Exhibit 99.1
CON-WAY INC.
2855 CAMPUS DRIVE, SUITE 300
SAN MATEO, CA 94403
(650) 378-5200
NEWS RELEASE
Contacts:
Media - Gary Frantz
(650) 378-5335
Investors - Patrick Fossenier
(650) 378-5353
CON-WAY INC. ANNOUNCES CHANGES TO EMPLOYEE PENSION PROGRAM, EXPANDED FUNDING
FOR 40I(K) RETIREMENT BENEFITS
SAN MATEO, Calif. - October 17, 2006-Con-way Inc. (NYSE:CNW) announced today
that its Board of Directors has approved changes to the company's pension and
retirement benefits programs. The changes are intended to preserve and
protect the retirement benefits earned by existing employees under the
company's defined benefit pension plan, while introducing an expanded defined
contribution plan that will provide additional company funds for employee
401(k) savings accounts, and a larger company match on employee 401(k)
contributions.
The enhanced retirement benefits program approved by the Board has the
following major provisions, which take effect January 1, 2007:
* As of December 31, 2006 no new employees will be eligible to join the
defined benefit pension plan. Employees who are participants in the
pension plan as of December 31 will retain all benefits and credited
service time earned, with credited service capped as of December 31.
Vesting rules do not change. As pay grows, the future pension benefit for
eligible employees can continue to grow for the next 10 years, after which
the benefit will be capped. The company will continue to fund the pension
plan with annual contributions sufficient to ensure future benefit
obligations are met.
* Benefits paid under the pension plan are determined based on years of
credited service and final average pay. Final average pay will be
calculated from the five highest years of earnings in the past 10 years
preceding retirement. The average pay calculation will include regular pay
and incentive compensation paid to the employee.
* The company's matching contribution to the employee's 401(k) account will
double from the current level of 50 percent of the first 3 percent of the
employee's pay, to 50 percent of the first 6 percent.
* The company will make a new Basic Contribution to the 401(k) accounts of
all employees. This new contribution will equal 3 to 5 percent of the
employee's pay, depending on years of service. The contribution will be
paid quarterly in every succeeding year of employment, and will vest
immediately. This is in addition to the regular company matching
contribution.
* The company will make a new Transition Contribution to the 401(k) accounts
of qualifying employees. The Transition Contribution amount will equal 1
to 3 percent of the employee's pay, depending on combined age and years of
service as of December 31, 2006. The contribution will be paid quarterly
in every succeeding year of employment. This new contribution will vest
immediately, and is in addition to the regular company matching
contribution.
* For qualifying employees age 45 and older, with a minimum five years of
service, the company is increasing its contribution to the employee's
retiree health savings account.
* The company will introduce a new supplemental retirement savings plan,
which is an additional retirement savings vehicle designed to enable all
employees to fully benefit from these changes.
"Our pension plan is well funded and on solid financial ground," said Douglas
W. Stotlar, Con-way president and CEO. "We are taking these steps today to
ensure that it remains so, while providing our employees with greatly
enhanced benefits in an expanded retirement savings program that rivals the
best in any industry."
The changes are intended to reduce the company's exposure to pension cost
volatility and make pension plan expenses more predictable. "Pension plans
are under pressure from market forces and legislative and regulatory
mandates," Stotlar noted. "With the changes announced today, we're in a
better position to manage the challenges, while continuing to provide
eligible employees with a pension benefit as part of their overall retirement
package."
"This is a prudent decision for our employees and our collective future,"
Stotlar said. "It preserves pension benefits already earned, increases the
company's cash contributions to employee 401(k) accounts, and provides a more
flexible and valuable mechanism for employees to save towards retirement."
"Our objective is to ensure that Con-way remains a financially strong
service leader, providing good, stable jobs and a competitive retirement plan
for our employees, as well as consistent returns for shareholders, not only
today, but tomorrow and for many years to come," he concluded.
The company said the pension plan changes and the transition to the expanded
Retirement Savings Plan with its enhanced 401(k) features will result in a
nominal increase in pension and retirement expense for 2007, which should
moderate in future years. The cash flow effect of the changes is expected to
be neutral as well. For 2006, the company will make a total of $75 million
in contributions to the defined benefit pension plan.
Con-way Inc. (NYSE:CNW) is a $ 4.2 billion freight transportation and
logistics company with businesses in less-than-truckload and full truckload
freight services, brokerage, logistics, warehousing, supply chain management
and trailer manufacturing. The company and its subsidiaries operate across
North America and in 20 countries. Further information about Con-way Inc. and
additional press releases are available via the Internet at www.con-way.com.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release constitute "forward-looking
statements" and are subject to a number of risks and uncertainties and should
not be relied upon as predictions of future events. All statements other than
statements of historical fact are forward-looking statements, including any
projections and objectives of management for future operations, any
statements concerning proposed new products or services, any statements
regarding Con-way's estimated future contributions to pension plans, any
statements as to the adequacy of reserves, any statements regarding the
outcome of any claims that may be brought against Con-way, any statements
regarding future economic conditions or performance, any statements of
estimates or belief and any statements or assumptions underlying the
foregoing. Specific factors that could cause actual results and other matters
to differ materially from those discussed in such forward-looking statements
include: changes in general business and economic conditions, the
creditworthiness of Con-way's customers and their ability to pay for services
rendered, increasing competition and pricing pressure, availability of fuel
and changes in fuel prices or fuel surcharges, the effects of the cessation
of the air carrier operations of Emery Worldwide Airlines, the possibility
that Con-way may, from time to time, be required to record impairment charges
for long-lived assets, the possibility of defaults under Con-way's $400
million credit agreement and other debt instruments (including defaults
resulting from unusual charges), and the possibility that Con-way may be
required to repay certain indebtedness in the event that the ratings assigned
to its long-term senior debt by credit rating agencies are reduced, labor
matters, enforcement of and changes in governmental regulations,
environmental and tax matters, matters relating to the 1996 spin-off of
Consolidated Freightways Corporation (CFC), including the possibility that
CFC's multi-employer pension plans may assert claims against Con-way, matters
relating to the sale of Menlo Worldwide Forwarding, Inc., including Con-way's
obligation to indemnify the buyer for certain losses in connection with the
sale, matters relating to GM's exercise of its call right to purchase Vector
SCM, LLC and matters relating to Con-way's defined benefit pension plans. The
factors included herein and in Item 7 of Con-way's 2005 Annual Report on Form
10-K as well as other filings with the Securities and Exchange Commission
could cause actual results and other matters to differ materially from those
in such forward-looking statements. As a result, no assurance can be given as
to future financial condition, cash flows, or results of operations.