Exhibit 99.1
10990 Roe Avenue Overland Park, KS 66211 Phone 913 696 6100 Fax 913 696 6116
News Release |  |
February 28, 2012
YRC Worldwide Reports Fourth Quarter 2011 Results
| • | YRC Freight tons per day up 6.7%, revenue per hundredweight up 4.8%, operating revenue up 11.0% |
| • | Regional tons per day up 4.7%, revenue per hundredweight up 5.7%, operating revenue up 12.6% |
OVERLAND PARK, KAN. — YRC Worldwide Inc. (NASDAQ: YRCW) today reported financial results for the fourth quarter of 2011.
Consolidated operating revenue for the fourth quarter of 2011 was $1.212 billion, up 11.1% over 2010, and consolidated operating loss was $38 million, which included a $13 million loss on asset disposals, $4 million of restructuring professional fees and $9 million of letter of credit fees (as detailed in the reconciliation below). Excluding these items, on a non-GAAP basis 2011 fourth quarter operating loss would have been $12 million. As a comparison, the company reported consolidated operating revenue of $1.092 billion for the fourth quarter of 2010 and a consolidated operating loss of $28 million, which included a $3 million loss on asset disposals, $8 million of letter of credit fees and $6 million of restructuring professional fees (as detailed in the reconciliation below). Excluding these items, on a non-GAAP basis 2010 fourth quarter operating loss would have been $11 million.
The company also reported positive operating cash flow of $27 million for the fourth quarter of 2011, which included the $4 million of restructuring professional fees, and reported gross capital expenditures of $35 million. When excluding the above noted restructuring professional fees, the company reported on a non-GAAP basis adjusted free cash flow usage of $4 million for the fourth quarter of 2011 (as detailed in the reconciliation below). As a comparison, the company generated non-GAAP basis adjusted free cash flow of $11 million for the fourth quarter of 2010, which included the add back of $7 million of restructuring professional fees (as detailed in the reconciliation below).
“I wish to express my thanks to our employees for their efforts as we work to build a more service-centric culture focused on delivering quality and consistently reliable freight service for our customers,” said James Welch, chief executive officer of YRC Worldwide. “I am pleased with the renewed focus on customer service, but obviously not satisfied with our consolidated operating results. However, I am encouraged that our performance trends over the fourth quarter are consistent with or exceeding the consolidated operating plan created by our now autonomous operating companies,” stated Welch.
“Our plans to streamline and simplify the YRC Freight network during 2012 are designed to enable fewer touches of the freight, expedite delivery to our customers, reduce costs by network optimization, and allow YRC Freight to return to its core competency of handling LTL shipments moving in the 2-day to 5-day transit lanes which are generally between 500 and 3,500 miles,” stated Welch. “Our YRC Freight growth strategy will focus on delivering consistent, high-quality, long-haul service that is reliable and cost-effective with competitive transit times.”
“I also want to recognize our Regional operating companies, Holland, Reddaway and New Penn, for continuing to deliver best-in-class service in the next-day and regional North American LTL markets,” said Welch. “The employees at all three Regional companies rallied and worked hard during 2011 to deliver an adjusted operating ratio of 97.3% which represents their second consecutive profitable year coming out of the economic downturn. Customer satisfaction remains high at Holland, Reddaway and New Penn, which validates that these three companies are doing the right things for their customers, and we expect their operating momentum to continue to improve in 2012.”
At December 31, 2011, the company’s cash, cash equivalents and availability under its $400 million multi-year asset-based loan facility (‘ABL’) was $277 million. The ABL borrowing base was $361 million as of December 31, 2011 as compared to $371 million as of September 30, 2011. As a comparison, the company’s cash, cash equivalents and unrestricted availability under its lending facilities was $279 million at September 30, 2011 and $194 million at December 31, 2010.
On December 15, 2011, the company sold a significant portion of the assets of its Glen Moore truckload operating subsidiary and redeployed the remaining revenue equipment units to YRC Freight and the Regional operating companies. “The proceeds from the sale of our Glen Moore assets improved our liquidity position and, more importantly, enable us to better focus our efforts on improving our core North American LTL businesses. We continue to evaluate additional sales of non-strategic assets,” stated Jamie Pierson, executive vice president and chief financial officer of YRC Worldwide. “On the operating front, our effective management of working capital produced a days-sales-outstanding of 35.4 days, which is a one-day improvement over last year.”
“We have hired Chicago-based NRC Realty & Capital Advisors LLC to coordinate the auction of 62 of our surplus properties resulting from our network integration activities,” said Pierson. “These surplus properties currently have substantial holding cost, maintenance and real estate taxes. We have chosen the auction process to monetize these properties and turn a liability into an asset. Some of these sites have been on the market for over three years, and we are marking them down to sell.”
In addition, the company reported a net loss of $86 million for the fourth quarter of 2011. As a comparison, the company reported net income of $15 million for the fourth quarter of 2010, which included an $87 million income tax benefit primarily due to a favorable IRS settlement.
Key Segment Information
Fourth quarter 2011 compared to the fourth quarter of 2010:
| • | YRC Freight (formerly YRC National Transportation) operating revenues up 11.0% to $805 million, adjusted operating ratio of 101.5, tons per day up 6.7%, shipments per day up 6.0%, revenue per hundredweight up 4.8% and revenue per shipment up 5.5%. |
| • | Regional Transportation operating revenues up 12.6% to $382 million, adjusted operating ratio of 97.7, tons per day up 4.7%, shipments per day up 2.5%, revenue per hundredweight up 5.7% and revenue per shipment up 7.9%. |
Non-GAAP Financial Measures
Adjusted operating income (loss) is a non-GAAP measure that reflects the company’s operating income (loss) 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. Free cash flow and adjusted free cash flow are non-GAAP measures that reflect the company’s operating cash flow minus gross capital expenditures and operating cash flow minus gross capital expenditures, excluding the restructuring costs included in operating cash flow, respectively. However, these financial measures should not be construed as better measurements than operating income, operating cash flow, net income or earnings per share, as defined by generally accepted accounting principles.
Adjusted operating income (loss), adjusted EBITDA and adjusted free cash flow 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; |
| • | Adjusted free cash flow excludes the cash usage by the company’s restructuring activities, debt issuance costs, equity issuance costs and principal payments on our outstanding debt and the resulting reduction in the company’s liquidity position from those cash outflows; |
| • | Other companies in our industry may calculate adjusted operating income (loss), adjusted EBITDA and adjusted free cash flow differently than we do, limiting their usefulness as a comparative measure. |
Because of these limitations, adjusted operating income (loss), adjusted EBITDA, free cash flow and adjusted free cash flow 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), adjusted EBITDA, free cash flow and adjusted free cash flow as secondary measures. The company has provided reconciliations of its non-GAAP measures (adjusted operating income (loss), adjusted EBITDA, free cash flow and adjusted free cash flow) to GAAP measures within the supplemental financial information in this release.
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Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. The words “will,” “plan,” “designed,” “enable,” and similar expressions are intended to identify forward-looking statements. 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 company’s ability to generate sufficient cash flows and liquidity to fund operations, 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.
* * * * *
About YRC Worldwide
YRC Worldwide Inc., a Fortune 500 company headquartered in Overland Park, Kan., is a leading provider of transportation andglobal logistics services. It is the holding company for a portfolio of successful brands includingYRC Freight,YRC Reimer,Holland,Reddaway, andNew Penn, and provides China-based services through itsJiayu andJHJ joint ventures. YRC Worldwide has one of the largest, most comprehensive less-than-truckload (LTL) networks 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 visitwww.yrcw.com for more information.
Web site:www.yrcw.com
Follow YRC Worldwide on Twitter:http://twitter.com/yrcworldwide
Investor Contact: Paul Liljegren
913-696-6108
investor@yrcw.com
Media Contact: Suzanne Dawson
Linden, Alschuler & Kaplan
212-329-1420
sdawson@lakpr.com
CONSOLIDATED BALANCE SHEETS
YRC Worldwide Inc. and Subsidiaries
(Amounts in thousands except share and per share data)
| December 31, 2011 | December 31, 2010 | |||||||
| ASSETS | (Unaudited) | |||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 200,521 | $ | 143,017 | ||||
Accounts receivable, net | 476,793 | 442,500 | ||||||
Prepaid expenses and other | 100,965 | 182,515 | ||||||
Restricted amounts held in escrow | 59,680 | — | ||||||
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Total current assets | 837,959 | 768,032 | ||||||
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PROPERTY AND EQUIPMENT: | ||||||||
Cost | 3,074,858 | 3,239,413 | ||||||
Less—accumulated depreciation | (1,738,304 | ) | (1,710,216 | ) | ||||
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Net property and equipment | 1,336,554 | 1,529,197 | ||||||
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OTHER ASSETS: | ||||||||
Intangibles, net | 117,492 | 139,525 | ||||||
Restricted amounts held in escrow | 96,251 | — | ||||||
Other assets | 97,584 | 134,802 | ||||||
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Total assets | $ | 2,485,840 | $ | 2,571,556 | ||||
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LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 151,922 | $ | 147,112 | ||||
Wages, vacations, and employees’ benefits | 210,409 | 196,486 | ||||||
Other current and accrued liabilities | 303,946 | 452,226 | ||||||
Current maturities of long-term debt | 9,459 | 222,873 | ||||||
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Total current liabilities | 675,736 | 1,018,697 | ||||||
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OTHER LIABILITIES: | ||||||||
Long-term debt, less current portion | 1,345,201 | 837,262 | ||||||
Deferred income taxes, net | 31,687 | 118,624 | ||||||
Pension and post retirement | 440,265 | 447,928 | ||||||
Claims and other liabilities | 351,563 | 360,439 | ||||||
Commitments and contingencies | ||||||||
SHAREHOLDERS’ DEFICIT: | ||||||||
Cumulative Preferred stock, $1.00 par value per share—authorized 5,000,000 | ||||||||
Series A Preferred stock, shares issued 1 and 0, liquidation preference $1 and $0 | — | — | ||||||
Series B Preferred stock, shares issued 0 and 0, liquidation preference $0 and $0 | — | — | ||||||
Common stock, $0.01 par value per share – authorized 33,333,333 and 266,667 shares, issued 6,847,000 and 159,000 shares | 68 | 2 | ||||||
Capital surplus | 1,902,957 | 1,643,752 | ||||||
Accumulated deficit | (1,930,202 | ) | (1,520,891 | ) | ||||
Accumulated other comprehensive loss | (234,100 | ) | (239,626 | ) | ||||
Treasury stock, at cost (410 shares) | (92,737 | ) | (92,737 | ) | ||||
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Total YRC Worldwide Inc. shareholders’ deficit | (354,014 | ) | (209,500 | ) | ||||
Non-controlling interest | (4,598 | ) | (1,894 | ) | ||||
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Total shareholders’ deficit | (358,612 | ) | (211,394 | ) | ||||
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Total liabilities and shareholders’ deficit | $ | 2,485,840 | $ | 2,571,556 | ||||
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The number of shares and the per share amounts for all periods presented within this release reflect the 1:300 reverse stock split which was effective on December 1, 2011.
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 | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
OPERATING REVENUE | $ | 1,212,328 | $ | 1,091,559 | $ | 4,868,844 | $ | 4,334,640 | ||||||||
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OPERATING EXPENSES: | ||||||||||||||||
Salaries, wages and employees' benefits | 685,970 | 654,422 | 2,798,192 | 2,671,468 | ||||||||||||
Equity based compensation expense | 715 | 665 | 15,510 | 31,205 | ||||||||||||
Operating expenses and supplies | 303,954 | 233,385 | 1,194,543 | 945,310 | ||||||||||||
Purchased transportation | 132,705 | 118,016 | 535,386 | 455,800 | ||||||||||||
Depreciation and amortization | 51,069 | 48,634 | 195,666 | 200,977 | ||||||||||||
Other operating expenses | 63,126 | 61,671 | 276,030 | 248,142 | ||||||||||||
(Gains) losses on property disposals, net | 12,938 | 2,636 | (8,246 | ) | 4,306 | |||||||||||
Impairment charges | — | — | — | 5,281 | ||||||||||||
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Total operating expenses | 1,250,477 | 1,119,429 | 5,007,081 | 4,562,489 | ||||||||||||
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OPERATING LOSS | (38,149 | ) | (27,870 | ) | (138,237 | ) | (227,849 | ) | ||||||||
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NONOPERATING (INCOME) EXPENSES: | ||||||||||||||||
Interest expense | 39,555 | 32,958 | 156,106 | 159,192 | ||||||||||||
Equity investment impairment | — | — | — | 12,338 | ||||||||||||
Fair value adjustment of derivative liabilities | — | — | 79,221 | — | ||||||||||||
(Gain) loss on extinguishment of debt, net | (582 | ) | 4,011 | (25,794 | ) | 5,947 | ||||||||||
Restructuring transaction costs | — | — | 17,783 | — | ||||||||||||
Other, net | 761 | 1,331 | (3,684 | ) | (4,437 | ) | ||||||||||
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Nonoperating expenses, net | 39,734 | 38,300 | 223,632 | 173,040 | ||||||||||||
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LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (77,883 | ) | (66,170 | ) | (361,869 | ) | (400,889 | ) | ||||||||
INCOME TAX PROVISION (BENEFIT) | 8,333 | (86,755 | ) | (7,452 | ) | (96,203 | ) | |||||||||
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NET INCOME (LOSS) FROM CONTINUING OPERATIONS | (86,216 | ) | 20,585 | (354,417 | ) | (304,686 | ) | |||||||||
NET LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX | — | (5,208 | ) | — | (23,084 | ) | ||||||||||
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NET INCOME (LOSS) | (86,216 | ) | 15,377 | (354,417 | ) | (327,770 | ) | |||||||||
LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (1,950 | ) | (420 | ) | (3,154 | ) | (1,963 | ) | ||||||||
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NET INCOME (LOSS) ATTRIBUTABLE TO YRC WORLDWIDE INC. | $ | (84,266 | ) | $ | 15,797 | $ | (351,263 | ) | $ | (325,807 | ) | |||||
AMORTIZATION OF BENEFICIAL CONVERSION FEATURE ON PREFERRED STOCK | — | — | (58,048 | ) | — | |||||||||||
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NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | (84,266 | ) | $ | 15,797 | $ | (409,311 | ) | $ | (325,807 | ) | |||||
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AVERAGE COMMON SHARES OUTSTANDING-BASIC | 6,794 | 158 | 2,087 | 132 | ||||||||||||
AVERAGE COMMON SHARES OUTSTANDING-DILUTED | 6,794 | 159 | 2,087 | 132 | ||||||||||||
BASIC INCOME (LOSS) PER SHARE | ||||||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO YRC WORLDWIDE INC. | $ | (12.40 | ) | $ | 132.59 | $ | (196.12 | ) | $ | (2,293.30 | ) | |||||
LOSS FROM DISCONTINUED OPERATIONS | — | (32.88 | ) | — | (174.87 | ) | ||||||||||
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NET INCOME (LOSS) PER SHARE | $ | (12.40 | ) | $ | 99.71 | $ | (196.12 | ) | $ | (2,468.17 | ) | |||||
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DILUTED INCOME (LOSS) PER SHARE | ||||||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO YRC WORLDWIDE INC. | $ | (12.40 | ) | $ | 132.45 | (196.12 | ) | $ | (2,293.30 | ) | ||||||
LOSS FROM DISCONTINUED OPERATIONS | — | (32.84 | ) | — | (174.87 | ) | ||||||||||
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NET INCOME (LOSS) | $ | (12.40 | ) | $ | 99.61 | $ | (196.12 | ) | $ | (2,468.17 | ) | |||||
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Amounts attributable to YRC Worldwide Inc. common shareholders: | ||||||||||||||||
Income (Loss) from continuing operations, net of tax | $ | (84,266 | ) | $ | 21,005 | $ | (409,311 | ) | $ | (302,723 | ) | |||||
Loss from discontinued operations, net of tax | — | (5,208 | ) | — | (23,084 | ) | ||||||||||
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Net income (loss) | $ | (84,266 | ) | $ | 15,797 | $ | (409,311 | ) | $ | (325,807 | ) | |||||
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The number of shares and the per share amounts for all periods presented within this release reflect the 1:300 reverse stock split which was effective on December 1, 2011.
STATEMENTS OF CONSOLIDATED CASH FLOWS
YRC Worldwide Inc. and Subsidiaries
For the Year Ended December 31
(Amounts in thousands)
| 2011 | 2010 | |||||||
| (Unaudited) | ||||||||
OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (354,417 | ) | $ | (327,770 | ) | ||
Noncash items included in net loss: | ||||||||
Depreciation and amortization | 195,666 | 205,930 | ||||||
Fair value adjustment of derivative liability | 79,221 | — | ||||||
(Gain) loss on extinguishment of debt | (25,794 | ) | 5,947 | |||||
Amortization of deferred debt costs | 23,761 | 46,182 | ||||||
Equity based compensation expense | 15,510 | 31,205 | ||||||
Paid-in-kind interest on Series A Notes and Series B Notes | 13,099 | — | ||||||
(Gains) losses on property disposals, net | (8,246 | ) | 5,706 | |||||
Deferred income tax benefit, net | (167 | ) | (64,163 | ) | ||||
Equity investment impairment | — | 12,338 | ||||||
Impairment charges | — | 5,281 | ||||||
Other noncash items, net | (3,714 | ) | (3,105 | ) | ||||
Restructuring transaction costs | 17,783 | — | ||||||
Changes in assets and liabilities, net: | ||||||||
Accounts receivable | (36,288 | ) | 4,859 | |||||
Accounts payable | 4,987 | (15,793 | ) | |||||
Other operating assets | (5,208 | ) | 46,806 | |||||
Other operating liabilities | 57,839 | 47,264 | ||||||
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Net cash provided by (used in) operating activities | (25,968 | ) | 687 | |||||
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INVESTING ACTIVITIES: | ||||||||
Acquisition of property and equipment | (71,628 | ) | (19,150 | ) | ||||
Proceeds from disposal of property and equipment | 67,461 | 85,669 | ||||||
Deposits into restricted escrow | (155,931 | ) | — | |||||
Disposition of affiliate, net of cash sold | — | 34,290 | ||||||
Other | 3,462 | 5,223 | ||||||
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Net cash provided by (used in) investing activities | (156,636 | ) | 106,032 | |||||
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FINANCING ACTIVITIES: | ||||||||
ABS borrowings (payments), net | (122,788 | ) | (23,497 | ) | ||||
Issuance of long-term debt | 441,602 | 230,258 | ||||||
Repayment of long-term debt | (46,687 | ) | (260,214 | ) | ||||
Debt issuance costs | (30,472 | ) | (18,614 | ) | ||||
Equity issuance costs | (1,547 | ) | (17,323 | ) | ||||
Equity issuance proceeds | — | 15,906 | ||||||
Stock issued in connection with the 6% notes | — | 11,994 | ||||||
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Net cash provided by (used in) financing activities | 240,108 | (61,490 | ) | |||||
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NET INCREASE IN CASH AND CASH EQUIVALENTS | 57,504 | 45,229 | ||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 143,017 | 97,788 | ||||||
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CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 200,521 | $ | 143,017 | ||||
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SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||
Interest paid | $ | (67,486 | ) | $ | (54,183 | ) | ||
Income tax (payment) refund, net | (6,475 | ) | 80,768 | |||||
Pension contribution deferral transfer to debt | — | 4,361 | ||||||
Lease financing transactions | 8,985 | 46,564 | ||||||
Deferred interest and fees converted to equity | 43,164 | — | ||||||
Interest paid in stock for the 6% Notes | 2,082 | 2,007 | ||||||
SUPPLEMENTAL FINANCIAL INFORMATION
YRC Worldwide Inc. and Subsidiaries
For the Three and Twelve Months Ended December 31
(Amounts in thousands)
(Unaudited)
SEGMENT INFORMATION
| Three Months | Twelve Months | |||||||||||||||||||||||
| 2011 | 2010 | % | 2011 | 2010 | % | |||||||||||||||||||
Operating revenue: | ||||||||||||||||||||||||
YRC Freight | $ | 804,500 | $ | 725,093 | 11.0 | $ | 3,203,038 | $ | 2,884,812 | 11.0 | ||||||||||||||
Regional Transportation | 381,705 | 339,078 | 12.6 | 1,554,273 | 1,353,912 | 14.8 | ||||||||||||||||||
Truckload | 22,149 | 25,699 | (13.8 | ) | 98,868 | 109,641 | (9.8 | ) | ||||||||||||||||
Other, net of eliminations | 3,974 | 1,689 | 12,665 | (13,725 | ) | |||||||||||||||||||
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Consolidated | 1,212,328 | 1,091,559 | 11.1 | 4,868,844 | 4,334,640 | 12.3 | ||||||||||||||||||
Operating income (loss): | ||||||||||||||||||||||||
YRC Freight | (26,665 | ) | (22,535 | ) | (88,480 | ) | (170,304 | ) | ||||||||||||||||
Regional Transportation | 6,902 | 6,055 | 32,888 | 3,126 | ||||||||||||||||||||
Truckload | (8,608 | ) | (3,163 | ) | (18,888 | ) | (10,162 | ) | ||||||||||||||||
Corporate and other | (9,778 | ) | (8,227 | ) | (63,757 | ) | (50,509 | ) | ||||||||||||||||
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Consolidated | $ | (38,149 | ) | $ | (27,870 | ) | $ | (138,237 | ) | $ | (227,849 | ) | ||||||||||||
Operating ratio: | ||||||||||||||||||||||||
YRC Freight | 103.3 | % | 103.1 | % | 102.8 | % | 105.9 | % | ||||||||||||||||
Regional Transportation | 98.2 | % | 98.2 | % | 97.9 | % | 99.8 | % | ||||||||||||||||
Truckload | �� | 138.9 | % | 112.3 | % | 119.1 | % | 109.3 | % | |||||||||||||||
Consolidated | 103.1 | % | 102.6 | % | 102.8 | % | 105.3 | % | ||||||||||||||||
Operating ratio is calculated as (i) 100 percent (ii) minus the result of dividing operating income by operating revenue or (iii) plus the result of dividing operating loss by operating revenue, and expressed as a percentage.
SUPPLEMENTAL INFORMATION
As of December 31, 2011 (in millions) | Par Value | Premium/ (Discount) | Book Value | |||||||||
Restructured term loan | $ | 303.1 | $ | 98.9 | $ | 402.0 | ||||||
ABL facility – Term A—(capacity $175M; borrowing base $136.1M; availability $76.1M) | 60.0 | (7.6 | ) | 52.4 | ||||||||
ABL facility – Term B—(capacity $224.4M; borrowing base $224.4M; availability $0M) | 224.4 | (12.4 | ) | 212.0 | ||||||||
Series A Notes | 146.3 | (35.0 | ) | 111.3 | ||||||||
Series B Notes | 98.0 | (37.1 | ) | 60.9 | ||||||||
6% convertible senior notes | 69.4 | (10.3 | ) | 59.1 | ||||||||
Pension contribution deferral obligations | 140.2 | (0.6 | ) | 139.6 | ||||||||
Lease financing obligations | 315.2 | — | 315.2 | |||||||||
5.0% and 3.375% contingent convertible senior notes | 1.9 | — | 1.9 | |||||||||
Other | 0.3 | — | 0.3 | |||||||||
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|
|
|
| |||||||
Total debt | $ | 1,358.8 | $ | (4.1 | ) | $ | 1,354.7 | |||||
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|
|
| |||||||
As of December 31, 2010 (in millions) | Par Value | Premium/ (Discount) | Book Value | |||||||||
Revolving credit facility | $ | 142.9 | $ | — | $ | 142.9 | ||||||
Term loan | 257.1 | 0.7 | 257.8 | |||||||||
ABS borrowings | 122.8 | — | 122.8 | |||||||||
6% convertible senior notes | 69.4 | (13.3 | ) | 56.1 | ||||||||
Pension contribution deferral obligations | 139.1 | — | 139.1 | |||||||||
Lease financing obligations | 338.4 | — | 338.4 | |||||||||
5.0% and 3.375% contingent convertible senior notes | 1.9 | — | 1.9 | |||||||||
Other | 1.1 | — | 1.1 | |||||||||
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|
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| |||||||
Total debt | $ | 1,072.7 | $ | (12.6 | ) | $ | 1,060.1 | |||||
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SUPPLEMENTAL FINANCIAL INFORMATION
YRC Worldwide Inc. and Subsidiaries
For the Three and Twelve Months Ended December 31
(Amounts in thousands)
(Unaudited)
| Three months | Twelve months | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
Operating revenue | $ | 1,212,328 | $ | 1,091,559 | $ | 4,868,844 | $ | 4,334,640 | ||||||||
Adjusted operating ratio | 101.0 | % | 101.0 | % | 101.0 | % | 102.9 | % | ||||||||
Reconciliation of operating loss to adjusted EBITDA: | ||||||||||||||||
Operating loss | $ | (38,149 | ) | $ | (27,870 | ) | $ | (138,237 | ) | $ | (227,849 | ) | ||||
(Gains) losses on property disposals, net | 12,938 | 2,636 | (8,246 | ) | 4,306 | |||||||||||
Impairment charges | — | — | — | 5,281 | ||||||||||||
Union equity awards | — | — | 14,884 | 24,995 | ||||||||||||
Letter of credit expense | 9,618 | 8,333 | 35,226 | 33,276 | ||||||||||||
Restructuring professional fees, included in operating income | 4,303 | 5,971 | 42,128 | 34,052 | ||||||||||||
Permitted dispositions and other | (276 | ) | — | 6,238 | — | |||||||||||
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| |||||||||
Adjusted operating loss | (11,566 | ) | (10,930 | ) | (48,007 | ) | (125,939 | ) | ||||||||
Depreciation and amortization | 51,069 | 48,634 | 195,666 | 200,977 | ||||||||||||
Equity based compensation expense | 715 | 665 | 626 | 6,210 | ||||||||||||
Restructuring professional fees, included in nonoperating income | — | 855 | 1,915 | 1,440 | ||||||||||||
Reimer Finance Co. dissolution (foreign exchange) | — | — | — | 5,540 | ||||||||||||
Other nonoperating, net | (741 | ) | (231 | ) | 3,754 | 1,190 | ||||||||||
Add: Truckload EBITDA loss (1) | 1,809 | 889 | 5,203 | 907 | ||||||||||||
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| |||||||||
Adjusted EBITDA | $ | 41,286 | $ | 39,882 | $ | 159,157 | $ | 90,325 | ||||||||
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| |||||||||
| Three months | Twelve months | |||||||||||||||
| Adjusted EBITDA by segment: | 2011 | 2010 | 2011 | 2010 | ||||||||||||
YRC Freight | $ | 11,853 | $ | 11,422 | $ | 43,664 | $ | (7,395 | ) | |||||||
Regional Transportation | 24,177 | 24,014 | 103,070 | 85,704 | ||||||||||||
Corporate and other | 5,256 | 4,446 | 12,423 | 12,016 | ||||||||||||
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|
|
|
|
|
|
| |||||||||
Adjusted EBITDA | $ | 41,286 | $ | 39,882 | $ | 159,157 | $ | 90,325 | ||||||||
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| |||||||||
| Three months | Twelve months | |||||||||||||||
| Reconciliation of Adjusted EBITDA to adjusted free cash flow (deficit): | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Adjusted EBITDA | $ | 41,286 | $ | 39,882 | $ | 159,157 | $ | 90,325 | ||||||||
Total restructuring professional fees | (4,303 | ) | (6,826 | ) | (44,043 | ) | (35,492 | ) | ||||||||
Permitted dispositions and other not included in adjusted EBITDA | — | — | — | (8,210 | ) | |||||||||||
Cash paid for interest | (22,659 | ) | (22,236 | ) | (67,486 | ) | (54,183 | ) | ||||||||
Cash paid for letter of credit fees | (9,495 | ) | — | (16,719 | ) | — | ||||||||||
Working capital cash flows excluding income tax, net | 27,172 | 1,873 | (50,402 | ) | (72,521 | ) | ||||||||||
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|
|
|
|
|
| |||||||||
Net cash provided by (used in) operating activities before income taxes | 32,001 | 12,693 | (19,493 | ) | (80,081 | ) | ||||||||||
Cash paid for income taxes, net | (5,187 | ) | (2,267 | ) | (6,475 | ) | 80,768 | |||||||||
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|
|
|
|
|
| |||||||||
Net cash provided by (used in) operating activities | 26,814 | 10,426 | (25,968 | ) | 687 | |||||||||||
Acquisition of property and equipment | (35,546 | ) | (6,625 | ) | (71,628 | ) | (19,150 | ) | ||||||||
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|
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| |||||||||
Free cash flow (deficit) | (8,732 | ) | 3,801 | (97,596 | ) | (18,463 | ) | |||||||||
Total restructuring professional fees | 4,303 | 6,826 | 44,043 | 35,492 | ||||||||||||
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| |||||||||
Adjusted free cash flow (deficit) | $ | (4,429 | ) | $ | 10,627 | $ | (53,553 | ) | $ | 17,029 | ||||||
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|
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|
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| |||||||||
Adjusted operating ratio is calculated as (i) 100 percent (ii) minus the result of dividing adjusted operating income by operating revenue or (iii) plus the result of dividing adjusted operating loss by operating revenue, and expressed as a percentage.
| (1) | Due to the sale of the Glen Moore assets in December 2011, we modified our 2010 Adjusted EBITDA by the amount of the Truckload EBITDA loss to be comparable to our 2011 calculation. |
Tire accounting change for YRC Freight:
On October 1, 2011, the Company elected to cease capitalization of replacement tires and expense these costs as incurred. Prior to the change, the cost of original and replacement tires mounted on new and existing equipment was reported in revenue equipment and amortized based on estimated usage for YRC Freight. Under the new policy, the cost of replacement tires is expensed at the time those tires are placed into service, as is the case with other repairs and maintenance costs. The cost of tires on new revenue equipment will be capitalized and depreciated over the estimated useful life of the related equipment. As this is a change in accounting policy, it was necessary to restate affected accounts for all years presented. The following is a summary of the effects of these adjustments:
| Q1 2011 | Q2 2011 | Q3 2011 | Q4 2011 | 2011 | ||||||||||||||||
Net property and equipment | $ | (24,642 | ) | |||||||||||||||||
Accumulated deficit | $ | (24,642 | ) | |||||||||||||||||
Operating expense and supplies | $ | (13 | ) | $ | (32 | ) | $ | 1,926 | $ | — | $ | 1,881 | ||||||||
Depreciation and amortization | 514 | 514 | 513 | — | 1,541 | |||||||||||||||
(Gains) losses on property disposals, net | (87 | ) | (63 | ) | (6 | ) | — | (156 | ) | |||||||||||
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|
|
|
|
|
|
| |||||||||||
Operating loss | $ | (414 | ) | $ | (419 | ) | $ | (2,433 | ) | $ | — | $ | (3,266 | ) | ||||||
| Q1 2010 | Q2 2010 | Q3 2010 | Q4 2010 | 2010 | ||||||||||||||||
Net property and equipment | $ | (21,377 | ) | |||||||||||||||||
Accumulated deficit | $ | (21,377 | ) | |||||||||||||||||
Operating expense and supplies | $ | (1,323 | ) | $ | (1,195 | ) | $ | (1,568 | ) | $ | 172 | $ | (3,914 | ) | ||||||
Depreciation and amortization | 617 | 617 | 617 | 617 | 2,468 | |||||||||||||||
(Gains) losses on property disposals, net | (282 | ) | (629 | ) | (601 | ) | 247 | (1,265 | ) | |||||||||||
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|
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|
| |||||||||||
Operating loss | $ | 988 | $ | 1,207 | $ | 1,552 | $ | (1,036 | ) | $ | 2,711 | |||||||||
Income tax provision (benefit) | $ | — | $ | — | $ | — | $ | 6,284 | $ | 6,284 | ||||||||||
SUPPLEMENTAL FINANCIAL INFORMATION
YRC Worldwide Inc. and Subsidiaries
For the Three and Twelve Months Ended December 31
(Amounts in thousands)
(Unaudited)
| Three months | Twelve months | |||||||||||||||
YRC Freight segment | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Operating Revenue | $ | 804,500 | $ | 725,093 | $ | 3,203,038 | $ | 2,884,812 | ||||||||
Adjusted operating ratio | 101.5 | % | 101.9 | % | 101.9 | % | 104.2 | % | ||||||||
Reconciliation of operating loss to adjusted EBITDA: | ||||||||||||||||
Operating loss | $ | (26,665 | ) | $ | (22,535 | ) | $ | (88,480 | ) | $ | (170,304 | ) | ||||
(Gains) losses on property disposals, net | 6,677 | 2,126 | (10,478 | ) | 512 | |||||||||||
Impairment charges | — | — | — | 3,281 | ||||||||||||
Union equity awards | 356 | — | 10,311 | 18,795 | ||||||||||||
Letter of credit expense | 7,806 | 6,470 | 28,093 | 25,838 | ||||||||||||
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|
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| |||||||||
Adjusted operating loss | (11,826 | ) | (13,939 | ) | (60,554 | ) | (121,878 | ) | ||||||||
Depreciation and amortization | 24,824 | 25,509 | 102,915 | 107,988 | ||||||||||||
Reimer Finance Co. dissolution (foreign exchange) | — | — | — | 5,540 | ||||||||||||
Other nonoperating, net | (1,145 | ) | (148 | ) | 1,303 | 955 | ||||||||||
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| |||||||||
Adjusted EBITDA | $ | 11,853 | $ | 11,422 | $ | 43,664 | $ | (7,395 | ) | |||||||
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| |||||||||
Adjusted EBITDA as % of operating revenue | 1.5 | % | 1.6 | % | 1.4 | % | -0.3 | % | ||||||||
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| Three months | Twelve months | |||||||||||||||
Regional Transportation segment | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Operating Revenue | $ | 381,705 | $ | 339,078 | $ | 1,554,273 | $ | 1,353,912 | ||||||||
Adjusted operating ratio | 97.7 | % | 97.6 | % | 97.3 | % | 98.4 | % | ||||||||
Reconciliation of operating income (loss) to adjusted EBITDA: | ||||||||||||||||
Operating income (loss) | $ | 6,902 | $ | 6,055 | $ | 32,888 | $ | 3,126 | ||||||||
(Gains) losses on property disposals, net | 531 | 510 | (2,655 | ) | 3,554 | |||||||||||
Impairment charges | — | — | — | 2,000 | ||||||||||||
Union equity awards | (356 | ) | — | 4,573 | 6,089 | |||||||||||
Letter of credit expense | 1,675 | 1,727 | 6,608 | 6,901 | ||||||||||||
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| |||||||||
Adjusted operating income | 8,752 | 8,292 | 41,414 | 21,670 | ||||||||||||
Depreciation and amortization | 15,460 | 15,728 | 61,562 | 63,618 | ||||||||||||
Other nonoperating, net | (35 | ) | (6 | ) | 94 | 416 | ||||||||||
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| |||||||||
Adjusted EBITDA | $ | 24,177 | $ | 24,014 | $ | 103,070 | $ | 85,704 | ||||||||
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Adjusted EBITDA as % of operating revenue | 6.3 | % | 7.1 | % | 6.6 | % | 6.3 | % | ||||||||
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| |||||||||
Adjusted operating ratio is calculated as (i) 100 percent (ii) minus the result of dividing adjusted operating income by operating revenue or (iii) 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 Twelve Months Ended December 31
(Amounts in thousands)
(Unaudited)
Corporate and other segment
| Three months | Twelve months | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
Reconciliation of operating loss to adjusted EBITDA: | ||||||||||||||||
Operating loss | $ | (9,778 | ) | $ | (8,227 | ) | $ | (63,757 | ) | $ | (50,509 | ) | ||||
(Gains) losses on property disposals, net | 404 | — | (581 | ) | 198 | |||||||||||
Letter of credit expense | 54 | 49 | 194 | 206 | ||||||||||||
Restructuring professional fees, included in operating income | 4,303 | 5,971 | 42,128 | 34,052 | ||||||||||||
Permitted dispositions and other | (276 | ) | — | 6,238 | — | |||||||||||
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|
|
|
|
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| |||||||||
Adjusted operating loss | (5,293 | ) | (2,207 | ) | (15,778 | ) | (16,053 | ) | ||||||||
Depreciation and amortization | 9,397 | 5,211 | 23,305 | 20,602 | ||||||||||||
Equity based compensation expense | 715 | 665 | 626 | 6,210 | ||||||||||||
Restructuring professional fees, included in nonoperating income | — | 855 | 1,915 | 1,440 | ||||||||||||
Other nonoperating, net | 437 | (78 | ) | 2,355 | (183 | ) | ||||||||||
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| |||||||||
Adjusted EBITDA | $ | 5,256 | $ | 4,446 | $ | 12,423 | $ | 12,016 | ||||||||
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Truckload segment (excluded from consolidated EBITDA)
| Three months | Twelve months | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
Operating Revenue | $ | 22,149 | $ | 25,699 | $ | 98,868 | $ | 109,641 | ||||||||
Adjusted operating ratio | 114.4 | % | 112.0 | % | 113.2 | % | 108.8 | % | ||||||||
Reconciliation of operating loss to adjusted EBITDA: | ||||||||||||||||
Operating loss | $ | (8,608 | ) | $ | (3,163 | ) | $ | (18,888 | ) | $ | (10,162 | ) | ||||
(Gains) losses on property disposals, net | 5,326 | — | 5,468 | 42 | ||||||||||||
Union equity awards | — | — | — | 111 | ||||||||||||
Letter of credit expense | 83 | 87 | 331 | 331 | ||||||||||||
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| |||||||||
Adjusted operating loss | (3,199 | ) | (3,076 | ) | (13,089 | ) | (9,678 | ) | ||||||||
Depreciation and amortization | 1,388 | 2,186 | 7,884 | 8,769 | ||||||||||||
Other nonoperating, net | 2 | 1 | 2 | 2 | ||||||||||||
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| |||||||||
Adjusted EBITDA | $ | (1,809 | ) | $ | (889 | ) | $ | (5,203 | ) | $ | (907 | ) | ||||
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| |||||||||
Adjusted EBITDA as % of operating revenue | -8.2 | % | -3.5 | % | -5.3 | % | -0.8 | % | ||||||||
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Adjusted operating ratio is calculated as (i) 100 percent (ii) minus the result of dividing adjusted operating income by operating revenue or (iii) 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 Freight | ||||||||||||||||||||
| Y/Y | Sequential | |||||||||||||||||||
| 4Q11 | 4Q10 | 3Q11 | % | % | ||||||||||||||||
Workdays | 62.0 | 62.5 | 64.0 | |||||||||||||||||
Total revenue(a) | $ | 789,097 | $ | 711,274 | $ | 836,568 | 10.9 | (5.7 | ) | |||||||||||
Total tonnage | 1,714 | 1,618 | 1,822 | 5.9 | (5.9 | ) | ||||||||||||||
Total tonnage per day | 27.64 | 25.89 | 28.46 | 6.7 | (2.9 | ) | ||||||||||||||
Total shipments | 2,932 | 2,789 | 3,166 | 5.1 | (7.4 | ) | ||||||||||||||
Total shipments per day | 47.29 | 44.63 | 49.47 | 6.0 | (4.4 | ) | ||||||||||||||
Total revenue/cwt. | $ | 23.03 | $ | 21.98 | $ | 22.96 | 4.8 | 0.3 | ||||||||||||
Total revenue/shipment | $ | 269 | $ | 255 | $ | 264 | 5.5 | 1.9 | ||||||||||||
Total weight/shipment | 1,169 | 1,160 | 1,151 | 0.7 | 1.6 | |||||||||||||||
Reconciliation of operating revenue to total picked up revenue: |
| |||||||||||||||||||
Operating revenue | $ | 804,500 | $ | 725,093 | $ | 841,560 | ||||||||||||||
Change in revenue deferral and other | (15,404 | ) | (13,818 | ) | (4,993 | ) | ||||||||||||||
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| |||||||||||||||
Total picked up revenue | $ | 789,097 | $ | 711,275 | $ | 836,568 | ||||||||||||||
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| Regional Transportation | ||||||||||||||||||||
| Y/Y | Sequential | |||||||||||||||||||
| 4Q11 | 4Q10 | 3Q11 | % | % | ||||||||||||||||
Workdays | 61.0 | 60.0 | 63.0 | |||||||||||||||||
Total picked up revenue(a) | $ | 380,717 | $ | 338,634 | $ | 404,825 | 12.4 | (6.0 | ) | |||||||||||
Total tonnage | 1,723 | 1,619 | 1,831 | 6.4 | (5.9 | ) | ||||||||||||||
Total tonnage per day | 28.25 | 26.99 | 29.06 | 4.7 | (2.8 | ) | ||||||||||||||
Total shipments | 2,368 | 2,273 | 2,553 | 4.2 | (7.3 | ) | ||||||||||||||
Total shipments per day | 38.82 | 37.89 | 40.53 | 2.5 | (4.2 | ) | ||||||||||||||
Total revenue/cwt. | $ | 11.05 | $ | 10.46 | $ | 11.05 | 5.7 | (0.1 | ) | |||||||||||
Total revenue/shipment | $ | 161 | $ | 149 | $ | 159 | 7.9 | 1.4 | ||||||||||||
Total weight/shipment | 1,455 | 1,425 | 1,434 | 2.2 | 1.5 | |||||||||||||||
Reconciliation of operating revenue to total picked up revenue: | ||||||||||||||||||||
Operating revenue | $ | 381,705 | $ | 339,078 | $ | 404,811 | ||||||||||||||
Change in revenue deferral and other | (988 | ) | (444 | ) | 14 | |||||||||||||||
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| |||||||||||||||
Total picked up revenue | $ | 380,717 | $ | 338,634 | $ | 404,825 | ||||||||||||||
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| (a) | Does not equal financial statement revenue due to revenue recognition adjustments between accounting periods. |