UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 31, 2013
FedEx Corporation
(Exact name of registrant as specified in its charter)
Commission File Number 1-15829
| Delaware | 62-1721435 | |
| (State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) | |
| 942 South Shady Grove Road, Memphis, Tennessee | 38120 | |
| (Address of principal executive offices) | (ZIP Code) | |
Registrant’s telephone number, including area code: (901) 818-7500
Federal Express Corporation
(Exact name of registrant as specified in its charter)
Commission File Number 1-7806
| Delaware | 71-0427007 | |
| (State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) | |
| 3610 Hacks Cross Road, Memphis, Tennessee | 38125 | |
| (Address of principal executive offices) | (ZIP Code) | |
Registrant’s telephone number, including area code: (901) 369-3600
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
SECTION 2. FINANCIAL INFORMATION.
| Item 2.02. | Results of Operations and Financial Condition. |
Attached as Exhibit 99.1 and incorporated herein by reference is a copy of FedEx Corporation’s press release, dated June 3, 2013, relating to the matters described below in Items 2.05 and 2.06 of this report, which will be included in FedEx’s financial results for the fourth quarter ended May 31, 2013. The press release is being furnished pursuant to Item 2.02 of Form 8-K and General Instruction B.2 thereunder. The information in the release shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
| Item 2.05. | Costs Associated with Exit or Disposal Activities. |
| Item 2.06. | Material Impairments. |
On May 31, 2013, the Board of Directors of FedEx Corporation approved the permanent retirement from service of two Airbus A310-200 aircraft and four related engines, three Airbus A310-300 aircraft and two related engines, five Boeing MD10-10 aircraft and 15 related engines, and rotables. As a consequence, a non-cash impairment charge of $100 million ($63 million, net of tax, or $0.20 per diluted share) was recorded in the fourth quarter of fiscal 2013. The decision to permanently retire these aircraft aligns with the plans of Federal Express Corporation (“FedEx Express”) to modernize its aircraft fleet and improve its global network. FedEx does not expect to be required to make any current or future cash expenditures as a result of the impairment.
In addition, on May 31, 2013, the Board of Directors of FedEx Corporation approved shortening the depreciable lives of the following aircraft and related engines: 47 Boeing MD10-10 aircraft and 172 related engines, 13 Boeing MD10-30 aircraft and 55 related engines, and 16 Airbus A310-200 aircraft and 60 related engines. This will accelerate the retirement of these aircraft to continue our fleet modernization plan of replacing older, less-efficient and less reliable aircraft with modern aircraft to build a fleet with higher reliability and better cost efficiency. The impact of accelerating the retirement of these aircraft will result in additional year-over-year depreciation expense of $74 million in the fiscal year ending May 31, 2014.
As of July 1, 2013, FedEx Express will complete the final retirement of the B727-200 fleet.
Certain statements in this report are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to future events and financial performance. These forward-looking statements involve risks and uncertainties. Actual results may differ materially from those contemplated (expressed or implied) by such forward-looking statements, because of, among other things, the risks and uncertainties you can find in our press releases and other SEC filings, including the risk factors identified under the heading “Risk Factors” in “Management’s Discussion and Analysis of Results of Operations and Financial Condition” in our most recent annual report on Form 10-K, as updated by our quarterly reports on Form 10-Q.
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SECTION 9. FINANCIAL STATEMENTS AND EXHIBITS.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. The following exhibit is being furnished as part of this Report. |
| Exhibit |
Description | |
| 99.1 | Press Release of FedEx Corporation dated June 3, 2013. | |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
| FedEx Corporation | ||||||
| Date: June 3, 2013 | By: | /s/ HERBERT C. NAPPIER | ||||
| Herbert C. Nappier | ||||||
| Staff Vice President and Corporate Controller | ||||||
| Federal Express Corporation | ||||||
| Date: June 3, 2013 | By: | /s/ J. RICK BATEMAN | ||||
| J. Rick Bateman | ||||||
| Vice President and Worldwide Controller | ||||||
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EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Press Release of FedEx Corporation dated June 3, 2013. | |
Exhibit 99.1
FOR IMMEDIATE RELEASE
FedEx Corp. Accelerates Aircraft Retirements
Board Increases Quarterly Dividend
MEMPHIS, Tenn., June 3, 2013 … FedEx Corp. (NYSE: FDX) announced today it had permanently retired or will accelerate the retirement of 86 aircraft and 308 related engines as it continues to modernize its aircraft fleet and improve the global network of FedEx Express.
The permanent retirement of aircraft and related engines announced today includes:
| • | Two A310-200 aircraft and four related engines; |
| • | Three A310-300 aircraft and two related engines; and |
| • | Five MD10-10 aircraft and 15 related engines. |
The impact of retiring these aircraft, engines and parts resulted in an impairment charge of $100 million recorded in May 2013.
In addition, FedEx will accelerate by several years the retirement of:
| • | 47 MD10-10 aircraft and 172 related engines; |
| • | 13 MD10-30 aircraft and 55 related engines; and |
| • | 16 A310-200 aircraft and 60 related engines. |
As of July 1, 2013, FedEx Express will complete the final retirement of the B727-200 fleet.
“We are modernizing our aircraft fleet by retiring older, less-efficient, and less-reliable aircraft and replacing them with modern aircraft to build a fleet with higher reliability and better cost efficiency,” said David J. Bronczek, president and chief executive officer of FedEx Express. “With the planned acquisition of new aircraft and projected slower economic growth than previously forecast, FedEx Express is lowering maintenance costs by aggressively parking and retiring aircraft.”
The impact of accelerating the retirement of aircraft will result in additional year-over-year depreciation expense of $74 million in FY14.
FedEx Express Aircraft Fleet Facts
| • | As of Feb. 28, 2013, FedEx Express’s fleet totaled 660 aircraft, including 368 jet aircraft. |
| • | During the four quarters ended Feb. 28, 2013, FedEx Express spent $3.8 billion on 1.2 billion gallons of jet fuel. |
| • | The B757 is significantly more fuel efficient per pound of payload and has 20% additional payload capacity than the B727 it replaces. |
| • | The B767 will provide similar capacity as the MD10s, with improved reliability, an approximate 30% increase in fuel efficiency and a minimum of a 20% reduction in unit operating costs. |
| • | The B767 shares spare parts, tooling and flight simulators with the B757. |
Dividend Declaration
The Board of Directors today declared a quarterly cash dividend of $0.15 per share on FedEx Corporation common stock, an increase of $0.01 per share over the previous dividend payment. The dividend is payable on July 1, 2013 to stockholders of record at the close of business on June 17, 2013. FedEx remains committed to paying higher dividends to shareowners in years to come.
Corporate Overview
FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $44 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world’s most admired and trusted employers, FedEx inspires its more than 300,000 team members to remain “absolutely, positively” focused on safety, the highest ethical and professional standards and the needs of their customers and communities. For more information, visit news.fedex.com.
Certain statements in this press release may be considered forward-looking statements, such as statements relating to management’s views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the global markets in which we operate, legal challenges or changes related to FedEx Ground’s owner-operators, new U.S. domestic or international government regulation, the impact from any terrorist activities or international conflicts, our ability to effectively operate, integrate and leverage acquired businesses, changes in fuel prices and currency exchange rates, our ability to match capacity to shifting volume levels and other factors which can be found in FedEx Corp.’s and its subsidiaries’ press releases and filings with the SEC.
Media Contact: Jess Bunn 901-818-7463
Investor Contact: Mickey Foster 901-818-7468
Home Page: fedex.com
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