August 3, 2010

YRC Worldwide Reports Second Quarter Results

- YRC National Tonnage Up 11% and YRC Regional Up 15% from First Quarter 2010 - YRC National Revenue per Shipment Up 3.9% and YRC Regional Up 4.9% from Last Year - YRC National and YRC Regional Both Report Positive Adjusted EBITDA

OVERLAND PARK, Kan., Aug 03, 2010 /PRNewswire via COMTEX News Network/ -- YRC Worldwide Inc. (Nasdaq: YRCW) today reported its second quarter 2010 results. For the second quarter ending June 30, 2010, the company announced a net loss of $9.5 million and a $.01 loss per share on an average outstanding fully diluted share count of 1.079 billion. As a comparison, the company reported a net loss of $309 million and a $5.20 loss per share in the second quarter of 2009 with average fully diluted shares outstanding of 59 million.

"We are pleased with the sequential improvement in our business volumes and earnings as our pricing discipline, customer mix management and cost initiatives gain significant traction," stated Bill Zollars, Chairman, President and CEO of YRC Worldwide. "For the quarter, the Regional companies reported positive operating income, and YRC National achieved positive adjusted EBITDA."

As previously reported, the company's second quarter 2010 results include an $83 million non-cash reduction to its equity-based compensation expense related to its March 2010 union equity-based awards. On a year-to-date basis, this benefit partially offsets the $108 million non-cash charge reported in the first quarter of 2010 related to the same equity awards. In addition, YRC Logistics is being reported within discontinued operations for all periods presented based upon the previously announced definitive agreement to sell a portion of YRC Logistics business to Austin Ventures for $37 million and discontinuation of its pooled distribution service offering. In November 2009 the company sold YRC Logistics' Dedicated Fleet business for $34 million.

For the second quarter of 2010, the company reported cash usage from operating activities of $33 million which included working capital requirements and other expenditures in excess of its positive adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). To fund revenue growth the company increased the aggregate borrowings under its asset-backed securitization (ABS) facility by approximately $30 million, inclusive of the $22 million of availability that resulted from the June 2010 amendment of that facility, and generated $15 million of net proceeds from its at-the-market equity issuance program.

At June 30, 2010, the company reported cash and cash equivalents of $144 million, unrestricted availability of $8 million and unused restricted revolver reserves of $129 million, subject to the terms of the company's credit agreement, for a total of $281 million. As a comparison, at March 31, 2010 the company reported a total of $241 million.

"The sequential growth in our business volumes put increased pressure on our liquidity even though our adjusted EBITDA from continuing operations improved from $3 million in April to $22 million in June," said Sheila Taylor, Executive Vice President and CFO of YRC Worldwide. "We proactively addressed these working capital needs by partnering with our lenders to open up additional borrowing availability, while we handled more shipments with fewer people and improved our consolidated days sales outstanding (DSO) by four days compared to last year, our best DSO in more than four years."

Key Segment Information

Second quarter 2010 compared to the second quarter of 2009:

  • YRC National Transportation tons per day and shipments per day down 18.6%, and revenue per hundredweight and revenue per shipment, both up 3.9%.
  • YRC Regional Transportation tons per day up 4.6%, shipments per day down 3.1%, revenue per hundredweight down 2.8% and revenue per shipment up 4.9%.

Second quarter 2010 compared to the first quarter of 2010:

  • YRC National Transportation tons per day up 11.0%, shipments per day up 8.0%, and revenue per shipment up 0.9%.
  • YRC Regional Transportation tons per day up 15.5%, shipments per day up 13.8%, and revenue per shipment up 0.5%.

Additional statistical information is available on the company's website at yrcw.com under Investors, Earnings Releases & Operating Statistics.

Outlook

"With the significant operating momentum we achieved throughout the second quarter and experienced in July, the company is positioned for further growth, and we expect to achieve positive adjusted EBITDA in the third quarter of 2010 in excess of the second quarter," stated Zollars.

In addition, the company has the following expectations for 2010:

  • Gross capital expenditures in the range of $30 million to $50 million
  • Excess real estate sales of approximately $50 million
  • Sale and financing leasebacks in the range of $40 million to $50 million
  • Interest expense in the range of $40 to $45 million per quarter, with cash interest of $10 million to $12 million per quarter
  • Effective income tax rate of approximately 2%

Credit Agreement Amendment

On July 28, 2010 the company amended its credit agreement, as follows:

  • The following provisions are effective upon approval of the conforming amendment by the applicable pension funds who are parties to the pension contribution deferral agreement:
    • the company would retain 100% of the estimated $30 million of net proceeds from initial closing of the sale of YRC Logistics and the company's revolver would be reduced by 50% of those proceeds;
    • the company would receive 75%, rather than 25%, of the next $20 million of net cash proceeds from sale and leaseback transactions and the company's revolver would be reduced by 50% of those proceeds, subject to the company's satisfaction of certain cost reduction criteria established by the credit agreement lenders;
    • the company would receive 25% of subsequent proceeds from the sale of real estate and sale and leaseback transactions and the company's revolver and term loan under the credit agreement would be ratably reduced by 75% of such proceeds; and
    • the amendment converts $150 million of outstanding revolver borrowings to term loans. As of June 30, 2010 the company had $358 million of outstanding revolver borrowings.
  • Adjusted EBITDA now includes a new add-back for charges, expense and losses from permitted dispositions and discontinued operations. For the second quarter of 2010 the company's adjusted EBITDA under this amendment was $40 million as compared to the covenant requirement of $5 million.
  • The amendment reduces the letter of credit sublimit to $550 million. As of June 30, 2010 the company had $455 million in outstanding letters of credit under its credit agreement.

Update on Second Closing of 6% Senior Convertible Notes and Outstanding 5% Notes

The company also announced that it expects the second closing with respect to the issuance and sale of the additional $20.2 million of its 6% senior convertible notes will be completed later today. The net proceeds from this sale will be used by the company to fund the repurchase of any of the company's approximately $20 million of outstanding 5% notes pursuant to a put option on August 9, 2010.

On August 2, 2010, the company and each of the buyers entered into a letter agreement pursuant to which the company agreed to temporarily increase the conversion rate on the 6% notes to one hundred thousand shares of common stock per $1,000 in principal amount of notes (thereby reducing the conversion price to $0.01 per share), which will result in the company issuing up to a maximum of 59 million total shares of common stock. The letter agreement provides that the conversion of the $590,000 of notes subject to the adjusted conversion rate will occur as of the second closing date. The aggregate number of shares that are issuable by the company on account of the entire $70 million of 6% notes remains unchanged at 201,880,000 as the limit for subsequent conversions of 6% notes into equity will be adjusted downward accordingly.

Review of Financial Results

YRC Worldwide Inc. will host a conference call for shareholders and the investment community today, Tuesday, August 3, 2010, beginning at 9:30am ET, 8:30am CT. The conference call will be open to listeners via the YRC Worldwide Internet site yrcw.com. An audio playback will be available after the call also via the YRC Worldwide web site.

Certain Non-GAAP Financial Measures

Adjusted EBITDA is a non-GAAP measure that reflects the company's earnings before interest, taxes, depreciation, and amortization expense, and further adjusted for letter of credit fees, equity-based compensation expense, net gains or losses on property disposals and certain other items, including restructuring professional fees and results of permitted dispositions and discontinued operations as defined in the company's credit agreement. Adjusted EBITDA is used for internal management purposes as a financial measure that reflects the company's core operating performance. In addition, management uses adjusted EBITDA to measure compliance with financial covenants in the company's credit agreement. However, this financial measure should not be construed as a better measurement than operating income, operating cash flow or earnings per share, as defined by generally accepted accounting principles.

Adjusted EBITDA has the following limitations:

  • Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our outstanding debt;
  • Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements;
  • Equity based compensation is an element of our long-term incentive compensation program, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period; and
  • Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered a substitute for performance measures calculated in accordance with GAAP.

Forward-Looking Statements:

This news release and statements made on the conference call for shareholders and the investment community contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "expect," "continue," and similar expressions are intended to identify forward-looking statements. It is important to note that the company's actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including (among others) our ability to generate sufficient cash flows and liquidity to fund operations, which raises substantial doubt about our ability to continue as a going concern, inflation, inclement weather, price and availability of fuel, sudden changes in the cost of fuel or the index upon which the company bases its fuel surcharge, competitor pricing activity, expense volatility, including (without limitation) expense volatility due to changes in rail service or pricing for rail service, ability to capture cost reductions, changes in equity and debt markets, a downturn in general or regional economic activity, effects of a terrorist attack, labor relations, including (without limitation) the impact of work rules, work stoppages, strikes or other disruptions, any obligations to multi-employer health, welfare and pension plans, wage requirements and employee satisfaction, and the risk factors that are from time to time included in the company's reports filed with the SEC.

The company's expectations regarding the timing and degree of market share growth are only its expectations regarding these matters. Actual timing and degree of market share growth could differ based on a number of factors including (among others) the company's ability to persuade existing customers to increase shipments with the company and to attract new customers, and the factors that affect revenue results (including the risk factors that are from time to time included in the company's reports filed with the SEC).

The company's expectations regarding the impact of, and the service and operational improvements and collateral and cost reductions due to, the integration of Yellow Transportation and Roadway, improved safety performance, right-sizing the network, consolidation of support functions, the company's credit ratings and the timing of achieving the improvements and cost reductions could differ materially from actual improvements and cost reductions based on a number of factors, including (among others) the factors identified in the prior paragraphs above, the ability to identify and implement cost reductions in the time frame needed to achieve these expectations, the success of the company's operating plans and programs, the company's ability to successfully reduce collateral requirements for its insurance programs, which in turn is dependent upon the company's safety performance, ability to reduce the cost of claims through claims management, the company's credit ratings and the requirements of state workers' compensation agencies and insurers for collateral for self-insured portions of workers' compensation programs, the need to spend additional capital to implement cost reduction opportunities, including (without limitation) to terminate, amend or renegotiate prior contractual commitments, the accuracy of the company's estimates of its spending requirements, changes in the company's strategic direction, the need to replace any unanticipated losses in capital assets, approval of the affected unionized employees of changes needed to complete the integration under the company's union agreements, the readiness of employees to utilize new combined processes, the effectiveness of deploying existing technology necessary to facilitate the combination of processes, the ability of the company to receive expected price for its services from the combined network and customer acceptance of those services.

The company's expectations regarding future asset dispositions and sale and financing leasebacks of real estate are only its expectations regarding these matters. Actual dispositions and sale and financing leasebacks will be determined by the availability of capital and willing buyers and counterparties in the market and the outcome of discussions to enter into and close any such transactions on negotiated terms and conditions, including (without limitation) usual and ordinary closing conditions such as favorable title reports or opinions and favorable environmental assessments of specific properties.

The company's expectations regarding interest and fees (including any deferred amounts) are only its expectations regarding these matters. Actual interest and fees (including any deferred amounts) could differ based on a number of factors, including (among others) the company's expected borrowings under the company's credit agreement and the ABS facility, which is affected by revenue and profitability results and the factors that affect revenue and profitability results (including the risk factors that are from time to time included in the company's reports filed with the SEC), and the company's ability to continue to defer the payment of interest and fees pursuant to the terms of the company's credit agreement, ABS facility and pension fund contribution deferral agreement, as applicable.

The company's expectations regarding its capital expenditures are only its expectations regarding this matter. Actual expenditures could differ materially based on a number of factors, including (among others) the factors identified in the preceding paragraphs.

The company's expectations regarding liquidity are only its expectations regarding this matter. Actual liquidity levels will depend upon (among other things) the company's operating results, the timing of its receipts and disbursements, the company's access to credit facilities or credit markets, the company's ability to continue to defer interest and fees under the company's credit agreement and ABS facility and interest and principal under the company's contribution deferral agreement, the continuation of the existing union wage reductions and temporary cessation of pension contributions, and the factors identified in the preceding paragraphs.

The company's expectations regarding its effective tax rate are only its expectations regarding this rate. The actual rate could differ materially based on a number of factors, including (among others) variances in pre-tax earnings on both a consolidated and business unit basis, variance in pre-tax earnings by jurisdiction, impacts on our business from the factors described above, variances in estimates on non-deductible expenses, tax authority audit adjustments, change in tax rates and availability of tax credits.

The company's expectations regarding its ability to close on the remaining $20.2 million of 6% notes are only its expectations regarding this matter. The closing of the remaining $20.2 million of the 6% notes is subject to satisfaction of customary closing conditions as set forth in the company's Note Purchase Agreement dated February 11, 2010, as modified by the letter agreement.

The company's expectations regarding its ability to close on the sale of YRC Logistics and the liquidity that the sale will provide are only its expectations regarding these matters. The closing of the sale of YRC Logistics is subject to satisfaction of certain closing conditions, including approval of multi-employer pension funds to which the company contributes. The net proceeds from the sale of YRC Logistics are subject to final determination of fees and expenses that the company incurs in connection with the sale.

YRC Worldwide Inc., a Fortune 500 company headquartered in Overland Park, Kan., is one of the largest transportation service providers in the world and the holding company for a portfolio of successful brands including YRC, YRC Reimer, YRC Glen Moore, YRC Logistics, New Penn, Holland and Reddaway. YRC Worldwide has the largest, most comprehensive network in North America, with local, regional, national and international capabilities. Through its team of experienced service professionals, YRC Worldwide offers industry-leading expertise in heavyweight shipments and flexible supply chain solutions, ensuring customers can ship industrial, commercial and retail goods with confidence. Please visit yrcw.com for more information.


    Investor                                Media
     Contact:     Paul Liljegren            Contact:    Suzanne Dawson
                                                         Linden Alschuler &
                  YRC Worldwide Inc.                     Kaplan
                  913.696.6108                          212.329.1420
                  Paul.Liljegren@yrcw.com               sdawson@lakpr.com


                          CONSOLIDATED BALANCE SHEETS
                      YRC Worldwide Inc. and Subsidiaries
                  (Amounts in thousands except per share data)



                                                   June 30,  December 31,
                                                       2010          2009
                                                       ----          ----
    ASSETS                                      (Unaudited)

    CURRENT ASSETS:
      Cash and cash equivalents                    $144,289       $97,788
      Accounts receivable, net                      477,032       442,814
      Prepaid expenses and other                    164,305       242,640
      Current assets of discontinued operations      72,175        75,578
                                                     ------        ------
        Total current assets                        857,801       858,820
                                                    -------       -------

    PROPERTY AND EQUIPMENT:
      Cost                                        3,377,307     3,529,583
      Less - accumulated depreciation             1,696,071     1,708,371
                                                  ---------     ---------
        Net property and equipment                1,681,236     1,821,212
                                                  ---------     ---------

    OTHER ASSETS:
      Intangibles, net                              148,633       160,407
      Other assets                                  143,550       170,176
      Noncurrent assets of discontinued
       operations                                    12,063        21,459
                                                     ------        ------
        Total assets                             $2,843,283    $3,032,074
                                                 ==========    ==========


    LIABILITIES AND SHAREHOLDERS' EQUITY
     (DEFICIT)

    CURRENT LIABILITIES:
      Accounts payable                             $170,232      $154,671
      Wages, vacations, and employees' benefits     206,006       213,754
      Other current and accrued liabilities         467,675       392,392
      Current maturities of long-term debt          245,475       197,127
      Current liabilities of discontinued
       operations                                    59,496        51,884
                                                     ------        ------
        Total current liabilities                 1,148,884     1,009,828
                                                  ---------     ---------

    OTHER LIABILITIES:
      Long-term debt, less current portion          913,474       935,782
      Deferred income taxes, net                    146,258       146,576
      Pension and post retirement                   352,637       351,861
      Claims and other liabilities                  359,247       419,883
      Noncurrent liabilities of discontinued
       operations                                        37           954


    SHAREHOLDERS' EQUITY (DEFICIT):
      Preferred stock, $1 par value per share             -         4,346
      Common stock, $0.01 par value per share        11,223           991
      Capital surplus                             1,615,076     1,576,349
      Accumulated deficit                        (1,460,889)   (1,177,280)
      Accumulated other comprehensive loss         (149,191)     (144,479)
      Treasury stock, at cost (3,079 shares)        (92,737)      (92,737)
                                                    -------       -------
        Total YRC Worldwide Inc. shareholders'
         equity (deficit)                           (76,518)      167,190
                                                    -------       -------
        Non-controlling interest                       (736)            -
           Total shareholders' equity (deficit)     (77,254)      167,190
        Total liabilities and shareholders'
         equity (deficit)                        $2,843,283    $3,032,074
                                                 ==========    ==========


        STATEMENTS OF CONSOLIDATED OPERATIONS
         YRC Worldwide Inc. and Subsidiaries
      For the Three and Six Months Ended June 30
     (Amounts in thousands except per share data)
                     (Unaudited)


                                                    Three Months
                                                    ------------
                                                  2010                2009
                                                  ----                ----

    OPERATING REVENUE                       $1,119,101          $1,226,264
                                            ----------          ----------

    OPERATING EXPENSES:
      Salaries, wages and employees'
       benefits                                682,934             986,685
      Equity based compensation expense        (81,542)             (6,271)
      Operating expenses and supplies          243,420             282,783
      Purchased transportation                 120,803             123,898
      Depreciation and amortization             50,074              59,912
      Other operating expenses                  57,309              74,515
      (Gains) losses on property disposals,
       net                                      (2,187)             (1,040)
      Impairment charges                             -                   -
                                                   ---                 ---
        Total operating expenses             1,070,811           1,520,482
                                             ---------           ---------
    OPERATING INCOME (LOSS)                     48,290            (294,218)
                                                ------            --------

    NONOPERATING (INCOME) EXPENSES:
      Interest expense                          41,385              38,333
      Equity investment impairment              12,338              30,374
      Other, net                                (6,697)              1,505
                                                ------               -----
        Nonoperating expenses, net              47,026              70,212
                                                ------              ------

    INCOME (LOSS) FROM CONTINUING
     OPERATIONS BEFORE INCOME TAXES              1,264            (364,430)
    INCOME TAX PROVISION (BENEFIT)                 224             (64,948)
    NET INCOME (LOSS) FROM CONTINUING
     OPERATIONS                                  1,040            (299,482)
    NET LOSS FROM DISCONTINUED
     OPERATIONS, NET OF TAX                    (11,358)             (9,555)
                                               -------              ------
    NET LOSS                                   (10,318)           (309,037)
    LESS: NET LOSS ATTRIBUTABLE TO NON-
     CONTROLLING INTEREST                         (847)                  -
       NET LOSS ATTRIBUTABLE TO YRC
        WORLDWIDE INC                          $(9,471)          $(309,037)
                                               =======           =========

    AVERAGE SHARES OUTSTANDING-BASIC         1,078,254              59,480
    AVERAGE SHARES OUTSTANDING-DILUTED       1,079,283              59,480

    BASIC LOSS PER SHARE
    INCOME (LOSS) FROM CONTINUING
     OPERATIONS                                     $-              $(5.04)
    LOSS FROM DISCONTINUED OPERATIONS            (0.01)              (0.16)
                                                 -----               -----
    NET LOSS                                    $(0.01)             $(5.20)
                                                ======              ======

    DILUTED EARNINGS (LOSS) PER SHARE
    INCOME (LOSS) FROM CONTINUING
     OPERATIONS                                     $-              $(5.04)
    LOSS FROM DISCONTINUED OPERATIONS            (0.01)              (0.16)
                                                 -----               -----
    NET LOSS                                    $(0.01)             $(5.20)
                                                ======              ======

    Amounts attributable to YRC Worldwide
     Inc. common shareholders:
    Income (loss) from continuing
     operations, net of tax                     $1,887           $(299,482)
    Loss from discontinued operations,
     net of tax                                (11,358)             (9,555)
                                               -------              ------
        Net loss                               $(9,471)          $(309,037)
                                               =======           =========




                                                     Six Months
                                                     ----------
                                                  2010                2009
                                                  ----                ----

    OPERATING REVENUE                       $2,106,245          $2,616,939
                                            ----------          ----------

    OPERATING EXPENSES:
      Salaries, wages and employees'
       benefits                              1,334,012           2,090,184
      Equity based compensation expense         28,329              26,754
      Operating expenses and supplies          480,789             620,620
      Purchased transportation                 214,902             253,012
      Depreciation and amortization            100,706             122,827
      Other operating expenses                 120,504             175,891
      (Gains) losses on property disposals,
       net                                       6,612                 559
      Impairment charges                         5,281                   -
                                                 -----                 ---
        Total operating expenses             2,291,135           3,289,847
                                             ---------           ---------
    OPERATING INCOME (LOSS)                   (184,890)           (672,908)
                                              --------            --------

    NONOPERATING (INCOME) EXPENSES:
      Interest expense                          82,312              70,530
      Equity investment impairment              12,338              30,374
      Other, net                                (4,791)              4,483
                                                ------               -----
        Nonoperating expenses, net              89,859             105,387
                                                ------             -------

    INCOME (LOSS) FROM CONTINUING
     OPERATIONS BEFORE INCOME TAXES           (274,749)           (778,295)
    INCOME TAX PROVISION (BENEFIT)              (5,654)           (206,823)
    NET INCOME (LOSS) FROM CONTINUING
     OPERATIONS                               (269,095)           (571,472)
    NET LOSS FROM DISCONTINUED
     OPERATIONS, NET OF TAX                    (15,361)            (11,347)
                                               -------             -------
    NET LOSS                                  (284,456)           (582,819)
    LESS: NET LOSS ATTRIBUTABLE TO NON-
     CONTROLLING INTEREST                         (847)                  -
                                                  ----
       NET LOSS ATTRIBUTABLE TO YRC
        WORLDWIDE INC                        $(283,609)          $(582,819)
                                             =========           =========

    AVERAGE SHARES OUTSTANDING-BASIC           801,274              59,427
    AVERAGE SHARES OUTSTANDING-DILUTED         801,274              59,427

    BASIC LOSS PER SHARE
    INCOME (LOSS) FROM CONTINUING
     OPERATIONS                                 $(0.33)             $(9.62)
    LOSS FROM DISCONTINUED OPERATIONS            (0.02)              (0.19)
                                                 -----               -----
    NET LOSS                                    $(0.35)             $(9.81)
                                                ======              ======

    DILUTED EARNINGS (LOSS) PER SHARE
    INCOME (LOSS) FROM CONTINUING
     OPERATIONS                                 $(0.33)             $(9.62)
    LOSS FROM DISCONTINUED OPERATIONS            (0.02)              (0.19)
                                                 -----               -----
    NET LOSS                                    $(0.35)             $(9.81)
                                                ======              ======

    Amounts attributable to YRC Worldwide
     Inc. common shareholders:
    Income (loss) from continuing
     operations, net of tax                  $(268,248)          $(571,472)
    Loss from discontinued operations,
     net of tax                                (15,361)            (11,347)
                                               -------             -------
        Net loss                             $(283,609)          $(582,819)
                                             =========           =========


                            STATEMENTS OF CONSOLIDATED CASH FLOWS
                             YRC Worldwide Inc. and Subsidiaries
                               For the Six Months Ended June 30
                                    (Amounts in thousands)
                                         (Unaudited)



                                                              2010       2009
                                                              ----       ----

    OPERATING ACTIVITIES:
      Net loss                                           $(284,456) $(582,819)
      Noncash items included in net loss:
        Depreciation and amortization                      105,228    130,718
        Equity based compensation expense                   28,345     26,754
        Impairment charges                                  17,619     30,374
        Pension settlement charge                              104      5,755
        Losses on property disposals, net                    8,310        587
        Deferred income tax benefit, net                    (5,784)  (199,086)
        Amortization of deferred debt costs                 22,689     10,493
        Other noncash items                                 (4,701)     4,567
      Changes in assets and liabilities, net:
        Accounts receivable                                (27,635)   166,976
        Accounts payable                                    17,665    (82,270)
        Other operating assets                              85,860     67,695
        Other operating liabilities                         22,284    176,839
                                                            ------    -------
        Net cash used in operating activities              (14,472)  (243,417)
                                                           -------   --------

    INVESTING ACTIVITIES:
      Acquisition of property and equipment                (10,855)   (26,026)
      Proceeds from disposal of property and equipment      35,781     37,533
      Other                                                  5,223       (198)
        Net cash provided by investing activities           30,149     11,309
                                                            ------     ------

    FINANCING ACTIVITIES:
      ABS borrowings (payments), net                         1,114     58,042
      Issuance of long-term debt                           141,795    284,201
      Repayment of long-term debt                         (101,100)  (223,449)
      Debt issuance costs                                   (9,568)   (47,526)
      Equity issuance costs                                (17,323)         -
      Equity issuance proceeds                              15,906          -
        Net cash provided by financing activities           30,824     71,268
                                                            ------     ------
    NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS    46,501   (160,840)
    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD          97,788    325,349
    CASH AND CASH EQUIVALENTS, END OF PERIOD              $144,289   $164,509
                                                          ========   ========

    SUPPLEMENTAL CASH FLOW INFORMATION
    Income tax refund, net                                 $83,288    $33,922
    Pension contribution deferral transfer to debt          $4,361   $133,227


                                   SUPPLEMENTAL FINANCIAL INFORMATION
                                   YRC Worldwide Inc. and Subsidiaries
                               For the Three and Six Months Ended June 30
                                         (Amounts in thousands)
                                               (Unaudited)


    SEGMENT INFORMATION

                                             Three Months
                                             ------------
                                       2010           2009      %
                                       ----           ----    ---

    Operating revenue:
      YRC National Transportation  $741,639       $873,738  (15.1)
      YRC Regional Transportation   351,498        337,855    4.0
      YRC Truckload                  28,216         27,545    2.4
      Eliminations and other         (2,252)       (12,874)
                                     ------        -------
      Consolidated                1,119,101      1,226,264   (8.7)

    Operating income (loss):
      YRC National Transportation    33,055       (239,477)
      YRC Regional Transportation    22,383        (48,346)
      YRC Truckload                  (1,984)        (2,371)
      Corporate and other            (5,164)        (4,024)
                                     ------         ------
      Consolidated                  $48,290      $(294,218)

    Operating ratio:
      YRC National Transportation      95.5%         127.4%
      YRC Regional Transportation      93.6%         114.3%
      YRC Truckload                   107.0%         108.6%
      Consolidated                     95.7%         124.0%

    (Gains) losses on property
     disposals, net:
      YRC National Transportation   $(2,647)       $(1,702)
      YRC Regional Transportation       460            662
      YRC Truckload                       -              -
      Corporate and other                 -              -
                                        ---            ---
      Consolidated                  $(2,187)       $(1,040)





    SEGMENT INFORMATION

                                              Six Months
                                              ----------
                                        2010          2009      %
                                        ----          ----    ---

    Operating revenue:
      YRC National Transportation $1,404,702    $1,896,348  (25.9)
      YRC Regional Transportation    660,652       693,023   (4.7)
      YRC Truckload                   55,101        53,521    3.0
      Eliminations and other         (14,210)      (25,953)
                                     -------       -------
      Consolidated                 2,106,245     2,616,939  (19.5)

    Operating income (loss):
      YRC National Transportation   (152,005)     (539,248)
      YRC Regional Transportation    (17,248)     (122,471)
      YRC Truckload                   (5,045)       (4,617)
      Corporate and other            (10,592)       (6,572)
                                     -------        ------
      Consolidated                 $(184,890)    $(672,908)

    Operating ratio:
      YRC National Transportation      110.8%        128.4%
      YRC Regional Transportation      102.6%        117.7%
      YRC Truckload                    109.2%        108.6%
      Consolidated                     108.8%        125.7%

    (Gains) losses on property
     disposals, net:
      YRC National Transportation     $2,302         $(390)
      YRC Regional Transportation      4,130           873
      YRC Truckload                       42            76
      Corporate and other                138             -
                                         ---           ---
      Consolidated                    $6,612          $559



      Note: YRC Logistic segment reported as discontinued operations for
      all periods presented.


    SUPPLEMENTAL INFORMATION

                                                               December
                                                    June 30,        31,
                                                        2010       2009
                                                        ----       ----
    Debt:
      Asset backed securitization borrowings        $147,399   $146,285
      Term loan                                      112,403    112,612
      Revolving credit facility                      357,999    329,119
                                                     -------    -------
        Bank Debt                                    617,801    588,016
      Lease financing obligations                    326,320    318,892
      Pension contribution deferral obligation       145,393    153,041
      Contingent convertible senior notes             21,671     21,671
      USF senior notes                                     -     45,289
      6% convertible senior notes                     46,739          -
      Other                                            1,025      6,000
                                                       -----      -----
         Total debt                                1,158,949  1,132,909
                                                   ---------  ---------
      Current maturities of contingent convertible
       senior notes and other                        (22,696)   (27,671)
      Current maturities of lease financing
       obligations                                    (2,880)    (2,671)
      Current maturities of pension contribution
       deferral obligations                          (72,500)   (20,500)
      Asset backed securitization borrowings       (147,399)   (146,285)
                                                    --------   --------
         Total current debt                        (245,475)   (197,127)
                                                    --------   --------
         Total long-term debt                        913,474    935,782
                                                     =======    =======

    Letters of credit
      Credit facility                                454,728    461,032
      Asset backed securitization                     72,180     77,180
      Total letters of credit                       $526,908   $538,212
                                                    ========   ========


                                 SUPPLEMENTAL FINANCIAL INFORMATION
                                 YRC Worldwide Inc. and Subsidiaries
                                       (Amounts in thousands)
                                             (Unaudited)



                                                  April 2010  May 2010
                                                  ----------  --------
     Operating revenue                              $355,938   $362,943
     Operating Ratio, as adjusted                      106.0%     103.9%

     Reconciliation of operating income (loss) to
      adjusted EBITDA:
     Operating income (loss)                        $(13,584)   $(8,060)
       (Gains) losses on property disposals, net      (7,994)    (6,423)
       Equity based compensation expense                 384        407
       Impairment charges                                  -          -
                                                         ---        ---
     Operating income (loss), as adjusted            (21,194)   (14,076)

       Depreciation and amortization                  16,513     16,032
       Letter of credit expense                        2,705      2,831
       Restructuring professional fees                 3,742      3,605
        Other, net                                       959      6,604
                                                         ---      -----
     Adjusted EBITDA                                  $2,725    $14,996
                                                      ======    =======







                                                  June 2010    2Q 2010
                                                  ---------    -------
     Operating revenue                             $400,220  $1,119,101
     Operating Ratio, as adjusted                     100.0%      103.2%

     Reconciliation of operating income (loss) to
      adjusted EBITDA:
     Operating income (loss)                        $69,934     $48,290
       (Gains) losses on property disposals, net     12,230      (2,187)
       Equity based compensation expense            (82,333)    (81,542)
       Impairment charges                                 -           -
                                                        ---         ---
     Operating income (loss), as adjusted              (169)    (35,439)

       Depreciation and amortization                 17,529      50,074
       Letter of credit expense                       2,733       8,269
       Restructuring professional fees                1,995       9,342
        Other, net                                      108       7,671
                                                        ---       -----
     Adjusted EBITDA                                $22,196     $39,917
                                                    =======     =======







     For the Three Months Ended                              June 30
                                                             -------
                                                        2010            2009
                                                        ----            ----
     Operating revenue                            $1,119,101      $1,226,264
     Operating Ratio, as adjusted                      103.2%          124.6%

     Reconciliation of operating income (loss) to
      adjusted EBITDA:
     Operating income (loss)                         $48,290       $(294,218)
       (Gains) losses on property disposals, net      (2,187)         (1,040)
       Equity based compensation expense             (81,542)         (6,271)
       Impairment charges                                  -               -
                                                         ---             ---
     Operating income (loss), as adjusted            (35,439)       (301,529)

       Depreciation and amortization                  50,074          59,912
       Letter of credit expense                        8,269           8,990
       Restructuring professional fees                 9,342               -
        Other, net                                     7,671          (1,347)
                                                       -----          ------
     Adjusted EBITDA                                 $39,917       $(233,974)
                                                     =======       =========



     Adjusted EBITDA by segment:
        YRC National                                  $6,172       $(207,459)
        YRC Regional                                  21,992         (30,635)
        YRC Truckload                                    (78)            (29)
        Corporate and other                           11,831           4,149
                                                      ------           -----
     Adjusted EBITDA                                 $39,917       $(233,974)
                                                     =======       =========




     For the Three Months Ended                            March 31
                                                           --------
                                                       2010            2009
                                                       ----            ----
     Operating revenue                             $987,144      $1,390,675
     Operating Ratio, as adjusted                     111.1%          124.7%

     Reconciliation of operating income (loss) to
      adjusted EBITDA:
     Operating income (loss)                      $(233,180)      $(378,690)
       (Gains) losses on property disposals, net      8,799           1,599
       Equity based compensation expense            109,871          33,025
       Impairment charges                             5,281               -
                                                      -----             ---
     Operating income (loss), as adjusted          (109,229)       (344,066)

       Depreciation and amortization                 50,632          62,915
       Letter of credit expense                       8,353           5,473
       Restructuring professional fees                    -               -
        Other, net                                     (790)         (1,130)
                                                       ----          ------
     Adjusted EBITDA                               $(51,034)      $(276,808)
                                                   ========       =========



     Adjusted EBITDA by segment:
        YRC National                               $(60,313)      $(238,506)
        YRC Regional                                  8,356         (49,908)
        YRC Truckload                                  (211)            205
        Corporate and other                           1,134          11,401
                                                      -----          ------
     Adjusted EBITDA                               $(51,034)      $(276,808)
                                                   ========       =========


                                        SUPPLEMENTAL FINANCIAL INFORMATION
                                        YRC Worldwide Inc. and Subsidiaries
                                              (Amounts in thousands)
                                                    (Unaudited)


                                                           For the Three
                                                            Months Ended
                                                     June 30        March 31
                                                          2010           2010
                                                          ----           ----
     Reconciliation of Adjusted EBITDA to net cash
      from (used in) operating activities:
       Adjusted EBITDA                                 $39,917       $(51,034)
       Add back amounts included in Adjusted EBITDA:
         Restructuring professional fees                (9,342)           n/a
         Discontinued operations and permitted
          dispositions                                  (7,422)        (2,135)
       Cash interest                                   (10,062)       (10,876)
       Working capital cash flows, net                 (47,869)         1,063
                                                       -------          -----
     Net cash used in operating activities before
      income taxes                                     (34,778)       (62,982)
       Cash income tax refunds, net                      2,016         81,272
     Net cash (used in) provided by operating
      activities                                      $(32,762)       $18,290
                                                      ========        =======




                                                               For the Six
                                                              Months Ended
                                                                 June 30
                                                                       2010
                                                                       ----
     Reconciliation of Adjusted EBITDA to net cash from (used
      in) operating activities:
       Adjusted EBITDA                                             $(11,117)
       Add back amounts included in Adjusted EBITDA:
         Restructuring professional fees                             (9,342)
         Discontinued operations and permitted dispositions          (9,557)
       Cash interest                                                (20,938)
       Working capital cash flows, net                              (46,806)
                                                                    -------
     Net cash used in operating activities before income
      taxes                                                         (97,760)
       Cash income tax refunds, net                                  83,288
     Net cash (used in) provided by operating activities           $(14,472)
                                                                   ========





      For the Three Months Ended                             June 30
                                                             -------
                                                        2010            2009
                                                        ----            ----
      YRC National segment
      --------------------
      Operating Revenue                             $741,639        $873,738
      Operating Ratio, as adjusted                     104.6%          128.3%

      Reconciliation of operating income (loss) to
       adjusted EBITDA:
      Operating income (loss)                        $33,055       $(239,477)
        (Gains) losses on property disposals, net     (2,647)         (1,702)
        Equity based compensation expense           (64,288)          (5,766)
        Impairment charges                                 -               -
                                                         ---             ---
      Operating income (loss), as adjusted          (33,880)        (246,945)

        Depreciation and amortization                 26,851          32,416
        Letter of credit expense                       6,409           6,925
         Other, net                                    6,792             145
                                                       -----             ---
      Adjusted EBITDA                                 $6,172       $(207,459)
                                                      ======       =========

      Adjusted EBITDA as % of operating revenue          0.8%          -23.7%
                                                         ===           =====


      YRC Regional segment
      --------------------
      Operating Revenue                             $351,498        $337,855
      Operating Ratio, as adjusted                      98.7%          114.6%

      Reconciliation of operating income (loss) to
       adjusted EBITDA:
      Operating income (loss)                        $22,383        $(48,346)
        (Gains) losses on property disposals, net        460             662
        Equity based compensation expense           (18,324)          (1,637)
        Impairment charges                                 -               -
                                                         ---             ---
      Operating income (loss), as adjusted             4,519         (49,321)

        Depreciation and amortization                 15,768          16,845
        Letter of credit expense                       1,725           1,833
         Other, net                                      (20)              8
                                                         ---             ---
      Adjusted EBITDA                                $21,992        $(30,635)
                                                     =======        ========

      Adjusted EBITDA as % of operating revenue          6.3%           -9.1%
                                                         ===            ====




     For the Three Months Ended                           March 31
                                                          --------
                                                       2010            2009
                                                       ----            ----
     YRC National segment
     --------------------
     Operating Revenue                             $663,063      $1,022,610
     Operating Ratio, as adjusted                     114.1%          127.0%

     Reconciliation of operating income (loss) to
      adjusted EBITDA:
     Operating income (loss)                      $(185,060)      $(299,771)
       (Gains) losses on property disposals, net      4,949           1,312
       Equity based compensation expense             83,090          21,846
       Impairment charges                             3,281               -
                                                      -----             ---
     Operating income (loss), as adjusted           (93,740)       (276,613)

       Depreciation and amortization                 26,978          33,146
       Letter of credit expense                       6,503           4,027
        Other, net                                      (54)            934
                                                        ---             ---
     Adjusted EBITDA                               $(60,313)      $(238,506)
                                                   ========       =========

     Adjusted EBITDA as % of operating revenue         -9.1%          -23.3%
                                                       ====           =====


     YRC Regional segment
     --------------------
     Operating Revenue                             $309,154        $355,168
     Operating Ratio, as adjusted                     103.1%          119.1%

     Reconciliation of operating income (loss) to
      adjusted EBITDA:
     Operating income (loss)                       $(39,631)       $(74,125)
       (Gains) losses on property disposals, net      3,670             211
       Equity based compensation expense             24,413           6,205
       Impairment charges                             2,000               -
                                                      -----             ---
     Operating income (loss), as adjusted            (9,548)        (67,709)

       Depreciation and amortization                 16,162          16,535
       Letter of credit expense                       1,705           1,277
        Other, net                                       37             (11)
                                                        ---             ---
     Adjusted EBITDA                                 $8,356        $(49,908)
                                                     ======        ========

     Adjusted EBITDA as % of operating revenue          2.7%          -14.1%
                                                        ===           =====


SOURCE YRC Worldwide

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