Revolver Reserve Amount

The Credit Agreement Amendment extends the date uponfrom October 29, 2009 to January 1, 2012 (or such later date as may be agreed to by 66 2/3% of the lenders) on which the revolving commitments will be permanently reduced by the revolver reserve amount, subject to early termination upon a Deferral Termination Event (defined below) so long as the Recapitalization Transaction (as defined in the Credit Agreement) is completed and the CDA Amendment (defined below) is effective. The Exchange Offer, as presently contemplated (and described below in “Contemplated Exchange Offer”), would meet the definition in the Credit Agreement of a Recapitalization Transaction. On November 5, 2009, the CDA Amendment became effective. However, if the Exchange Offer is not completed on or before December 16, 2009 (or such later date as may be agreed to by 66 2/3% of the lenders, the “Exchange Offer Deadline”), the revolving commitments will be permanently reduced by an amount equal to the then current Revolver Reserve Amount (as defined below) to September 1, 2009.

Asset Sale Mandatory Prepaymentrevolver reserve amount on that date.

PursuantAmendment No. 12 to the Credit Agreement bifurcated the revolver reserve amount into two blocks: the existing revolver reserve block and the new revolver reserve block.

The existing revolver reserve block is $106 million and will not increase above that amount. Until the earlier of the completion of the Exchange Offer and the Exchange Offer Deadline, the Credit Agreement Amendment the asset sale mandatory prepayment provision was amendedcontinues to no longer requireprovide the Company access to include any$50 million of the existing revolver reserve block at any time for specified operating needs (“Permitted Interim Loans”). Access to the remaining existing revolver reserve block (and any portion of the $50 million of the existing revolver reserve block that could be, but is not, borrowed prior to the completion of the Exchange Offer) is subject to borrowing conditions, including (among others) the following:

The new revolver reserve block was approximately $8.7 million at October 27, 2009 and will be increased by mandatory prepayments of net cash proceeds from certain asset sales and any excess cash flow sweeps. The Company may access the new revolver reserve block after the existing revolver reserve block has been fully borrowed, subject to the same borrowing conditions applicable to the existing revolver reserve block, except that the Company must obtain the approval of 66 2/3% of the lenders rather than complying with the minimum weekly operating EBITDA thresholds and maximum SG&A monthly expense amounts.

— Interest and Fee Deferrals

Amendment No. 12 to the Credit Agreement provides that the lenders will defer the payment of revolver and term loan interest, letter of credit fees and commitment fees for the period:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YRC Worldwide Inc. and Subsidiaries—(Continued)

(Unaudited)

— Deferral Exceptions and Termination Events

There are exceptions and termination events with respect to the interest and fee deferral described above, including (among others) the following:

— Mandatory Prepayments

Under the Credit Agreement, as amended, we are obligated to make mandatory prepayments on an annual basis of any excess cash flow and upon the receipt of net cash proceeds from certain asset sales and the issuance of equity and if we have an average liquidity amount for the immediately preceding five business days in excess of $250 million. The percentage of net cash proceeds received and the manner in which they are applied varies as set forth in greater detail in the Credit Agreement.

Asset Sales

The Credit Agreement, as amended, allows us to receive up to $400 million of net cash proceeds from asset sales in 2009 and $200 million of net cash proceeds from asset sales in 2010, which limits do not include net cash proceeds received from certain asset sales, including the following:

In addition, after Amendment No. 12 to the Credit Agreement, we can only consummate sale and leaseback transactions if

The Company expects to close approximately $50 million of approved sale leaseback transactions in the Revolver Reserve Amount,fourth quarter of 2009. See “—Lease Financing Transactions”. The closing of these sale leaseback transactions is subject to:to the satisfaction of normal and customary due diligence and related conditions, including the right of each buyer to terminate its obligation in its sole discretion during the inspection period, which conditions may be outside of the Company’s control.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YRC Worldwide Inc. and Subsidiaries—(Continued)

(Unaudited)

Financial Covenants

If the conditions in paragraphs (b) and (c) are not satisfied priorAmendment No. 12 to the Company’s receiptCredit Agreement eliminated the previous requirement that the Company maintain certain leverage and interest coverage ratios. In addition, Amendment No. 12 to the Credit Agreement eliminated minimum consolidated EBITDA level requirements for the fourth quarter of 2009 and the first quarter of 2010. Finally, Amendment No. 12 to the Credit Agreement reset certain requirements that the Company maintain minimum consolidated EBITDA and maximum capital expenditure levels, as follows:

Amendment No, 12 to the Credit Agreement allows the Company to add back certain restructuring charges when evaluating minimum consolidated EBITDA as set forth in greater detail in the Credit Agreement.

Teamster Approval of the respective net cash proceeds,Credit Agreement

The August 2009 modification to our collective bargaining agreement with the Teamsters requires, among other things, that we enter into a bank amendment that is acceptable to the Teamsters. The Teamsters National Freight Industry Negotiating Committee (“TNFINC”) certified to us that Amendment No. 12 to the Credit Agreement was satisfactory to the Teamsters, subject to the following conditions:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YRC Worldwide Inc. and Subsidiaries—(Continued)

(Unaudited)

Designated Officer

If any of these conditions are not met, TNFINC reserved the right to declare the modification to the collective bargaining agreement ineffective and continue to engageterminate the modification on a designated officer to, among other things, coordinate and oversee the Company’s continued recovery efforts.

ABS Facility AmendmentAmendments and Renewal

On July 30,October 27, 2009, we also amended our ABS Facility. The ABS Facility amendments extended the Company and the other parties thereto entered into Amendment No. 7 toexpiration of the ABS Facility (the “ABS Amendment”). from February 11, 2010 to October 26, 2010;providedthat, if the Exchange Offer is not completed by the Exchange Offer Deadline, the ABS Facility will expire on February 11, 2010.

The ABS Amendment amendsFacility amendments have amended certain Trigger Events (as defined in the ABS Facility) to make the Minimum Consolidated EBITDA (as defined in the ABS Facility) and maximum capital expenditure requirements consistent with the Credit Agreement. The ABS Amendment also amends specified provisions with respect to the Liquidity Notification Date (as defined in the ABS Facility) consistent with the See “Credit Agreement.Agreement Amendments – Financial Covenants” above. In connection with the ABS Facility Amendment, the Company paid fees to each participating co-agentaddition, certain calculations under the ABS Facility in an amount equalwere amended to 0.50%reduce the impact of certain negative effects that the integration of Yellow Transportation and Roadway has had on those calculations, due to rating adjustments and the timing of customer payments. As a result of the Group Limit (as defined inamendments, the obligation to repay outstanding amounts under the ABS Facility) applicableFacility due to those integration effects has been reduced or eliminated. The Co-Agents under the ABS Facility have completed preliminary work to verify the related integration adjustments; however, further substantiation by the Co-Agents as part of their annual audit of the ABS Facility is required. This audit must be completed by November 30, 2009.

The ABS Facility amendments also reduced the aggregate commitments under the ABS Facility from $500 million to $400 million and reduced the letter of credit facility sublimit from $105 million to $84 million. The Company believes that co-agent.the impact of this reduction will not affect the Company’s liquidity because the $400 million commitment level is sufficient given the Company’s current level of accounts receivable underlying the ABS Facility.

Upon completion of the Exchange Offer, the Co-Agents under the ABS Facility have also agreed to defer most of the fees during the term of the ABS Facility. This includes the $10 million fee that was originally due on September 30, 2009, prior to the ABS Facility amendments.

Lease Financing Transactions

We have entered into several lease financing transactions with various parties, including NATMI Truck Terminals, LLC and its affiliates (“NATMI”) and Estes Express Lines (“Estes”). The underlying transactions included providing title of certain real estate assets to the issuer in exchange for agreed upon proceeds; however, the transactions did not meet the accounting definition of a “sale leaseback” and as such, the assets remain on our balance sheet and long-term debt (titled Lease Financing Obligations) is reflected on our balance sheet in the amount of the proceeds. We are required to make annual lease payments, which are recorded as principal and interest payments under these arrangements, generally over a term of ten years.arrangements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YRC Worldwide Inc. and Subsidiaries—(Continued)

(Unaudited)

The table below summarizes our lease financing transactions through JuneSeptember 30, 2009:

On August 7, 2009, we executed a contract with NATMI for additional lease financing transactions having a value of approximately $81.4 million.

We have used the proceeds received from the above transactions, as follows:

In addition to the $79.3$80.3 million referenced in the table above, we were required to repay borrowings under the revolving loan by an additional $15.4$21.9 million as a result of additional asset sales thereby making the Revolver Reserve Amount equal to $94.7 million at June 30, 2009.

As previously discussed,revolver reserve amount (now known as the existing revolver reserve block after the Credit Agreement Amendment amended, among other things, the terms of the asset sale mandatory prepayment provision through August 31,amendments) equal to $102 million at September 30, 2009. Thereafter, unless otherwise amended, our

The Credit Agreement will require therequires any net proceeds from certain real estate asset sales (other than approximately $117 million in net cash proceeds received in the initial sale and leaseback transaction completed with NATMI in the first half of 2009 and sales of real estate on which the pension funds have a first priority security interest under the Contribution Deferral Agreement) received on or after January 1, 2009 to be applied as follows:

Amendment No. 12 to the Credit Agreement requires that the prepayments (using the applicable prepayment percentage) described above shall be applied (i) first, to repay any outstanding Permitted Interim Loans; (ii) second, to repay any outstanding loans (or to cash collateralize any letters of credit) from the new revolver reserve block; (iii) third, to repay any outstanding loans (or to cash collateralize any letters of credit) from the existing revolver reserve block; and (iv) fourth, to repay any other outstanding revolver loans (or to cash collateralize any other letters of credit) and increase the new revolver reserve amount by such prepayment amount. Prior to Amendment No. 12, the revolver reserve amount (now known as the existing revolver reserve amount) was increased by 50% of the net cash proceeds received in 2009 from real estate asset sales subject to the above prepayment requirements, except for approximately $48 million of such net cash proceeds received in August 2009. As of September 30, 2009, the Company had received approximately $252 million of net cash proceeds from real estate assets sales subject to the above prepayment requirements.

Pension Contribution Deferral Obligations

On June 17, 2009, weWe have entered into a Contribution Deferral Agreement with the Central States, Southeast, Southwest Areas Pension Fund (the “Central States Pension Fund”)26 union multi-employer pension funds, which provide retirement benefits to certain of employees, whereby approximately $84.0 million of pension contributions originally due to the Central States Pension Fund on or before June 15, 2009funds were converted to debt. All other Pension FundsAt September 30, 2009, $141.8 million of deferred contributions were subject to which we such owed pension contributionsthe terms of $49.2 million have also executed joinder agreements and are parties to the Contribution Deferral Agreement. In addition, we have deferred our Julycertain additional pension contributions of $30.1$22.7 million which relate to June hours,these pension funds, and are working with each Pension Fundthe

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YRC Worldwide Inc. and Subsidiaries—(Continued)

(Unaudited)

applicable fund to execute additional joinder agreements to add these amounts to the Contribution Deferral Agreement. At JuneSeptember 30, 2009, these amounts related to Junepension contributions for union employee hours worked prior to the cessation of contributions that the modification to the collective bargaining agreement provides. See “—Ratification of Collective Bargaining Agreement Modification”above.These amounts are classified as “Wages, vacations and employees’ benefits” in our consolidated balance sheet.

TheseThe deferred amounts bear interest at the applicable interest rate set forth in the trust documentation that governs the Pension Fundeach pension fund and range from 4% to 18% as of JuneSeptember 30, 2009.

On November 5, 2009, we entered into an amendment to the Contribution Deferral Agreement (the “CDA Amendment”).

— Amortization and Interest Deferral

Prior to the CDA Amendment, outstanding deferred pension payments under the Contribution Deferral Agreement were to be paid to the Funds in thirty-six equal monthly installments payable on the 15^th day of each calendar month commencing on January 15, 2010 (each a “CDA Amortization Payment”) and interest payments under the Contribution Deferral Agreement (each a “CDA Interest Payment”) were required to be made to the Funds in arrears on the fifteenth day of each calendar month.

The CDA Amendment provides that upon the completion of the Exchange Offer on or prior to Exchange Offer Deadline (so long as the lenders under the Credit Agreement do not permanently reduce revolving commitments under the Credit Agreement as a result of reducing the revolver reserve amount), all CDA Amortization Payments and CDA Interest Payments due from the date the completion of the Exchange Offer through the end of 2010 shall be deferred until December 31, 2011;provided, that the CDA Amortization Payments and CDA Interest Payments will become due at the election of the majority of the pension funds on December 31, 2010 if 90% of the pension funds do not approve a continuation of the deferral of CDA Amortization Payments and CDA Interest Payments for calendar year 2011. In addition, all deferred interest rate forand amortization payments will become payable at the Central States Pension Fund representingelection of the largestmajority of the pension funds and no new amounts may be deferred upon the earliest to occur of:

— Mandatory Prepayments

The CDA Amendment amends the mandatory prepayment provision tied to liquidity to provide that the Company will only be required to prepay obligations under the Contribution Deferral Agreement if the liquidity of the Company and its subsidiaries is greater than $250 million after deducting any amount due under the Credit Agreement by virtue of the Credit Agreement liquidity mandatory prepayment (as described in the Credit Agreement Amendment section above);provided that such prepayment obligation does not arise unless and until the excess liquidity amount is equal to prime plus two percent. We remit interest payments monthly.or greater than $1 million at any time.

In— Collateral

As part of the Contribution Deferral Agreement, in exchange for the deferral of the contribution obligations, we pledged identified real property to the Pension Fundspension funds so that the Pension Fundspension funds have a first priority security interest in certain of the identified real property and a second priority security interest in other identified real property located throughout the U.S. and Mexico.

We mustare required to prepay the deferred obligations on a ratable basis to the Pension Funds (i) with the net cash proceeds from the sale of first priority collateral or (ii) to the extent that Liquidity (as defined in the Credit Agreement)we sell any of the Company is greater than $250first lien property pledged to the pension funds with the net proceeds from the sale. We have made payments of $15.4 million an amount equalpursuant to such excess (the “Excess Amount”); provided that Liquidity must be equal to $250 million after giving effect to such payment and no payment shall be required until the Excess Amount is equal to or great than $1 million at any time.

We made a payment of $4.7 millionsales to reduce theseour obligations in Juneto the pension funds during the nine months ended September 30, 2009 leaving a balance of $128.5$141.8 million as of JuneSeptember 30, 2009. Additional repayment amounts are required in thirty-six equal monthly installments commencing on January 15, 2010.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YRC Worldwide Inc. and Subsidiaries—(Continued)

(Unaudited)

Existing Liquidity Position

The following table provides details of the outstanding components and unused available unused capacity under the Credit Agreement and ABS Facility at each period end:end after giving consideration to the amendments discussed above:

As we sold certain assets, we used the net cash proceeds to reduce the outstanding revolving loan balance. The amended Credit Agreement provides that we create the revolver reserve anblock with a certain accumulated portion of the net cashthose proceeds, from certain asset sales (the “Revolver Reserve Amount”), which

amount reduces our revolving creditavailable capacity under the revolver on a dollar-for-dollar basis unless certain conditions are satisfied. As a result of this provision, the available capacity of our overall availabilityrevolver was reduced by $94.7$102.2 million at JuneSeptember 30, 2009. There was no similar amount at December 31, 2008. After considering the Revolver Reserve Amountrevolver reserve amount of $94.7$102.2 million and outstanding usage, the unused available capacity under the revolving loan was $34.0$8.4 million at JuneSeptember 30, 2009. Our Credit Agreement requires that

Until amended on October 27, 2009, the revolving loan borrowing capacity will be permanently reduced by the Revolver Reserve Amount on September 1, 2009.

The ABS Facility permits borrowingsprovided capacity of up to $500 million based on qualifying accounts receivable of the Company.Company and certain other provisions. However, at JuneSeptember 30, 2009 and December 31, 2008, our underlying accounts receivablesuch provisions supported totalavailable capacity under the ABS Facility of $301.3$265.0 million and $435.4 million, respectively. Considering this limitation and outstanding usage, there was no unused available unused capacity under the Credit Agreement and the ABS Facility at JuneSeptember 30, 2009 and at December 31, 2008, was $53.1 million and $41.9 million, respectively.2008.

YRC Assurance Co. Ltd. (“YRC Assurance”) was the Company’s captive insurance company domiciled in Bermuda and a wholly owned and consolidated subsidiary of YRC Worldwide. YRC Assurance insured certain of our subsidiaries for certain of their respective self-insured obligations for workers’ compensation liabilities. Certain qualifying investments were made by YRC Assurance as required by Bermuda regulations. These investments included purchasing a position in the underlying receivables supporting our ABS Facility. As a result, as shown in the table above, our capacity under the ABS Facility was reduced by YRC Assurance’s investment in receivables of $221.0 million at December 31, 2008. Our Credit Agreement required us to cease the participation of YRC Assurance in the ABS Facility. We have complied with this requirement, and YRC Assurance is in the process of beingwas dissolved. As a result of these transactions, the operating companies who received insurance from YRC Assurance are now self-insured for their workers’ compensation liabilities.

Contemplated Exchange Offer

The Company intends to launch the Exchange Offer based upon terms discussed with representatives of a committee of the holders of its contingent convertible notes and a committee of the holders of its USF 8 ¹/2% notes (collectively the “Notes”). The successful completion of this exchange would allow the Company access to the existing revolver reserve and to begin deferring payment of lender interest and fees under its recently amended Credit Agreement and ABS Facility and to begin deferring the CDA Interest Payments and CDA Amortization Payments under the Contribution Deferral Agreement. See “Credit Agreement Amendments”, “ABS Facility Amendments” and “Pension Contribution Deferral Obligations” above.

In the aggregate and with full participation, noteholders would exchange approximately $536.8 million in face value of Notes plus accrued and unpaid interest for shares of common stock and new preferred stock, which together on an as-if converted basis would represent 95% of the Company’s common stock, prior to the Company’s grant of options to its union employees pursuant to modification to the Company’s collective bargaining agreements. See “Ratification of Collective Bargaining Agreement Modification” and “Teamster Approval of the Credit Agreement” above.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YRC Worldwide Inc. and Subsidiaries—(Continued)

(Unaudited)

Risks and Uncertainties Regarding Future Liquidity

In light of our recent operating results, we have satisfied our short term liquidity needs through a combination of borrowings under our Credit Agreement and ABS Facilitycredit facilities and, to a more significant degree, retained proceeds from asset sales and sale/leaseback financing transactions and deferralstransactions. In an effort to further manage liquidity, we have also instituted the deferral of pension plan payments. As our operating results improve, we expect that cash generated from operations will reduce our need to continue to rely upon these sources of liquidity to meet our short term funding requirements. Although we expect the wage reduction and temporary pension contribution cessation will improve our liquidity position, these and other cost savings measures noted above will be realized over time as they are implemented over the next several months. In order toTo continue to have sufficient liquidity to meet our operatingcash flow requirements throughout the remainder of 2009:2009 and through 2010:

OverWe expect our business to experience its usual seasonal low point in late 2009 and the longer term, we have an aggregatewinter of approximately $386.8 million2010. Deferral of indebtedness that matures or that we are otherwise requiredpayment of interest and fees to repurchase at the option of the holder within the next twelve months. Specifically, $150 million in aggregate principal amount of USF’s 8¹/2% Guaranteed Notes (the “USF Notes”) mature on April 15, 2010 and $236.8 million in aggregate principal amount of the 5.0% contingent convertible senior notes due 2023 (the “5.0% Notes”) may be put to us by the holders of the 5.0% Notes on August 8, 2010. In addition, our Credit Agreement permits the lenders, to accelerate the maturity datepurchasers of our obligationsaccounts receivable under our ABS Facility and pension funds subject to the Contribution Deferral Agreement and access to the revolver reserve blocks under the Credit Agreement ifand certain benefits of the remaining obligations under the USF Notes is equal to or greater than $50 million on or after March 1, 2010 or if the remaining obligations under the 5.0% Notes is equal to or greater than $50 million on or after June 25, 2010. Finally, the modification to our collective bargaining agreement with the Teamster’s provides that the Teamsters may terminate the wage and benefit reductions in the modification if the USF NotesABS Facility are not refinanced, repurchased or extinguished before March 1, 2010 or the 5.0% Notes are not refinanced, repurchased or extinguished before July 1, 2010 (or, in each case, such later date as the Teamsters may determine). If we do not have sufficient free cash flow to satisfy these obligations and the capital markets are not available to refinance the obligations, we would not be able to refinance these existing notes. Accordingly, we have retained financial and legal advisors and have commenced discussions with certain holders of these and other outstanding debt securities in an effort to address these upcoming maturities.

Risks and Uncertainties Relating to Liquidity

Our ability to satisfy our future liquidity requirements isall subject to a numbersuccessful completion of risksthe Exchange Offer by the Exchange Offer Deadline. As our business reaches this seasonal low point, we will need access to the additional liquidity that these agreements and uncertainties as outlined below.facilities provide to fund our operations.

The Credit Agreement andIf we have not completed the ABS Facility each requires usExchange Offer prior to complythe Exchange Offer Deadline, we will continue to explore options to complete our restructuring out of court, including further discussions with a number of covenants. Any failure to comply with these covenants would impact our ability to access borrowingslenders under these facilities. As previously discussed, the Credit Agreement, Amendmentthe Teamsters, our multi-employer pension funds and other stakeholders. Among other things, these discussions could result in amendments to the Exchange Offer, which our lenders, the Teamsters and the ABS Amendment eliminated any minimum EBITDA requirements through September 30, 2009 and resetmulti-employer pension funds who are parties to the minimum EBITDA requirement forContribution Deferral Agreement would have to approve. The approval of these parties is beyond the fourth quarterCompany’s control. Other options could also arise out of 2009 and each quarter during 2010. Additionally, these amendments eliminateddiscussions; however, these options would require the minimum liquidity requirement for August 2009. This minimum liquidity requirement will resume atparticipation of our stakeholders or other third parties, none of which are within the $100 million level in September 2009. Company’s control.

If we failare unable to meetcomplete the Exchange Offer and address our minimumnear term liquidity requirement or our required EBITDA levels under our Credit Agreement and ABS Facility after these dates,needs as a result of any such discussions, we would needthen expect to seek relief under the U.S. Bankruptcy Code. The Company expects that any such filing for relief would occur after its orderly completion of planning and preparation for such a waiverfiling.

To successfully complete a restructuring in a bankruptcy case, we would require debtor-in-possession financing, the most likely source of which would be our existing lenders. If we were unable to obtain financing in a bankruptcy case or forbearance from our lendersany such financing was insufficient to fund operations pending the completion of a restructuring, there would be substantial doubt that the Company could complete a restructuring.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The uncertainty regarding the Company’s ability to generate sufficient cash flows and lessors under our Credit Agreement, our ABS Facility and certain of our leases; otherwise our lenders and lessors could declare an event of default and accelerate our obligations thereunder. Ourliquidity to fund operations raises substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of assets carrying amounts or the amount of and classification of liabilities that maymight result from these and other significant uncertainties surrounding the Company’s ability to continue to meet it’s obligations as they become due in the ordinary course of business.

As of June 30, 2009, we had approximately $35.8 million of sale/leaseback transactions under contract that we expect to complete during the third quarter of 2009. In addition, we signed a contract with NATMI on August 7, 2009 for $81.4 million related to additional properties. The amount of actual dispositions and sale and financing leasebacks that we complete will be determined by the availability of capital and willing buyers and counterparties in the market and the outcome of discussions to enter intothis uncertainty.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YRC Worldwide Inc. 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.Subsidiaries—(Continued)

(Unaudited)

Contingent Convertible Notes

The modification tobalance sheet classification of our collective bargaining agreement withcontingent convertible notes between short-term and long-term is dependent upon certain conversion triggers, as defined in the Teamsters requires,applicable indenture. The contingent convertible notes include a provision whereby the note holder can require immediate conversion of the notes if, among other things, that we enter into a bank amendment that is acceptable toreasons, the Teamsters. We are involved in ongoing discussions with our lenders regarding this amendment. If we fail to enter into such a bank amendment, the Teamsters may nullify the benefits of our recent modification to the collective bargaining agreement (including the wage reduction, temporary pension contribution cessation and related cost benefits).

Our forecasts include significant judgment and significant market risk that may or may not be realized. Items that contribute to these judgments and risks, many of which are beyond our control, include the actual duration of the U.S. recession and our related assumptions around economic outlook, the continued improvements in productivities and service for our YRC network and the return of customers shipments to that network, our ability to further reduce costs and our need for additional liquidity including liquidity from cash flows from operating activities and other liquidity enhancing initiatives (such as sale and leaseback type transactions) that may not materialize. Our forecasts are also dependentcredit rating on the factors listed incontingent convertible notes assigned by Moody’s is lower than B2 or if the introduction to MD&A and the risk factors listed in Part I of our Annual Report on Form 10-K for the year ended December 31, 2008.

We have the following amortizable intangible assets:

Total marketing related intangible assets with indefinite lives, primarily tradenames, were $33.5 million and $32.8 million as of Junecredit rating assigned by S&P is lower than B. At September 30, 2009 and December 31, 2008, respectively.

During the three months ended June 30, 2009, we determined indicators of impairment, primarily volume reductionsconversion trigger was met, and accordingly, the contingent convertible notes have been classified as a short-term liability in allthe accompanying consolidated balance sheets. Based upon this particular conversion right and based upon an assumed market price of our reporting segments, were present. We performed certain tests consistingstock of discounted cash flow models and determined that$1.25 per share, which approximates the lives assigned to certain customer relationships should be reduced to better align with actual attrition rates. This resulted in additional amortization expense of $1.4 million during the three months ended June 30, 2009. Estimated amortization expense related to intangible assetscurrent market price, our aggregate obligation for 2009 and eachfull satisfaction of the next five years is as follows:

No other impairment amounts were required as$386.8 million par value of June 30, 2009.

The primary componentscontingent convertible notes would require cash payments of other assets are as follows:

During the three months ended June 30, 2009, we determined our investment$11.4 million. Our Credit Agreement will not allow us to pay more than $1 million in cash payments with respect to Shanghai Jiayu Logistics Co., Ltd. incurred an other than temporary impairment. This is primarily the resultconversion of different assumptions with respect to revenue growth rates fromthese notes unless a majority of the initial valuation to those assumed inlenders approve the current economic environment. As a result, we recognized an impairment charge for this equity method investment of $30.4 million during the three months ended June 30, 2009. This amount is classified as a non-operating expense in the accompanying statements of operations. No such amount was recorded during the three or six months ended June 30, 2008.excess payments.

7. Debt and Financing

Total debt consisted of the following:

As of JuneSeptember 30, 2009, we were in compliance with the various debt covenants, as amended, in May 2009, under our lending agreements.

Asset-Backed Securitization Facility

At June 30, 2009, our underlying accounts receivable supported total capacity under our ABS Facility of $301.3 million. In addition to the $205.0 million outstanding, the ABS facility capacity was also reduced by outstanding letters of credit of $77.2 million resulting in unused capacity of $19.1 million at June 30, 2009.

Lease Financing Obligations

The table below summarizes our lease financing transactions through June 30, 2009:

Pension Contribution Deferral Obligations

On June 17, 2009, we entered into a Contribution Deferral Agreement with the Central States, Southeast, Southwest Areas Pension Fund (the “Central States Pension Fund”) whereby approximately $84.0 million of pension contributions originally due to the Central States Pension Fund on or before June 15, 2009 was converted to debt. Other Pension Funds to which we owed pension contributions of $49.2 million have also executed joinder agreements and are parties to the Contribution Deferral Agreement.

These amounts bear interest at the applicable interest rate set forth in the trust documentation that governs the Pension Fund and range from 4% to 18% as of June 30, 2009. The interest rate for the Central States Pension Fund representing the largest deferred amount is equal to prime plus two percent (5.25% at June 30, 2009). We remit interest payments monthly.

In exchange for the deferral of the obligations, we pledged identified real property to the Pension Funds so that the Pension Funds have a first priority security interest in certain of the identified real property and a second priority security interest in other identified real property located throughout the U.S. and Mexico.

We must prepay the obligations on a ratable basis to the Pension Funds (i) with the net cash proceeds from the sale of first priority collateral or (ii) to the extent that Liquidity (as defined in the Credit Agreement as currently in effect) of the Company is greater than $250 million, an amount equal to such excess (the “Excess Amount”); provided, that, Liquidity shall be equal to $250 million after giving effect to such payment and no payment shall be required until the Excess Amount is equal to or great than $1 million at any time.

We made a payment of $4.7 million to reduce these obligations in June 2009 leaving a balance of $128.5 million as of June 30, 2009. Additional repayment amounts are required in thirty-six equal monthly installments commencing on January 15, 2010.

Contingent Convertible Senior Notes

In May 2008, the FASB issued ASC 470-20-65-1 relative to accounting for convertible debt instruments that may be settled in cash (formerly FASB Staff Position (“FSP”) No. APB 14-1, “Accounting for Convertible Debt Instruments that may be Settled in Cash upon Conversion (Including Partial Cash Settlement)”. This FSPguidance clarifies that issuers of convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. We adopted the FSPthis guidance on January 1, 2009.

The transition provisions require that the FSPthis guidance be applied retrospectively to all periods presented. The cumulative effect of the change in accounting principle on prior periods presented is recognized as of the beginning of the first period presented, with the offsetting adjustment to shareholders’ equity. Accordingly, in the accompanying consolidated balance sheet as of December 31, 2008, we recognized a reduction in long-term debt of $11.0 million, an increase in deferred income taxes, net of $3.9 million, an increase in capital surplus of $15.0 million, and an increase in retained deficit of $7.9 million. Adoption of the FSPthis guidance also resulted in the recognition of additional interest expense of $0.8 million in the accompanying statements of consolidated operations for each of the three month periods ended JuneSeptember 30, 2009 and 2008 and $1.6$2.3 million for each of the sixthree and nine month periods ended JuneSeptember 30, 2009 and 2008.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YRC Worldwide Inc. and Subsidiaries—(Continued)

(Unaudited)

Fair Value Measurement

Based on the quoted market prices for the USF senior notes due 2010, contingent convertible senior notes and industrial development bonds (level two inputs for fair value measurements as defined in SFAS No. 157,FASB ASC 820, “Fair Value Measurements”Measurement and Disclosures”), the fair value of fixed-rate debt at JuneSeptember 30, 2009 and December 31, 2008, was approximately $159.1$295.5 million and $212.7 million, respectively. The carrying amount of such fixed-rate debt at JuneSeptember 30, 2009 and December 31, 2008, was $536.4$536.2 million and $537.7 million, respectively.

8. Employee Benefits

7.	Restructuring and Reorganization

During the first half of 2009, we closed 18 service centers that were previously a part of the Regional Transportation networks. As a part of this action, we incurred certain restructuring charges of approximately $7.9 million consisting of employee severance, lease cancellations and other incremental costs. Also during the first half of 2009, we integrated our Yellow Transportation and Roadway networks into a single transportation network branded “YRC”. We incurred additional severance costs of $29.0 million, including $20.5 million in the National Transportation segment as we reduced headcount in response to both the YRC integration and lower volumes. Our National Transportation segment also recorded a $15.4 million charge consisting of contract and lease cancellations related to the YRC integration. Finally, our YRC Logistics segment recorded $5.0 million of severance and lease cancellation costs primarily in response to lower business levels.

We assess the accrual requirements under our restructuring efforts at the end of each reporting period. A rollforward of the restructuring accrual is set forth below:

Components of Net Periodic Pension and Other Postretirement Cost

The following table sets forth the components of our company-sponsored pension costs for the three and sixnine months ended JuneSeptember 30: