July 22, 2011

YRC Worldwide Achieves Adjusted Operating Income for Second Quarter of 2011

- YRC National achieves adjusted operating income for second quarter of 2011
- YRC National shipments per day up 7.1% and revenue per shipment up 5.0%
- YRC Regional shipments per day up 4.7% and revenue per shipment up 9.9%
- Management and board transition

OVERLAND PARK, Kan., July 22, 2011 /PRNewswire/ -- YRC Worldwide Inc. (NASDAQ: YRCW) today reported a net loss of $39 million, compared to a net loss of $10 million reported for the second quarter of 2010, which included an $83 million after-tax benefit for a fair value adjustment to an equity-based award.

Consolidated operating revenue for the second quarter of 2011 was $1.257 billion and consolidated operating loss was $2 million, which included $17 million of restructuring professional fees. As a comparison, the company reported consolidated operating revenue of $1.119 billion for the second quarter of 2010 and consolidated operating income of $48 million, which included an $83 million benefit for a fair value adjustment to an equity-based award and $9 million of restructuring professional fees.

"We are pleased with the continued year-over-year growth in business volumes and improvements in earnings as we achieved consolidated adjusted operating income for the second quarter," stated Bill Trubeck, Interim Executive Vice President and CFO of YRC Worldwide. "In particular, YRC National's adjusted operating income represents an important milestone for this business."

Board of Directors and Management Transition

The restructure closing will mark the conclusion of service for the company's current board of directors and the assignments for chief restructuring officer John Lamar and interim chief financial officer Bill Trubeck.  "I wish to express my gratitude to John Lamar and Bill Trubeck for their leadership and expertise during this critical period," stated Bill Zollars, chairman, president and CEO of YRC Worldwide.

In September of last year, YRC Worldwide announced Zollars' retirement following finalization of the recovery plan.  "With the completion of the comprehensive recovery plan and as I announced earlier, I will be stepping down as chairman, president and CEO of YRC Worldwide," said Zollars.  "I would like to extend my sincere thanks to all of our employees and other key stakeholders who have worked tirelessly to make the restructuring possible and to our loyal customers who have continued to allow us to serve their transportation and logistics needs throughout the restructuring period."

Key Segment Information

Second quarter 2011 compared to the second quarter of 2010:

  • YRC National Transportation adjusted operating ratio improved by 350 basis points to 99.2, shipments per day up 7.1%, tons per day up 6.2%, revenue per shipment up 5.0%, and revenue per hundredweight up 6.0%
  • YRC Regional Transportation adjusted operating ratio improved by 180 basis points to 95.9, tons per day up 8.1%, revenue per shipment up 9.9%, and revenue per hundredweight up 6.5%

Outlook

"The restructure closing which includes net cash proceeds from the $100 million of new notes and the new $400 million ABL will enhance our liquidity position and provide runway for the continued growth in revenues and earnings. With the operating momentum we achieved during the second quarter, which continued to-date into July, we expect to achieve year-over-year revenue growth and adjusted operating income for the remainder of 2011," stated Trubeck.

In addition, the company has the following updated expectations for full year 2011:

  • Gross capital expenditures up to $125 million
  • Excess property sales in the range of $30 million to $40 million
  • Cash interest of approximately $30 million per quarter, post restructure
  • Effective tax rate of 5%

Review of Financial Results

YRC Worldwide Inc. will host a conference call with the investment analyst community today, Friday, July 22, 2011, beginning at 9:30am ET, 8:30am CT.  The conference call will be available to listeners via the YRC Worldwide website yrcw.com.  An audio playback will be available after the call also via the YRC Worldwide website.

Certain Non-GAAP Financial Measures

Adjusted operating income (loss) is a non-GAAP measure that reflects the company's operating income before letter of credit fees, certain union employee equity-based compensation expense, net gains or losses on property disposals, and certain other items including restructuring professional fees and results of permitted dispositions.  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 and adjusted operating income (loss) are used for internal management purposes as financial measures that reflect 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, these financial measures should not be construed as better measurements than operating income, operating cash flow or earnings per share, as defined by generally accepted accounting principles.  

Adjusted operating income (loss) and adjusted EBITDA have the following limitations:

  • Adjusted operating income (loss) and Adjusted EBITDA do not reflect the interest expense or the cash requirements necessary to fund restructuring professional fees, letter of credit fees, 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 adjusted operating income (loss) and adjusted EBITDA exclude either certain union employee equity-based compensation expense or all of it as an expense, respectively, when presenting our ongoing operating performance for a particular period; and
  • Other companies in our industry may calculate adjusted operating income (loss) and adjusted EBITDA differently than we do, limiting their usefulness as a comparative measure.

Because of these limitations, adjusted operating income (loss) and adjusted EBITDA should not be considered a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using adjusted operating income (loss) and adjusted EBITDA as secondary measures.  The company has provided reconciliations of its non-GAAP measures (adjusted operating income [loss] and adjusted EBITDA) to GAAP measures within the supplemental financial information in this release.

*     *     *     *     *



IMPORTANT INFORMATION ABOUT THE RESTRUCTURING

This news release is for informational purposes only and does not constitute an offer to sell or buy, nor the solicitation of an offer to sell or buy, any securities referred to herein and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful. Any offer and sale of securities referred to herein has not been registered under the Securities Act of 1933, as amended, and, unless so registered, may not be offered or sold in the United States absent an applicable exemption from registration requirements.

*     *     *     *     *



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 and Section 21E of the Exchange Act. The words "would," "anticipate," "expect," "believe," "intend" and similar expressions are intended to identify forward-looking statements. It is important to note that any restructuring will be subject to a number of significant conditions, including, among other things, the satisfaction or waiver of the conditions contained in the definitive agreements related to the restructuring and the lack of unexpected or adverse litigation results. The company cannot provide you with any assurances that the conditions contained in the definitive agreements related to the restructuring will be satisfied or that the restructuring can be completed in the timeframes required under the company's various agreements with its stakeholders. The company cannot provide you with any assurances that any restructuring can be completed out-of-court or whether the company will be required to implement the restructuring under the supervision of a bankruptcy court, in which event, the company cannot provide you with any assurances that the terms of any such restructuring will not be substantially and materially different than any description in this news release or statements made on the conference call for shareholders and the investment community or that an effort to implement an in-court restructuring would be successful. In addition, even if a restructuring is completed, the company's future results could differ materially from any results projected in such forward-looking statements because of a number of factors, including (among others), the effect of any restructuring, whether out-of-court or in-court, may have on the company's customers' willingness to ship their products on the company's transportation network, the company's ability to generate sufficient cash flows and liquidity to fund operations, which raises substantial doubt about the company's 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, including the company's Annual Report on Form 10-K for the year ended December 31, 2010 and Quarterly Report on Form 10-Q for the three months ended March 31, 2011.

The company's expectations regarding future asset dispositions are only its expectations regarding these matters. Actual dispositions 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 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 and following paragraphs.

The company's expectations regarding liquidity, working capital and cash flow are only its expectations regarding these matters. Actual liquidity, working capital and cash flow will depend upon (among other things) completion of the restructuring, the company's operating results, the timing of its receipts and disbursements, the company's access to credit facilities or credit markets, the continuation of the wage, benefit and work rule concessions under the company's modified labor agreement and the factors identified in the preceding and following paragraphs.

The company's expectations regarding cash interest are only its expectations regarding these matters. Actual cash interest could differ based on a number of factors, including (among others) the completion of the restructuring, the company's expected borrowings under the company's credit agreement and the ABL 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).

The company's expectations regarding taxes are only its expectations regarding these matters. Actual taxes, including tax rates and refunds, 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.

*     *     *     *     *



About YRC Worldwide

YRC Worldwide Inc., a Fortune 500 company headquartered in Overland Park, Kan., is a leading provider of transportation and global logistics services. It is the holding company for a portfolio of successful brands including YRC, YRC Reimer, YRC Glen Moore, Reddaway, Holland and New Penn, and provides China-based services through its Jiayu and JHJ joint ventures. YRC Worldwide has the largest, most comprehensive less-than-truckload (LTL) 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 www.yrcw.com for more information.

Investor Contact:

Paul Liljegren


913-696-6108


paul.liljegren@yrcw.com



Media Contact:

Suzanne Dawson


Linden, Alschuler & Kaplan


212-329-1420


sdawson@lakpr.com



Web site: www.yrcw.com


Follow YRC Worldwide on Twitter: http://twitter.com/yrcworldwide



CONSOLIDATED BALANCE SHEETS

YRC Worldwide Inc. and Subsidiaries

(Amounts in thousands)



















June 30,


December 31,





2011


2010

ASSETS



(Unaudited)










CURRENT ASSETS:






Cash and cash equivalents


$                  155,926


$                  143,017


Accounts receivable, net


540,515


442,500


Prepaid expenses and other


189,882


182,515



Total current assets


886,323


768,032








PROPERTY AND EQUIPMENT:






Cost



3,174,845


3,237,971


Less - accumulated depreciation


1,716,629


1,687,397



Net property and equipment


1,458,216


1,550,574








OTHER ASSETS:






Intangibles, net


130,348


139,525


Other assets


117,973


134,802



Total assets


$               2,592,860


$               2,592,933















LIABILITIES AND SHAREHOLDERS' DEFICIT












CURRENT LIABILITIES:






Accounts payable


$                  157,136


$                  147,112


Wages, vacations, and employees' benefits


222,618


196,486


Other current and accrued liabilities


488,865


452,226


Current maturities of long-term debt


802,105


222,873



Total current liabilities


1,670,724


1,018,697








OTHER LIABILITIES:






Long-term debt, less current portion


326,170


837,262


Deferred income taxes, net


104,391


118,624


Pension and post retirement


450,087


447,928


Claims and other liabilities


366,843


360,439















SHAREHOLDERS' DEFICIT:






Preferred stock, $1 par value per share


-


-


Common stock, $0.01 par value per share


479


477


Capital surplus


1,644,694


1,643,277


Accumulated deficit


(1,639,991)


(1,499,514)


Accumulated other comprehensive loss


(234,710)


(239,626)


Treasury stock, at cost (123 shares)


(92,737)


(92,737)



Total YRC Worldwide Inc. shareholders' deficit


(322,265)


(188,123)



Non-controlling interest


(3,090)


(1,894)



  Total shareholders' deficit


(325,355)


(190,017)



Total liabilities and shareholders' deficit


$               2,592,860


$               2,592,933



Upon closing the restructuring transaction as described in the company's Registration Statement on Form S-1, as amended, the company would reclassify its amended Credit Agreement obligations, amended Contribution Deferral Agreement obligations and 6% Notes obligations to long-term debt, including certain deferred interest and fees, as the current Credit Agreement default would be waived in the new amended and restated Credit Agreement.


Additionally, upon closing the restructuring, the company's ABS facility will be refinanced with a new $400 million ABL facility with a maturity date of September 30, 2014 and the maturity date on the amended Contribution Deferral Agreement and the amended and restated Credit Agreement will be extended to March 31, 2015; therefore the current obligations held under these facilities would be reclassified to long-term debt.







Pre-restructuring

view


Restructuring

Impact


Post-restructuring

view


Other current and accrued liabilities


$                  488,865


$                (170,559)


$                  318,306


Current maturities of long-term debt


802,105


(794,097)


8,008


Long-term debt, less current portion


326,170


964,656


1,290,826



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


Six Months




2011


2010


2011


2010











OPERATING REVENUE

$          1,257,212


$          1,119,101


$          2,380,098


$          2,106,245











OPERATING EXPENSES:









Salaries, wages and employees' benefits

704,627


682,934


1,385,445


1,334,012


Equity based compensation (benefit) expense

405


(81,542)


(648)


28,329


Operating expenses and supplies

307,334


243,420


584,530


480,789


Purchased transportation

140,778


120,803


260,440


214,902


Depreciation and amortization

47,557


50,074


96,853


100,706


Other operating expenses

68,955


57,309


136,855


120,504


(Gains) losses on property disposals, net

(10,887)


(2,187)


(13,846)


6,612


Impairment charges

-


-


-


5,281



Total operating expenses

1,258,769


1,070,811


2,449,629


2,291,135

OPERATING INCOME (LOSS)

(1,557)


48,290


(69,531)


(184,890)











NONOPERATING (INCOME) EXPENSES:









Interest expense

40,069


41,385


78,872


82,312


Equity investment impairment

-


12,338


-


12,338


Other, net

(77)


(6,697)


(34)


(4,791)



Nonoperating expenses, net

39,992


47,026


78,838


89,859











INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

(41,549)


1,264


(148,369)


(274,749)

INCOME TAX PROVISION (BENEFIT)

(2,404)


224


(6,955)


(5,654)

NET INCOME (LOSS) FROM CONTINUING OPERATIONS

(39,145)


1,040


(141,414)


(269,095)

NET LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX

-


(11,358)


-


(15,361)

NET LOSS

(39,145)


(10,318)


(141,414)


(284,456)

LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST

(448)


(847)


(937)


(847)

  NET LOSS ATTRIBUTABLE TO YRC WORLDWIDE INC

$             (38,697)


$               (9,471)


$           (140,477)


$           (283,609)











AVERAGE COMMON SHARES OUTSTANDING-BASIC

47,754


43,130


47,697


32,051

AVERAGE COMMON SHARES OUTSTANDING-DILUTED

47,754


43,171


47,697


32,051











BASIC INCOME (LOSS) PER SHARE








INCOME (LOSS) FROM CONTINUING OPERATIONS

$                 (0.81)


$                   0.02


$                 (2.95)


$                 (8.40)

LOSS FROM DISCONTINUED OPERATIONS

-


(0.26)


-


(0.48)

NET LOSS

$                 (0.81)


$                 (0.24)


$                 (2.95)


$                 (8.88)











DILUTED INCOME (LOSS) PER SHARE








INCOME (LOSS) FROM CONTINUING OPERATIONS

$                 (0.81)


$                   0.02


$                 (2.95)


$                 (8.40)

LOSS FROM DISCONTINUED OPERATIONS

-


(0.26)


-


(0.48)

NET LOSS

$                 (0.81)


$                 (0.24)


$                 (2.95)


$                 (8.88)











Amounts attributable to YRC Worldwide Inc. common shareholders:








Income (loss) from continuing operations, net of tax

$             (38,697)


$                 1,887


$           (140,477)


$           (268,248)

Loss from discontinued operations, net of tax

-


(11,358)


-


(15,361)



Net loss

$             (38,697)


$               (9,471)


$           (140,477)


$           (283,609)



STATEMENTS OF CONSOLIDATED CASH FLOWS

YRC Worldwide Inc. and Subsidiaries

For the Six Months Ended June 30

(Amounts in thousands)

(Unaudited)



















2011


2010








OPERATING ACTIVITIES:






Net loss


$           (141,414)


$           (284,456)


Noncash items included in net loss:







Depreciation and amortization


96,853


105,228



Equity based compensation (benefit) expense


(648)


28,345



Impairment charges


-


17,619



(Gains) losses on property disposals, net


(13,846)


8,310



Deferred income tax benefit, net


(663)


(5,784)



Amortization of deferred debt costs


19,604


22,689



Other noncash items


1,599


(4,597)


Changes in assets and liabilities, net:







Accounts receivable


(98,015)


(27,635)



Accounts payable


10,200


17,665



Other operating assets


(21,755)


85,860



Other operating liabilities


86,744


22,284



Net cash used in operating activities


(61,341)


(14,472)








INVESTING ACTIVITIES:






Acquisition of property and equipment


(22,712)


(10,855)


Proceeds from disposal of property and equipment


26,000


35,781


Other


3,088


5,223



Net cash provided by investing activities


6,376


30,149








FINANCING ACTIVITIES:






ABS borrowings, net


41,449


1,114


Issuance of long-term debt


60,730


141,795


Repayment of long-term debt


(29,124)


(101,100)


Debt issuance costs


(5,181)


(9,568)


Equity issuance costs


-


(17,323)


Equity issuance proceeds


-


15,906



Net cash provided by financing activities


67,874


30,824

NET INCREASE IN CASH AND CASH EQUIVALENTS


12,909


46,501

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD


143,017


97,788

CASH AND CASH EQUIVALENTS, END OF PERIOD


$             155,926


$             144,289








SUPPLEMENTAL CASH FLOW INFORMATION





Income tax refund, net


$                    334


$               83,288

Pension contribution deferral transfer to debt


-


4,361

Lease financing transactions


8,995


26,747

Interest paid in stock for the 6% Notes


2,082


-



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


Six Months



2011


2010


%


2011


2010


%














Operating revenue:













YRC National Transportation

$            826,933


$            741,639


11.5


$         1,556,977


$         1,404,702


10.8


Regional Transportation

401,688


351,497


14.3


767,757


660,651


16.2


Truckload

25,514


28,216


(9.6)


50,721


55,101


(7.9)


Other, net of eliminations

3,077


(2,251)




4,643


(14,209)




Consolidated

1,257,212


1,119,101


12.3


2,380,098


2,106,245


13.0














Operating income (loss):













YRC National Transportation

10,627


33,055




(40,661)


(152,005)




Regional Transportation

14,734


22,383




13,556


(17,248)




Truckload

(3,741)


(1,984)




(7,591)


(5,045)




Corporate and other

(23,177)


(5,164)




(34,835)


(10,592)




Consolidated

$              (1,557)


$              48,290




$            (69,531)


$          (184,890)
















Operating ratio:













YRC National Transportation

98.7%


95.5%




102.6%


110.8%




Regional Transportation

96.3%


93.6%




98.2%


102.6%




Truckload

114.7%


107.0%




115.0%


109.2%




Consolidated

100.1%


95.7%




102.9%


108.8%

















Operating ratio is calculated as 100 minus the result of dividing operating income by operating revenue or plus the result of dividing operating loss by operating revenue, and expressed as a percentage.














SUPPLEMENTAL INFORMATION














June 30,


December 31,











2011


2010









Debt:













Term loan ($251,644 and $257,136 par value)

$            252,131


$            257,831










Revolving credit facility (capacity $700,074 and $713,699)

173,603


142,910










Credit agreement debt

425,734


400,741










364-day asset backed securitization (capacity $325,000, borrowing base $238,432 and $189,232)

164,237


122,788










Total lender debt

589,971


523,529










Lease financing obligations

331,170


338,437










Pension contribution deferral agreement

146,595


139,094










Contingent convertible senior notes (stated at par value)

1,870


1,870










6% convertible senior notes ($69,410 par value)

57,531


56,090










Other

1,138


1,115










  Total debt

$         1,128,275


$         1,060,135






















Letters of credit:













Revolving credit facility

$            447,784


$            454,566










364-day Asset backed securitization

64,680


61,180










Total letters of credit

$            512,464


$            515,746






















Availability













Unused revolver capacity

$              78,687


$            116,228










Restricted revolver reserves

(70,854)


(70,854)










Unrestricted revolver availability

7,833


45,374























Unused ABS capacity

96,083


141,032










ABS Usage limitation due to borrowing base

(86,568)


(135,768)










Unrestricted ABS availability

9,515


5,264























  Total revolver and ABS unrestricted availability

$              17,348


$              50,638






















Deferred interest and fees













Credit agreement debt

$            166,066


$            128,106










364-day asset backed securitization

25,773


17,651










Pension contribution deferral agreement

4,493


9,102










  Total deferred interest and fees

$            196,332


$            154,859











SUPPLEMENTAL FINANCIAL INFORMATION

YRC Worldwide Inc. and Subsidiaries

For the Three and Six Months Ended June 30

(Amounts in thousands)

(Unaudited)













Three months


Six months



2011


2010


2011


2010


Operating revenue

$               1,257,212


$            1,119,101


$            2,380,098


$            2,106,245


Adjusted operating ratio

98.9%


101.7%


101.6%


105.2%











Reconciliation of operating income (loss) to adjusted EBITDA:









Operating income (loss)

$                    (1,557)


$                 48,290


$                (69,531)


$              (184,890)


(Gains) losses on property disposals, net

(10,887)


(2,187)


(13,846)


6,612


Impairment charges

-


-


-


5,281


Union equity awards

-


(82,984)


-


24,995


Letter of credit expense

8,182


8,269


16,264


16,622


Restructuring professional fees, included in operating income (1)

16,951


9,342


25,440


21,487


Permitted dispositions and other

989


-


3,196


-


Adjusted operating income (loss)

13,678


(19,270)


(38,477)


(109,893)











Depreciation and amortization

47,557


50,074


96,853


100,706


Equity based compensation (benefit) expense

405


1,442


(648)


3,334


Restructuring professional fees, included in nonoperating income (1)

1,176


162


1,715


406


Reimer Finance Co. dissolution (foreign exchange)

-


5,540


-


5,540


  Other nonoperating, net

372


1,283


879


493


Adjusted EBITDA

$                    63,188


$                 39,231


$                 60,322


$                      586





























Reconciliation of Adjusted EBITDA to net cash used in operating activities:










Three months


Six months



March 31, 2011


June 30, 2011


2011


2010


Adjusted EBITDA

$                    (2,866)


$                 63,188


$                 60,322


$                      586


Total restructuring professional fees (1)

(9,028)


(18,127)


(27,155)


(21,893)


Permitted dispositions and other not included in adjusted EBITDA

-


-


-


(9,557)


Cash interest

(10,514)


(10,342)


(20,856)


(20,938)


Working capital cash flows excluding income tax, net

(34,419)


(39,567)


(73,986)


(45,958)


Net cash used in operating activities before income taxes

(56,827)


(4,848)


(61,675)


(97,760)


Cash income tax refunds, net

10,573


(10,239)


334


83,288


Net cash used in operating activities

$                  (46,254)


$                (15,087)


$                (61,341)


$                (14,472)











 Adjusted operating ratio is calculated as 100 minus the result of dividing adjusted operating income by operating revenue or plus the result of dividing adjusted operating loss by operating revenue, and expressed as a percentage.    


 (1) Adjusted EBITDA and adjusted operating income (loss) are presented inclusive of the add-back of all restructuring professional fees for all periods presented, without regard to the terms of the Credit Agreement in effect for the respective periods. As previously reported, the company and its lenders have eliminated the Adjusted EBITDA covenant and are in discussions to establish new convenants in connection with the completion of the restructuring of the company's balance sheet. Had the company followed the definition of Adjusted EBITDA that was in place within the Credit Agreement prior to elimination of the covenant, (i) the portion of restructuring professional fees that would be added back in determining Adjusted EBITDA for the three and six months ended June 30, 2011 would have been limited by approximately $16.9 million and $23.8 million, respectively and (ii) no restructuring professional fees would have been added back in determining Adjusted EBITDA for the first quarter of 2010.    



SUPPLEMENTAL FINANCIAL INFORMATION

YRC Worldwide Inc. and Subsidiaries

For the Three and Six Months Ended June 30

(Amounts in thousands)

(Unaudited)





Three months


Six months



2011


2010


2011


2010


Adjusted EBITDA by segment:









  YRC National Transportation

$               31,912


$               13,505


$               15,879


$             (37,274)


  Regional Transportation

31,859


23,898


44,042


34,732


  Truckload

(1,308)


25


(2,856)


(52)


  Corporate and other

725


1,803


3,257


3,180


Adjusted EBITDA

$               63,188


$               39,231


$               60,322


$                    586




















YRC National Transportation segment









Operating Revenue

$             826,933


$             741,639


$          1,556,977


$          1,404,702


Adjusted operating ratio

99.2%


102.7%


102.4%


107.0%











Reconciliation of operating income (loss) to adjusted EBITDA:









Operating income (loss)

$               10,627


$               33,055


$             (40,661)


$           (152,005)


(Gains) losses on property disposals, net

(10,140)


(2,647)


(9,608)


2,302


Impairment charges

-


-


-


3,281


Union equity awards

-


(64,274)


-


18,795


Letter of credit expense

6,442


6,409


12,794


12,912


Restructuring professional fees, included in operating income

-


7,333


-


16,867


Adjusted operating income (loss)

6,929


(20,124)


(37,475)


(97,848)











Depreciation and amortization

25,029


26,851


52,397


53,829


Reimer Finance Co. dissolution (foreign exchange)

-


5,540


-


5,540


  Other nonoperating, net

(46)


1,238


957


1,205


Adjusted EBITDA

$               31,912


$               13,505


$               15,879


$             (37,274)











Adjusted EBITDA as % of operating revenue

3.9%


1.8%


1.0%


-2.7%




















Regional Transportation segment









Operating Revenue

$             401,688


$             351,497


$             767,757


$             660,651


Adjusted operating ratio

95.9%


97.7%


98.3%


99.6%











Reconciliation of operating income (loss) to adjusted EBITDA:









Operating income (loss)

$               14,734


$               22,383


$               13,556


$             (17,248)


(Gains) losses on property disposals, net

111


460


(3,366)


4,130


Impairment charges

-


-


-


2,000


Union equity awards

-


(18,324)


-


6,089


Letter of credit expense

1,616


1,725


3,218


3,430


Restructuring professional fees, included in operating income

-


1,906


-


4,384


Adjusted operating income (loss)

16,461


8,150


13,408


2,785











Depreciation and amortization

15,365


15,768


30,603


31,930


  Other nonoperating, net

33


(20)


31


17


Adjusted EBITDA

$               31,859


$               23,898


$               44,042


$               34,732











Adjusted EBITDA as % of operating revenue

7.9%


6.8%


5.7%


5.3%




















Adjusted operating ratio is calculated as 100 minus the result of dividing adjusted operating income by operating revenue or plus the result of dividing adjusted operating loss by operating revenue, and expressed as a percentage.



SUPPLEMENTAL FINANCIAL INFORMATION

YRC Worldwide Inc. and Subsidiaries

For the Three and Six Months Ended June 30

(Amounts in thousands)

(Unaudited)













Three months


Six months



2011


2010


2011


2010


Truckload segment









Operating Revenue

$               25,514


$               28,216


$               50,721


$               55,101


Adjusted operating ratio

113.8%


107.7%


114.4%


108.1%











Reconciliation of operating loss to adjusted EBITDA:









Operating loss

$               (3,741)


$               (1,984)


$               (7,591)


$               (5,045)


(Gains) losses on property disposals, net

130


-


141


42


Union equity awards

-


(386)


-


111


Letter of credit expense

81


87


162


172


Restructuring professional fees, included in operating income

-


103


-


237


Adjusted operating loss

(3,530)


(2,180)


(7,288)


(4,483)











Depreciation and amortization

2,222


2,205


4,432


4,431


  Other nonoperating, net

-


-


-


-


Adjusted EBITDA

$               (1,308)


$                      25


$               (2,856)


$                    (52)











Adjusted EBITDA as % of operating revenue

-5.1%


0.1%


-5.6%


-0.1%




















Corporate and other segment


















Reconciliation of operating loss to adjusted EBITDA:









Operating loss

$             (23,177)


$               (5,164)


$             (34,835)


$             (10,592)


(Gains) losses on property disposals, net

(988)


-


(1,013)


138


Letter of credit expense

43


48


90


108


Restructuring professional fees, included in operating income

16,951


-


25,440


-


Permitted dispositions and other

989


-


3,196


-


Adjusted operating loss

(6,182)


(5,116)


(7,122)


(10,346)











Depreciation and amortization

4,941


5,250


9,421


10,516


Equity based compensation (benefit) expense

405


1,442


(648)


3,334


Restructuring professional fees, included in nonoperating income

1,176


162


1,715


406


  Other nonoperating, net

385


65


(109)


(730)


Adjusted EBITDA

$                    725


$                 1,803


$                 3,257


$                 3,180




















Adjusted operating ratio is calculated as 100 minus the result of dividing adjusted operating income by operating revenue or plus the result of dividing adjusted operating loss by operating revenue, and expressed as a percentage.



YRC Worldwide Inc.

Segment Statistics

(amounts in thousands except workdays and per unit data)
































YRC National Transportation








Y/Y


Sequential


2Q11


2Q10


1Q11


%


%

Workdays

               63.5


               63.5


               63.5















Total revenue(a)

$       821,611


$       730,263


$       735,472


              12.5


            11.7

Total tonnage

             1,820


             1,714


             1,666


                6.2


              9.2

Total tonnage per day

             28.66


             26.99


             26.24


                6.2


              9.2

Total shipments

             3,139


             2,931


             2,883


                7.1


              8.9

Total shipments per day

             49.44


             46.16


             45.41


                7.1


              8.9

Total revenue/cwt.

$           22.57


$           21.30


$           22.07


                6.0


              2.3

Total revenue/shipment

$              262


$              249


$              255


                5.0


              2.6

Total weight/shipment

             1,159


             1,170


             1,156


              (0.9)


              0.3











Reconciliation of operating revenue to total picked up revenue:







Operating revenue

$       826,933


$       741,639


$       730,044





Change in revenue deferral and other

(5,322)


(11,375)


5,428





Total picked up revenue

$       821,611


$       730,263


$       735,472




































Regional Transportation








Y/Y


Sequential


2Q11


2Q10


1Q11


%


%

Workdays

               63.5


               64.0


               64.5















Total picked up revenue(a)

$       402,063


$       351,948


$       366,876


              14.2


              9.6

Total tonnage

             1,850


             1,725


             1,750


                7.3


              5.7

Total tonnage per day

             29.14


             26.96


             27.13


                8.1


              7.4

Total shipments

             2,556


             2,459


             2,393


                3.9


              6.8

Total shipments per day

             40.25


             38.43


             37.10


                4.7


              8.5

Total revenue/cwt.

$           10.86


$           10.20


$           10.48


                6.5


              3.6

Total revenue/shipment

$              157


$              143


$              153


                9.9


              2.6

Total weight/shipment

             1,448


             1,403


             1,463


                3.2


            (1.0)











Reconciliation of operating revenue to total picked up revenue:







Operating revenue

$       401,688


$       351,497


$       366,069





Change in revenue deferral and other

                375


                451


                807





Total picked up revenue

$       402,063


$       351,948


$       366,876

























(a) Does not equal financial statement revenue due to revenue recognition adjustments between accounting periods.


'Total picked up revenue' is a non-GAAP measure which is used to calculate statistical information above such as Total revenue/cwt. and Total revenue/shipment.  The number of shipments and number of tons shown above are consistent with the 'Total picked up revenue.' A reconciliation of 'Total picked up revenue' to the GAAP measure 'Operating Revenue' for each segment is shown above.  'Total picked up revenue' and the related statistical information provide relative benchmarks for the company's volume and pricing performance and trends comparable to other LTL companies.



SOURCE YRC Worldwide

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