<PAGE>
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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 Quarter ended: SEPTEMBER 30, 1994 Commission File Number 1-5351
WORLDCORP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-3040585
(State of incorporation) (I.R.S. Employer Identification Number)
13873 Park Center Road, Suite 490, Herndon, VA 22071
(Address of Principal Executive Offices)
(703) 834-9200
(Registrant's telephone number)
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 X No
----- -----
The number of shares of the registrant's Common Stock outstanding on November
10, 1994 was 15,415,072.
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<PAGE>
WORLDCORP, INC.
SEPTEMBER 1994, QUARTERLY REPORT ON FORM 10Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets, September 30,
1994 and December 31, 1993........................................ 3
Condensed Consolidated Statements of Operations,
Three Months Ended September 30, 1994 and 1993.................... 5
Condensed Consolidated Statements of Operations
Nine months Ended September 30, 1994 and 1993..................... 7
Condensed Consolidated Statement of Changes in Common
Stockholders' Deficit, Nine months Ended September 30, 1994....... 9
Condensed Consolidated Statements of Cash Flows,
Nine months Ended September 30, 1994 and 1993.................... 10
Notes to Condensed Consolidated Financial Statements............. 11
Exhibit 11, Calculations of Earnings (Loss) Per Common Share..... 12
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................ 14
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K................................. 22
</TABLE>
2
<PAGE>
WORLDCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
(Unaudited)
September 30, December 31,
1994 1993
-------------- ------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents, including restricted
cash of $64 in 1994 and $3,171 in 1993 $ 7,419 $16,916
Restricted short-term investments 668 668
Trade accounts receivable, less allowance for doubtful
accounts of $306 in 1994 and $311 in 1993 8,001 8,476
Other receivables 5,045 5,109
Prepaid expenses and other current assets 4,121 3,476
Assets held for sale 5,373 6,000
------- -------
Total current assets 30,627 40,645
------- -------
ASSETS HELD FOR SALE 10,643 8,660
EQUIPMENT AND PROPERTY
Flight and other equipment 27,561 35,547
Equipment under capital leases 11,943 13,675
------- -------
39,504 49,222
Less accumulated depreciation and amortization 11,846 16,171
------- -------
Net equipment and property 27,658 33,051
------- -------
LONG-TERM OPERATING DEPOSITS 13,150 10,028
OTHER ASSETS AND DEFERRED CHARGES 7,294 4,735
------- -------
TOTAL ASSETS $89,372 $97,119
======= =======
</TABLE>
(Continued)
3
<PAGE>
WORLDCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(CONTINUED)
LIABILITIES AND COMMON STOCKHOLDERS' DEFICIT
(IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
(Unaudited)
September 30, December 31,
1994 1993
-------------- -------------
<S> <C> <C>
CURRENT LIABILITIES
Note payable to bank $ 3,841 $ 7,069
Current maturities of long-term obligations 12,266 10,448
Deferred aircraft rent 889 6,295
Accounts payable 13,020 11,064
Unearned revenue 728 4,456
Accrued maintenance in excess of reserves paid 6,597 14,732
Accrued salaries and wages 7,244 7,252
Accrued interest 2,429 2,224
Accrued taxes 2,009 955
--------- ---------
Total current liabilities 49,023 64,495
--------- ---------
LONG-TERM OBLIGATIONS, NET
Subordinated convertible debt 65,000 65,000
Subordinated notes, net 24,938 24,926
Deferred aircraft rent 1,603 1,850
Equipment financing and other long-term obligations 18,290 26,825
--------- ---------
Total long-term obligations, net 109,831 118,601
--------- ---------
OTHER LIABILITIES
Deferred gain from sale leaseback transactions, net of
accumulated amortization of $31,989 in 1994 and
$30,395 in 1993 8,638 10,322
Accrued postretirement benefits 2,372 2,250
Accrued maintenance in excess of reserves paid 2,927 2,080
Other 395 444
--------- ---------
Total other liabilities 14,332 15,096
--------- ---------
TOTAL LIABILITIES 173,186 198,192
--------- ---------
MINORITY INTEREST -- --
COMMON STOCKHOLDERS' DEFICIT
Common stock, $1 par value, (60,000,000 shares authorized,
15,374,876 shares issued and 15,312,291 shares outstanding
at September 30, 1994 and 15,224,076 shares issued and
15,161,491 shares outstanding at December 31, 1993) 15,375 15,224
Additional paid-in capital 37,038 34,071
Deferred compensation (1,408) --
Retained deficit (134,479) (148,114)
ESOP guaranteed bank loan -- (1,914)
Treasury stock, at cost (340) (340)
--------- ---------
TOTAL COMMON STOCKHOLDERS' DEFICIT (83,814) (101,073)
--------- ---------
COMMITMENTS AND CONTINGENCIES
TOTAL LIABILITIES AND COMMON
STOCKHOLDERS' DEFICIT $ 89,372 $ 97,119
========= =========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
4
<PAGE>
WORLDCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(IN THOUSANDS EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
OPERATING REVENUES
Contract flight operations $ 49,311 $ 43,378
Flight operations subcontracted to other carriers 1,922 63
Other 310 478
Transaction processing - US Order 342 334
-------- --------
Total operating revenues 51,885 44,253
-------- --------
OPERATING EXPENSES
Flight 21,046 18,491
Maintenance 7,446 6,681
Aircraft costs 13,238 13,963
Fuel 7,310 9,371
Flight operations subcontracted to other carriers 1,869 121
Depreciation and amortization 1,363 860
Selling and administrative 6,915 5,217
Transaction processing - US Order 5,090 2,401
-------- --------
Total operating expenses 64,277 57,105
-------- --------
OPERATING LOSS (12,392) (12,852)
-------- --------
OTHER INCOME (EXPENSE)
Interest expense (2,963) (2,852)
Interest income 300 263
Gain on sale of US Order banking operations 14,547 --
Other, net (673) (19)
-------- --------
Total other income (expense) 11,211 (2,608)
-------- --------
LOSS BEFORE INCOME TAXES
AND MINORITY INTEREST (1,181) (15,460)
INCOME TAX BENEFIT 51 29
MINORITY INTEREST (1,410) --
-------- --------
NET LOSS $ (2,540) $(15,431)
======== ========
</TABLE>
5
<PAGE>
WORLDCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(CONTINUED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
NET LOSS PER COMMON AND
COMMON EQUIVALENT SHARE
Primary $ (0.16) $ (1.06)
====== ======
Fully diluted $ * $ *
====== ======
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING
Primary 15,537,230 14,594,472
========== ==========
Fully diluted * *
========== ==========
</TABLE>
/*/ Fully diluted earnings per share are anti-dilutive.
See accompanying Notes to Condensed Consolidated Financial Statements
6
<PAGE>
WORLDCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
(IN THOUSANDS EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
OPERATING REVENUES
Contract flight operations $158,500 $155,730
Flight operations subcontracted to other carriers 2,199 1,221
Other 723 1,173
Transaction processing - US Order 1,023 742
-------- --------
Total operating revenues 162,445 158,866
-------- --------
OPERATING EXPENSES
Flight 54,421 49,681
Maintenance 18,482 23,505
Aircraft costs 41,644 37,988
Fuel 29,456 33,138
Flight operations subcontracted to other carriers 2,126 1,308
Depreciation and amortization 4,032 5,229
Selling and administrative 19,106 14,389
Transaction processing - US Order 9,714 7,227
Loss on sale of Key Airlines -- 837
-------- --------
Total operating expenses 178,981 173,302
-------- --------
OPERATING LOSS (16,536) (14,436)
-------- --------
OTHER INCOME (EXPENSE)
Interest expense (9,218) (7,975)
Interest income 777 609
Gain on sale of World Airways 26,922 --
Gain on sale of US Order banking operations 14,547 --
Other, net (720) (365)
-------- --------
Total other income (expense) 32,308 (7,731)
-------- --------
EARNINGS (LOSS) BEFORE INCOME TAXES
AND MINORITY INTEREST 15,772 (22,167)
INCOME TAX EXPENSE (97) (7)
MINORITY INTEREST (2,040) 2,368
-------- --------
NET EARNINGS (LOSS) $ 13,635 $(19,806)
======== ========
</TABLE>
(Continued)
7
<PAGE>
WORLDCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(CONTINUED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1993
------------ ------------
<S> <C> <C>
NET EARNINGS (LOSS) PER COMMON AND
COMMON EQUIVALENT SHARE
Primary $ 0.89 $ (1.37)
===== ======
Fully diluted $ 0.79 $ *
===== ======
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING
Primary 15,296,419 14,424,192
========== ==========
Fully diluted 21,446,357 *
========== ==========
</TABLE>
/*/ Fully diluted earnings per share are anti-dilutive.
See accompanying Notes to Condensed Consolidated Financial Statements
8
<PAGE>
WORLDCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES
IN COMMON STOCKHOLDERS' DEFICIT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994
(IN THOUSANDS EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Employee Total
Stock Owner- Common
Additional ship Plan Treasury Stock-
Common Paid-in Deferred Retained Guaranteed Stock holder's
Stock Capital Compensation Deficit Bank Loan at cost Deficit
----- ------- ------------ ------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT
12/31/93 $ 15,224 $ 34,071 $ 0 $(148,114) $ (1,914) $ (340) $(101,073)
Exercise of 149,900
options and
warrants 151 636 -- -- -- -- 787
Employee Stock
Ownership Plan
guaranteed bank
loan -- -- -- -- 1,914 -- 1,914
Grant of stock options -- 2,217 (2,217) -- -- -- --
Amortization of defer-
red compensation -- -- 809 -- -- -- 809
Other -- 114 -- -- -- -- 114
Net earnings -- -- -- 13,635 -- -- 13,635
-------- -------- ------- -------- ------ ------ --------
BALANCE AT
9/30/94 $ 15,375 $ 37,038 $ (1,408) $(134,479) $ 0 $ (340) $ (83,814)
======== ======== ======= ======== ====== ====== ========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
9
<PAGE>
WORLDCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD $ 16,916 $ 13,759
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings (loss) 13,635 (19,806)
Adjustments to reconcile net earnings (loss) to cash
used in operating activities:
Depreciation and amortization 4,032 5,229
Deferred gain recognition (1,683) (3,435)
(Gain) loss on sale of equipment and property 765 (140)
Loss on sale of investments 101 --
Minority interest on income (loss) of subsidiaries 2,040 (2,368)
Gain on sale of World Airways (26,922) --
Gain on sale of US Order banking operations (14,547) --
Other 1,718 730
Changes in certain assets and liabilities net of
effects of non-cash transactions:
Decrease in accounts receivable 3,147 4,095
Increase in deposits, prepaid expenses and other assets (6,770) (1,163)
Increase (decrease) in accounts payable, accrued
expenses and other liabilities (4,047) 10,380
-------- --------
Net cash used by operating activities (28,531) (6,478)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to equipment and property (4,370) (23,530)
Disposals of equipment and property 2,406 5,514
Proceeds from sale of US Order banking operations 14,746 --
Proceeds from sales of investments 6,029 3,811
Purchase of investments (6,133) (1,090)
-------- --------
Net cash provided (used) by investing activities 12,678 (15,295)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuances under bank line of credit and debt 68,763 21,897
Repayments under bank line of credit and debt (83,336) (12,836)
Repayment of ESOP guaranteed bank loan (1,734) --
Proceeds from stock transactions 913 2,287
Payment on redemption of preferred stock (2,718) --
Proceeds from sale of World Airways 24,651 --
Payment of dividends on US Order preferred stock (183) --
Other -- (71)
-------- --------
Net cash provided by financing activities 6,356 11,277
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS (9,497) (10,496)
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,419 $ 3,263
======== ========
</TABLE>
NOTE: Cash payments of approximately $8.6 million and $7.0 million were made
for interest in 1994 and 1993, respectively, and cash payments of
approximately $0.1 million were made for income taxes in 1994 and 1993.
Assets acquired through capital lease transactions were approximately
$0.2 million and $10.1 million in 1994 and 1993, respectively. A DC10
engine was exchanged for $1.0 million in lieu of cash owed to lessors
upon the return of three DC10 aircraft. A note payable of $1.1 million
was issued in exchange for the redemption of US Order preferred stock.
See accompanying Notes to Condensed Consolidated Financial Statements
10
<PAGE>
WORLDCORP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The condensed consolidated balance sheet of WorldCorp, Inc. ("WorldCorp" or
the "Company") as of September 30, 1994, the related condensed consolidated
statements of operations for the three and nine month periods ended September
30, 1994 and 1993, the condensed consolidated statement of changes in common
stockholders' deficit for the nine months ended September 30, 1994, and the
condensed consolidated statements of cash flows for the nine months ended
September 30, 1994 and 1993 are unaudited. In the opinion of management, all
adjustments necessary for a fair presentation of such financial statements have
been included. Such adjustments consisted only of normal recurring items. All
significant intercompany balances have been eliminated. Interim results are not
necessarily indicative of results for a full year. Certain 1993 amounts have
been reclassified to conform with the 1994 presentation.
The financial statements and notes are presented as required by Form 10-Q,
and do not contain certain information included in the Company's annual
financial statements and notes. These financial statements should be read in
conjunction with the financial statements and the notes included in the
Company's annual report filed on Form 10-K for the year ended December 31, 1993.
2. On February 28, 1994, WorldCorp, World Airways, Inc. ("World Airways"), and
MHS Berhad ("MHS") completed the 24.9% sale of World Airways' common stock for
$27.4 million in cash. WorldCorp recognized a gain of approximately $26.9
million from this transaction in the first quarter of 1994. The Company expects
to use a portion of its capital loss and net operating loss carryforwards to
offset this gain.
3. On March 31, 1994, the lease of three DC10-30 convertible aircraft expired.
World Airways returned these aircraft during the third quarter. In connection
with these lease terminations, the Company reversed $4.2 million in accrued
maintenance reserves in 1994. On October 24, 1994, World Airways entered into a
4 1/2 month lease for a DC10 aircraft beginning November 15, 1994.
4. On August 1, 1994, US Order, Inc. ("US Order") sold its electronic banking
and bill payment operations to VISA International Services Association, Inc.
("VISA") for $15.0 million. US Order is eligible to receive certain payments
from VISA as additional purchase price consideration beginning January 1, 1995
and continuing through December 31, 2000. These potential additional payments
will be based on the number of VISA customers using the US Order technology for
bill payment, and will be calculated monthly and paid quarterly. In addition,
WorldCorp has exercised an option to purchase additional shares of the voting
stock of US Order for consideration equal to $3.9 million which will increase
its voting ownership percentage to 90% by January 1995.
5. World Airways' cockpit and flight attendant crewmembers are covered by
collective bargaining agreements which expired in July 1992. On August 15,
1994, World Airways and the International Brotherhood of Teamsters
("Teamsters") executed a four-year agreement on behalf of World Airways' cockpit
members, which was ratified on September 9, 1994. The agreement contains
modifications to the crewmember work rules which will permit World Airways to
take greater advantage of the operational capabilities of the MD-11 aircraft
fleet in exchange for crewmember pay increases. World Airways is currently in
negotiations with the Teamsters to develop a new agreement for the flight
attendants.
11
<PAGE>
EXHIBIT 11
1 OF 2
WORLDCORP, INC. AND CONSOLIDATED SUBSIDIARIES
CALCULATIONS OF LOSS PER COMMON SHARE
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(IN THOUSANDS EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1993
------------ ------------
<S> <C> <C>
Loss from continuing operations $ (2,540) $ (15,431)
=========== ===========
NET LOSS APPLICABLE TO
COMMON STOCK $ (2,540) $ (15,431)
=========== ===========
Weighted average common shares
outstanding 15,537,230 14,594,472
=========== ===========
NET LOSS PER SHARE OF COMMON
STOCK $ (0.16) $ (1.06)
=========== ===========
</TABLE>
12
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EXHIBIT 11
2 OF 2
WORLDCORP, INC. AND CONSOLIDATED SUBSIDIARIES
CALCULATIONS OF EARNINGS (LOSS) PER COMMON SHARE
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
(IN THOUSANDS EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
1994 1993
------------------------- ---------
Fully
Primary Diluted
----------- ----------
<S> <C> <C> <C>
Earnings (loss) from continuing operations $ 13,635 $ 13,635 $ (19,806)
Plus: Assumed interest expense reduction
from conversion of Convertible Debt -- 3,413 --
---------- ---------- ----------
NET EARNINGS (LOSS) APPLICABLE
TO COMMON STOCK $ 13,635 $ 17,048 $ (19,806)
========== ========== ==========
Weighted average common shares
outstanding 15,296,419 21,446,357 14,424,192
PRIMARY AND FULLY DILUTED NUMBER OF SHARES 15,296,419 21,446,357 14,424,192
========== ========== ==========
NET EARNINGS (LOSS) PER SHARE
OF COMMON STOCK $ 0.89 $ 0.79 $ (1.37)
========== ========== ==========
</TABLE>
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
- --------------------------------------------------------------------------
OPERATIONS
- ----------
Management's Discussion and Analysis of Financial Condition and Results of
Operations presented below relates to the operations of WorldCorp, Inc.
("WorldCorp" or "the Company") as reflected in its condensed consolidated
financial statements. These statements primarily include the accounts of the
contract flight operations of World Airways, Inc. ("World Airways"). On February
28, 1994, the Company sold 24.9% of its ownership in World Airways to MHS
Berhad, a Malaysian aviation company. WorldCorp also has an ownership interest
in US Order, Inc. ("US Order"), a company which has developed systems that
facilitate banking, bill payment, enhanced telephone services, and shopping from
the home. In December 1993, US Order completed a $12.0 million private equity
placement. On August 1, 1994, US Order sold its electronic banking and bill
payment operations to VISA International Services Association, Inc. ("VISA"). As
of September 30, 1994, WorldCorp owns 48% of the voting stock of US Order. In
addition, WorldCorp has exercised an option to purchase additional shares of the
voting stock of US Order for consideration equal to $3.9 million which will
increase its voting ownership percentage to 90% (see "Business Trends") by
January 1995. US Order's results of operations are consolidated in the
accompanying financial statements.
GENERAL
WorldCorp owns majority positions in companies that operate in two distinct
business areas: air transportation (through World Airways) and transaction
processing (through US Order). MHS Berhad of Malaysia is an equity investor in
World Airways. Knight Ridder is an equity investor in US Order.
AIR TRANSPORTATION
- ------------------
World Airways is a contract air carrier that generally charges customers
based on a block hour basis rather than a per seat or per pound basis. A "block
hour" is defined as the elapsed time computed from the moment the aircraft moves
at its point of origin to the time it comes to rest at its destination.
Fluctuations in flight revenues are not necessarily indicative of true growth
because of shifts in the mix between full service contracts and basic contracts.
Under the terms of full service contracts, World Airways is responsible for all
costs associated with operating these contracts and receives a higher rate per
hour. Under the terms of basic contracts, World Airways provides only certain
services associated with the contract including aircraft, crews, insurance, and
maintenance ("Basic Contracts"). World Airways typically charges a lower rate
per hour for basic contracts since the customer is responsible for other
operating costs. For this reason, it is important to measure pure growth through
block hours flown rather than actual revenues earned. Typically, U.S. military
contracts are full service contracts where the rate paid is set annually and
consists of all flying costs, including fuel and ground handling of the aircraft
and cargo.
The Company's current fuel purchasing policy consists of the purchase of
fuel within seven days in advance of all flights based on current prices set by
individual airports. In addition, the Company receives certain volume discounts.
The Company purchases no fuel under long-term contracts nor does the Company
enter into futures or fuel swap contracts. The Company manages fuel price risk
by making the Company's customers responsible (in all of the Company's
contracts) for potential fuel price fluctuations in excess of five percent.
Customers
- ---------
World Airways' business relies heavily on its U.S. Air Mobility Command
("AMC"), Malaysian Airline System Berhad ("MAS"), and P.T. Garuda Indonesia
("Garuda") contracts, which provided 24%, 17%, and 21%, respectively, of
consolidated revenues in 1993, and 19%, 16%, and 16%, respectively, of total
block hours in 1993. During the first nine months of 1994, AMC, MAS, and Garuda
contracts provided 19%, 11%, and 31%, respectively, of consolidated revenues,
and 15%, 10%, and 25%, respectively, of total block hours. The loss of any of
these contracts or a substantial reduction in business from any of these
contracts, if not replaced, would have a material adverse effect on the
Company's revenues and financial condition.
AMC has awarded contracts to World Airways since 1956. The minimum contract
amount for 1995 of $35.2 million is a 73% increase over 1994, and will be
augmented by further expansion business. Expansion business totalled 161% of the
minimum contract amount for 1993 and 163% for the first nine months of 1994.
World Airways cannot determine
14
<PAGE>
how any future cuts in military spending may affect future operations with AMC.
World Airways has provided service to MAS since 1981, providing aircraft for
integration into MAS' scheduled passenger and cargo operations as well as
transporting passengers for the annual Hadj pilgrimage. The current MAS
contract, which was entered into in 1992, expires in 1996. In 1993, World
Airways provided four aircraft for Hadj operations. MHS Berhad ("MHS"), which
recently acquired 24.9% of World Airways, has acquired 32% of MAS. Due to the
strengthening of the MHS/MAS relationship, World Airways has agreed to provide
aircraft to MAS under long-term contracts (see Business Trends).
World Airways has provided service to Garuda since 1988 under an annual
contract. World Airways provided six aircraft for the 1994 Garuda Hadj
operations. In addition, World Airways has provided aircraft for Garuda's cargo
operations in previous years.
TRANSACTION SERVICES
- --------------------
US Order is a leading provider of interactive transaction services to the
home and the only company with a smart-screen based telephone that is fully
operational with a broad menu of available services. The company completed a
transaction with VISA International Services Association, Inc. ("VISA") on
August 1, 1994 in which the company sold its banking and bill payment operations
to VISA for $15.0 million in cash plus certain future payments. US Order is
eligible to receive certain payments from VISA as additional consideration
beginning January 1, 1995 and ending December 31, 2000. These potential
additional payments are derived from the number of VISA customers worldwide
using the US Order technology for bill payment. No assurances can be given as to
the amount of the royalty payments that will be received from VISA.
As a result of the purchase of US Order's banking operations by VISA, US
Order has agreed to certain restrictions on its operations with respect to the
banking and financial services industry. Similarly, VISA has agreed to certain
restrictions on its activities as they might relate to the ongoing businesses of
US Order. Additionally, VISA has agreed to market US Order as a "preferred
provider" of certain products and services. These products and services include
customization services, smart telephones, non-financial applications, customer
service, and facilities management. US Order expects to derive revenue from
these services as a wholesaler to VISA member banks, telephone companies, cable
television companies, and others.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1994 COMPARED TO THE THREE MONTHS ENDED
- ------------------------------------------------------------------------
SEPTEMBER 30, 1993
- ------------------
Operating Revenue
- -----------------
In the third quarter of 1994, operating revenues increased $7.6 million
(17%) to $51.9 million. This increase is due to an increase in block hours
flown. Block hours increased 24% to 6,622 in 1994 from 5,349 in 1993. This
increase was partially offset by an eight percent decrease in revenue per block
hour to $7,447 in 1994 from $8,110 in 1993 due to the shift in the mix of
business to more basic contracts. Block hours under full service contracts were
68% of total block hours in 1994 and 92% in 1993.
Aircraft capacity, the number of days that the Company's aircraft are
available for service (including days in maintenance), decreased to 7.1
available aircraft per day in the third quarter of 1994 from 9.3 in 1993. This
decrease was offset by a 61% increase in daily aircraft utilization to 10.1
hours in 1994 from 6.3 hours in 1993. Aircraft utilization is measured by the
total block hours that the Company's aircraft were in use divided by the number
of days that the aircraft were available for service (including days in
maintenance).
Operating Expenses
- ------------------
Flight costs increased $2.6 million (14%) due to an increase in block hours
flown offset by a shift to more Basic Contracts.
15
<PAGE>
Maintenance costs increased $0.8 million (11%) due to the increase in block
hours flown. Maintenance cost per block hour was $1,124 in the third quarter of
1994 compared with $1,249 in 1993. This decrease in maintenance cost per block
hour was largely due to a reduction of higher cost DC10 aircraft in favor of the
MD-11 aircraft.
Aircraft costs decreased $0.7 million (5%) in 1994. This decrease was
primarily due to a reduction of $3.0 million in rent costs associated with the
return of three DC10 aircraft in 1993 and three DC10 aircraft in the third
quarter of 1994. Partially offsetting this decrease was a $1.9 million increase
in rent cost associated with the delivery of one MD-11 aircraft during April
1994.
Fuel costs decreased by $2.1 million (22%) primarily due to a decrease in
full service contracts and a decrease in fuel price per gallon.
Flight operations subcontracted to other carriers increased $1.7 million
primarily due to the subservice of flights due to technical delays.
Depreciation and amortization increased $0.5 million (59%). In 1993 World
Airways reversed $1.1 million of previously expensed improvements associated
with two DC10-30 aircraft which were returned in July 1993. This increase was
partially offset by a reduction in depreciation associated with the return of
DC10 aircraft to their lessors.
Selling and administrative costs increased $1.7 million (33%) primarily as a
result of increased marketing efforts and stock options granted to certain
executives resulting in non-cash compensation expense.
Transaction Services - US Order
- -------------------------------
On August 1, 1994, US Order sold its electronic banking and bill payment
operations to VISA ("the VISA transaction"). The accompanying statements of
operations include 58% of the results of operations of US Order prior to the
VISA transaction and 64% thereafter. These percentages are based on liquidation
preferences. In the third quarter of 1994, the Company recorded $7.0 million of
net income (net of $2.5 million of minority interest) relating to US Order,
compared to $2.2 million of losses in 1993. This $9.2 million increase is due
to a $10.7 million gain (net of minority interest) resulting from the VISA
transaction offset by $1.9 million of compensation expense (net of minority
interest) from the buyout of US Order employee stock options as part of the
VISA transaction. WorldCorp has exercised an option to purchase additional
shares of the voting stock of US Order for consideration equal to $3.9 million,
which will increase its ownership of the voting stock to 90% by January 1995.
Non-Operating Items
- -------------------
Other non-operating expenses increased $0.7 million primarily due to the
loss on the sale of a DC-10 engine.
NINE MONTHS ENDED SEPTEMBER 30, 1994 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER
- --------------------------------------------------------------------------------
30, 1993
- --------
Operating Revenue
- -----------------
In the first nine months of 1994, operating revenues increased $3.6 million
(2%) to $162.4 million primarily due to an increase in block hours flown. Block
hours increased 15% to 20,279 in 1994 from 17,684 in 1993. This increase was
partially offset by guaranteed minimum payments related to the 1994 Hadj of $0.2
million which were significantly below guaranteed minimum payments of $8.3
million in 1993. This increase was also offset by an 11% decrease in revenue
per block hour to $7,815 in 1994 from $8,806 in 1993 (excluding revenue from
guaranteed block hours). Block hours under full service contracts were 75% of
total block hours in 1994 and 94% in 1993.
Aircraft capacity, the number of days that the Company's aircraft are
available for service (including days in maintenance), decreased to 8.7
available aircraft per day in the first nine months of 1994 from 9.0 in 1993.
This decrease was offset by an 18% increase in daily aircraft utilization to 8.5
hours in 1994 from 7.2 hours in 1993. Aircraft utilization is measured by the
total block hours that the Company's aircraft were in use divided by the number
of days that the aircraft were available for service (including days in
maintenance).
16
<PAGE>
Operating Expenses
- ------------------
Flight costs increased $5.0 million (10%) primarily due to costs associated
with increased passenger flying.
Maintenance costs decreased by $5.0 million (21%). In 1994, the lease of
three DC10-30 aircraft expired and excess accrued maintenance reserves of $4.2
million associated with these aircraft were reversed. Excluding the effect of
this reversal, maintenance cost per block hour was $1,120 in the first nine
months of 1994 compared with $1,329 in 1993. The reduced maintenance costs are
due, in part, to guarantees and warranties received from the engine and aircraft
manufacturers of the MD-11 aircraft. The Company is, in part, relying on
manufacturers' guidelines to estimate future maintenance costs on the MD-11
aircraft. In addition, the reduced maintenance costs are due, in part, to a
decrease in costs associated with the DC10 aircraft.
Aircraft costs increased by $3.6 million (10%) in 1994. This increase was
primarily due to a $12.1 million increase in rent cost associated with the
delivery of five MD-11 aircraft during March and April 1993 and April 1994. In
addition, the company incurred $1.6 million of rent costs associated with the
short-term lease of two aircraft in 1994. Partially offsetting these increases
was $10.2 million in rent costs associated with three DC10 aircraft which were
returned in 1993 and three DC10 aircraft returned in the third quarter of 1994.
Fuel costs decreased by $3.7 million (11%) primarily due to a decrease in
full service contracts and a decrease in fuel price per gallon.
Flight operations subcontracted to other carriers decreased $0.8 million
(63%) primarily due to the subservice of AMC flights during 1993's Hadj program.
Depreciation and amortization decreased $1.2 million (23%) primarily as a
result of the elimination of costs for leasehold improvements to two DC10-30
aircraft integrated into World Airways' fleet in April 1992. These aircraft were
initially leased under twelve-year operating leases and were returned to their
lessor in July 1993, accelerating the amortization of the related leasehold
improvements. In addition, depreciation expense decreased due to stopping
depreciation on excess DC10 spare parts currently held for sale following the
return of the DC10 aircraft. This decrease was partially offset by the
depreciation of spare parts purchased for MD-11 aircraft integrated into the
fleet in 1993.
Selling and administrative costs increased $4.5 million (30%) primarily as a
result of increased legal and professional fees and marketing efforts. In
addition, the Company granted stock options to certain executives, resulting in
compensation expense.
Transaction Services - US Order
- -------------------------------
In the first nine months of 1994, the Company recorded $2.5 million of net
income (net of $2.5 million of minority interest) relating to US Order, compared
to $5.0 million of losses (net of $2.4 million of minority interest) in 1993.
This $7.5 million increase is due to a $10.7 million gain (net of minority
interest) resulting from the VISA transaction offset primarily by $1.9 million
of compensation expense (net of minority interest) from the buyout of US Order
employee stock options as part of the VISA transaction.
Non-Operating Items
- -------------------
Interest income increased $0.2 million as a result of higher investment
balances. Interest expense increased $1.2 million (16%) in 1994 as a result of
MD-11 rotables financing, aircraft rent deferrals, and use of a bank line of
credit. In addition, WorldCorp recognized a gain of $26.9 million from the sale
of 24.9% of World Airways common stock in 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Company's air transportation subsidiary operates in a very challenging
business environment. During the past several years, the combination of a
generally weak economy, reduced military spending, and the depressed state of
the airline industry and the economy has adversely affected the Company's
operating performance. There has been significant recent growth in demand within
the industry, however, yields remain low. The Company is highly leveraged
primarily
17
<PAGE>
due to losses sustained by World Airways' discontinued scheduled operations
between 1979 and 1986, and losses the Company incurred in 1990, 1992, and 1993.
The Company has historically financed its working capital and capital
expenditure requirements out of cash flow from operating activities, secured
borrowings, and other financings from banks and other lenders.
Cash Flows from Operating Activities
- ------------------------------------
During the first nine months of 1994, operating activities used $28.5
million compared to $6.5 million in the prior year. This decrease in cash is
primarily due to operating losses incurred in 1994, MD-11 aircraft security
deposits, and a decrease in accounts payable due to payments to lessors and
reversal of excess accruals relating to the return of DC10 aircraft to their
lessors.
Cash Flows from Investing Activities
- ------------------------------------
Cash flows from investing activities provided $12.7 million in 1994 as
compared to using $15.3 million in 1993. In 1994, the Company purchased spare
parts for one MD-11 aircraft integrated into the fleet in April 1994. In 1993,
the Company purchased spare parts for four MD-11 aircraft integrated into the
fleet in March and April 1993. These purchases were offset by the sale of
equipment and investments. In addition, US Order sold its banking operations to
VISA for $14.7 million (net of related expenses).
Cash Flows from Financing Activities
- ------------------------------------
In the first nine months of 1994, financing activities provided $6.4 million
as compared to $11.3 million in the prior year. In 1994, the Company sold 24.9%
of World Airways to MHS for $24.7 million. In addition, US Order repurchased
$2.7 million of preferred stock. The Company made $16.3 million of net
repayments for debt and a bank line of credit in 1994 versus acquiring $9.1
million of additional debt and a bank line of credit in 1993. Finally, the
Company received $0.9 million from stock transactions in 1994 versus $2.3
million in 1993.
Capital Plans
- -------------
In October 1992 and January 1993, World Airways signed a series of
agreements to lease seven new MD-11 aircraft for initial lease terms of two to
five years. World Airways has taken delivery of four passenger MD-11 aircraft
and one freighter MD-11 and is scheduled to take delivery of two convertible MD-
11s in 1995. Two of the passenger MD-11 aircraft replaced the two passenger
DC10-30 aircraft which were integrated into World Airways' fleet in April 1992
and returned to McDonnell Douglas in July 1993. The delivery of the convertible
MD-11s is expected to occur approximately nine months after the end of the lease
of three DC10-30 convertibles during the third quarter of 1994. World Airways
plans to exit DC10 aircraft and ultimately standardize its fleet around the MD-
11 aircraft. World Airways, however, recently entered into a 4 1/2 month lease
for a DC10 aircraft beginning November 15, 1994. World Airways may choose to
lease additional DC10 aircraft to meet short-term peak demand requirements.
World Airways made $5.9 million of capital expenditures and cash deposits
for MD-11 integration in the first nine months of 1994. World Airways estimates
that its required capital expenditures for MD-11 integration will be
approximately $0.5 million for the remainder of 1994 and $9.8 million in 1995.
While World Airways is seeking financing for the purchase of additional spare
parts relating to the new MD-11 aircraft, no assurances can be given that the
Company will obtain the necessary financing. As of September 30, 1994, the
Company holds approximately $16.0 million (at book value) of aircraft spare
parts and transaction processing terminals currently available for sale. The
Company anticipates proceeds from the sale of a portion of these assets to be
approximately $1.1 million for the remainder of 1994 and $4.8 million in 1995.
US Order's working capital and capital expenditure requirements for the next
twelve months are expected to be approximately $4.0 million. On August 1, 1994,
US Order sold its electronic banking and bill payment operations to VISA for
$15.0 million plus certain future payments. Approximately $5.6 million of these
proceeds will be used to fund future working capital requirements of US Order.
On August 25, 1994, the Company's Board of Directors approved the exercise
of WorldCorp's option to purchase 4.8 million shares of US Order common stock
currently held by its founders. Under the terms of this agreement,
18
<PAGE>
WorldCorp shall pay $3.9 million in consideration as follows: $2.1 million in
shares of WorldCorp common stock and $1.8 million in cash. As a result of this
agreement, WorldCorp will increase its voting ownership in US Order to 90% by
January 1995.
As of November 11, 1994, WorldCorp has invested $11.7 million of equity (net
of $3.3 million received from the retirement of a portion of US Order preferred
stock - see "Financing Developments") and $3.5 million of unsecured debt in US
Order. WorldCorp does not plan to provide additional financing to US Order in
1994 or 1995.
Financing Developments
- ----------------------
The Company has closed certain transactions which, in aggregate, have
provided additional cash to WorldCorp, World Airways, and US Order.
First, on October 30, 1993, WorldCorp, Inc., World Airways, Inc., and MHS
Berhad entered into a Stock Purchase Agreement (the "Stock Purchase Agreement")
pursuant to which MHS, subject to satisfactory completion of its due diligence
investigations, agreed to purchase 24.9% of World Airways' common stock for
$27.4 million in cash. On February 28, 1994, WorldCorp, World Airways, and MHS
concluded this transaction. World Airways received upon closing (the "Closing")
$12.4 million to fund its working capital requirements. The remaining $15.0
million (less a $2.7 million deposit received in November 1993) was paid to
WorldCorp to add to its cash reserves. At the time of the signing of the Stock
Purchase Agreement, World Airways was a wholly-owned subsidiary of WorldCorp. As
a result of this transaction, WorldCorp recognized a gain of approximately $26.9
million in the first quarter of 1994.
Second, in 1993, World Airways closed an agreement with a financial
institution for a $20.0 million credit facility collateralized by certain
receivables and spare parts. This agreement contains certain covenants related
to World Airways' financial condition and operating results. Approximately $10.8
million of the proceeds from this transaction were used to retire existing
obligations. The balance was added to cash reserves. As of October 31, 1994,
$4.4 million of the $8.0 million portion of the credit facility collateralized
by receivables was utilized with $1.8 million borrowing capacity currently
available. World Airways was not in compliance with its debt covenants at the
end of the third quarter but has obtained a waiver of these covenants from the
financial institution. World Airways will not meet these required covenants in
the fourth quarter of 1994, and will seek waivers. No assurances can be given,
however, that the Company will obtain the required waivers.
Third, on August 1, 1994, US Order sold its electronic banking and bill
payment operations to VISA for $15.0 million and a 72 month royalty stream
commencing January 1, 1995 and ending December 31, 2000 (the "Royalty Period").
Of the proceeds received by US Order, $9.4 million was used to retire a portion
of its preferred stock (of which WorldCorp received $3.3 million) and vested
employee options. The remaining $5.6 million of these proceeds will be used to
fund future working capital requirements of US Order. The royalty amount is
based on the number of VISA customers using the electronic banking and bill
payment technology sold by US Order to VISA. To date, VISA has contracted with
approximately 30 U.S.-based financial institutions (including six of the
nation's top 20 banks) to offer the VISA bill pay system. No assurances can be
given as to the amount of the royalty payments that will be received from VISA.
As of this date, WorldCorp has sufficient cash reserves and likely financing
sources to meet its obligations for the foreseeable future. Similarly, having
completed the VISA transaction, US Order has sufficient cash reserves and likely
financing sources to meet its obligations for the foreseeable future. World
Airways' overall financial condition is significantly improved from this time
one year ago. World Airways' management believes it has sufficient financial
flexibility to fund its operations through borrowing capabilities with lenders
or affiliates and cost reduction activities detailed below.
BUSINESS TRENDS
The Company's air transportation business is highly seasonal. Typically,
World Airways experiences reduced demand during the first quarter for passenger
and cargo services relative to other times of the year. World Airways generally
experiences stronger results in the second and third quarters due to demand for
commercial passenger services including the annual Hadj pilgrimage. Fourth
quarter results depend upon the overall world economic climate and global trade
patterns.
19
<PAGE>
Soft demand and weakening yields have adversely affected worldwide cargo and
passenger markets. In response, World Airways has significantly increased its
worldwide sales and marketing presence by 1) selling 24.9% of its equity to MHS
Berhad, solidifying a marketing alliance with a leading aviation company in
Malaysia, 2) recruiting active outside board members with experience in
worldwide aviation and travel services, and 3) increasing its internal sales and
marketing staff from two to seven executives. Flying levels year-to-date through
October 1994 increased 13% over the same period in 1993.
As a result of its marketing alliance with MAS and increased marketing
efforts, World Airways has entered into several important contracts. First, MAS
has contracted for two MD-11 cargo aircraft for a total of 800 hours a month
over a five-year period. Operations for one aircraft began in September 1994.
The other contract commences in March 1995. Second, World Airways recently
began a six month contract with MAS for two MD-11 passenger aircraft. World
Airways is seeking to extend this contract over a long-term period. Third,
World Airways has obtained regulatory approval from the Government of Israel to
operate a scheduled service commencing in the spring of 1995.
In order to make World Airways more cost-competitive with certain passenger
and cargo carriers, and to improve cash flow, World Airways' management has
taken a series of steps to reduce operating costs. These steps generally
involve eliminating business activities that are not essential to World Airways'
operations, including eliminating those costs which customers are not prepared
to compensate for in the form of higher prices. World Airways' management
believes that these actions, which began earlier in the third quarter, may
result in improvements in operating income and cash flow of up to $16.0 million,
annually.
World Airways' cockpit and flight attendant crewmembers are covered by
collective bargaining agreements which expired in July 1992. On August 15,
1994, World Airways and the Internatioanl Brotherhood of Teamsters ("Teamsters")
executed a four-year agreement on behalf of World Airways' cockpit members,
which was ratified on September 9, 1994. The agreement contains modifications to
the crewmember work rules which will permit World Airways to take greater
advantage of the operational capabilities of the MD-11 aircraft fleet in
exchange for crewmember pay increases. World Airways is currently in
negotiations with the Teamsters to develop a new agreement for the flight
attendants.
US Order's research clearly indicated the importance of bill payment and
banking services in attracting and retaining customers. In addition, such
research indicated that consumers prefer to receive these banking services
through their local bank. The transaction with VISA helps to deliver to
consumers the banking services they demand through the channel they expect. As
a result of the VISA transaction, US Order's business shifts from that of a
retailer where the company spends significant amounts of capital up front to
acquire customers, to that of a wholesaler, where the consumer acquisition costs
are borne by the third parties such as VISA and its member banks. The company
believes that the VISA transaction sharply reduces the risk of US Order's future
performance while also expanding the business opportunities available to US
Order including customization services, smart telephones, non-financial
applications, customer service, and facilities management.
OTHER MATTERS
On August 11, 1992, WorldCorp, World Airways, and certain other commercial
paper customers of Washington Bancorporation ("WBC") were served with a
complaint by WBC as debtor-in-possession by and through the Committee of
Unsecured Creditors of WBC (the "Committee"). The complaint arises from
investment proceeds totaling $6.8 million received by WorldCorp and World
Airways from WBC in May 1990 in connection with the maturity of WBC commercial
paper. The Committee seeks to recover this amount on the grounds that these
payments constituted voidable preferences and/or fraudulent conveyances under
the Federal Bankruptcy Code and under applicable state law. On June 9, 1993,
the Company filed a motion to dismiss this litigation and intends to vigorously
contest the claim. No assurances can be given of the eventual outcome of this
litigation.
WorldCorp has never paid any cash dividends and does not plan to do so in
the foreseeable future. Both the 13 7/8% Subordinated Notes Indenture and the
indenture pursuant to which the Debentures were issued (the "Indentures")
restrict the Company's ability to pay dividends or make other distributions on
its common stock. In addition, the Indentures originally restricted the ability
of World Airways to pay dividends other than to the Company. In 1994, however,
the Company received approval from the holders of the Indentures to allow World
Airways to pay dividends to parties other than the Company.
20
<PAGE>
The $20 million credit facility also contains restrictions on World Airways'
ability to pay dividends. Under this agreement, World Airways cannot declare,
pay, or make any dividend or distribution in excess of the lesser of $4.5
million or 50% of net income for the previous nine months. In addition, World
Airways must have a cash balance of at least $7.5 million immediately after
giving effect to such dividend.
All of the funds from operations are generated by the Company's
subsidiaries. The ability of the Company and its subsidiaries to pay principal
and interest on their respective short and long-term obligations is
substantially dependent upon the payment to the Company of dividends, interest
or other charges by its subsidiaries and upon funds generated by the operations
of the subsidiaries.
As of December 31, 1993, the Company had net operating loss carryforwards,
investment tax credit carryforwards, and alternative minimum tax credit
carryforwards of $137.2 million, $9.6 million, and $2.2 million, respectively
(the "Carryforwards"). The availability of net operating loss and tax credit
carryforwards to reduce the Company's future federal income tax liability is
subject to limitations under the Internal Revenue Code of 1986, as amended (the
"Code"). Generally, these limitations restrict availability of net operating
loss and tax credit carryforwards upon an ownership change. In August 1991, the
Company experienced an ownership change, and the use of $72.6 million of net
operating loss carryforwards available to the Company from losses generated
prior to the ownership change, plus the tax credit carryforwards described
above, are limited to approximately $6.3 million annually (the "Limitation").
As a result of the transaction with MHS in February 1994, however, the
Carryforwards will be split into two components: those generated solely by
World Airways, and those generated by the remaining entities of the controlled
group. As a result, approximately $84.8 million of the consolidated net
operating loss carryforward will no longer be available to offset federal
taxable income reflected on future consolidated tax returns. Instead, the $84.8
million will be available to World Airways on a separate company basis (subject
to the Limitation). World Airways will also retain sole use of the $9.6 million
investment tax credit carryforward and the $2.2 million alternative minimum tax
credit carryforward to reduce its future federal income tax liability, subject
to limitations under the Code.
21
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
- ------------------------------------------
(a) Exhibits
--------
<TABLE>
<CAPTION>
Exhibit
No. Exhibit
------- -------
<S> <C> <C>
3.1 Certificate of Incorporation of WorldCorp, Inc. dated March 16, Incorporated
1987. [Filed as Exhibit 3.1 to WorldCorp, Inc.'s Registration by reference
Statement on Form S-4 (Commission File No. 33012735) filed on
March 19, 1987 and incorporated herein by reference.]
3.2 Amended and Restated Bylaws of WorldCorp, Inc. dated November 13, Incorporated
1987. (Filed as Exhibit 3.1 to WorldCorp, Inc.'s Annual Report on by reference
Form 10-K for the fiscal year ended December 31, 1987 and
incorporated herein by reference.)
4.1 Indenture dated as of August 1, 1987 between WorldCorp, Inc. and Incorporated
Norwest Bank of Minneapolis, N.A. (Filed as Exhibit 4.1 to by reference
Amendment No. 2 to WorldCorp, Inc.'s Form S-2 Registration
Statement (Commission File No. 33-1358276) filed August 13, 1987
and incorporated herein by reference.]
4.2 First Supplemental Indenture dated as of March 1, 1988 between Incorporated
WorldCorp, Inc. and Norwest Bank of Minneapolis, N.A. (Filed as by reference
Exhibit 4.2 to WorldCorp, Inc.'s Annual Report on Form 10-K for
the fiscal year ended December 31, 1988 and incorporated herein
by reference.)
10.1 Warrant Agreement between WorldCorp, Inc. and Drexel Burnham Incorporated
Lambert, Incorporated ("Drexel") dated as of June 30, 1988. by reference
(Filed as Exhibit 10.1 to WorldCorp, Inc.'s Form 10-Q for the
quarter ended March 31, 1989 and incorporated herein by
reference.)
10.2 Employment Agreement dated as of November 10, 1988 between Incorporated
WorldCorp, Inc. and T. Coleman Andrews, III. (Filed as Exhibit by reference
10.4 to WorldCorp, Inc.'s Annual Report on Form 10-K for the
fiscal year ended December 31, 1988 and incorporated herein by
reference.)
10.4 Aircraft Lease Agreement dated as of March 30, 1987 between World Incorporated
Airways, Inc. and The Connecticut National Bank, not in its by reference
individual capacity, but solely as Owner Trustee. (Filed as
Exhibit 10.34 to World Airways, Inc.'s Annual Report on Form 10-K
for the fiscal year ended December 31, 1986 and incorporated
herein by reference.)
10.5 Merger Agreement and Plan of Reorganization dated as of April 28, Incorporated
1987 by and among World Airways, Inc., World Merger Corporation by reference
and WorldCorp, Inc. [Filed as Exhibit 10.50 to WorldCorp, Inc.'s
Form S-2 Registration Statement (Commission File No. 33-1358276)
filed on July 31, 1987 and incorporated herein by reference.]
10.6 Assumption Agreement dated as of June 23, 1987 among WorldCorp, Incorporated
Inc., World Airways, Inc. and T. Coleman Andrews, III. [Filed as by reference
Exhibit 10.51 to WorldCorp, Inc.'s Form S-2 Registration
Statement (Commission File No. 33-1358276) filed on July 31, 1987
and incorporated herein by reference.]
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Exhibit
------- -------
<S> <C> <C>
10.7 Assumption Agreement dated as of June 23, 1987 among WorldCorp, Incorporated
Inc., World Airways, Inc. and D. Fraser Bullock. [Filed as by reference
Exhibit 10.52 to WorldCorp, Inc.'s Form S-2 Registration
Statement (Commission File No. 33-1358276) filed on July 31, 1987
and incorporated herein by reference.]
10.8 Guaranty and Amendment Agreement dated as of June 23, 1987 Incorporated
between WorldCorp, Inc. and The Connecticut National Bank, a by reference
national banking association, as Owner Trustee, with Burnham
Leasing Corporation, as Owner Participant. [Filed as Exhibit
10.55 to WorldCorp, Inc.'s Form S-2 Registration Statement
(Commission File No. 33-1358276) filed July 31, 1987 and
incorporated herein by reference.]
10.9 Form of Assumption Agreement dated as of June 23, 1987 among Incorporated
WorldCorp, Inc., World Airways, Inc. and each Indemnified Party. by reference
[Filed as Exhibit 10.60 to WorldCorp, Inc.'s Form S-2
Registration Statement (Commission File No. 33-1358276) filed on
July 31, 1987 and incorporated herein by reference.]
10.10 Agreement between World Airways, Inc. and Cockpit Crewmembers Incorporated
represented by International Brotherhood of Teamsters. [Filed by by reference
reference as Exhibit 10.66 to WorldCorp, Inc.'s Form S-3
Registration Statement (Commission File No. 2-91998) filed on
December 10, 1987 and incorporated herein by reference.]
10.11 Agreement between World Airways, Inc. and Flight Attendants Incorporated
represented by International Brotherhood of Teamsters. [Filed by reference
reference as Exhibit 10.67 to WorldCorp, Inc.'s Form S-3
Registration Statement (Commission File No. 2-91998) filed on
December 10, 1987 and incorporated herein by reference.]
10.12 Agreement between World Airways, Inc. and Mechanics represented Incorporated
by the International Brotherhood of Teamsters. (Filed as Exhibit by reference
10.41 to WorldCorp, Inc.'s Annual Report on Form 10-K for the
fiscal year ended December 31, 1988 and incorporated herein by
reference.)
10.13 Agreement between World Airways, Inc. and Stock Clerks and Store Incorporated
Room Employees represented by the International Brotherhood of by reference
Teamsters. (Filed as Exhibit 10.42 to WorldCorp, Inc.'s Annual
Report on Form 10-K for the fiscal year ended December 31, 1988
and incorporated herein by reference.)
10.14 Office Lease - The Hallmark Building dated as of May 16, 1987 Incorporated
between WorldCorp, Inc. and GT Renaissance Centre Limited by reference
Partnership. (Filed as Exhibit 10.36 to WorldCorp, Inc.'s Annual
Report on Form 10-K for the fiscal year ended December 31, 1989
and incorporated herein by reference.)
10.15 Lease Amendment dated as of June 27, 1989 between WorldCorp, Inc. Incorporated
and GT Renaissance Centre Limited Partnership. (Filed as Exhibit by reference
10.37 to WorldCorp, Inc.'s Annual Report on Form 10-K for the
fiscal year ended December 31, 1989 and incorporated herein by
reference.)
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Exhibit
------- -------
<S> <C> <C>
10.16 Office Lease - The Hallmark Building dated as of September 20, Incorporated
1989 between World Airways, Inc. and GT Renaissance Centre Limited by reference
Partnership. (Filed as Exhibit 10.38 to WorldCorp, Inc's Annual
Report on form 10-K for the fiscal year ended December 31, 1989
and incorporated herein by reference.)
10.17 Warrant Agreement dated as of July 22, 1989 between WorldCorp, Incorporated
Inc. and Charles W. Pollard. (Filed as Exhibit 10.45 to WorldCorp, by reference
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1989 and incorporated herein by reference.)
10.18 Warrant Agreement dated as of July 22, 1989 between WorldCorp, Incorporated
Inc. and T. Coleman Andrews. (Filed as Exhibit 10.46 to WorldCorp, by reference
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1989 and incorporated herein by reference.)
10.19 Warrant Agreement dated as of February 23, 1990 between WorldCorp, Incorporated
Inc. and D. Fraser Bullock. (Filed as Exhibit 10.47 to WorldCorp, by reference
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1989 and incorporated herein by reference.)
10.20 WorldCorp, Inc. Employee Savings and Stock Ownership Plan. (Filed Incorporated
Exhibit 10.49 to WorldCorp, Inc.'s Annual Report on Form 10-K by reference
as for the fiscal year ended December 31, 1989 and incorporated
herein by reference.)
10.21 Amendment No. 1 to WorldCorp Inc. Employee Savings and Stock Incorporated
Ownership Plan. (Filed as Exhibit 10.50 to WorldCorp, Inc.'s by reference
Annual Report on Form 10-K for the fiscal year ended December 31,
1989 and incorporated herein by reference.)
10.22 Loan and Security Agreement dated as of May 24, 1989 between Incorporated
WorldCorp Employee Savings and Stock Ownership Trust and American by reference
Security Bank, N.A. (Filed as Exhibit 10.51 to WorldCorp, Inc.'s
Annual Report on Form 10-K for the fiscal year ended December 31,
1989 and incorporated herein by reference.)
10.23 Guaranty Agreement dated as of May 24, 1989 by WorldCorp, Inc. for Incorporated
the benefit of American Security Bank, N.A. (Filed as Exhibit by reference
10.52 to WorldCorp, Inc.'s Annual Report on Form 10-K for the
fiscal year ended December 31, 1989 and incorporated herein by
reference.)
10.24 Guarantor's Security Agreement dated as of May 24, 1989 between Incorporated
WorldCorp, Inc. and American Security Bank, N.A. (Filed as Exhibit by reference
10.53 to WorldCorp, Inc.'s Annual Report on Form 10-K for the
fiscal year ended December 31, 1989 and incorporated herein by
reference.)
10.25 Warrant Agreement dated as of August 25, 1986 between World Incorporated
Airways, Inc. and T. Coleman Andrews, III. [Filed as Exhibit 10.13 by reference
to WorldCorp, Inc.'s Form S-4 Registration Statement (Commission
File No. 33-12735), filed March 19, 1987 and incorporated herein
by reference.]
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Exhibit
------- -------
<S> <C> <C>
10.26 Warrant Agreement dated as of August 25, 1986 between World Incorporated
Airways, Inc. and D. Fraser Bullock. [Filed as Exhibit 10.14 to by reference
WorldCorp, Inc.'s Form S-4 Registration Statement (Commission File
No. 33-12735), filed March 19, 1987 and incorporated herein by
reference.]
10.27 Aircraft Warranty Bill of Sale dated as of January 15, 1991 between Incorporated
World Airways, Inc. and First Security Bank of Utah, N.A., not in its by reference
individual capacity, but solely as Owner Trustee. (Filed as Exhibit
10.46 to WorldCorp, Inc.'s Annual Report on Form 10-K for the fiscal
year ended December 31, 1990 and incorporated herein by reference.)
10.28 Aircraft Lease Agreement dated as of January 15, 1991 between World Incorporated
Airways, Inc. and First Security Bank of Utah, N.A., not in its by reference
individual capacity, but solely as Owner Trustee. (Filed as Exhibit
10.47 to WorldCorp, Inc.'s Annual Report on Form 10-K for the fiscal
year ended December 31, 1990 and incorporated herein by reference.)
10.29 Loan and Security Agreement dated as of February 26, 1992 between Incorporated
WorldCorp, Inc. and US Order Incorporated. (Filed as Exhibit 10.38 by reference
to WorldCorp, Inc.'s Annual Report on Form 10-K for the fiscal year
ended December 31, 1991 and incorporated herein by reference.)
10.30 Aircraft Lease Agreement I dated as of February 12, 1992 between Incorporated
McDonnell Douglas Finance Corporation and World Airways, Inc. by reference
(Filed as Exhibit 10.39 to WorldCorp, Inc.'s Annual Report on Form
10-K for the fiscal year ended December 31, 1991 and incorporated
by reference.)
10.31 Aircraft Lease Agreement II dated as of February 12, 1992 between Incorporated
McDonnell Douglas Finance Corporation and World Airways, Inc. by reference
(Filed as Exhibit 10.40 to WorldCorp, Inc.'s Annual Report on Form
10-K for the fiscal year ended December 31, 1991 and incorporated
herein by reference.)
10.32 Aircraft Engine Purchase Agreement dated as of April 26, 1991 between Incorporated
Terandon Leasing Corporation and World Airways, Inc. (Filed as by reference
Exhibit 10.41 to WorldCorp, Inc.'s Annual Report on Form 10-K for
the fiscal year ended December 31, 1991 and incorporated herein by
reference.)
10.33 Aircraft Engine Lease Agreement dated as of April 26, 1991 between Incorporated
Terandon Leasing Corporation and World Airways, Inc. (Filed as by reference
Exhibit 10.42 to WorldCorp, Inc.'s Annual Report on Form 10-K for
the fiscal year ended December 31, 1991 and incorporated herein by
reference.)
10.34 Guaranty Agreement I dated as of February 12, 1992 between Incorporated
McDonnell Douglas Finance Corporation and World Airways, Inc. by reference
(Filed as Exhibit 10.43 to WorldCorp, Inc.'s Annual Report on Form
10-K for the fiscal year ended December 31, 1991 and incorporated
herein by reference.)
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Exhibit
------- -------
<S> <C> <C>
10.35 Guaranty Agreement II dated as of February 12, 1992 between Incorporated
McDonnell Douglas Finance Corporation and World Airways, Inc. by reference
(Filed as Exhibit 10.44 to WorldCorp, Inc.'s Annual Report on Form
10-K for the fiscal year ended December 31, 1991 and incorporated
herein by reference.)
10.36 Series A Preferred Stock Purchase Agreement dated as of September Incorporated
14, 1990 between US Order, Inc. and WorldCorp, Inc. (Filed as by reference
Exhibit 10.45 to WorldCorp, Inc.'s Annual Report on Form 10-K for
the fiscal year ended December 31, 1991 and incorporated herein by
reference.)
10.37 Stock Restriction Agreement dated as of September 14, 1990 between Incorporated
WorldCorp, Inc., William F. Gorog, Jonathan M. Gorog, Peter M. by reference
Gorog, Henry R. Nichols, William N. Melton and John Porter. (Filed
as Exhibit 10.46 to WorldCorp, Inc.'s Annual Report on Form 10-K
for the fiscal year ended December 31, 1991 and incorporated herein
by reference.)
10.38 Aircraft Lease Agreement for Aircraft Serial Number 48518 dated as Incorporated
of September 30, 1992 between World Airways, Inc. and International by reference
Lease Finance Corporation. (Filed as Exhibit 10.38 to WorldCorp,
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1992 and incorporated herein by reference.)
10.39 Aircraft Lease Agreement for Aircraft Serial Number 48519 dated as Incorporated
of September 30, 1992 between World Airways, Inc. and International by reference
Lease Finance Corporation. (Filed as Exhibit 10.39 to WorldCorp,
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1992 and incorporated herein by reference.)
10.40 Aircraft Lease Agreement for Aircraft Serial Number 48520 dated as Incorporated
of September 30, 1992 between World Airways, Inc. and International by reference
Lease Finance Corporation. (Filed as Exhibit 10.40 to WorldCorp,
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1992 and incorporated herein by reference.)
10.41 Aircraft Lease Agreement for Aircraft Serial Number 48633 dated as Incorporated
of September 30, 1992 between World Airways, Inc. and International by reference
Lease Finance Corporation. (Filed as Exhibit 10.41 to WorldCorp,
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1992 and incorporated herein by reference.)
10.42 Aircraft Lease Agreement for Aircraft Serial Number 48631 dated as Incorporated
of September 30, 1992 between World Airways, Inc. and International by reference
Lease Finance Corporation. (Filed as Exhibit 10.42 to WorldCorp,
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1992 and incorporated herein by reference.)
10.43 Aircraft Lease Agreement for Aircraft Serial Number 48632 dated as Incorporated
Incorporated of September 30, 1992 between World Airways, Inc. and by reference
International by reference Lease Finance Corporation. (Filed as
Exhibit 10.43 to WorldCorp, Inc.'s Annual Report on Form 10-K for
the fiscal year ended December 31, 1992 and incorporated herein by
reference.)
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Exhibit
------- -------
<S> <C> <C>
10.44 AMC contract between Air Mobility Command and World Airways, Inc. Incorporated
effective January 1, 1993. (Filed as Exhibit 10.44 to WorldCorp, by reference
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1992 and incorporated herein by reference.)
10.45 MD-11 Aircraft Charter Agreement dated as of March 18, 1993 be- Incorporated
tween World Airways, Inc. and PT. Garuda Indonesia. (Filed as by reference
Exhibit 10.45 to WorldCorp, Inc.'s Annual Report on Form 10-K for
the fiscal year ended December 31, 1992 and incorporated herein by
reference.)
10.45 DC10-30 Aircraft Charter Agreement dated as of March 18, 1993 be- Incorporated
tween World Airways, Inc. and PT. Garuda Indonesia. (Filed as by reference
Exhibit 10.45 to WorldCorp, Inc.'s Annual Report on Form 10-K for
the fiscal year ended December 31, 1992 and incorporated herein by
reference.)
10.46 Accounts Receivable Management and Security Agreement dated as of Incorporated
December 7, 1993 between World Airways, Inc. and BNY Financial by reference
Corporation. (Filed as Exhibit 10.46 to WorldCorp, Inc.'s Annual
Report on Form 10-K for the fiscal year ended December 31, 1993 and
incorporated herein by reference.)
10.47 Aircraft Parts Security Agreement dated as of December 7, 1993 Incorporated
between World Airways, Inc. and BNY Financial Corporation. (Filed by reference
as Exhibit 10.47 to WorldCorp, Inc.'s Annual Report on Form 10-K
for the fiscal year ended December 31, 1993 and incorporated herein
by reference.)
10.48 Warrant Certificate dated as of December 7, 1993 between WorldCorp, Incorporated
Inc. and BNY Financial Corporation. (Filed as Exhibit 10.48 to by reference
WorldCorp Inc.'s Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 and incorporated herein by reference.)
10.49 AMC contract dated as of October 1, 1993 between Air Mobility Incorporated
Command and World Airways, Inc. (Filed as Exhibit 10.49 to World- by reference
Corp Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 and incorporated herein by reference.)
10.50 Subscription and Preferred Stock Purchase Agreement dated as of Incorporated
December 20, 1993 between US Order, Inc. and Knight-Ridder, Inc. by reference
(Filed as Exhibit 10.50 to WorldCorp Inc.'s Annual Report on Form
10-K for the fiscal year ended December 31, 1993 and incorporated
herein by reference.)
10.51 Subscription and Preferred Stock Purchase Agreement dated as of Incorporated
December 21, 1993 between US Order, Inc. and WorldCorp, Inc. (Filed by reference
as Exhibit 10.51 to WorldCorp Inc.'s Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 and incorporated herein by
reference.)
10.52 Subscription and Preferred Stock Purchase Agreement dated as of Incorporated
December 20, 1993 between US Order, Inc. and Jerome Kohlberg, Jr. by reference
(Filed as Exhibit 10.52 to WorldCorp Inc.'s Annual Report on Form
10-K for the fiscal year ended December 31, 1993 and incorporated
herein by reference.)
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Exhibit
------- -------
<S> <C> <C>
10.53 Subscription and Preferred Stock Purchase Agreement dated as of Incorporated
December 21, 1993 between US Order, Inc. and Hoechst Celanese by reference
Corporation Employee Benefit Master Trust. (Filed as Exhibit 10.53
to WorldCorp Inc.'s Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 and incorporated herein by reference.)
10.54 Series C Preferred Stock Purchase Agreement dated as of December Incorporated
21, 1993 between US Order, Inc. and VeriFone, Inc. (Filed as by reference
Exhibit 10.54 to WorldCorp Inc.'s Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 and incorporated herein by
reference.)
10.55 Registration Rights Agreement dated as of December 21, 1993 between Incorporated
US Order, Inc. and VeriFone, Inc. (Filed as Exhibit 10.55 to by reference
WorldCorp Inc.'s Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 and incorporated herein by reference.)
10.56 Technology License Agreement dated as of December 21, 1993 between Incorporated
US Order, Inc. and VeriFone, Inc. (Filed as Exhibit 10.56 to by reference
WorldCorp Inc.'s Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 and incorporated herein by reference.)
10.57 Investment Agreement dated as of December 21, 1993 by and among US Incorporated
Order, Inc., WorldCorp, Inc., and VeriFone, Inc. (Filed as Exhibit by reference
10.57 to WorldCorp Inc.'s Annual Report on Form 10-K for the fiscal
year ended December 31, 1993 and incorporated herein by reference.)
10.58 Settlement Agreement dated as of February 8, 1994 between World Incorporated
Airways, Inc, WorldCorp, Inc., Concord Asset Management, Inc., by reference
Concord Leasing, Inc., and The CIT Group. (Filed as Exhibit 10.58
to WorldCorp Inc.'s Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 and incorporated herein by reference.)
10.59 Lease Agreement dated as of June 1, 1993 between World Airways, Incorporated
Inc. and Mattei Corporation. (Filed as Exhibit 10.59 to WorldCorp by reference
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 and incorporated herein by reference.)
10.60 Lease Agreement dated as of March 30, 1993 between World Airways, Incorporated
Inc. and Tinicum Properties Associates Limited Partnership, as by reference
amended by First Amendment to Lease dated July 9, 1993. (Filed as
Exhibit 10.60 to WorldCorp Inc.'s Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 and incorporated herein by
reference.)
10.61 Lease Agreement dated as of January 25, 1993 between World Flight Incorporated
Crew Services, Inc. and Sakioka Farms. (Filed as Exhibit 10.61 to by reference
WorldCorp Inc.'s Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 and incorporated herein by reference.)
10.62 Consignment Agreement dated as of September 30, 1993 between World Incorporated
Airways Inc. and The Memphis Group. (Filed as Exhibit 10.62 to by reference
WorldCorp Inc.'s Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 and incorporated herein by reference.)
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Exhibit
------- -------
<S> <C> <C>
10.63 Assignment and Assumption and Consent and Release for Aircraft Incorporated
Serial Number 47818 dated as of July 20, 1993 among World Airways, by reference
Inc., WorldCorp, Inc., McDonnell Douglas Corporation, and McDonnell
Douglas Finance Corporation. (Filed as Exhibit 10.63 to WorldCorp
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 and incorporated herein by reference.)
10.64 Assignment and Assumption and Consent and Release for Aircraft Incorporated
Serial Number 46999 dated as of July 9, 1993 among World Airways by reference
Inc., WorldCorp, Inc., McDonnell Douglas Corporation, and McDonnell
Douglas Finance Corporation. (Filed as Exhibit 10.64 to WorldCorp
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 and incorporated herein by reference.)
10.65 Aircraft Lease Agreement for Aircraft Serial Number 48458 dated as Incorporated
of January 15, 1993 between World Airways, Inc. and Wilmington by reference
Trust Company/GATX Capital Corporation. (Filed as Exhibit 10.65 to
WorldCorp Inc.'s Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 and incorporated herein by reference.)
10.66 Aircraft Lease Supplement for Aircraft Serial Number 48458 dated as Incorporated
of April 23, 1993 between World Airways, Inc. and Wilmington Trust by reference
Company/GATX Capital Corporation. (Filed as Exhibit 10.66 to World-
Corp Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 and incorporated herein by reference.)
10.67 Aircraft Spare Parts Lease Agreement dated as of April 15, 1993 Incorporated
between World Airways, Inc. and GATX Capital Corporation. (Filed as by reference
Exhibit 10.67 to WorldCorp Inc.'s Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 and incorporated herein by
reference.)
10.68 Amendment No. 1 To Aircraft Lease Agreement for Aircraft Serial Incorporated
Number 48518 dated as of November 1993 between World Airways, Inc. by reference
and International Lease Finance Corporation. (Filed as Exhibit
10.68 to WorldCorp Inc.'s Annual Report on Form 10-K for the fiscal
year ended December 31, 1993 and incorporated herein by reference.)
10.69 Amendment No. 2 to Aircraft Lease Agreement for Aircraft Serial Incorporated
Number 48518 dated as of March 8, 1993 between World Airways, Inc. by reference
and International Lease Finance Corporation. (Filed as Exhibit
10.69 to WorldCorp Inc.'s Annual Report on Form 10-K for the fiscal
year ended December 31, 1993 and incorporated herein by reference.)
10.70 Assignment of Rights for Aircraft Serial Number 48518 dated as of Incorporated
March 8, 1993 between World Airways, Inc. and International Lease by reference
Finance Corporation. (Filed as Exhibit 10.70 to WorldCorp Inc.'s
Annual Report on Form 10-K for the fiscal year ended December 31,
1993 and incorporated herein by reference.)
10.71 Assignment of Rights for Aircraft Engines Serial Numbers P723942, Incorporated
P723945, and P723943 dated as of March 1, 1993 between World by reference
Airways, Inc. and International Lease Finance Corporation. (Filed
as Exhibit 10.71 to WorldCorp Inc.'s Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 and incorporated herein by
reference.)
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Exhibit
------- -------
<S> <C> <C>
10.72 Agency Agreement for Aircraft Serial Number 48518 dated as of Incorporated
January 15, 1993 between World Airways, Inc. and International by reference
Lease Finance Corporation. (Filed as Exhibit 10.72 to WorldCorp
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 and incorporated herein by reference.)
10.73 Amendment No. 2 to Aircraft Lease Agreement for Aircraft Serial Incorporated
Number 48437 dated as of March 31, 1993 between World Airways, Inc. by reference
and International Lease Finance Corporation. (Filed as Exhibit
10.73 to WorldCorp Inc.'s Annual Report on Form 10-K for the fiscal
year ended December 31, 1993 and incorporated herein by reference.)
10.74 Amendment No. 3 to Aircraft Lease Agreement for Aircraft Serial Incorporated
Number 48437 dated as of April 15, 1993 between World Airways, Inc. by reference
and International Lease Finance Corporation. (Filed as Exhibit
10.74 to WorldCorp Inc.'s Annual Report on Form 10-K for the fiscal
year ended December 31, 1993 and incorporated herein by reference.)
10.75 Agency Agreement for Aircraft Serial Number 48437 dated as of Incorporated
January 15, 1993 between World Airways, Inc. and International by reference
Lease Finance Corporation. (Filed as Exhibit 10.75 to WorldCorp
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 and incorporated herein by reference.)
10.76 Assignment of Rights for Aircraft Serial Number 48437 dated as of Incorporated
April 15, 1993 between World Airways, Inc. and International Lease by reference
Finance Corporation. (Filed as Exhibit 10.76 to WorldCorp Inc.'s
Annual Report on Form 10-K for the fiscal year ended December 31,
1993 and incorporated herein by reference.)
10.77 Assignment of Rights for Aircraft Engines Serial Numbers P723913, Incorporated
P723912, and P723914 dated as of April 15, 1993 between World by reference
Airways, Inc. and International Lease Finance Corporation. (Filed
as Exhibit 10.77 to WorldCorp Inc.'s Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 and incorporated herein by
reference.)
10.78 Amendment No. 2 to Aircraft Lease Agreement for Aircraft Serial Incorporated
Number 48520 dated as of April 22, 1993 between World Airways, Inc. by reference
and International Lease Finance Corporation. (Filed as Exhibit
10.78 to WorldCorp Inc.'s Annual Report on Form 10-K for the fiscal
year ended December 31, 1993 and incorporated herein by reference.)
10.79 Agency Agreement for Aircraft Serial Number 48520 dated as of Incorporated
January 15, 1993 between World Airways, Inc. and International by reference
Lease Finance Corporation. (Filed as Exhibit 10.79 to WorldCorp
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 and incorporated herein by reference.)
10.80 Assignment of Rights for Aircraft Serial Number 48520 dated as of Incorporated
April 22, 1993 between World Airways, Inc. and International Lease by reference
Finance Corporation. (Filed as Exhibit 10.80 to WorldCorp Inc.'s
Annual Report on Form 10-K for the fiscal year ended December 31,
1993 and incorporated herein by reference.)
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Exhibit
------- -------
<S> <C> <C>
10.81 Assignment of Rights for Aircraft Engines Serial Numbers P723957, Incorporated
P723958, and P723956 dated as of March 1, 1993 between World by reference
Airways, Inc. and International Lease Finance Corporation. (Filed
as Exhibit 10.81 to WorldCorp Inc.'s Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 and incorporated herein by
reference.)
10.82 Aircraft Charter Agreement dated as of July 24, 1993 between World Incorporated
Airways, Inc. and Malaysian Airline System Berhad. (Filed as by reference
Exhibit 10.82 to WorldCorp Inc.'s Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 and incorporated herein by
reference.)
10.83 Amendment No. 1 to Aircraft Lease Agreement for Aircraft Serial Incorporated
Numbers 46835, 46837, and 46820 dated as of May 14, 1993 between by reference
World Airways, Inc. and The Connecticut National Bank (assigned to
Federal Express Corporation). (Filed as Exhibit 10.83 to WorldCorp
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 and incorporated herein by reference.)
10.84 Amendment No. 2 to Aircraft Lease Agreement for Aircraft Serial Incorporated
Numbers 46835, 46837, and 47820 dated as of May 14, 1993 between by reference
World Airways, Inc. and The Connecticut National Bank (assigned to
Federal Express Corporation). (Filed as Exhibit 10.84 to WorldCorp
Inc.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 and incorporated herein by reference.)
10.85 Return Agreement for Aircraft Serial Numbers 47818 and 46999 dated Incorporated
as of July 9, 1993 among World Airways, Inc., WorldCorp, Inc., by reference
International Lease Finance Corporation, McDonnell Douglas
Corporation, and McDonnell Douglas Finance Corporation. (Filed as
Exhibit 10.85 to WorldCorp Inc.'s Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 and incorporated herein by
reference.)
10.86/1/ Acquisition Agreement Among VISA International Service Association, Incorporated
US Order, Inc. WorldCorp, Inc. dated as of July 15, 1994. by reference
11.1 Statement on Calculation of Earnings Per Common Share. Incorporated
by reference
</TABLE>
/1/ Confidential stratment has been requested. The copy filed as an exhibit
omits the information subject to the confidentiality request. Confidential
portions so omitted have been filed separately with the Commission.
(b) Reports on Form 8-K.
--------------------
None.
31
<PAGE>
SIGNATURES
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, thereunto duly authorized.
WORLDCORP, INC.
By: /s/ T. Coleman Andrews, III
---------------------------
(T. Coleman Andrews, III)
Chief Executive Officer, President,
and Principal Accounting Officer
Date: November 14, 1994
32
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Consolidated Balance Sheets and Consolidated Statement of Operation and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 8,087
<SECURITIES> 0
<RECEIVABLES> 8,307
<ALLOWANCES> 306
<INVENTORY> 0
<CURRENT-ASSETS> 30,627
<PP&E> 39,504
<DEPRECIATION> 11,846
<TOTAL-ASSETS> 89,372
<CURRENT-LIABILITIES> 49,023
<BONDS> 109,831
<COMMON> 15,375
0
0
<OTHER-SE> (99,189)
<TOTAL-LIABILITY-AND-EQUITY> 89,372
<SALES> 0
<TOTAL-REVENUES> 162,445
<CGS> 0
<TOTAL-COSTS> 150,161
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 272
<INTEREST-EXPENSE> 9,218
<INCOME-PRETAX> 15,772
<INCOME-TAX> (97)
<INCOME-CONTINUING> 13,635
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,635
<EPS-PRIMARY> 0.89
<EPS-DILUTED> 0.79
</TABLE>
