Trucking Freight

YRC remain confident we will have a successful note exchange that can significantly reduce our debt and improve liquidity. And we continue to receive solid support from our stakeholders, including our lender group.

We also continue to receive questions whenever an analyst casts doubts on the YRCW debt-for-equity offer. The questions are to be expected: If you read or hear about a critical analyst report, you want to know what’s really happening.

Case in point: An analyst with R.W. Baird & Co. recently said it’s unlikely that YRCW will achieve a 95% agreement rate with bondholders by Dec. 8. While that analysis made for interesting headlines, the real story goes much deeper. For example, the report notes that if 95% of the bondholders don’t sign on, we still have other options, such as lowering the percentage requirement.

With these types of note exchange offers, changes–and the resulting deadline extensions–are typical. It’s also typical for note holders to wait until the deadline before taking official action. There may be other extensions announced before completion of this phase. In every event, however, we will bring you updates on Insight in a timely and transparent manner. It’s part of our Confidence Delivered(TM) promise to you.

YRC Worldwide Inc., a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of successful brands including YRC, YRC Reimer, YRC Logistics, New Penn, Holland, Reddaway and YRC Glen Moore. Building on the strength of its heritage brands, Yellow Transportation and Roadway, the enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally.

Story provided by a US apparel manufacturer:

I thank Wendy for reaffirming my choice of Yellow Freight. It’s one thing when a transportation provider drops the ball; it’s how you react that defines you.

One recent morning, a shipment scheduled for a 7:30 a.m. delivery at a warehouse-style retail outlet was not in sight. That meant the store would not accept the shipment until the following day, and I would lose the day’s sales and have to pay for the day’s floor space.

I called Wendy at YRC as soon as I learned of the problem. Wendy located the shipment and learned it could be delivered around 9:30 a.m. Then she called the store manager. I’m not sure what she said, but she persuaded him to allow the merchandise to be delivered later that morning.

Taking no chances with the delivery, Wendy jumped in her car and drove to the store location, arriving at the same time as the driver. I was amazed. She called me from the store, offering to help unload the racks and get the merchandise set up, while apologizing and reaffirming that the situation would be addressed internally at YRC.

Wendy truly cares about my business and that makes a huge difference to me.

While all our YRC employees work hard to ensure shipments are delivered on time and damage-free, unfortunately errors occasionally occur. When that happens we work hard to make it right. That’s part of confidence delivered.

OVERLAND PARK, Kan., June 18 /PRNewswire-FirstCall/ — YRC Worldwide Inc. (Nasdaq: YRCW) today clarified that the amendment it finalized on June 17, 2009 to its revolving credit facility with its lenders has the same terms in regards to total liquidity and capacity under the facility that existed prior to yesterday’s amendment. The new amendment does give the company immediate access to the escrow funds of $73 million by means of revolver capacity that can be borrowed at any time without approval from the lenders so long as the company’s cash is below $150 million. The $150 million is a new maximum of cash and cash equivalents that was mutually agreed to by the company and the lender group and set well above the company’s average daily cash usage. The company’s total liquidity includes its cash balance in addition to the availability under its credit facilities, which in total was $242 million at May 31, 2009.

“Yesterday’s amendment reflects the continued support of our lender group as we further implement our strategic actions both operationally and financially,” said Tim Wicks, Executive Vice President and CFO of YRC Worldwide. “We now have immediate access to the escrow funds, which is a month before the original agreement, and there is not an immediate reduction to our capacity.”

The company did not pay any fees to the lender group associated with this amendment.

YRC Worldwide Inc., a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of successful brands including YRC, YRC Reimer, YRC Logistics, New Penn, Holland, Reddaway and YRC Glen Moore. Building on the strength of its heritage brands, Yellow Transportation and Roadway, the enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. Headquartered in Overland Park, Kansas, YRC Worldwide< employs approximately 49,000 people.

RiskMetrics also recommended that shareholders reject YRC’s nominees for the board compensation committee, saying they acted poorly in providing for tax gross-up on YRC CEO Bill Zollars’, previously President of Yellow Transportation, use of corporate aircraft, an amount less than $10,000. A gross-up is a payment to cover taxes on compensation.

“We feel it is important to highlight that Mr. Zollars’ total compensation in 2008 decreased by over $1 million due in large part to our performance and that Mr. Zollars did not receive a $1.5 million restricted share grant due to our failure to meet certain performance targets,” the letter said. “We believe that these facts should weigh more heavily than a de minimis tax gross-up in determining whether the compensation committee approved an appropriate compensation package for Mr. Zollars.”

Overland Park, KS-based YRC Worldwide has made Moody’s Bottom Rung list. The list contains 283 companies most likely to default on their debts.

Companies from Chrysler to Rite Aid are listed. Moody’s told Reuters, “about 45 percent of companies on the list will default on debt in the next year which could include anything from filing for bankruptcy to missing debt payments.”

The Wall Street Journal writes, “The dominant industries on this at-risk list include much of the U.S. auto industry, the casino sector, and many retail chains, newspapers and broadcast-TV and radio-station networks. Energy firms, airlines and restaurant chains appear often on the list.”

Last year, Moody’s Bottom Rung list had 157 companies, according to ZDnet.

YRC’s stock opened at $1.88 on Tuesday. The company that consists of Yellow Transportation and Roadway Trucking has been issuing layoffs, and cutting employee compensation to save money.

Moody’s lists the probability of default rating for YRC as Ca. The corporate family rating is listed as Caa3. Both are at the low end of Moody’s rating system.

The Moody’s rating system is from excellent to poor: AAA, Aa1, Aa2, Aa3, A1, A2, A3, Baa1, Baa2, Baa3, Ba1, Ba2, Ba3, B1, B2, B3, Caa1, Caa2, Caa3, Ca, C.

YRC Worldwide Inc. has asked its union and lender for permission to defer certain pension fund payments if it offers company real estate as collateral.

The Overland Park-based trucking company YRC, merged Yellow Transportation and Roadway Trucking said in a Monday filing with the Securities and Exchange Commission that it is working to finalize discussions with the Teamsters and Chase Bank. YRC wants to offer its real estate as collateral in lieu of making pension fund payments for certain months, to be agreed upon. Payments can be $34 million to $45 million a month depending on employment levels, which vary by freight levels and the season.

YRC’s lenders must approve releasing specific real estate to secure deferred payments instead of selling the property.

“The company believes these alternatives can allow the company to utilize the real estate to its maximum benefit as opportunities arise,” the filing said. “These potential transactions are part of the company’s ongoing plans to address its financial performance and improve cash flow amid freight volume reductions in the recessionary environment.”

YRC doesn’t expect the deal to affect current or future benefits of employees participating in the pension funds, the filing said.

YRC, which has been struggling in a prolonged downturn, said last week that freight volume drops had accelerated during the first quarter. The company recently has been arranging sale-leasebacks of its real estate to improve cash flow.

This year, YRC expects an additional $100 million in proceeds from excess property, as well as significant sale-leaseback deals, including more than $270 million finalized or under contract.

YRC Worldwide hauls about one third of all the manufactured and retail goods in the country. So it’s not a good sign that it foresees doom and gloom for the U.S. economy in the near term.  YRC said it expects to post a third-quarter loss from core operations as further economic weakness drags down volume and prices.  YRC Worldwide also expects to incur reorganization costs of about 6 to 8 cents per share primarily related to employee severance.  It will also declare a one-time gain of 70 cents per share related to a streamlining of non-union employees retirement plans.

Nonetheless, it expects to be in full compliance with all terms of its credit agreement and to have borrowing capacity in excess of $600 million.

“The economy has softened further impacting both volume levels and pricing across our operating companies,” said chairman Bill Zollars. “After a solid second quarter, the third quarter started slowly and has progressively weakened.”YRC said its earnings have also been impacted by investments in combining its national companies, Yellow Transportation and Roadway. In 2003, Yellow acquired Roadway Express to become Yellow Roadway. Then in 2005, Yellow Roadway purchased USF and in 2006 became YRC Worldwide. “We do not see signs of the economy improving in the near term, but as we merge Yellow and Roadway, we expect operating results to show meaningful improvement,” said Zollars.

YRC is a subsidiary of YRC Worldwide Inc., a Fortune 500 company and one of the largest transportation service providers in the world. YRC Worldwide is a holding company for several successful companies, including YRC, Yellow Transport, Roadway Express, Reimer Express, YRC Logistics, New Penn, Holland, Reddaway and Glen Moore. YRC Worldwide companies provide global transportation services, transportation management solutions and logistics management. The companies represent a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. With headquarters in Overland Park, Kan., YRC Worldwide employs 55,000 people.

YRC Worldwide Inc. expects significant improvement in the second quarter as internal cost-saving initiatives, such as the integration of two subsidiaries, Yellow Transportation and Roadway Express, take effect.

The integration of Yellow Transport and Roadway is expected to mean about 1,000 more job cuts in the middle of the year.

Bill Zollars, CEO of the Overland Park-based trucking company (Nasdaq: YRCW), presented the information at a JPMorgan Aviation and Transportation Conference on Wednesday. YRC’s stock closed on Wednesday at $2.89, up 89 cents, or 44.5 percent, on volume of 3.4 million shares, according to Yahoo Finance. The stock’s average daily volume the past three months is 2.1 million shares.

Beginning in March and concluding in the fourth quarter of 2009, YRC offer the largest transportation network in North America with approximately 450 service centers — more than 100 additional service centers compared to the individual Yellow and Roadway networks. For you, this means more direct points, improved service, fewer handlings, and increased responsiveness to your business needs.

We know our service center locations are important to you. Here is a way for you to see, by state/province/country, our complete network of approximately 450 service centers.

Roadway Express and Yellow Transport merged in March to form YRC.