-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AMcreBkfxpmQUpEzr6iJQVckfBGI22bxBBsLZM+XV3UG7zZ03SNAtwUeRqJqH2nh bKUKgvEa+Usfg0b8IcwofQ== 0000912057-96-019782.txt : 19960910 0000912057-96-019782.hdr.sgml : 19960910 ACCESSION NUMBER: 0000912057-96-019782 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960826 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960906 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONSOLIDATED FREIGHTWAYS INC CENTRAL INDEX KEY: 0000023675 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 941444798 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05046 FILM NUMBER: 96626940 BUSINESS ADDRESS: STREET 1: 3240 HILLVIEW AVE CITY: PALO A LTO STATE: CA ZIP: 94304 BUSINESS PHONE: 4154942900 8-K 1 FORM 8-K - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT: AUGUST 26, 1996 (DATE OF EARLIEST EVENT REPORTED) CONSOLIDATED FREIGHTWAYS, INC. (Exact name of Registrant as specified in its charter) DELAWARE 1-5046 94-1444798 (State or other jurisdiction of (Commission File No.) (I.R.S. Employer incorporation or organization) Identification No.) 3240 HILLVIEW AVENUE PALO ALTO, CALIFORNIA 94304 (Address of principal executive offices) (415) 494-2900 Registrant's telephone number, including area code - -------------------------------------------------------------------------------- ITEM 5 - OTHER EVENTS On August 26, 1996, the Registrant's Board of Directors approved the spin-off of several businesses that will result in two separate, publicly traded companies, each offering a variety of premium freight transportation services. The Registrant will spin off its long-haul, less-than-truckload ("LTL") subsidiary, Consolidated Freightways Corporation of Delaware and its subsidiaries ("CFCD"). The businesses being spun off to shareholders include CF MotorFreight, the domestic LTL motor carrier operations, and its Canadian operations, including Canadian Freightways Ltd., Epic Express, Milne & Craighead and Canadian Sufferance Warehouses and other related businesses as well as Leland James Service Corporation ("LJSC") which combined will comprise a new public company, which will be called Consolidated Freightways Corporation ("CFC"). The Registrant will seek stockholder approval to change its name to CNF Transportation, Inc. ("CNF") and will consist of Emery Worldwide, the international air and ocean freight carrier; Con-Way Transportation Services, including its three regional less-than-truckload carriers and Con-Way Truckload Services; Menlo Logistics, a third-party logistics management firm; Road Systems, Inc., a trailer manufacturer; and VantageParts, a retail distributor of truck parts and supplies. The spin-off transaction, which is expected to be completed in the fourth quarter of 1996, is anticipated to be generally tax free for current stockholders and is subject to a number of conditions, including the receipt of a private letter ruling or an opinion of counsel that the spin-off will qualify generally as a tax-free distribution. The Registrant will continue to be listed on the New York Stock Exchange ("NYSE"). CFC plans to file an application to be listed on the NYSE. Each company will have its own separate Board of Directors. Donald E. Moffitt, chairman, president and chief executive officer of the Registrant will continue in those positions as head of CNF. W. Roger Curry, currently president and chief executive officer of CF MotorFreight, will maintain those positions at CFC. Joining Mr. Curry at the new company is William D. Walsh, currently a member of the Registrant's Board of Directors, who will leave the Registrant's Board of Directors and will become chairman of the board of CFC. G. Robert Evans will leave the Registrant's Board of Directors and will become a board member of CFC. ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS
PAGE OF THIS REPORT (A) Pro Forma Condensed Consolidated Financial Information Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1996 . . . . 3 Pro Forma Condensed Consolidated Statement of Income for the Six Months Ended June 30, 1996. . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Pro Forma Condensed Consolidated Statement of Income for the Year Ended December 31, 1995. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
CONSOLIDATED FREIGHTWAYS, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION The historical financial statements of Consolidated Freightways, Inc. include the results of operations and financial position of the businesses constituting Consolidated Freightways Corporation. The pro forma condensed consolidated balance sheet (unaudited) as of June 30, 1996 has been prepared assuming the spin-off of Consolidated Freightways Corporation and distribution of related shares occurred as of that date. The pro forma condensed consolidated statement of income (unaudited) for the six months ended June 30, 1996 has been prepared assuming the spin-off and distribution occurred as of January 1, 1996. The pro forma condensed consolidated statement of income (unaudited) for the year ended December 31, 1995 has been prepared assuming the spin-off and distribution occurred as of January 1, 1995. The pro forma adjustments are based upon available information and upon certain assumptions that the Registrant and CFC believe are reasonable which are described in the Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements. These pro forma financial statements are not necessarily indicative of the consolidated results of operations or financial position that would have existed had the distribution occurred on the dates indicated, or which may be attained in the future. 2 CONSOLIDATED FREIGHTWAYS, INC. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET JUNE 30, 1996 (IN THOUSANDS) (UNAUDITED)
CONSOLIDATED CONSOLIDATED ELIMINATE PRO FORMA FREIGHTWAYS, INC. FREIGHTWAYS, INC. CFCD & LJSC (a) ADJUSTMENTS PRO FORMA ----------------- --------------- ----------- ----------------- CURRENT ASSETS Cash and cash equivalents $ 123,064 $ (37,757) $ 102 (b) $ 85,409 Receivables, net of allowances 825,155 (293,599) 332 (b) 531,888 Operating supplies, at lower of average cost or market 39,524 (17,569) 5,502 (b) 27,457 Prepaid expenses 82,628 (38,748) 1,335 (b) 45,215 Deferred income taxes 134,044 (59,873) 288 (b) 74,459 ----------------- --------------- ----------- ----------------- TOTAL CURRENT ASSETS 1,204,415 (447,546) 7,559 764,428 ----------------- --------------- ----------- ----------------- Property, plant and equipment, net 1,132,136 (493,764) 24,520 (b) 701,802 38,910 (c) ----------------- --------------- ----------- ----------------- OTHER ASSETS Restricted funds 11,306 11,306 Deposits and other assets 98,808 (8,993) 4,023 (b) 93,838 Unamortized aircraft maintenance, net 125,918 125,918 Costs in excess of net assets of businesses acquired, net of accumulated amortization 303,585 303,585 ----------------- --------------- ----------- ----------------- 539,617 (8,993) 4,023 534,647 ----------------- --------------- ----------- ----------------- TOTAL ASSETS $ 2,876,168 $ (950,303) $ 75,012 $ 2,000,877 ----------------- --------------- ----------- ----------------- ----------------- --------------- ----------- -----------------
The accompanying notes are an integral part of this statement. 3 CONSOLIDATED FREIGHTWAYS, INC. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET JUNE 30, 1996 (IN THOUSANDS) (UNAUDITED)
CONSOLIDATED CONSOLIDATED ELIMINATE PRO FORMA FREIGHTWAYS, INC. FREIGHTWAYS, INC. CFCD & LJSC (a) ADJUSTMENTS PRO FORMA ----------------- --------------- ----------- ----------------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued liabilities $ 781,355 $ (301,283) $ 19,826 (b) $ 499,898 Accrued claims costs 163,350 (88,146) 82 (b) 75,286 Current maturities of long-term debt and capital leases 3,216 3,216 Short-term borrowings 122,000 122,000 Federal and other income taxes payable 6,586 6,586 ------------ ----------- ---------- ---------- TOTAL CURRENT LIABILITIES 1,076,507 (389,429) 19,908 706,986 Long-term debt, guarantees and capital leases 492,350 (15,100) 477,250 Accrued claims costs 162,117 (101,417) 60,700 Employee benefits and other liabilities 343,111 (137,492) 192 (b) 205,811 Deferred income taxes 78,090 (27,400) (3,355)(d) 48,825 1,490 (c) ------------ ----------- ---------- ---------- TOTAL LIABILITIES 2,152,175 (670,838) 18,235 1,499,572 ------------ ----------- ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 723,993 (279,465) 16,002 (b) 501,305 37,420 (c) 3,355 (d) ------------ ----------- ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,876,168 $ (950,303) $ 75,012 $2,000,877 ------------ ----------- ---------- ---------- ------------ ----------- ---------- ----------
The accompanying notes are an integral part of this statement. 4 CONSOLIDATED FREIGHTWAYS, INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1996 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
CONSOLIDATED CONSOLIDATED ELIMINATE PRO FORMA FREIGHTWAYS, INC. FREIGHTWAYS, INC. CFCD & LJSC (e) ADJUSTMENTS PRO FORMA ----------------- --------------- ----------- ----------------- REVENUES $ 2,723,005 $ (1,032,541) $ 51,745 (g) $ 1,742,209 COSTS AND EXPENSES 2,673,358 (1,070,765)(f) 51,745 (g) 1,654,094 (m) (244)(h) ------------ ------------- --------- ------------ OPERATING INCOME 49,647 38,224 244 88,115 ------------ ------------- --------- ------------ OTHER INCOME (EXPENSE) Investment income 223 (171) 52 Interest expense (19,990) 435 (19,555) Miscellaneous, net (886) 2,352 (2,828)(i) (1,362) ------------ ------------- --------- ------------ (20,653) 2,616 (2,828) (20,865) ------------ ------------- --------- ------------ INCOME (LOSS) BEFORE INCOME TAXES (BENEFITS) 28,994 40,840 (2,584) 67,250 INCOME TAXES (BENEFITS) 15,058 12,772 (1,008)(j) 26,822 ------------ ------------- --------- ------------ NET INCOME (LOSS) 13,936 28,068 (1,576) 40,428 Preferred Stock Dividends 4,317 4,317 ------------ ------------- --------- ------------ NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ 9,619 $ 28,068 $ (1,576) $ 36,111 ------------ ------------- --------- ------------ ------------ ------------- --------- ------------ AVERAGE COMMON SHARES OUTSTANDING: Primary (k) 44,899 45,358 Fully Diluted (l) 49,372 49,372 EARNINGS PER SHARE: Primary (k) $ 0.21 $ 0.80 ------------ ------------ ------------ ------------ Fully Diluted (l) $ 0.21 $ 0.75 ------------ ------------ ------------ ------------
The accompanying notes are an integral part of this statement. 5 CONSOLIDATED FREIGHTWAYS, INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1995 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
CONSOLIDATED CONSOLIDATED ELIMINATE PRO FORMA FREIGHTWAYS, INC. FREIGHTWAYS, INC. CFCD & LJSC (e) ADJUSTMENTS PRO FORMA ----------------- ---------------- ----------- ----------------- REVENUES $5,281,084 $(2,106,529) $ 115,522 (g) $3,290,077 COSTS AND EXPENSES 5,137,183 (2,149,315)(f) 115,522 (g) 3,102,902 (m) (488)(h) ---------- ----------- ---------- ---------- OPERATING INCOME 143,901 42,786 488 187,175 ---------- ----------- ---------- ---------- OTHER INCOME (EXPENSE) Investment income 841 (756) 85 Interest expense (34,325) 918 (33,407) Miscellaneous, net 456 850 (1,729)(i) (423) ---------- ----------- --------- ---------- (33,028) 1,012 (1,729) (33,745) ---------- ----------- ---------- ---------- INCOME (LOSS) BEFORE INCOME TAXES (BENEFITS) 110,873 43,798 (1,241) 153,430 INCOME TAXES (BENEFITS) 53,508 13,889 (484)(j) 66,913 ---------- ----------- ---------- ---------- NET INCOME (LOSS) 57,365 29,909 (757) 86,517 ---------- ----------- ---------- ---------- Preferred Stock Dividends 10,799 10,799 ---------- ---------- NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ 46,566 $ 29,909 $ (757) $ 75,718 ---------- ----------- ---------- ---------- ---------- ----------- ---------- ---------- AVERAGE COMMON SHARES OUTSTANDING: Primary (k) 44,362 44,812 Fully Diluted (l) 48,724 48,724 EARNINGS PER SHARE: Primary (k) $ 1.10 $ 1.74 ----------- ---------- ----------- ---------- Fully Diluted (l) $ 1.04 $ 1.64 ----------- ---------- ----------- ----------
The accompanying notes are an integral part of this statement. 6 NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. (a) Represents the elimination of the historical assets and liabilities of CFCD and LJSC. (b) Represents the transfers of certain assets and liabilities from LJSC in connection with the transfer of certain administrative service departments from LJSC to a subsidiary of the Registrant. (c) Represents the transfer of certain real properties from CFCD to a subsidiary of the Registrant, some of which may be leased back under short-term operating leases. (d) In connection with the spin-off, certain real property transfers from CFCD to a subsidiary of the Registrant will occur and will be recognized as taxable sales for income tax purposes and such taxes will be paid by CFC. However, the taxable sales recognition results in additional tax basis for the property transferred that is deductible in future periods by the Registrant and is recorded as a deferred tax asset. (e) Represents the elimination of the historical operating results of CFCD and LJSC. (f) The historical financial statements include an allocation of corporate overhead costs incurred by the Registrant using both incremental and proportional methods on a revenue and capital basis. Although management believes the allocation methods used provide CFCD with a reasonable share of such expenses, there can be no assurance that these costs will not increase after the spin-off. (g) To reflect intercompany sales and expenses between certain subsidiaries of the Registrant and CFCD previously eliminated in the historical consolidated financial statements of the Registrant. Such sales are expected to continue after the spin-off. (h) To adjust for the effects on depreciation expense and sub-lease rental income from third parties, resulting from the pro forma transfers of certain real properties from CFCD to a subsidiary of the Registrant. (i) To eliminate intercompany interest income, net, earned on balances receivable from CFCD. (j) To reflect the income tax effects of the pro forma adjustments using an estimated marginal tax rate of 39%. (k) Includes the dilutive effect of stock options and, in pro forma, the conversion into common stock of Series B Thrift and Stock Plan (TASP) convertible preferred shares for CFCD participants in the Registrant's TASP. Also included in the year ended December 31, 1995 is an addback to earnings of $2.2 million, which represents the Series C preferred stock dividend as such shares converted to common stock. (l) Includes the dilutive effect of stock options and Series B TASP preferred shares. The six months ended June 30, 1996 computation includes an addback to earnings of $1.0 million and the year ended December 31, 1995 includes an addback to earnings of $1.8 million representing the Series B convertible preferred stock dividend net of required replacement funding. Also included in the year ended December 31, 1995 is an addback to earnings of $2.2 million, which represents the Series C preferred stock dividend as such shares converted to common stock. (m) The Registrant's pro forma costs and expenses include depreciation and amortization of approximately $46 million and $84 million for the six months ended June 30, 1996 and the year ended December 31, 1995, respectively. Also includes rental expense of approximately $85 million and $169 million for the same respective periods. 7 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CONSOLIDATED FREIGHTWAYS, INC. Dated: September 6, 1996 By: /s/ Gregory L. Quesnel ----------------------------------- Name: Gregory L. Quesnel Title: Executive Vice President and Chief Financial Officer 8 -----END PRIVACY-ENHANCED MESSAGE-----