CNF Inc. Announces Write-Off Due to Homelife Business Failure.

Business Editors

PALO ALTO, Calif.--(BUSINESS WIRE)--July 13, 2001

CNF Inc. (NYSE:CNF) announced today that it would take a write-off over two quarters of approximately $23 million, net of tax, (47 cents per diluted share) primarily from unrealized accounts receivable due to the business failure of one of Menlo Logistics' customers. The majority of the charge will be taken in the second quarter.

The customer, Homelife, a retail furniture business that was formerly a unit of Sears, has announced that it has closed its stores nationwide due to adverse financial conditions. Menlo Logistics had a contract for supply chain management services with Homelife.

Menlo Logistics also announced that it would layoff, effective immediately, approximately 400 fulltime employees who worked on the Homelife account in various locations around the country.

John H. Williford, president and chief executive officer of Menlo Logistics, said he was very disappointed that Homelife had not been able to make a success of its business.

"Our project with Homelife was an end-to-end supply chain management system that was efficient and well run. Hundreds of Menlo employees devoted their efforts to this for more than a year. We are extremely disappointed that Homelife became another victim of this economic downturn."

Williford emphasized that the write-off would not affect Menlo's other clients. He said that aside from this one-time charge Menlo expects to post solid profits for the year on existing and new business and continues to win a significant number of the new contracts it bids on.

CNF plans to announce its full financial results for the second quarter on July 18.

CNF Inc. is a $6 billion management company of global supply chain services with businesses in regional trucking, air freight, ocean freight, customs brokerage, global logistics management and trailer manufacturing.

Forward-Looking Statements

Certain statements in this news release constitute "forward-looking statements" and are subject to a number of risks and uncertainties, and should not be relied upon as predictions of future events. All statements other than statements of historical fact are forward-looking statements including any projections and objectives of management for future operations, any statements concerning proposed new products or services, any statements regarding future economic conditions or performance, statements of belief and any statements or assumptions underlying the foregoing. Specific factors that could cause actual earnings, results of operations and other matters to differ materially from those discussed in such forward-looking statements include: changes in general business and economic conditions, the creditworthiness of the Company's customers and their ability to pay for services rendered, increasing competition and pricing pressure, changes in fuel prices, uncertainties regarding Emery Worldwide Airlines' (EWA) claims under its former Priority Mail contract with the United States Postal Service (USPS), uncertainties regarding EWA's existing Express Mail contract with the USPS, which will terminate August 26, 2001, labor matters, enforcement of and changes in governmental regulations, environmental and tax matters (including claims made by the Internal Revenue Service with respect to aircraft maintenance tax matters), the Department of Transportation investigation relating to Emery Worldwide's handling of hazardous materials and aircraft maintenance, the February 2000 crash of an EWA aircraft and related litigation, and matters relating to the company's 1996 spin-off of Consolidated Freightways Corporation. The factors included here and in Item 7 of our 2000 Annual Report on Form 10-K as well as other filings with the Securities and Exchange Commission could cause actual results and other matters to differ materially from those in such forward-looking statements. As a result, no assurance can be given as to future financial position or results of operations.