UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS AND SIMILAR PLANS
PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND
--- EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2004
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934
For the transition period from N/A to N/A
COMMISSION FILE NUMBER 1-5046
MENLO WORLDWIDE FORWARDING, INC. SAVINGS PLAN
CNF 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
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons administering the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
Menlo Worldwide Forwarding, Inc. Savings Plan
/s/ Mark C. Thickpenny
June 27, 2005 ---------------------------
Mark C. Thickpenny
Chairman, CNF Inc. Benefits Administrative
Committee
MENLO WORLDWIDE FORWARDING, INC.
SAVINGS PLAN
Financial Statements and Supplemental Schedule
December 31, 2004 and 2003
(With Report of Independent Registered Public Accounting Firm)
MENLO WORLDWIDE FORWARDING, INC.
SAVINGS PLAN
December 31, 2004 and 2003
Index
Page
Report of Independent Registered Public Accounting Firm 1
Financial Statements:
Statement of Net Assets Available for Benefits as of December 31,
2004 3
Statement of Net Assets Available for Benefits as of December 31,
2003 4
Statement of Changes in Net Assets Available for Benefits for the
Year ended December 31, 2004 5
Notes to Financial Statements 6
Supplemental Schedule
Schedule I: Schedule H, Line 4i - Schedule of Assets (Held at
End of Year) as of December 31, 2004 11
Report of Independent Registered Public Accounting Firm
The Finance Committee
CNF Inc. Board of Directors:
We have audited the accompanying statements of net assets available for
benefits of the Menlo Worldwide Forwarding, Inc. Savings Plan as of
December 31, 2004 and 2003, and the related statement of changes in net
assets available for benefits for the year ended December 31, 2004. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (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 net assets available for benefits of the Plan as
of December 31, 2004 and 2003, and the changes in its net assets available
for benefits for the year ended December 31, 2004, in conformity with U.S
generally accepted accounting principles.
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 purposes of additional analysis and is
not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedule is the responsibility of the Plan's
management. The supplemental schedule has been subjected to the auditing
procedures applied in the audit 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.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The fund information in the statements
of net assets available for benefits and statement of changes in net assets
available for benefits is presented for purposes of additional analysis
rather than to present the net assets available for benefits and changes in
net assets available for benefits of each fund. The fund information has been
subjected to the auditing procedures applied in the audit 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.
/s/ KPMG LLP
-------------------------
KPMG LLP
Portland, Oregon
June 17, 2005
MENLO WORLDWIDE FORWARDING,INC. SAVINGS PLAN
Statement of Net Assets Available for Benefits
December 31,2004
Nonparticipant-Directed
-----------------------
Restricted CNF
Participant- CNF common preferred
Directed stock fund stock fund Total
------------ ---------- ---------- -----------
Assets:
Investments, at fair
value:
Shares in registered
investment companies $ 11,301,996 $ - $ - $11,301,996
Common trust funds 3,437,513 - - 3,437,513
Participant loans 450,674 - - 450,674
CNF equity 712,477 557,236 1,351,369 2,621,082
------------ --------- ---------- -----------
Total investments 15,902,660 557,236 1,351,369 17,811,265
Net assets available
for benefits $ 15,902,660 $ 557,236 $1,351,369 $17,811,265
============ ========== ========== ===========
See accompanying notes to financial statements.
MENLO WORLDWIDE FORWARDING,INC.SAVINGS PLAN
Statement of Net Assets Available for Benefits
December 31,2003
Nonparticipant-Directed
-----------------------
Restricted CNF
Participant- CNF common preferred
Directed stock fund stock fund Total
------------ ---------- ---------- -----------
Assets:
Investments, at fair
value:
Shares in registered
investment companies $ 11,310,920 $ - $ - $11,310,920
Common trust funds 3,707,023 - - 3,707,023
Participant loans 407,271 - - 407,271
CNF equity 491,954 508,641 1,218,497 2,219,092
------------ ---------- ---------- -----------
Total investments 15,917,168 508,641 1,218,497 17,644,306
Participant contributions
receivable 10,354 - - 10,354
Cash 30 86 - 116
------------ ---------- ---------- -----------
Net assets available
for benefits $ 15,927,552 $ 508,727 $1,218,497 $17,654,776
============ ========== ========== ===========
See accompanying notes to financial statements.
MENLO WORLDWIDE FORWARDING,INC.SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
Year ended December 31,2004
Nonparticipant-Directed
-----------------------
Restricted CNF
Participant- CNF common preferred
Directed stock fund stock fund Total
------------ ---------- ---------- -----------
Additions (deductions):
Participant contributions $ 662,994 $ - $ - $ 662,994
Allocation of preferred
shares to participants
at cost (note 1) - - 72,269 72,269
Dividend and interest
income 45,846 5,230 - 51,076
Transfers in
from other plans 20,725 7,496 15,999 44,220
Net appreciation in
fair value of
investments (note 3) 1,296,442 203,130 218,119 1,717,691
Distributions to
participants (note 1) (2,090,124) (301,637) - (2,391,761)
------------ ----------- ---------- ------------
Total additions
(deductions) (64,117) (85,781) 306,387 156,489
Interfund transfers, net 39,225 134,290 (173,515) -
------------ ----------- ----------- ------------
Net increase (decrease) (24,892) 48,509 132,872 156,489
Net assets available
for benefits,
beginning of year $ 15,927,552 $ 508,727 $1,218,497 $17,654,776
------------ ----------- ----------- ------------
Net assets available
for benefits,
end of year $ 15,902,660 $ 557,236 $1,351,369 $17,811,265
============ ========== ========== ===========
See accompanying notes to financial statements.
MENLO WORLDWIDE FORWARDING, INC. SAVINGS PLAN
Notes to Financial Statements
(1) Description of Plan
The following description of the Menlo Worldwide Forwarding, Inc. Savings
Plan (the Plan), formerly the CNF Inc. EWW Savings Plan, is provided for
general information purposes only. Participants should refer to the
Employee Benefits Handbook or the Plan document for more complete
information.
(a) 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. (CNF) Benefits Administrative Committee
(the Committee), which is appointed by the Chief Executive Officer of
CNF. Menlo Worldwide Forwarding, Inc. is a subsidiary of Menlo
Worldwide, LLC that was sold in December 2004, as discussed below.
Menlo Worldwide, LLC is a wholly owned subsidiary of CNF Inc. The
Plan's trustee, T. Rowe Price Trust Company (the Trustee), is
responsible for the management and control of the Plan's assets, which
are held in individual participant investment accounts, collectively
known as "the Trust."
(b) Amendments
During 2000, CNF amended the plan and the CNF Thrift and Stock Plan
(TASP). Effective September 19, 2000, the pilots of Emery Worldwide
Airlines (EWA) ceased participation in the TASP and their elective
deferrals began being contributed to the Plan. The pilots' vested
balance in the TASP was transferred to the Plan effective December 20,
2000.
Effective January 1, 2004, the Plan was amended to permit in-service
withdrawals for financial hardship, in accordance with four "safe-
harbor" reasons (medical expenses, college tuition, purchase of
primary residence, or to prevent eviction). Participants who are
receiving benefits under a CNF-sponsored long-term disability plan are
eligible for in-service withdrawals from the Plan. Previously, such
withdrawals were only available if the participant qualified for
Social Security disability benefits.
In December 2004, CNF completed the sale of Menlo Worldwide
Forwarding, Inc. and its subsidiaries and Menlo Worldwide Expedite!,
Inc. (collectively referred to as MWF) to United Parcel Service, Inc.
(UPS). The active employees of MWF ceased participation in the
Plan as of the sale date and were permitted to transfer their
Plan account balances to a UPS-sponsored defined contribution plan.
In February and March 2005, transfers were made from the Plan to the
UPS defined contribution plan totaling $474,808 in rollover assets and
$110,599 in outstanding loans.
(c) Eligibility
Employees were eligible to participate in the Plan if they were
covered by a collective bargaining unit that specifically provided for
participation in the Plan. Employees were eligible to participate in
the Plan upon hire if they were regular full-time employees.
Supplemental or part-time employees became eligible upon completion of
one year of service during which the employee worked 750 hours.
(d) Contributions
Prior to the sale of MWF in December 2004, participants could
contribute up to 50% of their compensation into the Plan, as defined
in the Plan document and subject to certain limitations. Each
participating employee could direct contributions to any one or more
of the investment funds established under the Plan. CNF makes no
matching contributions for participants of the Plan.
Participants who formerly participated in the TASP, as discussed under
"Amendments" above and participants who transfered from noncontractual
to contractual positions within CNF, are awarded CNF preferred stock
as a substitute for cash dividends used for debt service on TASP debt.
For 2004, these participants received CNF preferred stock with a
historical cost of $72,269, as shown on the Statement of Changes in
Net Assets Available for Benefits.
(e) Participant Accounts
A separate account is maintained for each participant of the Plan.
Allocations of net Plan earnings are based upon participant account
balances. The benefits to which participants are entitled are the
benefits that can be provided from participants' vested accounts.
(f) Vesting
Participants are fully vested at all times in all contributions made
to the Plan plus net earnings thereon.
(g) Participant Loans
The Plan had a loan provision allowing participants access to funds on
a tax-free basis. Each participant could 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 was made
over the participant's current outstanding loan balance on the date of
the loan. Loans do not exceed 50% of a participant's vested account
balance (subject to administrative adjustment to assure compliance
with the 50% limit). The loans are secured by the vested balance in
the participant's account. Loans outstanding at December 31, 2004 bear
interest at rates ranging from 5.00% to 10.50%.
In connection with the sale of MWF, as described above, participants
with an outstanding loan balance could either transfer the balance to
a UPS-sponsored plan (if eligible for a UPS plan) or pay off the loan
balance. If the loan was not paid off within 75 days the loan was
defaulted and offset against the participants vested balance, in
accordance with plan rules.
(h) Distribution to Participants
Employees became eligible for distribution in connection with the sale
of MWF, as described above. Distributions are payable in the form of
lump-sum payments or in a series of substantially equal annual
installments.
(i) Plan Termination
Although it has not expressed any intent to do so, CNF has the right
under the Plan to terminate the Plan subject to the provisions of
ERISA. In the event of Plan termination, CNF 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
(a) Basis of Accounting
The accompanying financial statements have been prepared using the
accrual method of accounting.
(b) Financial Instruments
The investments in the accompanying financial statements are stated at
quoted market prices, which approximate fair value as of December 31,
2004 and 2003, except for (1) participant loans outstanding that are
valued at cost, which approximates fair value and, (2) CNF preferred
stock, which does not have a quoted market value, and is stated at
fair value as determined by an annual independent appraisal.
(c) Investments
The Plan offers 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 value of investment securities will occur in the near
term and that such changes could materially affect amounts reported in
the Statements of Net Assets Available for Benefits.
(d) Income Recognition
The difference in market value from one period to the next is included
in net appreciation in fair value of investments in the accompanying
Statement of Changes in Net Assets Available for Benefits. The net
appreciation in fair value of investments also includes realized gains
and losses.
Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date. Purchases and sales of securities
are recorded on the trade-date basis.
(e) Operating Expenses
During 2004, all administrative expenses of the Plan were paid by CNF.
(f) Payment of Benefits
Benefits paid to participants are recorded upon distribution.
(g) Estimates
CNF makes estimates and assumptions when preparing the financial
statements in conformity with U.S. generally accepted accounting
principles. These estimates and assumptions affect the amounts
reported in the accompanying financial statements and notes. Actual
results could differ from those estimates.
(3) Investments
The following presents investments that represent 5% or more of the
Plan's net assets:
December 31
---------------------------
2004 2003
------------ ------------
Participant directed investments:
Shares in registered investment companies:
T. Rowe Price Growth Stock Fund,
142,812 and 155,705 shares,
respectively $ 3,808,807 $ 3,788,311
T. Rowe Price Science and Technology
Fund, 151,999 and 178,730 shares,
respectively 2,903,174 3,360,129
T. Rowe Price Equity Income Fund,
87,271 and 98,158 shares,
respectively 2,320,543 2,371,486
Common trust funds:
T. Rowe Price U.S. Treasury Money
Market Trust,2,009,137 and
2,239,651 shares, respectively 2,009,137 2,239,651
Nonparticipant-directed investments:
CNF preferred stock, 5,299 and
5,641 shares, respectively 1,351,369 1,218,497
During 2004, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value as follows:
Shares in registered investment companies $ 936,181
Common trust funds 123,771
CNF common stock 439,620
CNF preferred stock 218,119
-------------
$ 1,717,691
=============
(4) Income Tax Status
The Internal Revenue Service has determined and informed CNF by a letter
dated October 3, 2001, that the Plan and related trust are designed in
accordance with applicable sections of 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, the Trustee as defined by the Plan. Therefore, these
investments and investment transactions qualify as party-in-interest.
Schedule I
MENLO WORLDWIDE FORWARDING, INC.SAVINGS PLAN
EIN 94-1444798
PLAN NO. 112
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2004
Identity
of issue
borrower, Description of investment
lessor, including maturity date,
or similar rate of interest, collateral, Current
party par, or maturity value Cost value
- ---------- ----------------------------- ------------- -------------
Shares in registered
investment companies:
*T.Rowe Price Growth Stock Fund
(142,812.424 shares) $ 3,621,413 $ 3,808,807
*T.Rowe Price Equity Income Fund
(87,271.274 shares) 2,092,506 2,320,543
*T.Rowe Price Science and Technology Fund
(151,998.622 shares) 4,079,763 2,903,174
*T.Rowe Price International Stock Fund
(56,174.574 shares) 711,499 726,337
*T.Rowe Price Small-Cap Stock Fund
(14,218.306 shares) 371,641 452,426
*T.Rowe Price Retirement 2005 Fund
(3,714.508 shares) 36,605 39,262
*T.Rowe Price Retirement 2010 Fund
(89.378 shares) 1,213 1,255
*T.Rowe Price Retirement 2015 Fund
(14,947.417 shares) 148,938 160,535
*T.Rowe Price Retirement 2020 Fund
(3,462.339 shares) 48,684 51,554
*T.Rowe Price Retirement 2025 Fund
(13,063.206 shares) 128,928 142,258
*T.Rowe Price Retirement 2030 Fund
(25.544 shares) 371 396
*T.Rowe Price Retirement Income Fund
(4,150.290 shares) 50,387 50,883
PIMCO PIMCO Total Return Fund
(58,088.330 shares) 621,500 619,802
J.P. Morgan
Investment
Management, Undiscovered Managers Small-Cap
Inc. Growth Fund (2,425.492 shares) 22,872 24,764
Common trust funds:
*T.Rowe Price Equity Index Trust
(15,562.336 shares) 491,228 531,765
*T.Rowe Price Bond Index Trust
(5,783.878 shares) 112,839 127,072
*T.Rowe Price U.S. Treasury Money Market Trust
(2,009,137.080 shares) 2,009,137 2,009,137
*T.Rowe Price Retirement Strategy Trust -
Balanced (31,054.856 shares) 667,825 769,539
*Plan
participants Participant loans with interest
from 5.00% to 10.50% and
maturity dates from 2005 to 2009 - 450,674
Common stock:
*CNF Inc. Unrestricted CNF Common Stock
(14,221.106 shares) 412,928 712,477
*CNF Inc. Restricted CNF Common Stock Fund
(11,122.468 shares) 305,276 557,236
Preferred stock:
*CNF Inc. CNF Preferred Stock
(5,299.486 shares) 805,842 1,351,369
Total investments ----------
$ 17,811,265
==========
*Represents a party-in-interest transaction as of December 31, 2004.
Note: Cost is calculated using the historical rolling-average-cost method.
See accompanying report of independent registered public
accounting firm.