SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 16, 2001
-----------------
ROADWAY CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 000-32821 34-1956254
(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
1077 Gorge Boulevard
Akron, Ohio 44310
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (330) 384-1717
ITEM 5. OTHER EVENTS.
In connection with the offering referenced in the Current Report on
Form 8-K filed earlier today, November 16, 2001, the following pro
forma financial information is provided.
UNAUDITED CONDENSED COMBINED PRO FORMA FINANCIAL DATA
The following unaudited condensed combined pro forma financial statements
and explanatory notes have been prepared to give effect to our acquisition of
Arnold and the consummation of the transactions related thereto. At the time of
the closing of the acquisition of Arnold, a wholly owned acquisition subsidiary
of Roadway will be merged with and into Arnold for aggregate cash consideration
of approximately $553.0 million. The transaction is being accounted for as a
purchase business combination.
In accordance with Article 11 of Regulation S-X under the Securities Act,
an unaudited condensed combined pro forma balance sheet as of September 8, 2001
and unaudited condensed combined pro forma statements of income for the
thirty-six weeks (three quarters) ended September 8, 2001 and the year ended
December 31, 2000, have been prepared to reflect our acquisition of Arnold and
the consummation of the transactions related thereto. The following unaudited
pro forma financial statements have been prepared based upon the historical
financial statements of Roadway and Arnold. We operate on 13 four-week
accounting periods with 12 weeks in each of the first three quarters and 16
weeks in the fourth quarter. Arnold operates on a calendar basis. Additionally,
the pro forma financial statements reflect certain balance sheet and statement
of income reclassifications made to conform Arnold's presentations to our
presentations. The unaudited pro forma financial statements should be read in
conjunction with:
- our historical audited consolidated financial statements for the year
ended December 31, 2000, and our unaudited condensed consolidated
financial statements as of September 8, 2001 and for the thirty-six week
period (three quarters) ended September 8, 2001, and
- the historical audited consolidated financial statements of Arnold for
the year ended December 31, 2000, and the unaudited condensed
consolidated financial statements as of September 30, 2001 and for the
nine month period ended September 30, 2001.
The pro forma balance sheet was prepared by combining our historical
unaudited consolidated balance sheet data as of September 8, 2001 and the
historical unaudited consolidated balance sheet data as of September 30, 2001
for Arnold, adjusted to reflect the use of proceeds from the notes offered by
this offering circular, the borrowings under our new credit facility, the
proceeds from the accounts receivable securitization and the intended sale of
ARLO. We expect that either concurrently with or shortly after the acquisition
of Arnold, we will sell substantially all of ARLO's assets for $105.0 million in
cash. The data has also been adjusted to reflect the application of net
after-tax proceeds, which are estimated to be $75.0 million, to prepay a portion
of the borrowings under the new credit facility. ARLO is reported as a segment
of Arnold, with 2000 and nine month 2001 revenues of approximately $47.8 million
and $42.8 million, respectively. The pro forma balance sheet reflects the
historical unaudited financial position of Roadway and Arnold, adjusted to
present the acquisition of Arnold and consummation of these related transactions
as if each had occurred at September 8, 2001.
The pro forma statements of income were prepared using the historical
consolidated statements of income data for both us and Arnold assuming the
acquisition and related transactions had each occurred on January 1, 2000. The
pro forma statement of income for the year ended December 31, 2000 was prepared
by combining the historical audited consolidated statements of income data of us
and the historical audited consolidated statements of income data of Arnold for
the year ended December 31, 2000. The pro forma statement of income for the
thirty-six week period (three quarters) ended September 8, 2001 was prepared by
combining the historical unaudited consolidated statement of income data of us
for the thirty-six week period (three quarters) ended September 8, 2001 and the
historical unaudited consolidated statement of income data of Arnold for the
nine month period ended September 30, 2001. The pro forma statements of income
give effect to the cost associated with financing the acquisition, including
interest expense and amortization of deferred loan origination fees.
The pro forma financial statements are prepared for illustrative purposes
only, and are not necessarily indicative of the operating results or financial
position that would have occurred if the acquisition and sale transaction
described above had been consummated at the beginning of the periods or the
dates indicated,
2
nor are they necessarily indicative of any future operating results or
financial position. The pro forma financial statements do not include any
adjustments related to any restructuring charges, profit improvements, potential
costs savings or one-time charges which may result from the acquisition of
Arnold, the intended sale of ARLO or the result of final valuations of supplies,
carrier operating property, other equipment and fixtures, investments in limited
partnerships, intangible assets and employee benefit obligations. Following the
acquisition, Roadway and Arnold will continue to operate independently under
their respective brand names and each company's management team and headquarters
location will remain the same. Therefore, we expect no integration costs. The
pro forma financial statements include an adjustment related to our intended
sale of ARLO. If the final sales proceeds are different than that assumed in the
pro forma financial statements, "costs in excess of net tangible assets acquired
and other intangible assets," long term debt, interest expense and tax expense
would change.
Upon closing of the acquisition, we will undertake a process to determine
the fair value at the date of acquisition of the tangible and intangible assets
acquired and liabilities assumed of Arnold. We expect that the process of
determining the fair value of most assets and liabilities will be substantially
completed by March 31, 2002, subject to the finalization of any contingencies
which are identified which may require future adjustment to arrive at a final
purchase price allocation. As a result of this process, we anticipate that a
portion of the amount initially classified as "costs in excess of net tangible
assets acquired and other intangible assets" in the pro forma financial
statements, which in accordance with Statement of Financial Accounting Standards
No. 142 will not be amortized, will be reclassified to the tangible and
identified intangible assets acquired, based on their estimated fair values at
the date of acquisition. These tangible and identified intangible assets will be
depreciated and amortized over their estimated useful lives. The excess of the
purchase price over the fair value of the tangible and identified intangible
assets acquired will be classified as goodwill, which will not be amortized. As
a result, the actual amount of depreciation and amortization expense may be
materially different from that presented in the pro forma statements of income.
Costs associated with implementing profit improvement programs initiated
subsequent to the consummation of the acquisition will be charged to our
earnings.
The acquisition has not been consummated as of the preparation of these pro
forma financial statements and there can be no assurances that the acquisition
will be consummated in the future. Our acquisition of Arnold is a condition to
the closing of this offering, but the sale of ARLO is not.
3
CONDENSED COMBINED PRO FORMA BALANCE SHEET -- SEPTEMBER 8, 2001
(UNAUDITED)
<Table>
<Caption>
ROADWAY PRO ROADWAY
ROADWAY ARNOLD FORMA COMBINED PRO
HISTORICAL ADJUSTED(26) ADJUSTMENTS FORMA(1)
---------- ------------ ----------- ------------
(DOLLARS IN THOUSANDS)
ASSETS
Current assets:
Cash and cash equivalents.......... $ 82,554 $ 51,036 $ (66,400)(2) $ 110,690
13,500(3)
105,000(4)
(75,000)(5)
Accounts receivable, net......... 283,319 42,319 (100,000)(6) 225,638
Prepaid expense and supplies..... 20,316 7,823 28,139
---------- -------- --------- ----------
Total current assets.................... 386,189 101,178 (122,900) 364,467
Carrier operating property, at cost..... 1,426,141 347,048 (155,275)(7) 1,627,503
9,589(8)
Less: allowance for depreciation...... 1,001,747 155,275 (155,275)(7) 1,001,747
---------- -------- --------- ----------
Net carrier operating property.......... 424,394 191,773 9,589 625,756
Costs in excess of net tangible assets
acquired and other intangible
assets................................ 15,206 7,459 247,494(9) 266,900
(7,459)(10)
4,200(11)
Deferred income taxes................... 46,375 1,765 (38,926)(12) 9,214
Other assets............................ 9,001 9,300(11) 18,301
---------- -------- --------- ----------
TOTAL ASSETS............................ $ 872,164 $311,176 $ 101,298 $1,284,638
========== ======== ========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable...................... $ 180,012 $ 17,385 $ 13,500(11) $ 248,147
7,250(13)
30,000(14)
Salaries and wages.................... 108,304 12,166 120,470
Current portion-long-term debt,
freight and casualty claims
payable............................ 51,680 3,147 54,827
---------- -------- --------- ----------
Total current liabilities............... 339,996 32,698 50,750 423,444
Long-term liabilities:
Casualty claims and other............. 62,685 4,026 66,711
Accrued pension and postretirement
health care........................ 119,617 119,617
Deferred income taxes................. 34,995 3,931(15)
(38,926)(12)
Long-term debt........................ 400,000(16) 325,000
(75,000)(5)
---------- -------- --------- ----------
Total long-term liabilities............. 182,302 39,021 290,005 511,328
Total stockholders' equity.............. 349,866 239,457 (239,457) 349,866
---------- -------- --------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY................................ $ 872,164 $311,176 $ 101,298 $1,284,638
========== ======== ========= ==========
</Table>
4
CONDENSED COMBINED PRO FORMA INCOME STATEMENT
(UNAUDITED)
<Table>
<Caption>
THIRTY-SIX WEEKS (THREE QUARTERS) ENDED SEPTEMBER 8, 2001
----------------------------------------------------------
ROADWAY ROADWAY
ROADWAY ARNOLD PRO FORMA COMBINED
HISTORICAL ADJUSTED(27) ADJUSTMENTS PRO FORMA(1)
---------- ------------ ----------- -------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Revenue.................................. $1,924,251 $292,996 $2,217,247
Operating expenses:
Salaries, wages and benefits........... 1,229,033 141,933 1,370,966
Operating supplies and expenses........ 336,833 46,109 $ (213)(17) 382,729
Purchased transportation............... 191,954 39,468 231,422
Operating taxes and licenses........... 49,829 7,761 57,590
Insurance and claims................... 34,044 7,869 41,913
Provision for depreciation............. 47,617 20,853 664(18) 69,134
Net loss (gain) on sale of carrier
operating property.................. 534 25 559
---------- -------- -------- ----------
Total operating expenses.......... 1,889,844 264,018 451 2,154,313
---------- -------- -------- ----------
Operating income......................... 34,407 28,978 (451) 62,934
Interest expense....................... (505) (63) (18,818)(19) (19,386)
Other income (expense), net............ (3,752) (700) (1,344)(20)
(854)(21)
1,286(22) (5,364)
---------- -------- -------- ----------
Total other income (expense)...... (4,257) (763) (19,730) (24,750)
---------- -------- -------- ----------
Income before income taxes............... 30,150 28,215 (20,181) 38,184
Provision for income taxes............... 12,964 10,262 (7,571)(23) 15,655
---------- -------- -------- ----------
Net income............................... $ 17,186 $ 17,953 $(12,610) $ 22,529
========== ======== ======== ==========
Earnings per share -- diluted............ $ 0.91 $ 0.95 $ (0.67) $ 1.19
========== ======== ======== ==========
Fully diluted shares outstanding......... 18,938 18,938 18,938 18,938
========== ======== ======== ==========
Operating ratio(24)...................... 98.2% 90.1% 97.2%
========== ======== ==========
CALCULATION OF EBITDA:
Income before income taxes............... $ 38,184
Interest expense......................... 19,386
Depreciation............................. 69,134
Amortization of costs in excess of net
tangible assets acquired and other
intangible assets...................... 833
Amortization of loan origination fees.... 1,344
----------
EBITDA(25)............................... $ 128,881
==========
</Table>
5
CONDENSED COMBINED PRO FORMA INCOME STATEMENT
(UNAUDITED)
<Table>
<Caption>
YEAR ENDED DECEMBER 31, 2000
----------------------------------------------------------
ROADWAY ROADWAY
ROADWAY ARNOLD PRO FORMA COMBINED
HISTORICAL ADJUSTED(28) ADJUSTMENTS PRO FORMA(1)
---------- ------------ ----------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Revenue.................................. $3,039,560 $414,543 $3,454,103
Operating expense:
Salaries, wages and benefits........... 1,889,928 189,135 2,079,063
Operating supplies and expenses........ 544,774 62,501 $ (284)(17) 606,991
Purchased transportation............... 308,089 58,633 366,722
Operating taxes and licenses........... 78,271 10,392 88,663
Insurance and claims................... 64,442 9,858 74,300
Provision for depreciation............. 55,675 29,509 959(18) 86,143
Net loss (gain) on sale of carrier
operating property.................. 1,969 (1,977) (8)
---------- -------- -------- ----------
Total operating expenses.......... 2,943,148 358,051 675 3,301,874
---------- -------- -------- ----------
Operating income......................... 96,412 56,492 (675) 152,229
Interest expense....................... (341) (1,340) (28,002)(19) (29,683)
Other income (expense), net............ 2,213 1,622 (1,958)(20)
(1,243)(21) 634
---------- -------- -------- ----------
Total other income (expense)...... 1,872 282 (31,203) (29,049)
---------- -------- -------- ----------
Income before income taxes............... 98,284 56,774 (31,878) 123,180
Provision for income taxes............... 41,742 20,975 (12,213)(23) 50,504
---------- -------- -------- ----------
Net income............................... $ 56,542 $ 35,799 $(19,665) $ 72,676
========== ======== ======== ==========
Earnings per share -- diluted............ $ 2.98 $ 1.88 $ (1.03) $ 3.83
========== ======== ======== ==========
Fully diluted shares outstanding......... 18,992 18,992 18,992 18,992
========== ======== ======== ==========
Operating ratio(24)...................... 96.8% 86.4% 95.6%
========== ======== ==========
CALCULATION OF EBITDA:
Income before income taxes............... $ 123,180
Interest expense......................... 29,683
Depreciation............................. 86,161
Amortization of costs in excess of net
tangible assets acquired and other
intangible assets...................... 1,203
Amortization of loan origination fees.... 1,958
----------
EBITDA(25)............................... $ 242,185
==========
</Table>
6
NOTES TO UNAUDITED CONDENSED COMBINED PRO FORMA FINANCIAL STATEMENTS
(1) The unaudited pro forma financial statements do not give effect to any
potential cost savings or other profit improvements that could result from
the acquisition. Roadway will undertake a study to determine the
allocation of the total purchase price to the various tangible and
intangible assets acquired and the liabilities assumed. These pro forma
financial statements reflect a preliminary allocation of purchase price
which is subject to change based on the finalization of the fair value of
the tangible and intangible assets acquired and liabilities assumed as of
the acquisition date. The preliminary estimated fair value of the assets
acquired and the liabilities assumed in the acquisition are as follows:
<Table>
<Caption>
TOTAL ARLO NET
------ ------ ------
(DOLLARS IN MILLIONS)
Tangible assets acquired at fair value............... $376.3 $(53.7) $322.6
Costs in excess of the net tangible assets of the
acquired business.................................. 277.1 (25.4) 251.7
Acquisition costs.................................... (13.5) -- (13.5)
Liabilities assumed.................................. (87.0) 4.1 (82.9)
------ ------ ------
Total purchase price................................. $552.9 $(75.0) $477.9
====== ====== ======
</Table>
These pro forma financial statements are not necessarily indicative of the
operating results or financial position that would have occurred had the
acquisition been consummated at the dates indicated, nor necessarily
indicative of future operating results.
(2) Reflects excess cash available at Roadway to be used in connection with
financing the acquisition.
(3) Reflects direct transaction related expenses of $4.2 million and loan
origination costs of $9.3 million which are accrued but unpaid in the pro
forma balance sheet.
(4) Represents expected gross proceeds from the sale of ARLO.
(5) Represents the application of net after-tax proceeds, which are estimated
to be $75.0 million, from our intended sale of ARLO to prepay a portion of
the borrowings under the new credit facility.
(6) Reflects the sale of accounts receivable of $100.0 million in connection
with the receivables financing used to finance, in part, the acquisition
of Arnold.
(7) Represents elimination of historical accumulated depreciation due to the
application of purchase accounting.
(8) Represents the preliminary net adjustment to carrier operating property,
buildings and other equipment and fixtures based on estimated fair values
as required by purchase accounting.
(9) Reflects the preliminary estimated adjustment for the costs in excess of
the net tangible assets of the acquired business at estimated fair value.
Roadway will undertake a study to determine the allocation of the total
purchase price to the various assets acquired and liabilities assumed in
order to allocate the total purchase price to the various intangible
assets, if any, acquired. Management believes, on a preliminary basis,
there may be intangible assets which will be evaluated. Any excess not
attributable to tangible and intangible assets will be reflected as costs
in excess of net tangible assets acquired and other intangible assets. The
sensitivity of the valuations regarding the above can be significant.
Accordingly, Roadway intends to continue to evaluate the assets acquired
and liabilities assumed and, as a result, the allocation of the purchase
price among the tangible and intangible assets is subject to change.
(10) Represents the elimination of the historical goodwill from Arnold.
(11) Represents the accrual of certain direct transaction expenses associated
with completing the acquisition and deferred financing costs related to
the financing associated with the acquisition, including banking, legal,
accounting and other.
7
(12) Reflects certain balance sheet and statement of income reclassifications
made to conform Arnold's presentation to Roadway's presentation.
(13) Represents the accrual on Arnold's opening balance sheet of certain direct
transaction expenses associated with completing the acquisition and
related transactions, including banking, legal, accounting and other.
(14) Represents the accrual of currently payable income taxes associated with
the taxable gain on the sale of ARLO.
(15) Represents deferred tax liabilities associated with the step-up in the
basis of carrier operating property, buildings, other equipment and
fixtures based on estimated fair values as required by purchase
accounting.
(16) Represents the issuance of $225.0 million of the notes offered by this
offering circular and $175.0 million of term loan borrowings under the
new credit facility, used to finance the acquisition of Arnold.
(17) Adjustment to remove Arnold's historical amortization of costs in excess
of net tangible assets acquired and other intangible assets.
(18) Adjustment to record incremental depreciation expense on the step-up of
Arnold's property and equipment.
(19) Adjustment to record additional interest expense on the new Roadway
financing arrangements.
(20) Adjustment to record amortization of deferred financing costs related to
the new Roadway financing arrangements.
(21) Adjustment to reflect the facility fee on the Roadway revolving line of
credit.
(22) Adjustment to reverse direct transaction costs recorded by Arnold related
to the acquisition including legal, accounting and other.
(23) Adjustment to record the income tax impact of the pro forma adjustments
assuming a combined pro forma effective income tax rate of 41%.
(24) The operating ratio is defined as the ratio of total operating expenses
for a period to total revenues for that period.
(25) EBITDA is defined as income before income tax expense, interest expense,
depreciation expense, amortization of costs in excess of net tangible
assets acquired and other intangible assets and amortization of deferred
loan origination fees. While EBITDA should not be considered a substitute
for operating income or a better indicator of liquidity than cash flows
from operating activities, which are determined in accordance with
generally accepted accounting principles, it is included in this offering
circular to provide additional information with respect to our ability to
meet our future debt service, capital expenditure and working capital
requirements. EBITDA is also included because management believes that
some investors find it to be a useful tool for measuring the ability to
service debt.
8
(26) This adjustment relates to the intended sale of ARLO. The balance sheet at
September 30, 2001 for Arnold was calculated as follows:
<Table>
<Caption>
ARNOLD ARLO ARNOLD
HISTORICAL ADJUSTMENTS ADJUSTED
---------- ----------- --------
(DOLLARS IN THOUSANDS)
ASSETS
Current assets:
Cash and cash equivalents................... $ 38,661 $ (928)(a) $ 51,036
13,303(b)
Marketable securities....................... 13,303 (13,303)(b)
Accounts receivable, net.................... 50,868 (8,549)(a) 42,319
Prepaid expenses and supplies............... 9,014 (1,191)(a) 7,823
Current deferred tax asset.................. 1,765 (1,765)(b)
-------- -------- --------
Total current assets...................... 113,611 (12,433) 101,178
Property plant and equipment................ 420,040 (72,992)(a) 347,048
Accumulated depreciation.................... 187,449 (32,174)(a) 155,275
-------- -------- --------
Net property, plant and equipment........... 232,591 (40,818) 191,773
Other assets:
Costs in excess of net tangible assets
acquired and other intangible assets...... 10,878 (3,419)(a) 7,459
Deferred income taxes....................... 1,765(b) 1,765
Other long-term assets...................... 9,142 (141)(a) 9,001
-------- -------- --------
Total assets.................................. $366,222 $(55,046) $311,176
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................ $ 15,712 $ (489)(a) $ 17,385
361(b)
705(b)
1,096(b)
Current notes payable....................... 237 (237)(a)
Salaries and wages.......................... 13,169 (642)(a) 12,166
(361)(b)
Income taxes payable........................ 705 (705)(b)
Freight and casualty claims payable......... 5,132 (889)(a) 3,147
(1,096)(b)
-------- -------- --------
Total current liabilities................. 34,955 (2,257) 32,698
Other liabilities:
Casualty claims payable and other........... 2,001 2,025(b) 4,026
Notes payable............................... 918 (918)(a)
Other long-term liabilities................. 2,050 (25)(a)
(2,025)(b)
Deferred income taxes....................... 34,995 34,995
======== ======== ========
Total stockholders' equity.................... 291,303 (51,846) 239,457
-------- -------- --------
Total liabilities and stockholders' equity.... $366,222 $(55,046) $311,176
======== ======== ========
</Table>
----------------------
(a) Represents the historical cost of assets that will be sold and the
liabilities that will not be assumed in connection with the sale of Arnold
to Roadway due to the intended sale of ARLO, taken from the books and
records of ARLO.
(b) Represents reclassification adjustments necessary to conform Arnold's
financial statement presentation to Roadway's presentation.
9
(27) This adjustment relates to the intended sale of ARLO. For the nine months
ended September 30, 2001, the Arnold adjusted pro forma statement of
income was calculated as follows:
<Table>
<Caption>
ARNOLD ARLO ARNOLD
HISTORICAL ADJUSTMENTS ADJUSTED
---------- ----------- --------
(DOLLARS IN THOUSANDS)
Revenues................................... $335,789 $(42,793)(a) $292,996
Operating expenses:
Salaries, wages and benefits............. 164,045 (22,112)(a) 141,933
Operating supplies and expenses.......... 57,021 (10,912)(a) 46,109
Purchased transportation................. 39,468 39,468
Operating taxes and licenses............. 8,304 (543)(a) 7,761
Insurance and claims..................... 8,112 (243)(a) 7,869
Provision for depreciation............... 24,310 (3,457)(a) 20,853
Net loss (gain) on sale of carrier
operating property.................... 31 (6) 25
-------- -------- --------
Total operating expenses............ 301,291 (37,273) 264,018
Operating income........................... 34,498 (5,520) 28,978
Interest expense........................... (146) 83(a) (63)
Other income (expense), net................ (700) (700)
-------- -------- --------
Total other income (expense)............... (846) 83 (763)
-------- -------- --------
Income before income taxes................. 33,652 (5,437) 28,215
Provision for income taxes................. 12,420 (2,158)(a) 10,262
-------- -------- --------
Net income................................. $ 21,232 $ (3,279) $ 17,953
======== ======== ========
</Table>
----------------------
(a) Represents the elimination of historical results taken from the books and
records of ARLO for the three quarters ended September 30, 2001. ARLO, which
is reported as Arnold's logistics and warehousing segment, is intended to be
sold in connection with the acquisition of Arnold.
10
(28) This adjustment relates to the intended sale of ARLO. For the year ended
December 31, 2000, the Arnold adjusted pro forma statement of income was
calculated as follows:
<Table>
<Caption>
ARNOLD ARLO ARNOLD
HISTORICAL ADJUSTMENTS ADJUSTED
---------- ----------- --------
(DOLLARS IN THOUSANDS)
Revenues................................... $462,365 $(47,822)(a) $414,543
Operating expenses:
Salaries, wages and benefits............. 212,403 (23,268)(a) 189,135
Operating supplies and expenses.......... 75,273 (12,772)(a) 62,501
Purchased transportation................. 58,633 58,633
Operating taxes and licenses............. 11,173 (781)(a) 10,392
Insurance and claims..................... 10,081 (223)(a) 9,858
Provision for depreciation............... 33,359 (3,850)(a) 29,509
Net loss (gain) on sale of carrier
operating property.................... (1,977) (1,977)
-------- -------- --------
Total operating expenses............ 398,945 (40,894) 358,051
Operating income........................... 63,420 (6,928) 56,492
Interest expense........................... (1,646) 306(a) (1,340)
Other income (expense), net................ 1,304 318(a) 1,622
-------- -------- --------
Total other income (expense)............... (342) 624 282
-------- -------- --------
Income before income taxes................. 63,078 (6,304) 56,774
Provision for income taxes................. 23,541 (2,566)(a) 20,975
-------- -------- --------
Net income................................. $ 39,537 $ (3,738) $ 35,799
======== ======== ========
</Table>
----------------------
(a) Represents the elimination of historical results taken from the books and
records of ARLO for the year ended December 31, 2000. ARLO, which is
reported as Arnold's logistics and warehousing segment, is intended to be
sold in connection with the acquisition of Arnold.
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ROADWAY CORPORATION
By: /s/ John J. Gasparovic
--------------------------------------
Name: John J. Gasparovic
Title: Vice President, General Counsel
and Secretary
Date: November 16, 2001