2014

YRC Worldwide Reports Fourth Quarter 2011 Results -- YRC Freight tons per day up 6.7%, revenue per hundredweight up 4.8%, operating revenue up 11.0%

-- Regional tons per day up 4.7%, revenue per hundredweight up 5.7%, operating revenue up 12.6%

OVERLAND PARK, KAN., 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



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