United States
Securities and Exchange Commission
Washington, DC 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES 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 _____ to _____
Commission file number 0-600
A. Full title of the plan and address of the plan, if different from that of
the issuer named below:
ROADWAY CORPORATION 401(k) STOCK SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of the principal executive office:
Roadway Corporation
1077 Gorge Boulevard
Akron, OH 44310
REQUIRED INFORMATION
--------------------
Financial Statements
--------------------
The Roadway Corporation 401(k) Stock Savings Plan ("Plan") is subject
to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). In
accordance with Item 4 and in lieu of the requirements of Items 1-3, the
following Plan financial statements and supplemental schedule prepared in
accordance with the financial reporting requirements of ERISA are included
herein:
Audited Financial Statements and Supplemental Schedules of the
Plan for the year ended December 31, 2001.
Exhibits
--------
23.1 Consent of independent auditors
AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
Roadway Express, Inc. 401(k) Stock Savings Plan
Years ended December 31, 2001 and 2000
with Report of Independent Auditors
Roadway Express, Inc. 401(k) Stock Savings Plan
Audited Financial Statements and Supplemental Schedules
Years ended December 31, 2001 and 2000
CONTENTS
Report of Independent Auditors.............................................. 1
AUDITED FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits............................. 2
Statements of Changes in Net Assets Available for Benefits.................. 3
Notes to Financial Statements............................................... 4
SUPPLEMENTAL SCHEDULES
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year).............. 12
Schedule H, Line 4(j)--Schedule of Reportable Transactions................... 13
Report of Independent Auditors
To the Administrative Committee
Roadway Express, Inc. 401(k) Stock Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the Roadway Express, Inc. 401(k) Stock Savings Plan as of December 31, 2001
and 2000, and the related statements of changes in net assets available for
benefits for the years then ended. 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 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 net assets available for benefits of the Plan at
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
(held at end of year) as of December 31, 2001, and reportable transactions for
the year then ended, are presented for purposes of additional analysis and are
not a required part of the financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Income Security Act of 1974. These
supplemental schedules are the responsibility of the Plan's management. The
supplemental schedules have been subjected to the auditing procedures applied in
our audits of the financial statements and, in our opinion, are fairly stated in
all material respects in relation to the financial statements taken as a whole.
May 31, 2002
1
Roadway Express, Inc. 401(k) Stock Savings Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2001 2000
----------------------------------------
Assets
Cash and temporary cash investments $ 4,001,910 $ 3,228,301
Investments, at fair value 331,626,132 242,070,889
Participant notes receivable 7,215,065 6,409,894
----------------------------------------
Total investments 342,843,107 251,709,084
Receivables:
Employer's contributions 602,084 568,684
Participants' contributions 240,030 260,817
Accrued interest and other 387,269 156,531
----------------------------------------
Total receivables 1,229,383 986,032
----------------------------------------
Net assets available for benefits $ 344,072,490 $ 252,695,116
========================================
See accompanying notes.
2
Roadway Express, Inc. 401(k) Stock Savings Plan
Statements of Changes in Net Assets Available for Benefits
YEARS ENDED DECEMBER 31
2001 2000
------------------------------------------
ADDITIONS
Investment income:
Dividends $ 1,041,441 $ 1,002,968
Interest 2,993,049 5,447,327
------------------------------------------
4,034,490 6,450,295
Contributions:
Participants 19,353,422 18,721,214
Employer 10,787,482 10,338,435
------------------------------------------
30,140,904 29,059,649
Net appreciation (depreciation) in
fair value of investments 88,093,564 (15,919,899)
------------------------------------------
Total additions 122,268,958 19,590,045
DEDUCTIONS
Distributions in-kind 16,380,245 9,267,683
Benefits paid directly to participants 14,511,339 12,675,312
------------------------------------------
Total deductions 30,891,584 21,942,995
------------------------------------------
Net increase (decrease) 91,377,374 (2,352,950)
Net assets available for benefits:
Beginning of year 252,695,116 255,048,066
------------------------------------------
End of year $ 344,072,490 $ 252,695,116
==========================================
See accompanying notes.
3
Roadway Express, Inc. 401(k) Stock Savings Plan
Notes to Financial Statements
Years Ended December 31, 2001 and 2000
1. DESCRIPTION OF PLAN
The following description of the Roadway Express, Inc. (the Company) 401(k)
Stock Savings Plan (Plan) provides only general information. Participants should
refer to the Plan Document for a more complete description of the Plan's
provisions.
GENERAL
The Plan is a defined contribution plan covering eligible employees of Roadway
Express, Inc. not covered by a collective bargaining agreement unless such
agreement expressly provides for participation in the Plan. The Plan was
established to encourage eligible employees to invest in Company stock.
Participation is immediately available to eligible employees who have attained
the age of 21 years prior to any enrollment date. The enrollment date is the
first day of the first pay period of the month following the month the
participant applies for enrollment. Eligible employees hired on or after January
1, 2000 are automatically enrolled 90 days after their eligibility date, unless
they actively enroll earlier or elect not to participate. Prior to January 1,
1999, employees only became eligible after completing one year of service. The
Plan is subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
CONTRIBUTIONS
Participants may make before and after tax contributions to the Plan aggregating
up to 14 1/2% of their annual compensation subject to the Internal Revenue
Service limitations. The maximum percentage of after tax contributions cannot
exceed 4 1/2% of the participant's compensation. Once the participant has
completed one year of service, the Company will match 100% of the participant's
before and after tax contributions up to 4 1/2% of annual compensation. Prior to
April 1, 1998, the Company match was made only on contributions invested in the
Company's stock fund for participants who had not reached 55 years of age. Once
the participant reached the age of 55, the Company matched up to 4 1/2% of the
participant's contributions regardless of the way contributions were invested.
Additional amounts may be contributed at the option of the Company's Board of
Directors. The Plan is funded by combined contributions from the participants
and the Company to a trust fund maintained by the Plan's trustee, KeyBank, N.A.
4
Roadway Express, Inc. 401(k) Stock Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct before and after tax
contributions in 1% increments in any of fourteen investment funds. Prior to
June 1, 2000, seven investment fund options were available. Effective, July 1,
2001, the Fidelity Advisors Growth Opportunities Fund was replaced with the Van
Kampen Growth and Income Fund. All participant account balances invested in the
Fidelity Advisors Growth Opportunities Fund were automatically liquidated and
transferred to the Van Kampen Growth and Income Fund on July 2, 2001. Company
contributions to the Plan must be invested in the Company Stock Fund.
Participants may change their investment options daily.
Participants with account balances invested in FDX, Inc. common stock are
obligated to transfer their holdings no later than July 17, 2002 to any of the
other investment options offered by the Plan.
Effective May 30, 2001, Roadway Express, Inc. became a wholly owned direct
subsidiary of Roadway Corporation and holders of common stock of Roadway
Express, Inc. became holders of an identical number of shares of common stock of
Roadway Corporation. The assets and liabilities of Roadway Corporation and its
subsidiaries were the same on a consolidated basis immediately after the merger
as the assets and the liabilities of Roadway Express, Inc. immediately before
the merger. The transaction did not have any effect on the net assets or
operations of the Plan.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution, the
Company's matching contribution and an allocation of Plan earnings. Allocations
are based on participant earnings or account balances, as defined. The benefit
to which a participant is entitled is the benefit that can be provided from the
participant's account.
VESTING
Participants are 100% vested in their contributions and the Company's
contributions plus actual earnings thereon.
5
Roadway Express, Inc. 401(k) Stock Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
PARTICIPANT NOTES RECEIVABLE
Effective July 1, 1998, participants who are active employees may borrow from
their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of
$50,000 or 50% of their account balance. Loan terms range from 1 to 5 years. The
loans are secured by the balance in the participant's account and bear interest
at a rate equal to the prime rate plus 1%. Principal and interest are paid
ratably through payroll deductions.
PAYMENT OF BENEFITS
Upon termination of service, a participant may elect to receive a lump-sum
amount equal to the vested value of his or her account, or upon death, total and
permanent disability or retirement, elect to receive annual installments over a
ten year period.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements have been prepared on the accrual basis of accounting.
INVESTMENT VALUATION
The Plan's investments are stated at fair value. Common stock is valued at the
closing quoted market price on the last business day of the plan year. The
shares of registered investment companies are valued at the net asset value as
determined by the fund on the last business day of the plan year. The
participant notes receivable are valued at their outstanding balances, which
approximate their fair value. Security transactions are recorded on a trade date
basis. Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date.
ADMINISTRATIVE FEES
All administrative fees are paid by the Company with the exception of custodial
fees for the three Vanguard funds. These fees are netted against earnings for
these funds.
6
Roadway Express, Inc. 401(k) Stock Savings Plan
Notes to Financial Statements (continued)
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
3. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the terms of the Plan to discontinue its contributions at any time and
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, the Plan shall pay all expenses chargeable against the Plan and
shall then distribute all assets to the participants in proportion to the
amounts credited to their accounts at the date of such termination.
4. INVESTMENTS
The Plan's investments (including investments purchased, sold, as well as held
during the year) appreciated (depreciated) in fair value as determined by quoted
market prices as follows:
NET REALIZED AND
UNREALIZED APPRECIATION (DEPRECIATION) IN
FAIR VALUE OF INVESTMENTS
YEARS ENDED DECEMBER 31
2001 2000
---------------------------------------------
Common stock $ 96,498,356 $ (3,705,827)
Shares of registered investment companies (8,404,792) (12,214,072)
---------------------------------------------
$ 88,093,564 $ (15,919,899)
=============================================
7
Roadway Express, Inc. 401(k) Stock Savings Plan
Notes to Financial Statements (continued)
4. INVESTMENTS (CONTINUED)
Investments that represent 5% or more of fair value of the Plan's net assets are
as follows:
DECEMBER 31
2001 2000
---------------------------------------------
FDX, Inc. common stock $ 51,614,634 $ 63,713,463
Roadway Express, Inc. common stock 59,508,849 35,469,570
Roadway Express, Inc. common stock* 135,538,182 75,885,235
American Balanced Fund 17,587,655 --
Fidelity Advisor Growth Opportunities Fund -- 22,125,942
Van Kampen Growth & Income Fund 22,021,449 --
* Nonparticipant-directed
8
Roadway Express, Inc. 401(k) Stock Savings Plan
Notes to Financial Statements (continued)
5. NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets and the significant components of changes in
net assets related to the nonparticipant-directed investment is as follows:
DECEMBER 31
2001 2000
---------------------------------------------
Investments, at fair value:
Roadway Express, Inc. common stock $ 135,538,182 $ 75,885,235
Cash and temporary cash investments 2,589,816 1,251,930
---------------------------------------------
Total investments 138,127,998 77,137,165
Receivables:
Contributions receivable 602,084 568,684
Other, net (61,767) 78,130
---------------------------------------------
Total receivables 540,317 646,814
---------------------------------------------
Net assets available for benefits $ 138,668,315 $ 77,783,979
=============================================
YEARS ENDED DECEMBER 31
2001 2000
---------------------------------------------
Change in net assets:
Contributions $ 10,787,482 $ 10,338,435
Dividends 719,290 680,542
Interest 88,901 120,095
Net appreciation (depreciation)
in fair value of investments 57,046,949 (1,320,218)
Distributions in-kind (3,956,511) (2,762,388)
Benefits paid directly to participants (3,679,817) (3,033,286)
Interfund transfers (net) (121,958) (217,431)
---------------------------------------------
$ 60,884,336 $ 3,805,749
=============================================
9
Roadway Express, Inc. 401(k) Stock Savings Plan
Notes to Financial Statements (continued)
6. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
DECEMBER 31
2001 2000
---------------------------------------------
Net assets available for benefits per the
financial statements $ 344,072,490 $ 252,695,116
Amounts allocated to withdrawn participants (1,626,220) (509,698)
---------------------------------------------
Net assets available for benefits per the
Form 5500 $ 342,446,270 $ 252,185,418
=============================================
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
DECEMBER 31
2001 2000
---------------------------------------------
Benefits paid to participants per the
financial statements $ 14,511,339 $ 12,675,312
Add amounts allocated on Form 5500 to
withdrawn participants at end of year 1,626,220 509,698
Less amounts allocated on Form 5500 to
withdrawn participants at beginning of year (509,698) (719,442)
---------------------------------------------
Benefits paid to participants per the
Form 5500 $ 15,627,861 $ 12,465,568
=============================================
Amounts allocated to withdrawn participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
year-end but not yet paid.
10
Roadway Express, Inc. 401(k) Stock Savings Plan
Notes to Financial Statements (continued)
7. TRANSACTIONS WITH PARTIES-IN-INTEREST
The Plan purchased shares of common stock of the Company for $6,630,532 and
$10,160,098 and sold shares of common stock of the Company for $0 and $18,699
during the years ended December 31, 2001 and 2000, respectively. The Plan also
received dividends on common stock of the Company of $1,041,441 and $1,002,968
during the years ended December 31, 2001 and 2000, respectively.
8. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated May 15, 2002, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the Code) and, therefore, the related trust is exempt
from taxation. Once qualified, the Plan is required to operate in conformity
with the Code to maintain its qualification. The Administrative Committee
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax exempt.
11
Roadway Express, Inc. 401(k) Stock Savings Plan
EIN: 34-0492670 Plan Number: 002
Schedule H, Line 4(i)--Schedule of Assets
(Held at End of Year)
December 31, 2001
DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE,
IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, COLLATERAL, CURRENT
LESSOR OR SIMILAR PARTY PAR OR MATURITY VALUE COST VALUE
-------------------------------------------------------------------------------------------------------------------
Cash and temporary cash investments $ 4,001,910 $ 4,001,910
Roadway Corporation* 5,314,633 shares 95,304,956 195,047,031
of common stock
FDX, Inc.* 994,885 shares 27,087,514 51,614,634
of common stock
Victory Stock Index Fund 156,566 units 3,174,533 2,663,195
Victory Intermediate Income Fund 588,438 units 5,660,584 5,749,037
American Balanced Fund 1,109,631 units 17,068,281 17,587,655
Van Kampen Growth & Income
Fund 1,294,618 units 23,450,521 22,021,449
American Funds Group Europacific
Growth Fund 194,069 units 6,769,830 5,214,645
Neuberger & Berman Genesis Assets
Fund 474,311 units 7,197,230 8,143,913
Templeton World Fund 74,429 units 1,175,592 1,106,013
Janus Twenty Fund 187,880 units 11,192,935 7,225,863
Janus Enterprise Fund 155,821 units 8,995,355 4,986,273
Victory DCS Money Market Fund 541,939 units 7,252,233 7,500,548
Vanguard LifeStrategy Conservative
Growth Fund 25,772 units 369,632 362,347
Vanguard LifeStrategy Moderate
Growth Fund 49,097 units 826,316 782,113
Vanguard LifeStrategy Growth Fund 93,024 units 1,815,817 1,621,416
Participant notes receivable* Interest ranging from 5.75% to
10.50%; due in 2002 to 2007 7,215,065 7,215,065
-----------------------------------
$228,558,304 $342,843,107
===================================
* Indicates party-in-interest to the Plan.
12
Roadway Express, Inc. 401(k) Stock Savings Plan
EIN: 34-0492670 Plan Number: 002
Schedule H, Line 4(j)--Schedule of Reportable Transactions
Year Ended December 31, 2001
CURRENT
VALUE OF
ASSET ON
IDENTITY OF PARTY DESCRIPTION OF PURCHASE SELLING COST OF TRANSACTION NET GAIN
INVOLVED ASSETS PRICE PRICE ASSET DATE OR (LOSS)
------------------------------------------------------------------------------------------------------------------------------------
CATEGORY (III)--SERIES OF TRANSACTIONS IN EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS
Key Trust Corp.* Roadway Corporation common stock $ 11,595,673 $ 11,595,673
$ 7,758,286 $ 7,758,286 **
* Indicates party-in-interest to the Plan.
** Realized gains and losses on investment sales transactions could not be
allocated between participant-directed and nonparticipant- directed
accounts.
There were no category (i), (ii) or (iv) reportable transactions during the year
ended December 31, 2001.
13
SIGNATURE
---------
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
ROADWAY CORPORATION 401(K) STOCK
SAVINGS PLAN
By: /s/ J. Dawson Cunningham
--------------------------------------------------
J. Dawson Cunningham
Roadway Corporation - Executive Vice
President and Chief Financial Officer