Federal Express 1998 Annual Report Download - page 42

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P40 FDX CORPORATION
NOTE 3: ACCRUED EXPENSES
May 31
In thousands 1998 1997
Insurance $ 292,173 $ 266,397
Compensated absences 278,550 260,724
Employee benefits 190,056 145,556
Taxes other than income taxes 188,464 159,180
Salaries 143,876 126,030
Aircraft overhaul 73,643 84,006
Other 234,138 181,146
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$1,400,900 $1,223,039
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
No. 128, “Earnings Per Share,” basic earnings per
share is computed by dividing net income by the number
of weighted-average common shares outstanding during
the year. Diluted earnings per share is computed by
dividing net income by the number of weighted-average
common and common equivalent shares outstanding
during the year (See Note 8).
Recent pronouncements.
In 1999, the Company will
adopt the provisions of three Statements of Financial
Accounting Standards (“SFAS”) recently issued by the
Financial Accounting Standards Board. SFAS No. 130,
“Reporting Comprehensive Income,” establishes stan-
dards for displaying comprehensive income and its
components in a full set of general purpose financial
statements. SFAS No. 131, “Disclosures about Seg-
ments of an Enterprise and Related Information,” estab-
lishes standards for reporting information about
operating segments in annual financial statements and
requires reporting selected information about operating
segments in interim financial reports issued to share-
holders. SFAS No. 132, “Employers’ Disclosures about
Pensions and Other Postretirement Benefits,” standard-
izes the disclosures for pensions and other postretire-
ment benefits to the extent practicable, requires
additional information on changes in the benefit obliga-
tions and fair values of plan assets that will facilitate
financial analysis and eliminates other disclosures no
longer useful as prescribed in previous standards.
SFAS Nos.130, 131 and 132 only affect financial disclo-
sures in interim and annual reports; therefore, the
adoption of these accounting standards will not have an
impact on the Company’s financial condition or results
of operations.
Effective June 1,1998, the Company adopted Statement
of Position (“SOP”) 98-1, “Accounting for the Cost of
Computer Software Developed or Obtained for Internal
Use,” released by the American Institute of Certified
Public Accountants in March 1998. SOP 98-1 provides
guidance on accounting for these costs and requires
that certain related expenses be capitalized. The Com-
pany estimates the pre-tax benefit of the adoption of
this Statement to be approximately $30,000,000 in
1999.
Reclassifications.
Certain prior year amounts have been
reclassified to conform to the 1998 presentation.
Use of estimates.
The preparation of the consolidated
financial statements in conformity with generally
accepted accounting principles requires management to
make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the
financial statements and the reported amounts of rev-
enues and expenses during the reporting period. Actual
results could differ from those estimates.