AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 14, 2002
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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YELLOW CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 48-0948788
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
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10990 ROE AVENUE
P.O. BOX 7563
OVERLAND PARK, KANSAS 66207
(913) 696-6100
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
WILLIAM F. MARTIN, JR.
SENIOR VICE PRESIDENT, LEGAL AND CORPORATE SECRETARY
10990 ROE AVENUE
P.O. BOX 7563
OVERLAND PARK, KANSAS 66207
(913) 696-6100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
COPIES TO:
W. LESLIE DUFFY, ESQ. JOHN R. SAGAN, ESQ.
CAHILL GORDON & REINDEL PHILLIP J. NIEHOFF, ESQ.
80 PINE STREET MAYER, BROWN, ROWE & MAW
NEW YORK, NY 10005 190 SOUTH LASALLE STREET
(212) 701-3000 CHICAGO, IL 60603-3441
(312) 782-0600
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED PER SHARE(1) PRICE(1) REGISTRATION FEE
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Common Stock, par value $1.00 per share...... 3,910,000 shares(2) $25.57 $99,978,700 $9,198.04
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) on the basis of the average high and low sales price
of the registrant's Common Stock as reported on The Nasdaq National Market
System on March 13, 2002.
(2) Includes 510,000 shares issuable upon exercise of the underwriters'
over-allotment option.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MARCH 14, 2002
3,400,000 Shares
[Yellow Corporation Logo]
Common Stock
------------------
Our common stock is listed on The Nasdaq National Market under the symbol
"YELL." The last reported sale price on March 13, 2002 was $25.50 per share.
The underwriters have an option to purchase a maximum of 510,000 additional
shares to cover over-allotments of shares.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" ON PAGE 11.
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND YELLOW
PUBLIC COMMISSIONS CORPORATION
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Per Share............................................ $ $ $
Total................................................ $ $ $
Delivery of the shares of common stock will be made on or about ,
2002.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
Joint Book-Running Managers
CREDIT SUISSE FIRST BOSTON DEUTSCHE BANC ALEX. BROWN
The date of this prospectus is , 2002.
Inside Front Cover-
Collage of photos representing assets of each operating unit consisting
primarily of trucks and trailers and representations of the company's
technology products.
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TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUMMARY.................... 1
RISK FACTORS.......................... 11
SPECIAL NOTE REGARDING FORWARD-
LOOKING STATEMENTS.................. 14
USE OF PROCEEDS....................... 15
DIVIDEND POLICY....................... 15
CAPITALIZATION........................ 16
BUSINESS.............................. 17
PAGE
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MANAGEMENT............................ 24
DESCRIPTION OF CAPITAL STOCK.......... 27
UNDERWRITING.......................... 29
NOTICE TO CANADIAN RESIDENTS.......... 31
WHERE YOU CAN FIND MORE INFORMATION... 32
LEGAL MATTERS......................... 32
EXPERTS............................... 33
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.
PROSPECTUS SUMMARY
You should read the following summary together with the more detailed
information appearing elsewhere in this prospectus or incorporated by reference
into this prospectus, including the section entitled "Risk Factors" and our
consolidated financial statements and related notes. Unless the context
otherwise requires, references in this prospectus to "Yellow," "we," "us" or
"our" or similar terms refer to Yellow Corporation and its consolidated
subsidiaries.
YELLOW CORPORATION
Yellow Corporation is a leader in global transportation services. We
provide national, regional and international less-than-truckload, or LTL,
truckload and non-asset-based transportation services through our three
principal operating units and captive technology company. Our primary focus is
the movement of goods and materials for business customers. In addition, we have
broadened our focus to include transportation management and logistics
consulting services.
Our Yellow Transportation, Inc. operating unit is among the nation's
largest transportation companies providing primarily LTL national, regional and
international transportation services for industrial, commercial, retail and
government markets. Yellow Transportation serves over 700,000 customer locations
from 366 strategically located facilities throughout North America, including
within Puerto Rico and Hawaii. The Yellow Transportation mission is to be the
leading provider of guaranteed, time-definite, defect-free, hassle-free
transportation services for business customers worldwide. Yellow Transportation
provides a portfolio of transportation services that addresses the varied
time-definite, expedited, specialized and geographic needs of its customers. In
addition, Yellow Transportation uses advanced technology to enhance the
efficiency of its operating systems and provide value-added technology tools to
its customers. For example, MyYellow.com(R) provides secure and customized
e-commerce resources that enable customers to manage transportation activity
over the Internet. All Yellow Transportation services are enhanced by
centralized 24-hour per day, 365-day per year customer service centers, which
provide full customer support and eliminate the need for contact with local
facilities.
SCS Transportation, Inc. provides regional overnight and second-day LTL and
selected truckload transportation services, as well as a variety of other
transportation and supply chain solutions to a broad range of industries through
two subsidiaries, Saia Motor Freight Line, Inc. and Jevic Transportation, Inc.
Saia is a leading regional LTL carrier that serves 21 states in the South,
Southwest, Pacific Northwest and West through 110 facilities. Saia customers can
choose from a wide variety of service options including overnight and second-day
regional LTL shipping, guaranteed/expedited delivery, selective truckload
shipping, consolidation/distribution services and specialized or customized
services. Jevic is a specialized LTL ground transportation services provider
that also offers selective truckload services throughout the continental United
States and Canada. Through its nine facilities, Jevic offers its customers
standard and customized regional transportation solutions based on its
non-traditional Breakbulk-Free(R) operating model. Jevic develops integrated
solutions for customers designed to lower their overall supply chain costs,
which can include direct-to-customer deliveries, multi-shipper order
consolidation for their inbound supplies, and express and time-definite
deliveries.
Meridian IQ, LLC is a non-asset-based company using web-based technology to
provide customers a single source for their logistics planning, global shipment
management and execution needs. Meridian IQ provides domestic and international
forwarding, multi-modal brokerage services and transportation solutions
management. Meridian IQ has the advantage of having direct access to and support
from the experience, the resources and the North American asset-based network of
Yellow Transportation. Meridian IQ is designed to deliver a wide range of
transportation solutions, providing customers improved return-on-investment
results through flexible, fast and easy-to-implement transportation services and
technology management solutions.
Yellow Technologies, Inc., a captive corporate resource, is focused on
creating a competitive advantage for our operating units by delivering
innovative information solutions and technology services. From
MyYellow.com(R) to sophisticated internal systems that support our complex
operations, Yellow Technologies provides value-added technology to our customers
and us.
GROWTH STRATEGY
We are committed to growth in revenues, profitability and cash flow, all
with the objective of maximizing return on invested capital. Our strategy
remains the expansion of our transportation services through both internal
growth and selected acquisitions that meet our investment criteria. The primary
components of our growth strategy are to:
- broaden our portfolio of asset-based transportation services;
- expand our customer base and geographic reach; and
- increase our focus on non-asset-based services.
INDUSTRY
In 2001, the trucking industry accounted for 87.3% of total domestic
freight revenue, or $610 billion, and 67.4% of domestic freight volume. Trucks
provide transportation services to virtually every industry operating in the
United States and generally offer higher levels of reliability, shipment
integrity and speed than other surface transportation options.
Yellow Transportation and SCS operate primarily in the LTL segment, which
accounted for approximately $63 billion of revenue in 2001, or 10.3% of total
trucking revenue. According to the American Trucking Association, LTL volume is
expected to grow at a 2.7% compound annual growth rate through 2007, increasing
to 3.2% annually from 2008 through 2013.
LTL carriers require expansive networks of pickup and delivery operations
around local service centers and, with respect to national carriers, shipments
are moved between origin and destination through a series of regional
distribution centers. Significant capital is required of LTL transportation
service providers to maintain a network of distribution and service centers and
revenue equipment. The substantial infrastructure spending needed for LTL
carriers makes it difficult for new start-up or small operations to effectively
compete with established companies.
Non-asset-based service providers such as logistics companies arrange for
and expedite the movement of goods and materials through the supply chain.
Logistics providers typically neither own nor operate the physical assets
necessary to move goods and materials, eliminating the significant capital
requirements normally experienced by an asset-based transportation company. This
model allows the non-asset-based firms to generate substantially better returns
and reduce variable costs in economic downturns. According to Cass Information
and Armstrong & Associates, the contract logistics market totaled $56.4 billion
in gross revenues in 2000.
COMPANY INFORMATION
Yellow Corporation, a Delaware corporation headquartered in Overland Park,
Kansas, is a holding company for the operating corporations named Yellow
Transportation, Inc., SCS Transportation, Inc. and Meridian IQ, LLC. Our mailing
address and principal executive offices are located at 10990 Roe Avenue, P.O.
Box 7563, Overland Park, Kansas 66207. Our telephone number is (913) 696-6100
and our web site address is www.yellowcorp.com. Information contained on our web
site is not incorporated by reference into this prospectus and you should not
consider information contained on our web site as part of this prospectus.
RECENT DEVELOPMENTS
We have received authorization from our board of directors to take the
steps necessary to effect the spin-off of SCS to our shareholders. It is our
belief that, with the anticipated improvement in the economy, the
2
timing is right to spin-off the regional businesses from our other operations so
that both entities can pursue independent growth strategies that will increase
shareholder value. The spin-off will be subject to a number of conditions and
approvals, including a determination by our board of directors that the spin-off
is in the best interest of our shareholders. The spin-off of SCS would be
accomplished by distributing to our shareholders all of the stock of SCS. Over
the coming months, our management and their advisors intend to undertake the
various tasks that are necessary to prepare for the spin-off, including applying
for a ruling from the IRS that the spin-off will be tax-free to us and to our
shareholders. If we determine that we will be unable to receive such a ruling
from the IRS on a timely basis, we could still proceed with the spin-off if we
receive an acceptable opinion from our outside accountants with respect to the
tax-free treatment of the spin-off. See "Risk Factors."
Effective January 1, 2002, we adopted the Financial Accounting Standards
Board's Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets." Under the new standard, 100 percent of the goodwill relating
to our acquisitions of Jevic is impaired. As a result, we will record a non-cash
charge of $75.2 million in the first quarter of 2002.
3
THE OFFERING
Common stock offered.................. 3,400,000 shares
Over-allotment option................. 510,000 additional shares
Common stock to be outstanding after
the offering.......................... 28,363,787 shares
Use of proceeds....................... We intend to use the net proceeds
from this offering to repay
outstanding indebtedness, increasing
capacity to implement our growth
strategies. See "Use of Proceeds."
Nasdaq National Market symbol......... YELL
The number of shares to be outstanding after this offering is based on
24,963,787 shares of our common stock outstanding as of February 28, 2002,
before giving effect to this offering. This number excludes approximately
453,447 shares of our common stock available for issuance under the Yellow
Corporation Amended Directors Stock Option Plan, Yellow Corporation 1999 Stock
Option Plan, Yellow Corporation 1997 Stock Option Plan, Yellow Corporation 1996
Stock Option Plan and Yellow Corporation 1992 Stock Option Plan. In addition,
2,154,625 shares of common stock were issuable upon exercise of outstanding
stock options as of February 28, 2002, with a weighted average exercise price of
$18.53 per share.
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Unless we indicate otherwise, the information in this prospectus assumes
that the underwriters' option to cover over-allotments is not exercised. See
"Underwriting."
4
YELLOW CORPORATION
SUMMARY CONSOLIDATED HISTORICAL FINANCIAL DATA
(IN THOUSANDS EXCEPT PER SHARE DATA AND PERCENTAGES)
The following table shows summary consolidated historical financial data of
Yellow Corporation, and should be read together with "Use of Proceeds,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," the consolidated financial statements and accompanying notes and
the other financial data included elsewhere in this prospectus or incorporated
by reference in this prospectus.
YEAR ENDED DECEMBER 31,
--------------------------------------
1999(1) 2000 2001(2)
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STATEMENT OF OPERATIONS:
Operating revenue...................................... $3,226,847 $3,588,140 $3,276,651
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Operating expenses:
Salaries, wages and employees' benefits.............. 2,041,590 2,210,505 2,074,458
Operating expenses and supplies...................... 490,446 583,594 535,762
Operating taxes and licenses......................... 100,602 112,329 107,156
Claims and insurance................................. 70,227 80,619 77,250
Depreciation and amortization........................ 110,310 126,883 126,143
Purchased transportation............................. 305,840 333,846 286,436
Unusual items........................................ 326 (12,165) 12,093
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Total operating expenses............................... 3,119,341 3,435,611 3,219,298
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Income from operations................................. 107,506 152,529 57,353
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Nonoperating expenses, net............................. 18,227 30,841 28,828
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Income from continuing operations before income
taxes................................................ 89,279 121,688 28,525
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Income tax provision................................... 38,364 52,386 13,224
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Income from continuing operations...................... $ 50,915 $ 69,302 $ 15,301
========== ========== ==========
Basic earnings per share:
Income from continuing operations...................... $ 2.04 $ 2.81 $ 0.63
========== ========== ==========
Diluted earnings per share:
Income from continuing operations...................... $ 2.02 $ 2.79 $ 0.62
========== ========== ==========
Average common shares -- basic......................... 25,003 24,649 24,376
Average common shares -- diluted....................... 25,168 24,787 24,679
OTHER FINANCIAL DATA:
EBITDA, excluding unusual items(3)..................... $ 218,142 $ 267,247 $ 195,589
Capital expenditures, net(4)........................... 313,692 134,837 121,184
Income from continuing operations before unusual
items(5)............................................. 51,115 61,833 22,726
Diluted earnings per share before unusual items(5)..... 2.03 2.49 0.92
5
DECEMBER 31, 2001
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HISTORICAL
HISTORICAL AS ADJUSTED(8)
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BALANCE SHEET DATA:
Cash and marketable securities.............................. $ 20,694 $ 20,694
Total assets(6)............................................. 1,285,777 1,285,777
Total debt, including off-balance sheet debt(7)............. 361,526 280,228
Total shareholders' equity(6)............................... 490,989 572,287
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(1) On July 9, 1999, Yellow Corporation acquired Jevic Transportation, Inc. The
results of operations include the results of operations of Jevic from the
date of the acquisition.
(2) In September 2001, Yellow Corporation acquired the 35% ownership interest in
Meridian IQ, formerly Transportation.com, LLC, that it did not already own.
Prior to the acquisition date, we accounted for our 65% ownership interest
under the equity method of accounting in accordance with EITF 96-16 due to
substantive participating rights of the minority investors. Losses on our
investment in Meridian IQ were recorded in nonoperating expenses until the
acquisition date. Subsequent to the acquisition date, the results of
Meridian IQ are reflected in the consolidated statement of operations.
(3) EBITDA is defined as income from operations plus unusual items, depreciation
and amortization. We have included data with respect to EBITDA because it is
commonly used as a measurement of financial performance by investors to
analyze and compare companies on the basis of operating performance. EBITDA
is not a measurement of financial performance under generally accepted
accounting principles and should not be considered an alternative to
operating income, as determined in accordance with generally accepted
accounting principles, as an indicator of our operating performance, or to
cash flows from operating activities, as determined in accordance with
generally accepted accounting principles, as a measurement of our liquidity.
EBITDA is not necessarily comparable with similarly titled measures for
other companies.
(4) Capital expenditures include $164.5 million in 1999 for the acquisition of
Jevic and $14.3 million in 2001 for the acquisition of the 35% ownership
interest in Meridian IQ that Yellow Corporation did not already own.
(5) Income from continuing operations before unusual items and diluted earnings
per share before unusual items are not measurements of financial performance
under generally accepted accounting principles and should not be considered
as alternatives to income from operations and diluted earnings per share. We
have included this data because investors commonly exclude nonrecurring
events when evaluating earnings performance.
(6) Includes $75.2 million of Jevic goodwill that was determined to be fully
impaired in the first quarter of 2002, when Yellow Corporation adopted the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets."
(7) Off-balance sheet debt consists of borrowings under an asset-backed
securitization facility involving accounts receivable of Yellow
Transportation. The amount outstanding at December 31, 2001 was $141.5
million.
(8) As adjusted to give effect to our receipt and application of the estimated
net proceeds from our sale of 3,400,000 shares of common stock in this
offering at an assumed public offering price of $25.50 per share.
6
YELLOW CORPORATION
SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL DATA -- EXCLUDING SCS
TRANSPORTATION, INC.
(IN THOUSANDS EXCEPT PER SHARE DATA AND PERCENTAGES)
The following table shows summary unaudited consolidated pro forma
financial data of Yellow Corporation. The pro forma financial data reflects the
spin-off of SCS as if it had occurred on January 1, 1999 for the Statement of
Operations and Other Financial Data, and as if it had occurred on December 31,
2001 for the Balance Sheet Data. The pro forma as adjusted Balance Sheet Data
also reflects the receipt and application of the estimated net proceeds from
this offering in the manner set forth in "Use of Proceeds." This pro forma
financial data excludes the historical unaudited financial results of SCS and
includes certain other pro forma adjustments described in the footnotes that, in
the opinion of management, are necessary to reflect the results of operations
and financial position of Yellow Corporation as if the spin-off had occurred on
the dates indicated.
The summary unaudited consolidated pro forma financial data is presented
for illustrative purposes only and does not purport to be indicative of the
operating results or financial position that actually would have occurred if the
spin-off had occurred on the dates indicated, nor is it necessarily indicative
of the future operating results or financial position of Yellow Corporation and
SCS as stand-alone entities. This pro forma financial data should be read
together with the audited consolidated financial statements and accompanying
notes of Yellow Corporation, which are incorporated by reference in this
prospectus.
YEAR ENDED DECEMBER 31,
--------------------------------------
1999 2000 2001
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STATEMENT OF OPERATIONS:
Operating revenue...................................... $2,632,337 $2,799,131 $2,505,069
---------- ---------- ----------
Operating expenses:
Salaries, wages and employees' benefits.............. 1,698,618 1,767,926 1,638,663
Operating expenses and supplies(1)................... 383,930 431,809 398,054
Operating taxes and licenses......................... 79,129 81,259 75,635
Claims and insurance................................. 58,477 61,535 56,999
Depreciation and amortization........................ 76,904 78,587 76,977
Purchased transportation............................. 258,891 266,113 215,132
Unusual items........................................ 341 (14,372) 5,415
---------- ---------- ----------
Total operating expenses............................... 2,556,290 2,672,857 2,466,875
---------- ---------- ----------
Income from operations................................. 76,047 126,274 38,194
---------- ---------- ----------
Nonoperating expenses, net(2).......................... 8,694 21,323 19,406
---------- ---------- ----------
Income from continuing operations before income
taxes................................................ 67,353 104,951 18,788
---------- ---------- ----------
Income tax provision(3)................................ 28,760 44,018 7,424
---------- ---------- ----------
Income from continuing operations...................... $ 38,593 $ 60,933 $ 11,364
========== ========== ==========
Basic earnings per share:
Income from continuing operations...................... $ 1.54 $ 2.47 $ 0.47
========== ========== ==========
Diluted earnings per share:
Income from continuing operations...................... $ 1.53 $ 2.46 $ 0.46
========== ========== ==========
Average common shares -- basic......................... 25,003 24,649 24,376
Average common shares -- diluted....................... 25,168 24,787 24,679
7
YEAR ENDED DECEMBER 31,
--------------------------------------
1999 2000 2001
---------- ---------- ----------
OTHER FINANCIAL DATA:
EBITDA, excluding unusual items(4)..................... $ 153,292 $ 190,489 $ 120,586
Capital expenditures, net(5)........................... 96,169 75,803 101,569
Income from continuing operations before unusual
items(6)............................................. 38,802 52,109 14,689
Diluted earnings per share before unusual items(6)..... 1.54 2.10 0.60
DECEMBER 31, 2001
------------------------
PRO FORMA
PRO FORMA AS ADJUSTED
--------- -----------
BALANCE SHEET DATA:
Cash and marketable securities.............................. $ 19,214 $ 19,214
Total assets................................................ 790,666 790,666
Total debt, including off-balance sheet debt(7)(8).......... 231,526 150,228(9)
Total shareholders' equity(8)............................... 262,348 343,646(9)
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(1) Operating expenses and supplies has been increased by $2.8 million in 1999,
$4.6 million in 2000 and $3.4 million in 2001. These same amounts
represented the management fee income Yellow Corporation received from SCS
related to services provided by Yellow Corporation for legal, accounting,
auditing, insurance and other costs. While these amounts are representative
of costs SCS would incur as a stand-alone entity, the pro forma financial
data was calculated assuming that Yellow Corporation costs would not be
substantially reduced after the spin-off.
(2) Interest expense has been increased by $1.2 million in 1999, $5.8 million in
2000 and $1.5 million in 2001. The pro forma financial data was calculated
assuming that SCS would have $130.0 million of funded debt at the spin-off
at an interest rate equal to the Yellow Corporation average outstanding
borrowing rate for each year presented. Historically, SCS debt levels have
been in excess of $130.0 million. A pro forma adjustment to historical
interest expense has been made to reflect this capitalization assumption.
(3) Pro forma adjustments have been tax-effected using a blended marginal
federal and state tax rate of 35.8%.
(4) EBITDA is defined as income from operations plus unusual items, depreciation
and amortization. We have included data with respect to EBITDA because it is
commonly used as a measurement of financial performance by investors to
analyze and compare companies on the basis of operating performance. EBITDA
is not a measurement of financial performance under generally accepted
accounting principles and should not be considered an alternative to
operating income, as determined in accordance with generally accepted
accounting principles, as an indicator of our operating performance, or to
cash flows from operating activities, as determined in accordance with
generally accepted accounting principles, as a measurement of our liquidity.
EBITDA is not necessarily comparable with similarly titled measures for
other companies.
(5) Capital expenditures include $14.3 million in 2001 for the acquisition of
the 35% ownership interest in Meridian that Yellow Corporation did not
already own.
(6) Income from continuing operations before unusual items and diluted earnings
per share before unusual items are not measurements of financial performance
under generally accepted accounting principles and should not be considered
as alternatives to income from operations and diluted earnings per share. We
have included this data because investors commonly exclude nonrecurring
events when evaluating earnings performance.
(7) Off-balance sheet debt consists of borrowings under an asset-backed
securitization facility involving accounts receivable of Yellow
Transportation. The amount outstanding at December 31, 2001 was $141.5
million.
8
(8) Includes pro forma adjustment to decrease debt and increase retained
earnings by $1.0 million. The pro forma financial data assumes SCS will have
$130.0 million of funded debt versus the historical debt balance of $129.0
million at December 31, 2001. A pro forma adjustment has been made to
reflect this capitalization.
(9) 2001 pro forma as adjusted total debt is decreased and total shareholders'
equity is increased by the equity proceeds received in this offering less
underwriting discounts and commissions.
9
SCS TRANSPORTATION, INC.
SUMMARY UNAUDITED HISTORICAL FINANCIAL DATA
(IN THOUSANDS EXCEPT PER SHARE DATA AND PERCENTAGES)
The following table shows summary unaudited financial data of SCS
Transportation, Inc., which includes its wholly owned subsidiaries Saia Motor
Freight Line, Inc. and Jevic Transportation, Inc., and has been derived from,
and should be read together with, the financial statements and accompanying
notes of Yellow Corporation incorporated by reference in this prospectus.
YEAR ENDED DECEMBER 31,
------------------------------
1999(1) 2000 2001
-------- -------- --------
STATEMENT OF OPERATIONS:
Operating revenue........................................... $594,510 $789,009 $771,582
-------- -------- --------
Operating expenses:
Salaries, wages and employees' benefits................... 342,972 442,579 435,795
Operating expenses and supplies........................... 109,298 156,379 141,124
Operating taxes and licenses.............................. 21,473 31,070 31,521
Claims and insurance...................................... 11,750 19,084 20,251
Depreciation and amortization............................. 33,406 48,296 49,166
Purchased transportation.................................. 46,949 67,733 71,304
Unusual items............................................. (16) 2,207 6,678
-------- -------- --------
Total operating expenses.................................... 565,832 767,348 755,839
-------- -------- --------
Income from operations...................................... 28,678 21,661 15,743
-------- -------- --------
OTHER FINANCIAL DATA:
EBITDA, excluding unusual items(2).......................... $ 62,068 $ 72,164 $ 71,587
Capital expenditures, net................................... 53,016 59,033 19,615
DECEMBER 31,
2001
------------
BALANCE SHEET DATA:
Cash and marketable securities.............................. $ 1,480
Total assets(3)............................................. 495,111
Total debt.................................................. 128,992
Total shareholder's equity(3)............................... 229,649
- ---------------
(1) On July 9, 1999, Yellow Transportation acquired Jevic Transportation, Inc.
The results of operations include the results of operations of Jevic from
the date of the acquisition. 1999 capital expenditures, net excludes $164.5
million relating to the Jevic acquisition.
(2) EBITDA is defined as income from operations plus unusual items, depreciation
and amortization. We have included data with respect to EBITDA because it is
commonly used as a measurement of financial performance by investors to
analyze and compare companies on the basis of operating performance. EBITDA
is not a measurement of financial performance under generally accepted
accounting principles and should not be considered an alternative to
operating income, as determined in accordance with generally accepted
accounting principles, as an indicator of our operating performance, or to
cash flows from operating activities, as determined in accordance with
generally accepted accounting principles, as a measurement of our liquidity.
EBITDA is not necessarily comparable with similarly titled measures for
other companies.
(3) Includes $75.2 million of Jevic goodwill to be fully impaired in the first
quarter of 2002, when we adopt the Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets."
10
RISK FACTORS
You should carefully consider the following risks factors and all other
information contained in or incorporated by reference into this prospectus
before purchasing our common stock. Investing in our common stock involves a
significant degree of risk.
WE ARE SUBJECT TO GENERAL ECONOMIC FACTORS THAT ARE LARGELY OUT OF OUR CONTROL,
ANY OF WHICH COULD HAVE A MATERIALLY ADVERSE EFFECT ON THE RESULTS OF OUR
OPERATIONS.
Our business is subject to a number of general economic factors that may
have a materially adverse effect on the results of our operations, many of which
are largely out of our control. These include recessionary economic cycles and
downturns in customers' business cycles, particularly in market segments and
industries, such as retail and manufacturing, where we have a significant
concentration of customers. Economic conditions may adversely affect our
customers' business levels, the amount of transportation services they need and
their ability to pay for our services. It is not possible to predict the medium
or long-term effects of the September 11, 2001 terrorists attacks and subsequent
events on the economy or on customer confidence in the United States, or the
impact, if any, on our future results of operations. Customers encountering
adverse economic conditions represent a greater potential for loss, and we may
be required to increase our reserve for bad-debt losses.
THE TRANSPORTATION INDUSTRY IS AFFECTED BY BUSINESS RISKS THAT ARE LARGELY OUT
OF OUR CONTROL, ANY OF WHICH COULD HAVE A MATERIALLY ADVERSE EFFECT ON THE
RESULTS OF OUR OPERATIONS.
Businesses operating in the transportation industry are affected by risks
that are largely out of our control, any of which could have a materially
adverse effect on the results of our operations. These factors include weather,
excess capacity in the transportation industry, interest rates, fuel taxes,
license and registration fees, and insurance premiums and self-insurance levels.
Our results of operations may also be affected by seasonal factors. See
"Business -- Seasonality." In addition, the business of our subsidiary SCS is
also affected by surpluses in the market for used equipment.
WE OPERATE IN A HIGHLY COMPETITIVE INDUSTRY, AND OUR BUSINESS WILL SUFFER IF WE
ARE UNABLE TO ADEQUATELY ADDRESS POTENTIAL DOWNWARD PRICING PRESSURES AND OTHER
FACTORS THAT MAY ADVERSELY AFFECT OUR OPERATIONS AND PROFITABILITY.
Numerous competitive factors could impair our ability to maintain our
current profitability. These factors include the following:
- we compete with many other transportation service providers of varying
sizes, some of which have more equipment and greater capital resources
than we do or have other competitive advantages;
- some of our competitors periodically reduce their prices to gain
business, especially during times of reduced growth rates in the economy,
which may limit our ability to maintain or increase prices or maintain
significant growth in our business;
- many customers reduce the number of carriers they use by selecting
so-called "core carriers" as approved transportation service providers,
and in some instances we may not be selected;
- many customers periodically accept bids from multiple carriers for their
shipping needs, and this process may depress prices or result in the loss
of some business to competitors;
- the trend towards consolidation in the ground transportation industry may
create other large carriers with greater financial resources and other
competitive advantages relating to their size;
- advances in technology require increased investments to remain
competitive, and our customers may not be willing to accept higher prices
to cover the cost of these investments; and
- competition from non-asset-based logistics and freight brokerage
companies may adversely affect our customer relationships and prices.
11
IF THE YELLOW TRANSPORTATION RELATIONSHIP WITH ITS EMPLOYEES WERE TO
DETERIORATE, IT MAY BE FACED WITH LABOR SHORTAGES OR STOPPAGES, WHICH COULD
ADVERSELY AFFECT ITS BUSINESS AND RESULTS OF OPERATIONS.
Yellow Transportation operations rely heavily on its employees, and any
labor stoppage caused by poor relations with its employees and/or the
renegotiation of labor contracts could adversely affect its business and results
of operations. Approximately 80% of Yellow Transportation employees are
organized by the International Brotherhood of Teamsters, or the IBT, and their
wages and benefits are governed by a common labor agreement that is renegotiated
every three to five years. The current five-year labor agreement will expire on
March 31, 2003. It is possible that Yellow Transportation could become subject
to additional work rules imposed by agreements with labor unions, or that work
stoppages or other labor disturbances could occur in the future, any of which
could have a materially adverse effect on its operations. Similarly, any failure
to negotiate a new labor agreement when required might result in a work stoppage
that could have a materially adverse effect on Yellow Transportation operations.
IF OUR PROPOSED SPIN-OFF OF SCS DOES NOT OCCUR, OUR NON-UNIONIZED REGIONAL
TRANSPORTATION BUSINESS COULD BECOME SUBJECT TO INCREASED UNIONIZATION EFFORTS;
OWNERSHIP OF NON-UNION SUBSIDIARIES COULD AFFECT OUR UNION NEGOTIATIONS.
The employees of SCS are not unionized. There is a risk that this business
may become the subject of increased unionization efforts if our proposed
spin-off of SCS does not occur. Furthermore, based on experience with prior
labor negotiations, our continued ownership of non-union subsidiaries could
create obstacles at the upcoming negotiations with the IBT.
ONGOING INSURANCE AND CLAIMS EXPENSES COULD SIGNIFICANTLY REDUCE OUR EARNINGS.
Our future insurance and claims expenses might exceed historical levels,
which could significantly reduce our earnings. We currently self-insure for a
portion of our claims exposure resulting from cargo loss, personal injury,
property damage and workers' compensation in amounts ranging from $250,000 to
$2.0 million. If the number or severity of claims for which we are self-insured
increases, our operating results could be adversely affected. We also maintain
insurance with licensed insurance companies above the amounts for which we
self-insure. Insurance carriers have recently begun to raise premiums for many
transportation companies. This could increase our insurance and claims expense
after our current coverage expires in March 2003 or cause us to raise our
self-insured retention.
Recent events may also affect the method by which our insurance obligations
are obtained, including the requirement that we post letters of credit instead
of surety bonds in support of our insurance obligations. Moreover, these recent
events could result in an increase in the amount of collateral required to
obtain such policies and/or an increase in our insurance premiums. If any of
these events occur, we may not be able to renew our existing insurance coverage
on terms acceptable to us, and our earnings could be materially and adversely
affected.
If our proposed spin-off of SCS occurs, future aggregate insurance and
claims expenses for the two separate entities are likely to be higher than they
would have been for the combined entity. In addition, SCS as a stand-alone
entity will not have access to surety bonds, and its capital structure could
limit its ability to post letters of credit instead of surety bonds in support
of its insurance obligations.
WE HAVE SIGNIFICANT ONGOING CAPITAL REQUIREMENTS THAT COULD AFFECT OUR
PROFITABILITY IF WE ARE UNABLE TO GENERATE SUFFICIENT CASH FROM OPERATIONS.
The transportation industry is very capital intensive. If we are unable to
generate sufficient cash from operations in the future, we may have to limit our
growth, enter into additional financing arrangements, or operate our revenue
equipment for longer periods, any of which could have a materially adverse
effect on our profitability.
Our ability to incur additional indebtedness could be adversely affected by
any increase in requirements that we post letters of credit in support of our
insurance policies. See "-- Ongoing insurance and claims
12
expenses could significantly reduce our earnings." We have a $300.0 million
unsecured credit agreement which expires in April 2004. As of December 31, 2001,
$85.0 million in borrowings and $90.0 million in letters of credit were
outstanding. Available borrowings were $125.0 million. As of December 31, 2001,
we also had approximately $85.0 million outstanding in surety bonds serving as
collateral for our workers' compensation and third-party liability programs.
Lack of availability of surety bonds in the future could result in our having to
post additional letters of credit, which would in turn reduce borrowing
availability under our credit agreement. If needed, additional indebtedness may
not be available on terms acceptable to us.
THE PROPOSED SPIN-OFF OF SCS MAY NOT BE COMPLETED OR, IF COMPLETED, MAY
ADVERSELY AFFECT THE ABILITY OF SCS TO ACCESS THE CAPITAL MARKETS.
We have received authorization from our board of directors to take the
steps necessary to effect the spin-off of SCS, our regional transportation
business, to our shareholders. The spin-off will be subject to certain
conditions and approvals. There can be no assurance that our board of directors
will ultimately determine that the proposed spin-off is in the best interests of
our shareholders, that the spin-off will be consummated or that we will be able
to implement our plan. If the spin-off is consummated, we cannot assure you that
a market for the common stock of SCS will be maintained or developed.
Additionally, if the spin-off is consummated, we cannot assure you that SCS will
be able to readily access the capital markets, if necessary, to finance its
operations.
THERE CAN BE NO ASSURANCE THAT OUR PROPOSED SPIN-OFF OF SCS WILL BE WITHOUT TAX
LIABILITY TO US AND OUR SHAREHOLDERS.
Our proposed spin-off of SCS to our shareholders will be subject to a
number of conditions, including the receipt of either a ruling from the Internal
Revenue Service or an opinion from our outside accountants that provides
assurances satisfactory to us that the spin-off qualifies for federal income tax
purposes as a tax-free transaction for us and our shareholders. We presently
intend to submit a ruling request to the IRS prior to the completion of the
spin-off. There can be no assurance that a favorable ruling from the IRS will be
obtained on a timely basis or at all. If the spin-off is accomplished in
reliance on the opinion of our outside accountants, it is possible that the IRS
would not agree with the opinion.
WE OPERATE IN A HIGHLY REGULATED INDUSTRY, AND COSTS OF COMPLIANCE WITH, OR
LIABILITY FOR VIOLATION OF, EXISTING OR FUTURE REGULATIONS COULD HAVE A
MATERIALLY ADVERSE EFFECT ON OUR BUSINESS.
The U.S. Department of Transportation and various state agencies exercise
broad powers over our business, generally governing such activities as
authorization to engage in motor carrier operations, safety and financial
reporting. We may also become subject to new or more restrictive regulations
imposed by the Department of Transportation, the Occupational Safety and Health
Administration or other authorities relating to engine exhaust emissions,
drivers' hours in service, security and ergonomics. Compliance with such
regulations could substantially impair equipment productivity and increase our
costs. See "Business -- Regulation."
The Environmental Protection Agency has issued regulations that require
progressive reductions in exhaust emissions from diesel engines through 2007.
These reductions begin with diesel engines manufactured late in 2002. The
regulations currently include subsequent reductions in the sulfur content of
diesel fuel in 2006 and the introduction of emissions after-treatment devices on
newly manufactured engines in 2007. These regulations could result in higher
prices for tractors and increased fuel and maintenance costs.
WE ARE SUBJECT TO VARIOUS ENVIRONMENTAL LAWS AND REGULATIONS, AND COSTS OF
COMPLIANCE WITH, OR LIABILITIES FOR VIOLATIONS OF, EXISTING OR FUTURE
REGULATIONS COULD HAVE A MATERIALLY ADVERSE EFFECT ON OUR BUSINESS.
Our operations are subject to environmental laws and regulations dealing
with the handling of hazardous materials, underground fuel storage tanks, and
discharge and retention of stormwater. We operate in industrial areas, where
truck terminals and other industrial activities are located, and where
groundwater or other forms
13
of environmental contamination may have occurred. Our operations involve the
risks of fuel spillage or seepage, environmental damage, and hazardous waste
disposal, among others. If we are involved in a spill or other accident
involving hazardous substances, or if we are found to be in violation of
applicable laws or regulations, it could have a materially adverse effect on our
business and operating results. If we fail to comply with applicable
environmental regulations, we could be subject to substantial fines or penalties
and to civil and criminal liability.
WHILE MERIDIAN IQ IS ENGAGED IN NON-ASSET-BASED OPERATIONS WHICH INVOLVE
EXISTING CUSTOMER BASES AND SERVICE OFFERINGS, THE TECHNOLOGY-BASED
TRANSPORTATION SOLUTIONS AND MANAGEMENT OFFERING IS UNPROVEN.
A significant portion of Meridian IQ revenue is represented by
consolidation of our existing non-asset-based businesses for which we have
existing revenues and customer acceptance. The newest offering, technology-based
transportation management services, represents the Meridian IQ strategy to
provide technology and management services that are not now adequately covered
by other non-asset-based transportation providers on a contractual basis. There
can be no assurance that customers will accept these new services or that
Meridian IQ will not face increased competition if it is successful.
OUR STOCK PRICE MAY BE VOLATILE IN THE FUTURE, WHICH COULD CAUSE YOU TO LOSE A
SIGNIFICANT PORTION OF YOUR INVESTMENT.
The market price of our common stock could be subject to significant
fluctuations in response to certain factors, such as variations in our
anticipated or actual results of operations, the operating results of other
companies in the transportation industry, changes in conditions affecting the
economy generally, including incidents of terrorism, analyst reports, general
trends in the industry, sales of common stock by insiders, as well as other
factors unrelated to our operating results. Volatility in the market price of
our common stock may prevent you from being able to sell your shares at or above
the price you paid for your shares.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
The Securities and Exchange Commission encourages companies to disclose
forward-looking information so that investors can better understand a company's
future prospects and make informed investment decisions. This prospectus
contains these types of statements, which are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Words such as "anticipate," "estimate," "expect," "project," "intend,"
"plan," "predict," "believe" and similar words or expressions are intended to
identify forward-looking statements. We use such forward-looking statements
regarding our future financial condition and results of operations and our
business operations directly in this prospectus and in the documents filed with
the SEC that are incorporated by reference in this prospectus. All
forward-looking statements reflect our management's present expectation of
future events and are subject to a number of important factors, risks,
uncertainties and assumptions, including industry and economic conditions, that
could cause actual results to differ materially from those described in the
forward-looking statements. The factors listed under "Risk Factors," as well as
any cautionary language in this prospectus and our filings with the SEC, provide
examples of these risks and uncertainties.
You are cautioned not to place undue reliance on the forward-looking
statements, which speak only as of the date of this prospectus or the date of
the document incorporated by reference in this prospectus. We have no
obligation, and expressly disclaim any obligation, to update any forward-looking
statements, whether as a result of new information, future events or otherwise.
14
USE OF PROCEEDS
We intend to use the net proceeds that we receive from this offering to
repay borrowings outstanding under our unsecured revolving credit facility and
use this increased capacity to implement our growth strategies. Periodically, we
consider acquisitions, but at this time we have no contracts, commitments or
understandings for any acquisition. Borrowings under our revolving credit
facility bear interest at a floating rate of 125 basis points over LIBOR and the
facility has a maturity of April 2004.
DIVIDEND POLICY
We do not pay cash dividends on our common stock and do not anticipate
paying cash dividends in the foreseeable future. Any future determination to pay
cash dividends will be at the discretion of our board of directors and will
depend upon our financial condition, results of operations, capital
requirements, and other factors that the board of directors deems relevant.
15
CAPITALIZATION
(DOLLARS IN THOUSANDS)
The following table sets forth our capitalization as of December 31, 2001:
- on a historical basis;
- on a historical as adjusted basis after giving effect to our receipt and
application of the estimated net proceeds from this offering in the
manner set forth in "Use of Proceeds" from our sale of 3,400,000 shares
of our common stock from treasury in this offering at an assumed public
offering price of $25.50 per share; and
- on a pro forma as adjusted basis after giving effect to the spin-off of
SCS and after giving effect to our receipt and application of the
estimated net proceeds from this offering as described above.
You should read this table in conjunction with our consolidated financial
statements and the accompanying notes, as well as the other financial
information included elsewhere in this prospectus or incorporated by reference
in this prospectus.
HISTORICAL PRO FORMA
HISTORICAL AS ADJUSTED AS ADJUSTED
---------- ----------- -----------
Cash and marketable securities.......................... $ 20,694 $ 20,694 $ 19,214
========= ======== ========
Current maturities of long-term debt.................... $ 6,281 $ 6,281 $ 41
Long-term debt.......................................... 213,745 132,447 8,687
--------- -------- --------
Total balance sheet debt........................... 220,026 138,728 8,728
Off-balance sheet debt.................................. 141,500 141,500 141,500
--------- -------- --------
Total debt, including off-balance sheet debt....... 361,526 280,228 150,228
--------- -------- --------
Shareholders' equity:
Common stock, $1.00 par value; 120,000,000 shares
authorized; 31,028,108 shares (actual and as
adjusted) issued................................... 31,028 31,028 31,028
Capital surplus....................................... 41,689 60,665 60,665
Retained earnings..................................... 537,496 537,496 308,524
Accumulated other comprehensive income................ (6,252) (6,252) (5,921)
Treasury stock, at cost 6,162,571 actual shares,
2,762,571 as adjusted.............................. (112,972) (50,650) (50,650)
--------- -------- --------
Total shareholders' equity......................... 490,989 572,287 343,646
--------- -------- --------
Total capitalization, including off-balance
sheet debt.................................. $ 852,515 $852,515 $493,874
========= ======== ========
Total debt to total capitalization, including
off-balance sheet debt................................ 42.4% 32.9% 30.4%
16
BUSINESS
GENERAL
We are a leading provider of global transportation services. We provide
national, regional and international less-than-truckload, or LTL, truckload and
non-asset-based transportation services. Through our three principal operating
units and captive technology company, we make global commerce work by connecting
people, places and information. Our primary focus is the movement of goods and
materials for business customers. In addition, we have broadened our focus to
include transportation management and logistics consulting services.
Our largest operating unit, Yellow Transportation, Inc., is a primarily LTL
transportation services company offering a full range of asset-based services
for the movement of industrial, commercial, and retail goods and materials. The
Yellow Transportation mission is to be the leading provider of guaranteed, time-
definite, defect-free, hassle-free transportation services for business
customers worldwide. Yellow Transportation addresses the increasingly complex
transportation needs of its customers through service offerings such as:
- Exact Express(R) -- a premium expedited and time-definite air and ground
service with an industry-leading 100% satisfaction guarantee;
- Definite Delivery(R) -- a guaranteed on-time service with constant
shipment monitoring and proactive notification;
- Standard Ground(R) -- a ground service with complete coverage of North
America;
- Standard Ground Regional Advantage(R) -- a high-speed service for
shipments moving between 500 and 1,500 miles;
- Yellow Global(R) -- a branded international freight forwarding and
customs brokerage service covering 88 countries; and
- MyYellow.com(R) -- a leading edge e-commerce web site offering secure and
customized online resources to manage transportation activity.
Our second operating unit, SCS Transportation, Inc., provides regional
overnight and second-day transportation services, as well as a variety of other
transportation and supply chain solutions through its two subsidiaries, Saia
Motor Freight Line, Inc. and Jevic Transportation, Inc. SCS provides LTL and
selected truckload services to a broad range of industries.
Our newest operating unit, Meridian IQ, LLC is a non-asset-based company
using web-based technology to provide customers a single source for their
logistics planning, global shipment management and execution needs. Meridian IQ
provides domestic and international forwarding, multi-modal brokerage services
and transportation solutions management. We have concentrated all of our
non-asset-based services under one management team in Meridian IQ in order to
bring focus to this fast-growing business.
Meridian IQ and Yellow Transportation have complementary service offerings
which create the ability to not only add value for the customer but also
generate revenue for each other. Meridian IQ has the advantage of being a
non-asset-based transportation service business with direct access to and
support from the experience, resources and North American network of Yellow
Transportation. We believe that the Meridian IQ business model addresses the
changing needs of the transportation market by building upon the technology and
operational expertise of the Yellow companies.
Yellow Technologies, Inc., our captive corporate resource, provides
innovative information solutions and technology services. From MyYellow.com(R),
an advanced customer-focused web site, to sophisticated systems that support our
complex operations, Yellow Technologies provides value-added technology to our
customers and us. The expertise of Yellow Technologies continues to receive
recognition from independent sources, as evidenced by our inclusion in the CIO
Magazine Top 100 technology companies for the third consecutive year, and by
being named the top transportation services provider in the InformationWeek 500.
17
RECENT DEVELOPMENTS
We have received authorization from our board of directors to take the
steps necessary to effect the spin-off of SCS to our shareholders. It is our
belief that, with the anticipated improvement in the economy, the timing is
right to spin-off the regional businesses from our other operations so that both
entities can pursue independent growth strategies that will increase shareholder
value. The spin-off will be subject to a number of conditions and approvals,
including a determination by our board of directors that the spin-off is in the
best interest of our shareholders. The spin-off of SCS would be accomplished by
distributing to our shareholders all of the stock of SCS. Over the coming
months, our management and their advisors intend to undertake the various tasks
that are necessary to prepare for the spin-off, including applying for a ruling
from the IRS that the spin-off will be tax-free to us and to our shareholders.
If we determine that we will be unable to receive such a ruling from the IRS on
a timely basis, we could still proceed with the spin-off if we receive an
acceptable opinion from our outside accountants with respect to the tax-free
treatment of the spin-off. See "Risk Factors."
INDUSTRY
In 2001, the trucking industry accounted for 87.3% of total domestic
freight revenue, or $610 billion, and 67.4% of domestic freight volume. Trucks
provide transportation services to virtually every industry operating in the
United States and generally offer higher levels of reliability, shipment
integrity and speed than other surface transportation options.
The trucking industry consists of three segments, including private fleets
and two "for-hire" carrier groups. The private carrier segment consists of
fleets owned and operated by shippers who move their own goods. The two
"for-hire" groups are based on the typical shipment sizes handled by
transportation service companies: truckload refers to providers transporting
shipments greater than 10,000 pounds and LTL refers to providers transporting
shipments less than 10,000 pounds.
Yellow Transportation and SCS are both primarily LTL carriers. The LTL
segment accounted for approximately $63 billion of revenue in 2001, or 10.3% of
total trucking revenue. According to the American Trucking Association, LTL
volume is expected to grow at a 2.7% compound annual growth rate through 2007,
increasing to 3.2% annually from 2008 through 2013.
LTL transportation providers consolidate numerous orders generally ranging
from 100 to 10,000 pounds from businesses in different locations. Orders are
consolidated at individual locations within a certain radius from service
centers. As a result, LTL carriers require expansive networks of pickup and
delivery operations around local service centers and, with respect to national
carriers, shipments are moved between origin and destination through a series of
regional distribution centers. Depending on the distance shipped, the LTL
segment is typically classified into three sub-groups:
- Regional -- Average distance is typically less than 500 miles with a
focus on one- and two-day markets. Regional transportation companies can
move shipments directly to their respective destination centers, which
increases service reliability and avoids costs associated with
intermediate handling.
- Interregional -- Average distance is usually between 500 and 1,000 miles
with a focus on serving two- and three-day markets. There is a blurring
of lines between regional and national providers, as each sees the
interregional segment as a growth opportunity, and there are no providers
who focus exclusively on this sector.
- National -- Average distance is typically in excess of 1,000 miles with
focus on service in two- to five-day markets. National providers rely on
interim shipment handling through hub and spoke networks, which require
numerous satellite service centers, multiple distribution centers, and a
relay network. To gain service and cost advantages, they often ship
directly between service centers, minimizing intermediate handling.
LTL providers moving shipments over longer distances often transfer freight
among vehicles at regional distribution centers to redirect shipments destined
for the same location. Significant capital is required of LTL
18
transportation service providers to maintain a network of distribution and
service centers and revenue equipment. The substantial infrastructure spending
needed for LTL carriers makes it difficult for new start-up or small operations
to effectively compete with established companies. As a result, the LTL segment
tends to be concentrated, with a few national companies and several regional
companies.
We also participate in the logistics market through Meridian IQ.
Non-asset-based service providers such as logistics companies arrange for and
expedite the movement of goods and materials through the supply chain. The
typical logistics provider neither owns nor operates the physical assets
necessary to move goods and materials, eliminating the significant capital
requirements normally experienced by a typical transportation company. This
lower asset requirement allows the non-asset-based firms to generate
substantially better returns and reduce variable costs in economic downturns.
According to Cass Information Systems, Inc. and Armstrong & Associates, the
contract logistics market totaled $56.4 billion in gross revenues in 2000.
GROWTH STRATEGY
We are committed to growth in revenues, profitability and cash flow, all
with the objective of maximizing return on invested capital. Our strategy
remains the expansion of our transportation services through both internal
growth and selected acquisitions that meet our investment criteria. The primary
components of our growth strategy are to:
Broaden Our Portfolio of Asset-Based Transportation Services -- Since 1997,
our Yellow Transportation asset-based service portfolio has expanded to include
guaranteed, expedited air and ground, time definite and global transportation
service options. We have also developed specialized services for the handling of
chemical and exhibition shipments. This expanded portfolio has created growth by
adding new customers and enabling further penetration within our existing
customer base with higher margin, value added services. SCS intends to continue
to build on the success of its current portfolio of transportation services,
including the growth of a guaranteed, time definite service offering and other
customized services. We intend to execute this strategy by building upon our
existing operational expertise and technology strengths.
Expand Our Customer Base and Geographic Reach -- Significant growth
opportunities exist through geographic expansion, particularly in our regional
business. SCS will focus on expanding its service area to North American regions
where it does not presently operate, as well as increasing lane density in its
current operating regions through an increased marketing effort to customers
that it does not presently serve. Yellow Transportation will focus its broad
national sales effort to both acquire new customers and increase penetration of
the existing customer base, as well as use its technology-based asset
utilization system to increase density in areas it currently serves. In
addition, Meridian IQ will focus on expanding its customer base both
domestically and internationally.
Increase Our Focus on Non-Asset-Based Services -- As transportation
management becomes increasingly sophisticated, customers are seeking tailored
solutions that can be quickly implemented. We are well positioned to capitalize
on this trend by leveraging our existing asset-based business capabilities and
customer relationships. We will provide tailored non-asset-based insourcing and
outsourcing solutions in a shorter timeframe than current industry standards
through Meridian IQ. Yellow Technologies will continue to invest in proprietary
technology, enabling us to grow while at the same time increasing asset
utilization and profitability.
YELLOW TRANSPORTATION, INC.
Yellow Transportation, founded in 1924, is among the nation's largest
transportation companies providing primarily LTL national, regional and
international transportation services for industrial, commercial retail and
government markets. Yellow Transportation serves over 700,000 customer locations
throughout North America and no one customer accounts for more than 6% of Yellow
Transportation business. Operating from 366 strategically located facilities,
service is provided throughout North America, including within Puerto Rico and
Hawaii. The Yellow Transportation network is driven by proprietary technology
developed and supported by Yellow Technologies. Approximately 20,000 Yellow
Transportation employees are dedicated to operating the system that supports
230,000 shipments in transit at any time. An operations research and
19
engineering team is responsible for the routing, sequencing and timing of nearly
60 million miles per month. Shipments range from 100 to 40,000 pounds, with an
average shipment size of 1,200 pounds traveling an average distance of more than
1,200 miles. Yellow Transportation has over 700 employees with sales
responsibilities.
As of December 31, 2001, Yellow Transportation owned or leased the
following equipment:
OWNED LEASED
------ ------
Highway tractors............................................ 2,681 492
Local tractors.............................................. 4,804 --
Trailers.................................................... 33,287 60
Yellow Transportation provides a portfolio of transportation services that
addresses the varied time-definite, expedited, specialized, and geographic
shipping needs of its customers.
Yellow Standard Ground(R) service and Standard Ground Regional Advantage(R)
service provide reliable and timely ground transportation. On-time service
performance improved to a high of more than 94% in 2001.
Additionally, Yellow Transportation offers two guaranteed services: Exact
Express(R) and Definite Delivery(R). Exact Express(R) is an expedited,
time-definite air and ground service backed by an industry-leading 100% customer
satisfaction guarantee and proactive notification in the event of an inability
to fulfill the specified delivery commitment. Shipment delivery can be arranged
same day, next day, or any day, including at the exact time of day specified by
the customer. This service offering has grown very rapidly, largely due to the
100% customer satisfaction guarantee and the on-time service performance
achieved through the expedited network and air transportation operations.
Definite Delivery(R) service provides a 100% on-time guarantee, backed with
constant shipment monitoring and proactive notification. Like Exact Express(R),
Definite Delivery(R) commands a price premium to standard services through its
service commitment and performance.
MyYellow.com(R) now has more than 65,000 registrants who utilize the Yellow
Transportation e-commerce capabilities developed by Yellow Technologies.
MyYellow.com(R) enables secure and customized on-line resources to manage
transportation activity over the Internet. Yellow Transportation also serves the
growing exhibition industry with expedited, guaranteed air and ground services.
As a partner with the American Chemistry Council Responsible Care Program,
Yellow Transportation provides expert and safe handling of chemical shipments.
In addition, the Yellow Transportation portfolio of services includes
transportation solutions for selective truckload shipments and other specialized
transportation needs.
All Yellow Transportation services are enhanced by centralized 24-hour per
day, 365-day per year customer service centers, which provide full customer
support and eliminate the need for contact with local facilities, resulting in
the streamlined flow of information.
Approximately 80% of Yellow Transportation employees are organized by the
IBT, and wages and benefits are governed by a common labor agreement that is
renegotiated every three to five years. The current five-year labor agreement
expires March 31, 2003.
SCS TRANSPORTATION, INC.
SCS offers a full line of standard and specialized ground transportation
services through its principal operating subsidiaries Saia and Jevic. SCS
employees are not represented by a collective bargaining unit and management
believes that relations with its employees are good.
Saia Motor Freight Line, Inc. -- Founded in 1924, Saia is a leading
regional LTL carrier that serves the South, Southwest, Pacific Northwest and the
West. Saia specializes in offering its customers a range of premium overnight
and second-day LTL services, with time-definite and expedited options. Within
these service options, Saia provides its customers with the flexibility to
handle shipments between 100 and 10,000 pounds.
Saia customers can choose from a wide variety of service options including
one- and two-day regional LTL shipping, guaranteed/expedited delivery, selective
truckload shipping, consolidation/distribution services
20
and specialized or customized services. As of December 31, 2001, Saia owned
2,341 tractors and 7,748 trailers.
Saia has invested more than $14.0 million since 1998 in technology to
enhance its ability to monitor and manage service operations and profitability.
As a result of the improved data capabilities, Saia has introduced its
trademarked Customer Service Indicators(R) program, allowing customers to
monitor service performance. Customers can access the information via the
Internet to help manage their shipments.
Saia operates a network comprised of 110 facilities. The average Saia
shipment weighs approximately 1,300 pounds and travels an average distance of
approximately 480 miles. In March 2001, Saia successfully integrated its WestEx
and Action Express affiliates into its operations and expanded its geographic
reach to 21 states. Saia has approximately 5,100 employees.
Jevic Transportation, Inc. -- Founded in 1981, Jevic is a specialized LTL
ground transportation services provider that also offers selective truckload
services throughout the continental United States and Canada. Jevic specializes
in offering its customers standard and customized regional transportation
solutions based on its non-traditional Breakbulk-Free(R) operating model, often
eliminating the need to rehandle freight at interim and destination terminals.
In 2001, average shipment weights were approximately 4,700 pounds, and the
average shipment distance was approximately 725 miles. As of December 31, 2001,
Jevic owned 1,300 tractors and 2,727 trailers and operated nine facilities.
Jevic has approximately 2,400 employees.
The Jevic approach offers customers a broad line of LTL and truckload
services that can accommodate a wider range of shipment sizes and trip lengths
than traditional regional carriers. Jevic develops integrated solutions for
customers designed to lower their overall supply chain costs, which can include
direct-to-customer deliveries, multi-shipper order consolidation for their
inbound supplies, and express and time-definite deliveries. Approximately half
of the Jevic trailers are heated and service customers with temperature-
sensitive requirements. Jevic is a partner with the American Chemical Council
Responsible Care Program and derives over 40% of its revenue from the chemical
and chemical-related sectors.
The technology employed by Jevic is crucial to its unique Breakbulk-Free(R)
LTL operating model. Jevic uses the Qualcomm OmniTRACS satellite-based
communications system, facilitating the load planning and capacity management
processes critical to its operating structure. To leverage this information,
Jevic has developed a proprietary suite of programs called PreSys(R) (predictive
systems) that allow early warning of potential problems and corrective action to
minimize service failures.
MERIDIAN IQ, LLC
Meridian IQ is a global transportation services and technology company.
Meridian IQ is designed to deliver a wide range of transportation solutions,
providing organizations with improved return-on-investment results through
flexible, fast and easy-to-implement transportation services and technology
management solutions. By combining the current non-asset-based businesses of
Yellow Transportation under one umbrella, Meridian IQ has an immediate revenue
stream and 8,500 customers.
Meridian IQ offers the following services:
- International Forwarding and Customs Brokerage -- arranging for the
administration, transportation and delivery of goods to over 78
countries;
- Multi-modal Brokerage Services -- providing companies with daily shipment
needs access to volume capacity and specialized equipment at competitive
rates;
- Domestic Forwarding and Expedited Services -- arranging guaranteed, time
definite transportation for companies within North America requiring
time-sensitive delivery options and guaranteed reliability; and
- Transportation Solutions and Technology Management -- web-based
Transportation Management Systems enabling customers to centrally manage
their transportation network with increased efficiency
21
and visibility. When combined with network consulting and operations management,
any organization, regardless of size, can outsource transportation functions
partially or even entirely with Meridian IQ.
Meridian IQ and Yellow Transportation create complementary service
offerings with the ability for each to generate revenue for the other. Through
its strong relationships, Yellow Transportation has introduced its customers to
Meridian IQ for value added transportation technology and management services.
This gives Meridian IQ immediate market credibility from established
relationships, and a large pool of existing Yellow Transportation customers to
target. In addition, Meridian IQ will bring Yellow Transportation new customers.
Meridian IQ has approximately 220 total employees, including a sales force
of over 40 employees. Additionally, the 700 members of the Yellow Transportation
sales force assist Meridian IQ in developing sales leads.
YELLOW TECHNOLOGIES, INC.
Yellow Technologies was established for the purpose of creating competitive
advantages for Yellow businesses by delivering innovative information solutions
and technology services. Yellow Technologies has approximately 325 total
employees. In addition to delivering and supporting highly integrated
applications and solutions, Yellow Technologies provides value-added technology
to our customers and us. The expertise of Yellow Technologies continues to
receive recognition from independent sources, as evidenced by inclusion as a CIO
Magazine Top 100 technology company for the third consecutive year and by being
named the top transportation services provider in the InformationWeek 500.
REGULATION
The trucking industry is subject to regulatory and legislative changes that
can have a materially adverse effect on our operations.
Historically, the Interstate Commerce Commission and various state agencies
regulated trucking companies' operating rights, accounting systems, rates and
charges, safety, mergers and acquisitions, periodic financial reporting and
other matters. In 1995, federal legislation was passed that preempted state
regulation of prices, rates, and services of motor carriers and eliminated the
Interstate Commerce Commission. Several Interstate Commerce Commission functions
were transferred to the Department of Transportation, but a lack of regulations
implementing such transfers currently prevents us from assessing the full impact
of this action.
Interstate motor carrier operations are subject to safety requirements
prescribed by the Department of Transportation. Matters such as weight and
dimensions of equipment are also subject to federal and state regulation. In
1988, the Department of Transportation began requiring national commercial
drivers' licenses for interstate truck drivers.
Our motor carrier operations are also subject to environmental laws and
regulations, including laws and regulations dealing with underground fuel
storage tanks, the transportation of hazardous materials and other environmental
matters. We have established programs to comply with all applicable
environmental regulations. As part of our safety and risk management program, we
periodically perform internal environmental reviews to achieve environmental
compliance and avoid environmental risk. If we fail to comply with the
applicable regulations, then we could be subject to substantial fines or
penalties and to civil and criminal liability.
Our operations involve certain inherent environmental risks. We maintain
bulk fuel storage and fuel islands at several of our facilities. Our operations
involve the risks of fuel spillage or seepage, environmental damage and
hazardous waste disposal, among others. We have instituted programs to monitor
and control environmental risks and ensure compliance with applicable
environmental laws. Operations conducted in industrial areas, where truck
terminals are normally located, and where groundwater or other forms of
environmental contamination may have occurred, potentially expose us to claims
that we contributed to the environmental contamination. We believe that we are
currently in compliance with applicable laws and regulations and that the cost
of compliance has not materially affected results of operations.
22
SEASONALITY
Our revenues are subject to seasonal variations. Customers tend to reduce
shipments after the winter holiday season, and operating expenses tend to be
higher in the winter months primarily due to colder weather, which causes higher
fuel consumption from increased idle time. Generally, the first quarter is the
weakest while the third is the strongest.
23
MANAGEMENT
The following table sets forth information with respect to the executive
officers of each of Yellow, Yellow Transportation, Yellow Technologies, SCS and
Meridian IQ.
YELLOW
NAME AGE POSITION
- ---- --- ------------------------------------------
William D. Zollars........................ 54 Chairman of the Board of Directors,
President and Chief Executive Officer
Donald G. Barger, Jr...................... 59 Senior Vice President and Chief Financial
Officer
William F. Martin, Jr..................... 54 Senior Vice President, Legal and Corporate
Secretary
Gregory A. Reid........................... 49 Senior Vice President and Chief Marketing
Officer
Stephen L. Bruffett....................... 38 Vice President and Treasurer
WILLIAM D. ZOLLARS Prior to being named Chairman, President and Chief
Executive Officer of Yellow Corporation in November 1999, Mr. Zollars had been
President of Yellow Transportation since 1996. He was Senior Vice President of
Ryder Integrated Logistics from 1994 to 1996. He is a member of the board of
Butler Manufacturing Company and Prologis Trust.
DONALD G. BARGER, JR. Mr. Barger has been Senior Vice President and Chief
Financial Officer of Yellow Corporation since November 2000. He was Vice
President and Chief Financial Officer of Hillenbrand Industries from 1998 to
November 2000, and Vice President and Chief Financial Officer of Worthington
Industries from 1993 to 1998. He is a member of the boards of Gardner, Denver
Inc. and Quanex Corporation.
WILLIAM F. MARTIN, JR. Mr. Martin has been Senior Vice President, Legal
and Corporate Secretary of Yellow Corporation since December 1993, and held
other positions at Yellow Corporation or its subsidiaries prior to that time.
GREGORY A. REID Mr. Reid was named Senior Vice President and Chief
Marketing Officer of Yellow Corporation in December 2001, having served as
Senior Vice President and Chief Communications Officer since November 2000. He
was Senior Vice President of Sales and Marketing for Yellow Transportation from
March 1997 to November 2000. Prior to that he was Vice President and General
Manager for Ryder Integrated Logistics' Western Division.
STEPHEN L. BRUFFETT Mr. Bruffett was named Vice President and Treasurer of
Yellow Corporation in July 2000. He was Director, Strategic Analysis of Yellow
Transportation from June 1998 to July 2000. Prior to that, he had been Director
of Finance for American Freightways since 1992.
YELLOW TRANSPORTATION
NAME AGE POSITION
- ---- --- ------------------------------------------
James L. Welch............................ 47 President and Chief Executive Officer
Michael J. Smid........................... 46 Executive Vice President and Chief
Administrative Officer
Steven E. Defenbaugh...................... 53 Senior Vice President, Sales and Marketing
Carl K. Scarborough, Jr................... 64 Senior Vice President, Labor Relations
Donald E. Emery........................... 52 Senior Vice President, Human Resources
JAMES L. WELCH Mr. Welch has been President and Chief Executive Officer of
Yellow Transportation since June 2000. He was Vice President, Central Business
Group of Yellow Transportation from March 1998
24
to May 2000, and served as Vice President, Operations Systems and Network
Support of Yellow Transportation from January 1997 to March 1998.
MICHAEL J. SMID Mr. Smid has been Executive Vice President and Chief
Administrative Officer of Yellow Transportation since June 2000. He was Senior
Vice President, Operations Support of Yellow Transportation from March 1998 to
May 2000 and Vice President, Central Business Group of Yellow Transportation
from January 1997 to March 1998.
STEVEN E. DEFENBAUGH Mr. Defenbaugh has been Senior Vice President, Sales
and Marketing of Yellow Transportation since November 2000. He was Vice
President, Southeast Business Group of Yellow Transportation from January 1997
to November 2000.
CARL K. SCARBOROUGH, JR. Mr. Scarborough has been Senior Vice President,
Labor Relations of Yellow Transportation since January 1997. He was Senior Vice
President, Human Resources of Yellow Transportation from April 1995 to January
1997.
DONALD E. EMERY Mr. Emery has been Senior Vice President, Human Resources
of Yellow Transportation since December 1999. He was Senior Director and
Director, Labor Relations of Yellow Transportation from August 1993 to December
1999.
YELLOW TECHNOLOGIES
NAME AGE POSITION
- ---- --- ------------------------------------------
Lynn M. Caddell........................... 49 President
LYNN M. CADDELL Mrs. Caddell has been President of Yellow Technologies
since November 1999. She joined Yellow Technologies in July 1997 as Vice
President, Systems Development. She was Senior Director, Systems Development at
America West from 1990 to 1997.
SCS
NAME AGE POSITION
- ---- --- ------------------------------------------
Herbert A. Trucksess, III................. 52 President and Chief Executive Officer
Richard D. O'Dell......................... 40 President and Chief Executive Officer Saia
Motor Freight Line, Inc.
Paul J. Karvois........................... 47 President and Chief Executive Officer
Jevic Transportation, Inc.
James J. Bellinghausen.................... 40 Vice President of Finance
HERBERT A. TRUCKSESS, III Mr. Trucksess was named President and Chief
Executive Officer of the Yellow Regional Transportation Group (now SCS
Transportation, Inc.) in February 2000. Mr. Trucksess had been Senior Vice
President and Chief Financial Officer of Yellow Corporation since June 1994.
RICHARD D. O'DELL Mr. O'Dell was named President and Chief Executive
Officer of Saia Motor Freight Line in November 1999. Mr. O'Dell joined Saia in
1997 as Vice President of Finance and Administration. From 1995 until assuming
his position with Saia, Mr. O'Dell was Vice President of Finance and
Administration of WestEx, a Yellow Corporation subsidiary.
PAUL J. KARVOIS Mr. Karvois was named President and Chief Executive
Officer of Jevic Transportation in December 1999, having served as chief
operating officer since March 1997. Mr. Karvois joined Jevic in January 1992 as
Director of Insurance and later in 1992 was appointed Director of Risk
Management. Mr. Karvois was promoted to Senior Vice President of Marketing and
Sales in December 1993.
JAMES J. BELLINGHAUSEN Mr. Bellinghausen was appointed Vice President of
Finance for the Yellow Regional Transportation Group (now SCS Transportation,
Inc.) in April 2000. Mr. Bellinghausen joined Yellow Corporation in August 1998
as Director of Corporate Accounting. Prior to joining Yellow Corporation, Mr.
Bellinghausen had 14 years of experience in public accounting.
25
MERIDIAN IQ
NAME AGE POSITION
- ---- --- ------------------------------------------
James D. Ritchie.......................... 41 President and Chief Executive Officer
Valerie A. Bonebrake...................... 49 Executive Vice President and Chief
Operating Officer, Solutions Management
JAMES D. RITCHIE Mr. Ritchie has been President and Chief Executive
Officer of Meridian IQ (formerly Transportation.com, LLC) since May 2000. Prior
to joining Transportation.com, Mr. Ritchie was Vice President and General
Manager for Ryder Integrated Logistics, a position he held from 1996 to February
2000.
VALERIE A. BONEBRAKE Mrs. Bonebrake has been Executive Vice President and
Chief Operating Officer, Solutions Management since January 2002. Prior to
joining Meridian IQ, Mrs. Bonebrake had been Senior Vice President of New
Services at Yellow Transportation since February 2000. She was Vice President
and General Manager for Ryder Integrated Logistics from 1997 to February 2000.
26
DESCRIPTION OF CAPITAL STOCK
This summary of the material features and rights of our capital stock does
not purport to be exhaustive and is qualified in its entirety by reference to
applicable Delaware law and our certificate of incorporation and by-laws. See
"Where You Can Find More Information."
COMMON STOCK
Our certificate of incorporation authorizes the issuance of up to
120,000,000 common shares, par value $1.00 per share. As of February 28, 2002,
there were 31,126,358 common shares issued, which included 24,963,787
outstanding and 6,162,571 treasury shares. Holders of our common shares are
entitled to one vote per share with respect to each matter presented to our
stockholders on which the holders of common shares are entitled to vote. Subject
to the preferences applicable to any outstanding preferred stock, the holders of
common shares are entitled to receive ratably any dividends declared by our
board of directors out of funds legally available for that purpose. In the event
of liquidation, holders of common shares will be entitled to receive any assets
remaining after the payment of our debts and the expenses of the liquidation,
subject to such preferences applicable to any outstanding preferred stock. The
holders of our common shares have no pre-emptive, subscription or conversion
rights. All issued and outstanding shares of common stock are validly issued,
fully paid and nonassessable.
PREFERRED STOCK
Our certificate of incorporation authorizes the issuance of up to 5,000,000
shares of preferred stock, par value $1.00 per share. As of February 28, 2002,
no shares of preferred stock were issued and outstanding. Our board of directors
has the authority, without action by our shareholders, to designate and issue
preferred stock in one or more series and to designate the rights, preferences
and privileges of each series, which may be greater than the rights of our
common shares. The issuance of preferred stock could have the effect of
delaying, deferring or preventing a change in control of our company without
further action by our shareholders and may adversely affect the market price,
and the voting and other rights, of the holders of our common shares. The
issuance of preferred stock with voting and conversion rights may adversely
affect the voting power of the holders of common shares, including the loss of
voting rights to others.
DELAWARE ANTI-TAKEOVER LAW
We are a Delaware corporation subject to Section 203 of the Delaware
General Corporation Law. Under Section 203, certain "business combinations"
between a Delaware corporation and an "interested stockholder" are prohibited
for a three-year period following the date that such stockholder became an
interested stockholder, unless:
- the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder was approved by the board
of directors of the corporation before such stockholder became an
interested stockholder;
- upon consummation of the transaction that resulted in such stockholder
becoming an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the time
the transaction commenced, excluding for purposes of determining the
number of shares outstanding voting stock owned (a) by directors who are
also officers and (b) by employee stock plans in which the employees do
not have a confidential right to tender stock held by the plan in a
tender or exchange offer; or
- the business combination is approved by the board of directors of the
corporation and authorized at a meeting by two-thirds of the voting stock
which the interested stockholder did not own.
The three-year prohibition also does not apply to some business
combinations proposed by an interested stockholder following the announcement or
notification of an extraordinary transaction involving the corporation and a
person who had not been an interested stockholder during the previous three
years or who became an interested stockholder with the approval of a majority of
the corporation's directors.
27
Under the Delaware General Corporation Law, the term "business combination"
is defined generally to include mergers or consolidations between a Delaware
corporation and an interested stockholder, transactions with an interested
stockholder involving the assets or stock of the corporation or its
majority-owned subsidiaries, and transactions which increase an interested
stockholder's percentage ownership of stock. The term "interested stockholder"
is defined generally as those stockholders who become beneficial owners of 15%
or more of a Delaware corporation's voting stock, together with the affiliates
or associates of that stockholder.
ANTI-TAKEOVER EFFECTS OF OUR CERTIFICATE OF INCORPORATION AND BY-LAWS
In addition, our certificate of incorporation provides that certain
"business combinations" require an affirmative vote of holders of at least 80%
of the voting power of the then outstanding capital stock entitled to vote
generally in the election of directors.
Our certificate of incorporation also contains restrictions on such
business combinations by requiring the approval of a majority of continuing
directors, as well as by requiring that certain fair price provisions be
satisfied. Continuing directors are directors (a) serving as directors prior to
June 1, 1983, (b) serving as directors before the substantial stockholder
acquired 10% of the then outstanding voting shares or (c) designated as
continuing directors by a majority of the then continuing directors prior to the
directors' election. Fair price provisions in our certificate of incorporation
mandate that the amount of cash and the fair market value of other consideration
to be received per share by holders of common stock not fall below certain
ratios.
The term "business combination" is defined in our certificate of
incorporation generally to include any merger or consolidation of our company or
any subsidiary with or into any substantial stockholder or any other
corporation, whether or not itself a substantial stockholder which, after such
merger or consolidation, would be an affiliate of a substantial stockholder,
transactions with a substantial stockholder involving assets or stock of our
company or any majority-owned subsidiary with an aggregate fair market value of
$5,000,000 or more, and transactions which increase a substantial stockholder's
percentage ownership of our capital stock. A "substantial stockholder" is
defined generally as any person who is or becomes the beneficial owner not less
than 10% of the voting shares, together with any affiliate of such stockholder.
An "affiliate" has the meaning set forth in the rules under the Securities
Exchange Act of 1934, as amended.
Our certificate of incorporation also provides that shareholders may act
only at an annual or special meeting of shareholders and not by written consent.
Our bylaws provide that special meetings of the shareholders can be called only
by the Chairman of the Board, the Chief Executive Officer or a majority of our
board of directors. These provisions could have the effect of delaying until the
next annual stockholders meeting stockholder actions that are favored by the
holders of a majority of the outstanding voting securities. These provisions may
also discourage another person or entity from making an offer to stockholders
for the common stock. This is because the person or entity making the offer,
even if it acquired a majority of our outstanding voting securities, would be
unable to call a special meeting of the stockholders and would be unable to
obtain unanimous written consent of the stockholders. As a result, any meeting
as to matters they endorse, including the election of new directors or the
appraisal of a merger, would have to wait for the next duly called stockholders
meeting.
28
UNDERWRITING
Credit Suisse First Boston Corporation and Deutsche Banc Alex. Brown Inc.
are acting as joint book-running managers for the offering. Under the terms and
subject to the conditions contained in an underwriting agreement dated
, 2002 we have agreed to sell to the underwriters named below, for
whom Credit Suisse First Boston Corporation and Deutsche Banc Alex. Brown Inc.
are acting as representatives, the following numbers of shares of common stock:
NUMBER
UNDERWRITER OF SHARES
- ----------- ---------
Credit Suisse First Boston Corporation......................
Deutsche Banc Alex. Brown Inc...............................
---------
Total..................................................... 3,400,000
=========
The underwriting agreement provides that the underwriters are obligated to
purchase all the shares of common stock in the offering if any are purchased,
other than those shares covered by the over-allotment option described below.
The underwriting agreement also provides that if an underwriter defaults, the
purchase commitments of non-defaulting underwriters may be increased or the
offering may be terminated.
We have granted to the underwriters a 30-day option to purchase on a pro
rata basis up to 510,000 additional shares from us at the initial public
offering price less the underwriting discounts and commissions. The option may
be exercised only to cover any over-allotments of common stock.
The underwriters propose to offer the shares of common stock initially at
the public offering price on the cover page of this prospectus and to selling
group members at that price less a selling concession of $
per share. The underwriters and selling group members may allow a discount of
$ per share on sales to other broker/dealers. After the initial public
offering, the representatives may change the public offering price and
concession and discount to broker/dealers.
The following table summarizes the compensation and estimated expenses we
will pay:
PER SHARE TOTAL
--------------------- ---------------------
WITHOUT WITH WITHOUT WITH
OVER- OVER- OVER- OVER-
ALLOTMENT ALLOTMENT ALLOTMENT ALLOTMENT
--------- --------- --------- ---------
Underwriting discounts and commissions paid by
us........................................... $ $ $ $
Expenses payable by us......................... $ $ $ $
We have agreed that we will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the Securities and
Exchange Commission a registration statement under the Securities Act of 1933
(the "Securities Act") relating to, any shares of our common stock or securities
convertible into or exchangeable or exercisable for any shares of our common
stock, or publicly disclose the intention to make any offer, sale, pledge,
disposition or filing, without the prior written consent of Credit Suisse First
Boston Corporation and Deutsche Banc Alex. Brown Inc. for a period of 90 days
after the date of this prospectus, except issuances pursuant to the exercise of
employee stock options outstanding on the date hereof.
Our officers and directors have agreed that they will not offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly, any
shares of our common stock or securities convertible into or exchangeable or
exercisable for any shares of our common stock, enter into a transaction that
would have the same effect, or enter into any swap, hedge or other arrangement
that transfers, in whole or in part, any of the economic consequences of
ownership of our common stock, whether any of these transactions are to be
settled by delivery of our common stock or other securities, in cash or
otherwise, or publicly disclose the intention to make any offer, sale, pledge or
disposition, or to enter into any transaction, swap, hedge or other arrangement,
without, in each case, the prior written consent of Credit Suisse First Boston
Corporation and Deutsche Banc Alex. Brown Inc. for a period of 90 days after the
date of this prospectus.
29
We have agreed to indemnify the underwriters against liabilities under the
Securities Act, or contribute to payments that the underwriters may be required
to make in that respect.
We have applied to list the shares of common stock on The Nasdaq National
Market.
In connection with the offering the underwriters may engage in stabilizing
transactions, over-allotment transactions, syndicate covering transactions,
penalty bids and passive market making in accordance with Regulation M under the
Securities Exchange Act of 1934 (the "Exchange Act").
- Stabilizing transactions permit bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum.
- Over-allotment involves sales by the underwriters of shares in excess of
the number of shares the underwriters are obligated to purchase, which
creates a syndicate short position. The short position may be either a
covered short position or a naked short position. In a covered short
position, the number of shares over-allotted by the underwriters is not
greater than the number of shares that they may purchase in the
over-allotment option. In a naked short position, the number of shares
involved is greater than the number of shares in the over-allotment
option. The underwriters may close out any covered short position by
either exercising their over-allotment option and/or purchasing shares in
the open market.
- Syndicate covering transactions involve purchases of the common stock in
the open market after the distribution has been completed in order to
cover syndicate short positions. In determining the source of shares to
close out the short position, the underwriters will consider, among other
things, the price of shares available for purchase in the open market as
compared to the price at which they may purchase shares through the
over-allotment option. If the underwriters sell more shares than could be
covered by the over-allotment option, a naked short position, the
position can only be closed out by buying shares in the open market. A
naked short position is more likely to be created if the underwriters are
concerned that there could be downward pressure on the price of the
shares in the open market after pricing that could adversely affect
investors who purchase in the offering.
- Penalty bids permit the representatives to reclaim a selling concession
from a syndicate member when the common stock originally sold by the
syndicate member is purchased in a stabilizing or syndicate covering
transaction to cover syndicate short positions.
- In passive market making, market makers in the common stock who are
underwriters or prospective underwriters may, subject to limitations,
make bids for or purchases of our common stock until the time, if any, at
which a stabilizing bid is made.
These stabilizing transactions, syndicate covering transactions and penalty bids
may have the effect of raising or maintaining the market price of our common
stock or preventing or retarding a decline in the market price of the common
stock. As a result the price of our common stock may be higher than the price
that might otherwise exist in the open market. These transactions may be
effected on The Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time.
A prospectus in electronic format may be made available on the web sites
maintained by one or more of the underwriters participating in this offering, or
selling group members, if any, who may participate in this offering. The
representatives may agree to allocate a number of shares to underwriters and
selling group members for sale to their online brokerage account holders.
Internet distributions will be allocated by the underwriters and selling group
members that will make internet distributions on the same basis as other
allocations.
Some of the underwriters or their affiliates have provided investment
advisory services to us in the past and may do so in the future. They receive
customary fees and commissions for these services.
30
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the common stock in Canada is being made only on a
private placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of common stock are made. Any resale of the common stock in Canada must
be made under applicable securities laws which will vary depending on the
relevant jurisdiction, and which may require resales to be made under available
statutory exemptions or under a discretionary exemption granted by the
applicable Canadian securities regulatory authority. Purchasers are advised to
seek legal advice prior to any resale of the common stock.
REPRESENTATIONS OF PURCHASERS
By purchasing common stock in Canada and accepting a purchase confirmation
a purchaser is representing to us and the dealer from whom the purchase
confirmation is received that
- the purchaser is entitled under applicable provincial securities laws to
purchase the common stock without the benefit of a prospectus qualified
under those securities laws,
- where required by law, that the purchaser is purchasing as principal and
not as agent, and
- the purchaser has reviewed the text above under Resale Restrictions.
RIGHTS OF ACTION -- ONTARIO PURCHASERS ONLY
Under Ontario securities legislation, a purchaser who purchases a security
offered by this prospectus during the period of distribution will have a
statutory right of action for damages, or while still the owner of the shares,
for rescission against us in the event that this prospectus contains a
misrepresentation. A purchaser will be deemed to have relied on the
misrepresentation. The right of action for damages is exercisable not later than
the earlier of 180 days from the date the purchaser first had knowledge of the
facts giving rise to the cause of action and three years from the date on which
payment is made for the shares. The right of action for rescission is
exercisable not later than 180 days from the date on which payment is made for
the shares. If a purchaser elects to exercise the right of action for
rescission, the purchaser will have no right of action for damages against us.
In no case will the amount recoverable in any action exceed the price at which
the shares were offered to the purchaser and if the purchaser is shown to have
purchased the securities with knowledge of the misrepresentation, we will have
no liability. In the case of an action for damages, we will not be liable for
all or any portion of the damages that are proven to not represent the
depreciation in value of the shares as a result of the misrepresentation relied
upon. These rights are in addition to, and without derogation from, any other
rights or remedies available at law to an Ontario purchaser. The foregoing is a
summary of the rights available to an Ontario purchaser. Ontario purchasers
should refer to the complete text of the relevant statutory provisions.
ENFORCEMENT OF LEGAL RIGHTS
All of our directors and officers as well as the experts named herein may
be located outside of Canada and, as a result, it may not be possible for
Canadian purchasers to effect service of process within Canada upon us or those
persons. All or a substantial portion of our assets and the assets of those
persons may be located outside of Canada and, as a result, it may not be
possible to satisfy a judgment against us or those persons in Canada or to
enforce a judgment obtained in Canadian courts against us or those persons
outside of Canada.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of common stock should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the common
stock in their particular circumstances and about the eligibility of the common
stock for investment by the purchaser under relevant Canadian legislation.
31
RELATIONSHIP WITH AFFILIATES OF CERTAIN UNDERWRITERS
We are in compliance with the terms of the indebtedness owed by us to
affiliates of Deutsche Banc Alex. Brown Inc. The decision of Deutsche Banc Alex.
Brown Inc. to distribute our shares of common stock was not influenced by their
respective affiliates that are our lenders and those affiliates had no
involvement in determining whether or when to distribute our shares of common
stock under this offering or the terms of this offering. Deutsche Banc Alex.
Brown Inc. will not receive any benefit from this offering other than the
underwriting discounts and commissions paid by us.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document that we file with
the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the Public Reference Room. The SEC also maintains a web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC. The address of the
SEC's web site is http://www.sec.gov.
This prospectus is part of a registration statement on Form S-3 that we
filed with the SEC. This prospectus, however, does not include all of the
information contained in the registration statement. For further information
about us and the securities offered by this prospectus, you should review the
registration statement and the information incorporated by reference therein.
You can obtain a copy of the registration statement free of charge from the
SEC's web site or from the SEC's Public Reference Room at the address listed
above.
The SEC allows us to "incorporate by reference" the information that we
file with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information.
We have filed the following documents with the SEC and they are
incorporated by reference into this prospectus:
- Annual Report on Form 10-K for the fiscal year ended December 31, 2001;
and
- Current Reports on Form 8-K, including exhibits, filed with the SEC on
January 29, 2002 and February 25, 2002.
Please note that all other documents and reports filed under Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act following the date of this
prospectus and prior to the termination of this offering will be deemed to be
incorporated by reference into this prospectus and to be made a part hereof from
the date of the filing of our reports and documents. Upon request, we will
provide without charge to each person, including any beneficial owner, to whom a
prospectus is delivered a copy of any or all of the information that has been
incorporated by reference in this prospectus. If you would like to obtain this
information from us, please direct your request, either in writing or by
telephone, to Yellow Corporation, 10990 Roe Avenue, P.O. Box 7563, Overland
Park, Kansas 66207, Attention: Stephen L. Bruffett, telephone number (913)
696-6100.
LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon for us
by Cahill Gordon & Reindel, New York, New York. Certain legal matters relating
to this offering will be passed upon for the underwriters by Mayer, Brown, Rowe
& Maw, Chicago, Illinois.
32
EXPERTS
The audited consolidated financial statements and schedules incorporated by
reference in this prospectus have been audited by Arthur Andersen LLP,
independent accountants, as indicated in their reports with respect thereto, and
are included herein in reliance upon the authority of said firm as experts in
giving said reports.
33
Inside Back Cover-
Pictures of corporate logo of the company and each business unit including:
YELLOW CORPORATION
YELLOW TRANSPORTATION
MERIDIAN IQ
SCS TRANSPORTATION
JEVIC MOTOR FREIGHT
SAIA MOTOR
YELLOW TECHNOLOGIES
[YELLOW CORPORATION LOGO]
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, incurred in connection with the sale of
common stock being registered (all amounts are estimated except the SEC
registration fee and the NASD Filing Fee).
Securities and Exchange Commission Registration Fee......... $ 9,198
NASD Filing Fee............................................. 10,498
Legal Fees and Expenses..................................... *
Accounting Fees and Expenses................................ *
Printing and engraving expenses............................. 100,000
Miscellaneous............................................... *
--------
Total..................................................... *
========
- ---------------
* To be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate of Incorporation and Bylaws of Yellow Corporation together
provide that Yellow's directors shall not be personally liable to Yellow or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability for (i) any breach of the director's duty of loyalty to
Yellow or its stockholders, (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law (the "DGCL"), or (iv) any
transaction from which the director derived an improper personal benefit. The
Certificate of Incorporation and Bylaws of Yellow also provide that if the DGCL
is amended to permit further elimination of limitation of the personal liability
of the directors, then the liability of Yellow's directors shall be eliminated
or limited to the fullest extent permitted by the DGCL, as so amended.
Yellow maintains directors' and officers' liability insurance against any
actual or alleged error, misstatement, misleading statement, act, omission,
neglect or breach of duty by any director or officer, excluding certain maters
including fraudulent, dishonest or criminal acts or self-dealing.
DGCL Section 102(b)(7) provides that Yellow may indemnify a present or
former director if such director conducted him or herself in good faith and
reasonably believed, in the case of conduct in his or her official capacity,
that his or her conduct was in Yellow's best interests.
DGCL Section 145 provides that Yellow may indemnify its directors and
officers, as well as other employees and individuals (each an "Indemnified
Party," and collectively, "Indemnified Parties"), against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement in connection
with specified actions, suits or proceedings, whether civil, criminal,
administrative or investigative, other than in connection with actions by or in
the right of Yellow (a "derivative action"), if an Indemnified Party acted in
good faith and in a manner such Indemnified Party reasonably believed to be in
or not opposed to Yellow's best interests and, with respect to any criminal
action or proceeding, had no reasonable cause to believe that his or her conduct
was unlawful. A similar standard is applicable in the case of derivative
actions, except that Yellow may only indemnify an Indemnified Party for expenses
(including attorneys' fees) incurred in connection with the defense or
settlement of such derivative action. Additionally, in the context of a
derivative action, DGCL Section 145 requires a court approval before there can
be any indemnification where an Indemnified Party has been found liable to
Yellow. The statute provides that it is not exclusive of other indemnification
arrangements that may be granted pursuant to a corporation's charter, by-laws,
disinterested director vote, stockholder vote, agreement or otherwise.
II-1
ITEM 16. EXHIBITS.
The following exhibits are filed as part of this Registration Statement:
EXHIBIT
NO. DESCRIPTION
- ------- -----------
1* Form of Underwriting Agreement
4.1 Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3(i) to the Company's Report on Form
10-Q for the quarter ended March 31, 1996).
4.2 Bylaws of the Company (incorporated by reference to Exhibit
3ii to the Company's Report on Form 10-K for the year ended
December 31, 2001).
5* Opinion of Cahill Gordon & Reindel regarding the legality of
the securities being registered.
23.1 Consent of Arthur Andersen LLP, Independent Accountants.
23.2* Consent of Cahill Gordon & Reindel (included in Exhibit 5).
24 Powers of Attorney authorizing execution of Registration
Statement on Form S-3 on behalf of certain directors and
officers of the registrant (included on the signature pages
to this Registration Statement).
- ---------------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes that:
1. For purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
2. For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
the form of prospectus filed by the registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared effective.
3. For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
4. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Overland Park, State of Kansas, on this 14th day of
March, 2002.
YELLOW CORPORATION
By: /s/ WILLIAM D. ZOLLARS
------------------------------------
Name: William D. Zollars
Title: Chairman of the Board of
Directors,
President and Chief
Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below in so signing also makes,
constitutes and appoints William D. Zollars as his or her true and lawful
attorney-in-fact, with full power of substitution, for him or her in any and all
amendments and post-effective amendments to this registration statement, and any
registration statement for the same offering that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and all
post-effective amendments thereto together with exhibits to any such
registration statements or amendments and other documents in connection
therewith, and hereby ratifies and confirms all that said attorney-in-fact or
said attorney-in-fact's substitute or substitutes may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed on March 14, 2002 by the following
persons in the capacities indicated.
NAME TITLE DATE
---- ----- ----
/s/ WILLIAM D. ZOLLARS Chairman of the Board of March 14, 2002
------------------------------------------------ Directors, President and Chief
William D. Zollars Executive Officer
/s/ DONALD G. BARGER, JR. Senior Vice President and Chief March 14, 2002
------------------------------------------------ Financial Officer
Donald G. Barger, Jr.
/s/ HOWARD M. DEAN Director March 14, 2002
------------------------------------------------
Howard M. Dean
Director March 14, 2002
------------------------------------------------
Cassandra C. Carr
/s/ CARL W. VOGT Director March 14, 2002
------------------------------------------------
Carl W. Vogt
Director March 14, 2002
------------------------------------------------
Richard C. Green, Jr.
II-3
NAME TITLE DATE
---- ----- ----
/s/ DENNIS E. FOSTER Director March 14, 2002
------------------------------------------------
Dennis E. Foster
Director March 14, 2002
------------------------------------------------
John C. McKelvey
/s/ WILLIAM L. TRUBECK Director March 14, 2002
------------------------------------------------
William L. Trubeck
II-4
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our reports dated January 25,
2002 included in the Yellow Corporation Form 10-K for the year ended December
31, 2001 and to all references to our firm included in this registration
statement.
ARTHUR ANDERSEN LLP
Kansas City, Missouri,
March 14, 2002