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%

Feb 28, 2012, 08:30 ET from YRC Worldwide

OVERLAND PARK, KAN., Feb. 28, 2012 /PRNewswire/ -- 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.

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 and global logistics services. It is the holding company for a portfolio of successful brands including YRC Freight, YRC Reimer, Holland, Reddaway, and New Penn, and provides China-based services through its Jiayu and JHJ 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 visit www.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,

December 31,

2011

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

-

Total current assets

837,959

768,032

PROPERTY AND EQUIPMENT:

Cost

3,074,858

3,239,413

Less - accumulated depreciation

(1,738,304)

(1,710,216)

Net property and equipment

1,336,554

1,529,197

OTHER ASSETS:

Intangibles, net

117,492

139,525

Restricted amounts held in escrow

96,251

-

Other assets

97,584

134,802

Total assets

$   2,485,840

$   2,571,556

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

Total current liabilities

675,736

1,018,697

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)

Total YRC Worldwide Inc. shareholders' deficit

(354,014)

(209,500)

Non-controlling interest

(4,598)

(1,894)

  Total shareholders' deficit

(358,612)

(211,394)

Total liabilities and shareholders' deficit

$   2,485,840

$   2,571,556

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

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

Total operating expenses

1,250,477

1,119,429

5,007,081

4,562,489

OPERATING LOSS

(38,149)

(27,870)

(138,237)

(227,849)

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)

Nonoperating expenses, net

39,734

38,300

223,632

173,040

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)

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)

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)

  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)

-

  NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS

$    (84,266)

$      15,797

$  (409,311)

$  (325,807)

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)

NET INCOME (LOSS) PER SHARE

$      (12.40)

$        99.71

$    (196.12)

$ (2,468.17)

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)

NET INCOME (LOSS)

$      (12.40)

$        99.61

$    (196.12)

$ (2,468.17)

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)

Net income (loss)

$    (84,266)

$      15,797

$  (409,311)

$  (325,807)

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

Net cash provided by (used in) operating activities

(25,968)

687

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

Net cash provided by (used in) investing activities

(156,636)

106,032

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

Net cash provided by (used in) financing activities

240,108

(61,490)

NET INCREASE IN CASH AND CASH EQUIVALENTS

57,504

45,229

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

143,017

97,788

CASH AND CASH EQUIVALENTS, END OF PERIOD

$  200,521

$  143,017

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)

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)

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 

Premium/

Book

(in millions)

Par Value

(Discount)

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

   Total debt 

$  1,358.8

$          (4.1)

$     1,354.7

As of December 31, 2010 

Premium/

Book

(in millions)

Par Value

(Discount)

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

   Total debt 

$  1,072.7

$        (12.6)

$     1,060.1

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

-

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

Adjusted EBITDA

$      41,286

$      39,882

$    159,157

$      90,325

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

Adjusted EBITDA

$      41,286

$      39,882

$    159,157

$      90,325

Reconciliation of Adjusted EBITDA to adjusted free cash flow (deficit):

Three months

Twelve months

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)

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

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)

Free cash flow (deficit)

(8,732)

3,801

(97,596)

(18,463)

Total restructuring professional fees

4,303

6,826

44,043

35,492

Adjusted free cash flow (deficit)

$        (4,429)

$      10,627

$    (53,553)

$      17,029

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)

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)

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

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

Adjusted EBITDA

$   11,853

$   11,422

$      43,664

$      (7,395)

Adjusted EBITDA as % of operating revenue

1.5%

1.6%

1.4%

-0.3%

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

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

Adjusted EBITDA

$   24,177

$   24,014

$    103,070

$      85,704

Adjusted EBITDA as % of operating revenue

6.3%

7.1%

6.6%

6.3%

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

-

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)

Adjusted EBITDA

$   5,256

$   4,446

$  12,423

$   12,016

Three months

Twelve months

Truckload segment (excluded from consolidated EBITDA)

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

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

Adjusted EBITDA

$ (1,809)

$    (889)

$   (5,203)

$      (907)

Adjusted EBITDA as % of operating revenue

-8.2%

-3.5%

-5.3%

-0.8%

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)

Total picked up revenue

$      789,097

$      711,275

$      836,568

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

Total picked up revenue

$      380,717

$      338,634

$      404,825

(a) Does not equal financial statement revenue due to revenue recognition adjustments between accounting periods.

SOURCE YRC Worldwide



RELATED LINKS

http://www.yrcw.com