EWW SAVINGS PLAN
FINANCIAL STATEMENTS AND SCHEDULE
AS OF DECEMBER 31, 2000 AND 1999
AND FOR THE YEAR ENDED DECEMBER 31, 2000
TOGETHER WITH AUDITORS' REPORT
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Compensation Committee of the
CNF Inc. Board of Directors:
We have audited the accompanying statements of net assets available for plan
benefits of the EWW Savings Plan as of December 31, 2000 and 1999, and the
related statement of changes in net assets available for plan benefits for
the year ended December 31, 2000. These financial statements and the
schedule referred to below are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial status of the Plan as of December 31, 2000
and 1999, and the changes in its financial status for the year ended December
31, 2000, in conformity with accounting principles generally accepted in the
United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held at end of year is presented for the purpose of additional analysis and is
not a required part of the basic financial statements but is supplementary
information required by Department of Labor Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
Portland, Oregon,
June 22, 2001
EWW SAVINGS PLAN
DECEMBER 31, 2000 AND 1999
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
Page
------
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Plan Benefits as of
December 31, 2000 and 1999 1
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 2000 2
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE 3
SUPPLEMENTAL SCHEDULE:
Schedule I: Part IV, Line 4i - Schedule of Assets Held at
End of Year as of December 31, 2000 6
PAGE 1
EWW SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 2000 AND 1999
2000 1999
ASSETS: ----------- ----------
Investments, at fair value-
Shares in registered investment companies:
T. Rowe Price participant directed funds-
Growth Stock Fund $ 1,360,484 $1,135,151
New Income Fund 226,825 169,557
Equity Income Fund 784,711 617,906
Science and Technology Fund 1,238,562 1,014,139
International Stock Fund 239,670 157,576
Small-Cap Stock Fund 35,063 -
----------- ----------
3,885,315 3,094,329
Common trust funds:
Equity Index Trust Fund 87,307 -
Bond Index Trust Fund 3,449 -
U.S. Treasury Money Market Trust 1,553,835 1,543,924
Retirement Strategy Trust-Balanced 385,772 415,207
Retirement Strategy Trust -
Conservative Growth 16,570 -
Retirement Strategy Trust -
Income Plus 1,693 -
----------- ----------
2,048,626 1,959,131
Participant loans 197,566 102,330
CNF Unrestricted Common Stock Fund 86,204 -
----------- ----------
Total Investments 6,217,711 5,155,790
Due from CNF Transportation Inc. Thrift and
Stock Plan for net assets to be transferred,
at fair market value (Note 1) 30,715,372 -
----------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $36,933,083 $5,155,790
=========== ==========
The accompanying notes are an integral part of these statements.
PAGE 2
EWW SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2000
ADDITIONS:
Participant contributions $ 1,595,618
Interest income 97,200
CNF Transportation Inc. Thrift and Stock Plan net assets
to be transferred (Note 1) 30,715,372
-----------
Total additions 32,408,190
DEDUCTIONS:
Net realized and unrealized depreciation in fair value of
investments (418,096)
Distributions to participants (212,801)
-----------
Total deductions (630,897)
Net increase 31,777,293
-----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS, December 31, 1999 5,155,790
-----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS, December 31, 2000 $36,933,083
===========
The accompanying notes are an integral part of this statement.
PAGE 3
EWW SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE
1. Description of Plan
The following description of the EWW Savings Plan (the Plan) is provided for
general information purposes only. Participants should refer to the Employee
Benefits Handbook or the Plan document for more complete information.
General: The Plan is a defined contribution plan and is subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended
(ERISA). Overall responsibility for administering the Plan rests with the CNF
Inc. (formerly CNF Transportation and referred to as the Company or CNF)
Administrative Committee (the Committee), which is appointed by the Chief
Executive Officer of the Company. The Committee reports directly to the
Compensation Committee of the Company's Board of Directors. The Plan's
trustee, T. Rowe Price Trust Company (the Trustee), is responsible for the
management and control of the Plan's assets.
Amendment: During 2000, the Company amended the CNF Transportation Thrift and
Stock Plan (TASP) and the Plan. Effective September 19, 2000, the Emery
Worldwide (EWW) pilots ceased participation in the TASP and their elective
deferrals began being contributed to the Plan. Transfer of the EWW pilots'
vested balance in the TASP was spun off effective December 20, 2000 with the
actual transfer to occur as soon as practicable. The unvested portion of
each pilot's account will remain in the TASP until vested. Any balances
remaining in the TASP until transferred to the Plan will continue to be
invested as provided under the TASP. The transfer of the EWW pilots'
accounts had not occurred at December 31, 2000. Accordingly, the vested and
unvested balance of the EWW pilots' share of the TASP's net assets was recorded
as an asset Due from CNF Transportation Inc. Thrift and Stock Plan in the
accompanying statement of net assets available for plan benefits.
Eligibility: The Plan covers all eligible employees of the Company who are
covered by a collective bargaining unit that specifically provides for
participation in the Plan. Employees become eligible to participate in the
Plan upon completion of 750 hours of service.
Contributions: An eligible employee may elect to contribute from 1% to 18% of
the employee's pretax compensation into the Plan. Employee contributions may
not exceed limits established by Internal Revenue Service regulations. Each
participating employee may direct contributions in any one or more of the
thirteen investment funds established under the Plan. The Company makes no
matching contributions for participants of the Plan.
Participant Accounts: A separate account is maintained for each participant of
the Plan. Each account is credited with the participant's contributions and
an allocation of the Plan's net earnings. The Plan's net earnings are
allocated to the separate funds in each participant's account based upon the
value of the individual's account fund balance in relation to the Plan's total
fund balance.
Vesting: Participants are fully vested at all times in all contributions made
to the Plan plus net earnings thereon.
Participant Loans: The Plan has a loan provision allowing participants access
to funds on a tax-free basis. Each participant may borrow from a minimum of
$1,000 up to a maximum of $50,000 from the participant's fund account, reduced
by the excess of the participant's highest outstanding loan balance during the
one-year period on the day before the loan is made over the participant's
current outstanding loan balance on the date of the loan. Loans may not exceed
45% of a participant's vested account balance. The loans are secured by the
vested balance in the participant's account. Loans must be repaid within 4 1/2
years and bear interest at a rate determined by the loan committee (the prime
rate plus 1% in 2000 and 1999). Loans outstanding at December 31, 2000 bear
interest at rates ranging from 8.75% to 10.50%. Principal and interest are
paid ratably through payroll deductions.
PAGE 4
Distribution to Participants: Employees become eligible for distribution upon
termination of employment, disability, retirement or death. Distributions are
payable in the form of lump sum payments or in a series of substantially equal
annual installments.
Plan Termination: Although it has not expressed any intent to do so, the
Company has the right under the Plan to terminate the Plan subject to the
provisions of ERISA. In the event of Plan termination, the Company shall
direct the Trustee with respect to the distribution of accounts to or for the
exclusive benefit of participants or their beneficiaries.
2. Summary of Significant Accounting Policies
Basis of Accounting: The accompanying financial statements have been prepared
on the accrual basis of accounting.
Investment Valuation: The investments in the accompanying financial statements
are stated at quoted market prices, which approximate fair value as of
December 31, 2000 and 1999 except for participant loans outstanding that are
valued at cost, which approximates fair value
Investments: The Plan invests in various investments. Investment securities
are generally exposed to various risks, such as interest rate, credit and
overall market volatility risks. Due to the level of risk associated with
certain investment securities, it is reasonably possible that changes in the
values of investment securities will occur in the near term and that such
changes could materially affect amounts reported in the Statement of Net
Assets Available for Plan Benefits.
SFAS 133: Effective January 1, 2001, the Plan adopted Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and
Hedging Activities" (SFAS 133). SFAS 133 establishes accounting and reporting
standards for derivative instruments and for hedging activities. It requires
all entities to recognize derivatives on the balance sheet as assets and
liabilities, measured at fair value. The Plan does not currently have any
derivative instruments and, accordingly, adoption of SFAS 133 did not have an
impact on its financial status.
Income Recognition: Interest income is recorded as earned on the accrual basis.
The difference in fair value from one period to the next is recognized and
included in net realized and unrealized appreciation (depreciation) in fair
value of investments in the accompanying Statement of Changes in Net Assets
Available for Plan Benefits. The net realized and unrealized appreciation
(depreciation) in fair value of investments also includes realized gains and
losses on investments sold during the year.
Purchases and sales of investments are recorded on a trade date basis.
Distribution to Participants: Benefit payments to participants are recorded
upon distribution.
Administrative Expenses: During 2000, all administrative expenses of the Plan
were paid by the Company.
PAGE 5
Estimates: Management makes estimates and assumptions when preparing the
financial statements in conformity with accounting principles generally
accepted in the United States. These estimates and assumptions affect the
amounts reported in the accompanying financial statements and notes thereto.
Actual results could differ from those estimates.
3. Investments
The investment options available to participants were revised during 2000 to
provide consistency with the investments held by the CNF Transportation Inc.
TASP, another defined contribution plan administered by the Company. This
version was due to the amendment described in Note 1, which resulted in
six additional investment options for participants of the Plan.
During 2000, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated (depreciated) in
value as follows:
Shares in registered investment companies $(429,888)
Common trust funds (8,798)
CNF Common stock 20,590
----------
$(418,096)
==========
4. Income Tax Status
The Internal Revenue Service has determined and informed the Company by letter
dated April 1992, that the Plan and related trust are designed in accordance
with applicable sections of the Internal Revenue Code (the Code). The Plan has
been amended since receiving the determination letter. However, the plan
administrator believes that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the Code.
Therefore, the plan administrator believes that the Plan was qualified and the
related trust was tax exempt as of the financial statement date.
5. Related Party Transactions
Certain Plan investments are shares in funds managed by T. Rowe Price Trust
Company. T. Rowe Price Trust Company (the Trustee) is the trustee as defined
by the Plan and therefore, these investments and investment transactions
qualify as party-in-interest.
PAGE 6
SCHEDULE I
EWW SAVINGS PLAN
EIN 94-1444798
PLAN NO. 112
PART IV, LINE 4i - SCHEDULE OF ASSETS HELD AT END OF YEAR
AS OF DECEMBER 31, 2000
(Note 5)
Identity of Issue Description of Investment Including
Borrower, Lessor Maturity Date, Rate of Interest, Current
or Similar Party Collateral, Par or Maturity Value Cost Value
- ----------------- ------------------------------------ ---------- ----------
Shares in registered investment companies:
*T. Rowe Price Growth Stock Fund (50,017.807
shares) $1,430,932 $1,360,484
*T. Rowe Price New Income Fund (26,685.343 shares) 230,407 226,825
*T. Rowe Price Equity Income Fund (31,808.297
shares) 745,900 784,711
*T. Rowe Price Science and Technology Fund
(34,820.422 shares) 1,542,316 1,238,562
*T. Rowe Price International Stock Fund
(16,506.172 shares) 246,535 239,670
*T. Rowe Price Small-Cap Stock Fund (1,468.897
shares) 35,812 35,063
Common Trust Funds:
*T. Rowe Price Equity Index Trust (2,492.351 shares) 89,789 87,307
*T. Rowe Price Bond Index Trust (203.264 shares) 3,334 3,449
*T. Rowe Price U.S. Treasury Money Market Fund
(1,553,835.320 shares) 1,553,835 1,553,835
*T. Rowe Price Retirement Strategy Trust-Balanced
(17,432.076 shares) 379,867 385,772
*T. Rowe Price Retirement Strategy Trust-
Conservative Growth (709.044 shares) 16,752 16,570
*T. Rowe Price Retirement Strategy Trust-Income
Plus (85.426 shares) 1,690 1,693
*Plan participants Participant Loans with interest from
8.75% to 10.50% and maturity dates
from 2001 to 2005 197,566 197,566
Common Stock:
*CNF Inc. Unrestricted CNF Common Stock
(2,549.477 shares) 66,673 86,204
---------- ----------
Total investments $6,541,408 $6,217,711
========== ==========
*Represents a party-in-interest transaction as of December 31, 2000.
NOTE: Cost is calculated using the historical rolling average cost method.
The accompanying notes are an integral part of this schedule.