UNITED STATES
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, 1996
OR
__ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from N/A to N/A
COMMISSION FILE NUMBER 1-12149
CONSOLIDATED FREIGHTWAYS CORPORATION STOCK AND SAVINGS PLAN
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 (415) 326-1700
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons administering the
employee benefit plan) have duly caused this annual report
to be signed on its behalf by the undersigned hereunto duly
authorized.
Consolidated Freightways Corporation Stock and Savings Plan
June 26, 1997 /s/Stephen D. Richards
Stephen D. Richards
Senior Vice President and
General Counsel
CONSOLIDATED FREIGHTWAYS CORPORATION
STOCK AND SAVINGS PLAN
INDEX TO UNAUDITED FINANCIAL STATEMENTS AND SCHEDULES
AS OF DECEMBER 31, 1996
FINANCIAL STATEMENTS:
Unaudited Statement of Net Assets Available for Plan
Benefits with Fund Information as of December 31, 1996 1
Unaudited Statement of Changes in Net Assets Available
for Plan Benefits with Fund Information for
the Period from December 2, 1996 to December 31, 1996 2
NOTES TO UNAUDITED FINANCIAL STATEMENTS AND SCHEDULES 3
SUPPLEMENTAL SCHEDULES:
Schedule I: Item 27a - Unaudited Schedule of Assets
Held for Investment Purposes as of December 31, 1996 8
Schedule II: Item 27d - Unaudited Schedule of
Reportable Transactions for the Period from
December 2, 1996 to December 31, 1996 9
Consolidated Freightways Corporation Stock and Savings Plan
Statement of Net Assets Available for Plan Benefits with Fund Information
As of December 31, 1996
(Unaudited)
Participant Directed
Equity International Growth New Income Bond Index
Index Trust Stock Fund Stock Fund Fund Trust
Assets:
Investments, at fair value
Mutual funds $ -- $6,864,226 $30,593,814 $8,445,842 $ --
Common trust funds 1,627,421 -- -- -- 255,912
Corporate equities -- -- -- -- --
Participant loans -- -- -- -- --
Total investments 1,627,421 6,864,226 30,593,814 8,445,842 255,912
Contributions receivable
Participants 9,068 23,765 64,942 17,544 1,303
Employer -- -- -- -- --
Total contributions receivable 9,068 23,765 64,942 17,544 1,303
Due from other plan -- -- -- -- --
Net assets available for plan benefits $1,636,489 $6,887,991 $30,658,756 $8,463,386 $ 257,215
<FN>
The accompanying notes are an integral part of the financial statements
Participant Directed
Retirement Retirement
U.S. Treasury Science and Equity Strategy Trust Strategy Trust
Money Market Technology Income Balance Income
Trust Fund Fund Plus
Assets:
Investments, at fair value
Mutual funds $ -- $22,632,569 $28,208,089 $ -- $ --
Common trust funds 16,853,412 -- -- 2,073,629 98,151
Corporate equities -- -- -- -- --
Participant loans -- -- -- -- --
Total investments 16,853,412 22,632,569 28,208,089 2,073,629 98,151
Contributions receivable
Participants 32,463 63,386 55,121 6,326 2,534
Employer -- -- -- -- --
Total contributions receivable 32,463 63,386 55,121 6,326 2,534
Due from other plan -- -- -- -- --
Net assets available for plan benefits $16,885,875 $22,695,955 $28,263,210 $2,079,955 $100,685
Participant Directed Non Participant
Retirement Unrestricted Unrestricted Directed
Strategy Trust CNF Common CFC Common Restricted CFC
Conservative Stock Stock Loan Common Stock
Growth Fund Fund Fund Fund Total
Assets:
Investments, at fair value
Mutual funds $ -- $ -- $ -- $ -- $ -- $ 96,744,540
Common trust funds 915,922 -- -- -- -- 21,824,447
Corporate equities -- 23,871,581 818,925 -- 2,303,362 26,993,868
Participant loans -- -- -- 8,735,025 -- 8,735,025
Total investments 915,922 23,871,581 818,925 8,735,025 2,303,362 154,297,880
Contributions receivable
Participants 4,944 -- 6,883 -- -- 288,279
Employer -- -- -- -- 510,740 510,740
Total contributions receivable 4,944 -- 6,883 -- 510,740 799,019
Due from other plan -- 1,514,771 266,138 -- -- 1,780,909
Net assets available for plan benefits $920,866 $25,386,352 $1,091,946 $8,735,025 $2,814,102 $156,877,808
Page 1
Consolidated Freightways Corporation Stock and Savings Plan
Statement of Changes in Net Assets Available for Plan Benefits with Fund Information
For the Period from December 2, 1996 to December 31, 1996
(Unaudited)
Participant Directed
Equity International Growth New Income Bond Index
Index Trust Stock Fund Stock Fund Fund Trust
Additions:
Participant contributions $ 28,025 $ 86,206 $ 236,275 $ 66,326 $ 4,122
Employer contributions -- -- -- -- --
Transfers in from other plans 1,628,634 6,636,255 30,322,511 8,488,283 258,873
Dividend and interest income -- 181,198 2,422,220 40,430 --
Total additions 1,656,659 6,903,659 32,981,006 8,595,039 262,995
Deductions:
Distributions to participants 21,022 29,990 137,416 67,621 5,725
Net depreciation in fair value of investments 5,811 115,762 2,282,708 84,809 783
Total deductions 26,833 145,752 2,420,124 152,430 6,508
Net increase prior to interfund transfers, net 1,629,826 6,757,907 30,560,882 8,442,609 256,487
Interfund transfers, net 6,663 130,084 97,874 20,777 728
Net increase 1,636,489 6,887,991 30,658,756 8,463,386 257,215
Net Assets Available for Plan Benefits
as of December 1, 1996 -- -- -- -- --
Net Assets Available for Plan Benefits
as of December 31, 1996 $1,636,489 $6,887,991 $30,658,756 $8,463,386 $257,215
<FN>
The accompanying notes are an integral part of the financial statements.
Participant Directed
Retirement Retirement
U.S. Treasury Science and Equity Strategy Trust Strategy Trust
Money Market Technology Income Balance Income
Trust Fund Fund Plus
Additions:
Participant contributions $ 126,008 $ 228,730 $ 197,548 $ 40,461 $ 3,820
Employer contributions -- -- -- -- --
Transfers in from other plans 17,259,403 23,109,772 28,020,893 2,048,172 99,755
Dividend and interest income 61,427 2,423,580 1,060,479 -- --
Total additions 17,446,838 25,762,082 29,278,920 2,088,633 103,575
Deductions:
Distributions to participants 162,399 86,359 162,247 7,483 --
Net depreciation in fair value of investments -- 3,326,616 927,104 2,398 201
Total deductions 162,399 3,412,975 1,089,351 9,881 201
Net increase prior to interfund transfers, net 17,284,439 22,349,107 28,189,569 2,078,752 103,374
Interfund transfers, net (398,564) 346,848 73,641 1,203 (2,689)
Net increase 16,885,875 22,695,955 28,263,210 2,079,955 100,685
Net Assets Available for Plan Benefits
as of December 1, 1996 -- -- -- -- --
Net Assets Available for Plan Benefits
as of December 31, 1996 $ 16,885,875 $ 22,695,955 $ 28,263,210 $2,079,955 $ 100,685
Participant Directed Non-Participant
Directed
Retirement Unrestricted Unrestricted Restricted
Strategy Trust CNF Common CFC Common CFC Common
Conservative Stock Stock Loan Stock
Growth Fund Fund Fund Fund Total
Additions:
Participant contributions $ 21,398 $ -- $ 22,786 $ -- $ -- $ 1,061,705
Employer contributions -- -- -- -- 510,740 510,740
Transfers in from other plans 901,875 23,906,762 678,095 8,999,251 1,547,282 153,905,816
Dividend and interest income -- 63,946 -- 59,018 -- 6,312,298
Total additions 923,273 23,970,708 700,881 9,058,269 2,058,022 161,790,559
Deductions:
Distributions to participants 4,445 132,846 201 57,911 11,765 887,430
Net depreciation in fair value of investments (239) (1,806,658) (146,129) -- (767,845) 4,025,321
Total deductions 4,206 (1,673,812) (145,928) 57,911 (756,080) 4,912,751
Net increase prior to interfund transfers, net 919,067 25,644,520 846,809 9,000,358 2,814,102 156,877,808
Interfund transfers, net 1,799 (258,168) 245,137 (265,333) -- --
Net increase 920,866 25,386,352 1,091,946 8,735,025 2,814,102 156,877,808
Net Assets Available for Plan Benefits
as of December 1, 1996 -- -- -- -- -- --
Net Assets Available for Plan Benefits
as of December 31, 1996 $920,866 $25,386,352 $1,091,946 $8,735,025 $2,814,102 $156,877,808
Page 2
CONSOLIDATED FREIGHWAYS CORPORATION
STOCK AND SAVINGS PLAN
NOTES TO UNAUDITED FINANCIAL STATEMENTS AND SCHEDULES
AS OF DECEMBER 31, 1996
1. DESCRIPTION OF PLAN:
The following description of the Consolidated
Freightways Corporation Stock and Savings Plan (the Plan) is
provided for general information purposes only.
Participants should refer to the Summary Plan Description
for more complete information.
General
Consolidated Freightways Corporation (the Company)
established the Consolidated Freightways Corporation Stock
and Savings Plan, effective December 2, 1996, for the
purpose of providing retirement benefits for the employees
of the Company. The Plan was subsequently amended
effective January 1, 1997. Prior to December 2, 1996, the
Company's employees participated in the Consolidated
Freightways Inc. Thrift and Stock Plan sponsored by
Consolidated Freightways Inc., the former parent. In
connection with the Company's spin-off from Consolidated
Freightways Inc. on December 2, 1996, the Company's
employees' account balances and loans outstanding were
transferred to the Plan. The Plan is a profit-sharing
plan offering the employees the opportunity to
save for their retirement and to increase their proprietary
interest in the Company by accumulating Company stock.
The Plan is intended to qualify as a profit sharing plan
under section 401(a) of the Internal Revenue Code (the
Code), with a salary deferral feature qualified under
Section 401(k) of the Code and is subject to the provisions
of the Employee Retirement Income Security Act of 1974, as
amended (ERISA). The related trust is intended to comply
with Section 501 of the Code.
Employees are eligible to participate in the Plan if the
participant is not covered by a collective bargaining
agreement, is not a leased employee, or is not a
nonresident alien. Employees of subsidiaries with
substantially all operations outside of the United States
for whom the Company does not make contributions under the
Federal Insurance Contributions Act on behalf of the
employee and does not accrue benefits under a Company funded
pension plan other than the Consolidated Freightways
Corporation Pension Plan are not eligible.
Overall responsibility for administering the Plan rests with
the Consolidated Freightways Corporation Administrative
Committee (the Committee) which is appointed by the Chief
Executive Officer of the Company. The Plan trustee, T. Rowe
Price (the Trustee), is responsible for the management and
control of the Plan's assets.
Page 3
Contributions
Participants may contribute up to 15 percent of their
compensation, as defined by the Plan and subject to certain
limitations. The Company makes matching contributions equal
to 50 percent of the participant's contribution, but not
exceeding 1.5 percent of the participant's compensation, as
defined. The Company's matching contributions occur
quarterly beginning at the end of the quarter in which the
participant completes two years of service with the Company.
Company contributions are in the form of the Company's
Common Stock or in cash and may be discontinued at any
time.
Participant Accounts
The Plan allows participants to select the type of
investment fund in which to invest their contributions. The
Company's contribution cannot be directed by the participant
and is deposited into the non-participant directed
Restricted CFC Common Stock Fund. Allocations of the
Company's matching contribution are based upon a percentage
of participant contributions as described above.
Allocations of net Plan earnings are based upon participant
account balances, as defined. The benefit to which a
participant is entitled is the balance of the participant's
account.
Amounts in the Unrestricted CNF Common Stock Fund are the
result of transfers from the former parent's plan.
Participants currently have the option to sell their shares
and reinvest the proceeds in funds other than CNF common
stock. Shares of CNF stock remaining unsold at December 31,
1999 will be sold by the Company and the proceeds will be
reinvested in the Unrestricted CFC Common Stock Fund.
Participants cannot purchase additional shares of CNF common
stock.
Vesting
Participants' accounts are fully vested.
Participant Loans
The Plan has a loan provision allowing participants access
to funds in their accounts. Participants can have up to
three loans outstanding at one time. Loans can be no less
than $1,000 and in aggregate cannot exceed the lesser of the
participant's elective contributions and related earnings,
45 percent of the employee's account balance or $50,000,
reduced by the highest aggregate loan balance within the
preceding 12 months. Loan transactions are treated as a
transfer to (from) the various investment funds from (to)
the Loan Fund. Loans can be made for a term not to exceed 4-
1/2 years and bear interest at a reasonable rate determined
by the Committee. Loans outstanding at
December 31, 1996 bear interest at rates ranging from
8 percent to 10.25 percent. Principal and interest
payments are paid ratably through payroll deductions.
Page 4
Terminations and Withdrawals
Participants and their beneficiaries can receive a total
distribution from their accounts upon death or termination
of employment. A participant can elect to have his/her
account distributed in a single lump sum or in a series of
substantially equal annual installments, as defined by the
Plan. Disabled participants may withdraw, in lump sums,
amounts attributable to their elective contributions and
rollovers before termination of employment. Participants
over the age of 59 1/2 may withdraw, in lump sums, amounts
attributable to their elective contributions, rollovers and
earnings thereon before termination of employment.
Participants over the age of 70 1/2 may withdraw all or part
of their vested balance before termination of employment.
Participants may withdraw certain accounts from prior plans,
in single sums, up to two times a year before termination of
employment. Distributions will be made in cash except that
the participants' accounts invested in the Company's Common
Stock can, at the direction of the participant, be paid in
shares.
Plan Termination
Although the Company has no intention of terminating the
Plan, it may do so at any time by resolution of the Board of
Directors. In the event that the Plan is terminated, the
accounts of all affected participants shall remain fully
vested and nonforfeitable. Upon termination of the Plan,
the net assets shall be transferred to a successor defined
contribution plan or other qualified plan, or be distributed
to each participant in the amount credited to his/her
account.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying unaudited financial statements have been
prepared using the accrual method of accounting.
Financial Instruments
The investments in the accompanying financial statements are
stated at quoted market prices which approximate fair value
as of December 31, 1996, except for participant loans
outstanding which are valued at cost which approximates fair
value.
Income Recognition
The difference in market value from one period to the next
is included in net depreciation in fair value of investments
in the accompanying Statement of Changes in Net Assets
Available for Plan Benefits with Fund Information. The net
depreciation in fair value of investments also includes
realized gains and losses.
Interest income is recorded on the accrual basis. Dividends
are recorded on the ex-dividend date. Purchases and sales
of securities are recorded on the trade date basis.
Operating Expenses
The Company may elect to pay any and all administrative fees
or expenses of the Plan. Otherwise, said expenses and
fees shall be paid from Plan assets. During 1996, all
administrative expenses and fees of the Plan were paid
by the Company.
Page 5
Payment of Benefits
Benefits paid to participants are recorded upon
distribution.
Estimates
Management makes estimates and assumptions when preparing
the financial statements in conformity with generally
accepted accounting principles. Those estimates and
assumptions affect the amounts reported in the accompanying
financial statements and notes thereto. Actual results
could differ from those estimates.
3. INVESTMENTS
The Plan allows participants to select the type of
investment fund in which to invest their contributions. A
description of each investment option follows:
Equity Index Trust Fund - This fund invests primarily
in common stocks that make up the S&P 500 Index.
Growth Stock Fund - This fund invests primarily in
common stocks of well-established growth companies
whose earnings have grown faster than the rate of
inflation and economy in general.
New Income Fund - This fund invests primarily in
corporate bonds, bank obligations, U.S. government and
mortgage-backed securities.
Equity Income Fund - This fund invests primarily in
common stocks of established companies that pay above-
average dividends and have prospects of future dividend
increases.
Science and Technology Fund - This fund invests
primarily in stocks of companies that are expected to
benefit from the development, advancement, and use of
science and technology.
International Stock Fund - This fund invests primarily
in the stocks of established growth companies outside
of the United States such as Europe, the Far East,
Australia, Canada and other areas.
Bond Index Trust - This fund invests primarily in U.S.
and foreign government securities and corporate bonds
as well as other securities.
U.S. Treasury Money Market Trust - This fund invests
primarily in short-term U.S. Treasury obligations and
repurchase agreements collateralized by U.S. Treasury
obligations.
Retirement Strategy Trust - Balanced - This fund
invests primarily in domestic and international stocks
(60 percent) and fixed income securities (40 percent).
Page 6
Retirement Strategy Trust - Conservative Growth - This
fund invests primarily in domestic and international
stocks (80 percent) and fixed income securities (20
percent).
Retirement Strategy Trust - Income Plus - This fund
invests primarily in fixed income securities (60
percent) and common stocks (40 percent).
Unrestricted CFC Common Stock Fund - This fund invests
in the common stock of Consolidated Freightways
Corporation.
The Plan also includes a non-participant directed investment
which is described as follows:
Restricted CFC Common Stock Fund - This fund invests
in the common stock of Consolidated Freightways
Corporation. The participants are entitled to full
voting rights and all dividends when paid on shares
credited to his/her account.
The Plan also includes the participant directed Unrestricted
CNF Common Stock Fund. This fund is invested in the common
stock of the former parent. Amounts in this fund are the
result of transfers from the former parent's plan.
Participants currently have the option to sell their shares
and reinvest the proceeds in funds other than CNF common
stock. Shares of CNF stock remaining unsold at December 31,
1999 will be sold by the Company and the proceeds will be
reinvested in the Unrestricted CFC Common Stock Fund.
Participants cannot purchase additional shares of CNF common
stock.
4. INCOME TAX STATUS
The Plan administrator is in the process of applying for a
determination letter from the Internal Revenue Service
indicating that the Plan and related trust conform to
applicable requirements of the Code. The Plan administrator
believes that the Plan is designed and is currently being
operated in compliance with applicable requirements of the
Code.
5. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares in funds managed by T.
Rowe Price. T. Rowe Price is the trustee as defined by the
Plan, and therefore, these investments and investment
transactions qualify as party-in-interest transactions.
6. RECONCILIATION TO FORM 5500:
The following is a reconciliation of net assets available
for plan benefits per the financial statements to the Form
5500 as of December 31, 1996:
Net assets available for plan benefits per
the financial statements $156,877,808
Amounts allocated to withdrawing participants --
Net assets available for plan benefits
per the Form 5500 $156,877,808
Page 7
SCHEDULE I
CONSOLIDATED FREIGHTWAYS CORPORATION
STOCK AND SAVINGS PLAN
EIN 77-0425334
PLAN NUMBER 002
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
Description of Investment Including
Identity of Issue, Borrower, Maturity Date, Rate of Interest, Collateral,
Lessor or Similar Party Par or Maturity Value Cost Current Value
Mutual Funds
* T.Rowe Price International Stock Fund
(497,407.661 shares) $ 6,978,651 $ 6,864,226
* T.Rowe Price Growth Stock Fund
(1,168,594.898 shares) 32,874,261 30,593,814
* T.Rowe Price New Income Fund (950,038.426 shares) 8,530,091 8,445,842
* T.Rowe Price Science and Technology Fund 25,945,487 22,632,569
(761,782.865 shares)
* T.Rowe Price Equity Income Fund
(1,251,468.012 shares) 29,135,629 28,208,089
Common Trust Funds
* T.Rowe Price Equity Index Trust
(87,542.804 shares) 1,633,358 1,627,421
* T.Rowe Price Bond Index Trust (19,700.684 shares) 256,687 255,912
* T.Rowe Price U.S. Treasury Money Market Trust 16,853,412 16,853,412
(16,853,412.410 shares)
* T.Rowe Price Retirement Strategy Trust-Balanced 2,076,043 2,073,629
(145,313.863 shares)
* T.Rowe Price Retirement Strategy Trust-Income Plus 98,369 98,151
(7,430.069 shares)
* T.Rowe Price Retirement Strategy Trust-Conservative
Growth 915,687 915,922
(62,435.065 shares)
Participant Loans
* Plan Participants Participant loans with interest rates
from 8% to 10.25% and maturity dates
from 1/97 to 6/01 8,735,025 8,735,025
Corporate Equity
* Consolidated Freightways Corp Common Stock (351,806.99 shares) 2,212,414 3,122,287
CNF Transportation Inc. Common Stock (1,072,880.02 shares) 22,082,710 23,871,581
$158,327,824 $154,297,880
<FN>
* Represents a party-in-interest as of December 31, 1996.
Note: Cost is calculated using the moving average method.
The accompanying notes are an integral part of this schedule.
Page 8
SCHEDULE II
CONSOLIDATED FREIGHTWAYS CORPORATION
STOCK AND SAVINGS PLAN
EIN 77-0425334
PLAN NUMBER 002
ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE PERIOD FROM DECEMBER 2, 1996 TO DECEMBER 31, 1996
Category (iii) - Series of transactions involving securities of the same issue that in aggregate exceed 5 percent
of net Plan assets as of the beginning of the Plan year.
Expense
Identity of Number of Purchase Selling Lease Incurred with
Party Involved Description of Asset Purchases Sales Price Price Rental Transaction
* T. Rowe Price New Income Fund 7 -- $8,630,345 -- -- --
* T. Rowe Price U.S. Treasury Money Market Trust 4 -- 7,421,053 -- -- --
* T. Rowe Price Equity Income Fund 6 -- 9,339,545 -- -- --
* T. Rowe Price New Income Fund -- 3 -- 99,694 -- --
* T. Rowe Price U.S. Treasury Money Market Trust -- 5 -- 663,570 -- --
* T. Rowe Price Equity Income Fund -- 4 -- 204,354 -- --
<FN>
* Represents a party-in-interest transaction for the period from December 2, 1996 to December 31, 1996.
Note: Cost is calculated using the moving average method.
The accompanying notes are an integral part of this schedule.
Current Value
Identity of Cost of Asset on Net Gain
Party Involved Description of Asset of Asset Transaction Date or (Loss)
* T. Rowe Price New Income Fund $8,630,345 $8,630,345 --
* T. Rowe Price U.S. Treasury Money Market Trust 7,421,053 7,421,053 --
* T. Rowe Price Equity Income Fund 9,339,545 9,339,545 --
* T. Rowe Price New Income Fund 100,239 99,694 (545)
* T. Rowe Price U.S. Treasury Money Market Trust 663,570 663,570 --
* T. Rowe Price Equity Income Fund 203,878 204,354 476
Page 9