Consolidated Freightways Settles Tax-sharing Liability With CNF.

Business Editors

MENLO PARK, Calif.--(BUSINESS WIRE)--May 16, 2000

Consolidated Freightways Corporation (CFC) (Nasdaq:CFWY) announced today that a tax-sharing liability with the company's former parent CNF Transportation Inc. has been settled. A substantial part of this was satisfied by a $16.7 million cash payment and notes converting the company's deferred tax obligation in the amount of $40.2 million, payable to CNF over a four-year period. Other less significant tax items are also fully reserved and will be paid as resolved within the next 24-30 months.

The issues arise from tax positions first taken by CNF in the mid-1980s. At the time of its spin-off the company entered into a tax-sharing agreement with CNF which obligated CFC to reimburse the former parent for a portion of any additional taxes and interest which relate to the company's business prior to the spin-off.

Consolidated Freightways is a transportation company primarily providing less-than-truckload and logistics services throughout the United States, Canada and Mexico using its system of 350 terminals and over 22,000 employees. The company also provides international freight services between the U.S. and more than 80 countries.