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Share Name | Share Symbol | Market | Type |
---|---|---|---|
YRC Worldwide Inc | NASDAQ:YRCW | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 5.11 | 5.09 | 5.11 | 0 | 01:00:00 |
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
|
48-0948788
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(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification No.)
|
|
|
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10990 Roe Avenue, Overland Park, Kansas
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|
66211
|
(Address of principal executive offices)
|
|
(Zip Code)
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Large accelerated filer
|
|
o
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Accelerated filer
|
|
ý
|
|
|
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|
|||
Non-accelerated filer
|
|
o
(Do not check if a smaller reporting company)
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|
Smaller reporting company
|
|
o
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Class
|
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Outstanding at October 21, 2016
|
Common Stock, $0.01 par value per share
|
|
33,274,012 shares
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Item
|
|
Page
|
|
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1
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||
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||
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||
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||
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||
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||
2
|
||
3
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||
4
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||
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1
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||
1A
|
||
6
|
||
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|
September 30,
2016 |
|
December 31,
2015 |
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
276.4
|
|
|
$
|
173.8
|
|
Restricted amounts held in escrow
|
43.0
|
|
|
58.8
|
|
||
Accounts receivable, net
|
477.8
|
|
|
427.4
|
|
||
Prepaid expenses and other
|
75.3
|
|
|
74.4
|
|
||
Total current assets
|
872.5
|
|
|
734.4
|
|
||
Property and Equipment:
|
|
|
|
||||
Cost
|
2,815.7
|
|
|
2,822.8
|
|
||
Less – accumulated depreciation
|
(1,927.9
|
)
|
|
(1,885.5
|
)
|
||
Net property and equipment
|
887.8
|
|
|
937.3
|
|
||
Intangibles, net
|
30.7
|
|
|
40.4
|
|
||
Restricted amounts held in escrow
|
—
|
|
|
63.4
|
|
||
Deferred income taxes, net
|
23.0
|
|
|
23.0
|
|
||
Other assets
|
56.6
|
|
|
80.9
|
|
||
Total Assets
|
$
|
1,870.6
|
|
|
$
|
1,879.4
|
|
Liabilities and Shareholders’ Deficit
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
163.9
|
|
|
$
|
161.1
|
|
Wages, vacations and employee benefits
|
203.6
|
|
|
195.1
|
|
||
Deferred income taxes, net
|
23.0
|
|
|
23.0
|
|
||
Claims and insurance accruals
|
122.8
|
|
|
125.0
|
|
||
Other accrued taxes
|
27.6
|
|
|
29.8
|
|
||
Other current and accrued liabilities
|
24.9
|
|
|
23.6
|
|
||
Current maturities of long-term debt
|
16.6
|
|
|
15.9
|
|
||
Total current liabilities
|
582.4
|
|
|
573.5
|
|
||
Other Liabilities:
|
|
|
|
||||
Long-term debt, less current portion
|
1,023.9
|
|
|
1,046.5
|
|
||
Deferred income taxes, net
|
3.8
|
|
|
3.7
|
|
||
Pension and postretirement
|
311.4
|
|
|
339.9
|
|
||
Claims and other liabilities
|
291.3
|
|
|
295.2
|
|
||
Commitments and contingencies
|
|
|
|
||||
Shareholders’ Deficit:
|
|
|
|
||||
Preferred stock, $1 par value per share
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value per share
|
0.3
|
|
|
0.3
|
|
||
Capital surplus
|
2,317.9
|
|
|
2,312.6
|
|
||
Accumulated deficit
|
(2,210.3
|
)
|
|
(2,239.3
|
)
|
||
Accumulated other comprehensive loss
|
(357.4
|
)
|
|
(360.3
|
)
|
||
Treasury stock, at cost (410 shares)
|
(92.7
|
)
|
|
(92.7
|
)
|
||
Total shareholders’ deficit
|
(342.2
|
)
|
|
(379.4
|
)
|
||
Total Liabilities and Shareholders’ Deficit
|
$
|
1,870.6
|
|
|
$
|
1,879.4
|
|
|
Three Months
|
|
Nine Months
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Operating Revenue
|
$
|
1,221.3
|
|
|
$
|
1,244.9
|
|
|
$
|
3,549.2
|
|
|
$
|
3,689.7
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
||||||||
Salaries, wages and employee benefits
|
715.8
|
|
|
725.8
|
|
|
2,132.6
|
|
|
2,148.6
|
|
||||
Operating expenses and supplies
|
206.9
|
|
|
217.1
|
|
|
595.7
|
|
|
678.1
|
|
||||
Purchased transportation
|
156.8
|
|
|
149.6
|
|
|
409.0
|
|
|
431.0
|
|
||||
Depreciation and amortization
|
40.3
|
|
|
40.7
|
|
|
119.5
|
|
|
123.6
|
|
||||
Other operating expenses
|
62.5
|
|
|
63.1
|
|
|
194.2
|
|
|
198.6
|
|
||||
(Gains) losses on property disposals, net
|
0.2
|
|
|
0.9
|
|
|
(11.2
|
)
|
|
1.5
|
|
||||
Total operating expenses
|
1,182.5
|
|
|
1,197.2
|
|
|
3,439.8
|
|
|
3,581.4
|
|
||||
Operating Income
|
38.8
|
|
|
47.7
|
|
|
109.4
|
|
|
108.3
|
|
||||
Nonoperating Expenses:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
25.6
|
|
|
25.7
|
|
|
77.9
|
|
|
81.2
|
|
||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
||||
Other, net
|
(1.2
|
)
|
|
(4.5
|
)
|
|
(0.9
|
)
|
|
(8.1
|
)
|
||||
Nonoperating expenses, net
|
24.4
|
|
|
21.2
|
|
|
77.0
|
|
|
73.7
|
|
||||
Income before income taxes
|
14.4
|
|
|
26.5
|
|
|
32.4
|
|
|
34.6
|
|
||||
Income tax expense
|
0.5
|
|
|
6.7
|
|
|
3.4
|
|
|
10.4
|
|
||||
Net Income
|
13.9
|
|
|
19.8
|
|
|
29.0
|
|
|
24.2
|
|
||||
Other comprehensive income (loss), net of tax
|
2.3
|
|
|
(1.9
|
)
|
|
2.9
|
|
|
2.9
|
|
||||
Comprehensive Income Attributable to YRC Worldwide Inc.
|
$
|
16.2
|
|
|
$
|
17.9
|
|
|
$
|
31.9
|
|
|
$
|
27.1
|
|
|
|
|
|
|
|
|
|
||||||||
Average Common Shares Outstanding – Basic
|
32,466
|
|
|
32,065
|
|
|
32,398
|
|
|
31,602
|
|
||||
Average Common Shares Outstanding – Diluted
|
33,194
|
|
|
32,621
|
|
|
32,915
|
|
|
32,569
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income Per Share – Basic
|
$
|
0.43
|
|
|
$
|
0.62
|
|
|
$
|
0.89
|
|
|
$
|
0.76
|
|
Income Per Share – Diluted
|
$
|
0.42
|
|
|
$
|
0.61
|
|
|
$
|
0.88
|
|
|
$
|
0.74
|
|
|
2016
|
|
2015
|
||||
Operating Activities:
|
|
|
|
||||
Net Income
|
$
|
29.0
|
|
|
$
|
24.2
|
|
Noncash items included in net income:
|
|
|
|
||||
Depreciation and amortization
|
119.5
|
|
|
123.6
|
|
||
Noncash equity-based compensation and employee benefits expense
|
16.2
|
|
|
18.5
|
|
||
(Gains) losses on property disposals, net
|
(11.2
|
)
|
|
1.5
|
|
||
Gain on disposal of equity method investment
|
(2.3
|
)
|
|
—
|
|
||
Other noncash items, net
|
7.6
|
|
|
0.7
|
|
||
Changes in assets and liabilities, net:
|
|
|
|
||||
Accounts receivable
|
(49.7
|
)
|
|
(29.4
|
)
|
||
Accounts payable
|
0.8
|
|
|
10.0
|
|
||
Other operating assets
|
4.1
|
|
|
(7.3
|
)
|
||
Other operating liabilities
|
(28.0
|
)
|
|
(50.3
|
)
|
||
Net cash provided by operating activities
|
86.0
|
|
|
91.5
|
|
||
Investing Activities:
|
|
|
|
||||
Acquisition of property and equipment
|
(75.4
|
)
|
|
(71.8
|
)
|
||
Proceeds from disposal of property and equipment
|
26.5
|
|
|
15.7
|
|
||
Restricted escrow receipts
|
112.1
|
|
|
41.9
|
|
||
Restricted escrow deposits
|
(32.9
|
)
|
|
(25.0
|
)
|
||
Proceeds from disposal of equity method investment, net
|
14.6
|
|
|
—
|
|
||
Other, net
|
—
|
|
|
0.4
|
|
||
Net cash provided by (used in) investing activities
|
44.9
|
|
|
(38.8
|
)
|
||
Financing Activities:
|
|
|
|
||||
Repayments of long-term debt
|
(26.5
|
)
|
|
(13.1
|
)
|
||
Debt issuance costs
|
(1.8
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(28.3
|
)
|
|
(13.1
|
)
|
||
Net Increase In Cash and Cash Equivalents
|
102.6
|
|
|
39.6
|
|
||
Cash and Cash Equivalents, Beginning of Period
|
173.8
|
|
|
171.1
|
|
||
Cash and Cash Equivalents, End of Period
|
$
|
276.4
|
|
|
$
|
210.7
|
|
|
|
|
|
||||
Supplemental Cash Flow Information
:
|
|
|
|
||||
Interest paid
|
$
|
(68.5
|
)
|
|
$
|
(79.3
|
)
|
Income tax payments, net
|
(4.1
|
)
|
|
(1.6
|
)
|
||
Debt redeemed for equity consideration
|
—
|
|
|
17.9
|
|
Preferred Stock:
|
|
||
Beginning and ending balance
|
$
|
—
|
|
Common Stock:
|
|
||
Beginning and ending balance
|
$
|
0.3
|
|
Capital Surplus:
|
|
||
Beginning balance
|
$
|
2,312.6
|
|
Equity-based compensation
|
5.3
|
|
|
Ending balance
|
$
|
2,317.9
|
|
Accumulated Deficit:
|
|
||
Beginning balance
|
$
|
(2,239.3
|
)
|
Net income
|
29.0
|
|
|
Ending balance
|
$
|
(2,210.3
|
)
|
Accumulated Other Comprehensive Loss:
|
|
||
Beginning balance
|
$
|
(360.3
|
)
|
Reclassification of net pension actuarial losses to net income, net of tax
|
10.3
|
|
|
Foreign currency translation adjustments
|
3.0
|
|
|
Reclassification of foreign currency translation gains to net income
|
(10.4
|
)
|
|
Ending balance
|
$
|
(357.4
|
)
|
Treasury Stock, At Cost:
|
|
||
Beginning and ending balance
|
$
|
(92.7
|
)
|
Total Shareholders’ Deficit
|
$
|
(342.2
|
)
|
•
|
YRC Freight is the reporting segment that focuses on longer haul business opportunities with national, regional and international services. YRC Freight provides for the movement of industrial, commercial and retail goods, primarily through centralized management. This reporting segment includes YRC Inc. (“YRC Freight”), a U.S. LTL subsidiary, and Reimer Express (“YRC Reimer”), a subsidiary located in Canada that specializes in shipments into, across and out of Canada. In addition to the United States and Canada, YRC Freight also serves parts of Mexico, Puerto Rico and Guam.
|
•
|
Regional Transportation is the reporting segment for our transportation service providers focused on business opportunities in the regional and next-day delivery markets. Regional Transportation is comprised of USF Holland LLC (“Holland”), New Penn Motor Express LLC (“New Penn”) and USF Reddaway Inc. (“Reddaway”). These companies each provide regional, next-day ground services in their respective regions through a network of facilities located across the United States, Canada, Mexico and Puerto Rico.
|
|
|
|
Fair Value Measurement Hierarchy
|
||||||||||||
(in millions)
|
Total Carrying
Value
|
|
Quoted prices
in active market
(Level 1)
|
|
Significant
other
observable
inputs (Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
Restricted amounts held in escrow-current
|
$
|
43.0
|
|
|
$
|
43.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total assets at fair value
|
$
|
43.0
|
|
|
$
|
43.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
As of September 30, 2016 (in millions)
|
Par Value
|
|
Discount
|
|
Debt Issuance Costs
|
|
Book
Value
|
|
Stated
Interest Rate
|
|
Average Effective
Interest Rate
|
||||||||||
Term Loan
|
$
|
680.8
|
|
|
$
|
(3.2
|
)
|
|
$
|
(9.7
|
)
|
|
$
|
667.9
|
|
|
8.00
|
%
|
(a)
|
8.20
|
%
|
ABL Facility
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|
N/A
|
|
||||
Secured Second A&R CDA
|
29.0
|
|
|
—
|
|
|
(0.2
|
)
|
|
28.8
|
|
|
3.3-18.3%
|
|
|
7.3
|
%
|
||||
Unsecured Second A&R CDA
|
73.2
|
|
|
—
|
|
|
(0.4
|
)
|
|
72.8
|
|
|
3.3-18.3%
|
|
|
7.3
|
%
|
||||
Lease financing obligations
|
272.4
|
|
|
—
|
|
|
(1.4
|
)
|
|
271.0
|
|
|
9.0-18.2%
|
|
|
12.0
|
%
|
||||
Total debt
|
$
|
1,055.4
|
|
|
$
|
(3.2
|
)
|
|
$
|
(11.7
|
)
|
|
$
|
1,040.5
|
|
|
|
|
|
||
Current maturities of Term Loan
|
(7.0
|
)
|
|
—
|
|
|
—
|
|
|
(7.0
|
)
|
|
|
|
|
||||||
Current maturities of lease financing obligations
|
(9.6
|
)
|
|
—
|
|
|
—
|
|
|
(9.6
|
)
|
|
|
|
|
||||||
Long-term debt
|
$
|
1,038.8
|
|
|
$
|
(3.2
|
)
|
|
$
|
(11.7
|
)
|
|
$
|
1,023.9
|
|
|
|
|
|
Four Consecutive Fiscal Quarters Ending
|
Maximum Total
Leverage Ratio
|
|
Four Consecutive Fiscal Quarters Ending
|
Maximum Total
Leverage Ratio
|
September 30, 2016
|
3.75 to 1.00
|
|
June 30, 2017
|
3.25 to 1.00
|
December 31, 2016
|
3.50 to 1.00
|
|
September 30, 2017
|
3.25 to 1.00
|
March 31, 2017
|
3.25 to 1.00
|
|
December 31, 2017 and thereafter
|
3.00 to 1.00
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||
(in millions)
|
Book Value
|
|
Fair value
|
|
Book Value
|
|
Fair value
|
||||||||
Term Loan
|
$
|
667.9
|
|
|
$
|
655.5
|
|
|
$
|
669.0
|
|
|
$
|
594.6
|
|
Lease financing obligations
|
271.0
|
|
|
268.3
|
|
|
276.3
|
|
|
282.9
|
|
||||
Second A&R CDA
|
101.6
|
|
|
98.4
|
|
|
117.1
|
|
|
102.1
|
|
||||
Total debt
|
$
|
1,040.5
|
|
|
$
|
1,022.2
|
|
|
$
|
1,062.4
|
|
|
$
|
979.6
|
|
|
Three Months
|
|
Nine Months
|
||||||||||||
(in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service cost
|
$
|
1.6
|
|
|
$
|
1.2
|
|
|
$
|
4.8
|
|
|
$
|
3.6
|
|
Interest cost
|
14.0
|
|
|
14.3
|
|
|
42.0
|
|
|
42.9
|
|
||||
Expected return on plan assets
|
(14.2
|
)
|
|
(15.0
|
)
|
|
(42.4
|
)
|
|
(45.0
|
)
|
||||
Amortization of net pension loss
|
3.5
|
|
|
4.0
|
|
|
10.3
|
|
|
12.0
|
|
||||
Total periodic pension cost
|
$
|
4.9
|
|
|
$
|
4.5
|
|
|
$
|
14.7
|
|
|
$
|
13.5
|
|
(shares in thousands)
|
2016
|
|
Beginning balance
|
32,141
|
|
Issuance of equity awards
|
330
|
|
Ending balance
|
32,471
|
|
|
Three Months
|
|
Nine Months
|
||||||||||||
(dollars in millions, except per share data, shares and stock units in thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Basic and dilutive net income available to common shareholders
|
$
|
13.9
|
|
|
$
|
19.8
|
|
|
$
|
29.0
|
|
|
$
|
24.2
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares outstanding
|
32,466
|
|
|
32,065
|
|
|
32,398
|
|
|
31,602
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Unvested shares and stock units
|
728
|
|
|
556
|
|
|
517
|
|
|
646
|
|
||||
Series B Notes
|
—
|
|
|
—
|
|
|
—
|
|
|
321
|
|
||||
Dilutive weighted average shares outstanding
|
33,194
|
|
|
32,621
|
|
|
32,915
|
|
|
32,569
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
(a)
|
$
|
0.43
|
|
|
$
|
0.62
|
|
|
$
|
0.89
|
|
|
$
|
0.76
|
|
Diluted earnings per share
(a)
|
$
|
0.42
|
|
|
$
|
0.61
|
|
|
$
|
0.88
|
|
|
$
|
0.74
|
|
(in millions)
|
YRC Freight
|
|
Regional
Transportation
|
|
Corporate/
Eliminations
|
|
Consolidated
|
||||||||
As of September 30, 2016
|
|
|
|
|
|
|
|
||||||||
Identifiable assets
|
$
|
1,324.2
|
|
|
$
|
723.7
|
|
|
$
|
(177.3
|
)
|
|
$
|
1,870.6
|
|
As of December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Identifiable assets
|
$
|
1,351.5
|
|
|
$
|
652.9
|
|
|
$
|
(125.0
|
)
|
|
$
|
1,879.4
|
|
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
|
||||||||
External revenue
|
$
|
777.9
|
|
|
$
|
443.7
|
|
|
$
|
(0.3
|
)
|
|
$
|
1,221.3
|
|
Operating income (loss)
|
$
|
20.8
|
|
|
$
|
21.9
|
|
|
$
|
(3.9
|
)
|
|
$
|
38.8
|
|
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
||||||||
External revenue
|
$
|
2,228.6
|
|
|
$
|
1,321.3
|
|
|
$
|
(0.7
|
)
|
|
$
|
3,549.2
|
|
Operating income (loss)
|
$
|
53.3
|
|
|
$
|
64.9
|
|
|
$
|
(8.8
|
)
|
|
$
|
109.4
|
|
Three Months Ended September 30, 2015
|
|
|
|
|
|
|
|
||||||||
External revenue
|
$
|
789.2
|
|
|
$
|
455.7
|
|
|
$
|
—
|
|
|
$
|
1,244.9
|
|
Operating income (loss)
|
$
|
16.7
|
|
|
$
|
33.6
|
|
|
$
|
(2.6
|
)
|
|
$
|
47.7
|
|
Nine Months Ended September 30, 2015
|
|
|
|
|
|
|
|
||||||||
External revenue
|
$
|
2,322.0
|
|
|
$
|
1,367.7
|
|
|
$
|
—
|
|
|
$
|
3,689.7
|
|
Operating income (loss)
|
$
|
39.4
|
|
|
$
|
75.9
|
|
|
$
|
(7.0
|
)
|
|
$
|
108.3
|
|
•
|
the uncertainty in the overall economy, including (without limitation) customer demand in the retail and manufacturing sectors;
|
•
|
the success of our management team in implementing its strategic plan and continued operational and productivity improvements, including (without limitation) our continued ability to meet quality delivery performance standards and our ability to increase volume and yield, and the impact of those improvements on our future liquidity and profitability;
|
•
|
our ability to generate sufficient liquidity to satisfy our cash needs and future cash commitments, including (without limitation) our obligations related to our indebtedness and lease and pension funding requirements, and our ability to achieve increased cash flows through improvement in operations;
|
•
|
our ability to comply with scheduled increases in financial performance-related debt covenants;
|
•
|
our ability to finance the maintenance, acquisition and replacement of revenue equipment and other necessary capital expenditures;
|
•
|
our dependence on our information technology systems in our network operations and the production of accurate information, and the risk of system failure, inadequacy or security breach;
|
•
|
changes in equity and debt markets;
|
•
|
seasonal factors such as severe weather conditions;
|
•
|
the price of fuel;
|
•
|
changes in the cost of fuel or the index upon which we base our fuel surcharge and the effectiveness of our fuel surcharge program in protecting us against fuel price volatility;
|
•
|
competition and competitive pressure on pricing;
|
•
|
expense volatility, including (without limitation) volatility due to changes in purchased transportation service or pricing for purchased transportation;
|
•
|
our ability to comply and the cost of compliance with federal, state, local and foreign laws and regulations, including (without limitation) labor laws and laws and regulations regarding the environment;
|
•
|
a terrorist attack;
|
•
|
labor relations, including (without limitation) our ability to attract and retain qualified drivers, the continued support of our union employees for our strategic plan, the impact of work rules, work stoppages, strikes or other disruptions, our obligations to multi-employer health, welfare and pension plans, wage requirements and employee satisfaction;
|
•
|
the impact of claims and litigation to which we are or may become exposed; and
|
•
|
other risks and contingencies, including (without limitation) the risk factors that are included in our reports filed with the SEC, including those described under “Risk Factors” in our annual report on Form 10-K and quarterly reports on Form 10-Q, including this quarterly report.
|
•
|
Operating Revenue:
Our operating revenue has two primary components: volume (commonly evaluated using number of shipments and weight per shipment) and yield or price (commonly evaluated on a dollar-per-hundred weight basis and a dollar-per-shipment basis). Yield includes fuel surcharge revenue, which is common in the trucking industry and represents an amount charged to customers that adjusts with changing fuel prices. We base our fuel surcharges on a published national index and adjust them weekly. Rapid material changes in the index or our cost of fuel can positively or negatively impact our revenue and operating income versus prior periods, as there is a lag in our adjustment of base rates in response to changes in fuel surcharge. We believe that fuel surcharge is an accepted and important component of the overall pricing of our services to our customers. Without an industry accepted fuel surcharge program, our base pricing for our transportation services would require numerous changes. We believe the distinction between base rates and fuel surcharge has blurred over time, and it is impractical to clearly separate all the different factors that influence the price that our customers are willing to pay. In general, under our present fuel surcharge program, we believe rising fuel costs are beneficial to us and falling fuel costs are detrimental to us.
|
•
|
Operating Income (Loss):
Operating income (loss) is our operating revenue less operating expenses. Our consolidated operating income (loss) includes certain corporate charges that are not allocated to our YRC Freight and Regional Transportation reporting segments.
|
•
|
Operating Ratio:
Operating ratio is a common operating performance metric used in the trucking industry. It 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.
|
•
|
Non-GAAP Financial Measures:
We use certain non-GAAP financial measures to assess our performance. These include EBITDA and Adjusted EBITDA:
|
◦
|
EBITDA:
a non-GAAP measure that reflects our earnings before interest, taxes, depreciation, and amortization expense. EBITDA is used for internal management purposes as a financial measure that reflects our core operating performance.
|
◦
|
Adjusted EBITDA:
a non-GAAP measure that reflects our earnings before interest, taxes, depreciation, and amortization expense, and further adjusts for letter of credit fees, equity-based compensation expense, net gains or losses on property disposals, restructuring professional fees, non-recurring consulting fees, expenses associated with certain lump sum payments to our IBT employees and the gains or losses from permitted dispositions, discontinued operations, among other items, as defined in our credit facilities. Adjusted EBITDA is used for internal management purposes as a financial measure that reflects our core operating performance, to measure compliance with financial covenants in our credit facilities and to calculate certain executive bonus compensation.
|
◦
|
EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or fund principal payments on our outstanding debt;
|
◦
|
Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to fund restructuring professional fees, nonrecurring consulting fees, letter of credit fees, service interest, principal payments on our outstanding debt or lump sum payments to our IBT employees required under the Memorandum of Understanding;
|
◦
|
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;
|
◦
|
Equity-based compensation is an element of our long-term incentive compensation package, although Adjusted EBITDA excludes employee equity-based compensation expense when presenting our ongoing operating performance for a particular period; and
|
◦
|
Other companies in our industry may calculate Adjusted EBITDA differently than we do, potentially limiting its usefulness as a comparative measure.
|
|
Third Quarter
|
|
First Three Quarters
|
||||||||||||||||
(in millions)
|
2016
|
|
2015
|
|
Percent Change
|
|
2016
|
|
2015
|
|
Percent Change
|
||||||||
Operating revenue
|
$
|
1,221.3
|
|
|
$
|
1,244.9
|
|
|
(1.9)%
|
|
$
|
3,549.2
|
|
|
$
|
3,689.7
|
|
|
(3.8)%
|
Operating income
|
$
|
38.8
|
|
|
$
|
47.7
|
|
|
(18.7)%
|
|
$
|
109.4
|
|
|
$
|
108.3
|
|
|
1.0%
|
Nonoperating expenses, net
|
$
|
24.4
|
|
|
$
|
21.2
|
|
|
15.1%
|
|
$
|
77.0
|
|
|
$
|
73.7
|
|
|
4.5%
|
Net income
|
$
|
13.9
|
|
|
$
|
19.8
|
|
|
(29.8)%
|
|
$
|
29.0
|
|
|
$
|
24.2
|
|
|
19.8%
|
•
|
A
$10.2 million
, or
4.7%
,
decrease
in operating expenses and supplies was primarily the result of an $8.9 million decrease in fuel expense in the
third quarter
of
2016
, as compared to the
third quarter
of
2015
. This decrease was largely driven by lower fuel prices on a per gallon basis, as well as fewer miles driven. Additionally, vehicle maintenance expense decreased by $4.1 million due to lower maintenance costs per mile and fewer miles driven.
|
•
|
A
$10.0 million
, or
1.4%
,
decrease
in salaries, wages and employee benefits was primarily attributed to an $8.1 million decrease in bonus compensation expense and a $3.9 million decrease in wages, which is primarily due to a decrease in shipping volumes, which required fewer employee hours to process freight. Offsetting this decrease is a $6.0 million increase in employee benefit costs.
|
•
|
A
$7.2 million
, or
4.8%
, increase in purchased transportation was primarily attributed to a $10.7 million increase in over-the-road and local purchased transportation expense and a $4.2 million increase in vehicle rent expense due to higher usage of operating leases for revenue equipment. Offsetting this increase is a $6.7 million decrease in rail purchased transportation expense due to a reduction in rail miles and lower rail rates, which is principally related to lower fuel surcharges paid to our providers.
|
•
|
An
$82.4 million
, or
12.2%
,
decrease
in operating expenses and supplies was primarily the result of a $66.4 million decrease in fuel expense in the
first three quarters
of
2016
, as compared to the
first three quarters
of 2015. This decrease was largely driven by lower fuel prices on a per gallon basis, as well as fewer miles driven. Additionally, vehicle maintenance expense decreased by $13.5 million due to lower maintenance costs per mile and fewer miles driven.
|
•
|
A
$22.0 million
, or
5.1%
, decrease in purchased transportation was primarily due to a $35.5 million decrease in rail purchased transportation expense due to a reduction in rail miles and lower rail rates, which is principally related to lower fuel surcharges paid to our providers, partially offset by an $11.7 million increase in vehicle rent expense due to higher usage of operating leases for revenue equipment.
|
•
|
A
$16.0 million
, or
0.7%
,
decrease
in salaries, wages and employee benefits was primarily attributed to a $21.0 million decrease in wages primarily driven by a decrease in shipping volumes, which required fewer employee hours to process freight, a $9.3 million decrease in bonus compensation expense, and a $3.7 million decrease in workers’ compensation expense due to improvements in current year claim frequency. These decreases were partially offset by a $17.5 million increase in employee benefit costs.
|
•
|
A
$4.4 million
, or
2.2%
,
decrease
in other operating expenses was primarily driven by a $3.7 million decrease in cargo claims expense due to improved frequency of claims in the
first three quarters
of 2016, as compared to the
first three quarters
of 2015.
|
•
|
Net gains from excess property sales in the
first three quarters
of
2016
were $11.2 million compared to losses of $1.5 million in the
first three quarters
of
2015
.
|
•
|
YRC Freight
is the reporting segment that focuses on longer haul business opportunities with national, regional and international services. YRC Freight provides for the movement of industrial, commercial and retail goods, primarily through centralized management. This reporting segment includes our LTL subsidiary YRC Freight and YRC Reimer, a subsidiary located in Canada that specializes in shipments into, across and out of Canada. In addition to the United States and Canada, YRC Freight also serves parts of Mexico, Puerto Rico and Guam.
|
•
|
Regional Transportation
is the reporting segment for our transportation service providers focused on business opportunities in the regional and next-day delivery markets. Regional Transportation is comprised of Holland, New Penn and Reddaway. These companies each provide regional, next-day ground services in their respective regions through a network of facilities located across the United States, Canada, Mexico and Puerto Rico.
|
|
Third Quarter
|
|
First Three Quarters
|
||||||||||||||||
(in millions)
|
2016
|
|
2015
|
|
Percent Change
|
|
2016
|
|
2015
|
|
Percent Change
|
||||||||
Operating revenue
|
$
|
777.9
|
|
|
$
|
789.2
|
|
|
(1.4)%
|
|
$
|
2,228.6
|
|
|
$
|
2,322.0
|
|
|
(4.0)%
|
Operating income
|
$
|
20.8
|
|
|
$
|
16.7
|
|
|
24.6%
|
|
$
|
53.3
|
|
|
$
|
39.4
|
|
|
35.3%
|
Operating ratio
(a)
|
97.3
|
%
|
|
97.9
|
%
|
|
0.6 pp
|
|
97.6
|
%
|
|
98.3
|
%
|
|
0.7 pp
|
(a)
|
pp represents the change in percentage points
|
|
Third Quarter
|
|
|
|||||||
|
2016
|
|
2015
|
|
Percent Change
(b)
|
|||||
Workdays
|
64.0
|
|
|
64.0
|
|
|
|
|||
|
|
|
|
|
|
|||||
Total picked up revenue (in millions)
(a)
|
$
|
763.6
|
|
|
$
|
784.4
|
|
|
(2.6
|
)%
|
Total tonnage (in thousands)
|
1,620
|
|
|
1,641
|
|
|
(1.3
|
)%
|
||
Total tonnage per day (in thousands)
|
25.31
|
|
|
25.64
|
|
|
(1.3
|
)%
|
||
Total shipments (in thousands)
|
2,678
|
|
|
2,740
|
|
|
(2.3
|
)%
|
||
Total shipments per day (in thousands)
|
41.84
|
|
|
42.82
|
|
|
(2.3
|
)%
|
||
Total picked up revenue per hundred weight
|
$
|
23.57
|
|
|
$
|
23.90
|
|
|
(1.4
|
)%
|
Total picked up revenue per hundred weight (excluding fuel surcharge)
|
$
|
21.31
|
|
|
$
|
21.24
|
|
|
0.3
|
%
|
Total picked up revenue per shipment
|
$
|
285
|
|
|
$
|
286
|
|
|
(0.4
|
)%
|
Total picked up revenue per shipment (excluding fuel surcharge)
|
$
|
258
|
|
|
$
|
254
|
|
|
1.3
|
%
|
Total weight per shipment (in pounds)
|
1,210
|
|
|
1,198
|
|
|
1.0
|
%
|
|
Third Quarter
|
||||||
(in millions)
|
2016
|
|
2015
|
||||
(a)
Reconciliation of operating revenue to total picked up revenue:
|
|
|
|
||||
Operating revenue
|
$
|
777.9
|
|
|
$
|
789.2
|
|
Change in revenue deferral and other
|
(14.3
|
)
|
|
(4.8
|
)
|
||
Total picked up revenue
|
$
|
763.6
|
|
|
$
|
784.4
|
|
•
|
A $12.5 million, or 8.8%, decrease in total operating expenses and supplies was primarily the result of a $6.0 million decrease in fuel expense, which was largely driven by lower fuel prices on a per gallon basis and fewer miles driven. Additionally, vehicle maintenance expense decreased by $4.6 million due to lower maintenance costs per mile and fewer miles driven in the
third quarter
of
2016
, as compared to the
third quarter
of
2015
.
|
•
|
A $3.3 million, or 0.7%, decrease in salaries, wages and employee benefits was driven by a $4.7 million decrease in wages primarily driven by a decrease in shipping volumes, which required fewer employee hours to process freight, and improved employee productivity, partially offset by a $3.3 million increase in employee benefit costs, in the
third quarter
of
2016
, as compared to the
third quarter
of
2015
.
|
•
|
A $3.3 million, or 2.8%, increase in purchased transportation was primarily due to a $10.4 million increase in over-the-road and local purchased transportation expense, offset by a $6.7 million decrease in rail purchased transportation expense due to a reduction in rail miles and lower rail rates, which is principally related to lower fuel surcharges paid to our providers, in the
third quarter
of
2016
, as compared to the
third quarter
of
2015
.
|
|
First Three Quarters
|
|
|
|||||||
|
2016
|
|
2015
|
|
Percent Change
(b)
|
|||||
Workdays
|
191.5
|
|
|
190.0
|
|
|
|
|||
|
|
|
|
|
|
|||||
Total picked up revenue (in millions)
(a)
|
$
|
2,208.9
|
|
|
$
|
2,313.9
|
|
|
(4.5
|
)%
|
Total tonnage (in thousands)
|
4,701
|
|
|
4,892
|
|
|
(3.9
|
)%
|
||
Total tonnage per day (in thousands)
|
24.55
|
|
|
25.75
|
|
|
(4.7
|
)%
|
||
Total shipments (in thousands)
|
7,875
|
|
|
8,135
|
|
|
(3.2
|
)%
|
||
Total shipments per day (in thousands)
|
41.12
|
|
|
42.81
|
|
|
(3.9
|
)%
|
||
Total picked up revenue per hundred weight
|
$
|
23.49
|
|
|
$
|
23.65
|
|
|
(0.7
|
)%
|
Total picked up revenue per hundred weight (excluding fuel surcharge)
|
$
|
21.34
|
|
|
$
|
20.87
|
|
|
2.3
|
%
|
Total picked up revenue per shipment
|
$
|
280
|
|
|
$
|
284
|
|
|
(1.4
|
)%
|
Total picked up revenue per shipment (excluding fuel surcharge)
|
$
|
255
|
|
|
$
|
251
|
|
|
1.5
|
%
|
Total weight per shipment (in pounds)
|
1,194
|
|
|
1,203
|
|
|
(0.7
|
)%
|
|
First Three Quarters
|
||||||
(in millions)
|
2016
|
|
2015
|
||||
(a)
Reconciliation of operating revenue to total picked up revenue:
|
|
|
|
||||
Operating revenue
|
$
|
2,228.6
|
|
|
$
|
2,322.0
|
|
Change in revenue deferral and other
|
(19.7
|
)
|
|
(8.1
|
)
|
||
Total picked up revenue
|
$
|
2,208.9
|
|
|
$
|
2,313.9
|
|
•
|
A $51.2 million, or 11.9%, decrease in total operating expenses and supplies was primarily the result of a $37.7 million decrease in fuel expense, which was largely driven by lower fuel prices on a per gallon basis and fewer miles driven. Additionally, vehicle maintenance expense decreased by $10.0 million due to lower maintenance costs per mile and fewer miles driven in the
first three quarters
of
2016
, as compared to the
first three quarters
of
2015
. These expense reductions were partially offset by a $4.1 million favorable legal settlement recorded in the
first three quarters
of
2015
, with no corresponding event in the
first three quarters
of
2016
.
|
•
|
A $26.5 million, or 7.8%, decrease in purchased transportation was primarily due to a $35.5 million decrease in rail purchased transportation expense due to a reduction in rail miles and lower rail rates, which is principally related to lower fuel surcharges paid to our providers, offset by a $5.8 million increase in local purchased transportation expense, in the
first three quarters
of
2016
, as compared to the
first three quarters
of
2015
.
|
•
|
A $14.0 million, or 1.1%, decrease in salaries, wages and employee benefits was driven by a $19.9 million decrease in wages primarily driven by a decrease in shipping volumes, which required fewer employee hours to process freight, and improved employee productivity, partially offset by a $9.4 million increase in employee benefit costs, in the
first three quarters
of
2016
, as compared to the
first three quarters
of
2015
.
|
•
|
A $0.7 million, or 0.6%, increase in other operating expense was primarily driven by a $5.5 million increase in our liability claims expense as a result of unfavorable development of prior year outstanding claims in the
first three quarters
of 2016, as compared to the
first three quarters
of 2015. This was partially offset by a $3.0 million decrease in cargo claims expense due to improved frequency of claims in the
first three quarters
of 2016, as compared to the
first three quarters
of 2015.
|
•
|
Net gains from excess property sales in the
first three quarters
of 2016 were $12.0 million compared to losses of $1.7 million in the
first three quarters
of 2015.
|
|
Third Quarter
|
|
First Three Quarters
|
||||||||||||||||||
(in millions)
|
2016
|
|
2015
|
|
Percent Change
|
|
2016
|
|
2015
|
|
Percent Change
|
||||||||||
Operating revenue
|
$
|
443.7
|
|
|
$
|
455.7
|
|
|
(2.6
|
)%
|
|
$
|
1,321.3
|
|
|
$
|
1,367.7
|
|
|
(3.4
|
)%
|
Operating income
|
$
|
21.9
|
|
|
$
|
33.6
|
|
|
(34.8
|
)%
|
|
$
|
64.9
|
|
|
$
|
75.9
|
|
|
(14.5
|
)%
|
Operating ratio
(a)
|
95.1
|
%
|
|
92.6
|
%
|
|
(2.5
|
) pp
|
|
95.1
|
%
|
|
94.5
|
%
|
|
(0.6
|
) pp
|
(a)
|
pp represents the change in percentage points
|
|
Third Quarter
|
|
|
|||||||
|
2016
|
|
2015
|
|
Percent Change
(b)
|
|||||
Workdays
|
63.0
|
|
|
64.0
|
|
|
|
|||
|
|
|
|
|
|
|||||
Total picked up revenue (in millions)
(a)
|
$
|
443.4
|
|
|
$
|
455.9
|
|
|
(2.8
|
)%
|
Total tonnage (in thousands)
|
1,914
|
|
|
1,974
|
|
|
(3.1
|
)%
|
||
Total tonnage per day (in thousands)
|
30.38
|
|
|
30.85
|
|
|
(1.5
|
)%
|
||
Total shipments (in thousands)
|
2,622
|
|
|
2,672
|
|
|
(1.9
|
)%
|
||
Total shipments per day (in thousands)
|
41.62
|
|
|
41.76
|
|
|
(0.3
|
)%
|
||
Total picked up revenue per hundred weight
|
$
|
11.58
|
|
|
$
|
11.55
|
|
|
0.3
|
%
|
Total picked up revenue per hundred weight (excluding fuel surcharge)
|
$
|
10.48
|
|
|
$
|
10.32
|
|
|
1.5
|
%
|
Total picked up revenue per shipment
|
$
|
169
|
|
|
$
|
171
|
|
|
(0.9
|
)%
|
Total picked up revenue per shipment (excluding fuel surcharge)
|
$
|
153
|
|
|
$
|
153
|
|
|
0.3
|
%
|
Total weight per shipment (in pounds)
|
1,460
|
|
|
1,478
|
|
|
(1.2
|
)%
|
|
Third Quarter
|
||||||
(in millions)
|
2016
|
|
2015
|
||||
(a)
Reconciliation of operating revenue to total picked up revenue:
|
|
|
|
||||
Operating revenue
|
$
|
443.7
|
|
|
$
|
455.7
|
|
Change in revenue deferral and other
|
(0.3
|
)
|
|
0.2
|
|
||
Total picked up revenue
|
$
|
443.4
|
|
|
$
|
455.9
|
|
•
|
A $3.0 million, or 3.6%, decrease in operating expenses and supplies was primarily the result of a $2.9 million decrease in fuel expense, which was largely driven by lower fuel prices on a per gallon basis and fewer miles driven in the
third quarter
of
2016
compared to the
third quarter
of 2015.
|
•
|
A $2.9 million, or 1.1%, decrease in salaries, wages and employee benefits was primarily driven by a $4.4 million decrease in bonus compensation expense, offset by a $2.3 million increase in employee benefit costs in the
third quarter
of 2016, as compared to the
third quarter
of 2015.
|
•
|
A $4.2 million, or 13.4%, increase in purchased transportation was primarily due to a $3.9 million increase in vehicle rent expense due to higher usage of operating leases for revenue equipment, in the
third quarter
of 2016, as compared to the
third quarter
of 2015.
|
|
First Three Quarters
|
|
|
|||||||
|
2016
|
|
2015
|
|
Percent Change
(b)
|
|||||
Workdays
|
191.5
|
|
|
191.5
|
|
|
|
|||
|
|
|
|
|
|
|||||
Total picked up revenue (in millions)
(a)
|
$
|
1,323.0
|
|
|
$
|
1,367.6
|
|
|
(3.3
|
)%
|
Total tonnage (in thousands)
|
5,794
|
|
|
5,948
|
|
|
(2.6
|
)%
|
||
Total tonnage per day (in thousands)
|
30.26
|
|
|
31.06
|
|
|
(2.6
|
)%
|
||
Total shipments (in thousands)
|
7,876
|
|
|
7,987
|
|
|
(1.4
|
)%
|
||
Total shipments per day (in thousands)
|
41.13
|
|
|
41.71
|
|
|
(1.4
|
)%
|
||
Total picked up revenue per hundred weight
|
$
|
11.42
|
|
|
$
|
11.50
|
|
|
(0.7
|
)%
|
Total picked up revenue per hundred weight (excluding fuel surcharge)
|
$
|
10.40
|
|
|
$
|
10.20
|
|
|
1.9
|
%
|
Total picked up revenue per shipment
|
$
|
168
|
|
|
$
|
171
|
|
|
(1.9
|
)%
|
Total picked up revenue per shipment (excluding fuel surcharge)
|
$
|
153
|
|
|
$
|
152
|
|
|
0.7
|
%
|
Total weight per shipment (in pounds)
|
1,471
|
|
|
1,489
|
|
|
(1.2
|
)%
|
|
First Three Quarters
|
||||||
(in millions)
|
2016
|
|
2015
|
||||
(a)
Reconciliation of operating revenue to total picked up revenue:
|
|
|
|
||||
Operating revenue
|
$
|
1,321.3
|
|
|
$
|
1,367.7
|
|
Change in revenue deferral and other
|
1.7
|
|
|
(0.1
|
)
|
||
Total picked up revenue
|
$
|
1,323.0
|
|
|
$
|
1,367.6
|
|
•
|
A $35.4 million, or 13.0%, decrease in operating expenses and supplies was primarily the result of a $28.8 million decrease in fuel expense, which was largely driven by lower fuel prices on a per gallon basis and fewer miles driven. Additionally, vehicle maintenance expense decreased by $3.5 million due to lower maintenance costs and fewer miles driven and professional service fees decreased by $3.4 million in the
first three quarters
of
2016
, as compared to the
first three quarters
of
2015
.
|
•
|
A $5.2 million, or 6.6%, decrease in other operating expense was primarily driven by a $2.9 million decrease in our liability claims expense as a result of more favorable development of prior year claims in the
first three quarters
of
2016
, as compared to the
first three quarters
of
2015
.
|
•
|
A $5.1 million, or 5.5%, increase in purchased transportation was primarily due to a $9.4 million increase in vehicle rent expense due to higher usage of operating leases for revenue equipment, partially offset by a $3.9 million decrease in purchased transportation expense due to a reduction in miles and rates, in the
first three quarters
of 2016, as compared to the
first three quarters
of 2015.
|
•
|
A $0.8 million, or 0.1%, increase in salaries, wages and employee benefits was driven by a $4.8 million increase in employee benefit costs, offset by a $1.4 million decrease in bonus compensation expense and $1.1 million decrease in wages. The decrease in wages was primarily due to the decrease in shipping volumes and partially offset by general wage rate increases in the
first three quarters
of
2016
, as compared to the
first three quarters
of
2015
.
|
|
Third Quarter
|
|
First Three Quarters
|
|
Trailing Twelve Months Ended
|
|
Trailing Twelve Months Ended
|
||||||||||||||||
(in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||||||
Reconciliation of net income to Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
$
|
13.9
|
|
|
$
|
19.8
|
|
|
$
|
29.0
|
|
|
$
|
24.2
|
|
|
$
|
5.5
|
|
|
$
|
30.4
|
|
Interest expense, net
|
25.5
|
|
|
25.6
|
|
|
77.6
|
|
|
80.9
|
|
|
103.8
|
|
|
108.1
|
|
||||||
Income tax expense (benefit)
|
0.5
|
|
|
6.7
|
|
|
3.4
|
|
|
10.4
|
|
|
(12.1
|
)
|
|
10.7
|
|
||||||
Depreciation and amortization
|
40.3
|
|
|
40.7
|
|
|
119.5
|
|
|
123.6
|
|
|
159.6
|
|
|
164.3
|
|
||||||
EBITDA
|
80.2
|
|
|
92.8
|
|
|
229.5
|
|
|
239.1
|
|
|
256.8
|
|
|
313.5
|
|
||||||
Adjustments for Term Loan Agreement:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(Gains) losses on property disposals, net
|
0.2
|
|
|
0.9
|
|
|
(11.2
|
)
|
|
1.5
|
|
|
(10.8
|
)
|
|
(4.3
|
)
|
||||||
Letter of credit expense
|
1.7
|
|
|
2.2
|
|
|
6.0
|
|
|
6.6
|
|
|
8.2
|
|
|
8.9
|
|
||||||
Restructuring professional fees
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||||
Nonrecurring consulting fees
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
5.1
|
|
|
—
|
|
|
5.1
|
|
||||||
Permitted dispositions and other
|
2.2
|
|
|
—
|
|
|
1.8
|
|
|
0.3
|
|
|
1.9
|
|
|
0.3
|
|
||||||
Equity-based compensation expense
|
1.5
|
|
|
2.8
|
|
|
6.0
|
|
|
6.5
|
|
|
8.0
|
|
|
9.7
|
|
||||||
Amortization of ratification bonus
|
—
|
|
|
4.6
|
|
|
4.6
|
|
|
14.4
|
|
|
9.1
|
|
|
19.6
|
|
||||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
||||||
Non-union pension settlement charge
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28.7
|
|
|
—
|
|
||||||
Other, net
(a)
|
(0.3
|
)
|
|
(3.6
|
)
|
|
3.1
|
|
|
(7.0
|
)
|
|
3.9
|
|
|
(9.3
|
)
|
||||||
Adjusted EBITDA
|
$
|
85.5
|
|
|
$
|
99.1
|
|
|
$
|
239.8
|
|
|
$
|
267.3
|
|
|
$
|
305.8
|
|
|
$
|
344.3
|
|
|
Third Quarter
|
|
First Three Quarters
|
||||||||||||
(in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Adjusted EBITDA by segment:
|
|
|
|
|
|
|
|
||||||||
YRC Freight
|
$
|
45.3
|
|
|
$
|
45.2
|
|
|
$
|
119.3
|
|
|
$
|
130.4
|
|
Regional Transportation
|
40.2
|
|
|
52.9
|
|
|
121.3
|
|
|
135.7
|
|
||||
Corporate and other
|
—
|
|
|
1.0
|
|
|
(0.8
|
)
|
|
1.2
|
|
||||
Adjusted EBITDA
|
$
|
85.5
|
|
|
$
|
99.1
|
|
|
$
|
239.8
|
|
|
$
|
267.3
|
|
|
Third Quarter
|
|
First Three Quarters
|
||||||||||||
YRC Freight segment (in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Reconciliation of operating income to Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
Operating income
|
$
|
20.8
|
|
|
$
|
16.7
|
|
|
$
|
53.3
|
|
|
$
|
39.4
|
|
Depreciation and amortization
|
22.9
|
|
|
23.3
|
|
|
67.9
|
|
|
70.5
|
|
||||
(Gains) losses on property disposals, net
|
—
|
|
|
1.1
|
|
|
(12.0
|
)
|
|
1.7
|
|
||||
Letter of credit expense
|
1.1
|
|
|
1.6
|
|
|
3.9
|
|
|
4.6
|
|
||||
Nonrecurring consulting fees
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
5.1
|
|
||||
Amortization of ratification bonus
|
—
|
|
|
3.0
|
|
|
3.0
|
|
|
9.3
|
|
||||
Other, net
(a)
|
0.5
|
|
|
0.3
|
|
|
3.2
|
|
|
(0.2
|
)
|
||||
Adjusted EBITDA
|
$
|
45.3
|
|
|
$
|
45.2
|
|
|
$
|
119.3
|
|
|
$
|
130.4
|
|
|
Third Quarter
|
|
First Three Quarters
|
||||||||||||
Regional Transportation segment (in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Reconciliation of operating income to Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
Operating income
|
$
|
21.9
|
|
|
$
|
33.6
|
|
|
$
|
64.9
|
|
|
$
|
75.9
|
|
Depreciation and amortization
|
17.4
|
|
|
17.4
|
|
|
51.6
|
|
|
53.2
|
|
||||
(Gains) losses on property disposals, net
|
0.3
|
|
|
(0.2
|
)
|
|
0.9
|
|
|
—
|
|
||||
Letter of credit expense
|
0.6
|
|
|
0.5
|
|
|
2.0
|
|
|
1.5
|
|
||||
Amortization of ratification bonus
|
—
|
|
|
1.6
|
|
|
1.6
|
|
|
5.1
|
|
||||
Other, net
(a)
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
40.2
|
|
|
$
|
52.9
|
|
|
$
|
121.3
|
|
|
$
|
135.7
|
|
|
Third Quarter
|
|
First Three Quarters
|
||||||||||||
Corporate and other (in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Reconciliation of operating loss to Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
Operating loss
|
$
|
(3.9
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
(8.8
|
)
|
|
$
|
(7.0
|
)
|
Depreciation and amortization
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
||||
Gains on property disposals, net
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
(0.2
|
)
|
||||
Letter of credit expense
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
0.5
|
|
||||
Restructuring professional fees
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||
Permitted dispositions and other
|
2.2
|
|
|
—
|
|
|
1.8
|
|
|
0.3
|
|
||||
Equity-based compensation expense
|
1.5
|
|
|
2.8
|
|
|
6.0
|
|
|
6.5
|
|
||||
Other, net
(a)
|
0.3
|
|
|
0.5
|
|
|
0.2
|
|
|
1.0
|
|
||||
Adjusted EBITDA
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
(0.8
|
)
|
|
$
|
1.2
|
|
|
Payments Due by Period
|
|
|
||||||||||||||||
(in millions)
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
|
Total
|
||||||||||
Balance sheet obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
ABL Facility
(a)
|
$
|
7.1
|
|
|
$
|
11.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18.7
|
|
Term Loan
(b)
|
62.2
|
|
|
753.0
|
|
|
—
|
|
|
—
|
|
|
815.2
|
|
|||||
Lease financing obligations
(c)
|
42.2
|
|
|
70.6
|
|
|
18.8
|
|
|
21.0
|
|
|
152.6
|
|
|||||
Pension deferral obligations
(d)
|
7.6
|
|
|
15.3
|
|
|
104.1
|
|
|
—
|
|
|
127.0
|
|
|||||
Workers’ compensation, property damage and liability claims obligations
(e)
|
101.1
|
|
|
131.1
|
|
|
58.0
|
|
|
100.7
|
|
|
390.9
|
|
|||||
Operating leases
(f)
|
102.4
|
|
|
143.4
|
|
|
56.5
|
|
|
21.5
|
|
|
323.8
|
|
|||||
Other contractual obligations
(g)
|
13.9
|
|
|
4.7
|
|
|
0.3
|
|
|
—
|
|
|
18.9
|
|
|||||
Capital expenditures
(h)
|
23.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23.6
|
|
|||||
Total contractual obligations
|
$
|
360.1
|
|
|
$
|
1,129.7
|
|
|
$
|
237.7
|
|
|
$
|
143.2
|
|
|
$
|
1,870.7
|
|
(a)
|
The ABL Facility includes future payments for the letter of credit and unused line fees and are not included on the Company’s consolidated balance sheets.
|
(b)
|
The Term Loan includes principal and interest payments, but excludes unamortized discounts.
|
(c)
|
The lease financing obligations include interest payments of
$103.2 million
and principal payments of
$49.4 million
. The remaining principal obligation is offset by the estimated book value of leased property at the expiration date of each lease agreement.
|
(d)
|
Pension deferral obligations includes principal and interest payments on the Second A&R CDA.
|
(e)
|
The workers’ compensation, property damage and liability claims obligations represent our estimate of future payments for these obligations, not all of which are contractually required.
|
(f)
|
Operating leases represent future payments, which include interest, under contractual lease arrangements primarily for revenue equipment and are not included on the Company’s consolidated balance sheets.
|
(g)
|
Other contractual obligations includes future service agreements and certain maintenance agreements and are not included on the Company’s consolidated balance sheets.
|
(h)
|
Capital expenditure obligations primarily includes noncancelable purchase orders for revenue equipment not yet delivered and are not included in the Company’s consolidated balance sheets.
|
|
Amount of Commitment Expiration Per Period
|
|
|
||||||||||||||||
(in millions)
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
|
Total
|
||||||||||
Unused line of credit
|
|
|
|
|
|
|
|
|
|
||||||||||
ABL Facility
(a)
|
$
|
—
|
|
|
$
|
55.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
55.0
|
|
Letters of credit
(b)
|
—
|
|
|
357.6
|
|
|
—
|
|
|
—
|
|
|
357.6
|
|
|||||
Surety bonds
(c)
|
134.1
|
|
|
1.6
|
|
|
0.1
|
|
|
—
|
|
|
135.8
|
|
|||||
Total commercial commitments
|
$
|
134.1
|
|
|
$
|
414.2
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
548.4
|
|
(a)
|
As of
September 30, 2016
, we held
$43.0 million
in restricted escrow, which represents cash collateral on our ABL Facility. Managed Accessibility was
$13.7 million
, which represents maximum availability of
$55.0 million
less the lower of 10% of the borrowing base or the facility size.
|
(b)
|
Letters of credit outstanding are generally required as collateral to support self-insurance programs and do not represent additional liabilities as the underlying self-insurance accruals are already included in our consolidated balance sheets.
|
(c)
|
Surety bonds are generally required for workers’ compensation to support self-insurance programs, which include certain bonds that do not have an expiration date but are redeemable on demand, and do not represent additional liabilities as the underlying self-insurance accruals are already included in our consolidated balance sheets.
|
31.1*
|
Certification of James L. Welch filed pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2*
|
Certification of Jamie G. Pierson filed pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1*
|
Certification of James L. Welch furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2*
|
Certification of Jamie G. Pierson furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101.INS*
|
XBRL Instance Document
|
101.SCH*
|
XBRL Taxonomy Extension Schema
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase
|
*
|
Indicates documents filed herewith.
|
|
|
YRC WORLDWIDE INC.
|
|
|
|
|
|
|
Date: October 27, 2016
|
|
/s/ James L. Welch
|
|
|
James L. Welch
|
|
|
Chief Executive Officer
|
|
|
|
Date: October 27, 2016
|
|
/s/ Jamie G. Pierson
|
|
|
Jamie G. Pierson
|
|
|
Executive Vice President and
|
|
|
Chief Financial Officer
|
1 Year YRC Worldwide Chart |
1 Month YRC Worldwide Chart |
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