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Previous: AIR PRODUCTS & CHEMICALS INC /DE/, 8-K, 2000-05-11 |
Next: AIRBORNE FREIGHT CORP /DE/, 10-Q, 2000-05-11 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
Commission File Number 1-6512
AIRBORNE FREIGHT CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware (State or other jurisdiction of incorporation or organization) |
91-0837469 (I.R.S. Employer Identification No.) |
3101 Western Avenue
P.O. Box 662
Seattle, Washington 98111-0662
(Address of principal executive offices)
Registrant's telephone number, including area code: (206) 285-4600
Indicate by check mark whether the Registrant (1) has filed all reports required 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 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.
| Class | Outstanding | |
| Common Stock, $1.00 par value | 49,013,505 | |
| |
|
(net of 2,244,526 treasury
shares) as of March 31, 2000 |
AIRBORNE FREIGHT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET EARNINGS
(Dollars in thousands except per share data)
(Unaudited)
Three Months Ended
March 31
------------------
2000 1999
---- ----
REVENUES:
Domestic $725,252 $681,261
International 87,212 88,087
-------- --------
812,464 769,348
OPERATING EXPENSES:
Transportation purchased 248,354 233,975
Station and ground operations 254,937 241,317
Flight operations and maintenance 142,963 122,183
General and administrative 63,197 59,084
Sales and marketing 20,019 18,348
Depreciation and amortization 49,569 49,613
-------- --------
779,039 724,520
-------- --------
EARNINGS FROM OPERATIONS 33,425 44,828
OTHER INCOME (EXPENSE):
Interest, net (4,914) (3,632)
Other 503 148
-------- --------
EARNINGS BEFORE INCOME TAXES 29,014 41,344
INCOME TAXES 11,115 16,100
-------- --------
NET EARNINGS BEFORE CHANGE IN ACCTG 17,899 25,244
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
(NET OF TAX) 14,206 -
-------- --------
NET EARNINGS $ 32,105 $ 25,244
======== ========
NET EARNINGS PER SHARE:
BASIC
Before change in accounting $ 0.37 $ 0.52
Cumulative effect of change in
accounting $ 0.29 $ -
-------- --------
Net earnings $ 0.66 $ 0.52
======== ========
DILUTED
Before change in accounting $ 0.36 $ 0.51
Cumulative effect of change in
accounting $ 0.29 $ -
-------- --------
Net earnings $ 0.65 $ 0.51
======== ========
DIVIDENDS PER SHARE $ 0.04 $ 0.04
======== ========
See notes to consolidated financial statements.
AIRBORNE FREIGHT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
March 31 December 31
2000 1999
---------- -----------
(Unaudited)
ASSETS
------
CURRENT ASSETS:
Cash $ 23,319 $ 28,678
Trade accounts receivable,
less allowance of $9,187 and $9,640 348,750 339,044
Spare parts and fuel inventory 45,905 44,263
Deferred income tax assets 27,422 31,950
Prepaid expenses and other 22,182 26,135
---------- -----------
TOTAL CURRENT ASSETS 467,578 470,070
PROPERTY AND EQUIPMENT, NET 1,223,433 1,115,712
EQUIPMENT DEPOSITS and OTHER ASSETS 53,792 57,468
---------- -----------
TOTAL ASSETS $1,744,803 $1,643,250
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 134,212 $ 142,087
Salaries, wages and related taxes 75,326 65,276
Accrued expenses 84,027 78,755
Income taxes payable 7,227 3,282
Current portion of debt 451 442
---------- -----------
TOTAL CURRENT LIABILITIES 301,243 289,842
LONG-TERM DEBT 356,591 314,707
DEFERRED INCOME TAX LIABILITIES 107,655 99,169
OTHER LIABILITIES 85,047 81,325
SHAREHOLDERS' EQUITY:
Preferred Stock, without par value -
Authorized 5,200,000 shares,
no shares issued
Common stock, par value $1 per share -
Authorized 120,000,000 shares
Issued 51,258,031 and 51,176,018 shares 51,258 51,176
Additional paid-in capital 303,560 298,742
Retained earnings 577,117 546,962
Accumulated other comprehensive income 1,544 918
---------- -----------
933,479 897,798
Treasury stock, 2,244,526 and 2,491,078
shares, at cost (39,212) (39,591)
---------- -----------
894,267 858,207
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,744,803 $1,643,250
========== ===========
See notes to consolidated financial statements.
AIRBORNE FREIGHT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Three Months Ended
March 31
------------------
2000 1999
-------- --------
OPERATING ACTIVITIES:
Net Earnings $ 32,105 $ 25,244
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Cumulative effect of change in accounting (14,206) -
Depreciation and amortization 49,569 44,745
Deferred income taxes 4,307 792
Provision for aircraft engine overhauls - 4,868
Other 8,135 6,407
-------- --------
CASH PROVIDED BY OPERATIONS 79,910 82,056
Change in:
Receivables (9,706) (4,753)
Inventories and prepaid expenses 2,311 (2,102)
Accounts payable (7,875) (17,212)
Accrued expenses, salaries and taxes payable 19,267 (8,675)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 83,907 49,314
INVESTING ACTIVITIES:
Additions to property and equipment (129,395) (80,327)
Disposition of property and equipment 1,138 29
Expenditures for engine overhauls - (4,918)
Other (1,864) (1,130)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (130,121) (86,346)
FINANCING ACTIVITIES:
Proceeds on bank notes, net 42,000 33,000
Principal payments on debt (107) (66)
Proceeds from common stock issuance 912 4,802
Dividends paid (1,950) (1,941)
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 40,855 35,795
-------- --------
NET DECREASE IN CASH (5,359) (1,237)
CASH AT JANUARY 1 28,678 18,679
-------- --------
CASH AT MARCH 31 $ 23,319 $ 17,442
======== ========
See notes to consolidated financial statements.
AIRBORNE FREIGHT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000 (Unaudited)
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 2000 presentation.
NOTE B-LONG-TERM DEBT:
Long-term debt consists of the following:
March 31 December 31
2000 1999
---- ----
(In thousands)
Senior debt:
Revolving bank credit $ 125,000 $ 95,000
Notes payable 12,000 -
Senior notes 200,000 200,000
Revenue bonds 13,200 13,200
Other debt 6,842 6,949
---------- ----------
357,042 315,149
Less current portion 451 442
---------- ----------
$ 356,591 $ 314,707
========== ==========
NOTE C-EARNINGS PER SHARE:
Basic earnings per share are based upon the weighted average number of common shares outstanding during the interim period. Diluted earnings per 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.
Weighted average shares outstanding used in earnings per share computations were as follows:
Three Months Ended
March 31
------------------
2000 1999
----------- ----------
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 48,785,792 48,479,073
Diluted 49,206,767 49,352,658
NOTE D-SEGMENT INFORMATION
The Company has organized its business into two reportable operating segments. The domestic segment derives its revenues from the door-to-door delivery of small packages and documents throughout the United States, Canada, and Puerto Rico. Domestic operations are supported principally by Company operated aircraft and facilities. The international segment derives its revenues from express door-to-door delivery and a variety of freight services. International revenues are recognized on shipments where the origin and/or destination is outside of locations supported by the domestic segment. The Company uses a variable cost approach to delivering international services through use of existing commercial airline capacity in connection with its domestic network and independent express and freight agents in locations not currently served by Company-owned foreign operations.
The following is a summary of key segment information (in thousands):
Three Months Ended
March 31
------------------
2000 1999
---- ----
SEGMENT REVENUES:
Domestic $725,252 $681,261
International 87,212 88,087
-------- --------
$812,464 $769,348
======== ========
SEGMENT EARNINGS FROM OPERATIONS:
Domestic $ 35,575 $ 44,200
International (2,150) 628
-------- --------
$ 33,425 $ 44,828
======== ========
NOTE E-OTHER COMPREHENSIVE INCOME
Other comprehensive income includes the following transactions and tax effects for the three month periods ended March 31, 2000 and 1999, respectively (in thousands):
Income Tax
Before (Expense) Net of
Tax or Benefit Tax
------- ---------- ------
2000
----
Unrealized securities gains arising
during the period $1,572 $ (605) $ 967
Less: Reclassification adjustment for
gains realized in net income (305) 117 (188)
------ ------ ------
Net unrealized securities gains 1,267 (488) 779
Foreign currency translation adjustments (249) 96 (153)
------ ------ ------
Other comprehensive income $1,018 $ (392) $ 626
====== ====== ======
Income Tax
Before (Expense) Net of
Tax or Benefit Tax
------- ---------- ------
1999
----
Unrealized securities losses arising
during the period $ (361) $ 139 $ (222)
Less: Reclassification adjustment for
gains realized in net income (65) 25 (40)
------ ------ ------
Net unrealized securities losses (426) 164 (262)
Foreign currency translation adjustments (6) 3 (3)
------ ------ ------
Other comprehensive income $ (432) $ 167 $ (265)
====== ====== ======
NOTE F-CHANGE IN ACCOUNTING:
Effective January 1, 2000, the Company changed its method of accounting for major engine overhaul costs on DC-9 aircraft from the accrual method to the direct expense method where costs are expensed as incurred. Previously, these costs were accrued in advance of the next scheduled overhaul based upon engine usage and estimates of overhaul costs. The Company believes that this new method is preferable because it is more consistent with industry practice and appropriate given the relatively large size of its DC- 9 fleet.
The cumulative effect of this change in accounting resulted in a non-cash credit of $14,206,000, net of taxes, or $.29 per share on a diluted basis being recognized in the quarter ending March 31, 2000. Excluding the cumulative effect, this change increased net earnings for the first quarter of 2000 by approximately $1.2 million, net of tax or $.02 per share. If the accounting change for engine overhaul costs had been retroactively applied, earnings from continuing operations for the three months ended March 31, 1999 would have been as follows:
Three months ended March 31 1999
----
As Reported:
Earnings from continuing operations $ 44,828
Diluted earnings per share $ 0.51
Proforma continuing operations:
Earnings from continuing operations $ 45,181
Diluted earnings per share $ 0.52
NOTE G-NEW ACCOUNTING PRONOUNCEMENTS:
ACCOUNTING FOR DERIVATIVE INSTRUMENTS:
In 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities" As amended by SFAS No. 137, this statement will be effective for fiscal year 2001. SFAS No. 133 requires an entity to recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value.
The Company had no outstanding fuel contracts at March 31, 2000. The Company has, in the past, utilized contracts with financial institutions to limit its exposure to volatility in jet fuel prices. Under terms of the contracts, the Company either makes or receives payments if the market price of heating oil, as determined by an index of monthly NYMEX Heating Oil futures contracts, is lower or exceeds certain prices agreed to between the Company and the financial institutions. The contracts, which have no cost basis, are accounted for as hedges since there has historically existed a high correlation between the changes in the NYMEX index and the price of jet fuel. Settlements are made in cash and are recorded in the earnings statement in the period of settlement as either an increase or decrease to fuel expense.
Under the cash flow hedge provisions of SFAS No. 133, the Company will be required to record outstanding fuel contracts at fair value, with corresponding changes in fair value recorded as a component of other comprehensive income if the hedges are determined to be effective. The Company has not adopted the provisions of SFAS No. 133 as of March 31, 2000 and is currently evaluating the future impact of this pronouncement on the financial statements and related disclosures.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS:
The Company's net earnings for the first quarter of 2000 were $32.1 million, or $.65 per share on a diluted basis, which includes a credit due to a change in accounting for certain engine overhaul costs. Net earnings before this nonrecurring credit were $17.9 million, or $.36 per share. This compares to net earnings of $25.2 million, or $.51 per share for the first quarter of 1999.
Effective at the beginning of 2000, the Company changed from the accrual method of accounting for DC-9 engine overhaul costs to the direct expense method where costs are expensed as incurred. The cumulative effect of this change in accounting resulted in a non-cash credit of $14.2 million, net of taxes, or $.29 per share.
Operating results were negatively impacted by the continued escalating cost of jet fuel during the first quarter of 2000. The net cost increase for jet fuel in the first quarter of 2000 verses 1999 was $18.0 million, equal to a net increase of approximately $.395 per gallon. To help offset this cost increase in jet fuel the Company implemented a 3% fuel surcharge beginning February 7, 2000, which resulted in $12.5 million being billed for the surcharge in the first quarter of 2000.
The Company experienced total shipment growth in the first quarter of 2000 of 3.5% compared to the first quarter of 1999. On a per day basis, total shipment growth was approximately 0.5% in the first quarter of 2000 compared to 1999 first quarter, as there were two additional operating days in this years first quarter. Although the growth achieved is modest, this was the first quarter in the last four quarters that some shipment growth was experienced. The Company is encouraged by this positive trend and hopes it is a sustainable trend that can be built upon.
The following table sets forth selected shipment and revenue data for the periods indicated:
Three Months Ended March 31
---------------------------
2000 1999
---- ----
Shipments (in thousands):
Domestic
Overnight 47,979 46,321
Next Afternoon Service 13,934 14,684
Second Day Service 19,771 17,814
100 Lbs. and Over 67 75
------ ------
Total Domestic 81,751 78,894
International
Express 1,529 1,577
Freight 94 99
------ ------
Total International 1,623 1,676
------ ------
Total Shipments 83,374 80,570
====== ======
Average Pounds per Shipment:
Domestic 4.21 4.21
International 47.87 43.12
Average Revenue per Pound:
Domestic $ 2.07 $ 2.02
International $ 1.11 $ 1.20
Average Revenue per Shipment:
Domestic $ 8.87 $ 8.64
International $53.74 $52.55
Total revenues increased 5.6% in the first quarter of 2000 compared to 2.6% in the first quarter of 1999. Domestic revenues increased 6.5% in the first quarter of 2000 compared to 2.8% in the comparable period of 1999. During the first quarter of 2000 fuel surcharge revenue of $12.5 million accounted for 1.9% of the domestic revenue growth. The Company is encouraged by the increased revenue growth and by the fact that it exceeded the growth rate in shipments, which continues a positive trend related to the Company's continuing focus on yield enhancements. The average revenue per domestic shipment increased 2.8% to $8.87 in the first quarter of 2000 compared to the first quarter of 1999.
Domestic shipments increased 3.6% in the first quarter of 2000 compared to 0.8% in the first quarter of 1999. Overnight shipments accounted for 58.7% of total domestic shipments in the first quarter of 2000, comparable to the overnight shipment percentage achieved in the first quarter of 1999. The higher yielding overnight shipments increased 3.6% in the first quarter of 2000, compared to 1.2% in the corresponding 1999 period. The Company's Next Afternoon Service shipments decreased 5.1% in the first quarter of 2000 compared to an increase of 2.1% in 1999. The Second Day Service shipments increased 11.0% in 2000 compared to a decrease of 1.1% in the first quarter of 1999. The Second Day Service category includes 554,000 shipments in the first quarter of 2000 associated with the Company's new residential delivery product, airborne@home. This product, which was introduced in late 1999, targets new business from internet retailers and catalog fulfillment providers. The Company is encouraged by the business opportunities of this new product which offers shippers a competitive combination of service and pricing, while providing the Company an efficient way to accomplish residential deliveries through an arrangement with the U.S. Postal Service.
International revenues decreased 1.0% in the first quarter of 2000 compared to an increase of 0.5% in the comparable period of 1999. Total international shipments decreased 3.2% in the first quarter of 2000 compared to an increase of 11.8% in the comparable period of 1999. International express shipments posted a decline of 3.0% in the first quarter of 2000, primarily due to the loss of a major customer. This compares to an increase of 13.6% for express shipments in the first quarter of 1999. Heavier weight international shipments also declined in the first quarter of 2000. The international segment contribution to earnings from operations was negative $2.1 million for the first quarter of 2000 compared to a contribution of $.6 million in the similar period of 1999.
Operating expenses as a percentage of revenues were 95.9% for the first quarter of 2000 compared to 94.2% in the corresponding period of 1999 and 94.9% for all of 1999. The Company experienced a 1.0% improvement in productivity for the first quarter of 2000, compared to the first quarter of 1999, as measured by shipments handled per paid employee hour. Operating cost per shipment handled increased 3.9% to $9.34 for the first quarter of 2000 compared to the first quarter of 1999. The significantly higher cost of jet fuel was a major factor negatively impacting operating costs so far in 2000. Comparisons of certain operating expense components are discussed below.
Transportation purchased increased as a percentage of revenues to 30.6% in the first quarter of 2000 compared to 30.4% in the comparable period of 1999. This increase was primarily due to the increase in farmed out cartage and surface line haul costs.
Station and ground expense of 31.4% of revenues in the first quarter of 2000 was comparable to the first quarter of 1999. Increased productivity helped to offset cost increases in this category of expense.
Flight operations and maintenance expense as a percentage of revenues during the first quarter of 2000 was 17.6%, compared to 15.9% in the first quarter of 1999. The average aviation fuel price for the first quarter of 2000 was $.94 per gallon which is 91% higher than the $.49 per gallon experienced in the first quarter of 1999. Aviation fuel consumption increased to 45.7 million gallons in the first quarter of 2000, a 2.5% increase over the similar period of 1999. As a result of fuel hedging contracts, the Company incurred $2.4 million of expense, equal to approximately $.05 per gallon, in the first quarter of 1999, with no comparable cost incurred in the first quarter of 2000.
Effective January 1, 2000, the Company began to expense DC-9 engine overhaul costs directly to maintenance expense as costs are incurred. Beginning in 2000, these overhaul costs are expensed to the flight operations and maintenance category. Prior to 2000, the Company used the accrual method with estimated engine overhaul costs provided in advance of the next scheduled overhaul. In 1999 and prior, engine overhaul cost provisions were included in the depreciation and amortization expense category.
General and administrative expense was 7.8% of revenues in the first quarter of 2000 compared to 7.7% in the comparable period of 1999. This category of cost stayed relatively constant as a percentage of revenues primarily due to the continued strong cost controls over labor and discretionary costs.
Depreciation and amortization expense was 6.1% of revenues in the first quarter of 2000 compared to 6.4% in the first quarter of 1999. Although there was higher depreciation expense in the first quarter of 2000 due to the increased number of 767 aircraft placed in service since the first quarter of 1999, this was offset by the elimination of the expense due to the change in accounting for engine reserves discussed above.
Interest expense in the first quarter of 2000 was higher than the first quarter of 1999 as the impact of higher levels of average outstanding borrowings offset the effect of lower average effective interest rates in the first quarter of 2000 compared to the first quarter of 1999. Capitalized interest was $1.5 million compared to $1.3 million in the first quarter of 2000 versus 1999, respectively.
The Company's effective tax rate was 38.3% in the first quarter of 2000 compared to 38.9% in the first quarter of 1999 and 38.1% for all of 1999.
LIQUIDITY AND CAPITAL RESOURCES:
Cash provided by operations net of change in working capital for the first quarter of 2000 was $83.9 million, compared to $49.3 million in the first quarter of 1999.
Capital expenditures continue to be a primary factor affecting the financial condition of the Company. The Company anticipates total capital expenditures to approximate $380 million in 2000. During the first quarter of 2000, total capital expenditures net of dispositions were $128.3 million compared to $80.3 million during the first quarter of 1999. Cash provided by operations and bank borrowings were the primary sources for funding capital expenditures in the first quarter of 2000.
The Company's strong operating cash flow is a major source of liquidity. Also, the Company's $250 million unsecured revolving bank credit agreement has traditionally been used as a major source of liquidity. The Company also has available $40 million under unsecured uncommitted money market lines of credit with several banks used in conjunction with the revolving credit agreement to facilitate settlement and accommodate short-term borrowing fluctuations. With the higher level of capital expenditures in 1999 and the first quarter of 2000, compared to 1998 and prior levels, reliance on the bank facilities has increased. A total of $137 million was outstanding at March 31, 2000 under the revolving bank credit and money market credit lines, compared to $95 million outstanding at December 31, 1999 and $62 million outstanding at March 31, 1999.
The Company's ratio of long-term debt to total capitalization was 26.25% at March 31, 2000, compared to 24.1% at March 31, 1999 and 24.7% at December 31, 1999.
In management's opinion, the available capacity under the bank credit agreements coupled with internally generated cash flow from remaining 2000 operations should provide adequate flexibility to finance anticipated capital expenditures for the balance of 2000.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK:
There have been no material changes in the Company's market risk sensitive instruments and positions since its disclosure in its Annual Report on Form 10-K for the year ended December 31, 1999. See Note F of the Notes to Consolidated Financial Statements to this Form 10-Q for further discussion regarding the Company's fuel hedging activities.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
The annual meeting of Airborne Freight Corporation was held at The Westin Hotel, 1900 Fifth Avenue, Seattle, Washington 98101 on April 25, 2000. A total of 44,496,445 shares were represented at the meeting comprising 91% of the outstanding shares of the Company entitled to vote at the meeting on the record date (February 21, 2000).
The following directors were duly elected for terms ending in 2003, in each case by an affirmative vote in excess of 96% of the shares represented at the meeting:
Number of Shares
Voted For
----------------
Robert S. Cline 43,535,682
Richard M. Rosenberg 43,494,739
William Swindells 43,065,478
The following are continuing directors with terms expiring as indicated:
Terms Expiring in 2001 Terms Expiring in 2002
--------------------- ----------------------
Rosalie J. Wolf Robert G. Brazier
Harold M. Messmer James H. Carey
Mary Agnes Wilderotter Andrew B. Kim
The shareholders, by an affirmative vote in excess of 95% of the shares
represented at the meeting and entitled to vote, approved the material
terms of the 2000-2004 Executive Incentive Compensation Plan ("EICP"). The
EICP provides for annual cash bonuses to certain executives of the Company
and its subsidiaries for each of calendar years 2000 through 2004.
The shareholders, by an affirmative vote of 66% of the shares represented at the meeting and entitled to vote, approved the Airborne Freight Corporation 2000 Director Stock Option Plan ("Plan"). The Plan provides automatic annual grants of stock options to non-employee directors of the Company.
The shareholders, by an affirmative vote of 73% of the shares represented at the meeting and entitled to vote, approved the proposal to urge the Board of Directors to take all necessary steps, in compliance with state law, to declassify the Board for the purpose of director elections.
The shareholders, by an affirmative vote of approximately 18% of the shares represented at the meeting and entitled to vote, rejected a proposal to recommend that the Company adopt all necessary governing documents for the policy that the Board must have at least one independent director with five years of significant airline flight-operations management experience.
The Airborne Board of Directors on the same date, April 25, 2000, reelected all existing executive officers, including Robert S. Cline as Chairman and Chief Executive Officer, and Robert G. Brazier as President and Chief Operating Officer.
The Board of Directors also declared a quarterly cash dividend of $0.04 per share on the Common Stock of the Company payable on May 23, 2000 to shareholders of record on May 9, 2000.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits -
EXHIBIT NO. 10 Material Contracts
---------------------------------
Executive Compensation Plans and Agreements
-------------------------------------------
10(a) Executive Group Incentive Compensation Plan
10(b) Executive Incentive Compensation Plan
EXHIBIT NO. 18 Letter Re: Change in Accounting Principles
-----------------------------------------------------------
18 Letter Re: Change in Accounting Principles
EXHIBIT NO. 27 Financial Data Schedule
----------------------------------------
27.1 Financial Data Schedule
27.2 Financial Data Schedule
27.3 Financial Data Schedule
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
----------------------------
(Registrant)
Date: 5/11/00 /s/Roy C. Liljebeck
------- --------------------
Roy C. Liljebeck
Executive Vice President,
Chief Financial Officer
Date: 5/11/00 /s/Lanny H. Michael
------- -------------------
Lanny H. Michael
Senior Vice President,
Treasurer and Controller