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, 2005
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
MENLO WORLDWIDE FORWARDING, INC. SAVINGS PLAN
Con-way Inc.
Incorporated in the State of Delaware
I.R.S. Employer Identification No. 94-1444798
2855 Campus Drive, Suite 300, San Mateo, California 94403
Telephone Number (650) 378-5200
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.
Menlo Worldwide Forwarding, Inc. Savings Plan
June 22, 2006 /s/ Mark C. Thickpenny
----------------------------
Mark C. Thickpenny
Chairman, Con-way Inc. Benefits
Administrative Committee
MENLO WORLDWIDE FORWARDING, INC. SAVINGS PLAN
Financial Statements and Supplemental Schedule
December 31, 2005 and 2004
(With Report of Independent Registered Public Accounting Firm)
MENLO WORLDWIDE FORWARDING, INC. SAVINGS PLAN
December 31, 2005 and 2004
Index
Page
Report of Independent Registered Public Accounting Firm 1
Financial Statements:
Statement of Net Assets Available for Benefits as of
December 31, 2005 3
Statement of Net Assets Available for Benefits as of
December 31, 2004 4
Statement of Changes in Net Assets Available for
Benefits for the year ended December 31, 2005 5
Notes to Financial Statements 6
Supplemental Schedule
Schedule I: Schedule H, Line 4i - Schedule of Assets
(Held at End of Year) as of December 31, 2005 12
Report of Independent Registered Public Accounting Firm
The Finance Committee
Con-way Inc. Board of Directors:
We have audited the accompanying statements of net assets available for
benefits of the Menlo Worldwide Forwarding, Inc. Savings Plan as of
December 31, 2005 and 2004, and the related statement of changes in net
assets available for benefits for the year ended December 31, 2005. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (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 net assets available for benefits of the Plan as
of December 31, 2005 and 2004, and the changes in its net assets available
for benefits for the year ended December 31, 2005, in conformity with U.S.
generally accepted accounting principles.
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 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
management. 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 audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The fund information in the statements
of net assets available for benefits and statement of changes in net assets
available for benefits is presented for purposes of additional analysis
rather than to present the net assets available for benefits and changes in
net assets available for 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 financial statements taken as a whole.
/s/ KPMG LLP
---------------
KPMG LLP
Portland, Oregon
June 12, 2006
MENLO WORLDWIDE FORWARDING, INC. SAVINGS PLAN
Statement of Net Assets Available for Benefits
December 31, 2005
Participant-Directed
Total
--------------------
Assets:
Investments, at fair value:
Shares in registered investment
companies $ 7,960,308
Common trust funds 2,180,898
Con-way Common Stock 1,003,527
Con-way Preferred Stock 1,090,888
Investments, at cost:
Participant loans 86,049
--------------------
Total investments 12,321,670
--------------------
Net assets available for benefits $ 12,321,670
====================
See accompanying notes to financial statements.
MENLO WORLDWIDE FORWARDING, INC. SAVINGS PLAN
Statement of Net Assets Available for Benefits
December 31, 2004
Nonparticipant-Directed
------------------------
Restricted
Con-way Con-way
Participant- Common Stock Preferred
Directed Fund Stock Fund Total
------------ ------------ ----------- ------------
Assets:
Investments, at fair value:
Shares in registered
investment companies $ 11,301,996 $ - $ - $ 11,301,996
Common trust funds 3,437,513 - - 3,437,513
Con-way Common Stock 712,477 557,236 - 1,269,713
Con-way Preferred Stock - - 1,351,369 1,351,369
Investments, at cost:
Participant loans 450,674 - - 450,674
------------ ------------ ----------- ------------
Total investments 15,902,660 557,236 1,351,369 17,811,265
------------ ------------ ----------- ------------
Net assets available
for benefits $ 15,902,660 $ 557,236 $ 1,351,369 $ 17,811,265
============ ============ =========== ============
See accompanying notes to financial statements.
MENLO WORLDWIDE FORWARDING, INC. SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2005
Nonparticipant-Directed
------------------------
Restricted
Con-way Con-way
Participant- Common Stock Preferred
Directed Fund Stock Fund Total
------------ ------------ ----------- ------------
Additions (deductions):
Allocation of preferred
shares to participants
at cost (note 1) $ - $ - $ 64,008 $ 64,008
Dividend and interest
income 41,363 1,859 - 43,222
Net appreciation in
fair value of
investments (note 3) 454,192 33,725 45,589 533,506
Transfers to other
plans (note 1) (15,818) - - (15,818)
Distributions to
participants (note 1) (5,729,371) (385,142) - (6,114,513)
------------ ------------ ----------- ------------
Total additions
(deductions) (5,249,634) (349,558) 109,597 (5,489,595)
Interfund transfers,
net (note 1) 1,668,644 (207,678) (1,460,966) -
------------ ------------ ----------- ------------
Net decrease (3,580,990) (557,236) (1,351,369) (5,489,595)
Net assets available
for benefits,
beginning of year $15,902,660 $ 557,236 $1,351,369 $17,811,265
------------ ------------ ----------- ------------
Net assets available
for benefits,
end of year $12,321,670 $ - $ - $12,321,670
============ ============ =========== ============
See accompanying notes to financial statements.
MENLO WORLDWIDE FORWARDING, INC. SAVINGS PLAN
Notes to Financial Statements
(1) Description of Plan
The following description of the Menlo Worldwide Forwarding, Inc. Savings
Plan (the Plan), formerly the CNF Inc. EWW Savings Plan, is provided for
general information purposes only. Participants should refer to the
Employee Benefits Handbook or the Plan document for more complete
information.
The term "Con-way" or "Company" refers to Con-way Inc., formerly CNF
Inc., and subsidiaries. On April 18, 2006, shareholders approved
management's proposal to change the Company's name to Con-way Inc. from
CNF Inc. The name of the Plan remains Menlo Worldwide Forwarding, Inc.
Savings Plan.
(a) 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 Con-way Inc. Benefits Administrative Committee
(the Committee), which is appointed by the Chief Executive Officer of
Con-way. Menlo Worldwide Forwarding, Inc. is a subsidiary of Menlo
Worldwide, LLC that was sold in December 2004, as discussed below.
Menlo Worldwide, LLC is a wholly owned subsidiary of Con-way. The
Plan's trustee, T. Rowe Price Trust Company (the Trustee), is
responsible for the management and control of the Plan's assets, which
are held in individual participant investment accounts, collectively
known as "the Trust."
Effective September 19, 2000, the pilots of Emery Worldwide Airlines
(EWA) ceased participation in the CNF Thrift and Stock Plan (TASP) and
their elective deferrals began being contributed to the Plan. The
pilots' vested balance in the TASP was transferred to the Plan
effective December 20, 2000.
(b) Amendments
In December 2004, Con-way completed the sale of Menlo Worldwide
Forwarding, Inc. and its subsidiaries and Menlo Worldwide Expedite!,
Inc. (collectively referred to as MWF) to United Parcel Service, Inc.
(UPS). The active employees of MWF ceased participation in the Plan as
of the sale date and were permitted to rollover their Plan account
balances to a UPS-sponsored defined contribution plan. In 2005,
approximately $3,590,000, including rollovers, was distributed from
the TASP to former employees as a result of the sale of MWF.
Effective September 6, 2005, the Plan was amended to remove certain
restrictions prohibiting the early transfer of assets from the
Preferred Stock Fund and the Restricted Con-way Common Stock Fund.
Prior to the amendment, balances in the nonparticipant-directed funds
could only be transferred to the participant-directed funds upon a
participant reaching age 55 and having completed at least 10 years of
participation in the Plan. The change effectively allows participants
to transfer Con-way's matching contributions to investments other than
Con-way equity. In September 2005, balances in the Restricted Con-way
Common Stock Fund were transferred to the Unrestricted Con-way Common
Stock Fund, and balances in the nonparticipant-directed Con-way
Preferred Stock Fund were changed to the participant-directed Con-way
Preferred Stock Fund.
Accordingly, in the Statements of Net Assets Available for Benefits,
previously restricted participant account balances related to matching
contributions of Con-way's common and preferred stock are included in
participant-directed investments as of December 31, 2005, but are
reported separately as nonparticipant-directed investments as of
December 31, 2004.
(c) Eligibility
Employees were eligible to participate in the Plan if they were
covered by a collective bargaining unit that specifically provided for
participation in the Plan. Employees were eligible to participate in
the Plan upon hire if they were regular full-time employees.
Supplemental or part-time employees became eligible upon completion of
one year of service during which the employee worked 750 hours.
(d) Contributions
Prior to the sale of MWF in December 2004, participants could
contribute up to 50% of their compensation into the Plan, and could
direct contributions to any one or more of the investment funds
established under the Plan. Con-way makes no matching contributions
for participants of the Plan.
Participants who formerly participated in the TASP, as discussed under
"Amendments" above, and participants who transferred from
noncontractual to contractual positions within Con-way, are awarded
Con-way preferred stock as a substitute for cash dividends used for
debt service on TASP debt. For 2005, these participants received Con-
way preferred stock with a historical cost of $64,008, as shown on the
Statement of Changes in Net Assets Available for Benefits.
(e) Participant Accounts
A separate account is maintained for each participant of the Plan.
Allocations of net Plan earnings are based upon participant account
balances. The benefits to which participants are entitled are the
benefits that can be provided from participants' vested accounts.
(f) Vesting
Participants are fully vested at all times in all contributions made
to the Plan plus net earnings thereon.
(g) Participant Loans
The Plan had a loan provision allowing participants access to funds on
a tax-free basis. Each participant could 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 was made
over the participant's current outstanding loan balance on the date of
the loan. Loans do not exceed 50% of a participant's vested account
balance (subject to administrative adjustment to assure compliance
with the 50% limit). The loans are secured by the vested balance in
the participant's account. Loans outstanding at December 31, 2005 bear
interest at rates ranging from 8.75% to 10.50%.
In connection with the sale of MWF, as described above, a participant
with an outstanding loan balance could either rollover the balance to
a UPS-sponsored plan (if eligible for a UPS plan) or pay off the loan
balance. If the loan was not paid off within 75 days, the loan was
defaulted and offset against the participant's vested balance, in
accordance with plan rules.
(h) Distribution to Participants
Employees became eligible for distribution in connection with the sale
of MWF, as described above. Distributions are payable in the form of
lump-sum payments or in a series of substantially equal annual
installments.
(i) Plan Termination
Although it has not expressed any intent to do so, Con-way has the
right under the Plan to terminate the Plan subject to the provisions
of ERISA. In the event of Plan termination, Con-way 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
(a) Basis of Accounting
The accompanying financial statements have been prepared using the
accrual method of accounting.
(b) Financial Instruments
The investments in the accompanying financial statements are stated at
quoted market prices, which approximate fair value as of December 31,
2005 and 2004, except for (1) participant loans outstanding that are
valued at cost, which approximates fair value and, (2) Con-way
preferred stock, which does not have a quoted market value, and is
stated at fair value as determined by an annual independent appraisal.
(c) Investments
The Plan offers various investments in securities that 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 value of investment securities will occur in the near term and
that such changes could materially affect amounts reported in the
Statements of Net Assets Available for Benefits.
(d) Income Recognition
The difference in market value from one period to the next is included
in net appreciation in fair value of investments in the accompanying
Statement of Changes in Net Assets Available for Benefits. The net
appreciation in fair value of investments also includes realized gains
and losses.
Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date. Purchases and sales of securities
are recorded on the trade-date basis.
(e) Operating Expenses
During 2005, all administrative expenses of the Plan were paid by Con-
way.
(f) Payment of Benefits
Benefits paid to participants are recorded upon distribution.
(g) Estimates
Con-way makes estimates and assumptions when preparing the financial
statements in conformity with U.S. generally accepted accounting
principles. These estimates and assumptions affect the amounts
reported in the accompanying financial statements and notes. Actual
results could differ from those estimates.
(3) Investments
The following investments represent 5% or more of the Plan's net assets:
December 31
--------------------------
2005 2004
------------ ------------
Participant-Directed investments:
Shares in registered investment companies:
T. Rowe Price Growth Stock Fund, 94,627
and 142,812 shares, respectively $ 2,687,396 $ 3,808,807
T. Rowe Price Equity Income Fund, 56,791
and 87,271 shares, respectively 1,472,020 2,320,543
T. Rowe Price Science and Technology Fund,
97,343 and 151,999 shares, respectively 1,905,003 2,903,174
T. Rowe Price International Stock Fund,
44,709 and 56,175 shares, respectively 661,249 726,337
Common trust funds:
T. Rowe Price U.S. Treasury Money Market
Trust,1,048,350 and 2,009,137 shares,
respectively 1,048,350 2,009,137
Con-way Equity:
Unrestricted Con-way Common Stock, 17,955
and 14,221 shares, respectively 1,003,527 712,477
Con-way Preferred Stock, 4,146 and zero
shares,respectively 1,090,888 -
Nonparticipant-Directed investments:
Con-way Preferred Stock, zero and 5,299
shares,respectively - 1,351,369
During 2005, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value as follows:
Shares in registered investment companies $ 364,957
Common trust funds 53,577
Con-way Common Stock 78,144
Con-way Preferred Stock 36,828
------------
$ 533,506
============
(4) Income Tax Status
The Internal Revenue Service has determined and informed Con-way 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 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, the Trustee as defined by the Plan. Therefore, these
investments and investment transactions qualify as party-in-interest.
Schedule I
MENLO WORLDWIDE FORWARDING, INC. SAVINGS PLAN
EIN 94-1444798
Plan No. 112
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2005
Identity
of issue
borrower, Description of investment
lessor, including maturity date,
or similar rate of interest,collateral, Current
party par, or maturity value Cost value
---------- ----------------------------- -------------- --------------
Shares in registered
investment companies:
*T.Rowe Price Growth Stock Fund
(94,626.613 shares) $ 2,419,203 $ 2,687,396
*T.Rowe Price Equity Income Fund
(56,790.900 shares) 1,383,372 1,472,020
*T.Rowe Price Science and Technology
Fund (97,343.033 shares) 2,718,267 1,905,003
*T.Rowe Price International Stock Fund
(44,709.213 shares) 582,695 661,249
*T.Rowe Price Small-Cap Stock Fund
(10,864.113 shares) 290,957 356,452
*T.Rowe Price Retirement 2005 Fund
(3,813.154 shares) 37,682 41,449
*T.Rowe Price Retirement 2010 Fund
(174.579 shares) 2,457 2,544
*T.Rowe Price Retirement 2015 Fund
(6,733.170 shares) 66,648 75,546
*T.Rowe Price Retirement 2020 Fund
(1,988.460 shares) 28,793 31,080
*T.Rowe Price Retirement 2025 Fund
(17,056.554 shares) 172,707 195,639
*T.Rowe Price Retirement 2030 Fund
(1,091.844 shares) 17,151 18,004
*T.Rowe Price Retirement Income Fund
(4,282.349 shares) 52,013 53,358
Allianz Global
Investors PIMCO Total Return Fund
(43,342.286 shares) 462,216 455,094
J.P. Morgan
Investment
Management, Undiscovered Managers Small-Cap
Inc. Growth Fund (534.565 shares) 5,220 5,474
Common trust funds:
*T.Rowe Price Equity Index Trust
(13,278.729 shares) 422,399 475,511
*T.Rowe Price Bond Index Trust
(6,074.375 shares) 127,535 136,552
*T.Rowe Price U.S. Treasury Money Market
Trust (1,048,349.570 shares) 1,048,350 1,048,350
*T.Rowe Price Retirement Strategy Trust -
Balanced (20,003.251 shares) 433,830 520,485
Common stock:
*Con-way Inc. Unrestricted Con-way Common
Stock (17,955.398 shares) 520,490 1,003,527
Preferred stock:
*Con-way Inc. Con-way Preferred Stock
(4,145.813 shares) 630,450 1,090,888
Participant loans:
*Plan
participants Participant loans with interest
from 8.75% to 10.50% and maturity
dates from 2006 to 2009 - 86,049
--------------
Total investments $ 12,321,670
==============
*Represents a party-in-interest transaction as of December 31, 2005.
Note: Cost is calculated using the historical rolling-average-cost method.
See accompanying report of independent registered
public accounting firm.