YRC Worldwide Reports Second Quarter Results
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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