UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
OR
___ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from N/A to N/A
COMMISSION FILE NUMBER 1-5046
CNF INC. EWW SAVINGS PLAN
CNF INC.
Incorporated in the State of Delaware
I.R.S. Employer Identification No. 94-1444798
3240 Hillview Avenue, Palo Alto, California 94304
Telephone Number (650) 494-2900
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons administering the employee benefit
plan) have duly caused this annual report to be signed on its behalf
by the undersigned hereunto duly authorized.
CNF Inc. Thrift and Stock Plan
June 28, 2002
/s/ Mark C. Thickpenny
Mark C. Thickpenny
Vice President and Treasurer
The report of Arthur Andersen LLP covering the 2000 financial statements
is a copy of a report previously issued by Andersen on June 22, 2001. We
have not been able to obtain a re-issued report from Andersen. Andersen
has not consented in this Annual Report on Form 11-K to the incorporation
by reference of its report into the registration statement (No. 333-48733,
333-56667, 333-92399, 333-36180, 333-54558). Because Andersen has not
consented in this filing to the incorporation by reference of its report
into the aforementioned registration statement, it may be more difficult
for you to seek remedies against Andersen and your ability to seek relief
against Andersen may be impaired.
CNF INC. EWW SAVINGS PLAN
FINANCIAL STATEMENTS AND SCHEDULE
AS OF DECEMBER 31, 2001 AND 2000
AND FOR THE YEAR ENDED DECEMBER 31, 2001
TOGETHER WITH AUDITORS' REPORT
Independent Auditors' Report
To the Compensation Committee of the
CNF Inc. Board of Directors:
We have audited the accompanying statement of net assets available for
plan benefits of the CNF Inc. EWW Savings Plan as of December 31,
2001, and the related statement of changes in net assets available for
plan benefits for the year ended December 31, 2001. These financial
statements are the responsibility of the plan administrator. Our
responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits of the Plan as of December 31, 2001, and the changes in its
net assets available for plan benefits for the year ended December 31,
2001, in conformity with accounting principles generally accepted in
the United States of America.
Our audit was performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
schedule of assets held at end of year is presented for purposes of
additional analysis and is not a required part of the basic financial
statements but is supplementary information required by the Department
of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental
schedule is the responsibility of the Plan's managment. The supplemental
schedule has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects, in relation to the basic financial
statements taken as a whole.
Our audit was performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The fund information in
the statement of changes in net assets available for plan benefits is
presented for purposes of additional analysis rather than to present the
changes in net assets available for plan benefits of each fund. The fund
information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects, in relation to the basic finanical
statements taken as a whole.
/s/KPMG LLP
-----------------
KPMG LLP
Portland, Oregon,
June 24, 2002
THIS REPORT IS A COPY OF A PREVIOUSLY ISSUED ARTHUR ANDERSEN LLP REPORT
AND HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Compensation Committee of the
CNF Inc. Board of Directors:
We have audited the accompanying statements of net assets available for plan
benefits of the EWW Savings Plan as of December 31, 2000 and 1999, and the
related statement of changes in net assets available for plan benefits for
the year ended December 31, 2000. These financial statements and the
schedule referred to below are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial status of the Plan as of December 31, 2000
and 1999, and the changes in its financial status for the year ended December
31, 2000, in conformity with accounting principles generally accepted in the
United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held at end of year is presented for the purpose of additional analysis and is
not a required part of the basic financial statements but is supplementary
information required by Department of Labor Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ Arthur Andersen LLP
Portland, Oregon,
June 22, 2001
CNF INC. EWW SAVINGS PLAN
DECEMBER 31, 2001 AND 2000
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
Page
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Plan Benefits as of
December 31, 2001 and 2000 1
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 2001 2
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE 3
SUPPLEMENTAL SCHEDULE:
Schedule I: Schedule H, Part IV, Line 4i - Schedule of
Assets Held at End of Year as of December 31, 2001 6
PAGE 1
CNF INC. EWW SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31,
2001 2000
ASSETS:
Investments, at fair value-
Participant Directed
Shares in registered investment companies:
T. Rowe Price-
Growth Stock Fund $5,864,629 1,360,484
New Income Fund - 226,825
Equity Income Fund 3,252,920 784,711
Science and Technology Fund 6,063,702 1,238,562
International Stock Fund 1,430,664 239,670
Small-Cap Stock Fund 514,257 35,063
PIMCO Total Return Fund 727,856 -
17,854,028 3,885,315
Common trust funds:
Morgan Stanley Institutional Fund
Trust Mid Cap Growth Portfolio 17,487 -
Equity Index Trust Fund 1,297,696 87,307
Bond Index Trust Fund 141,499 3,449
U.S. Treasury Money Market Trust 4,311,262 1,553,835
Retirement Strategy Trust - Balanced 1,176,012 385,772
Retirement Strategy Trust -
Conservative Growth - 16,570
Retirement Strategy Trust - Income Plus - 1,693
6,943,956 2,048,626
CNF Unrestricted Common Stock Fund 1,178,447 86,204
Participant loans 1,463,142 197,566
Participant contributions receivable 19,958 -
Due from CNF Inc. Thrift and Stock Plan
for net assets to be transferred, at
fair market value (Note 1) - 26,510,152
Total Participant Directed 27,459,531 32,727,863
Non-Participant Directed
Restricted CNF Common Stock Fund
Restricted CNF Common Stock 1,217,867 -
Due from CNF Inc. Thrift and Stock Plan
for net assets to be transferred,
at fair market value (Note 1) - 1,954,825
1,217,867 1,954,825
CNF Preferred Stock Fund
CNF Preferred Stock 2,062,085 -
Due from CNF Inc. Thrift and Stock Plan
for net assets to be transferred,
at fair market value (Note 1) - 2,250,395
Cash 16,843 -
2,078,928 2,250,395
NET ASSETS AVAILABLE FOR PLAN BENEFITS $30,756,326 $36,933,083
See accompanying notes to financial statements.
PAGE 2
CNF INC. EWW SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2001
Participant Non - Participant
Directed Directed Total
Restricted CNF
CNF Common Preferred
Stock Fund Stock Fund
ADDITIONS/(DEDUCTIONS):
Participant contributions $ 3,526,175 $ - $ - $ 3,526,175
Employer contributions 336,852 - - 336,852
Interest income 237,133 12,361 68,828 318,322
Transfers in from other plans 1,729,765 - - 1,729,765
Net appreciation (depreciation)
in fair value of
investments (Note 3) (6,945,390) (542,147) 33,925 (7,453,612)
Distributions to participants (4,179,866) (454,393) - (4,634,259)
Total additions (deductions) (5,295,331) (984,179) 102,753 (6,176,757)
INTERFUND TRANSFERS, net 26,999 247,221 (274,220) -
Net decrease (5,268,332) (736,958) (171,467) (6,176,757)
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, December 31, 2000 32,727,863 1,954,825 2,250,395 36,933,083
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, December 31, 2001 $27,459,531 $ 1,217,867 $ 2,078,928 $30,756,326
See accompanying notes to financial statements.
PAGE 3
CNF INC. EWW SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE
1. Description of Plan
The following description of the CNF Inc. EWW Savings Plan (the Plan) is
provided for general information purposes only. Participants should refer
to the Employee Benefits Handbook or the Plan document for more complete
information.
General: The Plan is a defined contribution plan and is subject to the
provisions of the Employee Retirement Income Security Act of 1974, as
amended (ERISA). Overall responsibility for administering the Plan rests
with the CNF Inc. (formerly CNF Transportation and referred to as the
Company or CNF) Administrative Committee (the Committee), which is appointed
by the Chief Executive Officer of the Company. The Committee reports
directly to the Compensation Committee of the Company's Board of Directors.
The Plan's trustee, T. Rowe Price Trust Company (the Trustee), is
responsible for the management and control of the Plan's assets.
Amendment: During 2000, the Company amended the CNF Transportation Thrift
and Stock Plan (TASP) and the Plan. Effective September 19, 2000, the Emery
Worldwide (EWW) pilots ceased participation in the TASP and their elective
deferrals began being contributed to the Plan. Transfer of the EWW pilots'
vested balance in the TASP was transferred to the Plan effective December
20, 2000. The unvested portion of each pilot's account will remain in the
TASP until vested. Any balances remaining in the TASP until transferred to
the Plan will continue to be invested as provided under the TASP. The EWW
pilots' vested balances, which were reported as a receivable due from the
TASP as of December 31, 2000, were transferred in 2001 from the TASP to the
Plan.
Eligibility: The Plan covers all eligible employees of the Company who are
covered by a collective bargaining unit that specifically provides for
participation in the Plan. Employees become eligible to participate in the
Plan upon hire if they are regular full-time employees. Supplemental or
part-time employees become eligible upon completion of 750 hours of service.
Contributions: An eligible employee may elect to contribute from 1% to 18%
of the employee's pretax compensation into the Plan. Employee contributions
may not exceed limits established by Internal Revenue Service regulations.
Each participating employee may direct contributions in any one or more of
the twelve investment funds established under the Plan. The Company makes
no matching contributions for participants of the Plan.
The Plan allows for a supplemental employer contribution of up to 10 days
of unused forfeited vacation and sick days for those participants whose
collective bargaining agreements provide for such contributions.
Participant Accounts: A separate account is maintained for each
participant of the Plan. Each account is credited with the participant's
and employer contributions and an allocation of the Plan's net earnings.
The Plan's net earnings are allocated to the separate funds in each
participant's account based upon the value of the individual's account fund
balance in relation to the Plan's total fund balance.
Vesting: Participants are fully vested at all times in all contributions
made to the Plan plus net earnings thereon.
Participant Loans: The Plan has a loan provision allowing participants
access to funds on a tax-free basis. Each participant may borrow from a
minimum of $1,000 up to a maximum of $50,000 from the participant's fund
account, reduced by the excess of the participant's highest outstanding loan
balance during the one-year period on the day before the loan is made over
the participant's current outstanding loan balance on the date of the loan.
Loans may not exceed 50% of a participant's vested account balance. The
loans are secured by the vested balance in the participant's account. Loans
must be repaid within 4 1/2 years and bear interest at a rate determined by
the loan committee (the prime rate plus 1% in 2001). Loans outstanding at
December 31, 2001 bear interest at rates ranging from 8.75% to 10.50%.
Principal and interest are paid ratably through payroll deductions.
PAGE 4
Distribution to Participants: Employees become eligible for distribution
upon termination of employment, disability, retirement or death.
Distributions are payable in the form of lump sum payments or in a series of
substantially equal annual installments.
Plan Termination: Although it has not expressed any intent to do so, the
Company has the right under the Plan to terminate the Plan subject to the
provisions of ERISA. In the event of Plan termination, the Company shall
direct the Trustee with respect to the distribution of accounts to or for
the exclusive benefit of participants or their beneficiaries.
2. Summary of Significant Accounting Policies
Basis of Accounting: The accompanying financial statements have been
prepared on the accrual basis of accounting.
Investment Valuation: The investments in the accompanying financial
statements are stated at quoted market prices, which approximate fair value
as of December 31, 2001 and 2000 except for participant loans outstanding
that are valued at cost, which approximates fair value.
Investments: The Plan invests in various investments. Investment
securities are generally exposed to various risks, such as interest rate,
credit and overall market volatility risks. Due to the level of risk
associated with certain investment securities, it is reasonably possible
that changes in the values of investment securities will occur in the near
term and that such changes could materially affect amounts reported in the
Statement of Net Assets Available for Plan Benefits.
Income Recognition: Interest income is recorded as earned on the accrual
basis.
The difference in fair value from one period to the next is recognized and
included in net realized and unrealized appreciation (depreciation) in fair
value of investments in the accompanying Statement of Changes in Net Assets
Available for Plan Benefits. The net realized and unrealized appreciation
(depreciation) in fair value of investments also includes realized gains and
losses on investments sold during the year.
Purchases and sales of investments are recorded on a trade date basis.
The plan is charged a wrap fee for each investment transaction recorded in
the Trust. Accordingly, these costs result in an overall reduction in the
investment returns recorded by each underlying asset.
Distribution to Participants: Benefit payments to participants are
recorded upon distribution.
Administrative Expenses: During 2001 and 2000, all administrative
expenses of the Plan were paid by the Company.
Reclassifications: Certain prior-year amounts have been reclassified to
conform with the current-year presentation.
PAGE 5
Estimates: Management makes estimates and assumptions when preparing the
financial statements in conformity with accounting principles generally
accepted in the United States of America. These estimates and assumptions
affect the amounts reported in the accompanying financial statements and
notes thereto. Actual results could differ from those estimates.
3. Investments
The investment options available to participants were revised during 2000
to provide consistency with the investments held by the CNF Transportation
Inc. TASP, another defined contribution plan administered by the Company.
This revision was due to the amendment described in Note 1, which resulted
in six additional investment options for participants of the Plan in 2000.
During 2001, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
(depreciated) in value as follows:
Shares in registered investment companies $ (6,136,009)
Common trust funds (530,573)
CNF Common stock (820,955)
CNF Preferred stock 33,925
$ (7,453,612)
4. Income Tax Status
The Internal Revenue Service has determined and informed the Company by a
letter dated October 3, 2001, that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code. The
Plan has been amended since receiving the determination letter. However,
the plan administrator believes that the Plan is designed and is currently
being operated in compliance with the applicable requirements of the Code.
Therefore, the plan administrator believes that the Plan was qualified and
the related trust was tax exempt as of the financial statement date.
5. Related Party Transactions
Certain Plan investments are shares in funds managed by T. Rowe Price
Trust Company. T. Rowe Price Trust Company (the Trustee) is the trustee as
defined by the Plan and therefore, these investments and investment
transactions qualify as party-in-interest.
PAGE 6
SCHEDULE I
CNF INC. EWW SAVINGS PLAN
EIN 94-1444798
PLAN NO. 112
SCHEDULE H, PART IV, LINE 4i - SCHEDULE OF ASSETS HELD AT END OF YEAR
AS OF DECEMBER 31, 2001
(Note 5)
Identity
of Issue Description of Investment Including
Borrower, Maturity Date, Rate of Interest, Current
Lessor Collateral, Par or Maturity Value Cost Value
or Similar
Party
Shares in registered investment
companies:
*T. Rowe Price Growth Stock Fund (242,540.488
shares) $ 6,302,304 $ 5,864,629
*T. Rowe Price Equity Income Fund (137,544.193
shares) 3,355,913 3,252,920
*T. Rowe Price Science and Technology Fund
(289,851.910 shares) 8,635,498 6,063,702
*T. Rowe Price International Stock Fund
(130,178.700 shares) 1,748,296 1,430,664
*T. Rowe Price Small-Cap Stock Fund (20,294.271
shares) 468,270 514,257
*T. Rowe Price PIMCO Total Return Fund
(69,584.698 shares) 741,088 727,856
Common Trust Funds:
Morgan Stanley Morgan Stanley Institutional
Fund Trust Mid Cap Growth 19,176 17,487
Portfolio (1,017.275 shares)
*T. Rowe Price Equity Index Trust (42,092.001 1,378,337 1,297,696
shares)
*T. Rowe Price Bond Index Trust (7,656.890 135,844 141,499
shares)
*T. Rowe Price U.S. Treasury Money Market Fund
(4,311,261.940 shares) 4,311,262 4,311,262
*T. Rowe Price Retirement Strategy Trust -
Balanced (56,027.265 1,205,645 1,176,012
shares)
*Plan Participant Loans with interest from
participants 8.75% to 10.50% and maturity dates
from 2002 to 2006 - 1,463,142
Common Stock:
*CNF Inc. Unrestricted CNF Common Stock
(35,125.111 shares) 1,007,545 1,178,447
*CNF Inc. Restricted CNF Common Stock Fund
(36,300.045 shares) 980,857 1,217,867
Preferred Stock
*CNF Inc. CNF Preferred Stock - Unallocated
(9,330.701 shares) 1,418,853 2,062,085
Total investments $30,719,525
*Represents a party-in-interest transaction as of December 31, 2001.
NOTE: Cost is calculated using the historical rolling-average-cost method.
See accompanying independent auditors' report.