Se UC eye y CreoContents Financial Highlights Message to Shareholders Operating Review Marketing, Sales and Customer Service Employees Air Operations Ground Operations Data Systems and Telecommunications Regulatory Affairs Operations Planning Finance and Administration Statements of Income Balance Sheets Statements of Changes in Stockholders’ Investment Statements of Changes in Financial Position Notes to Financial Statements and Auditors’ Report Management's Discussion and Analysis of Statements of Income Five-Year Summary Directors and Officers Corporate Information eoxe 12 14 16 18 20 at 22. 23 25 26 27 35, 37 Cover: A courier in a company van lays tracks in new snow near Boulder, Col- orado, delivering one of the 11.7 million shipments handied by Federal Express in fiscal 1979. The Company maintains overnight service on all traffic lanes, from the smallest to the largest cities, nationwide. Description of Business Federal Express Corporation is ‘America's airine for small packages. Using its own planes, radio-dispatched vans and central sorting facility in Mem- his, Federal Express picks up, ties and delivers packages, door-to-door, each business day to 172 major mar- kets coast-to-coast In addition, Federal Express, through an agreement with Air Canada, pro- vides high-priority, customs-cleared service between the United States and 31 Canadian markets, Federal Express Corporation was in- corporated on June 24, 1971 under the laws of the State of Delaware. The company is headquartered in Memphis, Tennessee. Services include overnight and second-day delivery, special han- dling of restricted articles and secure transport of classified materials.Absolutely, Positively Overnight Federal Express’ Unique Delivery ‘System. is in its unique and disarm: ingly simple system of package routing and delivery that Federal Express steps away from the crowd. As diagramed below, it works lke ths: ‘each afternoon Federal Express vans ‘across the country pick up packages addressed to consignees in any of 10,000 communities in the United Siates. These packages, in turn, are loaded on airplanes owned or leased by Federal Express. All airplanes fly toa central sorting facility in Memphis, most arriving between midnight and 1:00 a.m. ‘The packages are unloaded, sorted by destination, and reloaded on the air- craft, The airplanes, in turn, tly back to the point of origin carrying only those packages destined for that area Courier vans then deliver the packages that morning. Total time elapsed from pickup and delivery? Between 14 and 2é hours. Afternoon Responding 1o calls fom shippers wanting small packages delvered ‘overnight, Federal Express outers make pk-ups and return to stations, whare packages are Toaged on company-owned or leased planes The benefits of such a system are ap- parent. Once a package enters the Federal Express system, itis handled exclusively by Federal Express person- nel using Federal Express equipment, Keeping packages under the exclusive supervision of Federal Express reduces: claims to a fraction of those experi= enced by others in the industry. And the service level—the percentage of total packages delivered before noon at the correct destination—is unmatched in the industry. Itis through maintaining control of shipments, and through the dedication ofits employees in making the system work, that Federal Express’ claim of “Absolutely, Positively Overnight!” be- ‘comes more than an idle promise. Evening From airports navonwide, area fty packages to canta sortng lidnight to 2:30 a.m. Packages are sorted by destina tion an reloaded on airrat facity in Memphis, Tennessee > Fay im> ©) im imp Ce) eae Before Dawn Fedora Express planes return 0 the cites they eae tom, loaded vith packages addressed torecio fonts in areas served by arports in thase tes Federal Express’ efficent nub~ ‘and-epoke system Gepicted in this route map. Compary aircraft fy cargo toa Memphis hub where itl sored and fown to destination Cites. Domestic operations are ‘ecompished exclusively by Fes fetal Express people and equip ‘ent wth any one stop forthe soft processin Memphis, Before Noon [At Federal Express stations, packages are cored by routes ‘and colvered by couriers toad ‘ressees, completing an overnight oor tooo ete. |