UNITED STATES
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
October 5, 2004
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Date of Report (Date of earliest event reported)
CNF Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-5046 94-1444798
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(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
3240 Hillview Avenue, Palo Alto, California 94304
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(650) 494-2900
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant
under any of the following provisions (see General Instruction A.2
below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On October 5, 2004, CNF Inc. ("CNF") and Menlo Worldwide, LLC, a
wholly owned subsidiary of CNF, entered into a Stock Purchase
Agreement (the "Sale Agreement") with United Parcel Service of
America, Inc. (the "Purchaser") and United Parcel Service, Inc.
pursuant to which the Purchaser has agreed to a transaction (the
"Transaction") to acquire all of the issued and outstanding
capital stock of Menlo Worldwide Forwarding, Inc. ("MWF"), a
wholly owned subsidiary of Menlo Worldwide, LLC, and certain assets and
liabilities of CNF or its subsidiaries related to the business as
presently conducted by MWF (the "Forwarding Business").
Pursuant to the Sale Agreement, CNF will receive cash
consideration of $150 million that is subject to certain
adjustments, including post-closing purchase price adjustments.
In addition, the Purchaser will assume indebtedness associated
with the Forwarding Business, including approximately $110
million of debt held by MWF and other debt obligations related to
the Forwarding Business. Consummation of the Transaction is
subject to customary conditions, including receipt of government
regulatory approvals and consents.
A copy of the Sale Agreement is filed with this report as Exhibit
99.1. A copy of the press release announcing the execution of the
Sale Agreement is filed with this report as Exhibit 99.2. The
Sale Agreement and the press release are incorporated herein by
reference into this report, and the foregoing description of the
Sale Agreement and the transactions contemplated therein is
qualified in its entirety by reference to such exhibits.
Item 2.05 Costs Associated with Exit or Disposal Activities
Reference is made to Item 1.01 - Entry into a Material Definitive
Agreement and Item 2.06 - Material Impairments, which are
incorporated herein by reference. CNF expects to recognize an
impairment charge of approximately $260 million as described in
Item 2.06, which includes $9 million of transction costs related
to the Transaction. Under the Transaction described in Item
1.01, CNF will sell the Forwarding Business to the Purchaser.
Pursuant to the terms of the Sale Agreement, CNF will indemnify
the Purchaser against certain losses that the Purchaser may incur
after the closing of the Transaction with certain limitations. Any
losses related to these indemnification obligations or any other costs,
including any future cash expenditures, related to the Transaction cannot
be estimated at this time and will be disclosed in the future and
recognized in future periods when and if incurred.
Item 2.06 Material Impairments
Reference is made to Item 1.01 - Entry into a Material Definitive
Agreement and Item 2.05 - Costs Associated with Exit or Disposal
Activities, which are incorporated herein by reference. As of
September 30, 2004, CNF committed to a plan to sell the
Forwarding Business. In connection with this plan, CNF
designated the Forwarding Business as a held-for-sale asset and
plans to write down the net assets of the Forwarding Business to
fair value less the costs of sale. As a result, CNF plans to
recognize a $260 million estimated impairment charge in the third
quarter of 2004 that is based on on the fair value of the Forwarding
Business as determined by the Transaction described in Item 1.01.
There can be no assurance that actual costs of sale will not
differ from the estimates used in the impairment charge, and that
difference would be recognized as additional expense or income in
the period when and if that determination can be made.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
Exhibit 99.1 Stock Purchase Agreement by and among United
Parcel Service of America, Inc., and United Parcel
Service, Inc, CNF Inc. and Menlo Worldwide, LLC as of
October 5, 2004.
Exhibit 99.2 CNF Press Release dated October 5, 2004 regarding
sale of Menlo Worldwide Forwarding, Inc.
This Report on Form 8-K contains forward-looking statements that
reflect management's current expectations with respect to charges
associated with the sale of the Forwarding Business, and other
contingencies associated with Transaction. Achievement of these
expectations is subject to risks and uncertainties that could
cause actual results to differ materially from the expressed
expectations. Important factors that may cause such differences
include, but are not limited to, post-closing purchase price
adjustments, if any, under the Sale Agreement, indemnification
obligations that may arise, if any, under the Sale Agreement,
workforce reduction associated with exiting the Forwarding
Business, if any, and the scope of any severance payments, and
the final valuation of certain assets and liabilities associated
with the Transaction.
SIGNATURES
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.
October 6, 2004.
CNF Inc.
(Registrant)
by: /s/ Chutta Ratnathicam
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Chutta Ratnathicam
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
Exhibit 99.1 Stock Purchase Agreement by and among United
Parcel Service of America, Inc., and United Parcel
Service, Inc, CNF Inc. and Menlo Worldwide, LLC as of
October 5, 2004.
Exhibit 99.2 CNF Press Release dated October 5, 2004 regarding
sale of Menlo Worldwide Forwarding, Inc.