UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
(Address of principal executive office)(Zip Code)
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(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock, $0.01 par value per |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On November 2, 2020, YRC Worldwide Inc. announced its results of operations and financial condition for the three months ended September 30, 2020. A copy of the press release announcing the results of operations and financial condition is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure
Presentation slides to be referenced during the November 2, 2020 earnings call are attached hereto as Exhibit 99.2.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
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Exhibit Number |
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Description |
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99.1 |
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99.2 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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YRC WORLDWIDE INC. |
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By: |
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/s/ James R. Faught |
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James R. Faught |
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Chief Accounting Officer |
Date: November 2, 2020
Exhibit 99.1
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10990 Roe Avenue Overland Park, KS 66211 Phone 913 696 6108 Fax 913 696 6116
News Release |
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YRC Worldwide Reports Third Quarter 2020 Results
Holding Company to Reinvigorate Heritage Yellow Brand
Leadership and Board of Directors Changes Announced
OVERLAND PARK, Kan., November 2, 2020 -- YRC Worldwide Inc. (NASDAQ: YRCW) reported results for the third quarter ended September 30, 2020. Operating revenue was $1.183 billion and operating income was $19.4 million. In comparison, operating revenue in the third quarter of 2019 was $1.257 billion and operating income was $23.8 million, which included a $1.0 million net loss on property disposals.
Net loss for third quarter 2020 was $2.0 million, or $0.04 per share, compared to net loss of $16.0 million, or $0.48 per share, in third quarter 2019.
“During the quarter we transitioned to managing our busines in a tighter capacity environment and setting the stage for 2021. Improving tonnage trends late in Q3 has allowed LTL pricing to firm up with less volatility expected moving forward” said Darren Hawkins, Chief Executive Officer.
“We ended the quarter with just over $450 million in liquidity with a reaffirmed focus on managing our operations through the changes we’ve seen over the past 6 months, which has put us in a position to invest back into our business as we move forward. At the beginning of the quarter we secured a commitment with the US Treasury, and in October we received the first $75 million of the $400 million in Tranche B funds. These funds are dedicated for investment in our fleet”, continued Hawkins.
The Company announced that in 2021 the holding company will move forward under the heritage Yellow brand. The Company anticipates its LTL brands Holland, New Penn, Reddaway and YRC Freight, as well as HNRY Logistics will continue operating under their current names.
“Following an in-depth study, Yellow is the right brand and it’s the right time to modernize our existing holding company brand in conjunction with our enterprise transformation. The YRC Worldwide Inc. name was selected over a decade ago when the strategy of the Company included pursuits outside of North America. Today we have one of the largest, most comprehensive LTL and logistics networks focused on serving North America and the Yellow brand, as the original LTL company, reflects a strong and proud history”, continued Hawkins.
Leadership and Board of Directors
The Company also announced today that Jamie Pierson has resigned as the Chief Financial Officer and from the Board of Directors. This departure does not reflect any disagreements about the Company’s past financial reports or disclosures.
“Jamie has been instrumental in several financial transactions at critical times that have helped preserve an essential part of the American supply chain and the livelihoods of 30,000 families. Most recently he helped facilitate the CARES Act loan process and secure the other amendments to our credit facilities. We thank Jamie for his dedicated service to YRCW”, continued Hawkins.
As a result of this change effective immediately, Dan Olivier has been appointed as interim CFO. He has 22 years with the Company, including 12 years as the Vice President of Finance at Holland. Most recently Mr. Olivier served as the Vice President, Financial Planning and Analysis at YRC Worldwide Inc.
“Dan’s knowledge of the Company and his extensive involvement with every aspect of our business will provide for a smooth transition during this interim period,” continued Hawkins.
The Company recently named Leah Dawson Executive Vice President and General Counsel. Previously she had served as YRC Worldwide Inc.’s Assistant General Counsel since 2012. In addition, Darrel Harris has joined the Company and will serve in the newly created position of Executive Vice President of Strategic Initiatives. He most recently served as CEO of Xpress Global Systems for the past four years and is a 25-year industry veteran with extensive LTL experience.
The Company also announced two additions to its Board of Directors, former New Mexico Governor Susana Martinez and Shaunna D. Jones. Governor Martinez is the first female Hispanic governor in United States history and the first female governor of New Mexico. Ms. Jones has a legal background focused on transformation and strategic initiatives and currently serves as the U.S. Director of Diversity & Inclusion at Cleary Gottlieb Steen & Hamilton LLP.
“As we move forward with our work to operate as one company, Governor Martinez and Ms. Jones’s backgrounds will enhance our ability to grow while building our workforce with leaders that bring to us new perspectives and experiences”, concluded Hawkins.
Third Quarter 2020 Financial Update
•Revenue decreased by $73.4 million to $1.183 billion compared to revenue of $1.257 billion in third quarter of 2019.
•Net loss decreased by $14.0 million to $2.0 million compared to a net loss of $16.0 million in third quarter of 2019.
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On a non-GAAP basis, the Company generated consolidated Adjusted EBITDA of $62.0 million in the third quarter of 2020, a $3.9 million decrease compared to $65.9 million in the prior year comparable quarter (as detailed in the reconciliation below). Last twelve months (LTM) consolidated Adjusted EBITDA was $179.8 million compared to $240.8 million in 2019 (as detailed in the reconciliation below). |
Third Quarter 2020 Operational Update
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LTL revenue per hundredweight including fuel surcharge decreased 4.0%; however, LTL weight per shipment increased 2.2% resulting in an LTL revenue per shipment decrease of 1.9% when compared to the same period in 2019. Excluding fuel surcharge, LTL revenue per hundredweight was down 1.4% and LTL revenue per shipment was up 0.8%. |
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LTL tonnage per day decreased 4.1% when compared to 3Q19. LTL tonnage per day improved 6.2% in September as compared to August. |
•The consolidated operating ratio for the quarter was 98.4 compared to 98.1 in 3Q19.
Liquidity Update (as of September 30, 2020)
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The Company’s available liquidity as calculated under our credit agreement, which was comprised of cash and cash equivalents and Managed Accessibility (as detailed in the supplemental information provided below) under its ABL facility, was $453.7 million as of September 30, 2020. |
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The Company’s outstanding debt was $1.156 billion, an increase of $249.3 million compared to $906.3 million as of September 30, 2019. |
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For the nine months ended September 30, 2020, cash provided by operating activities was $108.5 million compared to $13.4 million for the nine months ended September 30, 2019. |
Key Information – Third quarter 2020 compared to Third quarter 2019
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YRC Worldwide |
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2020 |
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2019 |
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Percent Change(a) |
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Workdays |
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64.0 |
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63.0 |
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Operating revenue (in millions) |
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$ |
1,183.4 |
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$ |
1,256.8 |
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(5.8 |
)% |
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Operating income (in millions) |
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$ |
19.4 |
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$ |
23.8 |
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18.5 |
% |
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Operating ratio |
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98.4 |
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98.1 |
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(0.3 pp) |
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LTL tonnage per day (in thousands) |
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40.38 |
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42.11 |
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(4.1 |
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LTL shipments per day (in thousands) |
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70.00 |
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74.64 |
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(6.2 |
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LTL picked up revenue per hundredweight incl FSC |
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$ |
20.82 |
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$ |
21.70 |
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(4.0 |
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LTL picked up revenue per hundredweight excl FSC |
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$ |
18.90 |
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$ |
19.16 |
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(1.4 |
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LTL picked up revenue per shipment incl FSC |
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$ |
240 |
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$ |
245 |
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(1.9 |
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LTL picked up revenue per shipment excl FSC |
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$ |
218 |
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$ |
216 |
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0.8 |
% |
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LTL weight/shipment (in pounds) |
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1,154 |
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1,128 |
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2.2 |
% |
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Total tonnage per day (in thousands) |
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51.49 |
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52.81 |
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(2.5 |
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Total shipments per day (in thousands) |
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72.02 |
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76.34 |
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(5.7 |
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Total picked up revenue per hundredweight incl FSC |
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$ |
17.89 |
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$ |
18.75 |
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(4.6 |
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Total picked up revenue per hundredweight excl FSC |
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$ |
16.29 |
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$ |
16.61 |
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(1.9 |
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Total picked up revenue per shipment incl FSC |
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$ |
256 |
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$ |
259 |
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(1.4 |
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Total picked up revenue per shipment excl FSC |
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$ |
233 |
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$ |
230 |
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1.3 |
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Total weight/shipment (in pounds) |
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1,430 |
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1,383 |
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3.3 |
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(a) |
Percent change based on unrounded figures and not the rounded figures presented |
Review of Financial Results
YRC Worldwide Inc. will host a conference call with the investment community today, Monday November 2, 2020, beginning at 5:00 p.m. ET.
A live audio webcast of the conference call and presentation slides will be available on YRC Worldwide Inc.’s website www.yrcw.com. A replay of the webcast will also be available at www.yrcw.com.
Non-GAAP Financial Measures
EBITDA is a non-GAAP measure that reflects the company’s earnings before interest, taxes, depreciation, and amortization expense. Adjusted EBITDA is a non-GAAP measure that reflects EBITDA, and further adjusts for letter of credit fees, equity-based compensation expense, net gains or losses on property disposals, restructuring charges, transaction costs related to issuances of debt, non-recurring consulting fees, non-cash impairment charges and the gains or losses from permitted dispositions, discontinued operations, and certain non-cash expenses, charges and losses (provided that if any of such non-cash expenses, charges or losses represents an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period will be subtracted from Adjusted EBITDA in such future period to the extent paid). Adjusted EBITDA as used herein is defined as Consolidated EBITDA in our UST Credit Agreements and New Term Loan Agreement (collectively, the “TL Agreements”). EBITDA and Adjusted EBITDA are used for internal management purposes as a financial measure that reflects the company’s core operating performance. In addition, management uses Adjusted EBITDA to measure compliance with financial covenants in our TL Agreements and to determine certain management and employee bonus compensation. We believe our presentation of EBITDA and Adjusted EBITDA is useful to investors and other users as these measures represent key supplemental information our management uses to compare and evaluate our core underlying business results, particularly in light of our leverage position and the capital-intensive nature of our business. Further,
EBITDA is a measure that is commonly used by other companies in our industry and provides a comparison for investors to evaluate the performance of the companies in the industry. Additionally, Adjusted EBITDA helps investors to understand how the company is tracking against our financial covenants in our TL Agreements.
EBITDA and Adjusted EBITDA have the following limitations:
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EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or fund principal payments on our outstanding debt; |
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Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or fund principal payments on our outstanding debt, letter of credit expenses, restructuring charges, transaction costs related to debt, non-cash charges, charges or losses (subject to the conditions above), or nonrecurring consulting fees, among other items; |
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Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will have to be replaced in the future and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; |
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Equity-based compensation is an element of our long-term incentive compensation program for certain employees, although Adjusted EBITDA excludes employee equity-based compensation expense when presenting our ongoing operating performance for a particular period; and |
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Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. |
Because of these limitations, our non-GAAP measures should not be considered a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using our non-GAAP measures as secondary measures. The company has provided reconciliations of its non-GAAP measures to GAAP net income (loss) and operating income (loss) within the supplemental financial information in this release.
* * * * *
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Words such as “will,” “expect,” “intend,” “anticipate,” “believe,” “could,” “would,” “should,” “may,” “project,” “forecast,” “look forward,” “propose,” “plan,” “designed,” “enable,” and similar expressions which speak only as of the date the statement was made are intended to identify forward-looking statements. Forward-looking statements are inherently uncertain, are based upon current beliefs, assumptions and expectations of Company management and current market conditions, and are subject to significant business, economic, competitive, regulatory and other risks, uncertainties and contingencies, known and unknown, many of which are beyond our control. Our future financial condition and results could differ materially from those predicted in such forward-looking statements because of a number of factors, including (without limitation) general economic factors and transportation industry-specific economic conditions, including the impact of COVID-19; our ability to generate sufficient liquidity to satisfy our cash needs and future cash commitments, including (without limitation) the impact of COVID-19 on our results of operations, financial condition and cash flows; our obligations related to our indebtedness and lease and pension funding requirements, and our ability to achieve increased cash flows through improvement in operations; our failure to comply with the covenants in the documents governing our existing and future indebtedness; customer demand in the retail and manufacturing sectors; business risks and increasing costs associated with the transportation industry, including increasing equipment, operational and technology costs and disruption from natural disasters; competition and competitive pressure on pricing; the risk of labor disruptions or stoppages, if our relationship with our employees and unions were to deteriorate; increasing pension expense and funding obligations, subject to interest rate volatility; increasing costs relating to our self-insurance claims expenses; our ability to finance the maintenance, acquisition and replacement of revenue equipment and other necessary capital expenditures; our ability to comply and the cost of compliance with, or liability resulting from violation of, federal, state, local and foreign laws and regulations, including (without limitation) labor laws and laws and regulations regarding the environment; impediments to our operations and business resulting from anti-terrorism measures; the impact of claims and litigation expense to which we are or may become exposed; failure to realize the expected benefits and costs savings from our performance and operational improvement initiatives; our ability to attract and retain qualified drivers and increasing costs of driver compensation; a significant privacy breach or IT system disruption; risks of operating in foreign countries; our dependence on key employees; seasonality; shortages of fuel and changes in the cost of fuel or the index upon which we base our fuel surcharge and the effectiveness of our fuel surcharge program in protecting us against fuel price volatility; limitations on our operations, our financing opportunities, potential strategic transactions, acquisitions or dispositions resulting from restrictive covenants in the documents governing our existing and future indebtedness; fluctuations in the price of our common stock; dilution from future issuances of our common stock; our intention not to pay dividends on our common stock; that we have the ability to issue preferred stock that may adversely affect the rights of holders of our common stock; and other risks and contingencies, including (without limitation) the risk factors that are included in our reports filed with the SEC, including those described under “Risk Factors” in our annual report on Form 10-K and quarterly reports on Form 10-Q.
About YRC Worldwide
YRC Worldwide Inc. has one of the largest, most comprehensive logistics and less-than-truckload (LTL) networks in North America with local, regional, national, and international capabilities. Through our teams of experienced service professionals, YRC Worldwide offers industry-leading expertise in flexible supply chain solutions, ensuring customers can ship industrial, commercial, and retail goods with confidence. YRC Worldwide, headquartered in Overland Park, Kan., is the holding company for a portfolio of LTL brands including Holland, New Penn, Reddaway, and YRC Freight, as well as the logistics company HNRY Logistics.
Please visit our website at www.yrcw.com for more information.
Investor Contact: Tony Carreño
913-696-6108
investor@yrcw.com
Media Contact: Mike Kelley
913-696-6121
mike.kelley@yrcw.com
SOURCE: YRC Worldwide
YRC Worldwide Inc. and Subsidiaries
(Amounts in millions except share and per share data)
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September 30, 2020 |
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December 31, 2019 |
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
434.1 |
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$ |
109.2 |
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Restricted amounts held in escrow |
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4.4 |
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— |
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Accounts receivable, net |
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541.3 |
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464.4 |
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Prepaid expenses and other |
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53.3 |
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44.6 |
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Total current assets |
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1,033.1 |
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618.2 |
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PROPERTY AND EQUIPMENT: |
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Cost |
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2,709.8 |
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2,761.6 |
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Less—accumulated depreciation |
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(2,012.0 |
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(1,991.3 |
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Net property and equipment |
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697.8 |
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770.3 |
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Deferred income taxes, net |
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0.5 |
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0.6 |
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Operating lease right-of-use assets |
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299.4 |
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386.0 |
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Other assets |
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77.5 |
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56.5 |
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Total assets |
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$ |
2,108.3 |
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$ |
1,831.6 |
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LIABILITIES AND SHAREHOLDERS’ DEFICIT |
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CURRENT LIABILITIES: |
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Accounts payable |
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$ |
196.9 |
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$ |
163.7 |
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Wages, vacations, and employee benefits |
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234.3 |
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195.9 |
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Current operating lease liabilities |
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115.9 |
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120.8 |
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Claims and insurance accruals |
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110.8 |
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120.4 |
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Other accrued taxes |
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28.0 |
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25.8 |
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Other current and accrued liabilities |
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21.6 |
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21.3 |
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Current maturities of long-term debt |
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4.0 |
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4.1 |
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Total current liabilities |
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711.5 |
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652.0 |
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OTHER LIABILITIES: |
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Long-term debt, less current portion |
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1,099.2 |
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858.1 |
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Pension and postretirement |
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104.2 |
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236.5 |
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Operating lease liabilities |
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196.2 |
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246.3 |
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Claims and other liabilities |
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320.3 |
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279.9 |
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Commitments and contingencies |
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— |
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— |
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SHAREHOLDERS’ DEFICIT: |
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Preferred stock, $1 par value per share |
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— |
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— |
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Common stock, $0.01 par value per share |
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0.5 |
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0.3 |
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Capital surplus |
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2,383.1 |
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2,332.9 |
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Accumulated deficit |
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(2,347.2 |
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(2,312.4 |
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Accumulated other comprehensive loss |
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(266.8 |
) |
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(369.3 |
) |
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Treasury stock, at cost (410 shares) |
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(92.7 |
) |
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(92.7 |
) |
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Total shareholders’ deficit |
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(323.1 |
) |
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(441.2 |
) |
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Total liabilities and shareholders’ deficit |
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$ |
2,108.3 |
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$ |
1,831.6 |
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STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)
YRC Worldwide Inc. and Subsidiaries
For the Three and Nine Months Ended September 30
(Amounts in millions except per share data, shares in thousands)
(Unaudited)
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Three Months |
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Nine Months |
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2020 |
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2019 |
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2020 |
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2019 |
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OPERATING REVENUE |
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$ |
1,183.4 |
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$ |
1,256.8 |
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$ |
3,349.2 |
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$ |
3,711.7 |
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OPERATING EXPENSES: |
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Salaries, wages and employee benefits |
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720.6 |
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756.2 |
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2,088.7 |
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|
2,256.7 |
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Fuel, operating expenses and supplies |
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175.4 |
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218.9 |
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546.1 |
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|
683.1 |
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Purchased transportation |
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177.1 |
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160.7 |
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439.3 |
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465.0 |
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Depreciation and amortization |
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32.5 |
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37.2 |
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102.4 |
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|
|
115.7 |
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Other operating expenses |
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|
58.4 |
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|
|
59.0 |
|
|
|
175.2 |
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|
|
180.2 |
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(Gains) Losses on property disposals, net |
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|
— |
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1.0 |
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(45.3 |
) |
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(3.6 |
) |
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Impairment charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8.2 |
|
|
Total operating expenses |
|
|
1,164.0 |
|
|
|
1,233.0 |
|
|
|
3,306.4 |
|
|
|
3,705.3 |
|
|
OPERATING INCOME |
|
|
19.4 |
|
|
|
23.8 |
|
|
|
42.8 |
|
|
|
6.4 |
|
|
NONOPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
33.4 |
|
|
|
27.9 |
|
|
|
101.9 |
|
|
|
83.1 |
|
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
11.2 |
|
|
|
— |
|
|
|
11.2 |
|
|
Non-union pension and postretirement benefits |
|
|
(1.1 |
) |
|
|
2.0 |
|
|
|
(4.3 |
) |
|
|
2.8 |
|
|
Other, net |
|
|
— |
|
|
|
(0.8 |
) |
|
|
(1.2 |
) |
|
|
(0.9 |
) |
|
Nonoperating expenses, net |
|
|
32.3 |
|
|
|
40.3 |
|
|
|
96.4 |
|
|
|
96.2 |
|
|
LOSS BEFORE INCOME TAXES |
|
|
(12.9 |
) |
|
|
(16.5 |
) |
|
|
(53.6 |
) |
|
|
(89.8 |
) |
|
INCOME TAX BENEFIT |
|
|
(10.9 |
) |
|
|
(0.5 |
) |
|
|
(18.8 |
) |
|
|
(1.1 |
) |
|
NET LOSS |
|
|
(2.0 |
) |
|
|
(16.0 |
) |
|
|
(34.8 |
) |
|
|
(88.7 |
) |
|
OTHER COMPREHENSIVE INCOME, NET OF TAX |
|
|
98.0 |
|
|
|
3.6 |
|
|
|
102.5 |
|
|
|
9.1 |
|
|
COMPREHENSIVE INCOME (LOSS) |
|
$ |
96.0 |
|
|
$ |
(12.4 |
) |
|
$ |
67.7 |
|
|
$ |
(79.6 |
) |
|
AVERAGE COMMON SHARES OUTSTANDING—BASIC |
|
|
48,672 |
|
|
|
33,259 |
|
|
|
38,864 |
|
|
|
33,098 |
|
|
AVERAGE COMMON SHARES OUTSTANDING—DILUTED |
|
|
48,672 |
|
|
|
33,259 |
|
|
|
38,864 |
|
|
|
33,098 |
|
|
LOSS PER SHARE—BASIC |
|
$ |
(0.04 |
) |
|
$ |
(0.48 |
) |
|
$ |
(0.90 |
) |
|
$ |
(2.68 |
) |
|
LOSS PER SHARE—DILUTED |
|
$ |
(0.04 |
) |
|
$ |
(0.48 |
) |
|
$ |
(0.90 |
) |
|
$ |
(2.68 |
) |
|
OPERATING RATIO(a): |
|
|
98.4 |
% |
|
|
98.1 |
% |
|
|
98.7 |
% |
|
|
99.8 |
% |
|
(a) |
Operating ratio is calculated as (i) 100 percent (ii) minus the result of dividing operating income by operating revenue or (iii) plus the result of dividing operating loss by operating revenue, and expressed as a percentage. |
STATEMENTS OF CONSOLIDATED CASH FLOWS
YRC Worldwide Inc. and Subsidiaries
For the Nine Months Ended September 30
(Amounts in millions)
(Unaudited)
|
|
|
2020 |
|
|
2019 |
|
||
|
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(34.8 |
) |
|
$ |
(88.7 |
) |
|
Adjustments to reconcile net loss to cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
102.4 |
|
|
|
115.7 |
|
|
Lease amortization and accretion expense |
|
|
122.7 |
|
|
|
124.7 |
|
|
Lease payments |
|
|
(94.6 |
) |
|
|
(113.4 |
) |
|
Paid-in-kind interest |
|
|
40.5 |
|
|
|
— |
|
|
Equity-based compensation and employee benefits expense |
|
|
14.4 |
|
|
|
14.4 |
|
|
Non-union pension settlement charge |
|
|
1.9 |
|
|
|
1.7 |
|
|
Gains on property disposals, net |
|
|
(45.3 |
) |
|
|
(3.6 |
) |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
11.2 |
|
|
Impairment charges |
|
|
— |
|
|
|
8.2 |
|
|
Deferred income tax benefit, net |
|
|
(11.1 |
) |
|
|
(2.3 |
) |
|
Other non-cash items, net |
|
|
11.6 |
|
|
|
4.1 |
|
|
Changes in assets and liabilities, net: |
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(76.9 |
) |
|
|
(42.8 |
) |
|
Accounts payable |
|
|
24.8 |
|
|
|
(3.1 |
) |
|
Other operating assets |
|
|
(9.3 |
) |
|
|
0.6 |
|
|
Other operating liabilities |
|
|
62.2 |
|
|
|
(13.3 |
) |
|
Net cash provided by operating activities |
|
|
108.5 |
|
|
|
13.4 |
|
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Acquisition of property and equipment |
|
|
(41.4 |
) |
|
|
(111.5 |
) |
|
Proceeds from disposal of property and equipment |
|
|
55.3 |
|
|
|
9.9 |
|
|
Net cash provided by (used in) investing activities |
|
|
13.9 |
|
|
|
(101.6 |
) |
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Issuance of long-term debt, net |
|
|
245.0 |
|
|
|
570.0 |
|
|
Repayment of long-term debt |
|
|
(29.1 |
) |
|
|
(576.2 |
) |
|
Debt issuance costs |
|
|
(8.4 |
) |
|
|
(11 |
) |
|
Payments for tax withheld on equity-based compensation |
|
|
(0.6 |
) |
|
|
(0.8 |
) |
|
Net cash provided by (used in) financing activities |
|
|
206.9 |
|
|
|
(18.1 |
) |
|
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED AMOUNTS HELD IN ESCROW |
|
|
329.3 |
|
|
|
(106.3 |
) |
|
CASH, CASH EQUIVALENTS AND RESTRICTED AMOUNTS HELD IN ESCROW, BEGINNING OF PERIOD |
|
|
109.2 |
|
|
|
227.6 |
|
|
CASH, CASH EQUIVALENTS AND RESTRICTED AMOUNTS HELD IN ESCROW, END OF PERIOD |
|
$ |
438.5 |
|
|
$ |
121.3 |
|
|
SUPPLEMENTAL CASH FLOW INFORMATION |
|
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
(47.2 |
) |
|
$ |
(77.8 |
) |
|
Income tax payment, net |
|
|
(0.7 |
) |
|
|
(2.6 |
) |
SUPPLEMENTAL FINANCIAL INFORMATION
YRC Worldwide Inc. and Subsidiaries
(Amounts in millions)
(Unaudited)
SUPPLEMENTAL INFORMATION: Total Debt
|
As of September 30, 2020 |
|
|
|
Par Value |
|
|
Discount |
|
|
Commitment Fee |
|
|
Debt Issue Costs |
|
|
Book Value |
|
|||||
|
New Term Loan |
|
|
|
$ |
613.5 |
|
|
$ |
(22.5 |
) |
|
$ |
— |
|
|
$ |
(10.0 |
) |
|
$ |
581.0 |
|
|
ABL Facility |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Tranche A UST Credit Agreement |
|
|
|
|
246.7 |
|
|
|
— |
|
|
|
(15.4 |
) |
|
|
(4.1 |
) |
|
|
227.2 |
|
|
Tranche B UST Credit Agreement |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Secured Second A&R CDA |
|
|
|
|
24.1 |
|
|
|
— |
|
|
|
— |
|
|
|
(0.1 |
) |
|
|
24.0 |
|
|
Unsecured Second A&R CDA |
|
|
|
|
45.2 |
|
|
|
— |
|
|
|
— |
|
|
|
(0.1 |
) |
|
|
45.1 |
|
|
Lease financing obligations |
|
|
|
|
226.1 |
|
|
|
— |
|
|
|
— |
|
|
|
(0.2 |
) |
|
|
225.9 |
|
|
Total debt |
|
|
|
$ |
1,155.6 |
|
|
$ |
(22.5 |
) |
|
$ |
(15.4 |
) |
|
$ |
(14.5 |
) |
|
$ |
1,103.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2019 |
|
|
|
Par Value |
|
|
Discount |
|
|
Commitment Fee |
|
|
Debt Issue Costs |
|
|
Book Value |
|
|||||
|
New Term Loan |
|
|
|
$ |
600.0 |
|
|
$ |
(28.1 |
) |
|
$ |
— |
|
|
$ |
(12.0 |
) |
|
$ |
559.9 |
|
|
ABL Facility |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Secured Second A&R CDA |
|
|
|
|
26.0 |
|
|
|
— |
|
|
|
— |
|
|
|
(0.1 |
) |
|
|
25.9 |
|
|
Unsecured Second A&R CDA |
|
|
|
|
45.2 |
|
|
|
— |
|
|
|
— |
|
|
|
(0.1 |
) |
|
|
45.1 |
|
|
Lease financing obligations |
|
|
|
|
231.6 |
|
|
|
— |
|
|
|
— |
|
|
|
(0.3 |
) |
|
|
231.3 |
|
|
Total debt |
|
|
|
$ |
902.8 |
|
|
$ |
(28.1 |
) |
|
$ |
— |
|
|
$ |
(12.5 |
) |
|
$ |
862.2 |
|
SUPPLEMENTAL INFORMATION: Liquidity
|
|
|
September 30, 2020 |
|
|
December 31, 2019 |
|
||
|
Cash and cash equivalents |
|
$ |
434.1 |
|
|
$ |
109.2 |
|
|
Changes to restricted cash |
|
|
— |
|
|
|
(29.0 |
) |
|
Managed Accessibility (a) |
|
|
19.6 |
|
|
|
0.2 |
|
|
Total Cash and cash equivalents and Managed Accessibility |
|
$ |
453.7 |
|
|
$ |
80.4 |
|
|
(a) |
Managed Accessibility represents the maximum amount we would access on the ABL Facility and is adjusted for eligible receivables plus eligible borrowing base cash measured for the applicable period. Based on the eligible receivable’s management uses to measure availability, which is 10% of the borrowing line, the credit agreement governing the ABL Facility permits adjustments from eligible borrowing base cash to restricted cash prior to the compliance measurement date which is 15 days from the period close. |
SUPPLEMENTAL FINANCIAL INFORMATION
YRC Worldwide Inc. and Subsidiaries
For the Three and Nine Months Ended September 30
(Amounts in millions)
(Unaudited)
|
|
|
Three Months |
|
|
Nine Months |
|
||||||||||
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
|
Reconciliation of net loss to Adjusted EBITDA(a): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2.0 |
) |
|
$ |
(16.0 |
) |
|
$ |
(34.8 |
) |
|
$ |
(88.7 |
) |
|
Interest expense, net |
|
|
33.4 |
|
|
|
27.7 |
|
|
|
101.8 |
|
|
|
82.0 |
|
|
Income tax benefit |
|
|
(10.9 |
) |
|
|
(0.5 |
) |
|
|
(18.8 |
) |
|
|
(1.1 |
) |
|
Depreciation and amortization |
|
|
32.5 |
|
|
|
37.2 |
|
|
|
102.4 |
|
|
|
115.7 |
|
|
EBITDA |
|
|
53.0 |
|
|
|
48.4 |
|
|
|
150.6 |
|
|
|
107.9 |
|
|
Adjustments for New Term Loan Agreement: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Gains) losses on property disposals, net |
|
|
— |
|
|
|
1.0 |
|
|
|
(45.3 |
) |
|
|
(3.6 |
) |
|
Non-cash reserve changes(b) |
|
|
— |
|
|
|
(2.0 |
) |
|
|
3.0 |
|
|
|
14.0 |
|
|
Impairment charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8.2 |
|
|
Letter of credit expense |
|
|
2.0 |
|
|
|
1.6 |
|
|
|
5.2 |
|
|
|
4.8 |
|
|
Permitted dispositions and other |
|
|
0.3 |
|
|
|
0.1 |
|
|
|
0.5 |
|
|
|
(1.0 |
) |
|
Equity-based compensation expense |
|
|
1.1 |
|
|
|
1.8 |
|
|
|
4.3 |
|
|
|
5.2 |
|
|
Loss on extinguishment of debt |
|
|
- |
|
|
|
11.2 |
|
|
|
— |
|
|
|
11.2 |
|
|
Non-union pension settlement charge |
|
|
1.9 |
|
|
|
1.7 |
|
|
|
1.9 |
|
|
|
1.7 |
|
|
Other, net |
|
|
1.0 |
|
|
|
0.2 |
|
|
|
1.5 |
|
|
|
2.3 |
|
|
Expense amounts subject to 10% threshold(c): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COVID-19 |
|
|
— |
|
|
|
— |
|
|
|
3.9 |
|
|
|
— |
|
|
Other, net |
|
|
3.1 |
|
|
|
1.3 |
|
|
|
8.8 |
|
|
|
14.1 |
|
|
Adjusted EBITDA prior to 10% threshold |
|
|
62.4 |
|
|
|
65.3 |
|
|
|
134.4 |
|
|
|
164.8 |
|
|
Adjustments pursuant to TTM calculation(c) |
|
|
(0.4 |
) |
|
|
0.6 |
|
|
|
(0.4 |
) |
|
|
(1.5 |
) |
|
Adjusted EBITDA |
|
$ |
62.0 |
|
|
$ |
65.9 |
|
|
$ |
134.0 |
|
|
$ |
163.3 |
|
|
(a) |
Certain reclassifications have been made to prior year to conform to current year presentation. |
|
(b) |
Non-cash reserve changes reflect the net non-cash reserve charge for union and non-union vacation, with such non-cash reserve adjustment to be reduced by cash charges in a future period when paid. |
|
(c) |
Pursuant to the New Term Loan Agreement, Adjusted EBITDA limits certain adjustments in aggregate to 10% of the trailing-twelve-month (“TTM”) consolidated Adjusted EBITDA, prior to the inclusion of amounts subject to the 10% threshold, for each period ending. Such adjustments include, but are not limited to, restructuring charges, integration costs, severance, and non-recurring charges. The limitation calculation is updated quarterly based on TTM Adjusted EBITDA, however, the sum of the quarters may not necessarily equal TTM Adjusted EBITDA due to the expiration of adjustments from prior periods. |
SUPPLEMENTAL FINANCIAL INFORMATION
YRC Worldwide Inc. and Subsidiaries
For the Trailing Twelve Months Ended September 30
(Amounts in millions)
(Unaudited)
|
|
|
2020 |
|
|
2019 |
|
||
|
Reconciliation of net loss to Adjusted EBITDA(a): |
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(50.1 |
) |
|
$ |
(71.2 |
) |
|
Interest expense, net |
|
|
129.7 |
|
|
|
109.3 |
|
|
Income tax expense (benefit) |
|
|
(22.0 |
) |
|
|
7.8 |
|
|
Depreciation and amortization |
|
|
139.1 |
|
|
|
153.2 |
|
|
EBITDA |
|
|
196.7 |
|
|
|
199.1 |
|
|
Adjustments for Term Loan Agreement: |
|
|
|
|
|
|
|
|
|
Gains on property disposals, net |
|
|
(55.4 |
) |
|
|
(31.7 |
) |
|
Non-cash reserve changes(b) |
|
|
5.1 |
|
|
|
14.0 |
|
|
Impairment charges |
|
|
— |
|
|
|
8.2 |
|
|
Letter of credit expense |
|
|
6.9 |
|
|
|
6.4 |
|
|
Permitted dispositions and other |
|
|
0.6 |
|
|
|
(1.0 |
) |
|
Equity-based compensation expense |
|
|
5.4 |
|
|
|
6.0 |
|
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
11.2 |
|
|
Non-union pension settlement charge |
|
|
2.0 |
|
|
|
5.4 |
|
|
Other, net |
|
|
2.1 |
|
|
|
1.2 |
|
|
Expense amounts subject to 10% threshold(c): |
|
|
|
|
|
|
|
|
|
COVID-19 |
|
|
3.9 |
|
|
|
— |
|
|
Other, net |
|
|
12.9 |
|
|
|
23.5 |
|
|
Adjusted EBITDA prior to 10% threshold |
|
|
180.2 |
|
|
|
242.3 |
|
|
Adjustments pursuant to TTM calculation(c) |
|
|
(0.4 |
) |
|
|
(1.5 |
) |
|
Adjusted EBITDA |
|
$ |
179.8 |
|
|
$ |
240.8 |
|
For explanations of footnotes (a), (b) and (c), please refer to previous page.
Statistics
Quarterly Comparison
|
|
|
3Q20 |
|
|
3Q19 |
|
|
2Q20 |
|
|
Y/Y % (a) |
|
|
Sequential % (a) |
|
|||||
|
Workdays |
|
|
64.0 |
|
|
|
63.0 |
|
|
|
63.0 |
|
|
|
|
|
|
|
|
|
|
LTL picked up revenue (in millions) |
|
$ |
1,076.1 |
|
|
$ |
1,151.2 |
|
|
$ |
929.8 |
|
|
|
(6.5 |
) |
|
|
15.7 |
|
|
LTL tonnage (in thousands) |
|
|
2,584 |
|
|
|
2,653 |
|
|
|
2,283 |
|
|
|
(2.6 |
) |
|
|
13.2 |
|
|
LTL tonnage per day (in thousands) |
|
|
40.38 |
|
|
|
42.11 |
|
|
|
36.24 |
|
|
|
(4.1 |
) |
|
|
11.4 |
|
|
LTL shipments (in thousands) |
|
|
4,480 |
|
|
|
4,703 |
|
|
|
4,003 |
|
|
|
(4.7 |
) |
|
|
11.9 |
|
|
LTL shipments per day (in thousands) |
|
|
70.00 |
|
|
|
74.64 |
|
|
|
63.53 |
|
|
|
(6.2 |
) |
|
|
10.2 |
|
|
LTL picked up revenue/cwt. |
|
$ |
20.82 |
|
|
$ |
21.70 |
|
|
$ |
20.36 |
|
|
|
(4.0 |
) |
|
|
2.3 |
|
|
LTL picked up revenue/cwt. (excl. FSC) |
|
$ |
18.90 |
|
|
$ |
19.16 |
|
|
$ |
18.48 |
|
|
|
(1.4 |
) |
|
|
2.2 |
|
|
LTL picked up revenue/shipment |
|
$ |
240 |
|
|
$ |
245 |
|
|
$ |
232 |
|
|
|
(1.9 |
) |
|
|
3.4 |
|
|
LTL picked up revenue/shipment (excl. FSC) |
|
$ |
218 |
|
|
$ |
216 |
|
|
$ |
211 |
|
|
|
0.8 |
|
|
|
3.4 |
|
|
LTL weight/shipment (in pounds) |
|
|
1,154 |
|
|
|
1,128 |
|
|
|
1,141 |
|
|
|
2.2 |
|
|
|
1.1 |
|
|
Total picked up revenue (in millions)(b) |
|
$ |
1,179.1 |
|
|
$ |
1,247.7 |
|
|
$ |
1,018.4 |
|
|
|
(5.5 |
) |
|
|
15.8 |
|
|
Total tonnage (in thousands) |
|
|
3,295 |
|
|
|
3,327 |
|
|
|
2,926 |
|
|
|
(1.0 |
) |
|
|
12.6 |
|
|
Total tonnage per day (in thousands) |
|
|
51.49 |
|
|
|
52.81 |
|
|
|
46.44 |
|
|
|
(2.5 |
) |
|
|
10.9 |
|
|
Total shipments (in thousands) |
|
|
4,609 |
|
|
|
4,810 |
|
|
|
4,122 |
|
|
|
(4.2 |
) |
|
|
11.8 |
|
|
Total shipments per day (in thousands) |
|
|
72.02 |
|
|
|
76.34 |
|
|
|
65.44 |
|
|
|
(5.7 |
) |
|
|
10.1 |
|
|
Total revenue/cwt. |
|
$ |
17.89 |
|
|
$ |
18.75 |
|
|
$ |
17.40 |
|
|
|
(4.6 |
) |
|
|
2.8 |
|
|
Total revenue/cwt. (excl. FSC) |
|
$ |
16.29 |
|
|
$ |
16.61 |
|
|
$ |
15.85 |
|
|
|
(1.9 |
) |
|
|
2.7 |
|
|
Total revenue/shipment |
|
$ |
256 |
|
|
$ |
259 |
|
|
$ |
247 |
|
|
|
(1.4 |
) |
|
|
3.6 |
|
|
Total revenue/shipment (excl. FSC) |
|
$ |
233 |
|
|
$ |
230 |
|
|
$ |
225 |
|
|
|
1.3 |
|
|
|
3.5 |
|
|
Total weight/shipment (in pounds) |
|
|
1,430 |
|
|
|
1,383 |
|
|
|
1,419 |
|
|
|
3.3 |
|
|
|
0.7 |
|
|
(b)Reconciliation of operating revenue to total picked up revenue (in millions): |
|
|||||||||||||||||||
|
Operating revenue |
|
$ |
1,183.4 |
|
|
$ |
1,256.8 |
|
|
$ |
1,015.4 |
|
|
|
|
|
|
|
|
|
|
Change in revenue deferral and other |
|
|
(4.3 |
) |
|
|
(9.1 |
) |
|
|
3.0 |
|
|
|
|
|
|
|
|
|
|
Total picked up revenue |
|
$ |
1,179.1 |
|
|
$ |
1,247.7 |
|
|
$ |
1,018.4 |
|
|
|
|
|
|
|
|
|
|
(a) |
Percent change based on unrounded figures and not the rounded figures presented. |
|
(b) |
Does not equal financial statement revenue due to revenue adjustments for shipments in transit and the impact of other revenue. |
Statistics
YTD Comparison
|
|
|
2020 |
|
|
2019 |
|
|
Y/Y % (a) |
|
|||
|
Workdays |
|
|
192.5 |
|
|
|
189.5 |
|
|
|
|
|
|
LTL picked up revenue (in millions) |
|
$ |
3,055.5 |
|
|
$ |
3,404.7 |
|
|
|
(10.3 |
) |
|
LTL tonnage (in thousands) |
|
|
7,412 |
|
|
|
7,879 |
|
|
|
(5.9 |
) |
|
LTL tonnage per day (in thousands) |
|
|
38.50 |
|
|
|
41.58 |
|
|
|
(7.4 |
) |
|
LTL shipments (in thousands) |
|
|
12,806 |
|
|
|
13,962 |
|
|
|
(8.3 |
) |
|
LTL shipments per day (in thousands) |
|
|
66.52 |
|
|
|
73.68 |
|
|
|
(9.7 |
) |
|
LTL picked up revenue/cwt. |
|
$ |
20.61 |
|
|
$ |
21.61 |
|
|
|
(4.6 |
) |
|
LTL picked up revenue/cwt. (excl. FSC) |
|
$ |
18.55 |
|
|
$ |
19.05 |
|
|
|
(2.6 |
) |
|
LTL picked up revenue/shipment |
|
$ |
239 |
|
|
$ |
244 |
|
|
|
(2.2 |
) |
|
LTL picked up revenue/shipment (excl. FSC) |
|
$ |
215 |
|
|
$ |
215 |
|
|
|
(0.1 |
) |
|
LTL weight/shipment (in pounds) |
|
|
1,158 |
|
|
|
1,129 |
|
|
|
2.6 |
|
|
Total picked up revenue (in millions)(b) |
|
$ |
3,338.9 |
|
|
$ |
3,688.1 |
|
|
|
(9.5 |
) |
|
Total tonnage (in thousands) |
|
|
9,454 |
|
|
|
9,857 |
|
|
|
(4.1 |
) |
|
Total tonnage per day (in thousands) |
|
|
49.11 |
|
|
|
52.01 |
|
|
|
(5.6 |
) |
|
Total shipments (in thousands) |
|
|
13,158 |
|
|
|
14,270 |
|
|
|
(7.8 |
) |
|
Total shipments per day (in thousands) |
|
|
68.35 |
|
|
|
75.30 |
|
|
|
(9.2 |
) |
|
Total picked up revenue/cwt. |
|
$ |
17.66 |
|
|
$ |
18.71 |
|
|
|
(5.6 |
) |
|
Total picked up revenue/cwt. (excl. FSC) |
|
$ |
15.95 |
|
|
$ |
16.55 |
|
|
|
(3.6 |
) |
|
Total picked up revenue/shipment |
|
$ |
254 |
|
|
$ |
258 |
|
|
|
(1.8 |
) |
|
Total picked up revenue/shipment (excl. FSC) |
|
$ |
229 |
|
|
$ |
229 |
|
|
|
0.3 |
|
|
Total weight/shipment (in pounds) |
|
|
1,437 |
|
|
|
1,381 |
|
|
|
4.0 |
|
|
(b)Reconciliation of operating revenue to total picked up revenue (in millions): |
|
|||||||||||
|
Operating revenue |
|
$ |
3,349.2 |
|
|
$ |
3,711.7 |
|
|
|
|
|
|
Change in revenue deferral and other |
|
|
(10.3 |
) |
|
|
(23.6 |
) |
|
|
|
|
|
Total picked up revenue |
|
$ |
3,338.9 |
|
|
$ |
3,688.1 |
|
|
|
|
|
|
(a) |
Percent change based on unrounded figures and not the rounded figures presented. |
|
(b) |
Does not equal financial statement revenue due to revenue adjustments for shipments in transit and the impact of other revenue. |
YRC WORLDWIDE THIRD QUARTER 2020 EARNINGS CONFERENCE CALL
($ in millions) Term Loan Lease Financing Obligations CDA Notes UST Tranche A Capital Structure Overview Tranche A of $300M covers short-term contractual obligations and certain other obligations including pension and healthcare payments and will carry a variable interest rate, currently determined by LIBOR (subject to a floor of 1%), plus 3.5%, consisting of 1.5% cash and the remainder paid-in-kind (PIK). The UST Tranche A loan balance of $246.7M includes $1.7M of PIK interest as of 9/30/20. Tranche B of $400M will be used for essential capital investment in trailers and tractors and is expected to carry a variable interest rate, currently determined by LIBOR (subject to a floor of 1%), plus 3.5% in cash. UST Tranche B
Largest debt instruments and the current labor agreement mature at various dates in 2024 Focused on Operational Execution Runway 3.2 years IBT March ABL Facility Jan. Term Loan June CDA Notes December UST Loan Sept. Capital Structure and Labor Timeline Today 2020 2021 2022 2023 2024
COVENANT WAIVER THROUGH 3Q21 LTM Adjusted EBITDA Covenant (in millions)
Financial results
Financial results
Operating statistics – THIRD QUARTER (a) Percent change based on unrounded figures and not the rounded figures presented
OPERATING STATISTICS – FIRST THREE QUARTERS (a) Percent change based on unrounded figures and not the rounded figures presented
($ in millions) Adjusted Ebitda reconciliation YRCW Inc. Reconciliation of Net (Loss) Income to Adjusted EBITDA LTM LTM LTM LTM LTM LTM LTM **Make sure to do "ignore error" to get rid of green triangles YRCW Consolidated 2015 2016 2017 2018 2019 2Q 2018 2Q 2019 3Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2018 1Q 2019 2Q 2019 3Q 2019 1Q 2020 2Q 2020 3Q 2020 Reconciliation of net income (loss) to adjusted EBITDA Net income (loss) $0.7 $21.5 $-10.8 $20.2 $-,103.99999999999928 $14.4 $-23.6 $-16 $4.3 $-37.099999999999909 $-2 $20.2 $-14.299999999999862 $-52.299999999999869 $-71.199999999999875 $-50.599999999999831 $-64.099999999999739 $-50.099999999999739 Interest expense, net 107.1 103 102.4 104.5 109.9 25.5 27.799999999999997 27.7 28.2 40.200000000000003 33.4 104.5 105.5 107.8 109.3 111.60000000000001 124.00000000000001 129.70000000000002 Income tax (benefit) expense -5.0999999999999996 3.1 -7.3 11.1 -4.3 10.4 9.1 -0.5 -0.4 -7.5 -10.9 11.1 14.3 13.000000000000002 7.8000000000000007 5 -11.6 -22 Depreciation and amortization 163.69999999999999 159.80000000000001 147.69999999999999 147.69999999999999 152.4 37.599999999999994 38.5 37.200000000000003 35.700000000000003 34.200000000000003 32.5 147.69999999999999 150 150.9 153.19999999999999 148.10000000000002 143.80000000000001 139.10000000000002 EBITDA $266.39999999999998 $287.39999999999998 232 283.5 154.00000000000074 $87.899999999999991 51.8 48.400000000000006 67.800000000000011 29.800000000000097 53 $283.5 $255.50000000000011 219.40000000000015 199.10000000000011 214.10000000000019 192.10000000000028 196.7000000000003 Adjustments pursuant to Term Loan Agreement: (Gains) losses on property disposals, net 1.9 -14.6 -0.6 -20.8 -13.7 2.2000000000000002 -6.1999999999999993 1 -39.299999999999997 -6 0 -20.8 -22.4 -30.8 -31.700000000000003 -54.599999999999994 -54.4 -55.4 Noncash reserve changes 0 0 0 0 16.100000000000001 0 16 -2 0.3 2.7 0 0 0 16 14 16.400000000000002 3.1000000000000014 5.1000000000000014 Impairment charges 0 0 0 0 8.1999999999999993 0 0 0 0 0 0 0 8.1999999999999993 8.1999999999999993 8.1999999999999993 0 0 0 Letter of credit expense 8.8000000000000007 7.7 6.8 6.6 6.5 1.7 1.6 1.6 1.6 1.6 2 6.6 6.5 6.4 6.4 6.5 6.5 6.9 Permitted dispositions and other 0.4 3 1.2 0.3 -0.9 0.19999999999999996 0 0.1 0.2 0 0.3 0.3 -1.3000000000000003 -1.5 -1 0.4 0.4 0.60000000000000009 Equity-based compensation expense 8.5 7.3 6.5 6.3 6.3 3.1999999999999997 1.1000000000000001 1.8 2 1.2000000000000002 1.1000000000000001 6.3 6.9999999999999991 4.9000000000000004 5.9999999999999991 6 6.1000000000000005 5.4 Loss on extinguishment of debt 0.6 0 0 0 11.2 0 0 11.2 0 0 0 0 0 0 11.2 11.2 11.2 0 Non-union pension settlement charge 28.7 0 7.6 10.9 1.8 0 0 1.7 0 0 1.9 10.9 10.9 10.9 5.4 1.8 1.8 2 Other, net #REF! #REF! 2.2999999999999998 0.1 2.9 1.4 1 0.2 -1.6 2.1 1 0.1 2.2999999999999998 1.9 1.2 0.19999999999999973 1.3 2.1 Expense amounts subject to 10% threshold: 5.0999999999999996 0 8.1 COVID-19 0 0 0 0.2 3.6999999999999997 0 0 0 0 0 0.2 3.9 3.9 Other, net 20.9 18.2 3.8 4.0999999999999996 1.3 2.9 2.8000000000000003 3.1 7.7 25.5 25.799999999999997 23.500000000000004 12.4 11.1 12.9 Adjusted EBITDA prior to 10% threshold 274.2000000000001 307.8 210.60000000000073 96.600000000000009 69.399999999999991 65.300000000000011 34.100000000000016 37.900000000000098 62.4 294.60000000000002 292.2000000000001 261.20000000000016 242.30000000000007 214.60000000000019 183.10000000000028 180.2000000000003 Adjustments pursuant to TTM calculation 0.2 0 0 0 0 0 -2.1 0.6 0 0 -0.4 2.2999999999999998 0 -2.1 -1.5 0 0 -0.4 hardcode for LTM! Adjusted EBITDA #REF! #REF! $274.2000000000001 $307.8 $210.60000000000073 $96.600000000000009 $67.3 $65.900000000000006 $34.100000000000016 $37.900000000000098 $62 $591.5 $292.2000000000001 $259.10000000000014 $240.80000000000007 $214.60000000000019 $183.10000000000028 $179.8000000000003