UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549


                                  FORM 10-Q


            X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           ---            SECURITIES EXCHANGE ACT OF 1934

              For the quarterly period ended September 30, 2005

                                     OR

               TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           ---            SECURITIES EXCHANGE ACT OF 1934

             For the transition period from   N/A   to   N/A


                        COMMISSION FILE NUMBER 1-5046

                                  CNF 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

Indicate  by  check  mark  whether  the  registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2)  has  been subject to such filing
requirements for the past 90 days.
Yes  X    No
    ---      ---

Indicate  by check mark whether the registrant is an  accelerated  filer  (as
defined in Rule 12b-2 of the Exchange Act).
Yes  X    No
    ---      ---

Indicate by  check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).
Yes       No  X
    ---      ---


             Number of shares of Common Stock, $.625 par value,
               outstanding as of October 31, 2005:  52,327,232













                                  CNF INC.
                                  FORM 10-Q
                       Quarter Ended September 30, 2005

_______________________________________________________________________________
_______________________________________________________________________________

                                    INDEX



PART I.FINANCIAL INFORMATION                                               Page

   Item 1.  Financial Statements

             Consolidated Balance Sheets -
               September 30, 2005 and December 31, 2004                      3

             Statements of Consolidated Operations -
               Three and Nine Months Ended September 30, 2005 and 2004       5

             Statements of Consolidated Cash Flows -
               Nine Months Ended September 30, 2005 and 2004                 6

             Notes to Consolidated Financial Statements                      7

   Item 2.  Management's  Discussion  and  Analysis  of
              Financial Condition and Results of Operations                 18

   Item 3.  Quantitative and Qualitative Disclosures about Market Risk      34

   Item 4.  Controls and Procedures                                         35


PART II.OTHER INFORMATION

   Item 1.  Legal Proceedings                                               36

   Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds     36

   Item 6.  Exhibits                                                        37

   Signatures                                                               38







                           PART I. FINANCIAL INFORMATION



ITEM 1.  FINANCIAL STATEMENTS


                                    CNF INC.
                          CONSOLIDATED BALANCE SHEETS
                                  (Unaudited)
                             (Dollars in thousands)



                                                     September 30, December 31,
ASSETS                                                  2005          2004
                                                     ------------  ------------
Current Assets
  Cash and cash equivalents                          $   641,931   $   386,897
  Marketable securities                                  156,050       446,300
  Trade accounts receivable, net                         536,455       425,783
  Other accounts receivable (Note 2)                      10,095       134,577
  Operating supplies, at lower of average cost
    or market                                             19,103        16,665
  Prepaid expenses                                        43,394        48,092
  Deferred income taxes                                   58,274        51,453
  Assets of discontinued operations (Note 2)               9,226         5,128
                                                     ------------  ------------
    Total Current Assets                               1,474,528     1,514,895
                                                     ------------  ------------

Property, Plant and Equipment, at cost
  Land                                                   149,368       142,857
  Buildings and leasehold improvements                   635,791       618,698
  Revenue equipment                                      774,834       677,499
  Other equipment                                        220,994       210,102
                                                     ------------  ------------
                                                       1,780,987     1,649,156
  Accumulated depreciation and amortization             (838,914)     (789,835)
                                                     ------------  ------------
                                                         942,073       859,321
                                                     ------------  ------------
Other Assets
  Deferred charges and other assets (Note 4)              40,275        56,618
  Capitalized software, net                               45,648        50,347
  Assets of discontinued operations (Note 2)              16,027        15,220
                                                     ------------  ------------
                                                         101,950       122,185
                                                     ------------  ------------
    Total Assets                                     $ 2,518,551   $ 2,496,401
                                                     ============  ============


             The accompanying notes are an integral part of these statements.



                                    CNF INC.
                          CONSOLIDATED BALANCE SHEETS
                                 (Unaudited)
                (Dollars in thousands except per share amounts)



                                                     September 30, December 31,
LIABILITIES AND SHAREHOLDERS' EQUITY                    2005          2004
                                                     ------------  ------------
Current Liabilities
  Accounts payable                                   $   267,764   $   252,867
  Accrued liabilities                                    256,277       226,437
  Self-insurance accruals                                 87,098        86,095
  Current maturities of long-term debt                    15,030       112,727
  Income taxes payable                                    15,540            --
  Liabilities of discontinued operations (Note 2)         35,729        34,705
                                                     ------------  ------------
    Total Current Liabilities                            677,438       712,831

Long-Term Liabilities
  Long-term debt and guarantees                          582,714       601,344
  Self-insurance accruals                                104,389       102,512
  Employee benefits (Note 5)                             231,408       245,989
  Other liabilities and deferred credits                  21,698        20,296
  Deferred income taxes                                    9,366        29,200
  Liabilities of discontinued operations (Note 2)            759         6,862
                                                     ------------  ------------
    Total Liabilities                                  1,627,772     1,719,034
                                                     ------------  ------------
Commitments and Contingencies (Note 8)

Shareholders' Equity
  Preferred stock, no par value; authorized
    5,000,000 shares: Series B, 8.5% cumulative,
    convertible, $.01 stated value; designated
    1,100,000 shares; issued 658,073 and
    742,995 shares, respectively                               7             7
  Additional paid-in capital, preferred stock            100,086       113,002
  Deferred compensation, Thrift and Stock Plan           (42,686)      (49,117)
                                                     ------------  ------------
    Total Preferred Shareholders' Equity                  57,407        63,892
                                                     ------------  ------------
  Common stock, $.625 par value; authorized
    100,000,000 shares;issued 60,530,015 and
    58,544,254 shares, respectively                       37,850        36,590
  Additional paid-in capital, common stock               503,274       429,134
  Retained earnings                                      569,450       426,300
  Deferred compensation, restricted stock                 (3,751)       (5,744)
  Cost of repurchased common stock (Note 7)
    (8,340,812 and 6,364,868 shares, respectively)      (258,357)     (157,069)
                                                     ------------  ------------
    Total Common Shareholders' Equity                    848,466       729,211
                                                     ------------  ------------
  Accumulated Other Comprehensive Loss (Note 6)          (15,094)      (15,736)
                                                     ------------  ------------
    Total Shareholders' Equity                           890,779       777,367
                                                     ------------  ------------
      Total Liabilities and Shareholders' Equity     $ 2,518,551   $ 2,496,401
                                                     ============  ============


             The accompanying notes are an integral part of these statements.


                                    CNF INC.
                       STATEMENTS OF CONSOLIDATED OPERATIONS
                                  (Unaudited)
               (Dollars in thousands except per share amounts)



                                  Three Months Ended        Nine Months Ended
                                    September 30,             September 30,
                               -----------------------  -----------------------
                                   2005        2004        2005       2004
                               ----------- -----------  ----------- -----------
Revenues                       $1,099,151  $  973,619   $3,080,709  $2,744,921

Costs and Expenses
  Operating expenses (Note 4)     884,255     792,075    2,471,555   2,231,920
  Selling, general and
    administrative expenses        82,471      76,660      246,195     230,888
  Depreciation                     29,392      26,449       83,110      76,951
                               ----------- -----------  ----------- -----------
                                  996,118     895,184    2,800,860   2,539,759
                               ----------- -----------  ----------- -----------
Operating Income                  103,033      78,435      279,849     205,162
                               ----------- -----------  ----------- -----------
Other Income (Expense)
  Investment income                 5,668       2,112       15,830       4,247
  Interest expense                 (8,426)    (10,959)     (28,580)    (28,306)
  Miscellaneous, net                 (732)       (876)      (4,348)     (5,401)
                               ----------- -----------  ----------- -----------
                                   (3,490)     (9,723)     (17,098)    (29,460)

                               ----------- -----------  ----------- -----------
Income from Continuing
  Operations Before Taxes          99,543      68,712      262,751     175,702
    Income Tax
      Provision  (Note 9)          35,070      26,798       89,271      68,524
                               ----------- -----------  ----------- -----------
Income from Continuing
  Operations                       64,473      41,914      173,480     107,178
                               ----------- -----------  ----------- -----------

Discontinued Operations,
  net of tax (Note 2)
  Gain (Loss) from Disposal         3,335    (260,490)      (3,490)   (260,490)
  Income from
    Discontinued Operations            --       4,444           --       3,114
                               ----------- -----------  ----------- -----------
                                    3,335    (256,046)      (3,490)   (257,376)

Net Income (Loss)                  67,808    (214,132)     169,990    (150,198)
  Preferred Stock Dividends         1,816       2,075        5,841       6,119
                               ----------- -----------  ----------- -----------

Net Income (Loss)
  Applicable to Common
    Shareholders               $   65,992  $ (216,207)  $  164,149  $ (156,317)
                               =========== ===========  =========== ===========

Weighted-Average Common
   Shares Outstanding (Note 1)
    Basic                      52,081,891  50,670,398   52,198,251  50,150,987
    Diluted                    55,966,289  55,408,636   56,259,541  56,527,092

Earnings (Loss) per
  Common Share (Note 1)
    Basic
      Net Income from
       Continuing Operations   $     1.20  $     0.79   $     3.21  $     2.02
      Gain (Loss) from
       Disposal, net of tax          0.07       (5.15)       (0.07)      (5.20)
      Income from
       Discontinued Operations,
       net of tax                      --        0.09           --        0.06
      Net Income (Loss)        ----------- -----------  ----------- -----------
       Applicable to Common
        Shareholders           $     1.27  $    (4.27)  $     3.14  $    (3.12)
                               =========== ===========  =========== ===========

    Diluted
      Net Income from
       Continuing Operations   $     1.12  $     0.72   $     2.99  $     1.83
      Gain (Loss) from
       Disposal, net of tax          0.06       (4.70)       (0.06)      (4.61)
      Income from
       Discontinued Operations,
       net of tax                     --         0.08           --        0.06
                               ----------- -----------  ----------- -----------
      Net Income (Loss)
       Applicable to Common
        Shareholders           $     1.18  $    (3.90)  $     2.93  $    (2.72)
                               =========== ===========  =========== ===========


             The accompanying notes are an integral part of these statements.


                                    CNF INC.
                      STATEMENTS OF CONSOLIDATED CASH FLOWS
                                 (Unaudited)
                            (Dollars in thousands)

                                                           Nine Months Ended
                                                             September 30,
                                                     --------------------------
                                                          2005          2004
                                                     ------------  ------------
Cash and Cash Equivalents, Beginning of Period       $   386,897   $    38,183
                                                     ------------  ------------
Operating Activities
Net income (loss)                                        169,990      (150,198)
Adjustments to reconcile net income (loss) to
  net cash provided by operating activities:
    Discontinued operations, net of tax                    3,490       257,376
    Depreciation and amortization,net of accretion        91,308        86,957
    Increase (Decrease) in deferred income taxes         (17,043)       14,847
    Amortization of deferred compensation                  7,791         8,770
    Provision for uncollectible accounts                   3,626         3,894
    Equity in earnings of joint venture                  (10,833)       (8,079)
    Loss (Gain) from sales of property and
      equipment, net                                        (438)          159
    Changes in assets and liabilities:
      Receivables                                       (109,775)      (67,612)
      Prepaid expenses                                     4,698         1,075
      Accounts payable                                    16,019        29,819
      Accrued incentive compensation                      (1,312)       54,322
      Accrued liabilities, excluding accrued
        incentive compensation                            28,944        30,553
      Self-insurance accruals                              2,880        (4,645)
      Income taxes                                        61,379        30,974
      Employee benefits                                  (39,807)      (43,504)
      Deferred charges and credits                        26,744        71,562
      Other                                               (5,444)       (7,314)
                                                     ------------  ------------
        Net Cash Provided by Operating Activities        232,217       308,956
                                                     ------------  ------------
Investing Activities
  Capital expenditures                                  (168,133)     (110,111)
  Software expenditures                                   (6,314)       (9,209)
  Proceeds from sales of property and equipment, net       3,756         5,043
  Proceeds from sale of discontinued operations          108,366            --
  Net decrease (increase) in marketable securities       290,250       (65,110)
                                                     ------------  ------------
        Net Cash Provided by (Used in)
          Investing Activities                           227,925      (179,387)
                                                     ------------  ------------

Financing Activities
  Net proceeds from issuance of long-term debt                --       292,587
  Repayment of long-term debt and guarantees            (112,722)     (142,919)
  Proceeds from exercise of stock options                 56,844        25,074
  Payments of common dividends                           (15,782)      (15,153)
  Payments of preferred dividends                         (9,664)       (9,941)
  Repurchases of common stock                           (111,562)           --
                                                     ------------  ------------
        Net Cash Provided by (Used in)
          Financing Activities                          (192,886)      149,648
                                                     ------------  ------------

        Net Cash Provided by Continuing Operations       267,256       279,217
                                                     ------------  ------------
        Net Cash Used in Discontinued Operations         (12,222)       (3,891)
                                                     ------------  ------------
        Increase in Cash and Cash Equivalents            255,034       275,326
                                                     ------------  ------------
Cash and Cash Equivalents, End of Period             $   641,931   $   313,509
                                                     ============  ============

Supplemental Disclosure
  Cash paid for income taxes, net                    $    40,916   $    24,824
                                                     ============  ============
  Cash paid for interest, net of amounts capitalized $    27,470   $    19,692
                                                     ============  ============

             The accompanying notes are an integral part of these statements.








                                  CNF INC.
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)


1.  Principal Accounting Policies

Basis of Presentation

Pursuant to the rules and regulations of the Securities and Exchange
Commission, the accompanying consolidated financial statements of CNF Inc.
and its wholly owned subsidiaries ("CNF") have been prepared by CNF, without
audit by an independent registered public accounting firm. In the opinion of
management, the consolidated financial statements include all normal
recurring adjustments necessary to present fairly the information required to
be set forth therein.  Certain information and note disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States ("GAAP") have been
condensed or omitted from these statements pursuant to such rules and
regulations and, accordingly, should be read in conjunction with the
consolidated financial statements included in CNF's 2004 Annual Report on
Form 10-K.  Results for the periods presented are not necessarily indicative
of annual results.

In December of 2004, CNF completed the sale of Menlo Worldwide Forwarding,
Inc. and its subsidiaries and Menlo Worldwide Expedite!, Inc. (hereinafter
collectively referred to as "MWF") to United Parcel Service, Inc. and United
Parcel Service of America, Inc. (collectively, "UPS").  As a result, for the
periods presented, the results of operations, net assets, and cash flows of
the Menlo Worldwide Forwarding ("Forwarding") segment have been segregated
and reported as discontinued operations, as more fully discussed in Note 2,
"Discontinued Operations."  In addition to MWF, the Forwarding segment also
includes Emery Worldwide Airlines, Inc. ("EWA"), a separate wholly owned
subsidiary of CNF, which was not sold to UPS.

Earnings per Share ("EPS")

Basic EPS is computed by dividing reported earnings (loss) by the weighted-
average common shares outstanding.  Diluted EPS is calculated as follows:

 (Dollars in thousands            Three Months Ended        Nine Months Ended
  except per share data)             September 30,             September 30,
                               -----------------------  -----------------------
                                  2005        2004         2005         2004
                               ----------- -----------  ----------- -----------
Numerator:
  Continuing operations
    (after preferred stock
     dividends), as reported    $  62,657  $   39,839   $  167,639   $ 101,059
       Add-backs:
         Dividends on
          Series B preferred
          stock, net of
          replacement funding         269         303          830         954
         Interest expense on
          convertible
          subordinated
          debentures, net of
          trust dividend income        --          --           --       1,590
                               ----------- -----------  ----------- -----------
  Continuing operations            62,926      40,142      168,469     103,603
                               ----------- -----------  ----------- -----------
  Discontinued operations           3,335    (256,046)      (3,490)   (257,376)
                               ----------- -----------  ----------- -----------
  Applicable to common
   shareholders                $   66,261  $ (215,904)  $  164,979  $ (153,773)
                               =========== ===========  =========== ===========

Denominator:
  Weighted-average common
   shares outstanding          52,081,891  50,670,398   52,198,251  50,150,987
  Stock options and
   restricted stock               786,186   1,221,014      963,078   1,122,770
  Series B preferred
   stock                        3,098,212   3,517,224    3,098,212   3,517,224
  Convertible
   subordinated debentures             --          --           --   1,736,111
                               ----------- -----------  ----------- -----------
                               55,966,289  55,408,636   56,259,541  56,527,092
                               =========== ===========  =========== ===========
Earnings (Loss) per
  Diluted Share:
    Continuing operations      $     1.12  $     0.72   $     2.99  $     1.83
    Discontinued operations          0.06       (4.62)       (0.06)      (4.55)
                               ----------- -----------  ----------- -----------
    Applicable to
     common shareholders       $     1.18  $    (3.90)  $     2.93  $    (2.72)
                               =========== ===========  =========== ===========


For the nine months ended September 30, 2004, diluted shares reflect the
effect of convertible subordinated debentures, which were redeemed on June 1,
2004.

Stock-Based Compensation

Employees and non-employee directors have been granted options under CNF's
stock option plans to purchase common stock of CNF at prices equal to the
market value of the stock on the date of grant.  CNF accounts for stock-based
compensation utilizing the intrinsic-value method in accordance with the
provisions of Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" ("APB 25").  Accordingly, no compensation expense
is recognized for fixed-option plans because the exercise prices of employee
stock options equal the market prices of the underlying stock on the dates of
grant.

The table below sets forth the effect on net income and earnings per share if
CNF had applied the fair-value based method and recognition provisions of
SFAS 123, " Accounting for Stock-Based Compensation," to stock-based
compensation.  For purposes of this pro-forma disclosure, the value of the
options is estimated using a Black-Scholes option pricing model and amortized
ratably over the vesting periods.  Because the estimated value is determined
as of the date of grant, the actual value ultimately realized by the employee
may be significantly different.


 (Dollars in thousands,          Three Months Ended       Nine Months Ended
  except per share data)            September 30,            September 30,
                               -----------------------  -----------------------
                                   2005        2004        2005        2004
                               ----------- -----------  ----------- -----------
Net income (loss) applicable
 to common shareholders,
 as reported                   $   65,992  $ (216,207)  $  164,149  $ (156,317)
Stock-based compensation cost
 included in reported income,
 net of tax                           434          27          829       1,437
Additional compensation cost,
 net of tax, that
 would have been included in
 net income (loss) if the
 fair-value method had
 been applied                      (1,407)     (3,506)      (4,570)     (8,349)
                               ----------- -----------  ----------- -----------
Adjusted net income (loss)
 as if the fair-value
 method had been applied       $   65,019  $ (219,686)  $  160,408  $ (163,229)
                               =========== ===========  =========== ===========

Earnings (loss) per share:
  Basic:
    As reported                $     1.27  $    (4.27)  $     3.14  $    (3.12)
                               =========== ===========  =========== ===========
    Adjusted                   $     1.25  $    (4.34)  $     3.07  $    (3.25)
                               =========== ===========  =========== ===========
  Diluted:
    As reported                $     1.18  $    (3.90)  $     2.93  $    (2.72)
                               =========== ===========  =========== ===========
    Adjusted                   $     1.17  $    (3.96)  $     2.87  $    (2.84)
                               =========== ===========  =========== ===========

In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment" ("SFAS
123R"), a revision of SFAS 123 that supersedes APB 25 and its related
implementation guidance.  SFAS 123R eliminates the alternative to use APB
25's intrinsic-value method of accounting that was provided in SFAS 123 as
originally issued, and requires companies to recognize the cost of employee
services received in exchange for awards of equity instruments based on the
grant-date fair value of those awards (with limited exceptions) over the
period during which an employee is required to provide service in exchange
for the award.

SFAS 123R also amends FASB Statement No. 95, "Statement of Cash Flows," to
require that the benefits associated with the tax deductions in excess of
recognized compensation cost be reported as financing cash flows, rather than
as a reduction of taxes paid. This requirement will reduce net operating cash
flows and increase net financing cash flows in periods after the effective
date.

The effective date of SFAS 123R is as of the beginning of the first interim
or annual reporting period of the first fiscal year beginning on or after
June 15, 2005, which for CNF is the first quarter of 2006.  In the adoption
of SFAS 123R, CNF has concluded that it will continue its use of the Black-
Scholes model for estimating the fair value of stock option grants and will
apply the modified prospective transition method to all past share-based
awards outstanding and unvested as of the effective adoption date of January
1, 2006.  Under the modified prospective transition method, CNF will
recognize the associated expense over the remaining vesting period based on
the fair values previously determined and disclosed as part of the pro-forma
disclosures presented above.  The estimated annual compensation expense
related to these unvested stock options in 2006 is approximately $0.06 per
diluted common share.  However, the calculation of total compensation expense
for share-based awards after the effective date of SFAS 123R cannot be known
at this time as it is affected by the number of future shares awarded, and it
may be different from the calculation of pro-forma compensation expense under
SFAS 123, as presented in the table above.

Foreign Currency

Adjustments resulting from translating foreign functional currency financial
statements into U.S. dollars are included in the Accumulated Other
Comprehensive Loss in the Consolidated Balance Sheets.  Transaction gains and
losses that arise from exchange rate fluctuations on transactions denominated
in a currency other than the local currency are included in results of
operations.

In the first quarter of 2004, CNF concluded that it would no longer assume
indefinite reinvestment of past and future earnings of MWF's foreign
subsidiaries.  Accordingly, CNF recorded a deferred tax asset of $9.4 million
to recognize the associated tax effect of MWF's accumulated foreign currency
translation adjustment.  The deferred tax asset was recorded in Assets of
Discontinued Operations in the Consolidated Balance Sheets, as it relates to
the discontinued Forwarding segment.  In the third quarter of 2004, the
accumulated foreign currency translation adjustment associated with the
Forwarding segment was included in CNF's third-quarter impairment charge, as
more fully discussed in Note 2, "Discontinued Operations."  CNF did not
change its assumptions regarding the repatriation of the foreign earnings of
its other subsidiaries.

Reclassification

Certain amounts in the prior-period financial statements have been
reclassified to conform to the current-period presentation, including the
reclassification in the Consolidated Statement of Cash Flows of the $29.4
million first-quarter payment from the UPS that is more fully discussed below
in Note 2, "Discontinued Operations."  In the nine months ended September 30,
2005, the first-quarter payment has been reclassified to investing activities
from operating activities, where it was reported in CNF's 2005 first- and
second-quarter reports on Form 10-Q.


2.  Discontinued Operations

Discontinued operations in the periods presented relate to the sale of MWF,
to the shut-down of EWA and its terminated Priority Mail contract with the
U.S. Postal Service ("USPS"), and to the spin-off of Consolidated Freightways
Corporation ("CFC").  For the periods presented, the results of operations,
net assets, and cash flows of discontinued operations have been segregated
from continuing operations, except where otherwise noted.

As required by EITF 87-24, "Allocation of Interest to Discontinued
Operations," for periods prior to the disposition of MWF in 2004, continuing
operations has been allocated general corporate overhead charges that were
previously allocated to the discontinued Forwarding segment.  These corporate
overhead charges of $2.8 million in the third quarter and $11.0 million in
the first nine months of 2004 were allocated from discontinued operations to
Con-Way Transportation Services ("Con-Way") and Menlo Worldwide Logistics
("Logistics") based on segment revenue and capital employed.

Results of discontinued operations are summarized below:

                                  Three Months Ended       Nine Months Ended
                                    September 30,             September 30,
                               -----------------------  -----------------------
 (Dollars in thousands)           2005       2004          2005        2004
                               ----------- -----------  ----------- -----------

Revenues                       $       --  $  558,231   $       --  $1,582,996

Income from Discontinued
 Operations
   MWF
     Income before income              --       7,285           --       5,104
      taxes
     Income tax provision              --      (2,841)          --      (1,990)
                               ----------- -----------  ----------- -----------
                               $       --  $    4,444   $       --  $    3,114
                               =========== ===========  =========== ===========
Gain (Loss) from Disposal,
 net of tax
   MWF                         $    8,967  $ (260,490)  $    2,824  $ (260,490)
   EWA                             (7,192)         --       (7,874)         --
   CFC                              1,560          --        1,560          --
                               ----------- -----------  ----------- -----------
                               $    3,335  $ (260,490)  $   (3,490) $ (260,490)
                               =========== ===========  =========== ===========

The assets and liabilities of discontinued operations, which are presented in
the Consolidated Balance Sheets under the captions "Assets (or Liabilities)
of Discontinued Operations," consisted of the following:



                                                   September 30,   December 31,
 (Dollars in thousands)                                2005           2004
                                                   -------------  -------------
Assets
  Current assets                                   $      9,226   $      5,128
  Prepaid employee benefits and
   long-lived assets                                     16,027         15,220
                                                   -------------  -------------
         Total Assets                                    25,253         20,348
                                                   -------------  -------------
Liabilities
  Accounts payable and accrued liabilities               35,078         33,243
  Other                                                     651          1,462
                                                   -------------  -------------
    Current Liabilities                                  35,729         34,705

    Long-term liabilities                                   759          6,862
                                                   -------------  -------------
         Total Liabilities                               36,488         41,567
                                                   -------------  -------------

 Net Liabilities                                   $     11,235   $     21,219
                                                   =============  =============


MWF

Impairment Charge

On October 5, 2004, CNF and Menlo Worldwide, LLC ("MW") entered into a stock
purchase agreement with UPS to sell all of the issued and outstanding capital
stock of MWF.  CNF completed the sale on December 19, 2004, as more fully
discussed below. Although the stock purchase agreement was entered into on
October 5, 2004, decisions by CNF's management and its Board of Directors and
the third-quarter sale negotiations with UPS established CNF's commitment to
sell MWF as of September 30, 2004. In the process of evaluating several
strategic alternatives for Menlo Worldwide's Forwarding segment, CNF was
approached by UPS in the third quarter of 2004 with interest in acquiring
MWF.  Accordingly, in the third quarter of 2004, CNF classified MWF as held
for sale and recognized a $260.5 million impairment charge to write down the
recorded book value of MWF to its anticipated selling price, less costs to
sell.  The impairment charge was based on the agreement to sell MWF, as
described below, and primarily represents the estimated write-down to the
fair value of MWF's goodwill and long-lived assets, including MWF's
accumulated foreign currency translation adjustment, as well as estimated
selling costs.

Stock Purchase Agreement

The stock purchase agreement excludes certain assets and liabilities of MWF
and includes certain assets and liabilities of CNF or its subsidiaries
related to the business conducted by MWF.  Among the assets and liabilities
so excluded are those related to EWA, and the obligation related to MWF
employees covered under CNF's domestic pension, postretirement medical and
long-term disability plans.  Under the agreement, UPS agreed to pay to CNF an
amount equal to MWF's cash position as of December 31, 2004, and to pay the
estimated present value of CNF's retained obligations related to MWF
employees covered under CNF's long-term disability and postretirement medical
plans, as agreed to by the parties or, in the absence of such agreement, as
determined by an independent actuary.  In addition, UPS assumed indebtedness
associated with the MWF business, including approximately $110 million of
debt owed by MWF in connection with the City of Dayton, Ohio, Special
Facilities Revenue Refunding Bonds, certain capital leases and other debt,
other letters of credit, and overdraft facilities.  Under the stock purchase
agreement, CNF has agreed to a three-year non-compete covenant that, subject
to certain exceptions, will limit CNF's annual air freight and ocean
forwarding and/or customs brokerage revenues to $175 million through CNF's
2007 fiscal year.  CNF has also agreed to indemnify UPS against certain
losses that UPS may incur after the closing of the sale with certain
limitations.  Any losses related to these indemnification obligations or any
other costs, including any future cash expenditures, related to the sale that
have not been estimated and recognized at this time will be recognized in
future periods as an additional loss from disposal when and if incurred.


Disposition of MWF

Upon completion of the sale of MWF on December 19, 2004, CNF received cash
consideration of $150 million, subject to certain post-closing adjustments,
including adjustments for cash held by MWF at closing and MWF's net working
capital as of closing.  In connection with the sale, CNF in 2004 recognized a
fourth-quarter loss from disposal of $15.8 million (net of a $3.6 million tax
benefit), as the adjusted carrying value of MWF exceeded the cash
consideration, including amounts received at closing and expected to be
received in the future.  Following settlement of the MWF cash balance in
March 2005, CNF received cash of $29.4 million and recognized an additional
first-quarter net loss from disposal of $9.8 million, primarily to recognize
the difference between the actual cash received and CNF's estimate of the
cash position at December 31, 2004, and to accrue additional estimated
transaction costs.  As a result of additional adjustments in its estimated
disposition loss, CNF in 2005 reported a $3.6 million second-quarter net gain
and a $9.0 million third-quarter net gain, primarily to recognize an increase
in its estimate of deferred tax assets associated with employee benefit
obligations retained by CNF, as more fully discussed below under "- Excluded
Assets and Liabilities."

CNF recognized a tax benefit on its losses from the disposal of MWF,
which are treated as capital losses for tax purposes.  Under current tax law,
capital losses can only be used to offset capital gains.  Since CNF did not
forecast any significant taxable capital gains in the tax carry-forward
period, the $41.0 million cumulative disposal-related tax benefit at
December 31, 2004 was fully offset by a valuation allowance of an equal
amount.  In 2005, the cumulative disposal-related tax benefit and the
associated valuation allowance declined to $29.0 million at September 30,
2005 due primarily to the third-quarter sale-related proceeds received
from UPS and revisions to the tax effect of sale-related estimates,
partially offset by the first-quarter disposal-related capital loss.

Excluded Assets and Liabilities

As described above, the stock purchase agreement excludes, and CNF has
retained, the obligations related to MWF employees covered under certain CNF-
sponsored employee benefit plans, including domestic pension, postretirement
and long-term disability plans that cover the noncontractual employees and
former employees of both continuing and discontinued operations. These plans
also include certain pension plans that cover only the current and former
employees of the discontinued Forwarding segment (the "Forwarding Plans").
For financial reporting purposes, the prepaid benefit cost of the Forwarding
Plans is reported in Assets of Discontinued Operations while the accrued
benefit cost related to MWF employees covered under the other legally
separate CNF-sponsored plans are reported in Employee Benefits of continuing
operations.  Under the stock purchase agreement, UPS agreed to pay to CNF the
estimated present value of CNF's retained obligations related to MWF
employees covered under CNF's long-term disability and postretirement medical
plans (the "Reimbursable Plans.")  Accordingly, CNF in December 2004 recorded
in Other Accounts Receivable a receivable for its estimate of the present
value of the retained obligations of the Reimbursable Plans.  Under an
agreement reached in August 2005, UPS paid $79.0 million to CNF for the
agreed-upon estimated present value of the retained obligations of the
Reimbursable Plans.  The carrying value of these obligations at September 30,
2005 was equal to the cash reimbursement from UPS.  If, on CNF's annual
November 30 actuarial measurement date, the present value estimated by an
independent actuary is different than the carrying value, that difference
would be recognized as a gain or loss from disposal in the fourth quarter of
2005.

EWA

The results of EWA relate to the cessation of its air-carrier operations in
2001 and to the termination of its Priority Mail contract with the USPS in
2000.  In 2005, EWA recognized net losses of $0.6 million in the second
quarter and $7.2 million in the third quarter, due primarily to increases in
the estimated exposure for litigation and restructuring-related obligations.
EWA's estimated loss reserves increased to $35.1 million at September 30,
2005 from $33.8 million at December 31, 2004 due primarily to the third-
quarter loss described above, partially offset by the cash settlement of
restructuring-related obligations.  EWA's remaining loss reserves at
September 30, 2005 are reported in Liabilities of Discontinued Operations and
consisted mostly of CNF's estimated exposure related to the labor matters
described below, and other litigation-related losses.

In connection with the cessation of its air-carrier operations in 2001, EWA
terminated the employment of all of its pilots and crew members.  Those
pilots and crew members are represented by the Air Line Pilots Association
("ALPA") union under a collective bargaining agreement.  Subsequently, ALPA
filed a grievance on behalf of the pilots and crew members protesting the
cessation of EWA's air-carrier operations and MWF's use of other air
carriers.  The ALPA matters are the subject of litigation in U.S. District
Court and, depending on the outcome of that litigation, may be subject to
binding arbitration.  Based on CNF's current evaluation, management believes
that it has provided for its estimated exposure related to the ALPA matters.
However, there can be no assurance in this regard as CNF cannot predict with
certainty the ultimate outcome of these matters.



3.  Reporting Segments

CNF discloses segment information in the manner in which the components are
organized for making operating decisions, assessing performance and
allocating resources.  For financial reporting purposes, CNF is divided into
three reporting segments: Con-Way Transportation Services ("Con-Way"), Menlo
Worldwide, and CNF Other.  Menlo Worldwide consists of the operating results
of Menlo Worldwide Logistics ("Logistics") and Vector SCM, LLC ("Vector"), a
joint venture with General Motors ("GM") that is accounted for as an equity-
method investment.  Certain corporate activities and the results of Road
Systems, a trailer manufacturer, are reported in the CNF Other reporting
segment.

In December of 2004, CNF sold MWF.  As a result, for the periods presented,
the results of operations, net assets, and cash flows of the Forwarding
segment have been segregated as discontinued operations and excluded from the
reporting segment financial data summarized below.  Prior to the
reclassification, the combined operating results of MWF and a portion of the
operations of EWA were reported in continuing operations as the Forwarding
segment.  As more fully discussed in Note 2, "Discontinued Operations", for
periods prior to the disposition of MWF, continuing operations has been
allocated certain corporate overhead charges that were previously allocated
to the discontinued Forwarding segment. The additional corporate overhead
charges allocated to Con-Way and Logistics in the third quarter of 2004 were
$2.4 million and $0.4 million, respectively, and in the first nine months of
2004, were $9.6 million and $1.4 million, respectively.

In April 2005, Con-Way Logistics was integrated with Logistics. As a result,
for the periods presented, the operating results of Con-Way Logistics have
been reclassified to conform to the current-period presentation.


Financial Data

Management evaluates segment performance primarily based on revenue and
operating income (loss), except for Vector, which is evaluated based on MW's
proportionate share of Vector's income before taxes.  Accordingly, interest
expense, investment income and other non-operating items are not reported in
segment results.  Corporate expenses are generally allocated based on
measurable services provided to each segment or, for general corporate
expenses, based on segment revenue and capital employed.  Intersegment
revenue and related operating income have been eliminated to reconcile to
consolidated revenue and operating income.



 (Dollars in thousands)           Three Months Ended       Nine Months Ended
                                     September 30,           September 30,
                               -----------------------  -----------------------
                                  2005       2004           2005       2004
                               ----------- -----------  ----------- -----------
External Revenues
  Con-Way Transportation
   Services                    $  741,366  $  666,143   $2,095,630  $1,885,484
  Menlo Worldwide
   Logistics                      354,797     305,479      973,782     856,234
  CNF Other                         2,988       1,997       11,297       3,203
                               ----------- -----------  ----------- -----------
                               $1,099,151  $  973,619   $3,080,709  $2,744,921
                               =========== ===========  =========== ===========

Intersegment Revenue
  Con-Way Transportation
   Services                    $   25,490  $   13,491   $   57,412  $   36,692
  Menlo Worldwide
   Logistics                           --          38           --         241
  CNF Other                        15,275       7,524       36,234      20,188
                               ----------- -----------  ----------- -----------
                               $   40,765  $   21,053   $   93,646  $   57,121
                               =========== ===========  =========== ===========

Total  Revenues before
 Intersegment Eliminations
   Con-Way Transportation
    Services                   $  766,856  $  679,634   $2,153,042  $1,922,176
   Menlo Worldwide
    Logistics                     354,797     305,517      973,782     856,475
   CNF Other                       18,263       9,521       47,531      23,391
     Intersegment Revenue
      Eliminations                (40,765)    (21,053)     (93,646)    (57,121)
                               ----------- -----------  ----------- -----------
                               $1,099,151  $  973,619   $3,080,709  $2,744,921
                               =========== ===========  =========== ===========

Operating Income (Loss)
  Con-Way Transportation
   Services                    $   94,403  $   70,661   $  253,288  $  183,451
  Menlo Worldwide
    Logistics                       7,889       5,710       18,553      16,045
    Vector                          4,220       2,699       13,196       8,079
                               ----------- -----------  ----------- -----------
                                   12,109       8,409       31,749      24,124
                               ----------- -----------  ----------- -----------
  CNF Other                        (2,638)       (635)      (2,825)     (2,413)
                               ----------- -----------  ----------- -----------
                               $  103,874  $   78,435   $  282,212  $  205,162
                               ----------- -----------  ----------- -----------
Reconciliation of segments
 to consolidated amount:
   Income tax related
    to Vector, an
    equity-method
    investment (Note 4)              (841)         --       (2,363)         --
                               ----------- -----------  ----------- -----------
                               $  103,033  $   78,435   $  279,849  $  205,162
                               =========== ===========  =========== ===========


4.  Investment in Unconsolidated Joint Venture

Vector is a joint venture formed with GM in December 2000 for the purpose of
providing logistics management services on a global basis for GM, and
ultimately for customers in addition to GM.  Although Menlo Worldwide, LLC
("MW") owns a majority interest in Vector, MW's portion of Vector's operating
results are reported in the Menlo Worldwide reporting segment as an equity-
method investment based on GM's ability to control certain operating
decisions.  Vector is organized as a limited liability company that has
elected to be taxed as a partnership.  In the United States, the joint
venture partners are responsible for income taxes applicable to their share
of Vector's U.S. federal taxable income.  Accordingly, MW's portion of U.S
federal income taxes on Vector's domestic income is reported in CNF's tax
provision.  CNF's foreign tax credits related to Vector's foreign income are
also reflected in CNF's tax provision.  In foreign tax jurisdictions, Vector,
rather than the joint venture partners, is responsible for income taxes on
its foreign income.  In accordance with GAAP, MW's portion of Vector's income
taxes on its foreign income is reported in operating income as a component of
equity-method income rather than in CNF's tax provision.  MW's portion of
Vector's net income, which is reported as a reduction of operating expenses
in the accompanying Statements of Consolidated Operations, does not include
any provision for U.S. federal income taxes on income earned
by CNF, but does include a provision for MW's portion of Vector's income
taxes on foreign income.  The provision for the third quarter and first nine
months of 2005 was $0.8 million and $2.4 million, respectively.  MW's
undistributed earnings from Vector at September 30, 2005 and December 31,
2004, before provision for CNF's related parent income taxes, were $38.0
million and $27.2 million, respectively.


Vector participates in CNF's centralized cash management system, and,
consequently, Vector's domestic trade accounts payable are paid by CNF and
settled through Vector's affiliate accounts with CNF.  In addition, excess
cash balances in Vector's bank accounts, if any, are invested by CNF and
settled through affiliate accounts, which earn interest income based on a
rate earned by CNF's cash-equivalent investments and marketable securities.
As a result of Vector's excess cash invested by CNF, CNF's payable to
Vector as of September 30, 2005 and December 31, 2004 was $37.7
million and $15.5 million, respectively.

As required by the Vector Agreements, CNF provides Vector with a $20 million
line of credit for Vector's working capital and capital expenditure
requirements.  Under the credit facility, which matures on December 13, 2005,
Vector may obtain loans with an annual interest rate based on the rate CNF
pays under its $400 million revolving credit facility.  At September 30,
2005, CNF provided a portion of its $20 million credit commitment to Vector
through CNF's guarantee of $1.8 million of uncommitted local currency
overdraft facilities available to Vector by international banks.  At
September 30, 2005 and December 31, 2004, there was no balance outstanding
under Vector's uncommitted local currency overdraft facilities and no
borrowings were directly payable to CNF.

CNF's capital transactions with Vector, including cash advances to and from
Vector under CNF's centralized cash management system and credit facility
described above, are reported as adjustments to MW's investment in Vector in
Deferred Charges and Other Assets in CNF's Consolidated Balance Sheets.



5.  Employee Benefit Plans

Employees of CNF and its subsidiaries in the U.S. are covered under the CNF
Postretirement Medical Plan (the "Postretirement Plan") and several defined
benefit pension plans (the "Pension Plans").  The Pension Plans consist of a
plan that covers the non-contractual employees and former employees of CNF's
continuing and discontinued operations (the "CNF Retirement Plan"), as well
as certain pension plans that cover only the current and former employees of
the discontinued Forwarding segment (the "Forwarding Plans").  As more fully
discussed in Note 2, "Discontinued Operations," CNF completed the sale of MWF
in December 2004.  Accordingly, amounts related to the legally separate
Forwarding Plans are not included in the employee benefit disclosures below
and are reported as discontinued operations.  As a result, the employee
benefit plan interim disclosures presented below are provided only for the
CNF Retirement Plan and the Postretirement Plan (collectively "the CNF
Benefit Plans").  Although total amounts relating to the CNF Benefit Plans
are included in the disclosures below, the estimated portion of benefit
expense that relates to employees of MWF and EWA is included in Discontinued
Operations in the Statements of Consolidated Operations.  The obligation
related to employees of MWF and EWA covered by the CNF Benefit Plans is
included in Employee Benefits of continuing operations in CNF's Consolidated
Balance Sheets at September 30, 2005 and December 31, 2004.

The following table summarizes the components of net periodic benefit expense
for the CNF Retirement Plan:


                                 Three Months Ended        Nine Months Ended
                                     September 30,            September 30,
                               -----------------------  -----------------------
 (Dollars in thousands)           2005        2004         2005        2004
                               ----------- -----------  ----------- -----------
Service cost- benefits earned
 during the quarter            $   12,209  $   16,626   $   36,213  $   44,100
Interest cost on
 benefit obligation                13,117      12,900       38,905      41,197
Expected return on
 plan assets                      (14,611)    (16,958)     (43,337)    (44,760)
Net amortization and deferral         882       2,838        2,616       6,652
                               ----------- -----------  ----------- -----------
   Net periodic
     benefit expense           $   11,597  $   15,406   $   34,397  $   47,189
                               =========== ===========  =========== ===========


In the presentation above, the portion of benefit expense that relates to
discontinued operations was immaterial in the third quarter and first nine
months of 2005 and was $2.9 million and $10.1 million for the third quarter
and first nine months of 2004, respectively.

Through the first nine months of 2005, CNF contributed $75 million to its
Pension Plans, and plans to make another contribution in the fourth quarter
of 2005.  Assuming no material change in market conditions or expected asset
values between September 30 and the plan measurement date in November, CNF
estimates that the amount of the fourth-quarter contribution will be up to
$100 million.

 The following table summarizes the components of net periodic benefit
expense for the Postretirement Plan:


                                 Three Months Ended       Nine Months Ended
                                    September 30,           September 30,
                               -----------------------  -----------------------
 (Dollars in thousands)            2005       2004         2005        2004
                               ----------- -----------  ----------- -----------
Service cost- benefits earned
 during the quarter            $      791  $      164   $    1,053  $    1,201
Interest cost on
 benefit obligation                 3,315       1,659        4,413       4,802
Net amortization and deferral       1,141         113        1,518         262
                               ----------- -----------  ----------- -----------
   Net periodic
     benefit expense           $    5,247  $    1,936   $    6,984  $    6,265
                               =========== ===========  =========== ===========


In the presentation above, the portion of benefit expense that relates to
discontinued operations was $3.2 million in the third quarter and first nine
months of 2005 and was $0.9 million and $3.7 million in the third quarter and
first nine months of 2004, respectively.


6.  Comprehensive Income

Comprehensive income, which is a measure of all changes in equity except
those resulting from investments by owners and distributions to owners, was
as follows:

 (Dollars in thousands)
                                  Three Months Ended      Nine Months Ended
                                     September 30,          September 30,
                               -----------------------  -----------------------
                                  2005        2004         2005        2004
                               ----------- -----------  ----------- -----------

Net income (loss)              $   67,808  $ (214,132)  $  169,990  $ (150,198)

Other comprehensive income
 (loss):
    Unrealized loss on
     marketable securities             --          --           --      (2,044)
    Foreign currency
     translation adjustment
     (Note 1)                          31       1,394          642       9,512
                               ----------- -----------  ----------- -----------
                                       31       1,394          642       7,468
                               ----------- -----------  ----------- -----------
Comprehensive income (loss)    $   67,839  $ (212,738)  $  170,632  $ (142,730)
                               =========== ===========  =========== ===========

The following is a summary of the components of Accumulated Other
Comprehensive Loss, net of tax:

                                         September 30,    December 31,
 (Dollars in thousands)                       2005            2004
                                         -------------   -------------
Accumulated foreign currency
 translation adjustments (Note 1)        $       (414)   $     (1,056)
Minimum pension liability adjustment          (14,680)        (14,680)
                                         -------------   -------------
   Accumulated other
    comprehensive loss                   $    (15,094)   $    (15,736)
                                         =============   =============



7.  Common Stock Repurchase Program

In January 2005, CNF's Board of Directors authorized a two-year stock
repurchase program providing for the repurchase of up to $300 million in
common stock in open market purchases and privately negotiated transactions.
As of September 30, 2005, CNF repurchased a total of 2,389,000 shares at a
cost of $111.6 million.  CNF generally expects the remaining purchases to be
made ratably throughout the remainder of the program.



8.  Commitments and Contingencies

Spin-Off of CFC

On December 2, 1996, CNF completed the spin-off of Consolidated Freightways
Corporation ("CFC") to CNF's shareholders.  CFC was, at the time of the spin-
off, a party to certain multiemployer pension plans covering some of its
current and former employees.  The cessation of its U.S. operations in 2002
resulted in CFC's "complete withdrawal" (within the meaning of applicable
federal law) from these multiemployer plans, at which point it became
obligated, under federal law, to pay its share of any unfunded vested
benefits under those plans.

It is possible that the trustees of CFC's multiemployer pension plans may
assert claims that CNF is liable for amounts owing to the plans as a result
of CFC's withdrawal from those plans and, if so, there can be no assurance
that those claims would not be material.  CNF has received requests for
information regarding the spin-off of CFC from representatives from some of
the pension funds, and, in accordance with federal law, CNF has responded to
those requests.

CNF believes that it would ultimately prevail if any such claims were made,
although there can be no assurance in this regard.  CNF believes that the
amount of those claims, if asserted, could be material, and a judgment
against CNF for all or a significant part of these claims could have a
material adverse effect on CNF's financial condition, cash flow and results
of operations.

Prior to the enactment in April 2004 of the Pension Funding Equity Act of
2004, if the multiemployer funds had asserted such claims against CNF, CNF
would have had a statutory obligation to make cash payments to the funds
prior to any arbitral or judicial decisions on the funds' determinations.
Under the facts related to the CFC withdrawals and the law in effect after
enactment of the Pension Funding Equity Act of 2004, CNF would no longer be
required to make such payments to the multiemployer funds unless and until
final decisions in arbitration proceedings, or in court, upheld the funds'
determinations.

As a result of the matters discussed above, CNF can provide no assurance that
matters relating to the spin-off of CFC will not have a material adverse
effect on CNF's financial condition, cash flows or results of operations.

Other

In February 2002, a lawsuit was filed against EWA in the District Court for
the Southern District of Ohio, alleging violations of the Worker Adjustment
and Retraining Notification Act (the "WARN Act") in connection with employee
layoffs and ultimate terminations due to the August 2001 grounding of EWA's
airline operations and the shutdown of the airline operations in December
2001.  The court subsequently certified the lawsuit as a class action on
behalf of affected employees laid off between August 11 and August 15, 2001.
The WARN Act generally requires employers to give 60-days notice, or 60-days
pay and benefits in lieu of notice, of any shutdown of operations or mass
layoff at a site of employment.  The estimated range for potential loss on
this matter is zero to approximately $8 million.  CNF intends to continue to
vigorously defend the lawsuit.

In September 2003, CNF received notice from the United States Attorney's
Office for the District of Columbia that EWA is being considered for possible
civil action under the False Claims Act for allegedly submitting false
invoices to the USPS for payment under the Priority Mail contract.  EWA
subsequently entered into a tolling agreement with the government in order to
give the parties more time to investigate the allegations.  In November 2004,
CNF representatives met with the government to discuss the government's
allegations, and at that time received certain information relating to the
government's investigation.  In addition, CNF, on behalf of EWA, conducted
its own investigation into the allegations.  CNF is currently unable to
predict the outcome of this matter.  Under the False Claims Act, the
government would be entitled to recover treble damages, plus penalties, if a
court were to ultimately conclude that EWA knowingly submitted false invoices
to the USPS.

CNF is a defendant in various other lawsuits incidental to its businesses.
It is the opinion of management that the ultimate outcome of these actions
will not have a material impact on CNF's financial condition, cash flows, or
results of operations.


9.  Income Taxes

CNF's effective tax provision rate of 35.2% and 34.0% in the third quarter
and first nine months of 2005, respectively, declined from 39.0% in the same
periods of last year.   The lower rate in the third quarter was due primarily
to a reduction in the nine-month effective rate to 37.0%, excluding the
effect of issue-specific reversals of accrued income taxes (primarily a
second-quarter reversal of $7.0 million that related to an IRS settlement of
issues related to tax years prior to 2002).  Excluding the effect of the
reversals of accrued taxes, the lower effective tax rates in 2005 were due
primarily to an increase in tax-exempt interest income, increased foreign tax
credits, and the effect of the GAAP classification of income taxes on
Vector's increasing foreign income.  As more fully discussed in Note 4,
"Investment in Unconsolidated Joint Venture," of Item 1, "Financial
Statements," MW's portion of U.S. federal income taxes on Vector's domestic
income is reported in CNF's tax provision.  CNF's foreign tax credits related
to Vector's foreign income are also reflected in CNF's tax provision.
However, under GAAP, MW's portion of Vector's income taxes on its foreign
income is reported in operating income as a component of equity-method income
and is not a component of CNF's tax provision.

CNF receives a tax deduction equal to the difference between the grant price
and the exercise price of non-qualified stock options.  In connection with
non-qualified stock options exercised in the first nine months of 2005, CNF
at September 30, 2005 recognized a $15.9 million tax benefit as a reduction
of accrued income taxes and as increase in additional paid-in capital.






ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

                                Introduction

Management's Discussion and Analysis of Financial Condition and Results of
Operations (referred to as "Management's Discussion and Analysis") is
intended to assist in a historical and prospective understanding of CNF's
results of operations, financial condition and cash flows, including a
discussion and analysis of the following:

   * Overview of Business
   * Results of Operations
   * Liquidity and Capital Resources
   * Estimates and Critical Accounting Policies
   * Other Matters

This discussion and analysis should be read in conjunction with the
information included in CNF's 2004 Annual Report on Form 10-K.

                            Overview of Business

CNF provides transportation, logistics and supply chain management services
for a wide range of manufacturing, industrial, and retail customers.  For
financial reporting purposes, CNF is divided into three reporting segments:
Con-Way Transportation Services ("Con-Way"), primarily a provider of regional
less-than-truckload ("LTL") freight services; Menlo Worldwide, a provider of
integrated contract logistics solutions; and CNF Other, which includes
certain corporate activities and Road Systems, a trailer manufacturer.  Menlo
Worldwide consists of the operating results of Menlo Worldwide Logistics
("Logistics") and Vector, a joint venture with GM that is accounted for as an
equity-method investment.

CNF's operating unit results are generally expected to depend on the number
and weight of shipments transported, the prices received on those shipments,
and the mix of services provided to customers, as well as the fixed and
variable costs incurred by CNF in providing the services and the ability to
manage those costs under changing shipment levels. Con-Way primarily
transports shipments through a freight service center network while Logistics
and Vector manage the logistics functions of their customers and primarily
utilize third-party transportation providers for the movement of customer
shipments.

As more fully discussed under "Results of Operations - Discontinued
Operations," CNF and Menlo Worldwide, LLC ("MW") in 2004 sold MWF to UPS.
Accordingly, the results of operations, net assets, and cash flows of the
Forwarding segment have been segregated and reported as discontinued
operations, except where otherwise noted.



                            Results of Operations

The following table compares CNF's consolidated operating results (dollars in
thousands, except per share amounts):

                                Three Months Ended      Nine Months Ended
                                   September 30,          September 30,
                            ------------------------- ------------------------
                                 2005       2004         2005         2004
                            ------------ ------------ ------------ -----------
Net Income (Loss)
   Continuing
      Operations 1,2        $    62,657  $    39,839  $   167,639  $  101,059
   Discontinued
      Operations 2                3,335     (256,046)      (3,490)   (257,376)
                            ------------ ------------ ------------ -----------
   Applicable to Common
   Shareholders             $    65,992  $  (216,207) $   164,149  $ (156,317)
                            ============ ============ ============ ===========

Diluted Earnings (Loss)
 per Share
  Continuing Operations     $      1.12  $      0.72  $      2.99  $     1.83
  Discontinued Operations          0.06        (4.62)       (0.06)      (4.55)
                            ------------ ------------ ------------ -----------
  Applicable to Common
   Shareholders             $      1.18  $     (3.90) $      2.93  $    (2.72)
                            ============ ============ ============ ===========

1    After preferred stock dividends
2    As required by EITF 87-24, "Allocation of Interest to Discontinued
Operations," for periods prior to the disposition of MWF in 2004, continuing
operations has been allocated general corporate overhead charges that were
previously allocated to the discontinued Forwarding segment.  These corporate
overhead charges of $2.8 million in the third quarter and $11.0 million in
the first nine months of 2004 were allocated from discontinued operations to
Con-Way and Logistics based on segment revenue and capital employed.

In 2005, CNF's net income available to common shareholders of $66.0 million
($1.18 per diluted share) in the third quarter and $164.1 million ($2.93 per
diluted share) in the first nine months improved significantly over net
losses in the prior year, due primarily to last year's $260.5 million third-
quarter impairment charge related to MWF, which was sold in December 2004,
and to significantly higher net income from continuing operations.  CNF's net
income from continuing operations in the third quarter grew 57.3% to $62.7
million ($1.12 per diluted share) in 2005 from $39.8 million ($0.72 per
diluted share) in 2004, and in the first nine months, rose 65.9% to $167.6
million ($2.99 per diluted share) in 2005 from $101.1 million ($1.83 per
diluted share) in the prior year.  As more fully discussed below under
"Results of Operations - Discontinued Operations," in the periods presented,
discontinued operations relate to the sale of MWF, to the shut-down of EWA
and its terminated Priority Mail contract with the USPS, and to the spin-off
of CFC.



Continuing Operations

The following table compares CNF's segment operating results (dollars in
thousands):


 (Dollars in thousands)        Three Months Ended       Nine Months Ended
                                  September 30,            September 30,
                           ------------------------- -------------------------
                                2005        2004         2005         2004
                           ------------ ------------ ------------ ------------
Revenues
  Con-Way Transportation
   Services                $   741,366  $   666,143  $ 2,095,630  $ 1,885,484
  Menlo Worldwide
   Logistics                   354,797      305,479      973,782      856,234
  CNF Other                      2,988        1,997       11,297        3,203
                           ------------ ------------ ------------ ------------
                           $ 1,099,151  $   973,619  $ 3,080,709  $ 2,744,921
                           ============ ============ ============ ============

Operating Income (Loss)
  Con-Way Transportation
   Services                $    94,403  $    70,661  $   253,288  $   183,451
  Menlo Worldwide
   Logistics                     7,889        5,710       18,553       16,045
  Vector                         4,220        2,699       13,196        8,079
                           ------------ ------------ ------------ ------------
                                12,109        8,409       31,749       24,124
                           ------------ ------------ ------------ ------------
  CNF Other                     (2,638)        (635)      (2,825)      (2,413)
                           ------------ ------------ ------------ ------------
                           $   103,874  $    78,435  $   282,212  $   205,162
                           ------------ ------------ ------------ ------------

Reconciliation of segments
 to consolidated amount:
   Income tax related
    to Vector, an
    equity-method
    investment (Note 4)           (841)          --       (2,363)          --
                           ------------ ------------ ------------ ------------
                           $   103,033  $    78,435  $   279,849  $   205,162
                           ============ ============ ============ ============


CNF's revenue for the third quarter and first nine months of 2005 increased
12.9% and 12.2%, respectively, from the same periods last year, due to higher
revenue at all reporting segments.  Consolidated operating income in 2005
rose 31.4% in the third quarter and grew 36.4% in the first nine months of
the year on significantly higher operating income from Con-Way and improved
operating results from Menlo Worldwide.  Con-Way's operating income for the
third quarter and first nine months of 2005 increased 33.6% and 38.1%,
respectively, due largely to revenue growth of 11.3% and 11.1%, respectively,
and improved regional-carrier operating margins. Con-Way's revenue increases
in 2005 reflect regional-carrier tonnage growth and yield improvement on
increased fuel surcharges.  Improved operating margins at Con-Way primarily
reflect a decline in employee costs as a percentage of revenue, due largely
to lower incentive compensation that resulted from variations in operating
income and other performance factors relative to incentive plan targets.
Menlo Worldwide's operating income in the third quarter and first nine months
of 2005 increased 44.0% and 31.6%, respectively, with the third-quarter
improvement coming mostly from higher operating income at Menlo Logistics and
the nine-month improvement being primarily attributable to higher income from
Vector's foreign operations.  Reported segment income from Vector increased
56.4% to $4.2 million in the third quarter of 2005 and grew 63.3% to $13.2
million in the first nine months of 2005.  Logistics' operating income in the
third quarter and first nine months of 2005 increased 38.2% and 15.6%,
respectively, on revenue growth of 16.1% and 13.7%, respectively.

Other net expense decreased $6.2 million in the third quarter of 2005 and
$12.4 million in the first nine months of 2005 due primarily to increases in
investment income, which rose $3.6 million and $11.6 million, respectively,
on increased average cash equivalents and marketable securities.  Interest
expense decreased $2.5 million in the third quarter of 2005 and increased in
the first nine months of 2005 by $0.3 million, due largely to the net effect
on interest from financing transactions, including the $292.6 million net
issuance in April 2004 of 6.7% Senior Debentures, the $128.9 million
redemption in June 2004 of 5% Convertible Debentures, and the $100.0 million
repayment in June 2005 of 7.35% Notes.  In the first nine months of 2005, a
net decrease in other miscellaneous non-operating expenses primarily reflects
$2.7 million of second-quarter costs in 2004 associated with the redemption
of the Convertible Debentures, partially offset by higher other miscellaneous
expenses in 2005.

CNF's effective tax provision rate of 35.2% and 34.0% in the third quarter
and first nine months of 2005, respectively, declined from 39.0% in the same
periods of last year.   The lower rate in the third quarter was due primarily
to a reduction in the nine-month effective rate to 37.0%, excluding the
effect of issue-specific reversals of accrued income taxes (primarily a
second-quarter reversal of $7.0 million that related to an IRS settlement of
issues related to tax years prior to 2002).  Excluding the effect of the
reversals of accrued taxes, the lower effective tax rates in 2005 were due
primarily to an increase in tax-exempt interest income, increased foreign tax
credits, and the effect of the GAAP classification of income taxes on
Vector's increasing foreign income.  As more fully discussed in Note 4,
"Investment in Unconsolidated Joint Venture," of Item 1, "Financial
Statements," MW's portion of U.S. federal income taxes on Vector's domestic
income is reported in CNF's tax provision.  CNF's foreign tax credits related
to Vector's foreign income are also reflected in CNF's tax provision.
However, under GAAP, MW's portion of Vector's income taxes on its foreign
income is reported in operating income as a component of equity-method income
and is not a component of CNF's tax provision.


Con-Way Transportation Services

The following table compares operating results (dollars in thousands),
operating margins, and the percentage increase in selected operating
statistics of the Con-Way reporting segment:

                                Three Months Ended        Nine Months Ended
                                   September 30,             September 30,
                           ------------------------- -------------------------
                                2005        2004         2005         2004
                           ------------ ------------ ------------ ------------
Summary of Operating
 Results
   Revenues                $   741,366  $   666,143  $ 2,095,630  $ 1,885,484
   Operating Income             94,403       70,661      253,288      183,451
   Operating Margin               12.7%        10.6%        12.1%         9.7%


                            2005 vs. 2004             2005 vs. 2004
                           --------------            --------------
Selected Regional-Carrier
 Operating Statistics
   Revenue per day                +13.4%                    +12.3%
   Yield                           +4.1                      +4.9
   Weight per day                  +8.9                      +7.0
   Weight per shipment             +3.0                      +3.0

Con-Way's revenue in the third quarter and first nine months of 2005 rose
11.3% and 11.1%, respectively, from the same periods in 2004 due to higher
revenue from Con-Way's regional carriers and continued growth from the Con-
Way Supply Chain Services Group, which includes Con-Way NOW, Con-Way Air
Express, and Con-Way Truckload.  Revenue per day from the regional carriers
in the third quarter of 2005 rose 13.4% from the third quarter of 2004 on an
8.9% increase in weight per day ("weight") and a 4.1% increase in revenue per
hundredweight ("yield").  For the first nine months of 2005, revenue per day
from the regional carriers rose 12.3% from the same period last year on a
7.0% increase in weight and a 4.9% increase in yield.  Management believes a
portion of the weight improvement in 2005 was from market-share gains.  Yield
increases in the third quarter and first nine months of 2005 primarily
reflect an increase in fuel surcharges, continued growth in higher-rated
interregional joint services, and general rate increases, partially offset by
growth in lower-yielding lower-cost shipments, as more fully discussed below.
Like other LTL carriers, Con-Way assesses many of its customers with a fuel
surcharge.  The fuel surcharge is a part of Con-Way's overall rate structure
for customers and is intended to protect Con-Way from the adverse effects of
higher fuel costs.  As fuel prices have risen, the fuel surcharge has
increased Con-Way's yields and revenue.  At times, in the interest of its
customers, Con-Way has temporarily capped the fuel surcharge at a fixed
percentage.  Following a sharp increase in fuel costs in the aftermath of
hurricanes in the U.S., Con-Way imposed a temporary cap on its fuel surcharge
that was in effect from August 29 through October 24.  Excluding fuel
surcharges, yields in 2005 decreased 0.7% and increased 0.6% from the third
quarter and first nine months of 2004, respectively.  Yields in 2005 were
adversely affected by 3.0% increases in weight per shipment in both the third
quarter and first nine months of 2005, which were largely driven by a spot-
quote program that contributed to an increase in the number of shipments in
excess of 10,000 pounds. The spot-quote program was developed to place lower-
yielding large shipments into empty linehaul leg segments without requiring
additional capacity.  Commensurate with the lower transportation cost per
unit of weight, spot-quote and other lower-cost higher-weight shipments
generally have lower yields.

Con-Way's operating income in the third quarter and first nine months of 2005
increased 33.6% and 38.1%, respectively, due largely to higher revenue and
improved operating margins from the regional carriers.  Fuel costs in the
third quarter and first nine months of 2005 increased 71.1% and 61.7%,
respectively, and purchased transportation costs in the same comparative
periods increased 21.0% and 17.6%, respectively.  However, higher fuel costs
and fuel-related increases in purchased transportation costs were more than
recovered through fuel surcharges, as discussed above and more fully
discussed below in "Other Matters - Fuel Costs."  Employee costs in the third
quarter and first nine months of 2005 increased 5.5% and 4.8%, respectively,
but declined as a percent of revenue.  Employee costs in 2005 reflect
increases in base compensation and employee benefits, partially offset by
lower incentive compensation.  Base compensation in the third quarter and
first nine months of 2005 rose 9.9% and 8.8%, respectively, due primarily to
headcount increases attributable to higher business volumes, and to a lesser
extent, wage and salary rate increases.  Incentive compensation in the third
quarter and first nine months of 2005 declined by $7.1 million and $19.0
million, respectively, based on variations in operating income and other
performance measures relative to incentive plan targets.  Employee benefits
expense increased 3.2% and 2.8% in the third quarter and first nine months of
2005, respectively, due largely to growth in headcount, partially offset by a
decline in workers' compensation expense.  Lower workers' compensation
expense in the third-quarter and first nine months of 2005 was largely due to
a third quarter entry in 2004 to correct the cumulative under-recognition of
expense on certain prior-period claims, which had a $3.9 million adverse
effect, net of incentive compensation.


Menlo Worldwide

The Menlo Worldwide reporting segment consists of the operating results of
Logistics and Vector.  Menlo Worldwide in 2005 reported third-quarter
operating income of $12.1 million, an increase of 44.0% over last year.  In
the first nine months of 2005, segment income was $31.7 million, a 31.6%
improvement over the same prior-year period.  Although MW owns a majority
equity interest, the operating results of Vector are reported as an equity-
method investment based on GM's ability to control certain operating
decisions.  Accordingly, CNF's Consolidated Statements of Operations do not
include any revenue from Vector and only MW's proportionate share of the net
income from Vector is reported as a reduction of operating expenses.

The following table compares operating results (dollars in thousands) and
operating margins of the Menlo Worldwide reporting segment:

                               Three Months Ended       Nine Months Ended
                                  September 30,           September 30,
                           ------------------------- -------------------------
                                2005         2004        2005         2004
                           ------------ ------------ ------------ ------------
Summary of Operating
 Results

 Logistics
  Revenues                 $   354,797  $   305,479  $   973,782  $   856,234
  Purchased Transportation    (260,680)    (217,578)    (699,595)    (603,019)
                           ------------ ------------ ------------ ------------
  Net Revenues                  94,117       87,901      274,187      253,215

  Operating Income               7,889        5,710       18,553       16,045
  Operating Margin
   on Revenue                      2.2%         1.9%         1.9%         1.9%
  Operating Margin on
   Net Revenue                     8.4%         6.5%         6.8%         6.3%


 Vector
  Operating Income         $     4,220  $     2,699  $    13,196  $     8,079


Menlo Worldwide - Logistics

Logistics' revenue in the third quarter and first nine months of 2005
increased 16.1% and 13.7%, respectively, due to increases in revenue from
carrier-management and warehouse-management services.  In 2005, revenue from
carrier-management services in the third quarter and first nine months grew
18.8% and 14.9%, respectively, while revenue from warehouse-management
services rose 6.6% and 9.8%, respectively.  Carrier-management revenue is
attributable to contracts for which Logistics manages the transportation of
freight but subcontracts the actual transportation and delivery of products
to third parties, which Logistics refers to as purchased transportation.
Logistics' net revenue (revenue less purchased transportation) in the third
quarter and first nine months of 2005 increased 7.1% and 8.3%, respectively,
as purchased transportation costs grew at a higher rate than revenue.

Logistics' operating income in the third quarter and first nine months of
2005 increased 38.2% and 15.6%, respectively, over the same periods of last
year, due primarily to revenue increases and improved margins on warehouse-
management services, partially offset by a decline in margins on carrier-
management services.  Margins on warehouse-management and carrier-management
services were positively affected by lower employee costs, which were due
primarily to declines in health and welfare costs, workers' compensation and
incentive compensation.  Incentive compensation in the third quarter and
first nine months of 2005 declined by 28.7% and 7.4%, respectively, based on
variations in operating income and other performance measures relative to
incentive plan targets.  In the third quarter and first nine months of 2005,
margins on carrier-management services were adversely affected by higher
purchased transportation costs.  In 2005, purchased transportation costs in
the third quarter and first nine months grew 19.8% and 16.0%, respectively,
due to increased business levels and fuel-related increases in carrier rates.

Beginning in the second quarter of 2005, Logistics integrated the Con-Way
Logistics business into its operations.  Accordingly, the operating results
of Con-Way Logistics are reported in the Menlo Worldwide Logistics reporting
segment and prior periods have been reclassified to conform to the current-
period presentation.  The integration of the two businesses is intended to
provide an enterprise solution offering for Logistics' customers who want to
use Con-Way as a primary transportation provider in addition to those
customers who want a vendor-neutral transportation solution.  The integration
is also expected to expand Con-Way Logistics' multi-client warehousing
service model to Logistics' larger warehouse network.


Menlo Worldwide - Vector

Operating Results

Third-quarter segment income reported from MW's equity investment in Vector
increased to $4.2 million in 2005 from $2.7 million in 2004, and for the
nine-month period, improved to $13.2 million in 2005 from $8.1 million last
year.  Higher reported segment income from Vector was due primarily to higher
income earned in GM's international regions, partially offset by a decline in
income from GM's North America region.  Improved income in GM's international
regions was substantially due to increased business levels and the revised
compensation rates in GM's European region, as described below.

North America

In August 2003, the Vector Agreements were amended, primarily to expedite the
transition of logistics services in the North America region from GM to
Vector, as more fully discussed in Note 3, "Investment in Unconsolidated
Joint Venture," of Item 8, "Financial Statements and Supplementary Data," in
CNF's 2004 Annual Report on Form 10-K.  Prior to the 2003 amendment,
agreements pertaining to Vector provided that Vector would be compensated by
sharing in efficiency gains and cost savings achieved through the
implementation of Approved Business Cases ("ABCs") and other special projects
in GM's North America region and GM's three international regions.  An ABC is
a project, developed with and approved by GM, aimed at reducing costs,
assuming operational responsibilities, and/or achieving operational changes.

Under the amended Vector Agreements, Vector is compensated for its management
of logistics for all of GM's North America operations rather than through its
sharing in efficiency gains and cost savings under individual ABCs.  In each
year of a five-year period retroactive to January 1, 2003, Vector will be
compensated with a management fee based on shipment volumes ("volume-based
compensation") and, beginning in 2004, can earn additional compensation if
certain performance criteria are achieved ("performance-based compensation").
In accordance with GAAP, compensation under the volume-based management fee
is recognized as vehicles are shipped while performance-based compensation is
recognized on the achievement of specified levels of cost savings, which will
generally not be determinable until the fourth quarter of each contract year.
Vector will also be compensated by GM for its direct and administrative costs
in North America, subject to certain limitations.  For other special projects
in GM's North America region, Vector is compensated under ABCs.  CNF expects
a declining amount of compensation from the management fee in each successive
year covered under the amended Vector agreements for North America.  Except
for special projects compensated under ABCs, CNF does not currently expect to
earn performance-based compensation in 2005, based primarily on current-year
increases in fuel and other transportation costs that CNF believes will
prevent the attainment of performance criteria in 2005.

International

Compensation earned from GM's European region in the third quarter and first
nine months of 2005 increased $1.5 million and $6.4 million, respectively,
from the same periods last year, due primarily to increased business levels
and an amendment to ABCs for GM's European region.  Effective January 1,
2005, for the 2005 calendar year, all of the ABCs for GM's European region
were amended to compensate Vector with cost reimbursement and a management
fee based on vehicle production volumes, rather than through separately
approved ABCs.  After 2005, Vector's compensation for GM's European region
will again be based on separately approved ABCs, unless further amendments
are negotiated.  The compensation principles for GM's Latin America and
Asia/Pacific regions are unaffected by the 2005 amendments in the European
region.

Call Right and Put Right

Under the Vector Agreements, GM has the right to purchase MW's membership
interest in Vector ("Call Right") and MW has the right to require GM to
purchase MW's membership interest in Vector ("Put  Right").  The Call Right
and Put Right are exercisable at the sole discretion of GM and MW,
respectively.  Under the amended Vector Agreements, the amount payable by GM
to MW under the Put Right is based on a mutually agreed-upon estimated value
for MW's  membership interest as of the contract amendment date and will
decline on a straight-line basis over an 8-year period beginning January 1,
2004. Exercise of MW's  Put  Right  or  GM's Call  Right  would  result  in
MW  retaining  any  commercialization contracts involving customers other than
GM.


CNF Other Segment

The CNF Other segment consists of the results of Road Systems and certain
corporate activities.  A majority of the revenue from Road Systems was from
sales to Con-Way.  The CNF Other third-quarter operating loss increased to
$2.6 million in 2005 from $0.6 million in 2004, while the $2.8 million
operating loss in the first nine months of 2005 increased from $2.4 million
in 2004.  The first nine months of 2005 primarily reflect a $2.2 million
third-quarter loss resulting from an insurance settlement, while the same
period of last year primarily was affected by corporate insurance activities
and sales of corporate properties, which resulted in a $0.7 million first-
quarter loss.



Discontinued Operations

Discontinued operations in the periods presented relate to the sale of MWF,
to the shut-down of EWA and its terminated Priority Mail contract with the
USPS, and to the spin-off of CFC.  For the periods presented, the results of
operations, net assets, and cash flows of discontinued operations have been
segregated from continuing operations, except where otherwise noted.  The
operating results and net assets of discontinued operations are summarized in
Note 2, "Discontinued Operations," of Item 1, "Financial Statements."

MWF

Impairment Charge

On October 5, 2004, CNF and Menlo Worldwide, LLC ("MW") entered into a stock
purchase agreement with UPS to sell all of the issued and outstanding capital
stock of MWF.  CNF completed the sale on December 19, 2004, as more fully
discussed below. Although the stock purchase agreement was entered into on
October 5, 2004, decisions by CNF's management and its Board of Directors and
the third-quarter sale negotiations with UPS established CNF's commitment to
sell MWF as of September 30, 2004. In the process of evaluating several
strategic alternatives for Menlo Worldwide's Forwarding segment, CNF was
approached by UPS in the third quarter of 2004 with interest in acquiring
MWF.  Accordingly, in the third quarter of 2004, CNF classified MWF as held
for sale and recognized a $260.5 million impairment charge to write down the
recorded book value of MWF to its anticipated selling price, less costs to
sell.  The impairment charge was based on the agreement to sell MWF, as
described below, and primarily represents the estimated write-down to the
fair value of MWF's goodwill and long-lived assets, including MWF's
accumulated foreign currency translation adjustment, as well as estimated
selling costs.

Stock Purchase Agreement

The stock purchase agreement excludes certain assets and liabilities of MWF
and includes certain assets and liabilities of CNF or its subsidiaries
related to the business conducted by MWF.  Among the assets and liabilities
so excluded are those related to EWA, and the obligation related to MWF
employees covered under CNF's domestic pension, postretirement medical and
long-term disability plans.  Under the agreement, UPS agreed to pay to CNF an
amount equal to MWF's cash position as of December 31, 2004, and to pay the
estimated present value of CNF's retained obligations related to MWF
employees covered under CNF's long-term disability and postretirement medical
plans, as agreed to by the parties or, in the absence of such agreement, as
determined by an independent actuary.  In addition, UPS assumed indebtedness
associated with the MWF business, including approximately $110 million of
debt owed by MWF in connection with the City of Dayton, Ohio, Special
Facilities Revenue Refunding Bonds, certain capital leases and other debt,
other letters of credit, and overdraft facilities.  Under the stock purchase
agreement, CNF has agreed to a three-year non-compete covenant that, subject
to certain exceptions, will limit CNF's annual air freight and ocean
forwarding and/or customs brokerage revenues to $175 million through CNF's
2007 fiscal year.  CNF has also agreed to indemnify UPS against certain
losses that UPS may incur after the closing of the sale with certain
limitations.  Any losses related to these indemnification obligations or any
other costs, including any future cash expenditures, related to the sale that
have not been estimated and recognized at this time will be recognized in
future periods as an additional loss from disposal when and if incurred.  For
additional details, refer to the stock purchase agreement filed as an exhibit
to CNF's Form 8-K dated October 5, 2004 and the amendment to the stock
purchase agreement filed as an exhibit to CNF's Form 8-K dated December 21,
2004.


Disposition of MWF

Upon completion of the sale of MWF on December 19, 2004, CNF received cash
consideration of $150 million, subject to certain post-closing adjustments,
including adjustments for cash held by MWF at closing and MWF's net working
capital as of closing.  In connection with the sale, CNF in 2004 recognized a
fourth-quarter loss from disposal of $15.8 million (net of a $3.6 million tax
benefit), as the adjusted carrying value of MWF exceeded the cash
consideration, including amounts received at closing and expected to be
received in the future.  Following settlement of the MWF cash balance in
March 2005, CNF received cash of $29.4 million and recognized an additional
first-quarter net loss from disposal of $9.8 million, primarily to recognize
the difference between the actual cash received and CNF's estimate of the
cash position at December 31, 2004, and to accrue additional estimated
transaction costs.  As a result of additional adjustments in its estimated
disposition loss, CNF in 2005 reported a $3.6 million second-quarter net gain
and a $9.0 million third-quarter net gain, primarily to recognize an increase
in its estimate of deferred tax assets associated with employee benefit
obligations retained by CNF, as more fully discussed below under "- Excluded
Assets and Liabilities."

CNF recognized a tax benefit on its losses from the disposal of MWF,
which are treated as capital losses for tax purposes.  Under current tax law,
capital losses can only be used to offset capital gains.  Since CNF did not
forecast any significant taxable capital gains in the tax carry-forward
period, the $41.0 million cumulative disposal-related tax benefit at
December 31, 2004 was fully offset by a valuation allowance of an equal
amount.  In 2005, the cumulative disposal-related tax benefit and the
associated valuation allowance declined to $29.0 million at September 30,
2005 due primarily to the third-quarter sale-related proceeds received from
UPS and revisions to the tax effect of sale-related estimates, partially
offset by the first-quarter disposal-related capital loss.

Excluded Assets and Liabilities

As described above, the stock purchase agreement excludes, and CNF has
retained, the obligations related to MWF employees covered under certain CNF-
sponsored employee benefit plans, including domestic pension, postretirement
and long-term disability plans that cover the noncontractual employees and
former employees of both continuing and discontinued operations. These plans
also include certain pension plans that cover only the current and former
employees of the discontinued Forwarding segment (the "Forwarding Plans").
For financial reporting purposes, the prepaid benefit cost of the Forwarding
Plans is reported in Assets of Discontinued Operations while the accrued
benefit cost related to MWF employees covered under the other legally
separate CNF-sponsored plans are reported in Employee Benefits of continuing
operations.  Under the stock purchase agreement, UPS agreed to pay to CNF the
estimated present value of CNF's retained obligations related to MWF
employees covered under CNF's long-term disability and postretirement medical
plans (the "Reimbursable Plans.")  Accordingly, CNF in December 2004 recorded
in Other Accounts Receivable a receivable for its estimate of the present
value of the retained obligations of the Reimbursable Plans.  Under an
agreement reached in August 2005, UPS paid $79.0 million to CNF for the
agreed-upon estimated present value of the retained obligations of the
Reimbursable Plans.  The carrying value of these obligations at September 30,
2005 was equal to the cash reimbursement from UPS.  If, on CNF's annual
November 30 actuarial measurement date, the present value estimated by an
independent actuary is different than the carrying value, that difference
would be recognized as a gain or loss from disposal in the fourth quarter of
2005.

EWA

The results of EWA relate to the cessation of its air-carrier operations in
2001 and to the termination of its Priority Mail contract with the USPS in
2000.  In 2005, EWA recognized net losses of $0.6 million in the second
quarter and $7.2 million in the third quarter, due primarily to increases in
the estimated exposure for litigation and restructuring-related obligations.
EWA's estimated loss reserves increased to $35.1 million at September 30,
2005 from $33.8 million at December 31, 2004 due primarily to the third-
quarter loss described above, partially offset by the cash settlement of
restructuring-related obligations.  EWA's remaining loss reserves at
September 30, 2005 are reported in Liabilities of Discontinued Operations and
consisted mostly of CNF's estimated exposure related to the labor matters
described below, and other litigation-related losses.

In connection with the cessation of its air-carrier operations in 2001, EWA
terminated the employment of all of its pilots and crew members.  Those
pilots and crew members are represented by the Air Line Pilots Association
("ALPA") union under a collective bargaining agreement.  Subsequently, ALPA
filed a grievance on behalf of the pilots and crew members protesting the
cessation of EWA's air-carrier operations and MWF's use of other air
carriers.  The ALPA matters are the subject of litigation in U.S. District
Court and, depending on the outcome of that litigation, may be subject to
binding arbitration.  Based on CNF's current evaluation, management believes
that it has provided for its estimated exposure related to the ALPA matters.
However, there can be no assurance in this regard as CNF cannot predict with
certainty the ultimate outcome of these matters.



                       Liquidity and Capital Resources

Cash and cash equivalents rose to $641.9 million at September 30, 2005 from
$386.9 million at December 31, 2004, as $232.2 million provided by operating
activities and $227.9 million provided by investing activities exceeded
$192.9 million used in financing activities.  Cash provided by investing
activities primarily reflects the net effect of a $290.3 million decrease in
short-term marketable securities, $168.1 million of capital expenditures and
$108.4 million in payments received from UPS in connection with the sale of
MWF, while cash used in financing activities primarily reflects debt
repayment of $112.7 million and common stock repurchases of $111.6 million.
CNF's cash flows are summarized in the table below.

                                                    Nine Months Ended
 (Dollars in thousands)                                September 30,
                                              -----------------------------
                                                    2005          2004
                                              -------------- --------------
Operating Activities
  Net income (loss)                           $     169,990  $    (150,198)
  Discontinued operations                             3,490        257,376
  Non-cash adjustments (1)                           74,411        106,548
                                              -------------- --------------
                                                    247,891        213,726
Changes in assets and liabilities
  Receivables                                      (109,775)       (67,612)
  Accounts payable and accrued
    liabilities, excluding accrued
    incentive compensation                           44,963         60,372
  Accrued incentive compensation                     (1,312)        54,322
  Income taxes                                       61,379         30,974
  Employee benefits                                 (39,807)       (43,504)
  Deferred charges and credits                       26,744         71,562
  All other changes in assets
    and liabilities                                   2,134        (10,884)
                                              -------------- --------------
                                                    (15,674)        95,230

 Net Cash Provided by Operating Activities          232,217        308,956
                                              -------------- --------------

 Net Cash Provided by (Used in)
   Investing Activities                             227,925       (179,387)
                                              -------------- --------------

 Net Cash Provided by (Used in)
   Financing Activities                            (192,886)       149,648
                                              -------------- --------------

 Net Cash Provided by Continuing Operations         267,256        279,217
 Net Cash Used in Discontinued Operations           (12,222)        (3,891)
                                              -------------- --------------
 Increase in Cash and Cash Equivalents        $     255,034  $     275,326
                                              ============== ==============

 (1) "Non-cash adjustments" refer to depreciation, amortization, deferred
 income taxes, provision for uncollectible accounts, equity in earnings
 of joint venture, and non-cash gains and losses.


Continuing Operations

Operating Activities

Cash flow from operating activities in the first nine months of 2005 was
$232.2 million, a $76.7 million decrease from the same prior-year period, as
an increase in net income before non-cash items was more than offset by the
net use of cash due to changes in assets and liabilities. Receivables in the
first nine months of 2005 used $109.8 million on an increase in revenue.
Accrued incentive compensation decreased $1.3 million in the first nine
months of 2005, while the prior-year period reflects a $54.3 million
increase.  In both periods, changes in accrued incentive compensation reflect
CNF's payment schedule for its employee incentive plans, under which total
incentive compensation earned in an award year is paid to employees with a
partial payment in December of the award year and a final payment in February
of the next award year.  In the first nine months of 2005, $57.6 million in
payments for incentive compensation exceeded expense accruals of $56.3
million, while in the first nine months of 2004, $78.6 million in expense
accruals exceeded $24.3 million in payments.  Based primarily on taxable
income, increases in CNF's current tax payable provided $61.4 million, as
CNF reported an income tax payable at September 30, 2005 compared to an income
tax receivable at December 31, 2004, as reported in Other Receivables in CNF's
financial statements. The net use of cash from the decline in employee
benefit liabilities for the first nine months of 2005 and 2004 reflects the
effect of defined benefit pension plan funding contributions of $75.0 million
and $90.8 million, respectively, as described below under "- Defined Benefit
Pension Plans," partially offset by expense accruals for CNF's defined
benefit plan obligation.  Cash provided by changes in deferred charges and
credits declined to $26.7 million in the first nine months of 2005 from $71.6
million provided in the same nine-month period of 2004 due primarily to $54.5
million of cash payments received last year in connection with the
liquidation of corporate-owned life insurance policies, partially offset by
increases in CNF's payable to Vector, which is more fully discussed in Note
4, "Investment in Unconsolidated Joint Venture," in Item 1, "Financial
Statements."  Increases in CNF's payable to Vector in the first nine months
of both 2005 and 2004 provided cash of $22.2 million and $9.9 million,
respectively.

Investing Activities

Investing activities in the first nine months of 2005 provided $227.9 million
compared to $179.4 million used in the first nine months of 2004.  In 2005,
CNF collected non-trade receivables from UPS, including a $29.4 million
first-quarter payment received from UPS in connection with the sale of MWF
and a $79.0 million third-quarter payment received from UPS for CNF's
retained obligations related to MWF employees covered under CNF's long-term
disability and postretirement medical plans.
The $29.4 million first-quarter payment from UPS has been reclassified to
investing activities from operating activities, where it was reported in
CNF's 2005 first- and second-quarter reports on Form 10-Q.  In both periods
presented, investing activities also reflect fluctuations in short-term
marketable securities and capital expenditures. Investments in marketable
securities decreased in the first nine months of 2005 by $290.3 million,
primarily from the first-quarter conversion of auction-rate securities into
cash and cash equivalents, while the first nine months of 2004 reflect a
$65.1 million increase in marketable securities. Capital expenditures in the
first nine months of 2005 increased $58.0 million from the same period of
2004 due substantially to expenditures at Con-Way, which acquired $124.6
million of tractors and trailers in the first nine months of 2005, compared
to $75.2 million in the first nine months of 2004.

Financing Activities

Financing activities in the first nine months of 2005 used cash of $192.9
million compared to $149.6 million provided in the first nine months of 2004.
In the first nine months of 2005, cash used in financing activities includes
$111.6 million used for the repurchase of common stock under CNF's repurchase
program described below.  Financing activities in 2005 reflect the repayment
at maturity on June 1 of $100 million 7.35% Notes, while 2004 reflects the
$292.6 million net issuance of 6.7% Senior Debentures and the $128.9 million
redemption of 5% Convertible Debentures.  Financing activities in both
periods presented also reflect dividend payments and scheduled principal
payments for the Thrift and Stock Plan notes guaranteed by CNF.  Cash
provided by the exercise of stock options increased to $56.8 million in the
first nine months of 2005 from $25.1 million in the same period last year,
due primarily to an increase in the market price for CNF's common stock.

In January 2005, the Board of Directors authorized the repurchase of up to
$300 million in CNF's common stock from time to time during a two-year period
in open-market purchases and privately negotiated transactions.  CNF
currently estimates it will repurchase approximately $150 million of CNF's
common stock annually in each of 2005 and 2006.

CNF has a $400 million revolving credit facility that matures on March 11,
2010.  The revolving credit facility is available for cash borrowings and for
the issuance of letters of credit up to $400 million.  At September 30, 2005,
no borrowings were outstanding under the facility and $219.2 million of
letters of credit were outstanding, leaving $180.8 million of available
capacity for additional letters of credit or cash borrowings, subject to
compliance with financial covenants and other customary conditions to
borrowing.  CNF had other uncommitted unsecured credit facilities totaling
$35.0 million at September 30, 2005, which are available to support letters
of credit, bank guarantees, and overdraft facilities; at that date, a total
of $15.8 million was outstanding under these facilities.  Of the total
letters of credit outstanding at September 30, 2005, $218.7 million provided
collateral for CNF workers' compensation and vehicular self-insurance
programs.  See "Other Matters - Forward-Looking Statements" below, and Note
5, "Debt and Other Financing Arrangements," in Item 8, "Financial Statements
and Supplementary Data," of CNF's 2004 Annual Report on Form 10-K for
additional information concerning CNF's $400 million credit facility and some
of its other debt instruments.

Defined Benefit Pension Plans

As more fully discussed below under "Estimates and Critical Accounting
Policies - Defined Benefit Pension Plans," CNF periodically reviews the
funded status of its defined benefit pension plans for non-contractual
employees, and makes contributions from time to time as necessary to comply
with the funding requirements of the Employee Retirement Income Security Act
("ERISA").  In determining the amount and timing of its pension
contributions, CNF considers both the ERISA- and GAAP- based measurements of
funded status as well as the tax deductibility of contributions.  Through the
first nine months of 2005, CNF contributed $75.0 million to its defined
benefit pension plans, and plans to make another contribution in the fourth
quarter of 2005.  Assuming no material change in market conditions or
expected asset values between September 30 and the plan measurement date in
November, CNF estimates that the amount of the fourth-quarter contribution
will be up to $100 million.  CNF made defined benefit pension plan
contributions of $90.8 million in 2004.

Contractual Cash Obligations

CNF's contractual cash obligations as of December 31, 2004 are summarized in
CNF's 2004 Annual Report on Form 10-K under Item 7, "Management's Discussion
and Analysis - Liquidity and Capital Resources - Contractual Cash
Obligations."  In the first nine months of 2005, there have been no material
changes in CNF's contractual cash obligations outside the ordinary course of
business.  As discussed above, CNF repaid its $100 million 7.35% Notes on
June 1, 2005.

CNF currently anticipates capital expenditures of approximately $225.0
million in 2005.

Other

CNF's ratio of total debt to capital decreased to 40.2% at September 30, 2005
from 47.9% at December 31, 2004, due primarily to the increase in retained
earnings resulting from net income earned in the first nine months of 2005
and the repayment in June of $100 million 7.35% Notes.

In June 2005, Standard & Poor's affirmed its investment-grade rating on CNF's
senior unsecured debt and upgraded its outlook to "positive" from "stable."

Discontinued Operations

On December 19, 2004, CNF completed the sale of MWF to UPS for $150 million
in cash, subject to adjustment for cash held by MWF at closing and the net
capital of MWF as of closing.  In March 2005, CNF received $29.4 million from
UPS for the reimbursable cash held by MWF at closing, with no adjustment for
net capital.  The first-quarter payment from UPS and the third-quarter
payment more fully discussed below are reported as sale-related proceeds
under investing activities in CNF's Statements of Consolidated Cash Flows.

As more fully discussed under "Results of Operations - Discontinued
Operations," UPS agreed to pay to CNF an amount equal to CNF's retained
obligations related to MWF employees covered under CNF's long-term disability
and postretirement medical plans.  Accordingly, CNF in December 2004 recorded
in Other Accounts Receivable a receivable for its estimate of the present
value of these employee benefit obligations.  Under agreement reached in
August 2005, UPS paid $79.0 million to CNF for the agreed-upon present value
of the employee benefit obligations retained by CNF.




                 Estimates and Critical Accounting Policies

The preparation of financial statements in accordance with accounting
principles generally accepted in the U.S. requires management to adopt
accounting policies and make significant judgments and estimates.  In many
cases, there are alternative policies or estimation techniques that could be
used.  CNF maintains a process to evaluate the appropriateness of its
accounting policies and estimation techniques, including discussion with and
review by the Audit Committee of its Board of Directors and its independent
auditors.  Accounting policies and estimates may require adjustment based on
changing facts and circumstances and actual results could differ from
estimates.  The policies and estimates discussed below include those that are
most critical to the financial statements.

Self-Insurance Reserves

CNF uses a combination of insurance and self-insurance programs to provide
for the costs of medical, casualty, liability, vehicular, cargo and workers'
compensation claims. In the measurement of these costs, CNF considers
historical claims experience, medical costs, demographic and severity factors
and other assumptions.  Self-insurance accruals are developed based on the
estimated, undiscounted cost of claims, including those claims incurred but
not reported as of the balance sheet date.  The long-term portion of self-
insurance accruals relates primarily to workers' compensation and vehicular
claims that are payable over several years.  The actual costs may vary from
estimates.

Income Taxes

In establishing its deferred income tax assets and liabilities, CNF makes
judgments and interpretations based on the enacted tax laws and published tax
guidance that are applicable to its operations.  CNF records deferred tax
assets and liabilities and periodically evaluates the need for a valuation
allowance to reduce deferred tax assets to realizable amounts.  The
likelihood of a material change in CNF's expected realization of these assets
is dependent on future taxable income, future capital gains, its ability to
use foreign tax credit carry forwards and carry backs, final U.S. and foreign
tax settlements, and the effectiveness of its tax planning strategies in the
various relevant jurisdictions.  CNF is also subject to examination of its
income tax returns for multiple years by the IRS and other tax authorities.
CNF periodically assesses the likelihood of adverse outcomes resulting from
these examinations to determine the adequacy of its provision and related
accruals for income taxes.

Disposition and Restructuring Estimates

As more fully discussed under "Results of Operations - Discontinued
Operations," CNF's management made significant estimates and assumptions in
connection with the restructuring of EWA in 2001 and the disposition of MWF
in 2004.  Actual results could differ from estimates, which could affect
related amounts reported in the financial statements.

Uncollectible Accounts Receivable

CNF and its subsidiaries report accounts receivable at net realizable value
and provide an allowance for uncollectible accounts when collection is
considered doubtful.  Con-Way provides for uncollectible accounts based on
various judgments and assumptions, including revenue levels, historical loss
experience, and composition of outstanding accounts receivable.  Logistics,
based on the size and nature of its client base, performs a frequent and
periodic evaluation of its customers' creditworthiness and accounts
receivable portfolio and recognizes expense from uncollectible accounts when
losses are both probable and reasonably estimable.

Defined Benefit Pension Plans

CNF has defined benefit pension plans that cover employees and former non-
contractual employees in the United States.  The amount recognized as pension
expense and the accrued pension liability depend upon a number of assumptions
and factors, the most significant being the discount rate used to measure the
present value of pension obligations and the expected rate of return on plan
assets.  CNF assesses its plan assumptions for the discount rate, expected
rate of return on plan assets, and other significant assumptions on a
continuous basis, but concludes on those assumptions at the actuarial plan
measurement date in November of each year.

CNF assumed a discount rate of 6.25% for purposes of calculating its pension
expense in both 2005 and 2004.  CNF adjusts its discount rate periodically by
taking into account changes in high-quality corporate bond yields and the
guidance of its outside actuaries.  In determining the appropriate discount
rate, CNF in 2005 began utilizing a bond model that incorporates expected
cash flows of plan obligations.  The bond model uses a selected portfolio of
Moody's Aa-or-better rated bonds with cash flows and maturities that match
the projected benefit payments of CNF's pension plans.  CNF's discount rate
is equal to the yield on the portfolio of bonds, which will typically exceed
the Moody's Aa corporate bond index due to the long duration of expected
benefit payments from CNF's plan.  If all other factors were held constant, a
0.25% decline in the discount rate would result in an estimated $6 million
increase in 2005 annual pension expense.

CNF adjusts its expected rate of return on plan assets based on current
market expectations and historical returns.  The rate of return is based on
an expected 20-year return on the current asset allocation and the effect of
actively managing the plan, net of fees and expenses.  For purposes of
calculating its pension expense, CNF decreased its expected rate of return on
plan assets to 8.5% in 2005 from 9.0% in 2004, due to market declines.  Using
year-end plan asset values, a 0.25% decline in the expected rate of return on
plan assets would result in an estimated $2 million increase in 2005 annual
pension expense.

Differences between the expected and actual rate of return on plan assets
and/or changes in the discount rate may result in cumulative unrecognized
actuarial losses.  These unrecognized actuarial losses primarily reflect the
declining discount rate and lower market returns in recent years.  Although
these amounts may be recovered in future periods through actuarial gains, any
portion of the unrecognized actuarial loss outside of a corridor amount must
be amortized and recognized as expense over the average service period for
employees.  Amortization of the unrecognized actuarial loss in 2005 declined
$6 million from 2004, due primarily to a reduction in the difference between
expected and actual returns on plan assets in 2005.

Under assumptions applied at the 2004 measurement date, the accumulated
benefit obligation of certain CNF pension plans exceeded the fair value of
plan assets.  Accordingly, CNF recorded a minimum pension liability
adjustment to recognize the shortfall between the fair value of the assets
and the accumulated benefit obligation of these plans.  At September 30, 2005
and December 31, 2004, the cumulative additional minimum pension liability,
as reported in Accumulated Other Comprehensive Loss in Shareholders' Equity,
was $14.7 million (net of $9.4 million of tax benefits).

CNF periodically reviews the funded status of its defined benefit pension
plans for non-contractual employees, and makes contributions from time to
time as necessary to comply with the funding requirements of the Employee
Retirement Income Security Act ("ERISA").  In determining the amount and
timing of its pension contributions, CNF considers both the ERISA- and GAAP-
based measurements of funded status as well as the tax deductibility of
contributions.  Through the first nine months of 2005, CNF contributed $75.0
million to its defined benefit pension plans, and plans to make another
contribution in the fourth quarter of 2005.  Assuming no material change in
market conditions or expected asset values between September 30 and the plan
measurement date in November, CNF estimates that the amount of the fourth-
quarter contribution will be up to $100 million.  CNF made defined benefit
pension plan contributions of $90.8 million in 2004.  CNF estimates that a
$50 million pension funding payment in the fourth quarter of 2005 would
reduce annual pension expense in 2006 by $4 million.

Goodwill and Other Long-Lived Assets

CNF performs an impairment analysis of long-lived assets whenever
circumstances indicate that the carrying amount may not be recoverable.  For
assets that are to be held and used, an impairment charge is recognized when
the estimated undiscounted cash flows associated with the asset or group of
assets is less than carrying value.  If impairment exists, a charge is
recognized for the difference between the carrying value and the fair value.
Fair values are determined using quoted market values, discounted cash flows,
or external appraisals, as applicable.  Assets held for disposal are carried
at the lower of carrying value or estimated net realizable value.





                                Other Matters

Cyclicality and Seasonality

CNF's businesses operate in industries that are affected directly by general
economic conditions and seasonal fluctuations, which affect demand for
transportation services.  In the transportation industry, for a typical year,
the months of September and October usually have the highest business levels
while the months of December, January and February usually have the lowest
business levels.

Fuel Costs

CNF is exposed to the effects of changes in diesel fuel prices.  Like other
LTL carriers, Con-Way assesses many of its customers with a fuel surcharge.
The fuel surcharge is a part of Con-Way's overall rate structure for
customers and is intended to protect Con-Way from the adverse effects of
higher fuel costs.  As fuel prices have risen, the fuel surcharge has
increased Con-Way's yields and revenue, and Con-Way has more than recovered
higher fuel costs and fuel-related increases in purchased transportation.  At
times, in the interest of its customers, Con-Way has temporarily capped the
fuel surcharge at a fixed percentage.  Following a sharp increase in fuel
costs in the aftermath of hurricanes in the U.S., Con-Way imposed a temporary
cap on its fuel surcharge that was in effect from August 29 through October
24.  CNF cannot predict the future movement of fuel prices, Con-Way's ability
to recover higher fuel costs through fuel surcharges, or the effect that
changes in fuel surcharges may have on Con-Way's overall rate structure.
Con-Way's operating income would likely be adversely affected by a rapid and
significant decline in fuel prices as lower fuel surcharges would reduce Con-
Way's yield and revenue.  Whether or not fuel prices increase, decrease, or
remain constant, Con-Way's operating income may be adversely affected if
competitive pressures limited Con-Way's ability to assess its fuel
surcharges.

Business Interruption

CNF and its subsidiaries rely on CNF Service Company for the performance of
shared administrative and technology services in the conduct of their
businesses.  CNF's computer facilities and its administrative and technology
employees are located at the Administrative and Technology ("AdTech") Center,
a centralized shared-service facility in Portland, Oregon.  Although CNF
maintains backup systems and has disaster recovery processes and procedures
in place, a sustained interruption in the operation of these facilities,
whether due to terrorist activities, earthquakes, floods or otherwise, could
have a material adverse effect on CNF's financial condition, cash flows, and
results of operations.

Homeland Security

CNF is subject to compliance with cargo security and transportation
regulations issued by the Department of Homeland Security and the Department
of Transportation.  CNF is not able to accurately predict how new
governmental regulation will affect the transportation industry.  However,
CNF believes that any additional security measures that may be required by
future regulations could result in additional costs and could have an adverse
effect on its ability to serve customers and on its financial condition,
results of operations, and cash flows.

Employees

The workforce of CNF and its subsidiaries is not affiliated with labor
unions.  Consequently, CNF believes that the operations of its subsidiaries
have advantages over comparable unionized competitors in providing reliable
and cost-competitive customer services, including greater efficiency and
flexibility.  There can be no assurance that CNF's subsidiaries will be able
to maintain their current advantages over certain of their competitors.


New Accounting Standards

In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment" ("SFAS
123R"), a revision of SFAS 123 that supersedes APB 25 and its related
implementation guidance.  SFAS 123R eliminates the alternative to use APB
25's intrinsic-value method of accounting that was provided in SFAS 123 as
originally issued, and requires companies to recognize the cost of employee
services received in exchange for awards of equity instruments based on the
grant-date fair value of those awards (with limited exceptions) over the
period during which an employee is required to provide service in exchange
for the award.

SFAS 123R also amends FASB Statement No. 95, "Statement of Cash Flows," to
require that the benefits associated with the tax deductions in excess of
recognized compensation cost be reported as financing cash flows, rather than
as a reduction of taxes paid. This requirement will reduce net operating cash
flows and increase net financing cash flows in periods after the effective
date.

The effective date of SFAS 123R is as of the beginning of the first interim
or annual reporting period of the first fiscal year beginning on or after
June 15, 2005, which for CNF is the first quarter of 2006.  In the adoption
of SFAS 123R, CNF has concluded that it will continue its use of the Black-
Scholes model for estimating the fair value of stock option grants and will
apply the modified prospective transition method to all past share-based
awards outstanding and unvested as of the effective adoption date of January
1, 2006.  Under the modified prospective transition method, CNF will
recognize the associated expense over the remaining vesting period based on
the fair values previously determined and disclosed as part of the pro-forma
disclosures presented above.  The estimated annual compensation expense
related to these unvested stock options in 2006 is approximately $0.06 per
diluted common share.  However, the calculation of total compensation expense
for share-based awards after the effective date of SFAS 123R cannot be known
at this time as it is affected by the number of future shares awarded, and it
may be different from the calculation of pro-forma compensation expense under
SFAS 123.





Forward-Looking Statements

Certain statements included herein constitute "forward-looking statements"
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, 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 of earnings, revenues, weight, yield, volumes, income or
other financial or operating items, any statements of the plans, strategies,
expectations or objectives of CNF or its management for future operations or
other future items, any statements concerning proposed new products or
services, any statements regarding CNF's estimated future contributions to
pension plans, any statements as to the adequacy of reserves, any statements
regarding the outcome of any claims that may be brought against CNF by CFC's
multi-employer pension plans or any statements regarding future economic
conditions or performance, any statements regarding the outcome of legal and
other claims and proceedings against CNF; any statements of estimates or
belief and any statements or assumptions underlying the foregoing.

Certain such forward-looking statements can be identified by the use of
forward-looking terminology such as "believes," "expects," "may," "will,"
"should," "seeks," "approximately," "intends," "plans," "estimates" or
"anticipates" or the negative of those terms or other variations of those
terms or comparable terminology or by discussions of strategy, plans or
intentions.  Such forward-looking statements are necessarily dependent on
assumptions, data and methods that may be incorrect or imprecise and there
can be no assurance that they will be realized.  In that regard, the
following factors, among others and in addition to the matters discussed
elsewhere in this document and other reports and documents filed by CNF with
the Securities and Exchange Commission, could cause actual results and other
matters to differ materially from those discussed in such forward-looking
statements:

   * changes in general business and economic conditions, including the
     global economy;

   * the creditworthiness of CNF's customers and their ability to pay for
     services rendered;

   * increasing competition and pricing pressure;

   * changes in fuel prices or fuel surcharges;

   * the effects of the cessation of EWA's air carrier operations;

   * the possibility that CNF may, from time to time, be required to record
     impairment charges for long-lived assets;

   * the possibility of defaults under CNF's $400 million credit agreement
     and other debt instruments, including defaults resulting from additional
     unusual charges, and the possibility that CNF may be required to repay
     certain indebtedness in the event that the ratings assigned to its long-
     term senior debt by credit rating agencies are reduced;

   * labor matters, including the grievance by furloughed EWA pilots and crew
     members, labor organizing activities, work stoppages or strikes;

   * enforcement of and changes in governmental regulations, including the
     effects of new regulations issued by the Department of Homeland
     Security;

   * environmental and tax matters;

   * matters relating to CNF's 1996 spin-off of CFC, including the
     possibility that CFC's multi-employer pension plans may assert claims
     against CNF, that CNF may not prevail in those proceedings and may not
     have the financial resources necessary to satisfy amounts payable to
     those plans, and matters relating to CNF's defined benefit pension
     plans;

   * matters relating to the sale of MWF, including CNF's obligation to
     indemnify UPS for certain losses in connection with the sale;

As a result of the foregoing, no assurance can be given as to future
financial condition, cash flows, or results of operations.  See Note 8,
"Commitments and Contingencies" in Item 1, "Financial Statements."




ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

CNF is exposed to a variety of market risks, including the effects of
interest rates, fuel prices, and foreign currency exchange rates.  CNF enters
into derivative financial instruments only in circumstances that warrant the
hedge of an underlying asset, liability or future cash flow against exposure
to some form of interest rate, commodity or currency-related risk.
Additionally, the designated hedges should have high correlation to the
underlying exposure such that fluctuations in the value of the derivatives
offset reciprocal changes in the underlying exposure.

CNF is subject to the effect of interest rate fluctuations on the fair value
of its long-term debt.  Based on the fixed interest rates and maturities of
its long-term debt, fluctuations in market interest rates would not
significantly affect operating results or cash flows, but may have a material
effect on the fair value of long-term debt, as more fully discussed in Note
5, "Debt and Other Financing Arrangements," in Item 8, "Financial Statements
and Supplementary Data," in CNF's 2004 Annual Report on Form 10-K.

CNF is exposed to the effects of changes in diesel fuel prices.  Like other
LTL carriers, Con-Way assesses many of its customers with a fuel surcharge.
The fuel surcharge is a part of Con-Way's overall rate structure and is
intended to protect Con-Way from the adverse effects of higher fuel costs.
When fuel costs exceed certain specified thresholds, CNF seeks to charge
customers a fuel surcharge that is adjusted weekly based on a Department of
Energy index.  Fuel surcharges are common in the transportation industry and
generally have been accepted by customers.  As fuel prices have risen, the
fuel surcharge has increased Con-Way's yields and revenue and has more than
recovered higher fuel costs and fuel-related increases in purchased
transportation. At times, in the interest of its customers, Con-Way has
temporarily capped the fuel surcharge at a fixed percentage.  Following a
sharp increase in fuel costs in the aftermath of hurricanes in the U.S.,
Con-Way imposed a temporary cap on its fuel surcharge that was in effect
from August 29 through October 24.  CNF cannot predict the future movement
of fuel prices, Con-Way's ability to recover higher fuel costs through
fuel surcharges, or the effect that changes in fuel surcharges may have on
Con-Way's overall rate structure. Con-Way's operating income would likely be
adversely affected by a significant decline in fuel prices as lower fuel
surcharges would reduce Con-Way's yield and revenue.  Whether or not fuel
prices increase, decrease or remain constant, Con-Way's operating income may
also be adversely affected if competitive pressures limited Con-Way's ability
to continue to assess fuel surcharges to its customers.

The assets and liabilities of CNF's foreign subsidiaries are denominated in
foreign currencies, which create exposure to changes in foreign currency
exchange rates.  However, the market risk related to foreign currency
exchange rates is not material to CNF's financial condition, results of
operations, or cash flows.




ITEM 4.  CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures.

CNF's management, with the participation of CNF's Chief Executive Officer and
Chief Financial Officer, has evaluated the effectiveness of CNF's disclosure
controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-
15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) as of the end of the period covered by this report.  Based on such
evaluation, CNF's Chief Executive Officer and Chief Financial Officer have
concluded that CNF's disclosure controls and procedures are effective as of
the end of such period.

(b) Internal Control Over Financial Reporting.

There have not been any changes in CNF's internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the fiscal quarter to which this report relates that
have materially affected, or are reasonably likely to materially affect,
CNF's internal control over financial reporting.




                         PART II. OTHER INFORMATION



ITEM 1.  LEGAL PROCEEDINGS

Certain legal proceedings of CNF are also discussed in Note 2, "Discontinued
Operations," and Note 8, "Commitments and Contingencies," of Part 1, Item 1,
"Financial Statements."

EWA, MWF, Inc., MW and CNF Inc. are named as defendants in a lawsuit filed in
state court in California by approximately 140 former EWA pilots and crew
members.  The lawsuit alleges wrongful termination in connection with the
termination of EWA's air carrier operations, and seeks $500 million and
certain other unspecified damages. CNF believes that the lawsuit's claims are
without merit, and is vigorously defending the lawsuit.

In 2003, prior to the sale of MWF to UPS, CNF became aware of information
that Emery Transnational, a Philippines-based joint venture in which MWF,
Inc. may be deemed to be a controlling partner, may have made certain
payments in violation of the Foreign Corrupt Practices Act.  CNF promptly
notified the Department of Justice and the Securities and Exchange Commission
of this matter, and MWF, Inc. instituted policies and procedures in the
Philippines designed to prevent such payments from being made in the future.
CNF was subsequently advised by the Department of Justice that it is not
pursuing an investigation of this matter.  CNF has conducted an internal
investigation of approximately 40 other MWF, Inc. international locations and
has shared the results of the internal investigation with the SEC.  The
internal investigation revealed that Menlo Worldwide Forwarding (Thailand)
Limited, a Thailand-based joint venture, also may have made certain payments
in violation of the Foreign Corrupt Practices Act.  MWF, Inc. made certain
personnel changes and instituted policies and procedures in Thailand designed
to prevent such payments from being made in the future.  In December 2004,
CNF completed the sale of its air freight forwarding business (including the
stock of MWF, Inc., Emery Transnational and Menlo Worldwide Forwarding
(Thailand) Limited) to an affiliate of UPS.  In connection with that sale,
CNF agreed to indemnify UPS for certain losses resulting from violations of
the Foreign Corrupt Practices Act.  CNF is currently unable to predict
whether it will be required to make payments under the indemnity.


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides a summary of shares repurchased by CNF during
the quarter ended September 30, 2005:

                                            Total Number       Maximum Dollar
                     Total      Average   of Shares Purchased  Value of Shares
                   Number of     Price         as Part of      that May Yet Be
                    shares      Paid per   Publicly Announced  Purchased Under
                 Purchased[1]    Share         Program [1]      the Program[1]
                 -------------------------------------------------------------

July 1, 2005 -        130,300     $ 49.18         130,300       $  219,023,671
 July 31, 2005

August 1, 2005 -      360,300     $ 51.15         360,300       $  200,593,326
 August 31, 2005

September 1, 2005 -   242,700     $ 50.08         242,700       $  188,437,851
 September 30, 2005
                    ----------                 -----------
Total                 733,300     $ 50.45         733,300       $  188,437,851
                    ==========                 ===========


[1] In January 2005, CNF's Board of Directors authorized a two-year stock
repurchase program providing for the repurchase of up to $300 million in
common stock in open market purchases and privately negotiated transactions.










ITEM 6.  EXHIBITS

Exhibit No.

(10) Material Contracts

     10.1  Amendments to Executive Compensation Plans (Item 1.01 to CNF's
           Report on Form 8-K filed on September 29, 2005.*#)

     10.2  Termination of Material Executive Severance Agreements (Item 1.02
           to CNF's Report on Form 8-K filed on September 29, 2005.*#)

(31) Certification of Officers pursuant to Section 302 of the Sarbanes-Oxley
     Act of 2002

(32) Certification of Officers pursuant to Section 906 of the Sarbanes-Oxley
     Act of 2002


*  Previously filed with the Securities and Exchange Commission and
   incorporated herein by reference.
#  Designates a contract or compensation plan for Management or Directors.





                                 SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company (Registrant) has duly caused this Form 10-Q
Quarterly Report to be signed on its behalf by the undersigned, thereunto
duly authorized.

                                             CNF Inc.
                                             (Registrant)

November 7, 2005                              /s/ Kevin Schick
                                             ------------------------
                                             Kevin Schick
                                             Senior Vice President and
                                             Chief Financial Officer