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Con-way Inc. Reports Second-Quarter 2008 Results

SAN MATEO, Calif. - July 23, 2008

Con-way Inc. (NYSE:CNW) today reported net income from continuing operations for the second quarter of 2008 of $47.1 million (after preferred stock dividends), or 98 cents per diluted share. The results compared to second-quarter 2007 net income from continuing operations (after preferred stock dividends) of $47.7 million, or 99 cents per diluted share.

Earnings from continuing operations in the 2007 second quarter included a charge of 10 cents per diluted share for vehicle casualty claims costs, and a benefit of 5 cents per diluted share from the effect of discrete tax items.

Revenue in the 2008 second quarter was $1.34 billion, an increase of 24.8 percent from last year's revenue of $1.07 billion, complemented by acquisitions completed in 2007, and reflecting organic growth. Operating income in the 2008 second quarter was $94.9 million, an increase of 22.2 percent compared to $77.6 million earned in the second quarter a year ago.

Net income to common shareholders in the 2008 second quarter was $48.7 million, or $1.02 per diluted share. This compares to previous-year net income of $46.4 million, or 96 cents per diluted share. The 2008 second-quarter net income included a net gain of 4 cents per diluted share from discontinued operations. The 2007 second-quarter net income included a loss from discontinued operations of 3 cents per diluted share.

Commenting on the quarter, Con-way President and CEO Douglas W. Stotlar said, "Our enterprise turned in commendable results despite a challenging business environment and the inflationary effect of unprecedented fuel prices."

Con-way Freight, the company's less-than-truckload (LTL) unit, posted solid revenue and yield gains, benefiting from improved market responsiveness and increasing customer recognition of its transit time performance advantage. "Targeted growth initiatives, implemented late last year at our LTL unit, continued to produce market share gains," said Stotlar. "We also began to see indications of a more stable pricing environment in the quarter."

In the truckload sector, the weak economy drove a reduction in capacity as carriers continued to exit the market throughout the first half of 2008. "The trend of capacity leaving the market is improving the supply/demand balance which is benefiting Con-way Truckload," Stotlar said. "Our Truckload unit did an excellent job in managing costs, and taking advantage of synergy opportunities with its sister companies to reduce empty miles and improve asset utilization."

Menlo Worldwide Logistics recorded a double-digit increase in net revenue for the quarter, reflecting a combination of revenues from 2007 acquisitions, organic growth and a consistent win rate for new projects. While overall Menlo managed its core business operations well, profits were affected by higher than expected costs related to China activities, and two customer-specific issues which were resolved in the quarter. "Integration of our acquisition in China is proceeding at a slower pace than planned, so our expectations for profit from this operation will take a longer time horizon to realize," Stotlar noted. "Our expansion strategy in Asia is playing out from a growth perspective; we expect to see operating results improve through the remainder of the year."

The effective tax rate for the 2008 second quarter was 39.7 percent compared to 34.2 percent in the same period of 2007. The 2007 tax rate was affected by discrete tax adjustments which decreased the effective tax rate.

FREIGHT

For the 2008 second quarter, Con-way Freight, the company's regional less-than-truckload operations, reported:

Operating income of $77.4 million, an increase of 7.2 percent from the $72.2 million earned in the year-ago period.
Revenues of $824.0 million, a 10.6 percent increase over last year's second-quarter revenues of $744.9 million.
Tonnage per day handled by Con-way Freight increased 1.9 percent over the previous-year second quarter.
Yield for Con-way Freight improved 9.6 percent from the previous-year second quarter. Excluding the fuel surcharge, yield improved 1.2 percent.
Con-way Freight recorded an operating ratio of 90.8 in the 2008 second quarter compared to 90.5 in second-quarter 2007.

The 2008 second quarter had rebranding expense of $1.3 million compared to $2.9 million in 2007. The company completed Con-way Freight's rebranding in the second quarter.

LOGISTICS

For the second quarter of 2008, Menlo Worldwide Logistics, the company's global logistics and supply chain management operations, reported:

Operating income of $5.0 million, a 28.6 percent decrease from $6.9 million earned in the second quarter of 2007. Income decreased due to an operating loss in China, a charge related to a current customer, and a bad debt write-off.
Revenue of $377.1 million, up 16.4 percent from the previous-year second-quarter revenue of $323.9 million.
Net revenue of $126.6 million, an increase of 19.6 percent compared to $105.9 million in the previous-year second quarter. Net revenue increased primarily from organic growth and new revenues gained from Asia acquisitions completed late last year.

TRUCKLOAD

Results for the Truckload segment reflect the combined operations of Con-way's former truckload division and Contract Freighters, Inc., which Con-way acquired in August 2007, and renamed Con-way Truckload in January 2008. For the second quarter of 2008, the company's full-truckload transportation operations reported:

Operating income of $12.4 million.
Revenue of $137.4 million, after the elimination of $44.2 million in inter-company revenues.
Operating ratio before inter-company eliminations and exclusive of fuel surcharges was 90.6.

CON-WAY OTHER

Con-way Other includes the company's Road Systems, Inc. trailer manufacturing unit as well as other corporate activities. These activities produced a small profit during both the 2008 and 2007 second quarters.

2008 OUTLOOK

Con-way is maintaining its outlook for 2008 full-year diluted earnings per share from continuing operations at between $3.00 and $3.40 based on an assumed number of diluted shares outstanding of 48.2 million.

Con-way's effective tax rate is expected to be 39 percent for the year.

INVESTOR CONFERENCE CALL

Con-way will host a conference call for the investment community tomorrow, Thursday, July 24 at 11:00 a.m., Eastern Daylight Time (8:00 a.m. Pacific). On the call, management will review results of the quarter ending on June 30.

The call can be accessed by dialing (866) 264-3634 or (706) 643-3632 (for international callers) and is expected to last approximately one hour. Callers are requested to dial in at least five minutes before the start of the call. The call will also be available through a live internet webcast at http://www.con-way.com/, in the investor relations section.

An audio replay will be available for two weeks following the call by dialing (800) 642-1687 or (706) 645-9291 (for international callers) and using access code 51060587. An Internet replay of the presentation will also be available at the Con-way web site.

Con-way Inc. (NYSE:CNW) is a $4.7 billion freight transportation and logistics services company headquartered in San Mateo, Calif. A diversified transportation company, Con-way delivers industry-leading services through three primary operating companies: Con-way Freight, Con-way Truckload and Menlo Worldwide Logistics. These operating units provide high-performance, day-definite less-than-truckload and full truckload and intermodal freight transportation, as well as logistics, warehousing and supply chain management services, and trailer manufacturing. Con-way Inc. and its subsidiaries operate from more than 500 locations across North America and in 20 countries. For more information about Con-way, visit us on the Web at http://www.con-way.com/.

FORWARD-LOOKING STATEMENTS
Certain statements in this press release constitute "forward-looking statements" and are subject to a number of risks and uncertainties and should not be relied upon as predictions of future events. All statements other than statements of historical fact are forward-looking statements, including any projections and objectives of management for future operations, any statements concerning proposed new products or services, any statements regarding Con-way'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 Con-way, any statements regarding future economic conditions or performance, any statements of estimates or belief, any statements regarding the acquisition of Transportation Resources, Inc. and its subsidiaries, including Contract Freighters, Inc. (collectively, "CFI"), and related financing, and any statements or assumptions underlying the foregoing. Specific factors that could cause actual results and other matters to differ materially from those discussed in such forward-looking statements include: changes in general business and economic conditions, the creditworthiness of Con-way's customers and their ability to pay for services rendered, increasing competition and pricing pressure, changes in fuel prices or fuel surcharges and the effect of ongoing litigation alleging that Con-way engaged in price fixing of fuel surcharges in violation of Federal antitrust laws, the effects of the cessation of the air carrier operations of Emery Worldwide Airlines, the possibility that Con-way may, from time to time, be required to record impairment charges for long-lived assets, the acquisition of CFI and related financing (including integration risks and risks that acquisition synergies are not realized), the possibility of defaults under Con-way's $400 million credit agreement and other debt instruments (including without limitation defaults resulting from unusual charges), and the possibility that Con-way 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, enforcement of and changes in governmental regulations or legislation which potentially could result in an adverse impact on the company; environmental and tax matters, matters relating to the 1996 spin-off of Consolidated Freightways Corporation ("CFC"), including the possibility that CFC's multi-employer pension plans may assert claims against Con-way, matters relating to the sale of Menlo Worldwide Forwarding, Inc., including Con-way's obligation to indemnify the buyer for certain losses in connection with the sale, and matters relating to Con-way's defined benefit pension plans. The factors included herein and in Item 7 of Con-way's 2007 Annual Report on Form 10-K as well as other filings with the Securities and Exchange Commission could cause actual results and other matters to differ materially from those in such forward-looking statements. As a result, no assurance can be given as to future financial condition, cash flows, or results of operations.

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