EXHIBIT 99
CONSOLIDATED FREIGHTWAYS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(Unaudited)
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
(Dollars in thousands)
ASSETS
Current assets
Cash and cash equivalents $ 32,825 $ (59)(a) $ 32,766
Receivables, net of allowances 313,536 -- 313,536
Operating supplies, at lower of
average cost or market 16,767 (4,701)(a) 12,066
Prepaid expenses 36,353 (1,316)(a) 35,037
Deferred income taxes 55,405 -- 55,405
---------- ----------- ---------
Total current assets 454,886 (6,076) 448,810
---------- ----------- ---------
Net property, plant and equipment 485,651 (19,336)(a) 426,590
(39,725)(b)
Other assets 14,345 (5,660)(a) 8,685
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TOTAL ASSETS $954,882 $(70,797) $884,085
---------- ----------- ---------
---------- ----------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 83,229 $ (5,028)(a) $ 78,201
Accrued liabilities 212,969 (6,712)(a) 206,257
Accrued claims costs (d) 87,646 -- 87,646
---------- ----------- ---------
Total current liabilities 383,844 (11,740) 372,104
Long-term liabilities
Long-term debt 15,100 -- 15,100
Accrued claims costs (d) 102,801 -- 102,801
Deferred income taxes 35,276 (482)(a)
(1,490)(b) 33,304
Employee benefits and other
liabilities 132,982 -- 132,982
---------- ----------- ---------
Total liabilities 670,003 (13,712) 656,291
---------- ----------- ---------
Stockholders' Equity
CFI investment and advances 284,879 (18,850)(a) --
(38,235)(b)
(227,794)(c)
Common stock and paid-in capital 227,794 (c) 227,794
---------- ----------- ---------
Total stockholders' equity 284,879 (57,085) 227,794
---------- ----------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $954,882 $(70,797) $884,085
---------- ----------- ---------
---------- ----------- ---------
The accompanying notes are an integral part of these statements.
CONSOLIDATED FREIGHTWAYS CORPORATION
PRO FORMA CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
Nine Months Ended September 30, 1996
(Unaudited)
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
(Dollars in thousands, except per share amount)
REVENUES $1,592,146 $ - $1,592,146
COSTS AND EXPENSES
Operating Expenses(d) 1,414,969 1,382 (f) 1,416,351
Selling and administrative expenses 171,103 (e) - 171,103
Depreciation 66,599 (1,016)(f) 45,583
---------- ---------- ----------
1,632,671 366 1,633,037
---------- ---------- ----------
OPERATING LOSS (40,525) (366) (40,891)
OTHER INCOME (EXPENSE)
Investment income 214 - 214
Interest expense (i) (626) - (626)
Miscellaneous, net (2,586) (1,266)(g) 957
4,809 (h)
---------- ---------- ----------
(2,998) 3,543 545
---------- ---------- ----------
Loss before income tax benefits (43,523) 3,177 (40,346)
Income tax benefits (13,700) 1,224 (j) (12,476)
---------- ---------- ----------
NET LOSS $ (29,823) $ 1,953 $ (27,870)
---------- ---------- ----------
---------- ---------- ----------
Loss per share (assuming 22,006,500
shares outstanding as of September 30,
1996) $ (1.27)
----------
----------
The accompanying notes are an integral part of these statements.
CONSOLIDATED FREIGHTWAYS CORPORATION
PRO FORMA CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
Year Ended December 31, 1995
(Unaudited)
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ----------
(Dollars in thousands, except per share amount)
REVENUES $2,106,529 $ -- $2,106,529
COSTS AND EXPENSES
Operating expenses (d) 1,871,224 1,842 (f) 1,873,066
Selling and administrative
expenses 214,535(e) -- 214,535
Depreciation 63,556 (1,354)(f) 62,202
---------- ---------- ---------
2,149,315 488 2,149,803
---------- ---------- ---------
OPERATING LOSS (42,786) (488) (43,274)
OTHER INCOME (EXPENSE)
Investment income 756 -- 756
Interest expense (i) (918) -- (918)
Miscellaneous, net (850) (1,688)(g) (809)
1,729 (h)
---------- ---------- ---------
(1,012) 41 (971)
---------- ---------- ---------
Loss before income tax benefits (43,798) (447) (44,245)
Income tax benefits (13,889) (174)(j) (14,063)
---------- ---------- ---------
NET LOSS $ (29,909) $ (273) $(30,182)
---------- ---------- ---------
Loss per share (assuming
22,006,500 shares outstanding
as of September 30, 1996) $ (1.37)
--------
--------
The accompanying notes are an integral part of these statements.
CONSOLIDATED FREIGHTWAYS CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(a) Represents the transfer of certain assets (including real properties)
and liabilities from LJSC to a subsidiary of CFI in connection with
the transfer of various administrative service departments from LJSC to a
subsidiary of CFI.
(b) Represents the transfer of certain real properties from CFCD to a
subsidiary of CFI, some of which may be leased back to CFCD under
short-term operating leases.
(c) Represents the distribution of CFI's remaining investment in CFCD and
LJSC to shareholders of CFI pursuant to the Distribution.
(d) CFCD provides for uninsured workers' compensation claims in its financial
statements. Estimated costs of uninsured workers' compensation claims are
included in operating expenses on CFCD's financial statements. The amounts
provided are estimated based on historical claims and unfiled claims
through the date of the financial statements in accordance with generally
accepted accounting principles. The management of the Company to be in
place after the Distribution is currently evaluating the estimated accrued
claims cost for workers' compensation and expects to increase the accrual
after the Distribution to an estimate of the claims on a fully developed
basis. If management had so decided to act as of January 1, 1995, an
increase of approximately $20 million would have been included in operating
expenses for the year ended December 31, 1995. If, however, management had
so decided to act as of January 1, 1996, an increase of an amount between
$15 million and $20 million would have been included in operating expenses
for the nine months ended September 30, 1996, resulting in a corresponding
increase of an amount between $15 million and $20 million in the accrual
at September 30, 1996.
(e) The historical financial statements include an allocation of corporate
overhead costs incurred by CFI using both incremental and proportional
methods on a revenue and capital basis. These charges are included in
Selling and Administrative Expenses. Although management believes the
allocation methods used provided CFCD with a reasonable share of such
expenses, there can be no assurance that these costs will not increase
after the Distribution.
(f) To adjust for the effects on depreciation expense, and sub-lease rental
income from third parties, resulting from the pro forma transfers of
certain real properties.
(g) To adjust for the pro forma allocation of letter of credit and surety
bond fees from CFI relating to uninsured costs of primarily workers'
compensation claims and other lesser uninsured claims that CFCD
participates in with CFI. Also includes estimated unused commitment fee
and letter of credit fees on CFCD's anticipated revolving credit facility.
The Company anticipates that its letter of credit and surety bond
requirements, for programs similar to the CFI programs CFCD participated
in, will substantially increase. As a result, the Company anticipates a
substantial increase in related letter of credit and surety bond expenses.
(h) To eliminate the intercompany interest expense, net, charged on balances
payable to CFI.
(i) The historical financial statements do not include any allocation of
interest expense for CFI's consolidated borrowings (except to the extent
of interest expense on borrowings incurred directly by CFCD). Except for
borrowings incurred directly by CFCD, no portion of CFI's consolidated
borrowings were allocated to the Company in accordance with CFI's
centralized cash management policy, as all cash requirements not satisfied
by operating cash flows are met by CFI and recorded net in CFI Investment
and Advances on the balance sheet.
(j) To adjust for the effects of the pro forma adjustments on income tax
expense using an estimated marginal income tax rate of 39%.