UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE ACT
- --- OF 1934
For the fiscal year ended December 31, 2006
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
CON-WAY RETIREMENT SAVINGS PLAN
Con-way Inc.
Incorporated in the State of Delaware
I.R.S. Employer Identification No. 94-1444798
2855 Campus Drive, Suite 300, San Mateo, California 94403
Telephone Number (650) 378-5200
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.
Con-way Retirement Savings Plan
June 27, 2007 /s/ Mark C. Thickpenny
----------------------------
Mark C. Thickpenny
Chairman, Con-way Inc.
Administrative Committee
CON-WAY RETIREMENT SAVINGS PLAN
(Formerly the CNF Inc. Thrift and Stock Plan)
Financial Statements and Schedule
December 31, 2006 and 2005
(With Report of Independent Registered Public Accounting Firm Thereon)
CON-WAY RETIREMENT SAVINGS PLAN
Index to Financial Statements and Schedule
Page
Report of Independent Registered Public Accounting Firm 1
Financial Statements:
Statements of Net Assets Available for Benefits -
December 31, 2006 and 2005 2
Statement of Changes in Net Assets Available for Benefits -
Year Ended December 31, 2006 3
Notes to Financial Statements 4
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) as
of December 31, 2006 13
Report of Independent Registered Public Accounting Firm
The Board of Directors
Con-way Inc.:
We have audited the accompanying statements of net assets available for
benefits of the Con-way Retirement Savings Plan (formerly the CNF Inc. Thrift
and Stock Plan) as of December 31, 2006 and 2005, and the related
statement of changes in net assets available for benefits for the year
ended December 31, 2006. 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, 2006 and 2005, and the changes in its net assets available
for benefits for the year ended December 31, 2006, 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.
/s/ KPMG LLP
Portland, Oregon
June 27, 2007
CON-WAY RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31,
--------------------------------------------------------------------------------------------------
2006 2005
------------------------------------------------ -----------------------------------------------
Invested Unallocated Total Invested Unallocated Total
-------------- -------------- -------------- -------------- -------------- --------------
Assets:
Investments, at fair value:
Shares in registered
investment companies $ 522,251,988 $ - $ 522,251,988 $ 432,118,708 $ - $ 432,118,708
Common trust funds 184,357,490 - 184,357,490 172,426,214 - 172,426,214
Con-way Common Stock 109,977,740 - 109,977,740 148,397,087 - 148,397,087
Con-way Preferred Stock 86,702,686 52,751,639 139,454,325 92,455,475 75,214,555 167,670,030
Investments, at cost:
Participant loans 54,738,168 - 54,738,168 50,780,054 - 50,780,054
-------------- -------------- -------------- -------------- -------------- --------------
Total investments 958,028,072 52,751,639 1,010,779,711 896,177,538 75,214,555 971,392,093
-------------- -------------- -------------- -------------- -------------- --------------
Net assets held in 401(h)
account (notes 3 and 8) 22,905,747 - 22,905,747 17,849,515 - 17,849,515
-------------- -------------- -------------- -------------- -------------- --------------
Contributions receivable:
Participants 2,371,244 - 2,371,244 1,141,711 - 1,141,711
Con-way 2,800,627 - 2,800,627 2,763,154 - 2,763,154
-------------- -------------- -------------- -------------- -------------- --------------
Total contributions
receivable 5,171,871 - 5,171,871 3,904,865 - 3,904,865
-------------- -------------- -------------- -------------- -------------- --------------
Due from Con-way Preferred
Stock Fund - Unallocated 5,398,334 - 5,398,334 5,854,216 - 5,854,216
Dividend receivable - 4,027,226 4,027,226 - 4,309,958 4,309,958
Cash 328,540 - 328,540 247,816 - 247,816
-------------- -------------- -------------- -------------- -------------- --------------
Total assets 991,832,564 56,778,865 1,048,611,429 924,033,950 79,524,513 1,003,558,463
-------------- -------------- -------------- -------------- -------------- --------------
Liabilities:
Notes payable (note 5) - (62,000,000) (62,000,000) - (77,000,000) (77,000,000)
Accrued interest payable - (2,648,150) (2,648,150) - (3,098,150) (3,098,150)
Due to Con-way (note 1) - (1,379,076) (1,379,076) - (1,211,808) (1,211,808)
Due to Con-way Preferred Stock
Fund - Allocated - (5,398,334) (5,398,334) - (5,854,216) (5,854,216)
Amounts related to
obligation of 401(h)
account (notes 3 and 8) (22,905,747) - (22,905,747) (17,849,515) - (17,849,515)
-------------- -------------- -------------- -------------- -------------- --------------
Total liabilities (22,905,747) (71,425,560) (94,331,307) (17,849,515) (87,164,174) (105,013,689)
-------------- -------------- -------------- -------------- -------------- --------------
Net assets available for
benefits $ 968,926,817 $ (14,646,695) $ 954,280,122 $ 906,184,435 $ (7,639,661) $ 898,544,774
============== ============== ============== ============== ============== ==============
See accompanying notes to financial statements.
CON-WAY RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2006
Invested Unallocated Total
-------------- -------------- --------------
Additions:
Participant contributions $ 68,408,988 $ - $ 68,408,988
Con-way contributions (note 1) 10,491,309 12,122,685 22,613,994
Rollover contributions 2,375,078 - 2,375,078
Allocation of preferred shares
to RSP participants 14,962,790 - 14,962,790
Dividend and interest income 8,340,118 8,173,615 16,513,733
Net appreciation (depreciation) in fair
value of investments (Note 4) 29,566,419 (6,964,034) 22,602,385
-------------- -------------- --------------
Total additions 134,144,702 13,332,266 147,476,968
-------------- -------------- --------------
Deductions:
Distributions to participants (71,402,320) - (71,402,320)
Allocation of preferred shares
to RSP participants - (14,962,790) (14,962,790)
Allocation of preferred shares
to Con-way 401(k) Plan participants - (80,210) (80,210)
Interest expense - (5,296,300) (5,296,300)
-------------- -------------- --------------
Total deductions (71,402,320) (20,339,300) (91,741,620)
-------------- -------------- --------------
Net increase (decrease) 62,742,382 (7,007,034) 55,735,348
Net assets available for
benefits, December 31, 2005 906,184,435 (7,639,661) 898,544,774
-------------- -------------- --------------
Net assets available for
benefits, December 31, 2006 $ 968,926,817 $ (14,646,695) $ 954,280,122
============== ============== ==============
See accompanying notes to financial statements.
CON-WAY RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(1) Description of Plan
The following description of the Con-way Retirement Savings Plan
(the Plan or RSP), formerly the CNF Inc. Thrift and Stock Plan, is
provided for general information purposes only. Participants should refer
to the Con-way Employee Benefits Handbook or the Plan document for more
complete information.
The term "Con-way" or "Company" refers to Con-way Inc., formerly CNF
Inc., and subsidiaries. In April 2006, shareholders approved management's
proposal to change the Company's name to Con-way Inc. from CNF Inc.
(a) General
The Con-way sponsored Plan provides eligible employees the opportunity
to save for their retirement through the Plan's profit-sharing,
salary-deferral and stock-ownership features. The plan also provides
medical benefits for retired participants, as described in note 3,
Retiree Health Savings Account.
The Plan is intended to qualify as a profit-sharing plan under
Section 401(a) of the Internal Revenue Code (the Code), with a
salary-deferral feature qualified under Section 401(k) of the Code and
is subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended (ERISA). The Plan also operates, in
relevant part, as a leveraged employee stock ownership plan (ESOP),
and is designed to comply with Section 4975(e)(7) of the Code. Overall
responsibility for administering the Plan rests with the Con-way Inc.
Administrative Committee (the Committee), which is appointed by the
Chief Executive Officer of Con-way. The Plan's trustee, T. Rowe Price
(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).
In September 2000, the pilots of Emery Worldwide Airlines ceased
participation in the Plan and their elective deferrals began being
contributed to the Con-way 401(k) Plan, formerly the Menlo Worldwide
Forwarding Inc. Savings Plan (MWF Savings Plan). The pilots' vested
balances in the Plan were transferred to the Con-way 401(k) Plan in
December 2000. The transferred Con-way 401(k) Plan participant
accounts will continue to be allocated additional shares of Con-way's
Series B Cumulative Convertible Preferred Stock (Preferred Stock) as a
substitute for Preferred Stock cash dividends used for debt service,
as described below.
In 2002, Con-way designated a portion of the ESOP feature of the Plan
to be a money purchase pension plan and added medical benefits for
retired participants, as described in note 3, Retiree Health Savings
Account.
(b) Amendments
In August 2006, the plan name was changed from the CNF Inc. Thrift and
Stock Plan to the Con-way Retirement Savings Plan.
In October 2006, Con-way's Board of Directors approved changes to the
Plan, which expand benefits earned. The changes were effective
January 1, 2007, and are more fully discussed in note 9, Subsequent
Event.
(c) Eligibility
An employee is eligible to participate in the Plan if the employee is
not covered by a collective bargaining agreement, is not a leased
employee or is not a nonresident alien. There are no age or service
requirements for eligibility except that a supplemental employee must
complete one year of service during which the employee works
1,000 hours.
(d) Contributions
Participants may contribute up to 50% of their eligible compensation
subject to certain limitations. Con-way makes matching contributions
equal to 50% of participants' contributions, but generally not
exceeding 1.5% of participants' eligible compensation. Con-way
matching contributions are in the form of allocations of Preferred
Stock and open-market purchases of Con-way Common Stock (Common Stock)
from cash contributions by Con-way.
Cash dividends on the Preferred Stock are used for debt service on the
notes payable (see note 5). Participants are allocated additional
Preferred Stock as a substitute for the cash dividends used for debt
service. For the year ended December 31, 2006, annual interest
requirements were less than annual Preferred Stock cash dividends
received by the Plan.
As reported in the Statement of Changes in Net Assets Available for
Benefits, Preferred Stock was allocated to RSP and Con-way 401(k) Plan
participants at a fair value of $14,962,790 and $80,210, respectively.
In 2006, the total allocation to the RSP and Con-way 401(k) Plan
participants consisted of the following:
Con-way match of Preferred Stock $ 7,223,635
Additional Preferred Stock allocated to participants
as a substitute for cash dividends used for
debt service 7,819,365
------------
Total allocations to participants $ 15,043,000
============
In addition to its match of Preferred and Common Stock, Con-way made
contributions to the Plan for repayment of the notes payable described
in note 5. In 2006, principal payments consisted of the following:
Con-way cash contributions $ 12,122,685
Con-way Preferred Stock cash dividends in excess of
interest on the notes payable 2,877,315
------------
Total principal payments $ 15,000,000
============
At December 31, 2006 and 2005, the Preferred Stock cash dividend
payable in excess of interest payable on the RSP notes is reported in
the Statements of Net Assets Available for Benefits as amounts Due to
Con-way of $1,379,076 and $1,211,808, respectively.
(e) Participant Accounts
The Plan allows participants to select any one or more of the
investment funds established under the Plan in which contributions can
be invested. Con-way's matching contributions are deposited into the
Con-way Preferred Stock Fund - Allocated and the Con-way Common Stock
Fund. As with balances in other invested funds, participants may
transfer Con-way's matching contributions to investments other than
Con-way equity.
Allocations of Con-way's matching contributions are based upon a
percentage of participant contributions, as described above.
Allocations of net Plan earnings are based upon participant account
balances, as defined. Participants are only entitled to the vested
benefits.
(f) Vesting
Participants' contributions plus earnings thereon vest immediately.
Con-way's matching contributions generally vest after two years of
service with Con-way. If the employee is terminated prior to two years
of service, the matching contributions are forfeited. Forfeited shares
of Common and Preferred Stock are used to reduce future Con-way
contributions. At December 31, 2006 and 2005, forfeitures totaling
$213,224 and $162,998, respectively, were available to reduce future
contributions.
(g) Participant Loans
The Plan has a loan provision allowing participants access to funds.
Loans can be no less than $1,000 and cannot exceed the lesser of
$50,000 or 50% of a participant's vested account balance (subject to
administrative adjustment to assure compliance with the 50% limit).
Loans can be made for a term not to exceed 4-1/2 years. Loans
outstanding at December 31, 2006 bear interest at rates ranging from
5.00% to 10.50%. Principal and interest are paid ratably through
payroll deductions.
(h) Payments and Benefits
Participants can receive a total distribution from their accounts upon
death or termination of employment. Disabled participants can receive
a partial distribution of their accounts, excluding matching
contributions received after January 1, 2002, provided they qualify
for benefits under Con-way's long-term disability coverage. Other
types of withdrawals are permitted by the Plan in limited situations.
Participants can elect to have their accounts distributed in a single
lump sum or in a series of substantially equal annual installments, as
defined by the Plan. Distributions will be made in cash except that
(1) participant accounts invested in Common Stock can, at the
direction of the participant, be paid in shares and (2) participant
allocations of Preferred Stock will be converted into shares of Common
Stock and can, at the direction of the participant, then be paid in
common shares or in cash.
(i) Plan Termination
Although Con-way has no current intention of terminating the Plan, it
may do so at any time by resolution of the board of directors. In the
event that the Plan is terminated, the net assets of the Plan shall be
distributed to participants in the amount credited to their accounts.
(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,
2006 and 2005, except for (1) participant loans outstanding that are
valued at cost, which approximates fair value, and (2) Con-way
Preferred Stock, which does not have a quoted market value and is
stated at fair value, as determined by an annual independent
appraisal.
The notes payable of $62,000,000 and $77,000,000 at December 31, 2006
and 2005, respectively, in the accompanying financial statements are
stated at their carrying value. The fair value of the notes payable as
of December 31, 2006 and 2005 was approximately $66,000,000 and
$83,000,000, respectively. Fair value was estimated based on the
expected future payments discounted at market rates.
(c) Investments
The Plan offers various investments in securities that are generally
exposed to various risks, such as interest-rate, credit and overall
market-volatility risks. Due to the risk associated with certain
investment securities, it is reasonably possible that the value of
investment securities will change and that such changes could
materially affect amounts reported in the Statements of Net Assets
Available for Benefits.
(d) Income Recognition
The annual change in market value, including realized gains and
losses, is reported in net appreciation (depreciation) in fair value
of investments in the accompanying Statement of Changes in Net Assets
Available for Benefits.
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 2006, all administrative expenses of the Plan were paid by
Con-way.
(f) Payment of Benefits
Benefits paid to participants are recorded upon distribution.
(g) Estimates
Con-way 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.
(h) Reclassification
Certain amounts in the prior-period financial statements have been
reclassified to conform to the current-period presentation.
(3) Retiree Health Savings Account
Effective January 1, 2002, the Plan was amended to include a medical
benefit that funds a portion of the postretirement obligation for
retirees and their beneficiaries in accordance with Section 401(h) of the
Code. A separate account has been established and maintained in the Plan
for the net assets related to the medical benefit (the 401(h) account).
In accordance with Code Section 401(h), the Plan's investments in the
401(h) account may not be used for, or diverted to, any other purpose
other than providing health benefits for retirees and their
beneficiaries. Plan participants do not contribute to the 401(h) account
and do not direct the investment choices. Employer contributions to the
401(h) account are determined annually at the discretion of Con-way and
are subject to certain limitations as defined by the Code.
Upon reaching age 45, completing five or more years of service and
completing 1,000 or more paid hours of service in the Plan year, each
noncontractual employee is eligible for a retiree medical allocation with
respect to that Plan year. Retiree medical allocations for each 401(h)
Plan participant are equal, except for allocations to participants
retiring in the current plan year, for whom the allocation will be a
pro-rata portion of the amount allocated to other participants based on
the number of quarters employed in the year of retirement. Benefits to
individual participants are limited to the total accumulated retiree
medical allocation, plus interest credited at an annual rate equal to the
five-year Treasury Constant Maturity rate as published by the Federal
Reserve Board. In order to access their benefit balance during
retirement, a participant must be at least age 55 with at least 10 years
of service at retirement, or be at least age 65 at retirement. Any
remaining unclaimed benefit will be forfeited to the Plan upon a
participant's death or termination of employment prior to retirement
eligibility.
(4) Investments
The following investments represent 5% or more of the Plan's net assets.
December 31,
-------------------------
2006 2005
------------ ------------
Shares in registered investment companies:
T. Rowe Price Growth Stock Fund, 3,999,518 and
4,203,011 shares, respectively $126,504,740 $119,365,513
T. Rowe Price Equity Income Fund, 3,597,874 and
3,643,492 shares, respectively 106,317,172 94,439,308
T. Rowe Price Science and Technology Fund,
3,350,817 and 3,845,826 shares, respectively 70,233,128 75,262,820
Common trust funds:
T. Rowe Price U.S. Treasury Money Market Trust,
87,698,616 and 82,352,262 shares, respectively 87,698,616 82,352,262
T. Rowe Price Retirement Strategy Trust-Balanced,
1,675,288 and 1,745,491 shares, respectively 48,700,635 45,417,666
*Participant loans 54,738,168 50,780,054
Con-way equity:
Con-way Common Stock, 2,497,224 and
2,655,163 shares, respectively 109,977,740 148,397,087
Con-way Preferred Stock - Allocated, 373,059
and 351,368 shares, respectively 86,702,686 92,455,475
*Con-way Preferred Stock - Unallocated, 226,977
and 285,846 shares, respectively 52,751,639 75,214,555
*Nonparticipant-directed
During 2006, 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 $ 61,783,882
Common trust funds 10,586,550
Con-way Common Stock (30,479,676)
Con-way Preferred Stock (19,288,371)
------------
$ 22,602,385
============
In May 1989, the Plan purchased 986,259 shares of Preferred Stock for
$150,009,863 using proceeds from the debt described in note 5. The
Preferred Stock can only be issued to and held by the Plan Trustee. The
shares are held by the Trustee and allocated to participant accounts.
Upon allocation, the shares are first used to pay the Preferred Stock
cash dividend on shares previously allocated to the participant accounts
with the remainder used to satisfy a portion of Con-way's matching
contribution requirement. In connection with a participant's account
distribution, the Preferred Stock is converted into Common Stock at a
rate generally equal to that number of shares of Common Stock that could
be purchased for $152.10, but not less than the minimum conversion rate
of 4.708 shares of Common Stock for each share of Preferred Stock.
At December 31, 2006, outstanding Preferred Stock of 603,816 shares
consisted of 400,067 allocated shares and 203,749 unallocated shares.
Allocated shares at December 31, 2006 included 396,287 shares allocated
to RSP participant accounts and 3,780 shares allocated to Con-way 401(k)
Plan participant accounts. At December 31, 2005, outstanding Preferred
Stock of 641,359 shares consisted of 377,762 allocated shares and 263,597
unallocated shares. Allocated shares at December 31, 2005 included
373,616 shares allocated to RSP participant accounts and 4,146 shares
allocated to Con-way 401(k) Plan participant accounts. Unallocated shares
at December 31, 2006 and 2005 were pledged as collateral against the Plan
Notes, as described below. Preferred Stock of 23,228 and 22,248 shares
were allocated to participant accounts after December 31, 2006 and 2005,
respectively, but related to participant activity for the years ended
December 31, 2006 and 2005, respectively. Accordingly, the fair value of
this Preferred Stock is accrued as Due from (Due to) the Con-way
Preferred Stock Fund - Unallocated (Con-way Preferred Stock Fund -
Unallocated) to reflect the accrued allocation between funds.
(5) Notes Payable
In July 1989, the Plan completed the sale of $150,000,000 in aggregate
principal amount of notes (the Plan Notes) to a group of institutional
investors. The proceeds from the sale of the original Plan Notes were
used to repay a $150,000,000 bridge loan from Con-way to the Plan that
had financed the purchase of the Preferred Stock.
Con-way guarantees the Plan Notes. As of December 31, 2006, there was
$62,000,000 aggregate principal amount of Series B Plan Notes
outstanding, bearing interest at an annual rate of 8.54% and maturing on
January 1, 2009.
Holders of the Series B Plan Notes have the right to require Con-way to
repurchase those notes if, among other things, both Moody's and Standard
& Poor's have publicly rated Con-way's long-term senior debt at less than
investment grade unless, within 45 days, Con-way shall have obtained,
through a guarantee, letter of credit or other permitted credit
enhancement or otherwise, a credit rating for such notes of at least "A"
from Moody's or Standard & Poor's (or another nationally recognized
rating agency selected by the holders of such notes) and shall maintain a
rating on such notes of "A" or better thereafter. At December 31, 2006,
Con-way's senior long-term debt was rated as investment grade by both
Moody's (Baa3) and Standard & Poor's (BBB).
The interest expense on the Plan Notes is payable semiannually on
January 1 and July 1 and is subject to adjustment in certain
circumstances, including some changes in applicable tax laws. For the
year ended December 31, 2006, the Plan made a principal payment of
$15,000,000 to fully repay the Series A Plan Notes.
Future maturities of the Series B Plan Notes to be paid from excess
Preferred Stock cash dividends and/or additional cash contributions from
Con-way are $18,600,000 in 2007, $20,700,000 in 2008, and $22,700,000 in
2009.
(6) Income Tax Status
The Internal Revenue Service has determined and informed Con-way by a
letter dated August 20, 2003 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, Con-way
believes that the Plan is designed and is currently being operated in
compliance with the applicable requirements of the Code. Therefore, Con-
way believes that the Plan was qualified and the related trust was tax
exempt as of the financial statement date.
(7) Related-Party Transactions
Certain Plan investments are shares in registered investment companies
and common trust funds managed by T. Rowe Price, the Plan trustee, as
defined. Therefore, these investments and investment transactions qualify
as party-in-interest transactions.
(8) Reconciliation to Form 5500
The following is a reconciliation of net assets available for plan
benefits.
December 31,
-------------------------
2006 2005
------------ ------------
Net assets available for benefits -
financial statements $954,280,122 $898,544,774
Net assets held in 401(h) account included
as assets in Form 5500:
Employer contribution receivable 4,746,448 4,121,029
Shares in registered investment companies 18,159,299 13,728,486
------------ ------------
Net assets available for benefits -
Form 5500 $977,185,869 $916,394,289
============ ============
The assets in the 401(h) account included in Form 5500 are not available
to pay 401(k) benefits and can be used only to pay retiree health
benefits.
The following are reconciliations of the changes in net assets available
for plan benefits:
Retiree
Health
Savings
Account
Financial (401(h)
statements Account) Form 5500
------------ ------------ ------------
Year Ended December 31, 2006:
Net appreciation in fair
value of investments $ 22,602,385 $ 663,074 $ 23,265,459
Dividend and interest income 16,513,733 - 16,513,733
Con-way contributions 22,613,994 4,746,448 27,360,442
Distributions to participants (71,402,320) (353,290) (71,755,610)
(9) Subsequent Event
Con-way's Board of Directors approved changes to the RSP Plan, which were
effective January 1, 2007. The following provisions were made:
- Con-way's discretionary matching contributions to participants'
accounts increased to 50% of the first 6 percent of the
participants' eligible compensation from 50% of the first 3 percent
of the participants' eligible compensation.
- In addition to the matching contribution, Con-way makes a new basic
contribution to participant accounts of all eligible participants
that will equal 3 to 5 percent of the participants' eligible
compensation, depending on years of service, with the size of the
contribution increasing (up to the maximum 5% contribution) as years
of service increase. The contribution is made quarterly in every
succeeding year of employment and vests immediately.
- In addition to the matching contribution and the basic contribution,
Con-way makes a new transition contribution to the accounts of
qualifying participants that equals 1 to 3 percent of the
participants' eligible compensation, depending on the participants'
combined age and years of service as of December 31, 2006. The
contribution is made quarterly in every succeeding year of
employment and vests immediately.
Schedule I
CON-WAY RETIREMENT SAVINGS PLAN
EIN 94-1444798
Plan No. 003
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2006
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
(3,999,517.546 shares) $105,377,735 $126,504,740
*T. Rowe Price Equity Income Fund
(3,597,873.835 shares) 87,326,878 106,317,172
*T. Rowe Price Science and Technology Fund
(3,350,817.195 shares) 81,335,919 70,233,128
Dodge & Cox Dodge & Cox International Stock
Fund (1,072,601.002 shares) 42,078,083 46,829,760
*T. Rowe Price Small-Cap Stock Fund
(903,696.844 shares) 26,936,547 30,933,543
Allianz Global PIMCO Total Return Fund
Investors (3,327,658.209 shares) 35,349,332 34,541,092
J.P. Morgan Undiscovered Managers
Investment Small Cap Growth Fund
Management, Inc (596,149.907 shares) 5,689,288 6,152,267
*T. Rowe Price Retirement Income Fund
(121,383.352 shares) 1,491,334 1,593,763
*T. Rowe Price Retirement 2005 Fund
(143,894.111 shares) 1,568,329 1,670,611
*T. Rowe Price Retirement 2010 Fund
(1,025,331.774 shares) 15,233,248 16,272,015
*T. Rowe Price Retirement 2015 Fund
(1,450,813.725 shares) 16,536,561 17,946,566
*T. Rowe Price Retirement 2020 Fund
(1,521,756.614 shares) 24,169,832 26,402,477
*T. Rowe Price Retirement 2025 Fund
(1,017,591.280 shares) 11,950,043 13,086,224
*T. Rowe Price Retirement 2030 Fund
(714,116.018 shares) 12,180,791 13,275,417
*T. Rowe Price Retirement 2035 Fund
(324,384.316 shares) 3,908,161 4,272,141
*T. Rowe Price Retirement 2040 Fund
(252,772.670 shares) 4,358,224 4,739,488
*T. Rowe Price Retirement 2045 Fund
(119,772.348 shares) 1,389,555 1,481,584
Common trust funds:
*T. Rowe Price Equity Index Trust
(838,266.409 shares) 26,490,957 34,704,229
*T. Rowe Price Bond Index Trust
(566,410.695 shares) 11,587,827 13,254,010
*T. Rowe Price U.S. Treasury Money
Market Trust
(87,698,615.520 shares) 87,698,616 87,698,616
*T. Rowe Price Retirement Strategy
Trust-Balanced
(1,675,288.433 shares) 36,449,431 48,700,635
Common stock:
*Con-way Inc. Con-way Common Stock
(2,497,223.890 shares) 89,380,602 109,977,740
Preferred stock:
*Con-way Inc. Con-way Preferred
Stock - Allocated
(373,059.190 shares) 56,726,728 86,702,686
*Con-way Inc. Con-way Preferred
Stock - Unallocated
(226,976.632 shares) 34,523,146 52,751,639
Participant loans:
*Plan
Participants Participant loans with interest
from 5.00% to 10.50% and
maturity dates from 2007 to 2011 - 54,738,168
--------------
1,010,779,711
Investments held in 401(h) account:
Allianz Global PIMCO Total Return Fund
Investors (1,749,450.798 shares) 18,695,181 18,159,299
--------------
$1,028,939,010
==============
*Represents a party-in-interest as of December 31, 2006.
Note: Cost is calculated using the moving-average method.
See accompanying report of independent registered public accounting firm.