UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from N/A to N/A
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
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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 .
Number of shares of Common Stock, $.01 par value,
outstanding as of July 31, 2000: 21,525,549
CONSOLIDATED FREIGHTWAYS CORPORATION
FORM 10-Q
Quarter Ended June 30, 2000
____________________________________________________________________________
____________________________________________________________________________
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Balance Sheets -
June 30, 2000 and December 31, 1999 3
Statements of Consolidated Operations -
Three and Six Months Ended June 30, 2000 and 1999 5
Statements of Consolidated Cash Flows -
Six Months Ended June 30, 2000 and 1999 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Stockholder Proposals 15
Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURES 17
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
CONSOLIDATED FREIGHTWAYS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2000 1999
(Dollars in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 71,235 $ 49,050
Trade accounts receivable, net of allowances 312,060 343,198
Other receivables 8,239 6,524
Operating supplies, at lower of average
cost or market 8,498 9,268
Prepaid expenses 45,116 41,405
Deferred income taxes 70,328 21,567
Total Current Assets 515,476 471,012
PROPERTY, PLANT AND EQUIPMENT, at cost
Land 83,263 82,701
Buildings and improvements 351,705 354,012
Revenue equipment 528,698 545,129
Other equipment and leasehold improvements 147,953 139,408
1,111,619 1,121,250
Accumulated depreciation and amortization (752,395) (752,298)
359,224 368,952
OTHER ASSETS
Deposits and other assets 60,527 57,712
Deferred income taxes 16,004 18,596
76,531 76,308
TOTAL ASSETS $ 951,231 $ 916,272
The accompanying notes are an integral part of these statements.
CONSOLIDATED FREIGHTWAYS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2000 1999
(Dollars in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 89,664 $ 98,701
Accrued liabilities 221,745 202,287
Accrued claims costs 78,814 78,584
Federal and other income taxes 18,724 16,883
Other current liabilities 6,629 --
Total Current Liabilities 415,576 396,455
LONG-TERM LIABILITIES
Long-term debt 15,100 15,100
Accrued claims costs 97,261 97,839
Employee benefits 123,748 121,783
Other liabilities and deferred credits 42,828 26,533
Total Liabilities 694,513 657,710
SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value; authorized
5,000,000 shares; issued none -- --
Common stock, $.01 par value; authorized
50,000,000 shares; issued 23,133,848 shares 231 231
Additional paid-in capital 76,884 77,406
Accumulated other comprehensive loss (10,150) (10,087)
Retained earnings 204,760 207,632
Treasury stock, at cost (1,712,806 and 1,863,691
shares, respectively) (15,007) (16,620)
Total Shareholders' Equity 256,718 258,562
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 951,231 $ 916,272
The accompanying notes are an integral part of these statements.
CONSOLIDATED FREIGHTWAYS CORPORATION
STATEMENTS OF CONSOLIDATED OPERATIONS
(Dollars in thousands except per share data)
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
2000 1999 2000 1999
REVENUES $ 586,101 $ 589,781 $1,179,730 $1,147,989
COSTS AND EXPENSES
Salaries, wages and
benefits 377,971 379,781 757,631 738,181
Operating expenses 110,946 100,420 226,761 192,000
Purchased transportation 46,330 59,345 95,455 111,117
Operating taxes and
licenses 18,092 17,334 36,560 34,376
Claims and insurance 17,452 14,610 35,511 28,508
Depreciation 13,181 13,329 26,922 25,653
583,972 584,819 1,178,840 1,129,835
OPERATING INCOME 2,129 4,962 890 18,154
OTHER INCOME (EXPENSE)
Investment income 539 836 892 1,654
Interest expense (1,220) (886) (2,307) (1,918)
Miscellaneous, net (126) (226) (4,232) (585)
(807) (276) (5,647) (849)
Income (loss) before income
taxes (benefits) 1,322 4,686 (4,757) 17,305
Income taxes (benefits) 1,215 2,179 (1,885) 8,047
NET INCOME (LOSS) $ 107 $ 2,507 $ (2,872) $ 9,258
Basic average shares
outstanding 21,458,860 22,626,761 21,404,836 22,617,285
Diluted average shares
outstanding 21,458,860 23,454,306 21,404,836 23,032,273
Basic Earnings (Loss)
per Share: $ - $ 0.11 $ (0.13) $ 0.41
Diluted Earnings (Loss)
per Share: $ - $ 0.11 $ (0.13) $ 0.40
The accompanying notes are an integral part of these statements.
CONSOLIDATED FREIGHTWAYS CORPORATION
AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
Six Months Ended
June 30,
2000 1999
(Dollars in thousands)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 49,050 $ 123,081
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) (2,872) 9,258
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 30,125 28,040
Decrease in deferred income taxes (24,469) (4,380)
Gains from property disposals, net (3,044) (306)
Issuance of common stock under stock
compensation plans 1,358 230
Changes in assets and liabilities, net of
effects from acquisition of FirstAir Inc.
Receivables 31,076 (23,160)
Prepaid expenses (3,637) (831)
Accounts payable (11,810) 2,247
Accrued liabilities 18,932 19,260
Accrued claims costs (379) (5,421)
Income taxes 1,841 758
Employee benefits 1,965 3,955
Other 3,177 (22,898)
Net Cash Provided by Operating Activities 42,263 6,752
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (19,110) (16,673)
Software expenditures (4,417) (14,070)
Proceeds from sales of property 4,983 2,134
Acquisition of First Air, net of cash acquired (576) --
Net Cash Used by Investing Activities (19,120) (28,609)
CASH FLOWS FROM FINANCING ACTIVITIES
Net payments of short-term borrowings (691) --
Purchase of common stock (267) --
Net Cash Used by Financing Activities (958) --
Increase (Decrease) in Cash and Cash Equivalents 22,185 (21,857)
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 71,235 $ 101,224
The accompanying notes are an integral part of these statements.
CONSOLIDATED FREIGHTWAYS CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying consolidated financial statements of
Consolidated Freightways Corporation and subsidiaries (the Company)
have been prepared by the Company, without audit by independent
public accountants, pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management,
the consolidated financial statements include all normal recurring
adjustments necessary to present fairly the information required to
be set forth therein. Certain information and note disclosures
normally included in financial statements prepared in accordance with
accounting principles generally accepted in the United States have
been condensed or omitted from these statements pursuant to such
rules and regulations and, accordingly, should be read in conjunction
with the consolidated financial statements included in the Company's
1999 Annual Report to Shareholders.
There were no significant changes in the Company's commitments
and contingencies as previously described in the 1999 Annual Report
to Shareholders and related annual report to the Securities and
Exchange Commission on Form 10-K, except as discussed in Footnote 7
below, regarding settlement of tax liabilities.
2. Segment and Geographic Information
The Company operates in a single industry segment, primarily
providing less-than-truckload 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. The
following information sets forth revenues and property, plant and
equipment by geographic location. Revenues are attributed to
geographic location based upon the location of the customer. No one
customer provides 10% or more of total revenues.
Geographic Information
(Dollars in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Revenues
United States $549,349 $557,508 $1,107,252 $1,086,929
Canada 36,752 32,273 72,478 61,060
Total $586,101 $589,781 $1,179,730 $1,147,989
Geographic Information (continued)
As of
June 30,
2000 1999
Property, Plant and Equipment
United States $323,780 $335,228
Canada 35,444 30,845
Total $359,224 $366,073
3. Acquisition of FirstAir Inc.
On June 2, CF AirFreight Corporation, a wholly-owned subsidiary
of the Company, acquired substantially all of the assets and
liabilities of privately held FirstAir Inc., a non-asset based
provider of domestic and international air freight forwarding and
full and less-than-container load ocean freight transportation. The
purchase price was $1.2 million in cash and assumption of certain
liabilities. The acquisition has been accounted for under the
purchase method of accounting, and accordingly, the purchase price
has been allocated to assets purchased and liabilities assumed based
upon the fair values at the date of acquisition. The excess of the
purchase price over the fair values of the assets acquired and
liabilities assumed was approximately $2.3 million, which is being
amortized on a straight line basis. The purchase agreement also
provides for a contingent payment to the former owner if revenues
exceed certain targeted levels before May 31, 2003. The contingent
payment shall not exceed $2.5 million. The operating results of
FirstAir have been included in the Company's consolidated financial
statements since the date of acquisition. Operating results prior to
acquisition would have had an immaterial effect on the Company's
results of operations.
4. Stock Compensation
As of June 30, 2000, there were 1,197,000 granted but unissued
restricted common shares remaining from grants made under the
Company's various stock incentive plans. The shares vest over time
and are contingent upon the Company's average stock price achieving
pre-determined increases over the grant prices for 10 consecutive
trading days. Compensation expense is recognized based upon the
stock price when the minimum stock price is achieved. As of June 30,
2000, the stock price was below the pre-determined levels required
for vesting.
In June, the Company granted 1,274,800 stock options to certain
designated employees at $4.72 per share, equal to the closing stock
price on the date of the grant. The options vest twenty-five percent
on each of the following dates: July 15, 2000; May 16, 2001; May 16,
2002; and May 16, 2003.
5. Earnings (Loss) per Share
The following chart reconciles basic to diluted earnings per
share for the three and six months ended June 30, 2000 and 1999. See
Footnote 4 for a discussion of dilutive securities.
(Dollars in thousands except per share amounts)
Weighted
Three Average Earnings
Months Ended Net Income Shares Per Share
June 30, 2000
Basic $ 107 21,458,860 $ --
Dilutive effect of
restricted stock
and stock options -- -- --
Diluted $ 107 21,458,860 $ --
June 30, 1999
Basic $ 2,507 22,626,761 $0.11
Dilutive effect of
restricted stock
and stock options -- 827,545 --
Diluted $ 2,507 23,454,306 $0.11
Weighted
Six Average Earnings (Loss)
Months Ended Net Income Shares Per Share
(Loss)
June 30, 2000
Basic $(2,872) 21,404,836 $(0.13)
Dilutive effect of
restricted stock
and stock options -- -- --
Diluted $(2,872) 21,404,836 $(0.13)
June 30, 1999
Basic $ 9,258 22,617,285 $0.41
Dilutive effect of
restricted stock
and stock options -- 414,988 (0.01)
Diluted $ 9,258 23,032,273 $0.40
6. Comprehensive Income
Comprehensive income (loss) for the three and six months ended
June 30, 2000 and 1999 is as follows:
(Dollars in thousands)
Three Six
Months Ended Months Ended
June 30, June 30,
2000 1999 2000 1999
Net Income (Loss) $ 107 $2,507 $(2,872) $ 9,258
Other Comprehensive Income (Loss):
Foreign currency translation
adjustments (56) 1,394 (63) 1,876
Comprehensive Income (Loss) $ 51 $3,901 $(2,935) $11,134
7. Contingencies
The Company and its subsidiaries are involved in various
lawsuits incidental to their businesses. It is the opinion of
management that the ultimate outcome of these actions will not have a
material adverse effect on the Company's financial position or
results of operations.
The Company's former parent, CNF Transportation Inc. (CNF),
continues to dispute certain tax issues with the Internal Revenue
Service relating to the taxable years prior to the spin-off of the
Company. The issues arise from tax positions first taken by the
former parent in the mid-1980's.
Under a tax sharing agreement entered into between CNF and the
Company at the time of the spin-off, the Company is obligated to
reimburse the former parent for its share of any additional taxes and
interest that relate to the Company's business prior to the spin-off.
The Company has executed a tax settlement agreement that calls for a
full settlement of the tax sharing liability, except for certain
enumerated open tax items that are anticipated to be resolved within
the next 24 to 30 months. The settlement entailed an immediate cash
payment of $16.7 million, transfer of approximately $1 million of
real property, and the grant of tax obligations in the amounts of
$20.0 million payable over a four year period and bearing interest at
6.8% and $20.2 million to be settled by transfers of real property.
As of June 30, 2000, the Company believes that it has accrued the
necessary reserves to adequately provide for its entire liability to
CNF under the tax sharing agreement.
CONSOLIDATED FREIGHTWAYS CORPORATION AND SUBSIDIARIES
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Revenues for the quarter ended June 30, 2000 declined only
marginally compared to the same period last year, despite a 7.3%
decrease in tonnage. A higher proportion of lighter-weight freight in
the system, yield management programs as well as continued
competition accounted for the decrease in tonnage. Shipments
decreased 3.3% and the average weight per shipment decreased 4.1%.
The tonnage decrease was offset by an 8.3% increase in revenue per
hundredweight due to rate increases, a fuel surcharge and the change
in freight profile. Revenues for the six-month period increased 2.8%
despite lower tonnage. Tonnage decreased 4.6% for reasons noted
above but was offset by an 8.0% increase in revenue per
hundredweight.
Salaries, wages and benefits remained flat in the quarter
despite lower tonnage, due to salary and contractual wage and benefit
increases, lower P&D and cross-dock efficiencies and lower use of
rail. The six-month period increased 2.6%, despite lower tonnage,
for reasons noted above, as well as $4.0 million of severance pay due
to an administrative reorganization.
Operating expenses increased 10.5% in the quarter and 18.1% in
the six-month period due primarily to increased fuel costs. The
average fuel cost per gallon increased 67.9% in the quarter and 88.5%
in the six-month period compared with the prior year. The Company
has a fuel surcharge in place to offset the impact of the increased
fuel costs. Higher information systems costs and revenue equipment
lease expense, as well as lower use of rail also impacted the quarter
and six-month period. The Company benefited from approximately $3.0
million of gains on sales of properties during the quarter.
Purchased transportation decreased 21.9% and 14.1% in the
quarter and six-month period, respectively, due to a decrease in the
use of rail transportation. Rail miles as a percentage of inter-city
miles decreased to 22.1% from 26.9% in the quarter and to 22.5% from
26.7% in the six-month period, respectively, due to concerns about
service levels subsequent to a recent rail line merger. The decrease
also reflects the lower usage of owner-operators due to the shutdown
of Redwood Truckload, the Company's owner-operator truckload
subsidiary, in the second quarter.
Operating taxes and licenses increased 4.4% and 6.4% in the
quarter and six-month period, respectively, due to lower rail usage
and increased licensing costs due to changes in the fleet.
Claims and insurance increased 19.5% and 24.6% in the quarter
and six- month period, respectively, due to higher than anticipated
cargo claims and higher-cost vehicular accidents.
Depreciation increased 4.9% in the six-month period due to
increased capital expenditures in 1999. However, depreciation for
the quarter decreased 1.1% as a portion of the Company's linehaul
trailer fleet became fully depreciated.
The above resulted in operating income of $2.2 million for the
quarter compared with $5.0 million in the same period last year. The
operating ratio declined to 99.6% from 99.2%. Operating income for
the six-month period was $0.9 million compared with $18.2 million in
the prior year. The operating ratio declined to 99.9% from 98.4%.
Other expense, net increased $0.5 million and $4.8 million in
the quarter and six-month period, respectively, due to interest
expense on borrowings under a short-term credit facility and on tax
obligations payable to CNF. The six-month period also reflects a $4.0
million charge for settlement of the tax sharing agreement with CNF.
Both periods also reflect lower income on short-term investments as
funds were used for capital expenditure purposes.
The Company's effective income tax rates differ from the
statutory federal rate due primarily to foreign and state taxes and
non-deductible items.
Management is continuing with its program to improve the freight
mix by seeking business that provides appropriate compensation for
the freight handled. However, this may result in continued tonnage
declines in the short-term. As part of this program, management
implemented a 5.8% general rate increase effective August 1. This
should help offset an April 1 wage and benefit increase averaging
3.4% that will add approximately $15 million of expense in the
remainder of 2000. As part of an administrative reorganization to
reduce costs, the Company is consolidating its corporate headquarters
and administrative offices to a single facility in Vancouver, WA. A
portion of the proceeds from the sales of its Menlo Park, CA and
Portland, OR facilities will be reinvested back into high priority
real estate and capital investments with long-term value to the
Company.
As discussed in Footnote 4, there are 1,197,000 shares granted
under the Company's restricted stock plan that had not achieved the
pre-determined increases in stock price required for vesting as of
June 30. Compensation expense will be recognized for those shares
once the stock price meets the required levels.
As discussed above, the Company continues to experience
significant increases in 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, as determined from the Energy
Information Administration of the Department of Energy's publication
of weekly retail on-highway diesel prices. The Company currently has
a fuel surcharge in effect. However, there can be no assurance that
the Company will be able to successfully implement such surcharges in
response to increased fuel costs in the future.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2000, the Company had $71.2 million in cash and
cash equivalents. Net cash provided by operating activities for the
six months ended June 30, 2000 was $42.3 million compared with $6.8
million in the same period last year. The increase was due primarily
to improved collections of accounts receivable. Management expects
cash flow from operations for 2000 will be sufficient for working
capital requirements.
Net cash used by investing activities was $19.1 million compared
with $28.6 million in the same period last year. The decrease was due
primarily to lower software expenditures. The prior year reflects
costs to replace certain operational and financial software systems
for Year 2000 compliance. Management expects capital and software
expenditures to be approximately $50 million for the remainder of the
year, primarily for upgrades to terminal properties, technology
enhancements and the purchase of revenue equipment. It is
anticipated that those expenditures will be funded with existing cash
balances and cash from operations, supplemented by financing
arrangements. Additionally, as part of an administrative
reorganization, the Company is consolidating its corporate
headquarters and administrative offices to a single facility in
Vancouver, WA. A portion of the proceeds from the sales of its Menlo
Park, CA and Portland, OR facilities will be reinvested back into
high priority real estate and capital investments with long-term
value to the Company.
Net cash used by financing activities of $1.0 million reflects
repayment of short-term borrowings assumed in the purchase of
FirstAir Inc. and repurchases of common stock. Management
repurchased 60,000 shares during the quarter and is authorized to
repurchase an additional $19.7 million of common stock. Also during
the quarter, the Company repaid a $20 million short-term borrowing
made under its credit facility in March in anticipation of the
settlement of the tax sharing agreement with CNF, as discussed in
Footnote 7.
The Company has a multi-year $175 million unsecured credit
facility with several banks to provide for working capital and letter
of credit needs. Borrowings under the agreement bear interest at
LIBOR plus a margin. As of June 30, 2000, the Company had no short-
term borrowings and $68.7 million of letters of credit outstanding.
The continued availability of funds under this credit facility will
require that the Company comply with certain financial covenants, the
most restrictive of which requires the Company to maintain a minimum
tangible net worth. The Company is in compliance as of June 30, 2000
and expects to be in compliance with these covenants for the
remainder of the year.
As discussed in Footnote 7, the Company has executed a tax
settlement agreement that calls for a full settlement of the tax
sharing liability with CNF, except for certain enumerated open tax
items that are anticipated to be resolved within the next 24 to 30
months. The settlement entailed an immediate cash payment of $16.7
million, transfer of approximately $1 million of real property, and
the grant of tax obligations in the amounts of $20.0 million payable
over a four year period and bearing interest at 6.8% and $20.2
million to be settled by transfers of real property. As of June 30,
2000, the Company believes that it has accrued the necessary reserves
to adequately provide for its entire liability to CNF under the tax
sharing agreement.
OTHER
On May 8, 2000, the Board of Directors elected Patrick H. Blake
president, chief executive officer and a director of the Company and
chief executive officer of CF, the Company's long-haul subsidiary.
He replaces Vice Chairman of the Board G. Robert Evans, who served as
interim CEO after the retirement of W. Roger Curry in January. Mr.
Blake previously served as executive vice president of operations and
chief operating officer of the Company and president and chief
operating officer of CF. The Board elected Thomas A. Paulsen to
fulfill Mr. Blake's previous positions as president and chief
operating officer of CF and chief operating officer of the Company.
He previously served as senior vice president of operations.
On July 5, 2000, the Board of Directors elected Robert E.
Wrightson executive vice president and chief financial officer of the
Company. He replaces Sunil Bhardwaj, who served as chief financial
officer and treasurer before leaving the company. Mr. Wrightson
previously served as senior vice president and controller of the
Company.
Certain statements included or incorporated by reference herein
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 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is subject to market risks related to changes in
interest rates and foreign currency exchange rates, primarily the
Canadian dollar and Mexican peso. Management believes that the
impact on the Company's financial position, results of operations and
cash flows from fluctuations in interest rates and foreign currency
exchange rates would not be material. Consequently, management does
not currently use derivative instruments to manage these risks;
however, it may do so in the future.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
As previously disclosed, 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. 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.
ITEM 4. Submission of Matters to a Vote of Security Holders
At the Annual Shareholders Meeting held May 16, 2000, the
following matter was presented with the indicated voting results:
For the purpose of electing members of the Board of Directors,
the votes representing shares of Common stock were cast as follows:
Nominee For Withheld
G. Robert Evans 19,010,323 167,918
James B. Malloy 18,981,740 196,501
Because the terms of office for their groups of directors had
not ended, the following directors did not stand for election and
continued in office after the Annual Shareholders Meeting: Paul B.
Guenther, William D. Walsh, Robert W. Hatch, John M. Lillie and
Raymond F. O'Brien.
With his promotion to president and chief executive officer of
the Company on May 8, Patrick H. Blake was also elected to the Board
of Directors as a Group 2 director for a one year term.
ITEM 5. Stockholder Proposals
Pursuant to the Company's bylaws, stockholders who wish to bring
matters or propose nominees for director at the Company's 2001 annual
meeting of stockholders must provide specified information to the
Company between February 1, 2001 and March 3, 2001 (unless such
matters are included in the Company's proxy statement pursuant to
Rule 14a-8 under the Securities Exchange Act of 1934, as amended, in
which case the information must be received by the Company by
December 18, 2000).
ITEM 6. Exhibits and Reports on Form 8-K
(a)Exhibits
(10.1) Agreement Resolving Certain Matters under the Tax
Sharing Agreement Between CNF Transportation Inc.
and Consolidated Freightways Corporation
(27) Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed in the quarter ended
June 30, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company (Registrant) has duly caused this Form 10-Q
Quarterly Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Consolidated Freightways Corporation
(Registrant)
August 11, 2000 /s/Robert E. Wrightson
Robert E. Wrightson
As Executive Vice President and
Chief Financial Officer and
For Registrant