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 September 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
16400 S.E. CF Way, Vancouver, WA 98683
Telephone Number (360) 448-4000
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 October 31, 2000: 21,658,943
CONSOLIDATED FREIGHTWAYS CORPORATION
FORM 10-Q
Quarter Ended September 30, 2000
____________________________________________________________________________
____________________________________________________________________________
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Balance Sheets -
September 30, 2000 and December 31, 1999 3
Statements of Consolidated Operations -
Three and Nine Months Ended
September 30, 2000 and 1999 5
Statements of Consolidated Cash Flows -
Nine Months Ended September 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 12
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 16
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 16
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
September 30, December 31,
2000 1999
(Dollars in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 62,469 $ 49,050
Trade accounts receivable, net of allowances 329,298 343,198
Other receivables 9,442 6,524
Operating supplies, at lower of average
cost or market 8,363 9,268
Prepaid expenses 40,189 41,405
Deferred income taxes 75,478 21,567
Total Current Assets 525,239 471,012
PROPERTY, PLANT AND EQUIPMENT, at cost
Land 82,785 82,701
Buildings and improvements 344,444 354,012
Revenue equipment 527,063 545,129
Other equipment and leasehold improvements 149,728 139,408
1,104,020 1,121,250
Accumulated depreciation and amortization (752,229) (752,298)
351,791 368,952
OTHER ASSETS
Deposits and other assets 58,686 57,712
Deferred income taxes 7,722 18,596
66,408 76,308
TOTAL ASSETS $ 943,438 $ 916,272
The accompanying notes are an integral part of these statements.
CONSOLIDATED FREIGHTWAYS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2000 1999
(Dollars in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 88,028 $ 98,701
Accrued liabilities 224,653 202,287
Accrued claims costs 83,221 78,584
Federal and other income taxes 17,113 16,883
Other current liabilities 6,702 --
Total Current Liabilities 419,717 396,455
LONG-TERM LIABILITIES
Long-term debt 15,100 15,100
Accrued claims costs 95,810 97,839
Employee benefits 123,615 121,783
Other liabilities and deferred credits 30,618 26,533
Total Liabilities 684,860 657,710
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 76,486 77,406
Accumulated other comprehensive loss (10,155) (10,087)
Retained earnings 206,081 207,632
Treasury stock, at cost (1,605,240 and 1,863,691
shares, respectively) (14,065) (16,620)
Total Shareholders' Equity 258,578 258,562
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 943,438 $ 916,272
The accompanying notes are an integral part of these statements.
<TABLE>
<CAPTION>
CONSOLIDATED FREIGHTWAYS CORPORATION
STATEMENTS OF CONSOLIDATED OPERATIONS
(Dollars in thousands except per share data)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
REVENUES $ 592,902 $ 625,547 $ 1,772,632 $ 1,773,536
COSTS AND EXPENSES
Salaries, wages and
benefits 372,923 396,109 1,130,554 1,134,290
Operating expenses 109,279 107,224 336,040 299,224
Purchased transportation 54,010 65,358 149,465 176,475
Operating taxes and
licenses 16,932 18,103 53,492 52,479
Claims and insurance 21,490 15,289 57,001 43,797
Depreciation 12,674 13,741 39,596 39,394
587,308 615,824 1,766,148 1,745,659
OPERATING INCOME 5,594 9,723 6,484 27,877
OTHER INCOME (EXPENSE)
Investment income 339 619 1,231 2,273
Interest expense (1,273) (922) (3,580) (2,840)
Miscellaneous, net (95) (56) (4,327) (641)
(1,029) (359) (6,676) (1,208)
Income (loss) before income
taxes 4,565 9,364 (192) 26,669
Income taxes 3,244 4,634 1,359 12,681
NET INCOME (LOSS) $ 1,321 $ 4,730 $ (1,551) $ 13,988
Basic average shares
outstanding 21,507,159 22,564,538 21,439,193 22,599,509
Diluted average shares
outstanding 21,531,817 22,564,538 21,447,412 22,874,547
Basic Earnings (Loss)
per Share: $ 0.06 $ 0.21 $ (0.07) $ 0.62
Diluted Earnings (Loss)
per Share: $ 0.06 $ 0.21 $ (0.07) $ 0.61
</TABLE>
The accompanying notes are an integral part of these statements.
CONSOLIDATED FREIGHTWAYS CORPORATION
AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
Nine Months Ended
September 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) (1,551) 13,988
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 44,779 43,279
Decrease in deferred income taxes (33,862) (6,563)
Gains from property disposals, net (11,849) (898)
Issuance of common stock under stock
compensation plans 1,902 228
Changes in assets and liabilities, net of
effects from acquisition of FirstAir Inc.
Receivables 12,635 (47,243)
Prepaid expenses 1,290 1,190
Accounts payable (13,446) 3,480
Accrued liabilities 21,539 28,663
Accrued claims costs 2,577 (6,478)
Income taxes 230 5,829
Employee benefits 1,832 5,304
Other 5,117 (5,252)
Net Cash Provided by Operating Activities 31,193 35,527
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (30,062) (42,599)
Software expenditures (5,114) (20,486)
Proceeds from sales of property 19,536 4,569
Acquisition of FirstAir Inc., net of
cash acquired (1,176) --
Net Cash Used by Investing Activities (16,816) (58,516)
CASH FLOWS FROM FINANCING ACTIVITIES
Net payments of short-term borrowings (691) --
Purchase of common stock (267) (4,412)
Net Cash Used by Financing Activities (958) (4,412)
Increase (Decrease) in Cash and Cash Equivalents 13,419 (27,401)
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 62,469 $ 95,680
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 8
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 Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Revenues
United States $555,917 $591,922 $1,663,169 $1,678,851
Canada 36,985 33,625 109,463 94,685
Total $592,902 $625,547 $1,772,632 $1,773,536
Geographic Information (continued)
As of
September 30,
2000 1999
Property, Plant and Equipment
United States $315,454 $330,101
Canada 36,337 31,620
Total $351,791 $361,721
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 September 30, 2000, there were 1,204,000 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
September 30, 2000, the stock price was below the pre-determined
levels required for vesting.
In June, the Company granted 1,243,600 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 (loss)
per share for the three and nine months ended September 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
September 30, 2000
Basic $ 1,321 21,507,159 $0.06
Dilutive effect of
restricted stock
and stock options -- 24,658 --
Diluted $ 1,321 21,531,817 $0.06
September 30, 1999
Basic $ 4,730 22,564,538 $0.21
Dilutive effect of
restricted stock
and stock options -- -- --
Diluted $ 4,730 22,564,538 $0.21
Weighted Earnings
Nine Net Income Average (Loss)
Months Ended (Loss) Shares Per Share
September 30, 2000
Basic $(1,551) 21,439,193 $(0.07)
Dilutive effect of
restricted stock
and stock options -- 8,219 --
Diluted $(1,551) 21,447,412 $(0.07)
September 30, 1999
Basic $13,988 22,599,509 $0.62
Dilutive effect of
restricted stock
and stock options -- 275,038 (0.01)
Diluted $13,988 22,874,547 $0.61
6. Comprehensive Income (Loss)
Comprehensive income (loss) for the three and nine months ended
September 30, 2000 and 1999 is as follows:
(Dollars in thousands)
Three Nine
Months Ended Months Ended
September 30, September 30,
2000 1999 2000 1999
Net Income (Loss) $ 1,321 $ 4,730 $ (1,551) $ 13,988
Other Comprehensive Income (Loss):
Foreign currency translation
adjustments (5) (223) (68) 1,653
Comprehensive Income (Loss) $ 1,316 $ 4,507 $ (1,619) $ 15,641
7. Credit Facility
On September 27, 2000, the Company's unsecured credit facility
was amended, the primary effect of which was a reduction in the total
facility from $175.0 million to $155.0 million. Borrowings under
the agreement bear interest at LIBOR plus a margin. As of September
30, 2000, the Company had no short-term borrowings and $77.7 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 September 30, 2000 and expects
to be in compliance with these covenants for the remainder of the year.
8. 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 21 to 27 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 amount of
$40.2 million. Of this amount, $20.0 million is payable on May 15,
2004 and bears interest at 6.8% payable annually. Of the other $20.2
million, $13.5 million was repaid in September. As of September 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 September 30, 2000 decreased 5.2%
compared to the same period last year due to a 12.0% decrease in
tonnage levels. Continued refinement of the Company's freight
profile, a higher proportion of lighter weight freight in the system
as well as continued competition accounted for the decrease in
tonnage. Shipments decreased 8.2% and the average weight per
shipment decreased 4.1%. The tonnage decrease was offset by an 8.6%
increase in net revenue per hundredweight due to rate increases, a
fuel surcharge and an improved freight profile. Revenues for the
nine-month period were flat compared with the prior year despite a
7.1% decrease in tonnage. Tonnage decreased for the same reasons
noted above but was offset by an 8.1% increase in net revenue per
hundredweight. Revenues in the quarter and nine-month period were
also impacted by the shutdown of Redwood Truckload, the Company's
owner-operator truckload subsidiary, in the second quarter.
Salaries, wages and benefits decreased 5.9% in the quarter due
primarily to lower tonnage levels. An April contractual wage and
benefit increase and lower use of rail services impacted the quarter.
The nine-month period was flat despite lower tonnage, for reasons
noted above, as well as $4.0 million of severance pay due to an
administrative reorganization.
Operating expenses increased 1.9% in the quarter and 12.3% in
the nine-month period, despite lower tonnage, due primarily to
continued higher fuel costs. The average fuel cost per gallon
increased 51.9% in the quarter and 72.8% in the nine-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 nine-month
period. The Company benefited from approximately $8.7 million of
gains on sales of terminal real estate properties during the quarter
and $11.7 million for the nine-month period.
Purchased transportation decreased 17.4% and 15.3% in the
quarter and nine-month period, respectively, due to lower use of
rail. Rail miles as percentage of inter-city miles decreased to
25.4% from 28.2% in the quarter and to 23.4% from 27.2% in the nine-
month period due to lower tonnage. 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 decreased 6.5% in the quarter
primarily due to lower tonnage. The nine-month period increased 1.9%
as the impact of lower tonnage was offset by higher licensing costs
due to changes in the fleet.
Claims and insurance increased 40.6% and 30.1% in the quarter
and nine-month period, respectively, due to higher-cost vehicular
accidents and higher than anticipated cargo claims.
Depreciation decreased 7.8% in the quarter as more of the
Company's linehaul fleet became fully depreciated. The nine-month
period remained flat as the aging fleet offset depreciation on 1999
acquisitions.
The above resulted in operating income of $5.6 million for the
quarter compared with $9.7 million in the same period last year. The
operating ratio declined to 99.1% from 98.4%. Operating income for
the nine-month period was $6.5 million compared with $27.9 million in
the prior year. The operating ratio declined to 99.6% from 98.4%.
Other expense, net increased $0.7 million and $5.5 million in
the quarter and nine-month period, respectively primarily due to
interest expense on tax obligations payable to CNF. The nine-month
period also reflects a $4.0 million charge for settlement of a tax
liability 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 implementing an aggressive strategic marketing
plan emphasizing the strengths of the Company's long-haul
infrastructure in an effort to grow the business while providing
acceptable returns. As part of this plan, management is refining the
Company's freight profile by seeking and retaining only that business
that provides appropriate compensation for the freight handled.
However, this may result in continued tonnage declines in the short-
term. Additionally, 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 $10
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. 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 1,204,000 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
September 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 September 30, 2000, the Company had $62.5 million in cash
and cash equivalents. Net cash provided by operating activities for
the nine months ended September 30, 2000 was $31.2 million compared
with $35.5 million in the same period last year. Management expects
cash flow from operations for 2000 will be sufficient for working
capital requirements.
Net cash used by investing activities was $16.8 million compared
with $58.5 million in the same period last year. The decrease
reflects lower capital and software expenditures and significantly
higher proceeds from sales of real estate terminal properties. The
decrease in capital expenditures reflects management's decision to
scale expenditures back in line with business levels. Software
expenditures decreased as the prior year includes costs to replace
certain operational and financial software systems for Year 2000
compliance. Management expects capital and software expenditures to
be approximately $20 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. 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 nine month period and is
authorized to repurchase an additional $19.7 million of common stock.
The Company has a multi-year $155 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 September 30, 2000, the Company had no
short-term borrowings and $77.7 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 September 30, 2000 and expects to be in compliance with these
covenants for the remainder of the year.
As discussed in Footnote 8, 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 21 to 27
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 amount of $40.2 million. Of this
amount, $20.0 million is payable on May 15, 2004 and bears interest
at 6.8% payable annually. Of the other $20.2 million, $13.5 million
was repaid in September. As of September 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 fill
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. On August 15, 2000, James R. Tener was promoted to vice
president and controller, having previously served as director of
financial accounting. Also on August 15, Kerry K. Morgan was
promoted to vice president and treasurer, having previously served as
director of treasury and planning.
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 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(10.1) Amendment No 1., dated as of September 27, 2000, to the
Credit Agreement between Consolidated Freightways
Corporation of Delaware, ABN AMRO Bank, N.V. and
various other financial institutions, dated as
of October 12, 1999.
(27) Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed in the quarter ended
September 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)
November 13, 2000 /s/Robert E. Wrightson
Robert E. Wrightson
As Executive Vice President and
Chief Financial Officer and
For Registrant
November 13, 2000 /s/James R. Tener
James R. Tener
As Vice President and Controller
