SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION NUMBER 0-19791
FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN, IF DIFFERENT FROM
THAT OF THE ISSUER NAMED BELOW:
USF EMPLOYEES' 401K RETIREMENT PLAN
NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE
ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE:
USFREIGHTWAYS CORPORATION
8550 W. BRYN MAWR AVENUE, SUITE 700
CHICAGO, IL 60631
Total Number of Pages 14
Exhibit Index at Page 12
USF EMPLOYEES' 401K RETIREMENT PLAN
FORM 11-K
FOR THE YEAR ENDED DECEMBER 31, 2001
REQUIRED INFORMATION
FINANCIAL STATEMENTS AND SCHEDULE
December 31, 2001 and 2000
The following financial statement, supplementary schedules and exhibits are
filed as part of this Annual Report on Form 11-K of the USF Employees' 401K
Retirement Plan.
TABLE OF CONTENTS
1. Report of Independent Public Accountants
2. Statements of Net Assets Available for Benefits as of December 31,
2001 and 2000
3. Statements of Changes in Net Assets Available for Benefits for the
Years Ended December 31, 2001 and 2000
4. Notes to Financial Statements and Schedules
5. Schedule Supporting Financial Statements:
Schedule H, Line 4i--Schedule of Assets (Held at End of
Year)--December 31, 2001
6. Consent of Independent Auditors (Exhibit 23)
All schedules, except as set forth above, are omitted as not
applicable or not required, or the required information is included
in the financial statements or notes thereto.
The following documents, filed with the Securities and Exchange
Commission, are incorporated by reference herein:
Form S-8 Registration Statement No. 33-57634 filed January 28, 1993
and Prospectus dated January 28, 1993 covering 315,000 shares of
Common Stock of USFreightways Corporation pursuant to the USF
Employees' 401K Retirement Plan.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan Committee, which administers the USF Employees' 401K Retirement Plan,
has duly caused this Annual Report on Form 11-K to be signed on its behalf by
the undersigned hereunto duly authorized.
USF EMPLOYEES' 401K RETIREMENT PLAN
By Members of the Plan Committee
administering the USF Employees'
401K Retirement Plan
/s/ Christopher L. Ellis
------------------------
Christopher L. Ellis
------------------------
/s/ Gerard M. Klaisle
------------------------
Gerard M. Klaisle
/s/ Stephen G. Dill
------------------------
Stephen G. Dill
Date: May 28, 2002
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrative Committee of
USF Employees' 401K Retirement Plan:
We have audited the accompanying statements of net assets available for benefits
of the USF EMPLOYEES' 401K RETIREMENT PLAN as of December 31, 2001 and 2000, and
the related statements of changes in net assets available for benefits for the
years then ended. 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 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 net assets available for benefits of the USF
Employees' 401K Retirement Plan as of December 31, 2001 and 2000, and the
changes in net assets available for benefits for the years then ended, in
conformity with accounting principles generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The 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 the Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The 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/ Arthur Andersen LLP
- -----------------------
Arthur Andersen LLP
Chicago, Illinois
May 24, 2002
USF EMPLOYEES' 401K RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 2001 and 2000
2001 2000
ASSETS:
Investments at fair value (Note 3)-
USFreightways Corp. Common Stock $ 8,760,122 $ 7,421,544
Aetna Real Estate Fund 747,340 893,389
Fidelity Magellan Fund 52,256,906 57,651,110
Fidelity Equity Income Fund 10,002,885 8,851,319
Fidelity Growth Company Fund 67,148,121 91,343,933
Fidelity Intermediate Bond Fund 20,844,967 16,492,443
Fidelity Blue Chip Growth Fund 40,755,865 46,457,583
Fidelity Asset Manager Fund 5,122,174 5,052,862
Fidelity Retirement Money Market Portfolio 37,716,342 31,149,660
Fidelity Managed Income Portfolio 11,350,019 8,410,469
Fidelity Diversified International Fund 49,879 -
Pimco Total Return ADM Fund 647,564 -
Franklin Small Midcap Growth Fund 204,757 -
Newberger Genesis Trust Fund 429,013 -
Fidelity Freedom Income Fund 1,774 -
Fidelity Freedom 2000 Fund 92,436 -
Fidelity Freedom 2010 Fund 907,094 -
Fidelity Freedom 2020 Fund 677,789 -
Fidelity Freedom 2030 Fund 141,941 -
Fidelity Freedom 2040 Fund 18,411 -
Spartan US Equity Index Fund 246,444 -
Participant loans 9,682,648 9,383,792
------------ ------------
Total investments 267,804,491 283,108,104
------------ ------------
Receivables-
Participant contributions 802,310 599,272
Company contributions 2,286,100 2,226,677
------------ ------------
Total contributions receivable 3,088,410 2,825,949
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $270,892,901 $285,934,053
============ ============
The accompanying notes are an integral part of these statements.
USF EMPLOYEES' 401K RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Years Ended December 31, 2001 and 2000
2001 2000
INVESTMENT INCOME (LOSS):
Dividend and interest income $ 5,222,534 $ 18,087,875
Net depreciation in fair value of investments (Note 2)
(38,703,565) (35,606,894)
------------- -------------
Total investment (loss) (33,481,031) (17,519,019)
------------- -------------
CONTRIBUTIONS:
Participants 25,175,349 21,618,266
Company 11,122,925 10,319,755
------------- -------------
Total contributions 36,298,274 31,938,021
------------- -------------
DEDUCTIONS:
Benefits paid to participants (18,228,301) (16,679,028)
Administrative expenses (52,629) (49,790)
------------- -------------
Total deductions (18,280,930) (16,728,818)
------------- -------------
TRANSFERS INTO THE PLAN (Note 1) 422,535 265,704
------------- -------------
Net change (15,041,152) (2,044,112)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 285,934,053 287,978,165
------------- -------------
End of year $ 270,892,901 $ 285,934,053
============= =============
The accompanying notes are an integral part of these statements.
USF EMPLOYEES' 401K RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE
December 31, 2001 and 2000
1. PLAN DESCRIPTION
The following description of the USF Employees' 401K Retirement Plan (the
"Plan") is provided for general information purposes only. More complete
information regarding the Plan provisions may be found in the Plan
document.
General
The Plan is a defined contribution plan established by USFreightways
Corporation, the principal sponsor of the Plan, under provisions of
Section 401(a) of the Internal Revenue Code ("IRC"). The Plan covers
certain employees of USFreightways Corporation, as well as certain
employees of the following adopting sponsors of the Plan, all of which are
wholly owned subsidiaries of USFreightways Corporation including, USF
Bestway Inc., USF Logistics Inc., USF Logistics Services Inc., USF
Distribution Services Inc., USF Dugan Inc., USF Sales Corporation, USF
Holland Inc., USF Reddaway Inc., USF Red Star Inc., USF Worldwide Inc.,
USF Logistics (IMC) Inc., USF Glen Moore Inc., and World Trade Transport
of Virginia Inc. and their domestic subsidiaries, respectively.
Hereafter, the principal and adopting sponsors of the Plan are referred to
collectively as "the Company" or individually as "each Company." The Plan
is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA"), as amended. Unionized employees are excluded from
participating in the Plan if they have separately bargained for retirement
benefits.
During 2000, the Company acquired Tri-Star Transportation, Inc., and as
result transferred all of the trust assets of its predecessor plan of
$422,535 into the Plan in 2001.
During 2000, USF Distribution Services of Texas, Inc. adopted the Plan,
and as a result, transferred all of the trust assets of its predecessor
plan of $265,704 into the Plan.
Plan Administration
The Plan is administered by the USF Plan Administrative Committee, which
is appointed by the Board of Directors of the Company. Plan assets were
held by Fidelity Management Trust Company ("Fidelity") as Trustee for the
years ended December 31, 2001 and 2000.
Eligibility
Effective January 1, 2001, employees are eligible to participate in the
Plan after completing 90 days of service from date of hire and having
worked at least 250 hours within that period. Prior to January 1, 2001,
participants became eligible to enter the plan on January 1, April 1, July
1, or October 1, following the date the participant completed a qualifying
year of service.
Contributions
Eligible employees can contribute an amount up to 20% of their cash
compensation, as defined by the
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Plan, subject to certain limitations under the IRC. Each Company may
provide a matching contribution and/or nonelective contribution subject to
group discrimination limitations. The Company may also contribute a
discretionary amount. The Company made no discretionary contributions
during 2001 and 2000.
Vesting
Participants are fully vested at all times in their contributions, the
Company's matching and/or nonelective contribution, and plan earnings
thereon.
Benefits
Upon termination of service due to death, disability, retirement, or
financial hardship, the participant or their beneficiary is entitled to
distribution of his or her account through an elected distribution method
made by the participant in accordance with the Plan's provisions.
Participant Accounts
Each participant's account is credited with the participant's
contribution, each Company's matching contribution (if applicable), each
Company's nonelective contribution (if applicable), the Company's
discretionary contribution (if applicable), and the Plan's earnings
allocation. The allocation of plan earnings is based on participant
account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's
account.
Loans to Participants
Subject to such rules and limitations as may be established from time to
time, participants are allowed to borrow from employee deferral
contributions, rollover accounts, or any after-tax deferrals in their
account subject to a limit of the lesser of 50% of their vested account
balance, or $50,000. The interest rate on loans is the prime rate reported
in The Wall Street Journal in effect on the last day of the month
preceding the loan request. Loan repayments are normally made by payroll
deductions, generally over a period not to exceed five years at the
election of the participant, with the exception of principal residence
loans, which may be extended over a longer period.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements are prepared on the accrual basis of
accounting.
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires the Plan's
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ from those
estimates.
Income Recognition
Interest income is recorded as earned on the accrual basis. Dividend
income is recorded on the ex dividend date.
-9-
Investment Valuation
Cash equivalents are stated at cost, which approximates market value.
Marketable securities are stated at fair value. Securities traded on a
national securities exchange are valued at the last reported sales price
on the last business day of the year; investments traded in the
over-the-counter market and listed securities for which no sale was
reported on the last day of the Plan year are valued at the last reported
bid price.
Net Appreciation in Fair Value of Investments
Net realized and unrealized appreciation (depreciation) is recorded in the
accompanying statements of changes in net assets available for benefits as
net depreciation in fair value of investments.
Administrative Expenses
The Company pays all administrative expenses of the Plan, except for
administrative fees related to servicing participant loans, broker fees
and the Real Estate Limited Partnership fees. The investment income of the
trust is net of any investment advisory fees charged by the managers.
Benefit Payments
Benefits are recorded when paid.
3. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's
net assets:
December 31
2001 2000
Fidelity Retirement Money Market Portfolio $ 37,716,342 $ 31,149,660
Fidelity Blue Chip Growth Fund 40,755,865 46,457,583
Fidelity Growth Company Fund 67,148,121 91,343,933
Fidelity Intermediate Bond Fund 20,844,967 16,492,443
Fidelity Magellan Fund 52,256,906 57,651,110
============ ============
During 2001 and 2000, the Plan's investments appreciated (depreciated)
(including gains and losses on investments bought and sold, as well as
held during the year) in value as follows:
2001 2000
Mutual funds $ (39,140,141) $ (32,032,160)
Common stock 436,576 (3,574,734)
------------- -------------
Total $ (38,703,565) $ (35,606,894)
============= =============
The Plan provides for investments in mutual funds and common stock that,
in general, are exposed to various risks, such as interest rate, credit
and overall market volatility risks. Due to the level of risk
-10-
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 the amounts reported in
the statements of net assets available for benefits.
4. TAX STATUS
The Company has filed for a new determination letter but has not yet
received a response.
The Plan had previously received a favorable determination letter from the
Internal Revenue Service dated March 10, 1995, stating that the Plan is
qualified under Section 401(a) of the Internal Revenue Code ("IRC") and,
therefore, the related trust is exempt from tax under Section 501(a) of
the IRC. Once qualified, the Plan is required to operate in conformity
with the IRC to maintain its qualification. The Plan has been amended
since receiving the determination letter. The plan administrator believes
that the Plan is currently designed and is being operated in compliance
with the applicable requirements of the IRC.
5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
6. PARTY IN INTEREST
Certain Plan investments are funds managed by Fidelity Management Trust
Company. Fidelity Management Trust Company is the trustee as defined by
the Plan and, therefore, these transactions qualify as party-in-interest
transactions.
USF EMPLOYEES' 401K RETIREMENT PLAN
SCHEDULE H, LINE 4i--SCHEDULE OF ASSETS
(HELD AT END OF YEAR)
December 31, 2001
(Employer Identification Number 36-3790696, Plan Number 002)
Current
Identity of Issuer Description of Investment Value
*USFreightways Corporation USFreightways Corp. Common Stock $ 8,760,122
*Fidelity Management Trust Company Aetna Real Estate Fund 747,340
*Fidelity Management Trust Company Fidelity Magellan Fund 52,256,906
*Fidelity Management Trust Company Fidelity Equity Income Fund 10,002,885
*Fidelity Management Trust Company Fidelity Growth Company Fund 67,148,121
*Fidelity Management Trust Company Fidelity Intermediate Bond Fund 20,844,967
*Fidelity Management Trust Company Fidelity Blue Chip Growth Fund 40,755,865
*Fidelity Management Trust Company Fidelity Asset Manager Fund 5,122,174
*Fidelity Management Trust Company Fidelity Retirement Money Market Portfolio 37,716,342
*Fidelity Management Trust Company Fidelity Managed Income Portfolio 11,350,019
*Fidelity Management Trust Company Fidelity Diversified International Fund 49,879
*Fidelity Management Trust Company Pimco Total Return ADM Fund 647,564
*Fidelity Management Trust Company Franklin Small Midcap Growth Fund 204,757
*Fidelity Management Trust Company Newberger Genesis Trust Fund 429,013
*Fidelity Management Trust Company Fidelity Freedom Income Fund 1,774
*Fidelity Management Trust Company Fidelity Freedom 2000 Fund 92,436
*Fidelity Management Trust Company Fidelity Freedom 2010 Fund 907,094
*Fidelity Management Trust Company Fidelity Freedom 2020 Fund 677,789
*Fidelity Management Trust Company Fidelity Freedom 2030 Fund 141,941
*Fidelity Management Trust Company Fidelity Freedom 2040 Fund 18,411
*Fidelity Management Trust Company Spartan US Equity Index Fund 246,444
*Various Participants Participant loans (interest rate varies between
7.75 % and 11.50 %) 9,682,648
------------
*Party in interest. $267,804,491
============
The accompanying notes are an integral part of this schedule
EXHIBIT INDEX
Exhibit Number Page
23 Consent of Arthur Andersen LLP 13
99 Arthur Andersen LLP Quality Control System Letter 14