YRC Worldwide Finalizes Agreement With Teamsters Pension Fund
- Agreement with Central States provides relief for immediate funding
obligations
- Bank amendment releases escrow funds
- Sale and leaseback transactions continue to close
OVERLAND PARK, Kan., June 18 /PRNewswire-FirstCall/ -- YRC Worldwide Inc.
(Nasdaq: YRCW) announced today that it has finalized an agreement with Central
States, Southeast and Southwest Areas Pension Fund ("Central States") in which
the company will provide certain of the company's real estate as collateral in
lieu of making pension contribution payments during the second quarter. The
estimated combined contribution payment deferral to Central States is
approximately $83 million. The agreement calls for the company to repay the
deferred contributions over three years beginning in January 2010.
Central States is the largest of the company's International Brotherhood
of Teamsters ("IBT") multi-employer defined benefit pension funds,
representing 58 percent of the company's monthly pension funding obligations.
YRC Worldwide is also finalizing discussions with its other IBT multi-employer
pension funds to join as participants in this same agreement. Currently, the
company has deferred about $50 million related to these other funds.
In addition, YRC Worldwide announced that it finalized an amendment to its
credit agreement with its lenders that permits the company and its
subsidiaries to grant second priority liens on certain owned real estate in
conjunction with the pension deferrals described above. The amendment also
releases escrow funds of $73 million, generated from the company's prior real
estate transactions, to pay down the revolving credit facility without
reducing the company's borrowing availability under the facility.
The company noted that it continues to close on its sale and financing
leaseback agreements, with $94 million closed quarter-to-date through June 16.
The company expects to close approximately $77 million of additional sale and
financing leaseback transactions that are currently under contract.
"These transactions are especially critical as we continue to face
substantial headwinds from the global economic recession," said Bill Zollars,
Chairman, President and CEO of YRC Worldwide. "Today's announcement marks
important milestones, which are part of our overall strategy to provide us
with greater financial flexibility during the economic recession, giving us
additional liquidity and the ability to use our cash to support the business."
Zollars continued, "Most importantly, we continue to improve the level of
service to our customers, while we focus on making our cost structure more
competitive with others in our industry, strengthening our balance sheet and
reducing our short-term cash obligations."
At May 31, 2009, the company's cash and cash equivalents, excluding
restricted cash of $61 million, was $155 million compared to $151 million at
April 30, 2009. The aggregated cash balance and available unused capacity
under the credit agreements was $242 million at May 31, 2009, compared to $221
million at April 30, 2009.
This news release contains 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 word "expects" and
similar expressions are intended to identify forward-looking statements.
Although the company is negotiating with other IBT multi-employer pension
funds to become a party to the agreement with Central States, whether any of
those funds become a party to the agreement is dependent upon agreement of
each of those funds.
The company's expectations regarding its ability to close additional sale
and financing leaseback transactions are only its expectations regarding these
matters. Whether the company is able to close additional sale and financing
leaseback transactions will be determined by the satisfaction of usual and
ordinary closing conditions such as favorable title reports or opinions and
favorable environmental assessments of specific properties.
YRC Worldwide Inc., a Fortune 500 company and one of the largest
transportation service providers in the world, is the holding company for a
portfolio of successful brands including YRC, YRC Reimer, YRC Logistics, New
Penn, Holland, Reddaway and YRC Glen Moore. Building on the strength of its
heritage brands, Yellow Transportation and Roadway, the enterprise provides
global transportation services, transportation management solutions and
logistics management. The portfolio of brands represents a comprehensive array
of services for the shipment of industrial, commercial and retail goods
domestically and internationally. Headquartered in Overland Park, Kansas, YRC
Worldwide employs approximately 49,000 people.
SOURCE: YRC Worldwide Inc.
CONTACT: Investors, Sheila Taylor of YRC Worldwide Inc.,
+1-913-696-6108, sheila.taylor@yrcw.com; Media,
Suzanne Dawson of Linden
Alschuler & Kaplan, +1-212-329-1420, sdawson@lakpr.com
Web Site: http://www.yrcw.com