7 548.9
Revenue per Pound $0.93 $0.93 $0.94 $1.01
</TABLE>
4
<PAGE>
Exhibit 20.2
FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Unaudited)
<TABLE>
<CAPTION>
Year Ended May 31,
----------------------------------------------------
1993 1994 1995 1996 1997
-------- -------- -------- ---------- ----------
(In thousands, except ratios)
<S> <C> <C> <C> <C> <C>
Earnings:
Income before income taxes... $203,576 $378,462 $522,084 $ 539,959 $ 628,221
Add back:
Interest expense, net of
capitalized interest..... 168,762 152,170 130,923 105,449 95,689
Amortization of debt
issuance costs........... 4,906 2,860 2,493 1,628 1,328
Portion of rent expense
representative of
interest factor.......... 262,724 285,261 329,370 386,254 434,846
-------- -------- -------- ---------- ----------
Earnings as adjusted......... $639,968 $818,753 $984,870 $1,033,290 $1,160,084
======== ======== ======== ========== ==========
Fixed Charges:
Interest expense, net of
capitalized interest....... $168,762 $152,170 $130,923 $ 105,449 $ 95,689
Capitalized interest......... 31,256 29,738 27,381 39,254 39,449
Amortization of debt
issuance costs............. 4,906 2,860 2,493 1,628 1,328
Portion of rent expense
representative of interest
factor..................... 262,724 285,261 329,370 386,254 434,846
-------- -------- -------- ---------- ----------
$467,648 $470,029 $490,167 $ 532,585 $ 571,312
======== ======== ======== ========== ==========
Ratio of Earnings to Fixed
Charges 1.4 1.7 2.0 1.9 2.0
======== ======== ======== ========== ==========
</TABLE>
