UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1999 Commission File Number 1-12149
CONSOLIDATED FREIGHTWAYS CORPORATION
Incorporated in the State of Delaware
I.R.S. Employer Identification No. 77-0425334
175 Linfield Drive, Menlo Park, CA 94025
Telephone Number (650) 326-1700
Securities Registered Pursuant to Section 12(b) of the Act:
Name of Each
Exchange on
Title of Each Class Which Registered
Common Stock ($.01 par value) NASDAQ
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes___X___ No_______
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. ___X____
Aggregate market value of voting stock held by persons other than
Directors, Officers and those shareholders holding more than 5% of the
outstanding voting stock, based upon the closing price per share on the
National Automated System of the National Association of Securities
Dealers Inc. Automated Quotation System on February 29, 2000:
$102,514,124
Number of shares of Common Stock outstanding
as of February 29, 2000: 21,362,185
DOCUMENTS INCORPORATED BY REFERENCE
Parts I, II and IV
Parts I, II and IV are incorporated by reference from Consolidated
Freightways Corporation's 1999 Annual Report to Shareholders. (Only
those portions referenced herein are incorporated in this Form 10-K.)
Part III
Part III is incorporated by reference from the proxy statement to be
filed in connection with the Company's 2000 Annual Meeting of
Shareholders. (Only those portions referenced herein are incorporated
in this Form 10-K.)
CONSOLIDATED FREIGHTWAYS CORPORATION
FORM 10-K
Year Ended December 31, 1999
_______________________________________________________________________
INDEX
Item Page
PART I
1. Business 3
2. Properties 7
3. Legal Proceedings 8
4. Submission of Matters to a Vote of Security Holders 8
PART II
5. Market for the Registrant's Common Stock and
Related Stockholder Matters 8
6. Selected Financial Data 8
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
7A. Quantitative and Qualitative Disclosures About
Market Risk 9
8. Financial Statements and Supplementary Data 9
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 9
PART III
10. Directors and Executive Officers of the Registrant 10
11. Executive Compensation 10
12. Security Ownership of Certain Beneficial
Owners and Management 11
13. Certain Relationships and Related Transactions 11
PART IV
14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K 11
Signatures 12
Index to Information Incorporated by Reference 13
Index to Financial Information 14
CONSOLIDATED FREIGHTWAYS CORPORATION
FORM 10-K
Year Ended December 31, 1999
_______________________________________________________________________
PART I
ITEM 1. BUSINESS
(a) General Development of Business
Consolidated Freightways Corporation is a holding company that was
incorporated in Delaware in 1996. It is herein referred to as the
"Registrant" or "Company". The Company was formerly a subsidiary of CNF
Inc. (the former parent) through December 1, 1996. The Company
consists of Consolidated Freightways Corporation of Delaware (CFCD), a
nationwide motor carrier, incorporated in 1958 as successor to the
original trucking company organized in 1929, and its Canadian
operations, including Canadian Freightways Limited, Epic Express, Milne
& Craighead, Inc., Interport Sufferance Warehouses, Blackfoot Logistics
Ltd. and other related businesses; Redwood Systems, Inc., a supply
chain management services provider; and the Leland James Service
Corporation, an administrative service provider. The Company primarily
provides less-than-truckload (LTL) transportation and supply chain
management services throughout the United States and Canada, as well as
in Mexico through a joint venture, and international freight services
between the United States and more than 80 countries.
(b) Financial Information About Industry Segments
Segment information is summarized in Note 10 on page 27 of the 1999
Annual Report to Shareholders and is incorporated herein by reference.
(c) Narrative Description of Business
The Company, headquartered in Menlo Park, California, is the holding
company of CFCD, a full-service trucking company providing less-than-
truckload freight services throughout the United Stated and Canada, as
well as in Mexico through a joint venture, and one-stop international
freight service between the United States and more than 80 countries
worldwide through operating agreements with ocean carriers and a
network of international partners. Operations consist of an extensive
transportation network that typically moves shipments of manufactured
or non-perishable processed products having relatively high value and
requiring consistent, expedited service, compared to the bulk raw
materials characteristically transported by railroads, pipelines and
water carriers. Less-than-truckload (LTL) is an industry designation
for shipments weighing less than 10,000 pounds. CFCD is one of the
nation's largest LTL motor carriers in terms of 1999 revenues. The
Company also provides supply chain management services through its
wholly-owned subsidiary, Redwood Systems, Inc. (Redwood). Redwood is a
third party, non-asset based logistics company that offers complete
supply chain management services including dedicated contract
warehousing and carriage, just-in-time delivery and specialized time-
definite distribution, information-based logistics services and
worldwide multi-modal logistics.
CFCD's primary competitors in the national LTL market are Yellow
Freight System, Inc., Roadway Express, Inc. and Arkansas Best
Corporation. CFCD also competes for LTL freight with regional LTL
motor carriers, small package carriers, private carriage and freight
forwarders. Competition for freight is based primarily upon price,
service consistency and transit time. The Company is faced with a
steady erosion of its traditional "greater than 1,500 miles" length-of-
haul market due to trends such as the "regionalization" of freight due
to just-in-time inventory practices, distributed warehousing and other
changes in business processes. Also contributing to this decline are
new longer length-of-haul service offerings by regional and parcel
carriers. To remain competitive, the Company is continuing to invest
in its infrastructure to facilitate operations in the 500 to 1,500 mile
length-of-haul market. This includes closing some terminals and
expanding others to expedite freight through the system, reducing
handling and related costs. The Company successfully launched second
day service in certain eastern bound markets in early 1998, reducing
transit times by 1 to 2 days, and aggressively expanded this service
offering in 1999. Additionally, the Company must continue to develop
services tailored to customers' needs, like CF PrimeTime, the Company's
premium expedited service offering. The Company must also continue to
improve its freight profile through yield management programs designed
to seek appropriate compensation for the freight it handles.
As a large carrier of LTL general freight, at December 31, 1999, CFCD
operated 38,435 vehicle units including inter-city tractors and
trailers and pick-up and delivery units. It had a network of 351 U.S.
and Canadian freight terminals, metro centers and regional
consolidation centers.
There is a broad diversity in the customers served, size of shipments,
commodities transported and length of haul. No single commodity
accounted for more than a small fraction of total revenues.
CFCD operates daily schedules utilizing relay drivers who drive
approximately eight to ten hours each day and sleeper teams, which in
1999 approximated 20% of all linehaul miles in North America. Road
equipment consists of one tractor pulling two 28-foot double trailers
or, to a limited extent, one semi-trailer or three 28-foot trailers.
CFCD generally utilizes trailer equipment that is 102 inches in width.
CFCD continued to maximize use of lower-cost rail services where
feasible in 1999. Rail miles as a percentage of total linehaul miles
approximated 27%. In 1999, CFCD operated in excess of 649 million
linehaul miles.
CFCD and several Canadian subsidiaries serve Canada through terminals
in the provinces of Alberta, British Columbia, Manitoba, New Brunswick,
Nova Scotia, Ontario, Quebec, Saskatchewan and in the Yukon Territory.
The Canadian operations utilize a fleet of over 1,530 trucks, tractors
and trailers.
Cyclicality and Seasonality
The LTL trucking industry is affected directly by the state of the
overall economy and seasonal fluctuations, which affect the amount of
freight to be transported. Freight shipments, operating costs and
earnings are also affected adversely by inclement weather conditions.
The months of September, October and November of each year usually have
the highest business levels while the first quarter has the lowest.
Employees
At December 31, 1999, approximately 82% of the Company's domestic
employees were represented by various labor unions, primarily the
International Brotherhood of Teamsters. On April 13, 1998, the
International Brotherhood of Teamsters ratified a new five-year
National Master Freight Agreement with CFCD and three other national
motor freight carriers.
Labor costs, including fringe benefits, averaged approximately 64% of
the Company's 1999 revenues. The Company had approximately 22,100,
21,000 and 21,600 employees at December 31, 1999, 1998 and 1997,
respectively.
Fuel
The average fuel cost per gallon, excluding taxes, was $0.578,
$0.462 and $0.659 for the years ended December 31, 1999, 1998 and 1997.
During periods of sharply higher fuel costs, the Company's rules tariff
implements a fuel surcharge when the average cost per gallon of on-
highway diesel fuel exceeds $1.10, including tax, as determined from
the Energy Information Administration of the Department of Energy's
publication of weekly retail on-highway diesel prices. A fuel
surcharge was implemented throughout all of 1997 and was discontinued
in early 1998, when fuel prices started to decline. However, as fuel
prices began to increase again in 1999, the Company implemented a fuel
surcharge effective in July. Significant increases in fuel prices, to
the extent not offset by increases in transportation rates, would have
a material adverse effect on the profitability of the Company. There
can be no assurance that the Company will be able to maintain this
surcharge or successfully implement such surcharges in response to
increased fuel costs in the future.
Year 2000
The Company successfully completed the conversion of its internal
systems for Year 2000 compliance. Costs to modify operational and
financial systems and applications in 1999 were $4.9 million, and
include payroll and payroll-related costs as well as the costs of
external consultants. Total life-to-date costs of modifying
operational and financial systems and applications for Year 2000
compliance were $11.1 million. In certain cases, management opted to
replace rather than modify certain of its financial systems and
applications. Costs associated with the replacement of those systems
and applications have been capitalized. As of December 31, 1999, $41.2
million has been capitalized and includes the costs of hardware,
software, and payroll costs, as well as the costs of external
consultants. Given the possibility that not all Year 2000 problems
would appear on January 1, the Company is continuing to monitor its
internal systems, as well as its ability to transact with major
customers and suppliers. However, the Company does not expect that the
impact of any subsequent Year 2000 disruptions will have a material
adverse effect on the Company's financial position or results of
operations.
Federal and State Regulation
Regulation of motor carriers has changed substantially in the last 20
years. The process started with the Motor Carrier Act of 1980, which
allowed easier access to the industry by new trucking companies,
removed many restrictions on expansion of services by existing
carriers, and increased price competition by narrowing the antitrust
immunities available to the industry's collective ratemaking
organizations. This deregulatory trend was continued by subsequent
legislation in 1982, 1986, 1993 and 1994. The process culminated with
federal pre-emption of most economic regulation of intrastate trucking
regulatory bodies effective January 1, 1995, and with legislation which
terminated the Interstate Commerce Commission (ICC) effective January
1, 1996.
Currently, the motor carrier industry is subject to federal regulation
by the Federal Highway Administration (FHWA), the Federal Motor Carrier
Safety Administration (FMCSA) and the Surface Transportation Board
(STB), all of which are units of the United States Department of
Transportation (DOT). The FHWA performs certain functions inherited
from the ICC relating chiefly to motor carrier registration, cargo and
liability insurance, extension of credit to motor carrier customers,
and leasing of equipment by motor carriers from owner-operators. The
FMCSA, which was created in March 2000, enforces comprehensive trucking
safety regulations relating to driver qualifications, drivers' hours of
service, safety-related equipment requirements, vehicle inspection and
maintenance, analysis of and record-keeping for accidents, and
transportation of hazardous materials. Because CFCD makes large and
increasing use of rail "piggyback" (trailer-on-flatcar) service as
permitted under its current collective bargaining agreements, CFCD must
also comply with the hazardous materials transportation regulations of
DOT's Federal Railroad Administration. Compliance with similar
regulations of DOT's Federal Aviation Administration is required when
CFCD tenders shipments to air carriers in the PrimeTime Air program.
As pertinent to the general freight trucking industry, the STB has
authority to resolve certain types of pricing disputes and authorize
certain types of intercarrier agreements under jurisdiction inherited
from the ICC.
At the state level, federal pre-emption of economic regulation does not
prevent the states from regulating motor vehicle safety on their
highways. In addition, federal law allows all states to impose
insurance requirements on motor carriers conducting business within
their borders, and empowers most states to require motor carriers
conducting interstate operations through their territory to make annual
filings verifying that they hold appropriate registrations from FHWA.
Motor carriers also must pay state fuel taxes and vehicle registration
fees, which normally are apportioned on the basis of mileage operated
in each state.
Canadian Regulation
Although the provinces in Canada have regulatory authority over intra-
provincial operations of motor carriers, they have elected to
substantially eliminate intra-provincial regulation of the general
freight trucking industry. Federal legislation to phase in deregulation
of the extra-provincial motor carrier industry took effect January 1,
1988 and the phase in was completed in 1997. The new legislation
relaxed economic regulation of extra-provincial trucking by easing
market entry restrictions. The Canadian provinces have implemented
safety regulations of trucking services applicable to both extra-
provincial and intra-provincial operations of motor carriers. CFCD and
its Canadian affiliates wrote off substantially all of the unamortized
cost of their Canadian operating authorities in 1992.
General
The research and development activities of the Company are not
significant.
During 1999, 1998 and 1997 there was no single customer of the Company
that accounted for 10% or more of consolidated revenues.
The Company is subject to Federal, state and local environmental laws
and regulations relating to, among other things, contingency planning
for spills of petroleum products, and its disposal of waste oil.
Additionally, the Company is subject to significant regulations dealing
with underground fuel storage tanks. The Company stores some of its
fuel for its trucks and tractors in 252 underground tanks located in 48
states. The Company believes that it is in substantial compliance with
all such environmental laws and regulations and is not aware of any
leaks from such tanks that could reasonably be expected to have a
material adverse effect on the Company's competitive position,
operations or financial position. However, there can be no assurances
that environmental matters existing with respect to the Company, or
compliance by the Company with laws relating to environmental matters,
will not have a material adverse effect on the Company's business,
financial position or results of operations.
The Company has in place policies and methods designed to conform with
these regulations. The Company estimates that capital expenditures for
upgrading underground tank systems and costs associated with cleaning
activities for 2000 will not be material.
The Company has received notices from the Environmental Protection
Agency and others that it has been identified as a potentially
responsible party (PRP) under the Comprehensive Environmental Response
Compensation and Liability Act (CERCLA) or other Federal and state
environmental statutes at various Superfund sites. Under CERCLA, PRP's
are jointly and severally liable for all site remediation and expenses.
Based upon cost studies performed by independent third parties, the
Company believes its obligations with respect to such sites would not
have a material adverse effect on its financial condition or results of
operations.
(d) Financial Information About Foreign and Domestic Operations and
Export Sales.
Geographic information is summarized in Note 10 on page 27 of the 1999
Annual Report to Shareholders and is incorporated herein by reference.
ITEM 2. PROPERTIES
The following summarizes the terminals, freight service centers and
warehouses operated by the Company or its subsidiaries at December 31,
1999. These major facilities generally consist of a large dock with
loading doors, a small office and a large yard for the movement of
tractors and trailers in the normal business operations. As the Company
continues to invest in its infrastructure to become more competitive in
the shorter length-of-haul lanes, some terminals will be consolidated
and others expanded.
Owned Leased Total
217 138 355
The following table sets forth the location and square footage of the
principal facilities operated by the Company or its subsidiaries:
Location Square Footage
(e) Rancho Cucamonga, CA 419,064
(e) Guadalajara, Mexico 369,750
Mira Loma, CA 280,672
Chicago, IL 231,159
Carlisle, PA 151,100
Kansas City, MO 131,916
(f) Edmonton, Alberta, Canada 121,415
(b) Columbus, OH 118,774
Memphis, TN 118,745
Nashville, TN 118,622
(a) Indianapolis, IN 109,460
Orlando, FL 101,557
(e) Mira Loma, CA 109,790
South Chicago, IL 98,738
(e) St. Petersburg, FL 95,812
(f) Vancouver, British Columbia,
Canada 95,725
(a) Minneapolis, MN 94,890
Charlotte, NC 89,204
St. Louis, MO 88,640
Akron, OH 82,494
Sacramento, CA 81,286
Atlanta, GA 77,920
Houston, TX 77,346
Dallas, TX 75,358
(a)(d) Freemont, IN 73,760
(a)(d) Peru, IL 73,760
Buffalo, NY 73,380
Milwaukee, WI 70,661
Salt Lake City, UT 68,480
Seattle, WA 59,720
(f) Toronto, Ontario, Canada 53,431
(c) Springfield, MA 51,760
(a) Facility partially or wholly financed through the issuance of
industrial revenue bonds.
(b) Property pledged as collateral for the benefit of CNF Inc. for
workers' compensation claims prior to the spin-off of the Company
from its former parent, as required under the Reimbursement and
Indemnification Agreement dated October 1, 1996.
(c) Property is leased from a subsidiary of CNF Inc. through
December 1, 2005.
(d) Terminal closed in January 2000 as part of consolidation.
(e) Dedicated contract warehouse and distribution facility operated
by Redwood.
(f) Property is owned by one of the Company's Canadian subsidiaries.
ITEM 3. LEGAL PROCEEDINGS
The legal proceedings of the Company are summarized in Item 8.
Discussions of certain environmental matters are presented in Items 1
and 7.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
The Company's Common Stock is listed for trading on the NASDAQ Stock
Market's National Market. The Company's Common Stock began trading on
December 3, 1996. The quarterly ranges of the market price of the
Company's Common Stock during the period January 1, 1998 to December
31, 1999 are presented in the "Quarterly Financial Data" on page 30 of
the 1999 Annual Report to Shareholders and are incorporated herein by
reference. Currently there are no cash dividends paid on the Company's
Common Stock. The Company presently expects that it will not pay a
dividend in 2000. The Company's dividend policy thereafter will be
dependent on the circumstances then in existence. There can be no
assurance, however, that the Company will pay any cash dividends on its
Common Stock in the future.
During 1999, the Company repurchased 1,407,725 shares of its Common
Stock for $12.6 million. This completed a $25 million stock repurchase
program approved by the Board of Directors in 1998. On December 14,
1999, the Board of Directors authorized the repurchase of an additional
$20 million of Common Stock, of which $19.8 million remains available.
As of December 31, 1999, there were 31,800 holders of record of the
Common Stock ($.01 par value) of the Company.
ITEM 6. SELECTED FINANCIAL DATA
The Selected Financial Data is presented in the "Five Year Financial
Summary" on page 31 of the 1999 Annual Report to Shareholders and is
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results
of Operations is presented on pages 16 through 18 of the 1999 Annual
Report to Shareholders and is incorporated herein by reference.
Certain statements included or incorporated by reference herein,
including certain statements under "Management's Discussion and
Analysis of Financial Condition and Results of Operations" referred to
above, constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended, and are subject to
a number of risks and uncertainties. Any such forward-looking
statements included or incorporated by reference herein should not be
relied upon as predictions of future events. Certain such forward-
looking statements can be identified by the use of forward-looking
terminology such as "believes," "expects," "may," "will," "should,"
"seeks," "approximately," "intends," "plans," "pro forma," "estimates,"
or "anticipates" or the negative thereof or other variations thereof or
comparable terminology, or by discussions of strategy, plans or
intentions. Such forward-looking statements are necessarily dependent
on assumptions, data or methods that may be incorrect or imprecise and
they may be incapable of being realized. In that regard, the following
factors, among others, and in addition to matters discussed elsewhere
herein and in documents incorporated by reference herein, could cause
actual results and other matters to differ materially from those in
such forward-looking statements: changes in general business and
economic conditions; increases in domestic and international
competition and pricing pressure; increases in fuel prices; uncertainty
regarding the Company's ability to improve results of operations; labor
matters, including shortages of drivers and increases in labor costs;
changes in governmental regulation; and environmental and tax matters.
As a result of the foregoing, no assurance can be given as to future
results of operations or financial condition.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Quantitative and qualitative disclosures about market risk are
presented on page 17 of the 1999 Annual Report to Shareholders and are
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements and Auditors' Report are
presented on pages 19 through 29, inclusive, of the 1999 Annual Report
to Shareholders and are incorporated herein by reference. The
unaudited quarterly financial data is included on page 30 of the 1999
Annual Report to Shareholders and is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The identification of the Company's Directors is presented on pages 2
and 3 of the Company's 2000 Proxy Statement and those pages are
incorporated herein by reference.
The Executive Officers of the Company, their ages at December 31, 1999
and their applicable business experience are as follows:
G. Robert Evans, 68, Vice Chairman of the Board and Chief Executive
Officer of the Company since January 24, 2000. Prior to joining the
Company, Mr. Evans was chairman of Material Sciences Corporation from
1991 to 1998. He has served as a board member of the Company since
1996 and was a director of the former parent from 1990 to 1996. He
replaces W. Roger Curry who retired from the Company.
Patrick H. Blake, 50, Executive Vice President - Chief Operating
Officer of the Company and President of CFCD since May 13, 1999. Mr.
Blake served as Executive Vice President - Operations of the Company
since December 31, 1996 and as Executive Vice President - Operations of
CFCD since July 1994. He was Vice President-Eastern Region of CFCD
from 1992-1994 and a Division Manager from 1985-1992.
Sunil Bhardwaj, 44, Senior Vice President and Chief Financial Officer
of the Company since May 13, 1999. Mr. Bhardwaj served as Vice
President of Planning and Treasurer since December 2, 1996. He
previously served as Vice President of Internal Audit of the former
parent, assuming that position in 1993.
Wayne M. Bolio, 43, Vice President - Human Resources of the Company
since March 1, 2000. From April 1997 through February 2000, Mr. Bolio
served as Assistant General Counsel for the Company and was responsible
for its labor and employment legal matters. Prior to joining the
Company in April 1997, he was an attorney for Southern Pacific
Transportation Company from 1991, most recently as Assistant General
Counsel from 1993.
Patrick J. Brady, 48, Senior Vice President - Sales and Marketing since
February 25, 2000. Mr. Brady had served as Vice President Eastern
Region of CFCD since January 1995 and was a Division Manager before
that.
Stephen D. Richards, 56, Senior Vice President and General Counsel of
the Company since December 2, 1996. Mr. Richards has been Vice
President and General Counsel of CFCD since September 1995. He was
Deputy General Counsel of the former parent for the preceding four
years.
Thomas A. Paulsen, 56, Senior Vice President - Operations of CFCD since
August 1, 1998. Mr. Paulsen was a Vice President of CFCD from March 1,
1985 to July 31, 1998.
Robert E. Wrightson, 60, Senior Vice President and Controller of the
Company since December 2, 1996. Mr. Wrightson has served as Senior
Vice President and Controller of CFCD since July 1994. Prior to
joining CFCD, he was Vice President and Controller of the former
parent, assuming that position in 1989.
ITEM 11. EXECUTIVE COMPENSATION
The required information for Item 11 is presented on pages 8 through
17, inclusive, of the Company's 2000 Proxy Statement, and those pages
are incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The required information for Item 12 is included on pages 4 through 6
of the Company's 2000 Proxy Statement and is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K
(a) Financial Statements and Exhibits Filed
1. Financial Statements
See Index to Financial Information.
2. Financial Statement Schedules
See Index to Financial Information.
3. Exhibits
See Index to Exhibits.
(b) Reports on Form 8-K
No reports on Form 8-K were filed in the quarter ended
December 31, 1999.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Form 10-K
Annual Report to be signed on its behalf by the undersigned, thereunto
duly authorized.
March 29, 2000 CONSOLIDATED FREIGHTWAYS CORPORATION
(Registrant)
By:/s/Sunil Bhardwaj
Sunil Bhardwaj
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
March 29, 2000 /s/G. Robert Evans
G. Robert Evans
Vice Chairman of the Board and
Chief Executive Officer
March 29, 2000 /s/Sunil Bhardwaj
Sunil Bhardwaj
Senior Vice President and
Chief Financial Officer
March 29, 2000 /s/Robert E. Wrightson
Robert E. Wrightson
Senior Vice President and Controller
March 29, 2000 /s/William D. Walsh
William D. Walsh, Chairman of the Board
March 29, 2000 /s/Paul B. Guenther
Paul B. Guenther, Director
March 29, 2000 /s/John M. Lillie
John M. Lillie, Director
CONSOLIDATED FREIGHTWAYS CORPORATION
FORM 10-K
Year Ended December 31, 1999
_______________________________________________________________________
INDEX TO INFORMATION INCORPORATED BY REFERENCE
Consolidated Freightways Corporation and Subsidiaries
The following items are incorporated herein by reference from the
Company's 1999 Annual Report to Shareholders. The page references
refer to the Annual Report to Shareholders.
Item Page
Item 1(b). Financial Information About Industry Segments 27
Item 1(d). Financial Information About Foreign and Domestic
Operations and Export Sales 27
Item 5. Market for the Registrant's Common Stock and
Related Stockholder Matters 30
Item 6. Selected Financial Data 31
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 16-18
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk 17
Item 8. Financial Statements and Supplementary Data 19-30
The following items are incorporated herein by reference from the
Company's 2000 Proxy Statement. The page references refer to the Proxy
Statement.
Item Page
Item 10. Directors and Executive Officers of
the Registrant 2-3
Item 11. Executive Compensation 8-17
Item 12. Security Ownership of Certain Beneficial Owners
and Management 4-6
CONSOLIDATED FREIGHTWAYS CORPORATION
FORM 10-K
Year Ended December 31, 1999
_______________________________________________________________________
INDEX TO FINANCIAL INFORMATION
Consolidated Freightways Corporation and Subsidiaries
The following Consolidated Financial Statements of Consolidated
Freightways Corporation and Subsidiaries appearing on pages 19 through
29, inclusive, of the Company's 1999 Annual Report to Shareholders are
incorporated herein by reference:
Consolidated Balance Sheets - December 31, 1999 and 1998
Statements of Consolidated Income - Years Ended December 31, 1999,
1998 and 1997
Statements of Consolidated Cash Flows - Years Ended December 31,
1999, 1998 and 1997
Statements of Consolidated Shareholders' Equity - Years Ended
December 31, 1999, 1998 and 1997
Notes to Consolidated Financial Statements
Report of Independent Public Accountants
In addition to the above, the following consolidated financial
information is filed as part of this Form 10-K:
Page
Consent of Independent Public Accountants 15
Report of Independent Public Accountants 15
Schedule II - Valuation and Qualifying Accounts 16
The other schedules have been omitted because either (1) they are
neither required nor applicable or (2) the required information has
been included in the consolidated financial statements or notes
thereto.
SIGNATURE
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our reports included and incorporated by reference in
this Form 10-K, into Consolidated Freightways Corporation's (the
Company) previously filed Registration Statement File Nos. 333-16851,
333-16835, 333-25167, 333-95859, 333-85775 and 333-95861.
/s/Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Portland, Oregon,
March 28, 2000
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of
Consolidated Freightways Corporation:
We have audited in accordance with generally accepted auditing
standards, the consolidated financial statements included in
Consolidated Freightways Corporation's 1999 Annual Report to
Shareholders incorporated by reference in this Form 10-K, and have
issued our report thereon dated January 26, 2000. Our audit was made
for the purpose of forming an opinion on those statements taken as a
whole. The Schedule on page 16 is the responsibility of the Company's
management and is presented for the purpose of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and,
in our opinion, fairly states in all material respects the financial
data required to be set forth therein in relation to the basic
financial statements taken as a whole.
/s/Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Portland, Oregon,
January 26, 2000
SCHEDULE II
CONSOLIDATED FREIGHTWAYS CORPORATION
VALUATION AND QUALIFYING ACCOUNTS
THREE YEARS ENDED DECEMBER 31, 1999
(In thousands)
DESCRIPTION
ALLOWANCE FOR DOUBTFUL ACCOUNTS
BALANCE AT CHARGED TO CHARGED TO BALANCE AT
BEGINNING COSTS AND OTHER END OF
OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
1999 $11,413 $18,166 $ - $(16,785)(a) $12,794
1998 $ 7,467 $15,127 $ - $(11,181)(a) $11,413
1997 $ 9,692 $ 8,374 $ - $(10,599)(a) $ 7,467
(a) Accounts written off net of recoveries.
INDEX TO EXHIBITS
ITEM 14(a)(3)
Exhibit No.
(2) Plan of acquisition, reorganization, arrangement, liquidation or
succession:
2.1 Distribution Agreement between Consolidated Freightways
Corporation and Consolidated Freightways, Inc., dated
November 25, 1996. (Exhibit 2.1 to the Company's Form 8-K dated
March 12, 1997.) (*)
(3) Articles of incorporation and bylaws:
3.1 Amended and Restated Certificate of Incorporation of Consolidated
Freightways Corporation. (Exhibit 3.1 to the Company's Form 10 filed
October 2, 1996.) (*)
3.2 Amended and Restated Bylaws of Consolidated Freightways
Corporation. (Exhibit 3.2 to the Company's Form 10-K for the
year ended December 31, 1998.) (*)
(10) Material Contracts:
10.1 Alternative Dispute Resolution Agreement Between Consolidated
Freightways Corporation and Consolidated Freightways,
Inc., dated as of December 2, 1996. (Exhibit 10.2 to the Company's
Form 8-K dated March 12, 1997.) (*)
10.2 Employee Benefit Matters Agreement between Consolidated
Freightways Corporation and Consolidated Freightways, Inc., dated as
of December 2, 1996. (Exhibit 10.3 to the Company's Form 8-K dated
March 12, 1997.) (*)
10.3 Tax Sharing Agreement between Consolidated Freightways
Corporation and Consolidated Freightways, Inc., dated as of December
2, 1996. (Exhibit 10.4 to the Company's Form 8-K dated March 12,
1997.) (*)
10.4 Reimbursement and Indemnification Agreement between
Consolidated Freightways Corporation of Delaware and Consolidated
Freightways,Inc., dated as of October 1, 1996. (Exhibit 10.5 to
the Company's Form 8-Kdated March 12, 1997.) (*)
10.5 Consolidated Freightways Corporation 1996 Stock Option and
Incentive Plan. (Exhibit 10.6 to the Company's Form 10 filed October
2, 1996)(*)(#)
10.6 Consolidated Freightways Corporation 1996 Restricted Stock
Award Agreements. (Exhibit 10.8 to the Company's Form 10-K for the
year ended December 31, 1996.) (*)(#)
10.7 Consolidated Freightways Corporation Deferred Compensation Plan
for Executives. (Exhibit 10.10 to the Company's Form 10-K
for the year ended December 31, 1996.) (*)(#)
10.8 Consolidated Freightways Corporation Supplemental Executive
Retirement Plan. (Exhibit 10.11 to the Company's
Form 10-K for the year ended December 31, 1996.) (*)(#)
10.9 Consolidated Freightways Inc. Executive Split-Dollar Life
Insurance Plan. (Exhibit 10.12 to the Company's Form 10-K for the year
ended December 31, 1996.) (*)(#)
10.10 Reimbursement and Security Agreement dated July 3, 1997
between Consolidated Freightways Corporation and CNF Transportation
Inc. (Exhibit 10.1 to the Company's Form 10-Q for the quarter ended
June 30, 1997.)(*)
10.11 Consolidated Freightways Corporation 1999 Equity Incentive
Plan and Forms of Stock Options Agreements. (Exhibit 10.3 to the
Company's Form 10-Q for the quarter ended June 30, 1999.) (*)(#)
(*) Previously filed with the Securities and Exchange Commission and
incorporated by reference.
(#) Designates a contract or compensation plan for Management or
Directors.
INDEX TO EXHIBITS
ITEM 14(a)(3)
Exhibit No.
10.12 Form of Restricted Stock Award and Deferral Agreement under
the 1999 Equity Incentive Plan. (Exhibit 4.5 to the Company's
Registration Statement on Form S-8 dated August 23, 1999, File No 333-
85775.) (*)(#)
10.13 Consolidated Freightways Corporation Non-Employee Directors'
Equity Plan and Form of Stock Option Agreement. (Exhibit 10.4 to the
Company's Form 10-Q for the quarter ended June 30, 1999.) (*)(#)
10.14 Employment Agreements with Senior Management. (Exhibits 10.21 to the
Company's Form 10-K for the year ended December 31, 1998 and 10.1
to the Company Form 10-Q for the quarter ended June 30, 1999.) (*)(#)
10.15 Consolidated Freightways Corporation Management Change-of-Control
Plan. (Exhibit 10.22 to the Company's Form 10-K for the year ended
December 31, 1998.) (*)(#)
10.16 Credit Agreement between Consolidated Freightways Corporation of
Delaware, ABN AMRO Bank, N.V. and various other financial
institutions, dated as of October 12, 1999.
10.17 Lease Agreement between Consolidated Freightways Corporation of
Delaware, ABN AMRO Bank, N.V. and various other financial
institutions, dated as of October 12, 1999.
(13) Annual Report to Security Holders:
Consolidated Freightways Corporation 1999 Annual Report to
Shareholders. (Only those portions referenced herein are incorporated
in this Form 10-K. Other portions such as the "Letter to Shareholders"
are not required and therefore not "filed" as part of this Form 10-K.)
(23) Consents of Experts and Counsel
(23.1) Consent of Arthur Andersen LLP, independent public
accountants (included on page 15 with the auditor's report
in this Annual Report on Form 10-K)
(21) Significant Subsidiaries of the Company
(27) Financial Data Schedule
(*) Previously filed with the Securities and Exchange Commission and
incorporated by reference.
(#) Designates a contract or compensation plan for Management or
Directors.