Yellow (YELLQ) 8-K Results of Operations and Financial Condition

Exhibit 99.1

CONSOLIDATED BALANCE SHEETS

YRC Worldwide Inc. and Subsidiaries

(Amounts in thousands except per share data)

	December 31, 2005			December 31, 2004
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	82,361		$	106,489
Accounts receivable, net		1,164,383			778,596
Prepaid expenses and other		230,888			168,356
Total current assets		1,477,632			1,053,441
PROPERTY AND EQUIPMENT:
Cost		3,607,415			2,672,289
Less - accumulated depreciation		1,401,623			1,249,571
Net property and equipment		2,205,792			1,422,718
OTHER ASSETS:
Goodwill		1,234,065			632,141
Intangibles, net		713,677			468,310
Other assets		103,023			50,559
Total assets	$	5,734,189		$	3,627,169
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	393,934		$	307,089
Wages, vacations, and employees’ benefits		522,882			427,731
Other current and accrued liabilities		372,988			210,519
Asset backed securitization (“ABS”) borrowings		374,970			—
Current maturities of contingently convertible notes		—			250,000
Current maturities of long-term debt		—			4,400
Total current liabilities		1,664,774			1,199,739
OTHER LIABILITIES:
Long-term debt, less current portion		1,113,085			403,535
Deferred income taxes, net		387,220			319,839
Claims and other liabilities		632,622			489,865
Total other liabilities		2,132,927			1,213,239
SHAREHOLDERS’ EQUITY:
Common stock, $1 par value per share		60,450			51,303
Preferred stock, $1 par value per share		—			—
Capital surplus		1,172,139			694,504
Retained earnings		838,614			550,484
Accumulated other comprehensive loss		(27,610	)		(33,159	)
Unamortized equity awards		(17,485	)		(10,479	)
Treasury stock, at cost (3,158 and 2,066 shares)		(89,620	)		(38,462	)
Total shareholders’ equity		1,936,488			1,214,191
Total liabilities and shareholders’ equity	$	5,734,189		$	3,627,169

STATEMENTS OF CONSOLIDATED OPERATIONS

YRC Worldwide Inc. and Subsidiaries

For the Three and Twelve Months Ended December 31

(Amounts in thousands except per share data)

(Unaudited)

	Three Months						Twelve Months
	2005			2004			2005			2004
OPERATING REVENUE	$	2,483,100		$	1,774,137		$	8,741,557		$	6,767,485
OPERATING EXPENSES:
Salaries, wages and employees’ benefits		1,389,651			1,064,447			5,111,113			4,172,144
Operating expenses and supplies		435,428			273,118			1,438,426			1,011,864
Purchased transportation		304,605			206,070			991,157			752,788
Depreciation and amortization		69,714			44,722			250,562			171,468
Other operating expenses		132,076			78,287			406,348			302,167
Gains on property disposals, net		(5,042	)		(3,957	)		(5,388	)		(4,547	)
Acquisition and executive severance charges		2,952			—			13,029			—
Total operating expenses		2,329,384			1,662,687			8,205,247			6,405,884
OPERATING INCOME		153,716			111,450			536,310			361,601
NONOPERATING (INCOME) EXPENSES:
Interest expense		20,618			9,506			63,371			43,954
Write off of deferred debt issuance costs		—			—			—			18,279
Other		2,164			999			676			1,705
Nonoperating expenses, net		22,782			10,505			64,047			63,938
INCOME BEFORE INCOME TAXES		130,934			100,945			472,263			297,663
INCOME TAX PROVISION		54,087			37,600			184,133			113,336
NET INCOME	$	76,847		$	63,345		$	288,130		$	184,327
AVERAGE SHARES OUTSTANDING-BASIC		57,864			48,617			54,358			48,149
AVERAGE SHARES OUTSTANDING-DILUTED		59,376			51,170			56,905			49,174
BASIC EARNINGS PER SHARE	$	1.33		$	1.30		$	5.30		$	3.83
DILUTED EARNINGS PER SHARE	$	1.30		$	1.24		$	5.07		$	3.75

STATEMENTS OF CONSOLIDATED CASH FLOWS

YRC Worldwide Inc. and Subsidiaries

For the Twelve Months Ended December 31

(Amounts in thousands)

	2005			2004
	(Unaudited)
OPERATING ACTIVITIES:
Net cash from operating activities	$	497,677		$	435,718
INVESTING ACTIVITIES:
Acquisition of property and equipment		(304,718	)		(201,818	)
Proceeds from disposal of property and equipment		48,283			37,529
Acquisition of companies, net of cash acquired		(753,892	)		(10,463	)
Investment in affiliate		(46,043	)		—
Other		12,075			4,494
Net cash used in investing activities		(1,044,295	)		(170,258	)
FINANCING ACTIVITIES:
ABS borrowings, net		374,970			(71,500	)
Issuance (repayment) of long-term debt		190,561			(175,044	)
Debt issuance costs		(4,245	)		(2,938	)
Proceeds from exercise of stock options		11,203			15,859
Treasury stock repurchase		(49,999	)		—
Other		—			(514	)
Net cash provided by (used in) financing activities		522,490			(234,137	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(24,128	)		31,323
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		106,489			75,166
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	82,361		$	106,489

SUPPLEMENTAL FINANCIAL INFORMATION

YRC Worldwide Inc. and Subsidiaries

For the Three Months Ended December 31

(Amounts in thousands except per share data)

(Unaudited)

	Three Months
	2005			2004			%
Operating revenue:
Yellow Transportation	$	886,541		$	824,491		7.5
Roadway Express		865,072			822,227		5.2
YRC Regional Transportation		584,381			69,470		n/m
Meridian IQ		153,485			59,861		n/m
Corporate and other		(6,379	)		(1,912	)
Consolidated		2,483,100			1,774,137
Reported operating income (loss):
Yellow Transportation		64,547			55,728		15.8
Roadway Express		62,600			54,840		14.2
YRC Regional Transportation		30,138			8,668		n/m
Meridian IQ		4,245			1,484		n/m
Corporate and other		(7,814	)		(9,270	)
Consolidated		153,716			111,450
Adjustments to operating income by segmenta :
Yellow Transportation		(4,275	)		(2,329	)
Roadway Express		(1,193	)		(1,668	)
YRC Regional Transportation		3,363			40
Meridian IQ		(26	)		—
Corporate and other		41			—
Consolidated		(2,090	)		(3,957	)
Adjusted operating income (loss)a:
Yellow Transportation		60,272			53,399		12.9
Roadway Express		61,407			53,172		15.5
YRC Regional Transportation		33,501			8,708		n/m
Meridian IQ		4,219			1,484		n/m
Corporate and other		(7,773	)		(9,270	)
Consolidated	$	151,626		$	107,493
Reported operating ratio:
Yellow Transportation		92.7	%		93.2	%
Roadway Express		92.8	%		93.3	%
YRC Regional Transportation		94.8	%		87.5	%
Consolidated		93.8	%		93.7	%
Adjusted operating ratio:
Yellow Transportation		93.2	%		93.5	%
Roadway Express		92.9	%		93.5	%
YRC Regional Transportation		94.3	%		87.5	%
Consolidated		93.9	%		93.9	%
Reconciliation of reported diluted earnings per share (EPS) to adjusted diluted EPS:
Reported diluted EPS	$	1.30		$	1.24
Gains on property disposals		(0.05	)		(0.05	)
Acquisition charges		0.03			—
Pre-acquisition foreign currency adjustmentd		0.02			—
Change in effective tax ratec		0.07			—
Contingent convertible dilution impact		—			0.05
Adjusted diluted EPS	$	1.37		$	1.24

SUPPLEMENTAL FINANCIAL INFORMATION

YRC Worldwide Inc. and Subsidiaries

For the Twelve Months Ended December 31

(Amounts in thousands except per share data)

(Unaudited)

	Twelve Months
	2005			2004			%
Operating revenue:
Yellow Transportation	$	3,421,310		$	3,180,590		7.6
Roadway Express		3,321,064			3,119,927		6.4
YRC Regional Transportation		1,570,828	b		260,572		n/m
Meridian IQ		447,563	b		213,199		n/m
Corporate and other		(19,208	)		(6,803	)
Consolidated		8,741,557			6,767,485
Reported operating income (loss):
Yellow Transportation		255,329			191,546		33.3
Roadway Express		209,122			158,334		32.1
YRC Regional Transportation		85,794	b		33,897		n/m
Meridian IQ		15,167	b		3,738		n/m
Corporate and other		(29,102	)		(25,914	)
Consolidated		536,310			361,601
Adjustments to operating income by segmenta :
Yellow Transportation		(7,108	)		(3,113	)
Roadway Express		1,159			(1,466	)
YRC Regional Transportation		8,838			32
Meridian IQ		(37	)		—
Corporate and other		4,789			—
Consolidated		7,641			(4,547	)
Adjusted operating income (loss)a:
Yellow Transportation		248,221			188,433		31.7
Roadway Express		210,281			156,868		34.0
YRC Regional Transportation		94,632			33,929		n/m
Meridian IQ		15,130			3,738		n/m
Corporate and other		(24,313	)		(25,914	)
Consolidated	$	543,951		$	357,054
Reported operating ratio:
Yellow Transportation		92.5	%		94.0	%
Roadway Express		93.7	%		94.9	%
YRC Regional Transportation		94.5	%		87.0	%
Consolidated		93.9	%		94.7	%
Adjusted operating ratio:
Yellow Transportation		92.7	%		94.1	%
Roadway Express		93.7	%		95.0	%
YRC Regional Transportation		94.0	%		87.0	%
Consolidated		93.8	%		94.7	%
Reconciliation of reported diluted EPS to adjusted diluted EPS:
Reported diluted EPS	$	5.07		$	3.75
Gains on property disposals		(0.06	)		(0.06	)
Acquisition charges		0.10			—
Executive severance		0.04			—
Pre-acquisition foreign currency adjustmentd		0.02			—
Change in effective tax ratec		0.08			—
Contingent convertible dilution impact		—			0.03
Write off debt issuance costs - nonoperating		—			0.24
Adjusted diluted EPS	$	5.25		$	3.96

^a Management excludes these items when evaluating operating income and segment performance to more accurately compare the results of our core operations among periods. This measurement should not be construed as a better measurement than operating income as defined by generally accepted accounting principles. Adjustments presented in the 2005 period herein consist of property gains and losses, acquisition related charges and executive severance charges. Adjustments presented in the 2004 period herein consist of property gains and losses.

^b Includes the revenue and operating income of USF operating companies since May 25, 2005, the date of acquisition.

^c Management excluded the impact of an increase to its effective tax rate as it primarily related to a change in the accounting treatment of Roadway deferred taxes established at the acquisition date. This is not expected to impact the tax rate in future periods.

^d Management excluded the portion of a foreign currency adjustment related to the Roadway financial statements prior to the acquisition. As the company can no longer apply purchase accounting to increase goodwill related to this acquisition, the adjustment was recorded directly to the income statement. This adjustment, recorded in other nonoperating expenses on the Statements of Consolidated Operations, was not related to 2005 performance.