SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
Amendment #1 to Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1995
Commission File Number 1-6512
AIRBORNE FREIGHT CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware
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(State of incorporation or organization)
91-0837469
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(IRS Employer Identification No.)
3101 Western Avenue
P.O. Box 662
Seattle, Washington 98111-0662
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(Address of Principal Executive Office)
Registrant's telephone number, including area code: (206) 285-4600
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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: XXX No:
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Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the close of the period covered by this report.
Common Stock, par value $1 per share
Outstanding (net of 315,150 treasury shares)
as of June 30, 1995 21,050,336 shares
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AIRBORNE FREIGHT CORPORATION
Amendment #1 to June 30, 1995 Form 10-Q
The undersigned registrant hereby amends the following financial
statements of it Form 10-Q dated June 30, 1995, as set forth in the pages
attached hereto:
Part I - Financial Information:
Item I - Financial Statements: Notes to the Financial Statements have
been amended to include Note D - Supplemental Guarantor Information.
<TABLE>
AIRBORNE FREIGHT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET EARNINGS
(Dollars in thousands except per share data)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30 June 30
------- -------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Domestic $452,631 $407,657 $ 894,808 $ 804,541
International 93,309 76,885 181,048 146,553
-------- -------- ---------- ---------
545,940 484,542 1,075,856 951,094
OPERATING EXPENSES:
Transportation purchased 196,726 162,534 385,511 317,532
Station and ground operations 170,812 144,931 335,926 290,141
Flight operations and maintenance 79,311 65,454 157,372 131,236
General and administrative 37,019 36,552 74,513 72,268
Sales and marketing 16,250 14,037 31,881 27,332
Depreciation and amortization 34,846 33,309 69,648 67,074
-------- -------- ---------- ---------
534,964 456,817 1,054,851 905,583
-------- -------- ---------- ---------
EARNINGS FROM OPERATIONS 10,976 27,725 21,005 45,511
INTEREST, NET 6,964 6,069 13,689 12,010
-------- -------- ---------- ---------
EARNINGS BEFORE INCOME TAXES 4,012 21,656 7,316 33,501
INCOME TAXES 1,750 8,593 3,174 13,438
-------- -------- ---------- ---------
NET EARNINGS 2,262 13,063 4,142 20,063
PREFERRED STOCK DIVIDENDS 68 103 139 687
-------- -------- ---------- ---------
NET EARNINGS AVAILABLE
TO COMMON SHAREHOLDERS $ 2,194 $ 12,960 $ 4,003 $ 19,376
======== ======== ========== =========
NET EARNINGS PER COMMON SHARE:
Primary - $ .10 $ .61 $ .19 $ .93
======== ======== ========== =========
Fully Diluted - $ .10 $ .57 $ .19 $ .89
======== ======== ========== =========
DIVIDENDS PER COMMON SHARE $ .075 $ .075 $ .15 $ .15
======== ======== ========== =========
<FN>
See notes to consolidated financial statements.
</TABLE>
<TABLE>
AIRBORNE FREIGHT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<CAPTION>
June 30 December 31
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ASSETS
------ 1995 1994
---- ----
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 14,451 $ 10,318
Trade accounts receivable,
less allowance of $7,550 and $7,500 219,887 221,788
Spare parts and fuel inventory 30,845 28,071
Deferred income tax assets 13,040 12,458
Prepaid expenses 20,865 20,701
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TOTAL CURRENT ASSETS 299,088 293,336
PROPERTY AND EQUIPMENT, NET 806,832 766,346
EQUIPMENT DEPOSITS and OTHER ASSETS 18,557 18,824
---------- ----------
TOTAL ASSETS $1,124,477 $1,078,506
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES:
Accounts payable $ 111,649 $ 117,194
Salaries, wages and related taxes 45,299 43,858
Accrued expenses 59,889 59,053
Income taxes payable 348 342
Current portion of debt 6,152 6,018
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TOTAL CURRENT LIABILITIES 223,337 226,465
LONG-TERM DEBT 334,397 279,422
SUBORDINATED DEBT 115,000 118,580
DEFERRED INCOME TAX LIABILITIES 29,806 30,402
OTHER LIABILITIES 28,374 31,239
REDEEMABLE PREFERRED STOCK 3,948 5,000
SHAREHOLDERS' EQUITY:
Preferred Stock, without par value -
Authorized 5,200,000 shares,
no shares issued
Common stock, par value $1 per share -
Authorized 60,000,000 shares
Issued 21,365,486 and 21,285,924 shares 21,366 21,286
Additional paid-in capital 185,661 184,369
Retained earnings 183,559 182,714
---------- ----------
390,586 388,369
Treasury stock, 315,150 shares, at cost (971) (971)
---------- ----------
389,615 387,398
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,124,477 $1,078,506
========== ==========
<FN>
See notes to consolidated financial statements.
</TABLE>
<TABLE>
AIRBORNE FREIGHT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<CAPTION>
Six Months Ended
June 30
----------------
1995 1994
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net Earnings $ 4,142 $ 20,063
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 64,689 62,119
Provision for aircraft engine overhauls 4,959 4,955
Deferred income taxes (1,178) 301
Other (2,791) (2,920)
-------- --------
CASH PROVIDED BY OPERATIONS 69,821 84,518
Change in:
Receivables 1,901 (13,544)
Inventories and prepaid expenses (2,938) 3,620
Accounts payable (5,545) 12,218
Accrued expenses, salaries & taxes payable 2,283 2,437
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 65,522 89,249
INVESTING ACTIVITIES:
Additions to property and equipment (106,098) (94,267)
Dispositions of property and equipment 340 755
Expenditures for engine overhauls (3,922) (3,064)
Other (257) (889)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (109,937) (97,465)
FINANCING ACTIVITIES:
Proceeds from bank note borrowings, net 68,600 47,000
Principal payments on debt (17,071) (38,838)
Proceeds from common stock issuance 320 2,803
Dividends paid (3,301) (3,838)
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 48,548 7,127
-------- --------
NET INCREASE (DECREASE) IN CASH 4,133 (1,089)
CASH AT JANUARY 1 10,318 7,134
-------- --------
CASH AT JUNE 30 $ 14,451 $ 6,045
======== ========
<FN>
See notes to consolidated financial statements.
</TABLE>
AIRBORNE FREIGHT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1995
(Unaudited)
NOTE A--SUMMARY OF FINANCIAL STATEMENT PREPARATION:
The consolidated financial statements included herein are unaudited
but include all adjustments which are, in the opinion of management,
necessary for a fair presentation of the financial position and results of
operations and cash flows for the interim periods reported.
Certain amounts for prior periods have been reclassified to conform to
the 1995 presentation.
NOTE B--LONG-TERM DEBT:
<TABLE>
Long-term debt consists of the following:
<CAPTION>
June 30 December 31
------- -----------
1995 1994
---- ----
(In thousands)
<S> <C> <C>
Senior debt:
Revolving bank credit $219,000 $135,000
Notes payable 1,600 17,000
Senior notes 100,000 100,000
Revenue bonds 13,200 13,200
Other debt 3,169 16,670
-------- --------
336,969 281,870
Subordinated debt:
Senior subordinated notes 3,580 7,150
Convertible subordinated debentures 115,000 115,000
-------- --------
118,580 122,150
-------- --------
Total long-term debt 455,549 404,020
Less current portion 6,152 6,018
-------- --------
$449,397 $398,002
======== ========
</TABLE>
NOTE C--EARNINGS PER COMMON SHARE:
Primary earnings per common share are based upon the weighted average
number of common shares outstanding during the interim period plus dilutive
common equivalent shares applicable to the assumed exercise of outstanding
stock options.
Fully diluted earnings per share for the three and six months ended
June 30, 1995 are the same as primary earnings per share. Fully diluted
earnings per share for the three and six month period ended June 30, 1994,
assumes conversion of the Company's redeemable preferred stock and
convertible subordinated debentures as well as the dilutive common
equivalent shares applicable to the assumed exercise of stock options. Net
earnings as adjusted for the elimination of preferred stock dividends and
interest expense, net of applicable taxes, relative to the assumed
conversion was $14,128,000 and $22,193,000 for the three and six month
periods, respectively.
<TABLE>
Average shares outstanding used in earnings per share computations
were as follows:
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30 June 30
------- -------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
AVERAGE SHARES OUTSTANDING
Primary 21,178 21,404 21,182 20,788
Fully Diluted 21,180 24,900 21,182 24,900
</TABLE>
NOTE D--SUPPLEMENTAL GUARANTOR INFORMATION:
In connection with the proposed shelf offering by Airborne Freight
Corporation (the "Company") of $100,000,000 of unsecured Senior Notes
("Notes") certain of its subsidiaries (collectively, "Guarantors") will
fully and unconditionally guarantee, on a joint and several basis, the
Company's obligations to pay principal, premium, if any, and interest with
respect to the Notes. The Guarantors are ABX Air, Inc. ("ABX") and
Airborne Forwarding Corporation ("AFC"), which are wholly-owned by the
Company, and Airborne FTZ, Inc. ("FTZ") and Wilmington Air Park, Inc.
("WAP"), which are wholly-owned subsidiaries of ABX. Non-guarantor
subsidiaries' assets, liabilities, revenues and net earnings are
inconsequential both individually and on a combined basis in comparison to
the Company's consolidated financial statement totals.
Summarized financial information of the guarantors on a combined basis
is presented below, management does not consider disclosure of separate
subsidiary financial statements for each guarantor to be material.
Summarized information is as follows (in thousands):
<TABLE>
<CAPTION>
Balance Sheet Information:
June 30, 1995 1994
<S> <C> <C>
Current Assets $ 37,027 $ 32,689
Property & Equipment 699,380 676,499
Other Noncurrent Assets 8,713 7,199
Current Liabilities 63,127 58,893
Long-term Debt 13,797 16,483
Other Noncurrent Liabilities 65,630 57,112
Intercompany Payable 469,157 470,138
</TABLE>
<TABLE>
<CAPTION>
Earnings Statement Information:
Six Months Ended June 30, 1995 1994
<S> <C> <C>
Revenues - Intercompany $316,570 $285,876
Revenues - Third-party 21,446 13,260
Operating Expenses 318,127 281,519
Earnings from Operations 16,889 17,617
Net Earnings 7,229 10,986
</TABLE>
ABX is a certificated air carrier which owns and operates the domestic
express cargo services for which the Company is the sole customer. ABX
also offers air charter services on a limited basis to third-party
customers. FTZ owns certain aircraft parts inventory which it sells
primarily to ABX, with limited sales to third-party customers. FTZ is also
the holder of a foreign trade zone certificate at Wilmington airport
property. WAP is the owner of the Wilmington airport property which
includes the Company's main sort facility, aircraft maintenance facilities,
runway and related airport facilities and airline administrative and
training facilities. ABX is the only occupant and customer of WAP. AFC,
d.b.a. Sky Courier, provides expedited courier services and regional
logistics warehousing primarily to third-party customers.
Investment balances and revenues between Guarantor subsidiaries have
been eliminated for purposes of presenting the above summarized financial
information.
Intercompany revenues and net earnings recorded by ABX, FTZ, and WAP
are controlled by the Company and are based on various discretionary
factors. Intercompany payable amounts represent net amounts due the
Company by its Guarantor subsidiaries. The Company provides the Guarantor
subsidiaries with substantially all cash necessary to fund operating and
capital expenditure requirements. Federal income taxes allocated to the
Guarantors have been computed assuming the subsidiaries filed a separate
return. No state income taxes have been allocated to the Guarantor
subsidiaries.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized:
AIRBORNE FREIGHT CORPORATION
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(Registrant)
<TABLE>
<CAPTION>
<S> <C> <C>
Date: September 1, 1995 /s/Roy C. Liljebeck
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Roy C. Liljebeck
Executive Vice President,
Chief Financial Officer
Date: September 1, 1995 /s/Lanny H. Michael
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Lanny H. Michael
Senior Vice President,
Treasurer and Controller
</TABLE>
