CON-WAY INC.
|
|||||
FORM 10-Q
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|||||
Quarter Ended June 30, 2011
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Table of Contents
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Page
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PART I. FINANCIAL INFORMATION
|
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Item 1.
|
Financial Statements
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||||
Consolidated Balance Sheets -
|
|||||
June 30, 2011 and December 31, 2010
|
3
|
||||
Statements of Consolidated Income -
|
|||||
Three and Six Months Ended June 30, 2011 and 2010
|
5
|
||||
Statements of Consolidated Cash Flows -
|
|||||
Six Months Ended June 30, 2011 and 2010
|
6
|
||||
Notes to Consolidated Financial Statements
|
7
|
||||
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
18
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|||
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
31
|
|||
Item 4.
|
Controls and Procedures
|
32
|
|||
PART II. OTHER INFORMATION
|
|||||
Item 1.
|
Legal Proceedings
|
33
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|||
Item 1A.
|
Risk Factors
|
33
|
|||
Item 6.
|
Exhibits
|
33
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|||
Signatures
|
34
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||||
ITEM 1. FINANCIAL STATEMENTS
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||||||||
CON-WAY INC.
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
(Dollars in thousands)
|
||||||||
June 30,
|
December 31,
|
|||||||
ASSETS
|
2011
|
2010
|
||||||
(Unaudited)
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 469,413 | $ | 421,420 | ||||
Trade accounts receivable, net
|
629,126 | 539,849 | ||||||
Other accounts receivable
|
54,276 | 79,065 | ||||||
Operating supplies, at lower of average cost or market
|
25,807 | 23,868 | ||||||
Prepaid expenses
|
45,290 | 47,345 | ||||||
Deferred income taxes
|
18,592 | 8,530 | ||||||
1,242,504 | 1,120,077 | |||||||
Property, Plant and Equipment
|
||||||||
Land
|
194,818 | 194,818 | ||||||
Buildings and leasehold improvements
|
819,966 | 817,599 | ||||||
Revenue equipment
|
1,532,935 | 1,480,561 | ||||||
Other equipment
|
311,912 | 306,215 | ||||||
2,859,631 | 2,799,193 | |||||||
Accumulated depreciation
|
(1,428,371 | ) | (1,394,608 | ) | ||||
1,431,260 | 1,404,585 | |||||||
Other Assets
|
||||||||
Deferred charges and other assets
|
36,438 | 39,107 | ||||||
Capitalized software, net
|
18,772 | 19,083 | ||||||
Marketable securities
|
5,774 | 6,039 | ||||||
Intangible assets, net
|
15,630 | 17,191 | ||||||
Goodwill
|
338,073 | 337,650 | ||||||
414,687 | 419,070 | |||||||
Total Assets
|
$ | 3,088,451 | $ | 2,943,732 | ||||
The accompanying notes are an integral part of these statements.
|
CON-WAY INC.
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
(Dollars in thousands except per share amounts)
|
||||||||
June 30,
|
December 31,
|
|||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
2011
|
2010
|
||||||
(Unaudited)
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$ | 373,139 | $ | 304,176 | ||||
Accrued liabilities
|
227,665 | 203,231 | ||||||
Self-insurance accruals
|
101,856 | 105,857 | ||||||
Short-term borrowings
|
19,185 | 18,552 | ||||||
Current maturities of long-term debt and capital leases
|
20,397 | 20,074 | ||||||
Total Current Liabilities
|
742,242 | 651,890 | ||||||
Long-Term Liabilities
|
||||||||
Long-term debt
|
718,274 | 718,215 | ||||||
Long-term obligations under capital leases
|
66,069 | 75,735 | ||||||
Self-insurance accruals
|
158,454 | 169,311 | ||||||
Employee benefits
|
401,944 | 418,731 | ||||||
Other liabilities and deferred credits
|
43,674 | 41,789 | ||||||
Deferred income taxes
|
86,781 | 48,529 | ||||||
Total Liabilities
|
2,217,438 | 2,124,200 | ||||||
Commitments and Contingencies (Note 10)
|
||||||||
Shareholders' Equity
|
||||||||
Common stock, $0.625 par value; authorized 100,000,000 shares;
|
||||||||
issued 62,995,517 and 62,750,994 shares, respectively
|
39,345 | 39,143 | ||||||
Additional paid-in capital, common stock
|
590,993 | 580,008 | ||||||
Retained earnings
|
838,208 | 821,187 | ||||||
Cost of repurchased common stock
|
||||||||
(7,466,906 and 7,884,597 shares, respectively)
|
(322,417 | ) | (340,912 | ) | ||||
Total Common Shareholders' Equity
|
1,146,129 | 1,099,426 | ||||||
Accumulated Other Comprehensive Loss
|
(275,116 | ) | (279,894 | ) | ||||
Total Shareholders' Equity
|
871,013 | 819,532 | ||||||
Total Liabilities and Shareholders' Equity
|
$ | 3,088,451 | $ | 2,943,732 | ||||
The accompanying notes are an integral part of these statements.
|
CON-WAY INC.
|
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STATEMENTS OF CONSOLIDATED INCOME
|
|||||||||||||||||
(Unaudited)
|
|||||||||||||||||
(Dollars in thousands except per share amounts)
|
|||||||||||||||||
Three Months Ended
|
Six Months Ended
|
||||||||||||||||
June 30,
|
June 30,
|
||||||||||||||||
2011
|
2010
|
2011
|
2010
|
||||||||||||||
Revenues
|
$ | 1,348,549 | $ | 1,306,263 | $ | 2,594,176 | $ | 2,468,174 | |||||||||
Costs and Expenses
|
|||||||||||||||||
Salaries, wages and employee benefits
|
508,874 | 523,950 | 1,000,514 | 1,013,409 | |||||||||||||
Purchased transportation
|
348,526 | 344,039 | 665,516 | 621,680 | |||||||||||||
Fuel and fuel-related taxes
|
150,110 | 122,335 | 286,137 | 236,684 | |||||||||||||
Other operating expenses
|
142,018 | 140,191 | 272,700 | 273,942 | |||||||||||||
Depreciation and amortization
|
50,540 | 47,938 | 100,854 | 92,964 | |||||||||||||
Maintenance
|
32,509 | 32,016 | 61,981 | 63,501 | |||||||||||||
Rents and leases
|
28,730 | 30,319 | 56,521 | 59,051 | |||||||||||||
Purchased labor
|
27,077 | 30,043 | 53,092 | 54,344 | |||||||||||||
Loss from impairment of intangible assets
|
- | - | - | 2,767 | |||||||||||||
1,288,384 | 1,270,831 | 2,497,315 | 2,418,342 | ||||||||||||||
Operating Income
|
60,165 | 35,432 | 96,861 | 49,832 | |||||||||||||
Other Income (Expense)
|
|||||||||||||||||
Investment income
|
227 | 325 | 549 | 707 | |||||||||||||
Interest expense
|
(13,923 | ) | (14,688 | ) | (27,842 | ) | (31,088 | ) | |||||||||
Miscellaneous, net
|
(1,025 | ) | (758 | ) | (2,763 | ) | (2,054 | ) | |||||||||
(14,721 | ) | (15,121 | ) | (30,056 | ) | (32,435 | ) | ||||||||||
Income before Income Tax Provision
|
45,444 | 20,311 | 66,805 | 17,397 | |||||||||||||
Income Tax Provision
|
16,022 | 6,448 | 30,461 | 7,571 | |||||||||||||
Net Income Available to Common Shareholders | $ | 29,422 | $ | 13,863 | $ | 36,344 | $ | 9,826 | |||||||||
Weighted-Average Common Shares Outstanding
|
|||||||||||||||||
Basic
|
55,413,243 | 51,665,047 | 55,227,528 | 50,506,809 | |||||||||||||
Diluted
|
56,136,065 | 52,362,407 | 55,939,330 | 51,184,703 | |||||||||||||
Earnings per Common Share
|
|||||||||||||||||
Basic
|
|||||||||||||||||
Net Income Available to Common Shareholders
|
$ | 0.53 | $ | 0.27 | $ | 0.66 | $ | 0.19 | |||||||||
Diluted
|
|||||||||||||||||
Net Income Available to Common Shareholders
|
$ | 0.52 | $ | 0.26 | $ | 0.65 | $ | 0.19 | |||||||||
The accompanying notes are an integral part of these statements.
|
STATEMENTS OF CONSOLIDATED CASH FLOWS
|
||||||||
(Unaudited)
|
||||||||
(Dollars in thousands)
|
||||||||
Six Months Ended
|
||||||||
June 30,
|
||||||||
2011
|
2010
|
|||||||
Cash and Cash Equivalents, Beginning of Period
|
$ | 421,420 | $ | 476,575 | ||||
Operating Activities
|
||||||||
Net income
|
36,344 | 9,826 | ||||||
Adjustments to reconcile net income to net cash provided
|
||||||||
by operating activities:
|
||||||||
Depreciation and amortization, net of accretion
|
100,364 | 90,349 | ||||||
Non-cash compensation and employee benefits
|
12,207 | 10,174 | ||||||
Increase in deferred income taxes
|
26,224 | 2,574 | ||||||
Provision for uncollectible accounts
|
3,159 | 2,924 | ||||||
Loss from impairment of intangible assets
|
- | 2,767 | ||||||
Loss (Gain) from sales of property and equipment, net
|
(1,632 | ) | 783 | |||||
Changes in assets and liabilities:
|
||||||||
Receivables
|
(96,076 | ) | (121,567 | ) | ||||
Prepaid expenses
|
2,055 | (3,265 | ) | |||||
Accounts payable
|
63,386 | 71,243 | ||||||
Accrued variable compensation
|
(1,506 | ) | (591 | ) | ||||
Accrued liabilities, excluding accrued variable compensation
|
||||||||
and employee benefits
|
25,000 | 16,635 | ||||||
Self-insurance accruals
|
(14,858 | ) | 22,019 | |||||
Accrued income taxes
|
29,942 | (6,388 | ) | |||||
Employee benefits
|
1,389 | 13,269 | ||||||
Deferred charges and credits
|
1,699 | (2,300 | ) | |||||
Other
|
(1,751 | ) | (2,114 | ) | ||||
Net Cash Provided by Operating Activities
|
185,946 | 106,338 | ||||||
Investing Activities
|
||||||||
Capital expenditures
|
(138,834 | ) | (88,351 | ) | ||||
Software expenditures
|
(3,854 | ) | (4,700 | ) | ||||
Proceeds from sales of property and equipment
|
19,891 | 2,436 | ||||||
Purchases of marketable securities
|
- | (49,260 | ) | |||||
Proceeds from sales of marketable securities
|
300 | 10,300 | ||||||
Net Cash Used in Investing Activities
|
(122,497 | ) | (129,575 | ) | ||||
Financing Activities
|
||||||||
Repayment of long-term debt and capital leases
|
(9,272 | ) | (204,316 | ) | ||||
Net proceeds from short-term borrowings
|
245 | 6,035 | ||||||
Proceeds from issuance of common stock
|
- | 143,325 | ||||||
Proceeds from exercise of stock options
|
4,087 | 1,148 | ||||||
Excess tax benefit from stock-option exercises
|
544 | 146 | ||||||
Payments of common dividends
|
(11,060 | ) | (9,924 | ) | ||||
Net Cash Used in Financing Activities
|
(15,456 | ) | (63,586 | ) | ||||
Increase (Decrease) in Cash and Cash Equivalents
|
47,993 | (86,823 | ) | |||||
Cash and Cash Equivalents, End of Period
|
$ | 469,413 | $ | 389,752 | ||||
Supplemental Disclosures
|
||||||||
Cash paid (refunded) for income taxes, net
|
$ | (28,881 | ) | $ | 16,463 | |||
Cash paid for interest, net of amounts capitalized
|
$ | 27,421 | $ | 35,560 | ||||
Non-cash Financing Activities
|
||||||||
Capital lease incurred to acquire revenue equipment
|
$ | - | $ | 35,104 | ||||
Repurchased common stock issued under defined contribution plan
|
$ | 17,307 | $ | 17,945 | ||||
The accompanying notes are an integral part of these statements.
|
(Dollars in thousands except per share data)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net income available to common
|
||||||||||||||||
shareholders, as reported
|
$ | 29,422 | $ | 13,863 | $ | 36,344 | $ | 9,826 | ||||||||
Denominator:
|
||||||||||||||||
Weighted-average common shares outstanding
|
55,413,243 | 51,665,047 | 55,227,528 | 50,506,809 | ||||||||||||
Stock options and nonvested stock
|
722,822 | 697,360 | 711,802 | 677,894 | ||||||||||||
56,136,065 | 52,362,407 | 55,939,330 | 51,184,703 | |||||||||||||
Diluted earnings per share
|
$ | 0.52 | $ | 0.26 | $ | 0.65 | $ | 0.19 | ||||||||
Antidilutive securities excluded from the
|
||||||||||||||||
computation of diluted EPS
|
2,004,579 | 1,559,367 | 2,004,579 | 1,578,359 | ||||||||||||
(Dollars in thousands)
|
Logistics
|
Truckload
|
Other
|
Total
|
||||||||||||
Balance at December 31, 2009
|
||||||||||||||||
Goodwill
|
$ | 54,968 | $ | 464,598 | $ | 727 | $ | 520,293 | ||||||||
Accumulated impairment losses
|
(31,822 | ) | (134,813 | ) | -- | (166,635 | ) | |||||||||
23,146 | 329,785 | 727 | 353,658 | |||||||||||||
Impairment charge
|
(16,414 | ) | -- | -- | (16,414 | ) | ||||||||||
Change in foreign currency exchange rates
|
406 | -- | -- | 406 | ||||||||||||
Balances at December 31, 2010
|
||||||||||||||||
Goodwill
|
55,374 | 464,598 | 727 | 520,699 | ||||||||||||
Accumulated impairment losses
|
(48,236 | ) | (134,813 | ) | -- | (183,049 | ) | |||||||||
7,138 | 329,785 | 727 | 337,650 | |||||||||||||
Change in foreign currency exchange rates
|
423 | -- | -- | 423 | ||||||||||||
Balances at June 30, 2011
|
||||||||||||||||
Goodwill
|
55,797 | 464,598 | 727 | 521,122 | ||||||||||||
Accumulated impairment losses
|
(48,236 | ) | (134,813 | ) | -- | (183,049 | ) | |||||||||
$ | 7,561 | $ | 329,785 | $ | 727 | $ | 338,073 |
June 30, 2011
|
December 31, 2010
|
|||||||||||||||
(Dollars in thousands)
|
Gross Carrying Amount
|
Accumulated Amortization
|
Gross Carrying Amount
|
Accumulated Amortization
|
||||||||||||
Customer relationships
|
$ | 27,792 | $ | 12,162 | $ | 27,530 | $ | 10,339 |
(Dollars in thousands)
|
||||
Year ending December 31:
|
||||
Remaining six months of 2011
|
$ | 1,600 | ||
2012
|
2,600 | |||
2013
|
2,400 | |||
2014
|
2,400 | |||
2015
|
2,400 | |||
2016
|
2,400 |
(Dollars in thousands)
|
Employee-Separation Costs
|
Contract-Termination Costs
|
Total
|
|||||||||
Balance at December 31, 2010
|
$ | -- | $ | 371 | $ | 371 | ||||||
Cash payments
|
-- | (371 | ) | (371 | ) | |||||||
Balance at June 30, 2011
|
$ | -- | $ | -- | $ | -- | ||||||
Total expense recognized to date
|
$ | 5,126 | $ | 728 | $ | 5,854 |
(Dollars in thousands)
|
Employee-Separation Costs
|
Relocation and
Other Costs
|
Total
|
|||||||||
Balance at December 31, 2010
|
$ | 2,496 | $ | -- | $ | 2,496 | ||||||
2011 charges
|
1,063 | 645 | 1,708 | |||||||||
Cash payments
|
(3,387 | ) | (645 | ) | (4,032 | ) | ||||||
Balance at June 30, 2011
|
$ | 172 | $ | -- | $ | 172 | ||||||
Total expense recognized to date
|
$ | 3,559 | $ | 645 | $ | 4,204 | ||||||
Expected remaining expenses
|
$ | -- | $ | 427 | $ | 427 |
|
·
|
Freight. The Freight segment consists of the operating results of the Con-way Freight business unit, which provides regional, inter-regional and transcontinental less-than-truckload freight services throughout North America.
|
|
·
|
Logistics. The Logistics segment consists of the operating results of the Menlo Worldwide Logistics business unit, which develops contract-logistics solutions, including the management of complex distribution networks and supply-chain engineering and consulting, and also provides multimodal freight brokerage services.
|
|
·
|
Truckload. The Truckload segment consists of the operating results of the Con-way Truckload business unit, which provides asset-based full-truckload freight services throughout North America.
|
|
·
|
Other. The Other reporting segment consists of the operating results of Road Systems, a trailer manufacturer, and certain corporate activities for which the related income or expense has not been allocated to other reporting segments.
|
(Dollars in thousands)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenues before Inter-segment Eliminations
|
||||||||||||||||
Freight
|
$ | 839,829 | $ | 816,965 | $ | 1,607,570 | $ | 1,541,968 | ||||||||
Logistics
|
394,012 | 385,775 | 763,987 | 740,958 | ||||||||||||
Truckload
|
155,451 | 145,454 | 300,666 | 286,070 | ||||||||||||
Other
|
12,297 | 14,019 | 24,294 | 25,858 | ||||||||||||
Inter-segment Revenue Eliminations
|
(53,040 | ) | (55,950 | ) | (102,341 | ) | (126,680 | ) | ||||||||
$ | 1,348,549 | $ | 1,306,263 | $ | 2,594,176 | $ | 2,468,174 | |||||||||
Inter-segment Revenue Eliminations
|
||||||||||||||||
Freight
|
$ | 12,435 | $ | 12,934 | $ | 23,726 | $ | 25,382 | ||||||||
Logistics
|
8,644 | 5,360 | 14,805 | 8,530 | ||||||||||||
Truckload
|
21,524 | 25,676 | 42,370 | 69,786 | ||||||||||||
Other
|
10,437 | 11,980 | 21,440 | 22,982 | ||||||||||||
$ | 53,040 | $ | 55,950 | $ | 102,341 | $ | 126,680 | |||||||||
Revenues from External Customers
|
||||||||||||||||
Freight
|
$ | 827,394 | $ | 804,031 | $ | 1,583,844 | $ | 1,516,586 | ||||||||
Logistics
|
385,368 | 380,415 | 749,182 | 732,428 | ||||||||||||
Truckload
|
133,927 | 119,778 | 258,296 | 216,284 | ||||||||||||
Other
|
1,860 | 2,039 | 2,854 | 2,876 | ||||||||||||
$ | 1,348,549 | $ | 1,306,263 | $ | 2,594,176 | $ | 2,468,174 | |||||||||
Operating Income (Loss)
|
||||||||||||||||
Freight
|
$ | 39,155 | $ | 17,226 | $ | 59,499 | $ | 14,073 | ||||||||
Logistics
|
12,095 | 13,008 | 20,741 | 25,864 | ||||||||||||
Truckload
|
10,323 | 5,132 | 17,406 | 8,107 | ||||||||||||
Other
|
(1,408 | ) | 66 | (785 | ) | 1,788 | ||||||||||
$ | 60,165 | $ | 35,432 | $ | 96,861 | $ | 49,832 |
June 30, 2011
|
||||||||||||||||
(Dollars in thousands)
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Cash equivalents
|
$ | 438,033 | $ | 105,800 | $ | 332,233 | $ | -- | ||||||||
Other marketable securities
|
5,774 | -- | -- | 5,774 |
December 31, 2010
|
||||||||||||||||
(Dollars in thousands)
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Cash equivalents
|
$ | 388,053 | $ | 118,763 | $ | 269,290 | $ | -- | ||||||||
Other marketable securities
|
6,039 | -- | -- | 6,039 |
(Dollars in thousands)
|
Auction-rate security
|
|||
Balance at December 31, 2009
|
$ | 6,691 | ||
Unrealized gain
|
48 | |||
Partial redemption
|
(700 | ) | ||
Balance at December 31, 2010
|
$ | 6,039 | ||
Unrealized gain
|
35 | |||
Partial redemption
|
(300 | ) | ||
Balance at June 30, 2011
|
$ | 5,774 |
Qualified Pension Plans
|
||||||||||||||||
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
(Dollars in thousands)
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Interest cost on benefit obligation
|
$ | 17,685 | $ | 17,204 | $ | 35,655 | $ | 34,568 | ||||||||
Expected return on plan assets
|
(21,426 | ) | (18,138 | ) | (42,968 | ) | (37,519 | ) | ||||||||
Amortization of net loss
|
2,534 | 2,307 | 5,273 | 4,535 | ||||||||||||
Net periodic benefit expense (income)
|
$ | (1,207 | ) | $ | 1,373 | $ | (2,040 | ) | $ | 1,584 | ||||||
Non-Qualified Pension Plans
|
||||||||||||||||
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
(Dollars in thousands)
|
2011 | 2010 | 2011 | 2010 | ||||||||||||
Interest cost on benefit obligation
|
$ | 957 | $ | 966 | $ | 1,894 | $ | 1,940 | ||||||||
Amortization of net loss
|
182 | 115 | 339 | 226 | ||||||||||||
Net periodic benefit expense
|
$ | 1,139 | $ | 1,081 | $ | 2,233 | $ | 2,166 |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
(Dollars in thousands)
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Service cost
|
$ | 316 | $ | 305 | $ | 721 | $ | 703 | ||||||||
Interest cost on benefit obligation
|
1,125 | 1,195 | 2,246 | 2,416 | ||||||||||||
Amortization of prior service credit
|
(303 | ) | (300 | ) | (606 | ) | (601 | ) | ||||||||
Net periodic benefit expense
|
$ | 1,138 | $ | 1,200 | $ | 2,361 | $ | 2,518 |
(Dollars in thousands)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net income
|
$ | 29,422 | $ | 13,863 | $ | 36,344 | $ | 9,826 | ||||||||
Other comprehensive income (loss):
|
||||||||||||||||
Foreign currency translation adjustment
|
709 | (1,392 | ) | 1,703 | (2,438 | ) | ||||||||||
Unrealized gain (loss) on available-for-sale
|
||||||||||||||||
security, net of deferred tax of $10, $16,
|
||||||||||||||||
$14, and $22, respectively
|
(16 | ) | (24 | ) | 21 | 34 | ||||||||||
Employee benefit plans, net of deferred tax of
|
||||||||||||||||
$941, $828, $1,952, and $3,887,
|
||||||||||||||||
respectively
|
1,472 | 1,294 | 3,054 | 4,790 | ||||||||||||
Comprehensive income
|
$ | 31,587 | $ | 13,741 | $ | 41,122 | $ | 12,212 |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
(Dollars in thousands)
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
Salaries, wages and employee benefits
|
$ | 4,406 | $ | 3,320 | $ | 9,169 | $ | 6,895 | ||||||||
Deferred income tax benefit
|
(1,732 | ) | (1,286 | ) | (3,576 | ) | (2,657 | ) | ||||||||
Net share-based compensation expense
|
$ | 2,674 | $ | 2,034 | $ | 5,593 | $ | 4,238 |
|
·
|
Overview of Business
|
|
·
|
Results of Operations
|
|
·
|
Liquidity and Capital Resources
|
|
·
|
Critical Accounting Policies and Estimates
|
|
·
|
Forward-Looking Statements
|
|
·
|
Freight. The Freight segment consists of the operating results of the Con-way Freight business unit, which provides regional, inter-regional and transcontinental less-than-truckload freight services throughout North America.
|
|
·
|
Logistics. The Logistics segment consists of the operating results of the Menlo Worldwide Logistics business unit, which develops contract-logistics solutions, including the management of complex distribution networks and supply-chain engineering and consulting, and also provides multimodal freight brokerage services.
|
|
·
|
Truckload. The Truckload segment consists of the operating results of the Con-way Truckload business unit, which provides asset-based full-truckload freight services throughout North America.
|
|
·
|
Other. The Other reporting segment consists of the operating results of Road Systems, a trailer manufacturer, and certain corporate activities for which the related income or expense has not been allocated to other reporting segments.
|
(Dollars in thousands except per share amounts)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenues
|
$ | 1,348,549 | $ | 1,306,263 | $ | 2,594,176 | $ | 2,468,174 | ||||||||
Costs and expenses
|
||||||||||||||||
Other costs and expenses
|
1,288,384 | 1,270,831 | 2,497,315 | 2,415,575 | ||||||||||||
Loss from impairment of intangible assets
|
--- | -- | --- | 2,767 | ||||||||||||
1,288,384 | 1,270,831 | 2,497,315 | 2,418,342 | |||||||||||||
Operating income
|
60,165 | 35,432 | 96,861 | 49,832 | ||||||||||||
Other non-operating expense
|
14,721 | 15,121 | 30,056 | 32,435 | ||||||||||||
Income before income tax provision
|
45,444 | 20,311 | 66,805 | 17,397 | ||||||||||||
Income tax provision
|
16,022 | 6,448 | 30,461 | 7,571 | ||||||||||||
Net income available to
|
||||||||||||||||
common shareholders
|
$ | 29,422 | $ | 13,863 | $ | 36,344 | $ | 9,826 | ||||||||
Diluted earnings per share
|
$ | 0.52 | $ | 0.26 | $ | 0.65 | $ | 0.19 |
(Dollars in millions)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Salaries and wages
|
$ | -- | $ | 8 | $ | -- | $ | 15 | ||||||||
Compensated absences
|
-- | -- | -- | 15 | ||||||||||||
Defined contribution plan
|
||||||||||||||||
Matching
|
9 | 9 | 17 | 17 | ||||||||||||
Basic and transition
|
6 | 6 | 12 | 12 | ||||||||||||
Total estimated cost savings
|
$ | 15 | $ | 23 | $ | 29 | $ | 59 | ||||||||
(Dollars in thousands)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenue before inter-segment eliminations
|
$ | 839,829 | $ | 816,965 | $ | 1,607,570 | $ | 1,541,968 | ||||||||
Salaries, wages and employee benefits
|
375,916 | 389,091 | 737,658 | 745,925 | ||||||||||||
Purchased transportation
|
136,718 | 138,317 | 258,241 | 258,324 | ||||||||||||
Fuel and fuel-related taxes
|
103,722 | 84,629 | 196,454 | 161,810 | ||||||||||||
Other operating expenses
|
115,748 | 117,515 | 223,495 | 231,352 | ||||||||||||
Depreciation and amortization
|
27,591 | 25,343 | 55,167 | 48,259 | ||||||||||||
Maintenance
|
23,935 | 22,195 | 45,233 | 43,871 | ||||||||||||
Rents and leases
|
11,913 | 13,686 | 22,775 | 25,094 | ||||||||||||
Purchased labor
|
5,131 | 8,963 | 9,048 | 13,260 | ||||||||||||
Total operating expenses
|
800,674 | 799,739 | 1,548,071 | 1,527,895 | ||||||||||||
Operating income
|
$ | 39,155 | $ | 17,226 | $ | 59,499 | $ | 14,073 | ||||||||
Operating margin
|
4.7 | % | 2.1 | % | 3.7 | % | 0.9 | % | ||||||||
2011 vs. 2010
|
2011 vs. 2010
|
|||||||||||||||
Selected Operating Statistics
|
||||||||||||||||
Weight per day
|
-8.3 | % | -6.6 | % | ||||||||||||
Revenue per hundredweight (“yield”)
|
+11.2 | % | +10.5 | % | ||||||||||||
Shipments per day (“volume”)
|
-10.1 | % | -9.2 | % | ||||||||||||
Weight per shipment
|
+2.1 | % | +2.9 | % |
(Dollars in thousands)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenue before inter-segment eliminations
|
$ | 394,012 | $ | 385,775 | $ | 763,987 | $ | 740,958 | ||||||||
Purchased transportation expense
|
(247,028 | ) | (242,978 | ) | (474,682 | ) | (453,912 | ) | ||||||||
Net revenue
|
146,984 | 142,797 | 289,305 | 287,046 | ||||||||||||
Salaries, wages and employee benefits
|
56,621 | 54,285 | 109,970 | 106,517 | ||||||||||||
Fuel and fuel-related taxes
|
285 | 216 | 541 | 429 | ||||||||||||
Other operating expense
|
37,520 | 36,016 | 76,979 | 73,213 | ||||||||||||
Depreciation and amortization
|
2,795 | 3,201 | 5,636 | 6,264 | ||||||||||||
Maintenance
|
719 | 591 | 1,421 | 1,165 | ||||||||||||
Rents and leases
|
15,679 | 15,506 | 31,387 | 31,751 | ||||||||||||
Purchased labor
|
21,270 | 19,974 | 42,630 | 39,076 | ||||||||||||
Loss from impairment of intangible assets
|
-- | -- | -- | 2,767 | ||||||||||||
Total operating expenses excluding
|
||||||||||||||||
purchased transportation
|
134,889 | 129,789 | 268,564 | 261,182 | ||||||||||||
Operating income
|
$ | 12,095 | $ | 13,008 | $ | 20,741 | $ | 25,864 | ||||||||
Operating income excluding impairment
|
$ | 12,095 | $ | 13,008 | $ | 20,741 | $ | 28,631 | ||||||||
Operating margin on revenue
|
3.1 | % | 3.4 | % | 2.7 | % | 3.5 | % | ||||||||
Operating margin on net revenue
|
8.2 | % | 9.1 | % | 7.2 | % | 9.0 | % | ||||||||
Operating margin on revenue excluding impairment
|
3.1 | % | 3.4 | % | 2.7 | % | 3.9 | % | ||||||||
Operating margin on net revenue excluding impairment
|
8.2 | % | 9.1 | % | 7.2 | % | 10.0 | % |
(Dollars in thousands)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Freight revenue
|
$ | 113,965 | $ | 116,498 | $ | 224,578 | $ | 232,700 | ||||||||
Fuel-surcharge revenue
|
37,152 | 25,039 | 67,469 | 45,784 | ||||||||||||
Other revenue
|
4,334 | 3,917 | 8,619 | 7,586 | ||||||||||||
Revenue before inter-segment eliminations
|
155,451 | 145,454 | 300,666 | 286,070 | ||||||||||||
Salaries, wages and employee benefits
|
52,053 | 52,710 | 102,420 | 105,628 | ||||||||||||
Purchased transportation
|
7,033 | 6,437 | 12,863 | 12,625 | ||||||||||||
Fuel and fuel-related taxes
|
45,971 | 37,431 | 88,965 | 74,331 | ||||||||||||
Other operating expenses
|
14,605 | 18,697 | 28,954 | 35,315 | ||||||||||||
Depreciation and amortization
|
17,145 | 15,323 | 33,829 | 30,672 | ||||||||||||
Maintenance
|
7,784 | 9,139 | 15,155 | 18,301 | ||||||||||||
Rents and leases
|
264 | 261 | 533 | 480 | ||||||||||||
Purchased labor
|
273 | 324 | 541 | 611 | ||||||||||||
Total operating expenses
|
145,128 | 140,322 | 283,260 | 277,963 | ||||||||||||
Operating income
|
$ | 10,323 | $ | 5,132 | $ | 17,406 | $ | 8,107 | ||||||||
Operating margin on revenue
|
6.6 | % | 3.5 | % | 5.8 | % | 2.8 | % | ||||||||
Operating margin on revenue
|
||||||||||||||||
excluding fuel-surcharge revenue
|
8.7 | % | 4.3 | % | 7.5 | % | 3.4 | % | ||||||||
2011 vs. 2010
|
2011 vs. 2010
|
|||||||||||||||
Selected Operating Statistics
|
||||||||||||||||
Loaded miles
|
-6.1 | % | -7.2 | % | ||||||||||||
Freight revenue per loaded mile
|
+4.2 | % | +4.0 | % |
(Dollars in thousands)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenue
|
||||||||||||||||
Road Systems
|
$ | 12,297 | $ | 14,019 | $ | 24,294 | $ | 25,858 | ||||||||
Operating income (loss)
|
||||||||||||||||
Road Systems
|
$ | 6 | $ | 91 | $ | (79 | ) | $ | (18 | ) | ||||||
Con-way re-insurance activities
|
(1,289 | ) | 271 | 36 | 2,418 | |||||||||||
Con-way corporate properties
|
(371 | ) | (247 | ) | (730 | ) | (584 | ) | ||||||||
Other
|
246 | (49 | ) | (12 | ) | (28 | ) | |||||||||
$ | (1,408 | ) | $ | 66 | $ | (785 | ) | $ | 1,788 |
(Dollars in thousands)
|
Six Months Ended
June 30,
|
|||||||
2011
|
2010
|
|||||||
Operating Activities
|
||||||||
Net income
|
$ | 36,344 | $ | 9,826 | ||||
Non-cash adjustments (1)
|
140,322 | 109,571 | ||||||
Changes in assets and liabilities
|
9,280 | (13,059 | ) | |||||
Net Cash Provided by Operating Activities
|
185,946 | 106,338 | ||||||
Net Cash Used in Investing Activities
|
(122,497 | ) | (129,575 | ) | ||||
Net Cash Used in Financing Activities
|
(15,456 | ) | (63,586 | ) | ||||
Increase (Decrease) in Cash and Cash Equivalents
|
$ | 47,993 | $ | (86,823 | ) | |||
(1) “Non-cash adjustments” refer to depreciation, amortization, impairment charges, deferred income taxes,
|
||||||||
provision for uncollectible accounts, and other non-cash income and expenses.
|
|
·
|
Defined Benefit Pension Plans
|
|
·
|
Goodwill
|
|
·
|
Income Taxes
|
|
·
|
Property, Plant and Equipment and Other Long-Lived Assets
|
|
·
|
Revenue Recognition
|
|
·
|
Self-Insurance Accruals
|
|
·
|
any projections of earnings, revenues, weight, yield, volumes, income or other financial or operating items;
|
|
·
|
any statements of the plans, strategies, expectations or objectives of Con-way’s management for future operations or other future items;
|
|
·
|
any statements concerning proposed new products or services;
|
|
·
|
any statements regarding Con-way’s estimated future contributions to pension plans;
|
|
·
|
any statements as to the adequacy of reserves;
|
|
·
|
any statements regarding the outcome of any legal and other claims and proceedings that may be brought against Con-way;
|
|
·
|
any statements regarding future economic conditions or performance;
|
|
·
|
any statements regarding strategic acquisitions; and
|
|
·
|
any statements of estimates or belief and any statements or assumptions underlying the foregoing.
|
Exhibit No.
|
||
(10)
|
Material contracts:
|
|
10.1
|
Summary of Certain Compensation Arrangements (Item 5.02 to Con-way’s Report on Form 8-K filed on April 27, 2011).*#
|
|
(31)
|
Certification of Officers pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
(32)
|
Certification of Officers pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
(101)
|
The following financial statements from Con-way’s Form 10-Q for the quarter ended June 30, 2011, filed on August 8, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Statements of Consolidated Income, (iii) Statements of Consolidated Cash Flows, and (iv) Notes to Consolidated Financial Statements.
|
|
* Previously filed with the Securities and Exchange Commission and incorporated herein by reference.
|
||
# Designates a contract or compensation plan for Management or Directors.
|
Con-way Inc.
|
|
(Registrant)
|
|
August 8, 2011
|
/s/ Stephen L. Bruffett
|
Stephen L. Bruffett
|
|
Executive Vice President and
|
|
Chief Financial Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Con-way Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Con-way Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Consolidated Balance Sheets (Parenthetical) (USD $)
|
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Consolidated Balance Sheets | ||
Common stock, par value | $ 0.625 | $ 0.625 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 62,995,517 | 62,750,994 |
Repurchased common stock, shares | 7,466,906 | 7,884,597 |
Statements Of Consolidated Income (USD $)
In Thousands, except Share data |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Statements Of Consolidated Income | ||||
Revenues | $ 1,348,549 | $ 1,306,263 | $ 2,594,176 | $ 2,468,174 |
Costs and Expenses | ||||
Salaries, wages and employee benefits | 508,874 | 523,950 | 1,000,514 | 1,013,409 |
Purchased transportation | 348,526 | 344,039 | 665,516 | 621,680 |
Fuel and fuel-related taxes | 150,110 | 122,335 | 286,137 | 236,684 |
Other operating expenses | 142,018 | 140,191 | 272,700 | 273,942 |
Depreciation and amortization | 50,540 | 47,938 | 100,854 | 92,964 |
Maintenance | 32,509 | 32,016 | 61,981 | 63,501 |
Rents and leases | 28,730 | 30,319 | 56,521 | 59,051 |
Purchased labor | 27,077 | 30,043 | 53,092 | 54,344 |
Loss from impairment of intangible assets | 2,767 | |||
Total Costs and Expenses | 1,288,384 | 1,270,831 | 2,497,315 | 2,418,342 |
Operating Income | 60,165 | 35,432 | 96,861 | 49,832 |
Other Income (Expense) | ||||
Investment income | 227 | 325 | 549 | 707 |
Interest expense | (13,923) | (14,688) | (27,842) | (31,088) |
Miscellaneous, net | (1,025) | (758) | (2,763) | (2,054) |
Total Other Income (Expense) | (14,721) | (15,121) | (30,056) | (32,435) |
Income before Income Tax Provision | 45,444 | 20,311 | 66,805 | 17,397 |
Income Tax Provision | 16,022 | 6,448 | 30,461 | 7,571 |
Net Income Available to Common Shareholders | $ 29,422 | $ 13,863 | $ 36,344 | $ 9,826 |
Weighted-Average Common Shares Outstanding | ||||
Basic | 55,413,243 | 51,665,047 | 55,227,528 | 50,506,809 |
Diluted | 56,136,065 | 52,362,407 | 55,939,330 | 51,184,703 |
Basic | ||||
Net Income Available to Common Shareholders | $ 0.53 | $ 0.27 | $ 0.66 | $ 0.19 |
Diluted | ||||
Net Income Available to Common Shareholders | $ 0.52 | $ 0.26 | $ 0.65 | $ 0.19 |
Employee Benefit Plans (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Pension Plans, Defined Benefit [Member]
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Components Of Net Periodic Benefit Expense (Income) |
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Postretirement Medical Plan [Member]
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Components Of Net Periodic Benefit Expense (Income) |
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Document And Entity Information
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6 Months Ended | |
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Jun. 30, 2011
|
Jul. 31, 2011
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Document And Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2011 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2011 | |
Entity Registrant Name | Con-way Inc. | |
Trading Symbol | cnw | |
Entity Central Index Key | 0000023675 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 55,573,894 |
Principal Accounting Policies (Narrative and Table) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Principal Accounting Policies | ||||
Net income available to common shareholders, as reported | $ 29,422 | $ 13,863 | $ 36,344 | $ 9,826 |
Weighted-average common shares outstanding | 55,413,243 | 51,665,047 | 55,227,528 | 50,506,809 |
Stock options and nonvested stock | 722,822 | 697,360 | 711,802 | 677,894 |
Denominator for net income per share | 56,136,065 | 52,362,407 | 55,939,330 | 51,184,703 |
Diluted earnings per share | $ 0.52 | $ 0.26 | $ 0.65 | $ 0.19 |
Anti-dilutive securities excluded from the computation of diluted EPS | 2,004,579 | 1,559,367 | 2,004,579 | 1,578,359 |
Reporting segments | 4 |
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Shareholders' Equity
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Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | 7. Shareholders' Equity
Comprehensive Income
Comprehensive income, which is a measure of all changes in equity except those resulting from investments by owners and distributions to owners, was as follows:
Common Stock Offering
In May 2010, Con-way sold 4,300,000 shares of repurchased common stock in an underwritten public offering at a price of $35.00 per share. The net proceeds from the offering were $143.3 million after deducting the underwriting discount and direct costs. The $42.8 million difference between the net proceeds and the $186.1 million historical cost of the repurchased common stock was recorded as a reduction to retained earnings in common shareholders' equity. |
Goodwill And Intangible Assets (Narrative) (Details) (USD $)
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3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | |||
---|---|---|---|---|---|---|---|
Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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Jun. 30, 2010
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Dec. 31, 2010
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Mar. 31, 2010
Menlo Worldwide Logistics [Member]
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Mar. 31, 2010
Chic Logistics' [Member]
|
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Amortization expense | $ 800,000 | $ 800,000 | $ 1,600,000 | $ 1,700,000 | |||
Impairment loss/charge | 16,414,000 | 2,800,000 | |||||
Carrying amount of intangible assets | $ 0 |
Subsequent Event (Details) (USD $)
|
Jun. 30, 2011
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Subsequent Events [Abstract] | |
Unsecured revolving credit facility | $ 325 |
Shareholders' Equity (Narrative) (Details) (USD $)
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1 Months Ended | 6 Months Ended |
---|---|---|
May 31, 2010
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Jun. 30, 2010
|
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Shareholders' Equity | ||
Sale of repurchased common stock | 4,300,000 | |
Repurchased common stock price per share | $ 35.00 | |
Proceeds from issuance of common stock | $ 143,300,000 | $ 143,325,000 |
Reduction to retained earnings | 42,800,000 | |
Historical cost of stock issued | $ 186,100,000 |
Share-Based Compensation (Tables)
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Jun. 30, 2011
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Share-Based Compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation Arrangement Expenses Recognized |
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Principal Accounting Policies (Policy)
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Basis Of Presentation | Basis of Presentation
These interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and Rule 10-01 of Regulation S-X, and should be read in conjunction with Con-way's 2010 Annual Report on Form 10-K. Accordingly, significant accounting policies and other disclosures normally provided have been omitted.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, including normal recurring adjustments, necessary to present fairly Con-way's financial condition, results of operations and cash flows for the periods presented. Results for the interim periods presented are not necessarily indicative of annual results. |
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Earnings Per Share ("EPS") | Earnings per Share ("EPS")
Basic EPS is computed by dividing reported earnings by the weighted-average common shares outstanding. Diluted EPS is calculated as follows:
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Reclassifications | Reclassifications
Certain amounts in the prior-period financial statements have been reclassified to conform to the current-period presentation. |
Restructuring Activities
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Restructuring Activities | 3. Restructuring Activities
As more fully discussed below, Con-way recognized restructuring charges of $1.2 million and $1.7 million in the second quarter and first half of 2011, respectively, and expects to recognize $0.4 million of additional expense in the second half of 2011. In the second quarter and first half of 2010, Con-way recognized restructuring charges of $0.6 million and $1.4 million, respectively. Con-way reported the employee-separation costs in salaries, wages and employee benefits and all other costs in other operating expenses. Con-way's remaining liability for amounts expensed but not yet paid was $0.2 million at June 30, 2011. The remaining liability relates to employee-separation costs that are expected to be paid through 2011.
Outsourcing Initiative
In 2009, as part of an ongoing effort to reduce costs and improve efficiencies, Con-way initiated a project to outsource a significant portion of its information-technology infrastructure function and a small portion of its administrative and accounting functions. Con-way does not expect to incur additional restructuring charges for the outsourcing initiative.
The following table summarizes the effect of the outsourcing initiative:
Consolidation of Executive Offices
In the third quarter of 2010, in an effort to more closely align corporate functions and better support the business, Con-way initiated a project to consolidate its executive offices located in San Mateo, California and Ann Arbor, Michigan. The consolidation was substantially completed in the second quarter of 2011 when the executive office in San Mateo closed. The remaining liability and expenses are expected to be settled in 2011.
The following table summarizes the effect of the initiative:
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Fair-Value Measurements (Changes In Fair Value Of Auction-Rate Security) (Details) (USD $)
In Thousands |
6 Months Ended | 12 Months Ended |
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Jun. 30, 2011
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Dec. 31, 2010
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Fair-Value Measurements | ||
Beginning balance | $ 6,039 | $ 6,691 |
Unrealized gain | 35 | 48 |
Partial redemption | (300) | (700) |
Ending balance | $ 5,774 | $ 6,039 |
Income Taxes
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6 Months Ended |
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Jun. 30, 2011
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Income Taxes | |
Income Taxes | 9. Income Taxes
Con-way's second-quarter and year-to-date effective tax rates in 2011 were 35.3% and 45.6%, respectively. In the second quarter and first half of 2010, the effective tax rates were 31.7% and 43.5%, respectively. The tax provision in 2011 included a $1.1 million second-quarter income-tax benefit associated with the reversal of a portion of Con-way's accrued liability for uncertain tax positions and a $5.9 million first-quarter charge due to the matter discussed below under "Uncertain Tax Positions." In 2010, the tax provision included a $2.2 million second-quarter income-tax benefit and a $2.3 million first-quarter charge related to health care legislation. Excluding these items and other less material discrete adjustments, the second-quarter and year-to-date effective tax rates in 2011 were 37.7% and 37.6%, respectively, compared to 42.6% in both periods of 2010. The rates in 2011 declined from 2010 due primarily to a benefit associated with a fuel-related tax credit that was not in effect during 2010 until legislation was enacted in December 2010.
Other accounts receivable in the consolidated balance sheets include income tax receivables of $10.6 million and $41.2 million at June 30, 2011 and December 31, 2010, respectively.
Uncertain Tax Positions
Con-way is subject to examination for federal income taxes for 2005 to 2010. The Internal Revenue Service ("IRS") has issued a Revenue Agent's Report for tax years 2005 through 2007 proposing certain adjustments, one of which relates primarily to the treatment of certain payments to retirees and former employees of Menlo Worldwide Forwarding, Inc. and its subsidiaries and Menlo Worldwide Expedite!, Inc. (collectively "MWF") by Con-way after the sale of MWF to United Parcel Service, Inc. in 2004. Con-way disagrees with this proposed adjustment and has contested it through the IRS administrative appeals process. Con-way met with the IRS Appeals Division, and following negotiations, the IRS requested an offer from Con-way in July 2011 to settle. In July 2011, the IRS accepted Con-way's offer to settle at an amount approximating the current liability recognized. Ultimate resolution of this matter is subject to final approval and documentation.
Due primarily to the matter discussed above, Con-way's estimated liability for unrecognized tax benefits increased to $18.2 million (including $6.5 million of accrued interest and penalties) at June 30, 2011 from $15.9 million (including $6.1 million of accrued interest and penalties) at December 31, 2010. |
Goodwill And Intangible Assets (Tables)
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Schedule Of Changes In Gross Carrying Amounts Of Goodwill |
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Schedule Of Intangible Assets |
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Schedule Of Estimated Amortization Expense |
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Commitments And Contingencies
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6 Months Ended |
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Jun. 30, 2011
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Commitments And Contingencies | |
Commitments And Contingencies | 10. Commitments and Contingencies
Purchase Obligations
In connection with its outsourcing initiative, Con-way entered into agreements with third-party service providers in the first quarter of 2010. Payments to the third-party providers are estimated to be $240 million between 2011 and 2016, when the agreements are expected to expire. The payments under the terms of the agreements are subject to change depending on the quantities and types of services consumed. The estimated payments reflect amounts based on projections of services expected to be consumed. The contracts also contain provisions that allow Con-way to terminate the contract at any time; however, Con-way would be required to pay additional fees if termination is for causes other than the failure of the service providers to perform. If Con-way had elected, for convenience, to terminate the contract for the outsourced information-technology services at December 31, 2010, the termination fee would have been approximately $39 million, compared to approximately $34 million if Con-way elects to terminate the contract on December 31, 2011.
Menlo Worldwide, LLC
Menlo Worldwide, LLC ("MW") has asserted claims against the sellers of Chic Holdings, which MW acquired in 2007, alleging inaccurate books and records, misstatement of revenue, and other similar matters related to the pre-sale financial performance of the Chic businesses and is pursuing all legal and equitable remedies available to MW. There currently exists a $9 million hold-back in escrow against which MW may apply any award for breach of warranty under the purchase agreement. The ultimate outcome of this matter is uncertain and any resulting award will not be recognized until received.
Emery Worldwide Airlines, Inc.
In February 2002, a lawsuit was filed against Emery Worldwide Airlines, Inc. ("EWA") in the District Court for the Southern District of Ohio, alleging violations of the Worker Adjustment and Retraining Notification Act (the "WARN Act") in connection with employee layoffs and ultimate terminations due to the August 2001 grounding of EWA's airline operations and the shutdown of the airline operations in December 2001. The court subsequently certified the lawsuit as a class action on behalf of affected employees laid off between August 11 and August 15, 2001. The WARN Act generally requires employers to give 60-days notice, or 60-days pay and benefits in lieu of notice, of any shutdown of operations or mass layoff at a site of employment. The lawsuit was tried in early January 2009, and on September 28, 2009, the court issued its decision in favor of EWA. The Plaintiffs appealed the judgment and the District Court's decision was affirmed on February 16, 2011. Plaintiffs' petitions for rehearing of the appellate court's decision were denied by orders dated March 4, 2011 and March 9, 2011. Plaintiffs filed a petition with the Supreme Court on June 7, 2011 arguing that the lower courts were wrong in ruling that there is no right to a jury trial in a WARN Act case. Plaintiffs contend that there is a split in the circuit courts on the issue and that the Supreme Court should review the case to resolve that split. Con-way filed its opposition to the petition on July 14, 2011.
Con-way is a defendant in various other lawsuits incidental to its businesses. It is the opinion of management that the ultimate outcome of these actions will not have a material effect on Con-way's financial position, results of operations or cash flows. |
Restructuring Activities (Schedule Of Summarizes The Effect Of The Initiative) (Details) (USD $)
In Thousands |
6 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2011
|
Jun. 30, 2011
Outsourcing Initiative [Member]
|
Jun. 30, 2011
Outsourcing Initiative [Member]
Employee-Separation Costs [Member]
|
Jun. 30, 2011
Outsourcing Initiative [Member]
Contract-Termination Costs [Member]
|
Jun. 30, 2011
Consolidation Of Executive Offices [Member]
|
Jun. 30, 2011
Consolidation Of Executive Offices [Member]
Employee-Separation Costs [Member]
|
Jun. 30, 2011
Consolidation Of Executive Offices [Member]
Relocation And Other Costs [Member]
|
|
Beginning balance | $ 200 | $ 371 | $ 371 | $ 2,496 | $ 2,496 | ||
2011 charges | 1,708 | 1,063 | 645 | ||||
Cash payments | (371) | (371) | (4,032) | (3,387) | (645) | ||
Ending balance | 172 | 172 | |||||
Total expense recognized to date | 5,854 | 5,126 | 728 | 4,204 | 3,559 | 645 | |
Expected remaining expenses | $ 400 | $ 427 | $ 427 |
Share-Based Compensation
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Share-Based Compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | 8. Share-Based Compensation
Under terms of its share-based compensation plans, Con-way grants various types of share-based compensation awards to employees and directors. The plans provide for awards in the form of stock options, nonvested stock (also known as restricted stock), performance-share plan units and stock appreciation rights ("SARs"). See Note 12, "Share-Based Compensation," of Item 8, "Financial Statements and Supplementary Data," in Con-way's 2010 Annual Report on Form 10-K for additional information concerning its share-based compensation awards.
The following expense was recognized for share-based compensation:
The SARs are liability-classified awards and, as a result, Con-way re-measures the fair value of the awards each reporting period until the awards are settled. At June 30, 2011 and December 31, 2010, Con-way had recognized accrued liabilities for cash-settled SARs of $4.6 million and $2.9 million, respectively, using a fair value per SAR of $18.28 and $16.41, respectively. |
Principal Accounting Policies
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Principal Accounting Policies | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principal Accounting Policies | 1. Principal Accounting Policies
Organization
Con-way Inc. and its consolidated subsidiaries ("Con-way") provide transportation, logistics and supply-chain management services for a wide range of manufacturing, industrial and retail customers. Con-way's business units operate in regional and transcontinental less-than-truckload and full-truckload freight transportation, contract logistics and supply-chain management, multimodal freight brokerage, and trailer manufacturing. As more fully discussed in Note 4, "Segment Reporting," for financial reporting purposes, Con-way is divided into four reporting segments: Freight, Logistics, Truckload and Other.
Basis of Presentation
These interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and Rule 10-01 of Regulation S-X, and should be read in conjunction with Con-way's 2010 Annual Report on Form 10-K. Accordingly, significant accounting policies and other disclosures normally provided have been omitted.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, including normal recurring adjustments, necessary to present fairly Con-way's financial condition, results of operations and cash flows for the periods presented. Results for the interim periods presented are not necessarily indicative of annual results. Earnings per Share ("EPS")
Basic EPS is computed by dividing reported earnings by the weighted-average common shares outstanding. Diluted EPS is calculated as follows:
New Accounting Standards
In June 2011, the FASB issued Accounting Standards Update ("ASU") 2011-05, "Presentation of Comprehensive Income." This ASU, codified in the "Comprehensive Income" topic of the FASB Accounting Standards Codification, eliminates the option to present the components of other comprehensive income as part of the statement of shareholders' equity. Instead, entities are required to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive statements. In addition, items that are reclassified from other comprehensive income to net income must be presented on the face of the financial statements. The accounting guidance in ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and requires full retrospective application. Con-way currently reports other comprehensive income in the statement of shareholders' equity. Upon adoption, Con-way will be required to reclassify prior-period reported amounts and present net income, other comprehensive income and comprehensive income in accordance with the amended standards
Reclassifications
Certain amounts in the prior-period financial statements have been reclassified to conform to the current-period presentation. |
Segment Reporting
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | 4. Segment Reporting
Con-way discloses segment information in the manner in which the business units are organized for making operating decisions, assessing performance and allocating resources. For the periods presented, Con-way is divided into the following four reporting segments:
Financial Data
Management evaluates segment performance primarily based on revenue and operating income (loss). Accordingly, investment income, interest expense, and other non-operating items are not reported in segment results. Corporate expenses are generally allocated based on measurable services provided to each segment, or for general corporate expenses, based on segment revenue. Inter-segment revenue and related operating income (loss) have been eliminated to reconcile to consolidated revenue and operating income (loss). Transactions between segments are generally based on negotiated prices.
|
Share-Based Compensation (Details) (USD $)
|
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|
Share-Based Compensation | |||||
Salaries, wages and employee benefits | $ 4,406,000 | $ 3,320,000 | $ 9,169,000 | $ 6,895,000 | |
Deferred income tax benefit | (1,732,000) | (1,286,000) | (3,576,000) | (2,657,000) | |
Net share-based compensation expense | 2,674,000 | 2,034,000 | 5,593,000 | 4,238,000 | |
Accrued liabilities for cash-settled | $ 4,600,000 | $ 4,600,000 | $ 2,900,000 | ||
Fair value per SAR | $ 18.28 | $ 18.28 | $ 16.41 |
Restructuring Activities (Narrative) (Details) (USD $)
In Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2011
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Restructuring Activities | |||||
Restructuring charges | $ 1.2 | $ 0.6 | $ 1.7 | $ 1.4 | |
Expected additional restructuring cost | 0.4 | ||||
Remaining liability for amounts expensed but not yet paid | $ 0.2 | $ 0.2 |
Fair-Value Measurements
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair-Value Measurements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair-Value Measurements | 5. Fair-Value Measurements
Assets and liabilities reported at fair value are classified in one of the following three levels within the fair-value hierarchy:
Level 1: Quoted market prices in active markets for identical assets or liabilities
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3: Unobservable inputs that are not corroborated by market data
The following table summarizes the valuation of financial instruments within the fair-value hierarchy:
Cash equivalents consist of short-term interest-bearing instruments (primarily commercial paper, certificates of deposit and money-market funds) with maturities of three months or less at the date of purchase.
Money-market funds reflect their published net asset value and are classified as Level 1 instruments within the fair-value hierarchy. Commercial paper and certificates of deposit are generally valued using published interest rates for instruments with similar terms and maturities, and accordingly, are classified as Level 2 instruments within the fair-value hierarchy. At June 30, 2011, the weighted-average remaining maturity of the cash equivalents was less than one month. Based on their short maturities, the carrying amount of the cash equivalents approximates their fair value.
Con-way holds one auction-rate security, which is valued with an income approach that utilizes a discounted cash flow model. The following table summarizes the change in fair values of Con-way's auction-rate security, which was valued using Level 3 inputs:
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Commitments And Contingencies (Details) (USD $)
In Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Mar. 31, 2010
|
Jun. 30, 2011
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Commitments And Contingencies | ||||
Estimated payments to the third-party providers | $ 240 | |||
Significant purchase commitment termination fee | 34 | 39 | ||
Escrow hold back for gain contingency | $ 9 |
Goodwill And Intangible Assets (Schedule Of Changes In Gross Carrying Amounts Of Goodwill) (Details) (USD $)
In Thousands |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2011
|
Dec. 31, 2010
|
Dec. 31, 2009
|
|
Goodwill | $ 521,122 | $ 520,699 | $ 520,293 |
Accumulated impairment losses | (183,049) | (183,049) | (166,635) |
Total Goodwill | 338,073 | 337,650 | 353,658 |
Impairment charge | (16,414) | ||
Change in foreign currency exchange rates | 423 | 406 | |
Logistics [Member]
|
|||
Goodwill | 55,797 | 55,374 | 54,968 |
Accumulated impairment losses | (48,236) | (48,236) | (31,822) |
Total Goodwill | 7,561 | 7,138 | 23,146 |
Impairment charge | (16,414) | ||
Change in foreign currency exchange rates | 423 | 406 | |
Truckload [Member]
|
|||
Goodwill | 464,598 | 464,598 | 464,598 |
Accumulated impairment losses | (134,813) | (134,813) | (134,813) |
Total Goodwill | 329,785 | 329,785 | 329,785 |
Impairment charge | |||
Change in foreign currency exchange rates | |||
Other [Member]
|
|||
Goodwill | 727 | 727 | 727 |
Accumulated impairment losses | |||
Total Goodwill | 727 | 727 | 727 |
Impairment charge | |||
Change in foreign currency exchange rates |
Segment Reporting (Operating Income(Loss) (Details) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Revenues | $ 1,348,549 | $ 1,306,263 | $ 2,594,176 | $ 2,468,174 |
Inter-segment Revenue Eliminations | 53,040 | 55,950 | 102,341 | 126,680 |
Revenue from External Customers | 1,348,549 | 1,306,263 | 2,594,176 | 2,468,174 |
Operating Income (Loss) | 60,165 | 35,432 | 96,861 | 49,832 |
Other [Member]
|
||||
Revenues | 12,297 | 14,019 | 24,294 | 25,858 |
Inter-segment Revenue Eliminations | 10,437 | 11,980 | 21,440 | 22,982 |
Revenue from External Customers | 1,860 | 2,039 | 2,854 | 2,876 |
Operating Income (Loss) | (1,408) | 66 | (785) | 1,788 |
Inter-Segment Eliminations [Member]
|
||||
Revenues | (53,040) | (55,950) | (102,341) | (126,680) |
Freight [Member]
|
||||
Revenues | 839,829 | 816,965 | 1,607,570 | 1,541,968 |
Inter-segment Revenue Eliminations | 12,435 | 12,934 | 23,726 | 25,382 |
Revenue from External Customers | 827,394 | 804,031 | 1,583,844 | 1,516,586 |
Operating Income (Loss) | 39,155 | 17,226 | 59,499 | 14,073 |
Logistics [Member]
|
||||
Revenues | 394,012 | 385,775 | 763,987 | 740,958 |
Inter-segment Revenue Eliminations | 8,644 | 5,360 | 14,805 | 8,530 |
Revenue from External Customers | 385,368 | 380,415 | 749,182 | 732,428 |
Operating Income (Loss) | 12,095 | 13,008 | 20,741 | 25,864 |
Truckload [Member]
|
||||
Revenues | 155,451 | 145,454 | 300,666 | 286,070 |
Inter-segment Revenue Eliminations | 21,524 | 25,676 | 42,370 | 69,786 |
Revenue from External Customers | 133,927 | 119,778 | 258,296 | 216,284 |
Operating Income (Loss) | $ 10,323 | $ 5,132 | $ 17,406 | $ 8,107 |
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Mar. 31, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|
Income Taxes | ||||||
Effective tax rate | 35.30% | 31.70% | 45.60% | 43.50% | ||
Tax charge related to recently enacted health care legislation | $ 2.3 | |||||
Unrecognized tax benefits resulting in the reversal of accrued liability | 1.1 | 2.2 | ||||
Effective tax rate excluding discrete items | 37.70% | 42.60% | 37.60% | 42.60% | ||
Charge due to the matter discussed | 5.9 | 5.9 | ||||
Income tax receivables | 10.6 | 10.6 | 41.2 | |||
Liability for unrecognized tax benefits | 18.2 | 18.2 | 15.9 | |||
Accrued interest and penalties | $ 6.5 | $ 6.5 | $ 6.1 |
Goodwill And Intangible Assets (Schedule Of Estimated Amortization Expense) (Details) (USD $)
In Thousands |
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Goodwill And Intangible Assets | |
Remaining six months of 2011 | $ 1,600 |
2012 | 2,600 |
2013 | 2,400 |
2014 | 2,400 |
2015 | 2,400 |
2016 | $ 2,400 |
Principal Accounting Policies (Tables)
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Calculation Of Numerator And Denominator In Earnings Per Share |
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Employee Benefit Plans
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Employee Benefit Plans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | 6. Employee Benefit Plans
In the periods presented, employees of Con-way and its subsidiaries in the U.S. were covered under several retirement benefit plans, including defined benefit pension plans, defined contribution retirement plans, a postretirement medical plan and a long-term disability plan. See Note 11, "Employee Benefit Plans," of Item 8, "Financial Statements and Supplementary Data," in Con-way's 2010 Annual Report on Form 10-K for additional information concerning its employee benefit plans. See "Cost-Reduction Actions" below for a discussion of employee benefits changes that were effective in April 2009.
Defined Benefit Pension Plans
As a result of plan amendments in previous years, no additional benefits accrue under these plans and already-accrued benefits will not be adjusted for future increases in compensation. The following table summarizes the components of net periodic benefit expense (income) for Con-way's domestic defined benefit pension plans:
Con-way expects to make required contributions of $22.0 million and discretionary contributions of $40.6 million to its Qualified Pension Plans in 2011, including $9.7 million contributed through July 2011. Con-way's estimate of its 2011 contribution is subject to change based on variations in interest rates, asset returns, Pension Protection Act requirements and other factors.
Defined Contribution Retirement Plans
Con-way's defined contribution retirement plans consist mostly of the primary defined contribution retirement plan (the "Primary DC Plan").
Con-way's expense under the Primary DC Plan was $8.8 million and $17.7 million in the second quarter and first six months of 2011, respectively, compared to $10.3 million and $19.2 million in the same periods of 2010. At June 30, 2011 and December 31, 2010, Con-way had recognized accrued liabilities of $10.8 million and $10.4 million, respectively, for its contributions related to the Primary DC Plan.
In the first six months of 2011 and 2010, Con-way used 461,151 shares and 511,319 shares, respectively, of repurchased common stock (also referred to as treasury stock), to fund $17.3 million and $17.9 million, respectively, of contributions to the Primary DC Plan. Effective in July 2011, Con-way's contributions to the Primary DC Plan will be in the form of cash, rather than in treasury stock. Postretirement Medical Plan
The following table summarizes the components of net periodic benefit expense for the postretirement medical plan:
Long-term Disability Plan
Con-way's expense associated with the long-term disability plan was $3.7 million and $6.3 million in the second quarter and first six months of 2011, respectively, compared to $4.0 million and $7.1 million in the same respective periods of 2010. In Con-way's consolidated balance sheets, the long-term and current portions of the long-term disability plan obligation are reported in employee benefits and accrued liabilities, respectively. At June 30, 2011, the long-term and current portions of the obligation were $21.8 million and $11.4 million, respectively, and at December 31, 2010, were $22.1 million and $11.4 million, respectively.
Cost-Reduction Actions
In response to economic conditions, in March 2009 Con-way announced several measures to reduce costs and conserve cash, as detailed below. The measures announced in March 2009 consisted of the suspension or curtailment of employee benefits and a reduction in salaries and wages.
Salaries and Wages
Effective in March 2009, the salaries and wages of certain employees were reduced by 5%, including corporate and shared-services employees and those at the Con-way Freight and Road Systems business units. Effective in January 2010, Con-way restored one-half of the salary and wage reductions. Con-way restored the remaining one-half of salary and wage reductions effective in January 2011.
Compensated Absences
Effective in April 2009, a compensated-absences benefit was suspended at Con-way Freight. During the period of suspension, no compensated-absences benefits were earned for current-year service; however, employees could use previously vested benefits. Also, effective in March 2009, Menlo Worldwide Logistics reduced its compensated-absences benefit by 25%. Effective in April 2010, Con-way Freight and Menlo Worldwide Logistics reinstated their compensated-absences benefits.
Defined Contribution Plan
Effective in April 2009, employer contributions to Con-way's Primary DC Plan were suspended or limited. The "matching" and "transition" contributions were suspended and the "basic" contribution was limited to no more than 3% of an employee's eligible compensation. In July 2011, Con-way announced that it has elected to prospectively reinstate the "basic" and "transition" contributions to their prior levels in the fourth quarter of 2011. The reinstated contributions, which are based on employees' years of service, will consist of a "basic" contribution that ranges from 3% to 5% of eligible compensation and a "transition" contribution that ranges from 1% to 3% of eligible compensation. |
Segment Reporting (Tables)
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Operating Income (Loss) |
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Shareholders' Equity (Schedule Of Change In Equity) (Details) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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Jun. 30, 2010
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Shareholders' Equity | ||||
Net income | $ 29,422 | $ 13,863 | $ 36,344 | $ 9,826 |
Foreign currency translation adjustment | 709 | (1,392) | 1,703 | (2,438) |
Unrealized gain (loss) on available-for-sale security, net of deferred tax of $10, $16, $14, and $22, respectively | (16) | (24) | 21 | 34 |
Employee benefit plans, net of deferred tax of $941, $827, $1,952, and $3,887, respectively | 1,472 | 1,294 | 3,054 | 4,790 |
Comprehensive income | 31,587 | 13,741 | 41,122 | 12,212 |
Unrealized gain (loss) on available-for-sale security, deferred tax | 10 | 16 | 14 | 22 |
Employee benefit plans, deferred tax | $ 941 | $ 828 | $ 1,952 | $ 3,887 |
Goodwill And Intangible Assets (Schedule Of Intangible Assets) (Details) (Customer Relationships [Member], USD $)
In Thousands |
Jun. 30, 2011
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Dec. 31, 2010
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Customer Relationships [Member]
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Gross Carrying Amount | $ 27,792 | $ 27,530 |
Accumulated Amortization | $ 12,162 | $ 10,339 |
Fair-Value Measurements (Tables)
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Jun. 30, 2011
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Fair-Value Measurements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Valuation Of Financial Instruments At Fair-Value |
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Changes In Fair Values Of Auction-Rate Security |
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Shareholders' Equity (Tables)
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Schedule of Comprehensive Income (Loss) [Table Text Block] |
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Goodwill And Intangible Assets
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Jun. 30, 2011
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Goodwill And Intangible Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill And Intangible Assets | 2. Goodwill and Intangible Assets
Goodwill
Goodwill is recorded as the excess of an acquired entity's purchase price over the amounts assigned to assets acquired (including separately recognized intangible assets) and liabilities assumed. Goodwill is not amortized but is assessed for impairment on an annual basis in the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The assessment requires the comparison of the fair value of a reporting unit to the carrying value of its net assets, including allocated goodwill. If the carrying value of the reporting unit exceeds its fair value, Con-way must then compare the implied fair value of the reporting-unit goodwill with the carrying amount of the goodwill. If the carrying amount of the reporting-unit goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.
The following table shows the changes in the gross carrying amounts of goodwill attributable to each applicable segment:
Intangible Assets
The fair value of intangible assets is amortized on a straight-line basis over the estimated useful life. In the second quarter and first half of 2011, amortization expense related to intangible assets was $0.8 million and $1.6 million, respectively, compared to $0.8 million and $1.7 million in the same respective periods of 2010. Intangible assets consisted of the following:
In the first quarter of 2010, Con-way evaluated the fair value of Chic Logistics' customer-relationship intangible asset due to lower projected revenues from customers comprising the customer relationship intangible asset. As a result, Menlo Worldwide Logistics recognized a $2.8 million impairment loss to reduce the carrying amount of the intangible asset to zero.
Estimated amortization expense for the next five years is presented in the following table:
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Subsequent Event
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6 Months Ended |
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Jun. 30, 2011
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Subsequent Events [Abstract] | |
Subsequent Event | 11. Subsequent Event
Con-way has a $325 million unsecured revolving credit facility, which is more fully discussed in Note 7, "Debt and Other Financing Arrangements," of Item 8, "Financial Statements and Supplementary Data," in Con-way's 2010 Annual Report on Form 10-K. On August 2, 2011, Con-way amended the revolving credit facility to extend the maturity date from November 4, 2014 to August 2, 2016. The amended facility also includes revised pricing that lowers Con-way's cost of utilizing the facility. The financial covenants and available credit provided to Con-way under the facility are unchanged by the amendment. |
Fair-Value Measurements (Summary Of Valuation Of Financial Instruments At Fair-Value) (Details) (USD $)
In Thousands |
Jun. 30, 2011
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Dec. 31, 2010
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Cash equivalents | $ 438,033 | $ 388,053 |
Other marketable securities | 5,774 | 6,039 |
Fair Value, Inputs, Level 1 [Member]
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Cash equivalents | 105,800 | 118,763 |
Other marketable securities | ||
Fair Value, Inputs, Level 2 [Member]
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Cash equivalents | 332,233 | 269,290 |
Other marketable securities | ||
Fair Value, Inputs, Level 3 [Member]
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Cash equivalents | ||
Other marketable securities | $ 5,774 | $ 6,039 |
Restructuring Activities (Tables)
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Outsourcing Initiative [Member]
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Schedule Of Effects Of The Restructuring Initiatives |
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Consolidation Of Executive Offices [Member]
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Schedule Of Effects Of The Restructuring Initiatives |
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Employee Benefit Plans (Narrative) (Details) (USD $)
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0 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||||
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Apr. 30, 2009
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Mar. 31, 2009
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Jun. 30, 2011
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Jun. 30, 2010
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Dec. 31, 2010
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Jun. 30, 2011
Maximum [Member]
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Jun. 30, 2011
Minimum [Member]
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Jul. 31, 2011
Qualified Pension Plans [Member]
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Jun. 30, 2011
Qualified Pension Plans [Member]
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Jun. 30, 2011
Long-Term Disability Plan [Member]
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Jun. 30, 2010
Long-Term Disability Plan [Member]
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Jun. 30, 2011
Long-Term Disability Plan [Member]
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Jun. 30, 2010
Long-Term Disability Plan [Member]
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Dec. 31, 2010
Long-Term Disability Plan [Member]
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Jun. 30, 2011
Defined Contribution Retirement Plans [Member]
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Jun. 30, 2010
Defined Contribution Retirement Plans [Member]
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Jun. 30, 2011
Defined Contribution Retirement Plans [Member]
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Jun. 30, 2010
Defined Contribution Retirement Plans [Member]
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Dec. 31, 2010
Defined Contribution Retirement Plans [Member]
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Required contributions | $ 22,000,000 | ||||||||||||||||||
Discretionary contributions | 9,700,000 | 40,600,000 | |||||||||||||||||
Defined benefit plan expense | 3,700,000 | 4,000,000 | 6,300,000 | 7,100,000 | 8,800,000 | 10,300,000 | 17,700,000 | 19,200,000 | |||||||||||
Recognized accrued liabilities | 10,800,000 | 10,800,000 | 10,400,000 | ||||||||||||||||
Repurchased common stock issued under defined contribution plan | 17,307,000 | 17,945,000 | 461,151 | 511,319 | |||||||||||||||
Defined benefit plan employer contribution | 17,300,000 | 17,900,000 | |||||||||||||||||
Long-term portion of the obligation | 401,944,000 | 418,731,000 | 21,800,000 | 21,800,000 | 22,100,000 | ||||||||||||||
Current portion of the obligation | $ 11,400,000 | $ 11,400,000 | $ 11,400,000 | ||||||||||||||||
Percentage of reduction in salaries and wages | 5.00% | ||||||||||||||||||
Reduction in compensated-absences benefit | 25.00% | ||||||||||||||||||
Limited basic contribution in percentage | 3.00% | 5.00% | 3.00% | ||||||||||||||||
Limited transition contribution in percentage | 3.00% | 1.00% |