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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1999
Commission File Number 1-5046
CNF TRANSPORTATION INC.
Incorporated in the State of Delaware
I.R.S. Employer Identification No. 94-1444798
3240 Hillview Avenue, Palo Alto, California 94304
Telephone Number (650) 494-2900
Securities Registered Pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------------------ ----------------------
Common Stock ($.625 par value) New York Stock Exchange
Pacific Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act:
7.35% Notes Due 2005
8 7/8% Notes Due 2010
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
Yes X No
----- -----
Aggregate market value of voting stock held by persons other than
Directors, Officers and those shareholders holding more than 5%
of the outstanding voting stock, based upon the closing price per
share Composite Tape on January 31, 2000: $1,258,097,931
Number of shares of Common Stock outstanding as of February 29,2000:
48,493,099
- PAGE 1 -
DOCUMENTS INCORPORATED BY REFERENCE
Parts I, II and IV
CNF Transportation Inc. 1999 Annual Report to Shareholders (only
those portions referenced herein are incorporated in this Form 10-
K).
Part III
Proxy Statement dated March 20, 2000 (only those portions
referenced herein are incorporated in this Form 10-K).
- PAGE 2 -
CNF TRANSPORTATION INC.
FORM 10-K
Year Ended December 31, 1999
------------------------------
INDEX
-----
Item Page
- ---- ----
PART I
1. Business.............................................3
2. Properties..........................................13
3. Legal Proceedings...................................15
4. Submission of Matters to a Vote of
Security Holders..................................15
PART II
5. Market for the Company's Common Stock and Related
Security Holder Matters...........................16
6. Selected Financial Data.............................16
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations...............16
7A. Quantitative and Qualitative Discussions about
Market Risk.......................................16
8. Financial Statements and Supplementary Data.........17
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure...............17
PART III
10. Directors and Executive Officers of the Company.....17
11. Executive Compensation..............................19
12. Security Ownership of Certain Beneficial Owners
and Management....................................19
13. Certain Relationships and Related Transactions......19
PART IV
14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K.......................................19
- PAGE 3 -
CNF TRANSPORTATION INC.
FORM 10-K
Year Ended December 31, 1999
----------------------------
PART I
------
ITEM 1. BUSINESS
CNF Transportation Inc. and subsidiaries (collectively the
Registrant or the Company) is a management company of global
supply-chain services with businesses in regional less-than-
truckload trucking, multi-modal full truckload, multi-client
warehousing and expedited ground transport (Con-Way
Transportation Services); domestic and international airfreight,
ocean freight, customs brokerage and logistics services (Emery
Worldwide); full-service logistics management (Menlo Logistics);
postal sortation and transportation services (Emery Worldwide
Airlines), and trailer manufacturing (Road Systems).
In compliance with Statement of Financial Accounting Standards
(SFAS) 131, "Disclosures about Segments of an Enterprise and
Related Information", the Company discloses segment information
in the manner in which the components are organized for making
operating decisions, assessing performance and allocating
resources. The Company's four segments, which are discussed
below, include Con-Way Transportation Services, Emery Worldwide,
Menlo Logistics and Other. The Other segment consists primarily
of the operations under a Priority Mail contract with the U.S.
Postal Service, and includes Road Systems and, prior to the sale
of its assets in May 1999, VantageParts. For financial
information concerning the Company's business segments, refer to
Note 13 of the Notes to Consolidated Financial Statements
contained in the Company's 1999 Annual Report to Shareholders,
which is incorporated herein by reference.
The operations of the Company are primarily conducted in the U.S.
but to an increasing extent are conducted in foreign countries.
For geographic group information, also refer to Note 13 of the
Notes to Consolidated Financial Statements contained in the 1999
Annual Report to Shareholders.
On December 2, 1996, the Company completed the tax-free
distribution (the Spin-off) to its shareholders of a new publicly
traded company, Consolidated Freightways Corporation (CFC), a
long-haul less-than-truckload (LTL) motor carrier and its related
businesses. The Registrant's shareholders received one share of
CFC stock for every two shares of the Registrant's stock that
were owned on November 15, 1996. Following the Spin-off, the
Company changed its name to CNF Transportation Inc. The Company,
formerly Consolidated Freightways, Inc., was incorporated in
Delaware in 1958.
- PAGE 4 -
CON-WAY TRANSPORTATION SERVICES SEGMENT
- --------------------------------------
The Con-Way reporting segment consists of Con-Way Transportation
Services Inc. and its subsidiaries.
Con-Way Regional Carriers
Con-Way's primary business units are three regional LTL motor
carriers that operate dedicated regional trucking networks.
These regional LTL carriers principally serve core geographic
territories with next-day and second-day service to
manufacturing, industrial, commercial and retail business-to-
business customers.
Con-Way's regional carriers include Con-Way Central Express
(CCX), which serves 25 states of the central and northeast U.S.,
Ontario and Quebec, Canada and Puerto Rico; Con-Way Southern
Express (CSE), which serves a 12-state southern market from Texas
to Virginia and Florida, and also operates in Puerto Rico and
parts of Mexico; and Con-Way Western Express (CWX), which
operates in 13 western states and serves parts of Canada and
Mexico.
In 1998, Con-Way began offering coast-to-coast service in all 50
states by fully linking its three regional carriers. The
expansion of Con-Way's joint service offerings permits Con-Way's
regional carriers to provide full service throughout the U.S. and
to major cities in Canada. By offering joint services, the
regional carriers can provide next-day and second-day freight
delivery between their respective core territories utilizing
existing infrastructure. The joint service allows each carrier
to provide coverage of inter-regional market lanes that were not
previously serviced as part of its core territory.
In February 1999, Con-Way began offering customers a new
guaranteed delivery service option. The new service offers an
automatic 100% delivery guarantee for an additional charge to the
customer.
Con-Way Truckload Services, Con-Way NOW and Con-Way Integrated
Services
Con-Way Truckload Services (CWT) is a full-service, multi-modal
truckload company that provides door-to-door delivery of
truckload shipments by highway and rail forwarding with domestic
intermodal marketing services, and assembly and distribution
services. In addition, CWT is a subcontractor for the Priority
Mail operation, which is discussed below in the "Other" segment.
Con-Way NOW specializes in time-definite shipments, such as
replacement parts, medical equipment and other urgent shipments,
where expedited delivery is critical. Con-Way NOW has delivery
service in 48 states and parts of Canada.
- PAGE 5 -
In 1998, Con-Way created a new business, Con-Way Integrated
Services (CIS), to provide logistics solutions to customers. CIS
offers integrated supply chain services for shippers, using its
own multi-client warehouses, its multi-modal carrier
relationships, and alliances with leading supply chain software
firms to bring semi-customized solutions configured to its
customers' needs.
Con-Way - Competitive Conditions
The trucking industry is intensely competitive. Principal
competitors of Con-Way include regional and national LTL
companies. Competition in the trucking industry is based on
freight rates, service, reliability, transit times and scope of
operations.
EMERY WORLDWIDE SEGMENT
- -----------------------
The Emery Worldwide reporting segment includes the combined
accounts of Emery Air Freight Corporation and its subsidiaries
(EAFC), a portion of the operations of Emery Worldwide Airlines,
Inc. (EWA), and Emery Expedite!, Inc. The Registrant is the owner
of 100% of the outstanding shares of these companies. EWA
primarily provides nightly air delivery services for EAFC and
Express Mail (a next-day delivery service) under a contract
awarded by the U.S. Postal Service (USPS). The operations of the
Express Mail contract are reported in the Emery Worldwide
business segment. In 1997, EWA was awarded a contract for the
sortation and transportation of Priority Mail, a second-day
delivery service, in the eastern United States. The operations
of the Priority Mail contract are reported in the Other business
segment.
- PAGE 6 -
Emery Air Freight Corporation
Emery Air Freight Corporation (EAFC) provides both domestic and
international air freight services. In North America, EAFC
relies principally on the dedicated aircraft of EWA and EAFC's
ground fleet to provide commercial door-to-door delivery for next-
day, second-day and deferred shipments. Internationally, EAFC
acts principally as a freight forwarder by providing door-to-door
and airport-to-airport commercial services in over 200 countries.
Emery Air Freight Corporation - North America
EAFC's hub-and-spoke system is centered at the Dayton, Ohio
International Airport, where its leased air cargo facility (the
Hub) and related support facilities are located. The Hub handles
a wide variety of shipments, ranging from small packages to
heavyweight cargo, with a total effective sort capacity of
approximately 1.2 million pounds per hour, generally handling
over 5 million pounds of freight daily. While Emery's freight
system is designed to handle parcels, packages and shipments of a
variety of sizes and weights, its air freight operations are
focused primarily on heavy air freight (defined as shipments of
70 pounds or more). The operation of the Hub in conjunction with
EWA's airlift system contributes to EAFC's ability to maintain
service reliability. As of December 31, 1999, EAFC had
substantially completed a $75 million redesign and expansion of
the Hub that is expected to increase freight handling capacity
30% in the year 2000.
In addition to the Dayton Hub, EAFC operates nine regional hubs,
strategically located around the United States near Sacramento
and Los Angeles, California; Dallas, Texas; Chicago, Illinois;
Poughkeepsie, New York; Charlotte, North Carolina; Atlanta,
Georgia; Nashville, Tennessee; and Orlando, Florida.
EAFC provides services in North America through a system of sales
offices and service centers. EAFC's door-to-door service within
North America relies on the airlift system of EWA, supplemented
with commercial airlines. Customers are typically concerned with
timely deliveries rather than the mode of transportation. Because
the average cost of ground transportation is considerably less
than air transportation, EAFC seeks to manage its costs by using
trucks, rather than aircraft, to transport freight whenever
possible, typically in connection with second-day and deferred
deliveries.
Emery Air Freight Corporation - International
Internationally, EAFC operates primarily as an air freight
forwarder using commercial airlines, while utilizing controlled
lift only on a limited basis. (International business is defined
as shipments that either originate or terminate outside of the
United States). EAFC provides services internationally through
foreign subsidiaries, branches, service centers and agents. In
1997, EAFC opened new distribution centers in Singapore and Miami
to serve Asia and Latin America, respectively.
EAFC's expansion plans have been focused on international
operations due to the expectation of greater opportunities in an
expanding worldwide economy and the lower capital requirements of
the variable-cost based international operations. From 1995 to
1999, EAFC's international air freight revenue increased 37.5%,
compared with a 13.8% increase in North American air freight
revenue for the same period. Emery's fastest-growing regions
internationally have been Latin America and Asia. In 1998,
however, business in Asia declined as a result of a severe
regional economic downturn that also adversely impacted other
international regions.
- PAGE 7 -
Emery Worldwide Airlines
In addition to providing aircraft for EAFC's commercial air
freight operations, EWA uses its aircraft to provide charter
services and also to provide air delivery services for Express
Mail (a next-day delivery service) under a ten-year contract with
the USPS. The current Express Mail contract was awarded to EWA
in 1993. In addition, EWA has also received separate contracts
to carry peak-season Christmas and other mail for the USPS.
Emery recognized approximately $253 million, $214 million and
$163 million of revenue in 1999, 1998 and 1997, respectively,
from Express Mail and other contracts for the USPS, excluding
Priority Mail revenue that is reported in the "Other" segment.
Emery Expedite!, Emery Global Logistics and Emery Customs
Brokerage
To enhance the range of services it can offer to its customers
and to provide further avenues for growth, Emery has established
several variable-cost based "strategic business units." These
units include Emery Expedite!, a rapid response freight handling
subsidiary providing door-to-door delivery of shipments in North
America and overseas. Emery Global Logistics operates North
American and international warehouses and distribution centers
for a variety of customers. Emery Customs Brokerage (ECB)
provides full service customs clearance regardless of mode or
carrier. Through ECB, Emery also serves as a global freight
forwarder and non-vessel-operating common carrier that provides
full and less-than-container load service.
Emery - Competition
The air freight industry is intensely competitive. Principal
competitors of Emery include other integrated air freight
carriers, air freight forwarders and international airlines and,
to a lesser extent, trucking companies, passenger and cargo air
carriers. Competition in the air freight industry is intense and
is based on, among other things, freight rates, quality of
service, reliability, transit times and scope of operations.
Emery - Strategic Initiatives
Management will continue to focus on positioning Emery as a
premium service provider. In North America, management intends
to continue developing an infrastructure capable of servicing a
higher volume of premium and guaranteed delivery services and
will seek to reduce the costs associated with its infrastructure.
Key initiatives include replacing older and less reliable
aircraft with newer aircraft having lower maintenance costs and
the recent reconfiguration of its Hub sortation center.
- PAGE 8 -
Internationally, Emery's management will focus on expanding its
variable-cost-based operations and will continue its efforts to
increase international revenue as a percentage of total revenue.
For 1999, total international revenue of $1.09 billion comprised
45% of Emery's total revenue.
An important element in providing premium service is the ability
to track freight information, optimize carrier selections, and
interlink and analyze customer data. Starting in 1996, Emery
began to invest in what is expected to be a $75 million multi-
year technology program to upgrade its hardware and software
systems architecture, including its global tracking system called
Emcon 2000. The Emcon 2000 system is expected to provide
enhanced tracking information for shipments to reduce mis-sorts,
avoid potential overloads and to signal freight with specialized
handling requirements. Emery's management expects the Emcon 2000
system to be implemented in 2000 in its North American operations
and in 2001 for its international operations.
MENLO LOGISTICS SEGMENT
- -----------------------
The Menlo reporting segment consists of Menlo Logistics, Inc.,
which was founded in 1990, and its subsidiaries (Menlo). Menlo
specializes in developing and managing complex national and
global supply and distribution networks, including transportation
management, dedicated contract warehousing and dedicated contract
carriage. In serving its customers, Menlo uses and develops
logistics optimization and customer order and shipment tracking
software, and also provides real-time warehouse, transportation
and order management systems. Menlo has developed the ability to
link these systems with each other and with its customers'
internal systems.
The Company believes that Menlo's technology skills, operations
processes and design expertise with sophisticated logistics
systems have established it as a leader in the emerging field of
contract logistics. Complex projects, which call upon Menlo's
skills in managing carrier networks, dedicated vehicle fleets and
automated warehouses as an integrated system, recently have been
the fastest growing segment of Menlo's business.
The Company believes that three industry trends have driven
Menlo's growth. First, the Company believes that a number of
businesses are increasingly evaluating their overall logistics
costs, including transportation, warehousing and inventory
carrying costs. Second, the Company believes that outsourcing of
non-core services, such as distribution, has become more
commonplace with many businesses. Finally, the Company believes
that the ability to access information through computer networks
has increased the value of capturing real-time logistics
information to track inventories, shipments and deliveries.
Menlo's ability to provide solutions to intricate distribution
issues for large companies with complex supply chains has helped
Menlo to secure new projects and expand services for existing
customers. In 1998, Menlo secured six new significant contracts.
In 1999, Menlo began new projects with Delphi, Williams-Sonoma,
The North Face, and a major tool manufacturer. Also in 1999,
Menlo agreed to expand certain projects for Hewlett-Packard.
Compensation from Menlo's customers takes different forms,
including cost-plus, gain-sharing, per-piece, fixed-dollar and
consulting fees. In most cases, customers reimburse start-up and
development costs.
- PAGE 9 -
Menlo seeks to limit the financial commitments it undertakes by
typically providing that any facility or major equipment lease
that it enters into on behalf of a customer must be assumed by
the customer upon termination of the contract with Menlo.
However, few customer relationships have been ended by either
Menlo or its customers.
While the Company seeks to take advantage of cross-business
synergies whenever possible, Menlo is operated as an independent
business segment within the Company and not as a conduit through
which business can be referred to Con-Way or Emery. The
independence of Menlo from the Company's other primary business
units is viewed as essential to maintaining Menlo's credibility
with its customers.
Menlo - Competition
Menlo operates in the relatively new but intensely competitive
third-party logistics (3PL) industry. Competition is based
largely on computer system skills and the ability to rapidly
implement logistics solutions. Competitors in the 3PL industry
are numerous and include domestic and foreign logistics companies
and the logistics arms of integrated transportation companies;
however, Menlo primarily competes against a limited number of
major competitors that have resources sufficient to service large
logistics contracts.
OTHER SEGMENT
- -------------
The Other segment consists primarily of the operations under a
Priority Mail contract with the USPS, and includes Road Systems,
a trailer manufacturer, and prior to the sale of its assets in
May 1999, VantageParts, a wholesale distributor of truck parts
and supplies.
Priority Mail Contract
In April 1997, the USPS awarded EWA a contract for the sortation
and transportation of Priority Mail, a second-day delivery
service, in portions of 13 states in the eastern United States.
This contract expires in February 2002 and may be renewed, at the
option of the USPS, for two additional terms of three years. The
Company recognized $555.5 million, $410.8 million, and $51.6
million of revenue from the Priority Mail contract in 1999, 1998,
and 1997, respectively.
Among other things, the Priority Mail contract calls for EWA to
lease or acquire, equip, fully staff and operate ten Priority
Mail Processing Centers (PMPCs) in ten major metropolitan areas,
primarily along the eastern seaboard. All ten of the PMPCs were
operational as of June 30, 1998. EWA also provides air
transportation under the contract and provides ground
transportation between the PMPCs and other USPS facilities. Con-
Way Truckload Services, a subsidiary of Con-Way Transportation
Services, acts as a subcontractor and provides line-haul
transportation between PMPCs.
- PAGE 10 -
Issues arising from the Priority Mail contract, including an
ongoing dispute as to pricing terms under the contract, are
discussed in Management's Discussion and Analysis - Other Segment
contained in the Company's 1999 Annual Report to Shareholders,
which is incorporated herein by reference. The Company has had
discussions with the USPS on a range of possibilities for
restructuring the activities under the Priority Mail contract.
Although the Company cannot predict whether these discussions
will in fact result in additional payments to the Company or a
modification to the contract, the wide range of alternatives
discussed has included both increasing and decreasing the scope
of the Company's activities under the contract and both partial
and total termination of the contract. In addition, both the
Company and the USPS have notified each other of alleged breaches
under the contract. If the Company's activities under the
contract are curtailed or terminated, the costs could be
material. Likewise, it is possible that the USPS could assert
claims against the Company for breach of the contract or other
matters, which could be significant.
In March 2000, the Company filed a claim with the USPS related to
the Priority Mail contract to recover actual and expected
reductions to EWA's contract pricing. This claim was filed in
response to a reduction by the USPS in contract pricing for both
prior and future periods. The claim is in addition to the
previously reported 1999 pricing claim and substantially covers
the remaining initial term of the contract.
Road Systems and VantageParts
A majority of the revenue from Road Systems and, prior to the
sale of its assets in May 1999, VantageParts, was from sales to
other subsidiaries of the Company and to CFC. Road Systems
primarily manufactures and rebuilds trailers, converter dollies
and other transportation equipment.
Prior to the sale of its assets in May 1999, VantageParts served
as a distributor and remanufacturer of vehicle component parts
and accessories to the heavy-duty truck and trailer industry, as
well as the maritime, construction and aviation industries.
GENERAL
- -------
Employees
At December 31, 1999, the Company had approximately 34,400
regular employees of which 30,800 were regular full-time
employees. The 34,400 regular part-time and full-time employees
by segment were as follows: Con-Way, 15,100; Emery Worldwide,
11,900; Menlo, 2,200; Other segment, 4,300. Approximately 900
regular employees were employed by CNF in executive,
administrative and technology positions to support the Company's
operating subsidiaries.
- PAGE 11 -
Seasonality
The Company operates in industries that are affected directly by
general economic conditions and seasonal fluctuations, both of
which affect demand for transportation services. In a typical
year for the trucking and air freight industries, the months of
September and October usually have the highest business levels
while the months of January and February usually have the lowest
business levels. Operations under the Priority Mail contract
peak in December due primarily to higher shipping demand related
to the holiday season.
Regulation - Ground Transportation
The motor carrier industry is subject to federal regulation by
the Federal Highway Administration (FHWA) and the Surface
Transportation Board (STB), both of which are units of the United
States Department of Transportation (DOT). The FHWA performs
certain functions inherited from the Interstate Commerce
Commission (ICC) relating chiefly to motor carrier registration,
cargo and liability insurance, extension of credit to motor
carrier customers, leasing of equipment by motor carriers from
owner-operators and enforces comprehensive trucking safety
regulations. The STB has authority to resolve certain types of
pricing disputes and authorize certain types of intercarrier
agreements under jurisdiction inherited from the ICC.
At the state level, federal preemption of economic regulation
does not prevent the states from regulating motor vehicle safety
on their highways. In addition, federal law allows all states to
impose insurance requirements on motor carriers conducting
business within their borders, and empowers most states to
require motor carriers conducting interstate operations through
their territory to make annual filings verifying that they hold
appropriate registrations from FHWA. Motor carriers also must
pay state fuel taxes and vehicle registration fees, which
normally are apportioned on the basis of mileage operated in each
state.
Regulation - Air Transportation
The air transportation industry is subject to extensive
regulation by various federal, state and foreign governmental
entities. The industry is subject to federal regulation under
the Federal Aviation Act of 1958, as amended (Aviation Act) and
regulations issued by the DOT pursuant to the Aviation Act.
EAFC, as an air freight forwarder, and EWA, as an airline, are
subject to different regulations. Air freight forwarders are
exempted from most DOT economic regulations and are not subject
to Federal Aviation Administration (FAA) safety regulations,
except security-related rules. Airlines such as EWA are subject
to, among other things, maintenance, operating and other safety-
related regulations by the FAA, including Airworthiness
Directives promulgated by the FAA which require airlines such as
EWA to make modifications to aircraft.
- PAGE 12 -
During recent years, operations at several airports have been
subject to restrictions or curfews on arrivals or departures
during certain night-time hours designed to reduce or eliminate
noise for surrounding residential areas. None of these
restrictions have materially affected EWA's or EAFC's operations.
If such restrictions were to be imposed with respect to the
airports at which EWA's or EAFC's activities are centered
(particularly EAFC's major Hub at the Dayton International
Airport), and no alternative airports were available to serve the
affected areas, there could be a material adverse effect on EWA's
or EAFC's operations. Under applicable law, the FAA is
authorized to establish aircraft noise standards and the
administrator of the Environmental Protection Agency is
authorized to issue regulations setting forth standards for
aircraft emissions. The Company believes that its present fleet
of owned, leased and chartered aircraft is operating in
substantial compliance with currently applicable noise and
emission laws.
Regulation - Environmental
The Company is subject to stringent laws and regulations that (i)
govern activities or operations that may have adverse
environmental effects such as discharges to air and water, as
well as handling and disposal practices for solid and hazardous
waste, and (ii) impose liability for the costs of cleaning up,
and certain damages resulting from, sites of past spills,
disposals or other releases of hazardous materials. In
particular, under applicable environmental laws, the Company may
be responsible for remediation of environmental conditions and
may be subject to associated liabilities (including liabilities
resulting from lawsuits brought by private litigants) relating to
its operations and properties. Environmental liabilities
relating to the Company's properties may be imposed regardless of
whether the Company leases or owns the properties in question and
regardless of whether such environmental conditions were created
by the Company or by a prior owner or tenant, and also may be
imposed with respect to properties which the Company may have
owned or leased in the past.
The Company's operations involve the storage, handling and use of
diesel and jet fuel and other hazardous substances. In
particular, the Company is subject to stringent environmental
laws and regulations dealing with underground fuel storage tanks
and the transportation of hazardous materials. The Company has
been designated a Potentially Responsible Party (PRP) by the EPA
with respect to the disposal of hazardous substances at various
sites. The Company expects that its share of the clean-up costs
will not have a material adverse effect on the Company's
financial position or results of operations.
- PAGE 13 -
ITEM 2. PROPERTIES
CON-WAY TRANSPORTATION SERVICES SEGMENT
- ---------------------------------------
As of December 31, 1999, Con-Way operated 318 freight service
centers, of which 86 were owned and 232 were leased. The service
centers, which are strategically located to cover the geographic
area served by Con-Way, represent physical buildings and real
property with dock, office and/or shop space ranging in size from
approximately 1,000 to 96,000 square feet. These facilities do
not include meet-and-turn points, which generally represent small
owned or leased real property with no physical structures.
In addition to freight service centers operated by Con-Way's
regional carriers, Con-Way Integrated Services leases 3
warehouses near Los Angeles, California; Chicago, Illinois; and
Jersey City, New Jersey. The warehouses range in size from
approximately 103,000 to 171,000 square feet.
The total number of trucks, tractors and trailers utilized in the
Con-Way operations at December 31, 1999 was approximately 27,700.
EMERY WORLDWIDE SEGMENT
- -----------------------
Emery's hub system is centered at the Dayton, Ohio International
Airport (the Hub), where its leased air cargo facility and
related support facilities are located. The Hub, which
encompasses approximately 800,000 square feet, was financed by
City of Dayton, Ohio revenue bonds. The Hub and related property
secures the principal amount of the industrial revenue bonds.
As of December 31, 1999, EAFC operated 232 freight service
centers, of which 11 were owned. The service centers are
strategically located to cover the geographic areas served by
Emery. These facilities range in size from approximately 1,000
to 112,000 square feet of office, dock and/or shop space.
In addition to the freight service centers operated by EAFC, Emery
also leases various customer-dedicated warehouses and 4 large multi-
user warehouses in Dayton, Ohio; Miami, Florida; the Netherlands,
and Singapore. The multi-user warehouses range from approximately
104,000 to 136,000 square feet.
At December 31, 1999, Emery operated 74 aircraft, of which 26
were owned and 48 were leased. In addition to owned and leased
aircraft, Emery "wet leases" aircraft on a short-term basis to
supplement nightly capacity and to provide feeder services. The
wet lease agreements call for the owner-lessor to provide flight
crews, insurance, maintenance, fuel and other supplies required
to operate the aircraft. Although aircraft under wet leases can
vary depending on seasonal demand, 17 aircraft were used in
connection with these agreements as of December 31, 1999. At
December 31, 1999, EWA had entered into commitments for operating
leases for 9 new aircraft to be delivered in 2000.
- PAGE 14 -
As of December 31, 1999, 1 aircraft was dedicated for exclusive
use in the Priority Mail operations and 19 of the aircraft
reported above were designated for shared use with the Priority
Mail operation. These aircraft, which are used primarily at
night in EWA's commercial non-Priority Mail freight operations,
are also used in "daylight turns" of aircraft for the
transportation of Priority Mail. As of December 31, 1999, 26
aircraft were dedicated to service the Express Mail contract with
the USPS. Operations related to the Express Mail contract are
included in the Emery Worldwide segment and the Priority Mail
operations are included in the Other segment.
At December 31, 1999, EAFC operated approximately 1,700 trucks,
tractors and trailers, as well as equipment provided by its
agents.
MENLO LOGISTICS SEGMENT
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As of December 31, 1999, Menlo operated 35 warehouses. Of these
warehouses operated by Menlo, 25 were leased by Menlo and 9 were
leased or owned by Menlo's clients. The 25 facilities leased by
Menlo ranged in size from approximately 16,000 to 366,000 square
feet.
At December 31, 1999, Menlo operated approximately 400 trucks,
tractors and trailers.
OTHER SEGMENT
- -------------
The principal operating properties of the Other segment are
comprised primarily of 10 Priority Mail Processing Centers
(PMPCs) and related sortation and transportation equipment. The
PMPCs, which are large warehouses modified for efficient
sortation of mail, range in size from approximately 120,000 to
300,000 square feet. The 10 PMPCs are located in the eastern
United States in Newark and Bridgeport, New Jersey; Bethpage and
Rochester, New York; Nashua, New Hampshire; Pittsburgh,
Pennsylvania; Springfield, Massachusetts; and Jacksonville, Miami
and Orlando, Florida.
As discussed above under "Emery Worldwide Segment", as of
December 31, 1999, 1 aircraft in EWA's fleet was used exclusively
in the Priority Mail operations and 19 of the aircraft that are
dedicated to Emery's operations were designated for shared use
with the Priority Mail operation. These aircraft, which are used
primarily at night in EWA's commercial non-Priority Mail freight
operations, are also used in "daylight turns" of aircraft for the
transportation of Priority Mail.
At December 31, 1999, approximately 900 trucks, tractors and
trailers were operated by EWA in the Priority Mail operation.
- PAGE 15 -
ITEM 3. LEGAL PROCEEDINGS
The legal proceedings of the Company are summarized in Note 12 of
the Notes to Consolidated Financial Statements contained in the
1999 Annual Report to Shareholders and is incorporated herein by
reference. Discussion of environmental matters is presented in
Item 1.
The Department of Transportation, through its Office of Inspector
General, and the Federal Aviation Administration are conducting
an investigation relating to the handling of hazardous materials
by Emery. The investigation is ongoing and Emery is cooperating
fully. Because the investigation is at a preliminary stage, we
are unable to predict the outcome of this investigation.
On February 16, 2000, a DC-8 cargo aircraft operated by EWA
crashed shortly after take-off from Mather Field, near
Sacramento, California. The crew of three was killed. There
were no reported injuries on the ground. The cause of the crash
has not been determined. The National Transportation Safety
Board has begun an investigation.
We are currently unable to predict the outcome of this matter or
the effect it may have on the Company. We may be subject to
claims and proceedings relating to the crash, which could include
private lawsuits seeking monetary damages and governmental
proceedings. Although EWA maintains insurance that is intended
to cover claims that may arise in connection with an airplane
crash, the Company cannot assure that the insurance will in fact
be adequate to cover all possible types of claims. In
particular, any claims for punitive damages or any impact of
possible government proceedings or other sanctions would not be
covered by insurance.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
- PAGE 16 -
PART II
-------
Information for Items 5 through 8 of Part II of this Report
appears in the Company's 1999 Annual Report to Shareholders as
indicated below and is incorporated herein by reference.
ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED
SECURITY HOLDER MATTERS
The Company's common stock is listed for trading on the New York
and Pacific Stock Exchanges under the symbol "CNF".
Page Number of Annual
Report to Shareholders
----------------------
Range of common stock prices for each of the quarters
in 1999 and 1998 32
Common shareholders of record at December 31, 1999 34
Dividends paid on common stock for each of the quarters
in 1999 and 1998 32
ITEM 6. SELECTED FINANCIAL DATA
Selected Consolidated Financial Data 34
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8
ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK 12
Certain statements included or incorporated by reference herein
constitute "forward-looking statements" within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended,
and are subject to a number of risks and uncertainties. Any such
forward-looking statements contained or incorporated by reference
herein should not be relied upon as predictions of future events.
Certain such forward-looking statements can be identified by the
use of forward-looking terminology such as "believes," "expects,"
"may," "will," "should," "seeks," "approximately," "intends,"
"plans," "estimates" or "anticipates" or the negative thereof or
other variations thereof or comparable terminology, or by
discussions of strategy, plans or intentions. Such forward-
looking statements are necessarily dependent on assumptions, data
or methods that may be incorrect or imprecise and they may be
incapable of being realized. In that regard, the following
factors, among others and in addition to the matters discussed
below and elsewhere in this document and in documents
incorporated by reference herein, could cause actual results and
other matters to differ materially from those in such forward-
looking statements: changes in general business and economic
conditions; increasing domestic and international competition and
pricing pressure; changes in fuel prices, particularly in light
of recent fuel price increases; uncertainty regarding the
Company's Priority Mail contract with the USPS, including
uncertainties regarding the Company's claims under the contract
described herein or incorporated by reference; labor matters,
including changes in labor costs, renegotiations of labor
contracts and the risk of work stoppages or strikes; changes in
governmental regulation; environmental and tax matters, including
- PAGE 17 -
claims made by the Internal Revenue Service with respect to the
aviation excise tax and aircraft maintenance tax matters
discussed in documents incorporated by reference; and matters
relating to the spin-off of Consolidated Freightways Corporation
(CFC). In that regard, the Company is or may be subject to
substantial liabilities with respect to certain matters relating
to CFC's business and operations, including, without limitation,
guarantees of certain indebtedness of CFC and liabilities for
employment-related, tax and environmental matters, including the
tax matters discussed in documents incorporated by reference.
Although CFC is, in general, either the primary or secondary
obligor or jointly and severally liable with the Company with
respect to these matters, a failure to pay or other default by
CFC with respect to the obligations as to which the Company is or
may be, or may be perceived to be, liable, whether because of CFC
successfully contesting their obligation to reimburse the Company
or otherwise, could lead to substantial claims against the
Company. As a result of the foregoing, no assurance can be given
as to future results of operations or financial condition.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Page Number of Annual
Report to Shareholders
----------------------
Consolidated Balance Sheets 14
Statements of Consolidated Income 16
Statements of Consolidated Cash Flows 17
Statements of Consolidated Shareholders' Equity 18
Notes to Consolidated Financial Statements 20
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
--------
Information for Items 10 through 12 of Part III of this Report
appears in the Proxy Statement for the Company's 1999 Annual
Meeting of Shareholders to be held on April 25, 2000, as
indicated below and is incorporated by reference.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The Executive Officers of the Company, their ages at December 31,
1999, and their applicable business experience are as follows:
Gregory L. Quesnel, 51, President and Chief Executive Officer of
the Company. Mr. Quesnel joined the CNF organization as Director
of Accounting in 1975, following several years of professional
experience with major corporations in the petroleum and wood
products industries. Mr. Quesnel advanced through increasingly
responsible positions and in 1986 was promoted to the top
financial officer position at the Company's largest subsidiary.
In 1990, Mr. Quesnel was elected Vice President and Treasurer of
CNF; in 1991, he was elected Senior Vice President and Chief
Financial Officer; and he was promoted to Executive Vice
President and Chief Financial Officer in 1994. As part of a
planned succession, Mr. Quesnel was elected President and Chief
Operating Officer in July 1997. In May 1998, Mr. Quesnel was
named President and Chief Executive Officer of the Company. At
that time, he was also elected as a member of the CNF Board of
Directors. Mr. Quesnel is a member of the Financial Executives
Institute, the California Business Roundtable, and the Conference
Board. He also serves as a member of the Executive Committee of
the Bay Area Council of the Boy Scouts of America. Mr. Quesnel
earned a bachelor's degree in finance from the University of
Oregon and holds a master's degree in business administration
from the University of Portland. Mr. Quesnel is a member of the
Executive and Director Affairs Committees of the Board.
- PAGE 18 -
Gerald L. Detter, 55, President and Chief Executive Officer of
Con-Way Transportation Services and Senior Vice President of the
Company. Mr. Detter joined the former Consolidated Freightways
Corporation of Delaware (CFCD) in 1964 as a dockman and advanced
through several positions of increasing responsibility to become
Division Manager in Detroit, Michigan in 1976. In 1982, he was
named the first President and Chief Executive Officer of Con-Way
Central Express. In 1997, Mr. Detter was named to his current
position.
Roger Piazza, 60, President and Chief Executive Officer of Emery
Worldwide and Senior Vice President of the Company. Mr. Piazza
originally joined the former CF AirFreight in 1976 as manager of
the Detroit Service Center. During the following ten years he
served as a division manager and area vice president. Following
the merger of CF AirFreight and Emery Worldwide in 1989, Mr.
Piazza was named Vice President - North America. In 1999, Mr.
Piazza was named to his current position.
Chutta Ratnathicam, 52, Senior Vice President and Chief Financial
Officer of the Company. Mr. Ratnathicam joined the Company in
1977 as a corporate auditor and following several increasingly
responsible positions was named Vice President Internal Audit for
the Company in 1989. In 1991, he was promoted to Vice President-
International for Emery. In 1997, Mr. Ratnathicam was named
Senior Vice President and Chief Financial Officer of the Company.
Eberhard G.H. Schmoller, 56, Senior Vice President, General
Counsel and Secretary of the Company. Mr. Schmoller joined CFCD
in 1974 as a staff attorney and in 1976 was promoted to CFCD
Assistant General Counsel. In 1983, he was appointed Vice
President and General Counsel of the former CF AirFreight and
assumed the same position with Emery after the acquisition in
1989. Mr. Schmoller was named Senior Vice President and General
Counsel of the Company in 1993.
John H. Williford, 43, President and Chief Executive Officer of
Menlo Logistics and Senior Vice President of the Company. Mr.
Williford joined the Company in 1981 as an Economics/Senior
Marketing Analyst. In 1984, he was named Director of Marketing
for the Company's international operations and was later
appointed Director of Marketing for the Company. Since its
inception in 1990, Mr. Williford has been the principal executive
in charge of Menlo Logistics, first as General Manager and then
as President and Chief Executive Officer. In 1998, Mr. Williford
was named Senior Vice President of the Company.
- PAGE 19 -
Information regarding members of the Company's Board of Directors
is presented on pages 3 through 9, inclusive, of the Company's
Proxy Statement dated March 20, 2000 and is incorporated herein
by reference.
ITEM 11. EXECUTIVE COMPENSATION
Page Number of
Proxy Statement
---------------
Compensation Information 13
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Stock Ownership - Directors and Executive Officers 10
Stock Ownership - Significant shareholders 32
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) 1. FINANCIAL STATEMENTS
The consolidated financial statements of the Company,
together with the Notes to Consolidated Financial
Statements, and the report thereon of Arthur Andersen LLP,
dated January 28, 2000, are presented on pages 14 through 33
of the Company's 1999 Annual Report to Shareholders and are
incorporated herein by reference. With the exception of the
information incorporated by reference in Items 1, 3, 5, 6,
7, 7A, 8 and 14 hereof, the Company's 1999 Annual Report to
Shareholders is not to be deemed as filed as part of this
Report.
2. FINANCIAL STATEMENT SCHEDULE
Page Number
in Form 10-K
------------
Report of Independent Public Accountants
on Financial Statement Schedule S-1
Schedule II - Valuation and Qualifying Accounts S-2
All other financial statement schedules have been omitted
because they are not applicable or the required information
is included in the consolidated financial statements, or the
notes thereto, contained in the Company's 1999 Annual Report
to Shareholders and incorporated herein by reference.
- PAGE 20 -
3. EXHIBITS
Exhibits are being filed in connection with this Report and
are incorporated herein by reference. The Exhibit Index on
pages E-1 through E-6 is incorporated herein by reference.
(b) REPORTS ON FORM 8-K
On March 8, 2000, the Registrant filed a Report on Form 8-K
in connection with the issuance of $200 million aggregate
principal amount of its 8 7/8% Notes due 2010 (the "Notes")
under the Company's shelf registration statement on Form S-3
(File No. 333-56667). In the Report on Form 8-K, the
Company filed an Underwriting Agreement, Indenture and form
of Note executed in connection with the previously announced
public offering of the Notes.
- PAGE 21 -
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this Form 10-K Annual Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CNF TRANSPORTATION INC.
(Registrant)
March 27, 2000 /s/ Gregory L. Quesnel
--------------------------------
President and Chief Executive
Officer
March 27, 2000 /s/ Chutta Ratnathicam
---------------------------------
Chutta Ratnathicam
Senior Vice President and
Chief Financial Officer
March 27, 2000 /s/ Gary D. Taliaferro
---------------------------------
Gary D. Taliaferro
Corporate Controller
- PAGE 22 -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the
dates indicated.
March 27, 2000 /s/ Donald E. Moffitt
---------------------------------
Donald E. Moffitt
Chairman of the Board
March 27, 2000 /s/ Gregory L. Quesnel
---------------------------------
Gregory L. Quesnel
President, Chief Executive
Officer and Director
March 27, 2000 /s/ Robert Alpert
---------------------------------
Robert Alpert, Director
March 27, 2000 /s/ Richard A. Clarke
---------------------------------
Richard A. Clarke, Director
March 27, 2000 /s/ Margaret G. Gill
---------------------------------
Margaret G. Gill, Director
March 27, 2000
---------------------------------
Robert Jaunich II, Director
March 27, 2000 /s/ W. Keith Kennedy, Jr.
---------------------------------
W. Keith Kennedy, Jr., Director
- PAGE 23 -
SIGNATURES
March 27, 2000 /s/ Richard B. Madden
--------------------------------
Richard B. Madden, Director
March 27, 2000 /s/ Michael J. Murray
--------------------------------
Michael J. Murray, Director
March 27, 2000 /s/ Robert D. Rogers
--------------------------------
Robert D. Rogers, Director
March 27, 2000
--------------------------------
William J. Schroeder, Director
March 27, 2000 /s/ Robert P. Wayman
--------------------------------
Robert P. Wayman, Director
- S-1 -
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the
incorporation of our reports included and incorporated by
reference in this Form 10-K, into the Company's previously filed
Registration Statement File Nos. 2-81030, 33-52599, 33-60619, 33-
60625, 33-60629, 333-26595, 333-30327, 333-48733, 333-56667, and
333-92399
/s/Arthur Andersen LLP
----------------------
ARTHUR ANDERSEN LLP
San Francisco, California
March 24, 2000
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Shareholders and Board of Directors of
CNF Transportation Inc.:
We have audited in accordance with generally accepted auditing
standards, the consolidated financial statements included in CNF
Transportation Inc.'s 1999 Annual Report to Shareholders
incorporated by reference in this Form 10-K, and have issued our
report thereon dated January 28, 2000. Our audit was made for
the purpose of forming an opinion on those statements taken as a
whole. The Schedule II--Valuation and Qualifying Accounts on
page S-2 is the responsibility of the Company's management and is
presented for the purpose of complying with the Securities and
Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the
auditing procedures applied in the audit of the basic financial
statements and, in our opinion, fairly states in all material
respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
/s/Arthur Andersen LLP
----------------------
ARTHUR ANDERSEN LLP
San Francisco, California
January 28, 2000
- S-2 -
SCHEDULE II
CNF TRANSPORTATION INC.
VALUATION AND QUALIFYING ACCOUNTS
THREE YEARS ENDED DECEMBER 31, 1999
(In thousands)
DESCRIPTION
- -----------
ALLOWANCE FOR DOUBTFUL ACCOUNTS
ADDITIONS
------------------------------------
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING COSTS AND OTHER END
OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
--------- -------- -------- ---------- -------
1999 $21,098 $15,229 $ - $(10,164)(a) $26,163
1998 $20,155 $11,050 $ - $(10,107)(a) $21,098
1997 $18,712 $12,528 $ - $(11,085)(a) $20,155
(a) Accounts written off net of recoveries.
- E-1 -
INDEX TO EXHIBITS
ITEM 14(a)(3)
Exhibit No.
- -----------
(3) Articles of incorporation and by-laws:
3.1 CNF Transportation Inc. Certificate of Incorporation,as
amended. (Exhibit 4(a) to the Company's registration
statement on Form S-3 dated May 6, 1997.*)
3.2 CNF Transportation Inc. By-laws, as amended
September 28, 1998 (Exhibit 4(b) to the Company's
registration statement on Form S-3 dated November 10,
1998.*).
(4) Instruments defining the rights of security holders,
including debentures:
4.1 Certificate of Designations of the Series B Cumulative
Convertible Preferred Stock. (Exhibit 4.1 as filed on Form SE
dated May 25, 1989*)
4.2 Indenture between the Registrant and Bank One, Columbus, NA,
as successor trustee, with respect to 9-1/8% Notes Due 1999,
Medium-Term Notes, Series A and 7.35% Notes due 2005. (Exhibit
4.1 as filed on Form SE dated March 20, 1990*)
4.3 Indenture between the Registrant and The First National Bank
of Chicago Bank, trustee, with respect to debt securities.
(Exhibit 4(d) as filed on Form S-3 dated June 27, 1995*)
4.4 Indenture between the Registrant and Bank One, Columbus, NA,
trustee, with respect to subordinated debt securities. (Exhibit
4(e) as filed on Form S-3 dated June 27, 1995*)
4.5 Form of Security for 7.35% Notes due 2005 issued by
Consolidated Freightways, Inc. (Exhibit 4.4 as filed on Form S-4
dated June 27, 1995*)
4.6 Declaration of Trust of the Trust (Exhibit 4(k) to the
Company's Amendment 1 to Form S-3 dated May 30, 1997*)
4.7 Form of Amended and Restated Declaration of Trust of the
Trust, including form of Trust Preferred Security. (Exhibit 4(l)
to the Company's Amendment 1 to Form S-3 dated May 9, 1997*)
4.8 Form of Guarantee Agreement with respect to Trust Preferred
Securities. (Exhibit 4(m) to the Company's Amendment 1 to Form S-
3 dated May 30, 1997*)
- E-2 -
4.9 Form of Indenture between CNF Transportation Inc. and Bank
One Trust Company, National Association (Exhibit 4(d)(i) to the
Company's Form 8-K dated March 3, 2000*).
4.10 Form of Security for 8 7/8% Notes due 2010 issued by CNF
Transportation Inc. (Exhibit 4(i) to the Company's Form 8-K
dated March 3, 2000*).
Instruments defining the rights of security holders of
long-term debt of CNF Transportation Inc., and its
subsidiaries for which financial statements are required to
be filed with this Form 10-K, of which the total amount of
securities authorized under each such instrument is less
than 10% of the total assets of CNF Transportation Inc. and
its subsidiaries on a consolidated basis, have not been
filed as exhibits to this Form 10-K. The Company agrees to
furnish a copy of each applicable instrument to the
Securities and Exchange Commission upon request.
(10) Material contracts:
10.1 Consolidated Freightways, Inc. Long-Term Incentive Plan of
1988 as amended through Amendment 3. (Exhibit 10.2 as filed on
Form SE dated March 25, 1991*#)
10.2 Consolidated Freightways, Inc. Stock Option Plan of 1988 as
amended. (Exhibit 10(i) to the Company's Form 10-K for the year
ended December 31, 1987 as amended in Form S-8 dated December 16,
1992*#)
10.3 Emery Air Freight Plan for Retirees, effective October 31,
1987. (Exhibit 4.23 to the Emery Air Freight Corporation
Quarterly Report on Form 10-Q dated November 16, 1987**)
10.4 Consolidated Freightways, Inc. Common Stock Fund (formerly
Emery Air Freight Corporation Employee Stock Ownership Plan, as
effective October 1, 1987 ("ESOP"). (Exhibit 4.33 to the Emery
Air Freight Corporation Annual Report on Form 10-K dated March
28,1988**)
10.5 Employee Stock Ownership Trust Agreement, dated as of
October 8, 1987, as amended, between Emery Air Freight
Corporation and Arthur W. DeMelle, Daniel J. McCauley and Daniel
W. Shea, as Trustees under the ESOP Trust. (Exhibit 4.34 to the
Emery Air Freight Corporation Annual Report on Form 10-K dated
March 28, 1988**)
- E-3 -
10.6 Amended and Restated Subscription and Stock Purchase
Agreement dated as of December 31, 1987 between Emery Air Freight
Corporation and Boston Safe Deposit and Trust Company in its
capacity as successor trustee under the Emery Air Freight
Corporation Employee Stock Ownership Plan Trust ("Boston Safe").
(Exhibit B to the Emery Air Freight Corporation Current Report on
Form 8-K dated January 11, 1988**)
10.7 Supplemental Subscription and Stock Purchase Agreement dated
as of January 29, 1988 between Emery Air Freight Corporation and
Boston Safe. (Exhibit B to the Emery Air Freight Corporation
Current Report on Form 8-K dated February 12, 1988**)
10.8 Trust Indenture, dated as of November 1, 1988, between City
of Dayton, Ohio and Security Pacific National Trust Company (New
York), as Trustee and Bankers Trust Company, Trustee. (Exhibit
4.1 to Emery Air Freight Corporation Current Report on Form 8-K
dated December 2, 1988**)
10.9 Bond Purchase Agreement dated November 7, 1988, among the
City of Dayton, Ohio, the Emery Air Freight Corporation and
Drexel Burnham Lambert Incorporated. (Exhibit 28.7 to the Emery
Air Freight Corporation Current Report on Form 8-K dated December
2, 1988**)
10.10 Lease agreement dated November 1, 1988 between the City
of Dayton, Ohio and Emery Air Freight Corporation. (Exhibit 10.1
to the Emery Air Freight Corporation Annual Report on Form 10-K
for the year ended December 31, 1988**)
10.11 $350 million Amended and Restated Credit Agreement
dated November 21, 1996 among Consolidated Freightways, Inc. and
various financial institutions. (Exhibit 10.18 to the Company's
Form 10-K for the year ended December 31, 1996*).
10.12 Official Statement of the Issuer's Special Facilities
Revenue Refunding Bonds, 1993 Series E and F dated September 29,
1993 among the City of Dayton, Ohio and Emery Air Freight
Corporation. (Exhibit 10.1 to the Company's Form 10-Q for the
quarterly period ended September 30, 1993*).
10.13 Trust Indenture, dated September 1, 1993 between the
City of Dayton, Ohio and Banker's Trust Company as Trustee.
(Exhibit 10.2 to the Company's Form 10-Q for the quarterly period
ended September 30, 1993*).
- E-4 -
10.14 Supplemental Lease Agreement dated September 1, 1993
between the City of Dayton, Ohio, as Lessor, and Emery Air
Freight Corporation, as Lessee. (Exhibit 10.3 to the Company's
Form 10-Q for the quarterly period ended September 30, 1993*).
10.15 Supplemental Retirement Plan dated January 1, 1990.
(Exhibit 10.31 to the Company's Form 10-K for the year ended
December 31, 1993*#)
10.16 Directors' 24-Hour Accidental Death and Dismemberment
Plan. (Exhibit 10.32 to the Company's Form 10-K for the year
ended December 31, 1993*#)
10.17 Executive Split-Dollar Life Insurance Plan dated
January 1, 1994. (Exhibit 10.33 to the Company's Form 10-K for
the year ended December 31, 1993*#)
10.18 Board of Directors' Compensation Plan dated January 1,
1994. (Exhibit 10.34 to the Company's Form 10-K for the year
ended December 31, 1993*#)
10.19 Directors' Business Travel Insurance Plan. (Exhibit
10.36 to the Company's Form 10-K for the year ended December 31,
1993*#)
10.20 Deferred Compensation Plan for Executives 1998
Restatement. (Exhibit 10.20 to the Company's Form 10-K for the
year ended December 31, 1997. *#)
10.21 Amended and Restated 1993 Nonqualified Employee Benefit
Plans Trust Agreement dated January 1, 1995. (Exhibit 10.38 to
the Company's Form 10-K for the year ended December 31, 1994.*#)
10.22 CNF Transportation Inc., 1997 Equity and Incentive Plan
for Non-Employee Directors, as amended June 30, 1997. (Exhibit
10.33 to the Company's Form 10-K for the year ended December 31,
1997. *#)
10.23 Amended and Restated Retirement Plan for Directors of
Consolidated Freightways, Inc. dated January 1, 1994. (Exhibit
10.40 to the Company's Form 10-K for the year ended December 31,
1994.*#)
10.24 CNF Transportation Inc. Return on Equity Plan, as
amended through Amendment No. 1 (Exhibit 10.24 to the Company's
Form 10-K for the year ended December 31, 1997. *#)
10.25 Employee Benefit Matters Agreement by and between
Consolidated Freightways, Inc. and Consolidated Freightways
Corporation dated December 2, 1996. (Exhibit 10.33 to the
Company's form 10-K for the year ended December 31, 1996.*#)
- E-5 -
10.26 Distribution Agreement between Consolidated
Freightways, Inc., and Consolidated Freightways Corporation dated
November 25, 1996. (Exhibit 10.34 to the Company's Form 10-K for
the year ended December 31, 1996.*#)
10.27 Transition Services Agreement between CNF Service
Company, Inc. and Consolidated Freightways Corporation dated
December 2, 1996. (Exhibit to the Company's Form 10-K for the
year ended December 31, 1996.*#)
10.28 Tax Sharing Agreement between Consolidated Freightways,
Inc., and Consolidated Freightways Corporation dated December 2,
1996. (Exhibit to the Company's Form 10-K for the year ended
December 31, 1996.*#)
10.29 CNF Transportation Inc. 1997 Equity and Incentive Plan
as amended as of January 31, 2000. (Exhibit A to the Company's
Proxy Statement dated March 20, 2000. *#)
10.30 CNF Transportation Inc. Deferred Compensation Plan for
Directors 1998 Restatement. (Exhibit 10.34 to the Company's Form
10-K for the year ended December 31, 1997. *#)
10.31 CNF Transportation Inc. Executive Severance Plan. (Exhibit 10.32
to the Company's Form 10-K for the year ended December 31,
1998.*#)
10.32 CNF Transportation Inc. Summary of Incentive Compensation
plans for 2000. #
10.33 Value Management Plan dated June 28, 1999.#
(12a)Computation of ratios of earnings to fixed charges
(12b)Computation of ratios of earnings to combined fixed
charges and preferred stock dividends.
(13) Annual report to security holders:
CNF Transportation Inc. 1999 Annual Report to Shareholders
(Only those portions referenced herein are incorporated in
this Form 10-K. Other portions such as "Letter to
Shareholders" are not required and, therefore, are not
"filed" as part of this Form 10-K.)
(21) Significant Subsidiaries of the Company.
(27) Financial Data Schedule
- E-6 -
(99) Additional documents:
99.1 CNF Transportation Inc. 1999 Notice of Annual
Meeting and Proxy Statement dated March 20, 2000 and
filed on Form DEF 14A. (Only those portions referenced
herein are incorporated in this Form 10-K. Other
portions are not required and, therefore, are not
"filed" as a part of this Form 10-K. *)
99.2 Note Agreement dated as of July 17, 1989, between the ESOP,
Consolidated Freightways, Inc. and the Note Purchasers named
therein. (Exhibit 28.1 as filed on Form SE dated July 21, 1989*)
99.3 Guarantee and Agreement dated as of July 17, 1989, delivered
by Consolidated Freightways, Inc. (Exhibit 28.2 as filed on Form
SE dated July 21, 1989*).
99.4 Form of Restructured Note Agreement between Consolidated
Freightways, Inc., Thrift and Stock Ownership Trust as Issuer and
various financial institutions as Purchasers named therein, dated
as of November 3, 1992. (Exhibit 28.4 to the Company's Form 10-K
for the year ended December 31, 1992*).
The remaining exhibits have been omitted because either (1) they
are neither required nor applicable or (2) the required
information has been included in the consolidated financial
statements or notes thereto.
Footnotes to Exhibit Index
---------------------------
* Previously filed with the Securities and Exchange Commission
and incorporated herein by reference.
** Incorporated by reference to indicated reports filed under
the Securities Act of 1934, as amended, by Emery Air Freight
Corporation File No. 1-3893.
# Designates a contract or compensation plan for Management or
Directors.