![]() 1 YRC Worldwide Inc. Deutsche Bank Transportation Conference September 6, 2012 Exhibit 99.1 |
![]() 2 Forward-looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as “ will, ” “ expect, ” “ intend, ” “ anticipate, ” “ believe, ” “ project, ” “ forecast, ” “ propose, ” “ plan, ” “ designed, ” “ enable ” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are inherently uncertain and are subject to significant business, economic, competitive, regulatory and other risks, uncertainties and contingencies, known and unknown, many of which are beyond our control. Our future financial condition and results could differ materially from those predicted in such forward-looking statements because of a number of factors, including (without limitation) our ability to generate sufficient cash flows and liquidity to fund operations and satisfy our obligations related to our substantial indebtedness and lease and pension funding requirements; our ability to finance the maintenance, acquisition and replacement of revenue equipment and finance other necessary capital expenditures; changes in equity and debt markets; general or regional economic activity, including (without limitation) customer demand in the retail and manufacturing sectors; the success of our management team in implementing its strategic plan and operational and productivity improvements, including (without limitation) our continued ability to meet high on-time and quality delivery performance standards, and the impact of those improvements on our future liquidity and profitability; inclement weather; price and availability of fuel; sudden changes in the cost of fuel or the index upon which we base our fuel surcharge and the effectiveness of our fuel surcharge program in protecting us against fuel price increases; competition and competitive pressure on service and pricing; expense volatility, including (without limitation) expense volatility due to changes in rail service or pricing for rail service our ability to comply and the cost of compliance with federal, state, local and foreign laws and regulations, including (without limitation) laws and regulations for the protection of employee safety and health and the environment; terrorist attack; labor relations, including (without limitation) the continued support of our union employees with respect to our strategic plan, the impact of work rules, work stoppages, strikes or other disruptions, our obligations to multi-employer health, welfare and pension plans, wage requirements and employee satisfaction; the impact of claims and litigation to which we are or may become exposed; and other risks and contingencies, including (without limitation) the risk factors that are included in our reports filed with the Securities and Exchange Commission, including those described under “Risk Factors” in our annual report on Form 10-K and quarterly reports on Form 10-Q. |
![]() 3 I. Introduction i. Company Overview and History ii. Operating Company Descriptions II. July 2011 Transaction i. Transaction Details ii. Board of Directors / Management Team iii. Organizational and Operational Changes iv. YRC Freight “Flywheel” III. 2Q12 Financial Update i. Financial Performance ii. Liquidity IV. Conclusion V. Appendix Table of Contents |
![]() 4 I. Introduction |
![]() 5 YRC Worldwide is one of the largest less-than-truckload (LTL) carriers in North America and generates approximately $5B of revenue by providing services under a portfolio of four subsidiaries Introduction Approximately 23% of the public carrier market share, providing the broadest coverage and more service capability throughout North America than any competitor |
![]() 6 Revenue $5.0B Locations 431 U.S. and Canada Trucks 15,000 Trailers 51,000 Annual tons 14.1M Annual shipments 21.9M Annual miles 1.1B YRC Worldwide Tearsheet |
![]() 7 1919 Reddaway founded 1924 Yellow Cab and Transit Company founded 1929 Holland Motor Express founded 1930 Roadway Express launched 1931 New Penn begins operations 1952 Reimer Express begins service in Winnipeg 1959 Yellow Transit becomes a public company 1986 Glen Moore begins operations 1997 Roadway acquires Reimer Express in Canada 2001 Roadway acquires New Penn 2002 Meridian IQ launched 2003 Yellow acquires Roadway, Reimer and New Penn 2005 Yellow Roadway Corp. acquires USF which includes Holland and Reddaway 2005 Joint venture with Jin Jiang for JHJ International 2006 Corporation’s name changed to YRC Worldwide to reflect scope of services 2007 Meridian IQ renamed YRC Logistics 2008 Company acquires Jiayu China ground network 2010 Disposition of YRC Logistics 2011 July 2011 Transaction – new board and management team 2011 Disposition of Glen Moore assets 2011 Headquarter consolidation – one company, one culture, one vision with one mission 2012 Disposition of Jiayu (pending Chinese regulatory approvals) 2012 Excess real estate auction Company History |
![]() 8 Source: Public filings (Form 10-K, Form 10-Q and earnings releases) 11.2% 11.3% 11.1% 11.6% 11.7% 11.7% 11.6% 11.6% 11.1% 11.2% 11.4% 11.6% 12.0% 11.9% 11.9% 11.8% 12.3% 12.2% 18.3% 17.3% 16.6% 16.9% 16.5% 16.2% 16.3% 16.7% 16.4% 22.0% 21.5% 21.4% 19.9% 20.2% 20.5% 20.8% 19.6% 20.5% 8.6% 9.0% 9.1% 9.1% 9.0% 8.8% 8.9% 8.7% 8.7% 9.3% 9.8% 10.3% 10.3% 10.4% 10.7% 11.0% 11.1% 11.2% 7.1% 7.1% 7.3% 7.4% 7.3% 7.2% 7.1% 7.4% 7.3% 5.3% 5.7% 5.6% 5.6% 5.5% 5.5% 5.0% 4.9% 5.0% 4.9% 4.8% 5.0% 5.3% 5.4% 5.2% 5.3% 5.5% 5.4% 2.1% 2.1% 2.0% 2.0% 2.1% 2.2% 2.1% 2.1% 2.1% 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Market Share Among Public Carriers (Total Tonnage per Day) Vitran ABF SAIA ODFL UPS Freight Fed Ex Freight Con-way YRC Regional YRC Freight Roadrunner 23-24% Market Share Market Share – Stabilized and Holding Steady Note: YRC Regional amounts exclude Glen Moore for all periods. FedEx Freight amounts include Watkins for all periods and Vitran includes PJAX for all periods |
![]() 9 Segment Descriptions YRC Freight is comprised of the merged Yellow Transportation and Roadway. YRC Freight (YRCF) offers a range of services for the transportation of industrial, commercial and retail goods in regional, national and international markets, primarily through the operation of owned or leased equipment. YRC Freight also includes YRC Reimer, a subsidiary located in Canada that specializes in shipments into, across and out of Canada. In addition to the United States and Canada, YRC Freight also serves parts of Mexico, Puerto Rico and Guam YRC Regional is comprised of Holland, Reddaway and New Penn. These companies each provide regional, next-day ground services in their respective regions through a network of facilities located across the United States; Quebec, Canada; Mexico; and Puerto Rico. Approximately 98% of Regional Transportation shipments are completed in two days or less YRCW has two major segments serving domestic as well as international customers |
![]() 10 YRC Freight was created through the March 2009 • Customers: ~ 200,000* • Service Centers: 282** • Dock doors: ~ 15,600 • Average Length of Haul: ~ 1,300 miles • Average LTL Weight/Shipment: ~ 950 pounds • Total Active Employees: ~ 22,000 • Average days in transit 3.7 • Business by days in transit: Next day 4% Two days 25% Three days 29% Four or more days 42% ** Includes Canada and Mexico * Represents the number of unique payer locations YRC Freight integration of the Yellow Transportation and Roadway networks, combining two companies with more than 80 years experience each |
![]() 11 • Customers: ~ 200,000* • Service Centers: 114 • Dock Doors: ~ 3,900 • Average Length of Haul: ~ 500 miles • Average LTL Weight/Shipment: ~ 1,300 pounds • Total Active Employees: ~ 11,000 • Average Days in Transit 98% in less than 2 days * Represents the number of unique payer locations Regional Transportation Regional Transportation provides transportation service to customers in the regional and next-day markets and is comprised of Holland, Reddaway and New Penn – Holland provides local next-day, regional and expedited services through a network located in the Central, Southeastern, and portions of the Northeastern, United States. Holland also provides service to the provinces of Ontario and Quebec, Canada – Reddaway provides local next-day, regional and expedited services through a network located in California, the Pacific Northwest, the Rocky Mountain States and the Southwest. Additionally, Reddaway provides services to Alaska and to the provinces of Alberta and British Columbia, Canada – New Penn provides local next-day, day-definite, and time-definite services through a network located in the Northeastern United States; Quebec, Canada; and Puerto Rico |
![]() 12 II. July 2011 Transaction |
![]() 13 In July 2011, the restructuring was completed – New Board seated – New CEO placed • New Management structure / team followed – Additional liquidity provided – Extended maturities on all major credit facilities to late 2014 / early 2015 New Management team changed strategic focus and implemented new business plan – Singularly focusing on North American LTL operations – Closed the former legacy Roadway headquarters to create one company with • one vision • one culture and • one mission – Divesting non-core, non-strategic assets (e.g. Glen Moore, Jiayu, excess real estate) – Investing via the P&L to improve customer experience / service at YRC Freight the “Flywheel” – Streamlining the holding company, driving responsibility and autonomy to the OpCos Since taking over and preparing a forecast based on the simplified and focused strategic direction, the new management has exceeded its internally prepared forecast July 2011 Transaction |
![]() 14 NAME POSITION DIRECTOR SINCE COMMITTEE(S) COMPANY James E. Hoffman Retired President 2011 Compensation + Alliant Energy Resources James L. Welch Chief Executive Officer 2011 YRC Worldwide Inc. Raymond J. Bromark Retired Partner 2011 Audit/Ethics * PricewaterhouseCoopers LLP Matthew A. Doheny President 2011 Compensation North Country Capital LLC Finance * Robert L. Friedman Sr. Managing Director 2011 Audit/Ethics The Blackstone Group, LP Finance Michael J. Kneeland President and CEO 2011 Compensation * United Rentals Inc. Governance Harry Wilson Chairman and CEO 2011 Finance MAEVA Advisors, LLC James Winestock, Jr. Retired Sr. Vice President for U.S. Operations 2011 Governance * United Parcel Services, Inc. Douglas A. Carty Chairman 2011 Audit/Ethics Switzer-Carty Transportation Inc. Governance North Country Capital LLC MAEVA Advisors, LLC + =Chairman of the Board * = Committee Chairman Board of Directors |
![]() 15 James L. Welch Chief Executive Officer – As chief executive officer, James Welch leads YRC Worldwide and its operating companies. During his 33-year tenure in the transportation and logistics industry, Welch has established a proven track record of leading organizations through difficult challenges and moving them to positions of improved operational efficiency and profitability. – Welch is the former president and chief executive officer of Dynamex Inc., a position he took following a 29-year career at Yellow Transportation, a YRC Worldwide subsidiary. Welch began his career with Yellow when he was 23; he rose through the ranks and served from 2000-2007 as president and CEO. – He has a bachelor of science degree in psychology with a minor in business from West Texas A&M University. In addition, he attended the Executive Development Program at Yale University and is a regular attendee at the Center for Service Leadership at Arizona State University. Jamie G. Pierson Executive Vice President and Chief Financial Officer – As the leader of the company’s financial organization, Jamie Pierson is responsible for the areas of corporate finance, treasury, cash management, accounting, tax, risk management and employee benefits. In addition to supporting the holding company, Pierson’s team also assists the individual operating companies when and where needed. Pierson joined YRC Worldwide in 2011, after serving as interim CFO. – Previously, Pierson was a managing director with Alvarez & Marsal North America where he focused on out-of-court restructurings and company-side senior management advisory. It was in this role that Pierson first worked with YRC Worldwide, and subsequently was involved with all aspects of the company’s financial operations and ensuing restructuring. Prior to A&M, Pierson was vice president, Corporate Development and Integration with Greatwide Logistics Services. He also was a managing director with FTI Capital Advisors, and in the finance advisory group of Houlihan Lokey Howard & Zukin. – Pierson graduated from the University of Texas where he earned a bachelor’s degree in business administration, with concentrations in finance and accounting and later a master’s degree in business administration with concentrations in finance and entrepreneurship. 33 years 5+ years Management Team |
![]() 16 Jeffrey A. Rogers President, YRC Freight – Jeff Rogers is president of YRC Freight, a leading transporter of industrial, commercial and retail goods that specializes in less-than-truckload solutions for businesses across North America. A 28-year veteran of the freight transportation industry, Rogers has brought to YRC Freight a simple and direct approach to leadership that is results-oriented. – Prior to assuming that role in September 2011, Rogers served for three years as president of another YRC Worldwide company, Holland, which provides regional transportation service in 12 states and two Canadian provinces. His previous assignments include serving as chief financial officer for YRC Worldwide regional companies, and various operations and finance roles at Yellow Transportation and United Parcel Service. – A native of Wichita, Kansas, Rogers is a decorated military veteran. He holds a bachelor's degree in accounting from Newman University in Wichita and a master’s degree in business administration from Baker University. Scott D. Ware President, Holland – Scott Ware leads Holland, a YRC Worldwide subsidiary, that has long been recognized for delivering the most next-day service lanes in its territory. Holland provides industry leading, on-time reliability for less-than-truckload (LTL) shipments in the central and southeastern US. Before being named president in May 2012, Scott served as vice president of Operations at Holland where he was responsible for the management and execution of major operational initiatives focused on specific performance improvements. Ware has more than 27 years of industry experience. – Prior to joining Holland in 2007, Ware was director of LineHaul Operations at Saia, Inc. He was previously director of Line Haul at Jevic Transportation and prior to that a manager of Freight Flow Operations at Con-way, Inc. 28 years Management Team 27 years |
![]() 17 Thomas J. “TJ” O’Connor President, Reddaway – T.J. O’Connor leads Reddaway, a YRC Worldwide subsidiary that has built a long-standing tradition of reliable, next- day and two-day delivery services for less-than-truckload shipments in the western United States and Canada, including Alaska and Hawaii. He was named president in 2007 after serving as president and CEO of USF Bestway. – A tenured member of the YRC Worldwide team, O’Connor joined Roadway in 1982. While at Roadway, he served in various management positions including Western Division vice president, district manager for Texas and Louisiana, and district manager of Mountain Time Zone states. Steven D. Gast President, New Penn – Steve Gast leads New Penn, a YRC Worldwide subsidiary that is highly regarded as one of the most efficiently operated less-than-truckload transportation providers and has one of the lowest claim ratios in the industry. New Penn provides reliable, next-day service through a network of 25 service centers in the northeastern U.S., Quebec, Canada and Puerto Rico. Gast was named president in 2006. He joined the company in 1997 and held positions of increasing responsibility in the areas of pricing, finance, administration and strategic planning. – Gast has more than 35 years of experience in the transportation industry. Starting as a management trainee with McLean Trucking Company, Gast later worked for Sun Carriers, Red Star and Plymouth Rock before joining New Penn . 30 years 35 years Management Team |
![]() 18 Eliminated: – Chief Operations Officer – Chief Marketing Officer – Chief Administrative Officer – President of Customer Care YRCW Holland Reddaway New Penn YRC Freight Glen Moore Corporate Former Structure • CEO / CFO team • Legal team • Quality team • Security team • Sales • Customer Care • HR • IT • Equipment Services YRCW Holland Reddaway New Penn YRC Freight Glen Moore Corporate New Structure • CEO / CFO team • Sales • Customer Care • HR • IT • Equipment Services • Legal team • Security team Moved Sales, Customer Care, HR, IT and Equipment Services functions from “corporate” down to the OpCos Decreased the number of corporate / shared service employees from approximately 2,000 to < 400. The 1,600 employees were reallocated to the OpCos and the individual OpCos are responsible for justifying their value / existence within their respective companies Streamlined Holding Company |
![]() 19 The last several years of activities have largely been focused on – The integration of Yellow and Roadway into YRCF in March 2009 – Dramatic capacity and cost reductions to right-size the company (facilities, equipment and employees) – Financial restructuring efforts, including communication challenges with our customers One result of these activities was that our service quality had been damaged and was in need of improvement Re-branded YRC to YRC Freight to give the company a sense of direction and identity The Path Forward: Under new leadership, focus shifted dramatically toward improving the customer experience, resulting in increased shipment levels, improved business mix and operational efficiency This will happen in stages (detail on the following page) – Improve service quality and win the hearts and minds of our employees • Introduce a new employee mantra and service promise, while maintaining steady costs – Productivity improves as we are “in cycle” operationally (fluid and efficient) – Costs associated with service failures decline – Volume picks up, customer churn slows down – Yield and business mix improve The new employee mantra is simple Pick it up on time. Deliver it on time. Don’t bust it. Consistently! YRCF – Strategic Direction |
![]() 20 Month Improve service quality Consistent performance (on-time P&D, undamaged, recover quickly) Get “in cycle” Perform on Time-Critical shipments TQM Maintain productivity and cost (No increase or decrease) Volume picks up, churn goes down • Service improvement drives sales/customer confidence, leading to increased shipping levels • Local channel churn slows down • Time-Critical shipments increase Yield improves • Customer mix improves as local channel grows through improved service and better pricing decisions • Customers willing to pay more for better service; increase in high-yielding Time-Critical shipments Productivity improves as we remain “in cycle” Failure-related costs decline Cargo claims Service recoveries Other “Win hearts and minds” Service quality tools Introduce mantra, brand promise Employee survey Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Line of sight objectives Training & education Rewards & recognition, respect YRCF – Path Forward “The Flywheel” |
![]() 21 On-Standard Service Percent YRCF – On-Standard Service 60.0% 65.0% 70.0% 75.0% 80.0% 85.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Focus is on maintaining momentum created in the first quarter of 2012 - Mantra: “Pick it up on time, deliver it on time and don’t bust it. Consistently.” On-Standard Service Percent appears to have stabilized at or above 80.0% which is well above the levels seen in 2011 Improving the customer experience is anticipated to lead to - Higher shipment volume - Lower customer churn - Increased pricing power - Reduced service failure cost In June 2012, the company raised service standards (i.e. decreased the time to delivery) in 20K lanes causing a slight decrease in service percent compared to earlier months in 2012 Goal 2012 Actual 2011 Actual |
![]() 22 III. 2Q12 Financial Update |
![]() 49.44K 48.41K 30.00 35.00 40.00 45.00 50.00 55.00 2Q11 2Q12 YRC Freight Shipments per Day -2.1% 40.25K 41.25K 30.00 35.00 40.00 45.00 50.00 55.00 2Q11 2Q12 Regional Shipments per Day +2.5% 29.14K 30.42K 20.00 22.00 24.00 26.00 28.00 30.00 32.00 2Q11 2Q12 Regional Tonnage per Day +4.4% 28.66K 27.72K 20.00 22.00 24.00 26.00 28.00 30.00 32.00 2Q11 2Q12 YRC Freight Tonnage per Day YOY Volume – Down at YRC Freight, Up at Regional 23 Decline in volume at YRCF largely attributable to more active customer mix management (increasing price on low margin accounts) and softening economy as the quarter progressed Increase in volume at Regional due to continued high-quality service and increasing market share -3.3% |
![]() 24 Improved revenue per cwt and revenue per shipment at YRCF attributable to “flywheel” investment in service, more active customer mix management and industry-wide pricing discipline Regional increases due to continued superior service / value and industry pricing discipline $22.57 $23.24 $22.20 $22.40 $22.60 $22.80 $23.00 $23.20 $23.40 2Q11 2Q12 YRC Freight Revenue per cwt +2.9% $10.86 $11.12 $10.30 $10.50 $10.70 $10.90 $11.10 $11.30 2Q11 2Q12 Regional Revenue per cwt +2.4% $157 $164 $152 $154 $156 $158 $160 $162 $164 $166 2Q11 2Q12 Regional Revenue per Shipment +4.3% $262 $266 $259 $260 $261 $262 $263 $264 $265 $266 $267 2Q11 2Q12 YRC Freight Revenue per Shipment +1.7% YOY Yield – Improved across the board |
![]() 25 (0.5%) ($ in millions) Footnotes: (1) $1,257.2 $1,250.8 $1,200.0 $1,220.0 $1,240.0 $1,260.0 $1,280.0 $1,300.0 2Q11 2Q12 2Q Comparison Lower volume at YRCF, lower FSC and the inclusion of disposed truckload operations in 2Q11 offset by modestly higher yield led to a slight decline in YOY revenue YRCW Revenue 1) 2Q11 includes revenue from the operations of Glen Moore. Excluding the $25.6M from those disposed operations in 2Q11, revenue would have been $1,231.6M and would have resulted in a 1.6% YOY increase in 2Q12. |
![]() 26 ($ in millions) Reconciliation of Operating Income to Adjusted EBITDA 2Q11 2Q12 Operating revenue 1,257.2 $ 1,250.8 $ Adjusted operating ratio 99.0% 98.3% Reconciliation of operating income to adjusted EBITDA: Operating income (loss) (5.6) $ 15.5 $ (Gains) losses on property disposals, net (7.3) (6.5) Union Equity Awards Letter of credit expense 8.2 9.6 Restructuring professional fees 16.9 2.5 Gain (loss) on permitted dispositions and other 1.0 (0.2) Adjusted operating income (loss) 13.2 20.9 Depreciation and amortization 48.1 45.7 Equity based compensation (benefit) expense 0.4 1.0 Restructuring professional fees, included in nonoperating loss 1.2 - Other nonoperating, net 0.3 2.5 Add: Truckload EBITDA income 1.3 - Adjusted EBITDA 64.5 $ 70.1 $ Consolidated Adjusted EBITDA increased $5.6M in 2Q12 Margin continues to expand as the quality of revenue at YRCF improves and cost management inclusive of safety and workers comp / BIPD continue to pay dividends even as pension contributions increased YOY Regional segment pricing improvement leading to increased profitability and margin expansion $64.5 $70.1 $.0 $20.0 $40.0 $60.0 $80.0 2Q11 2Q12 2Q Adjusted EBITDA +8.7% YRCW Adjusted EBITDA |
![]() 27 ($ in thousands) +21% +2.5x Footnotes: 1) See Appendix for reconciliation of Operating Income to Adjusted EBITDA. (37,239) 40,400 47,287 39,878 (1,305) 64,528 54,648 41,286 15,318 70,098 ($120) ($100) ($80) ($60) ($40) ($20) $ $20 $40 $60 $80 1Q 2Q 3Q 4Q 2010 2011 2012 Highest quarterly EBITDA in 3 years and positive comping trend continuing Reported 21% LTM increase Proforma for pension = 2.5x LTM increase YRCW Adjusted EBITDA (pro forma for Pension) 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Adj. EBITDA Reported 1 (37,239) 40,400 47,287 39,878 (1,305) 64,528 54,648 41,286 15,318 70,098 Union Pension Cessation Benefit (21,000) (21,000) (21,000) (21,000) (21,000) (14,000) - - - - Pro forma Adj. EBITDA* (58,239) 19,400 26,287 18,878 (22,305) 50,528 54,648 41,286 15,318 70,098 Pension Months Included above 3 3 3 3 3 2 Last Twelve Months: Adj. EBITDA Reported 90,326 126,260 150,388 157,749 159,157 175,780 181,350 Union Pension Cessation Benefit (84,000) (84,000) (77,000) (56,000) (35,000) (14,000) - Pro forma Adj. EBITDA* 6,326 42,260 73,388 101,749 124,157 161,780 181,350 * Pro forma assumes $7M of union pension per month for all periods prior to June 2011 |
![]() 28 Three months 2012 2011 Change Adjusted EBITDA 70.1 $ 64.5 $ 5.6 $ Total restructuring professional fees (2.5) (18.1) 15.6 Cash paid for interest (28.8) (10.3) (18.5) Cash paid for letter of credit fees (9.5) - (9.5) Working capital cash flows excluding income tax, net (29.7) (40.9) 11.2 Net cash used in operating activities before income taxes (0.4) (4.8) 4.4 Cash received from income taxes, net 0.9 (10.2) 11.1 Net cash used in operating activities 0.5 (15.0) 15.5 Acquisition of property and equipment (15.6) (12.7) (2.9) Free cash flow (deficit) (15.1) (27.7) 12.6 Total restructuring professional fees 2.5 18.1 (15.6) Adjusted free cash flow (deficit) (12.6) $ (9.6) $ (3.0) $ Pro Forma Adjusted Free Cash Flow Adjusted free cash flow (deficit) (12.6) (9.6) (3.0) Union Pension Cessation - (21.5) 21.5 Cash Interest - (18.4) 18.4 Lender Cash LC fees - (9.5) 9.5 Pro Forma adjusted free cash flow (deficit) (12.6) $ (59.0) $ 46.4 $ Quarterly Adjusted FCF declined by $3.0M to ($12.6M) in 2Q12 from ($9.6M) in 2Q11 largely due to resuming cash payment of interest and LC fees that exceeded the increase in Adjusted EBITDA and decline in changes in Working Capital However, on a pro forma basis after taking into account the Union Pension Cessation and Cash Interest / LC Fees benefit in 2011, Adjusted FCF improved by $46.4M Total Liquidity improved $76M to $249M at the end of 2Q12 from $173M in 2Q11 as the July 2011 restructuring brought incremental cash and liquidity from new credit facilities and debt issuances Footnotes: ($ in millions) $173 $249 2Q11 2Q12 Total Liquidity +44.0% Free Cash Flow and Liquidity 1 1) Represents balance sheet liquidity, which includes amounts such as restricted and foreign cash that are disallowed under our credit agreements in determining compliance with our “minimum cash “ covenant |
![]() 29 July 2011 transaction significantly enhanced liquidity via Series B Notes proceeds and increased ABL availability Best second quarter liquidity since 2008 ($ in millions) $275 $218 $171 $96 $134 $154 $161 $194 $165 $173 $279 $277 $241 $249 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Liquidity |
![]() 30 IV. Conclusion |
![]() 31 Subsequent to the July 2011 transaction – A new Board was seated – A new Management team was placed – Laser-like focus on North American LTL operations – One corporate headquarters with one culture, one vision and one mission – Reorganizing “corporate” to support overall strategy and increase accountability across the organization – The new Management team made some strategic yet difficult decisions to refocus the business and shed some non-core assets and has successfully executed against those decisions / objectives • Sold substantially all of the assets of truckload operations (Glen Moore) • Sold one of the company’s remaining two Chinese JVs (Jiayu); waiting on regulatory approval to close • Conducted auction of excess real estate; now moving to close sold properties – – The recent credit agreement amendment to modify financial covenants provided the company with increased financial flexibility for the foreseeable future Conclusion Management’s concept of the “Flywheel” is gaining traction as On-Standard Service has increased approximately 20% points at YRC Freight and the Regionals continue to deliver industry standard -- if not better -- service |
![]() 32 On a year-over-year basis Revenue increased 1.6% reported highest quarterly EBITDA in four years New management team executing on non-quantitative commitments AND exceeding forecast Overall, much progress has been achieved year-over-year; have been able to absorb resumption of both multi-employer pension expense and cash interest and LC expense but still more to do Liquidity ended 2Q12 at $249M which is the highest second quarter since 2008 Conclusion – 2Q12 Financial Results Footnote 1) On a pro forma basis excluding Glen Moore revenue from 2011 1 Adjusted EBITDA positively comping for the 3 rd consecutive year and |
![]() 33 V. Appendix |
![]() 34 Operating Income to Adjusted EBITDA Reconciliation of Operating Income to Adjusted EBITDA 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Operating income (loss) (232.2) $ 49.5 $ (17.3) $ (27.9) $ (68.4) $ (5.6) $ (26.1) $ (38.1) $ (48.8) $ 15.5 $ (Gains) losses on property disposals, net 8.5 (2.8) (4.0) 2.6 (3.0) (7.3) (10.8) 12.9 8.4 (6.5) Union Equity Awards 108.0 (83.0) - 14.9 Letter of credit expense 8.4 8.3 8.3 8.3 8.1 8.2 9.3 9.6 8.1 9.6 Restructuring professional fees 12.1 9.3 6.6 6.0 8.5 16.9 12.4 4.3 0.5 2.5 Gain (loss) on permitted dispositions and other 5.3 - - - 2.2 1.0 - (0.3) (1.9) (0.2) Adjusted operating income (loss) (89.9) (18.7) (6.4) (10.9) (52.7) 13.2 (0.3) (11.6) (33.8) 20.9 Depreciation and amortization 51.2 50.7 50.4 48.6 49.8 48.1 46.7 51.1 49.0 45.7 Equity based compensation (benefit) expense 1.9 1.4 2.2 0.7 (1.1) 0.4 0.6 0.7 1.1 1.0 Restructuring professional fees, included in nonoperating loss 0.2 0.2 0.2 0.9 0.5 1.2 0.2 - - - Other nonoperating, net (0.8) 6.8 0.9 (0.2) 0.5 0.3 6.9 (0.7) (0.9) 2.5 Add: Truckload EBITDA income 0.1 (0.0) (0.0) 0.9 1.5 1.3 0.5 1.8 - - Adjusted EBITDA (37.2) $ 40.4 $ 47.3 $ 39.9 $ (1.3) $ 64.5 $ 54.6 $ 41.3 $ 15.3 $ 70.1 $ |