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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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48-0948788
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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10990 Roe Avenue, Overland Park, Kansas
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66211
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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o
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Accelerated filer
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ý
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Class
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Outstanding at April 25, 2014
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Common Stock, $0.01 par value per share
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31,265,736 shares
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Item
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Page
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1
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2
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3
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4
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1
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1A
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5
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6
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March 31,
2014 |
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December 31,
2013 |
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(Unaudited)
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Assets
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|
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|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
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$
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140.5
|
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$
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176.3
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Restricted amounts held in escrow
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171.6
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90.1
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||
Accounts receivable, net
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535.7
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460.9
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||
Prepaid expenses and other
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101.3
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70.6
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Total current assets
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949.1
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797.9
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Property and Equipment:
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Cost
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2,844.4
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2,844.2
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Less – accumulated depreciation
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(1,781.2
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)
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(1,754.4
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)
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Net property and equipment
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1,063.2
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1,089.8
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||
Intangibles, net
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74.8
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79.8
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Restricted amounts held in escrow
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—
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0.6
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||
Deferred income taxes, net
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18.3
|
|
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18.3
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Other assets
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109.7
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|
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78.5
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Total Assets
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$
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2,215.1
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$
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2,064.9
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Liabilities and Shareholders’ Deficit
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Current Liabilities:
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||||
Accounts payable
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$
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224.7
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$
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176.7
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Wages, vacations and employees’ benefits
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219.0
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191.2
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Deferred income taxes, net
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21.8
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18.6
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Other current and accrued liabilities
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182.6
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189.5
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Current maturities of long-term debt
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107.4
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8.6
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Total current liabilities
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755.5
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584.6
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Other Liabilities:
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Long-term debt, less current portion
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1,097.5
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1,354.8
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Deferred income taxes, net
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1.7
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1.8
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Pension and postretirement
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373.7
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384.8
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Claims and other liabilities
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349.8
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336.3
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Commitments and contingencies
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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, $0.01 par value per share
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0.3
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|
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0.1
|
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Capital surplus
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2,285.9
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1,964.4
|
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Accumulated deficit
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(2,242.5
|
)
|
|
(2,154.2
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)
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||
Accumulated other comprehensive loss
|
(314.1
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)
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|
(315.0
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)
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||
Treasury stock, at cost (410 shares)
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(92.7
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)
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(92.7
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)
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||
Total shareholders’ deficit
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(363.1
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)
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(597.4
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)
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||
Total Liabilities and Shareholders’ Deficit
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$
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2,215.1
|
|
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$
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2,064.9
|
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Three Months
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||||||
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2014
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2013
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||||
Operating Revenue
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$
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1,210.9
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$
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1,162.5
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Operating Expenses:
|
|
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Salaries, wages and employees’ benefits
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725.7
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681.0
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Operating expenses and supplies
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283.7
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267.8
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Purchased transportation
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131.9
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114.9
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Depreciation and amortization
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41.0
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43.6
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Other operating expenses
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60.8
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49.8
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(Gains) losses on property disposals, net
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0.2
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(4.5
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)
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Total operating expenses
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1,243.3
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1,152.6
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Operating Income (Loss)
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(32.4
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)
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9.9
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Nonoperating Expenses:
|
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Interest expense
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58.2
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|
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39.2
|
|
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Gain on extinguishment of debt
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(11.2
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)
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—
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Other, net
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(5.1
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)
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(0.3
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)
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Nonoperating expenses, net
|
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41.9
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38.9
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Loss before income taxes
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(74.3
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)
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(29.0
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)
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Income tax benefit
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(4.1
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)
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(4.5
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)
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Net loss
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(70.2
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)
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(24.5
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)
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||
Amortization of beneficial conversion feature on preferred stock
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(18.1
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)
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—
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Net Loss Attributable to Common Shareholders
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(88.3
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)
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(24.5
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)
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Net loss
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(70.2
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)
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(24.5
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)
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Other comprehensive income, net of tax
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0.9
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3.1
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Comprehensive Loss Attributable to YRC Worldwide Inc.
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$
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(69.3
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)
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$
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(21.4
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)
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Average Common Shares Outstanding – Basic
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22,344
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8,380
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Average Common Shares Outstanding – Diluted
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22,344
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8,380
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Net Loss Per Share – Basic
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$
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(3.95
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)
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$
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(2.93
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)
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Net Loss Per Share – Diluted
|
|
$
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(3.95
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)
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$
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(2.93
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)
|
|
2014
|
|
2013
|
||||
Operating Activities:
|
|
|
|
||||
Net loss
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$
|
(70.2
|
)
|
|
$
|
(24.5
|
)
|
Noncash items included in net loss:
|
|
|
|
||||
Depreciation and amortization
|
41.0
|
|
|
43.6
|
|
||
Paid-in-kind interest on Series A Notes and Series B Notes
|
10.1
|
|
|
7.6
|
|
||
Amortization of deferred debt costs
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3.3
|
|
|
1.6
|
|
||
Amortization of premiums and discounts on debt
|
17.7
|
|
|
1.4
|
|
||
Equity based compensation expense
|
6.6
|
|
|
1.0
|
|
||
(Gains) losses on property disposals, net
|
0.2
|
|
|
(4.5
|
)
|
||
Gain on extinguishment of debt
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(11.2
|
)
|
|
—
|
|
||
Other noncash items, net
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(3.3
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)
|
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(0.4
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)
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||
Changes in assets and liabilities, net:
|
|
|
|
||||
Accounts receivable
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(75.4
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)
|
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(45.2
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)
|
||
Accounts payable
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37.2
|
|
|
(2.0
|
)
|
||
Other operating assets
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(16.9
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)
|
|
9.1
|
|
||
Other operating liabilities
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4.7
|
|
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(1.6
|
)
|
||
Net cash used in operating activities
|
(56.2
|
)
|
|
(13.9
|
)
|
||
Investing Activities:
|
|
|
|
||||
Acquisition of property and equipment
|
(11.7
|
)
|
|
(17.2
|
)
|
||
Proceeds from disposal of property and equipment
|
0.6
|
|
|
0.6
|
|
||
Restricted escrow (deposits) receipts, net
|
(80.9
|
)
|
|
4.5
|
|
||
Other, net
|
3.4
|
|
|
1.8
|
|
||
Net cash used in investing activities
|
(88.6
|
)
|
|
(10.3
|
)
|
||
Financing Activities:
|
|
|
|
||||
Issuance of long-term debt
|
693.0
|
|
|
0.3
|
|
||
Repayments of long-term debt
|
(789.5
|
)
|
|
(2.4
|
)
|
||
Debt issuance costs
|
(27.4
|
)
|
|
—
|
|
||
Equity issuance costs
|
(17.1
|
)
|
|
—
|
|
||
Equity issuance proceeds
|
250.0
|
|
|
—
|
|
||
Net cash (used in) provided by financing activities
|
109.0
|
|
|
(2.1
|
)
|
||
Net Decrease In Cash and Cash Equivalents
|
(35.8
|
)
|
|
(26.3
|
)
|
||
Cash and Cash Equivalents, Beginning of Period
|
176.3
|
|
|
208.7
|
|
||
Cash and Cash Equivalents, End of Period
|
$
|
140.5
|
|
|
$
|
182.4
|
|
|
|
|
|
||||
Supplemental Cash Flow Information
:
|
|
|
|
||||
Interest paid
|
$
|
(39.4
|
)
|
|
$
|
(28.5
|
)
|
Income tax refund, net
|
$
|
13.6
|
|
|
$
|
14.6
|
|
Preferred Stock:
|
|
||
Beginning balance
|
$
|
—
|
|
Issuance of preferred stock
|
0.6
|
|
|
Conversion of preferred shares to common shares
|
(0.6
|
)
|
|
Ending balance
|
$
|
—
|
|
Common Stock:
|
|
||
Beginning balance
|
$
|
0.1
|
|
Issuance of common stock
|
0.1
|
|
|
Issuance of common stock upon conversion of Series B Notes
|
0.1
|
|
|
Ending balance
|
$
|
0.3
|
|
Capital Surplus:
|
|
||
Beginning balance
|
$
|
1,964.4
|
|
Issuance of equity, net
|
249.3
|
|
|
Conversion of preferred shares to common shares
|
0.6
|
|
|
Beneficial conversion feature on preferred stock
|
18.1
|
|
|
Share-based compensation
|
5.9
|
|
|
Issuance of equity upon conversion and exchange of Series B Notes
|
64.7
|
|
|
Equity issuance costs
|
(17.1
|
)
|
|
Ending balance
|
$
|
2,285.9
|
|
Accumulated Deficit:
|
|
||
Beginning balance
|
$
|
(2,154.2
|
)
|
Amortization of beneficial conversion feature on preferred stock
|
(18.1
|
)
|
|
Net loss
|
(70.2
|
)
|
|
Ending balance
|
$
|
(2,242.5
|
)
|
Accumulated Other Comprehensive Loss:
|
|
||
Beginning balance
|
$
|
(315.0
|
)
|
Reclassification of net pension actuarial losses to net loss, net of tax
|
2.0
|
|
|
Foreign currency translation adjustments
|
(1.1
|
)
|
|
Ending balance
|
$
|
(314.1
|
)
|
Treasury Stock, At Cost:
|
|
||
Beginning and ending balance
|
$
|
(92.7
|
)
|
Total Shareholders’ Deficit
|
$
|
(363.1
|
)
|
•
|
YRC Freight is the reporting segment that focuses on longer haul business opportunities in national, regional and international services. YRC Freight provides for the movement of industrial, commercial and retail goods, primarily through centralized management and customer facing organizations. This reporting segment includes our LTL subsidiary YRC Inc. (our YRC Freight operations in the United States) and Reimer Express, a subsidiary located in Canada that specializes in shipments into, across and out of Canada. In addition to the United States and Canada, YRC Freight also serves parts of Mexico, Puerto Rico and Guam.
|
•
|
Regional Transportation is the reporting segment for our transportation service providers focused on business opportunities in the regional and next-day delivery markets. Regional Transportation is comprised of USF Holland Inc. (“Holland”), New Penn Motor Express, Inc. (“New Penn”) and USF Reddaway Inc. (“Reddaway”). These companies each provide regional, next-day ground services in their respective regions through a network of facilities located across the United States, Canada, Mexico and Puerto Rico.
|
|
|
|
Fair Value Measurement Hierarchy
|
||||||||||||
(in millions)
|
Total Carrying
Value
|
|
Quoted prices
in active market
(Level 1)
|
|
Significant
other
observable
inputs (Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
Restricted amounts held in escrow-current
|
$
|
171.6
|
|
|
$
|
171.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted amounts held in escrow-long term
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total assets at fair value
|
$
|
171.6
|
|
|
$
|
171.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash Sources (in millions)
|
|
|
Cash Uses (in millions)
|
|
||||
New Term Loan
|
$
|
700.0
|
|
|
Extinguish Prior ABL Facility (includes accrued interest)
|
$
|
326.0
|
|
Proceeds from sale of common stock
|
215.0
|
|
|
Extinguish Prior Term Loan (includes accrued interest)
|
299.7
|
|
||
Proceeds from sale of convertible preferred stock
|
35.0
|
|
|
Retire 6% Notes
|
71.5
|
|
||
Cash proceeds from restricted amounts held in escrow - existing ABL facility
|
90.0
|
|
|
Repurchase Series A Notes (includes accrued interest)
|
93.9
|
|
||
New ABL Facility
|
—
|
|
|
Redeem Series A Notes (on August 5, 2014 and includes accrued interest)
|
89.6
|
|
||
|
|
|
Fees, Expenses and Original Issuance Discount
|
50.8
|
|
|||
|
|
|
Restricted Cash to Balance Sheet
(a)
|
92.0
|
|
|||
|
|
|
Cash to Balance Sheet
|
16.5
|
|
|||
Total sources
|
$
|
1,040.0
|
|
|
Total uses
|
$
|
1,040.0
|
|
(a)
|
Under the terms of the New ABL facility, this amount was classified as “restricted cash” in the consolidated balance sheet at the closing date of the New ABL Facility.
|
Non-Cash Sources (in millions)
|
|
|
Non-Cash Uses (in millions)
|
|
||||
Secured Second A&R CDA
|
$
|
51.0
|
|
|
A&R CDA
|
$
|
124.2
|
|
Unsecured Second A&R CDA
|
73.2
|
|
|
Exchange/conversion of Series B Notes to common stock
|
50.6
|
|
||
Exchange/conversion of Series B Notes to common stock
|
50.6
|
|
|
|
|
|||
Total sources
|
$
|
174.8
|
|
|
Total uses
|
$
|
174.8
|
|
•
|
50%
of excess cash flow (paid if permitted under the New ABL Facility), subject to step downs to (x)
25%
if the total leverage ratio is less than or equal to
3.50
to
1.00
but greater than
3.00
to
1.00
and (y)
0%
if the total leverage ratio is less than or equal to
3.00
to
1.00
.
|
•
|
100%
of the net cash proceeds of all asset sales or similar dispositions outside of the ordinary course of business and casualty events (subject to materiality thresholds and customary reinvestment rights).
|
•
|
100%
of cash proceeds from debt issuances that are not permitted by the New Term Loan documentation.
|
As of March 31, 2014 (in millions)
|
Par Value
|
|
Premium/
(Discount)
|
|
Book
Value
|
|
Stated
Interest Rate
|
|
Effective
Interest Rate
|
||||||||
New Term Loan
|
$
|
698.2
|
|
|
$
|
(6.8
|
)
|
|
$
|
691.4
|
|
|
8.0
|
%
|
|
8.2
|
%
|
New ABL Facility
1
|
—
|
|
|
—
|
|
|
—
|
|
|
2.7
|
%
|
|
2.7
|
%
|
|||
Series A Notes
|
86.7
|
|
|
(7.0
|
)
|
|
79.7
|
|
|
10.0
|
%
|
|
18.3
|
%
|
|||
Series B Notes
|
16.5
|
|
|
(2.3
|
)
|
|
14.2
|
|
|
10.0
|
%
|
|
25.6
|
%
|
|||
Secured Second A&R CDA
|
51.0
|
|
|
—
|
|
|
51.0
|
|
|
3.3-18.3%
|
|
|
7.3
|
%
|
|||
Unsecured Second A&R CDA
|
73.2
|
|
|
—
|
|
|
73.2
|
|
|
3.3-18.3%
|
|
|
7.3
|
%
|
|||
Lease financing obligations
|
295.2
|
|
|
—
|
|
|
295.2
|
|
|
10.0-18.2%
|
|
|
11.9
|
%
|
|||
Other
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
|
|
|
|
|
|||
Total debt
|
$
|
1,221.0
|
|
|
$
|
(16.1
|
)
|
|
$
|
1,204.9
|
|
|
|
|
|
||
Current maturities of New Term Loan
|
(7.0
|
)
|
|
—
|
|
|
(7.0
|
)
|
|
|
|
|
|||||
Current maturities of Series A Notes
|
(86.7
|
)
|
|
7.0
|
|
|
(79.7
|
)
|
|
|
|
|
|||||
Current maturities of Series B Notes
|
(16.5
|
)
|
|
2.3
|
|
|
(14.2
|
)
|
|
|
|
|
|||||
Current maturities of lease financing obligations
|
(6.3
|
)
|
|
—
|
|
|
(6.3
|
)
|
|
|
|
|
|||||
Current maturities of other
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
|
|
|
|||||
Long-term debt
|
$
|
1,104.3
|
|
|
$
|
(6.8
|
)
|
|
$
|
1,097.5
|
|
|
|
|
|
1
|
As of March 31, 2014, the borrowing base on our New ABL Facility was
$450.0 million
. The availability of
$82.5 million
is derived by reducing the borrowing base by our
$367.5 million
of outstanding letters of credit as of March 31, 2014.
|
As of December 31, 2013 (in millions)
|
Par Value
|
|
Premium/
(Discount)
|
|
Book
Value
|
|
Stated
Interest Rate
|
|
Effective
Interest Rate
|
||||||||
Restructured Term Loan
|
$
|
298.1
|
|
|
$
|
37.7
|
|
|
$
|
335.8
|
|
|
10.0
|
%
|
|
—
|
%
|
Term A Facility (capacity $175.0, borrowing base $156.5, availability $51.5)
|
105.0
|
|
|
(2.1
|
)
|
|
102.9
|
|
|
8.5
|
%
|
|
15.8
|
%
|
|||
Term B Facility (capacity $219.9, borrowing base $219.9, availability $0.0)
|
219.9
|
|
|
(3.9
|
)
|
|
216.0
|
|
|
11.25
|
%
|
|
15.0
|
%
|
|||
Series A Notes
|
177.8
|
|
|
(17.8
|
)
|
|
160.0
|
|
|
10.0
|
%
|
|
18.3
|
%
|
|||
Series B Notes
|
69.2
|
|
|
(10.5
|
)
|
|
58.7
|
|
|
10.0
|
%
|
|
25.6
|
%
|
|||
6% Notes
|
69.4
|
|
|
(1.1
|
)
|
|
68.3
|
|
|
6.0
|
%
|
|
15.5
|
%
|
|||
A&R CDA
|
124.2
|
|
|
(0.2
|
)
|
|
124.0
|
|
|
3.25-18.3%
|
|
|
7.3
|
%
|
|||
Lease financing obligations
|
297.5
|
|
|
—
|
|
|
297.5
|
|
|
10.0-18.2%
|
|
|
11.9
|
%
|
|||
Other
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
|
|
|
|||||
Total debt
|
$
|
1,361.3
|
|
|
$
|
2.1
|
|
|
$
|
1,363.4
|
|
|
|
|
|
||
Current maturities of lease financing obligations
|
(8.4
|
)
|
|
—
|
|
|
(8.4
|
)
|
|
|
|
|
|||||
Current maturities of other
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
|
|
|
|||||
Long-term debt
|
$
|
1,352.7
|
|
|
$
|
2.1
|
|
|
$
|
1,354.8
|
|
|
|
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||
(in millions)
|
Carrying amount
|
|
Fair Value
|
|
Carrying amount
|
|
Fair Value
|
||||||||
New Term Loan
|
$
|
691.4
|
|
|
$
|
704.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restructured Term Loan
|
—
|
|
|
—
|
|
|
335.8
|
|
|
289.2
|
|
||||
ABL Facility
|
—
|
|
|
—
|
|
|
318.9
|
|
|
326.1
|
|
||||
Series A Notes and Series B Notes
|
93.9
|
|
|
103.2
|
|
|
218.7
|
|
|
225.8
|
|
||||
Lease financing obligations
|
295.2
|
|
|
295.2
|
|
|
297.5
|
|
|
297.5
|
|
||||
Other
|
124.4
|
|
|
125.4
|
|
|
192.5
|
|
|
179.8
|
|
||||
Total debt
|
$
|
1,204.9
|
|
|
$
|
1,227.8
|
|
|
$
|
1,363.4
|
|
|
$
|
1,318.4
|
|
Four Consecutive Fiscal Quarters Ending
|
Maximum Total
Leverage Ratio
|
|
Four Consecutive Fiscal Quarters Ending
|
Maximum Total
Leverage Ratio
|
June 30, 2014
|
6.00 to 1.00
|
|
June 30, 2016
|
3.50 to 1.00
|
September 30, 2014
|
5.00 to 1.00
|
|
September 30, 2016
|
3.50 to 1.00
|
December 31, 2014
|
4.50 to 1.00
|
|
December 31, 2016
|
3.25 to 1.00
|
March 31, 2015
|
4.00 to 1.00
|
|
March 31, 2017
|
3.25 to 1.00
|
June 30, 2015
|
3.75 to 1.00
|
|
June 30, 2017
|
3.25 to 1.00
|
September 30, 2015
|
3.75 to 1.00
|
|
September 30, 2017
|
3.25 to 1.00
|
December 31, 2015
|
3.75 to 1.00
|
|
December 31, 2017 and thereafter
|
3.00 to 1.00
|
March 31, 2016
|
3.50 to 1.00
|
|
|
|
•
|
we must achieve improvements in our operating results, primarily at our YRC Freight operating segment, which rely upon pricing and shipping volumes and network efficiencies;
|
•
|
we must continue to implement and realize cost saving measures, including those identified in the new MOU, to match our costs with business levels and in a manner that does not harm operations and our productivity and efficiency initiatives must be successful; and
|
•
|
we must be able to generate operating cash flows that are sufficient to meet the cash requirements for pension contributions to our single and multi-employer pension funds, cash interest and principal payments on our funded debt, payments on our equipment leases, and for capital expenditures or additional lease payments for new revenue equipment.
|
|
|
Three Months
|
||||||
(in millions)
|
|
2014
|
|
2013
|
||||
Service cost
|
|
$
|
1.0
|
|
|
$
|
1.1
|
|
Interest cost
|
|
15.2
|
|
|
14.0
|
|
||
Expected return on plan assets
|
|
(13.4
|
)
|
|
(13.9
|
)
|
||
Amortization of net loss
|
|
3.2
|
|
|
3.7
|
|
||
Total periodic pension cost
|
|
$
|
6.0
|
|
|
$
|
4.9
|
|
(shares in thousands)
|
2014
|
|
Beginning balance
|
10,173
|
|
Conversion of preferred stock to common stock
|
2,333
|
|
Issuance of common stock
|
14,333
|
|
Issuance of equity awards
|
294
|
|
Issuance of common stock upon conversion or exchange of Series B Notes
|
3,470
|
|
Ending balance
|
30,603
|
|
•
|
YRC Freight
is the reporting segment for our transportation service providers focused on business opportunities in national, regional and international services. YRC Freight provides for the movement of industrial, commercial and retail goods, primarily through centralized management and customer facing organizations. This unit includes our LTL subsidiary YRC Inc. (our YRC Freight operations in the United States) and Reimer Express, a subsidiary located in Canada that specializes in shipments into, across and out of Canada. In addition to the United States and Canada, YRC Freight also serves parts of Mexico, Puerto Rico and Guam.
|
•
|
Regional Transportation
is the reporting segment for our transportation service providers focused on business opportunities in the regional and next-day delivery markets. The Regional Transportation companies each provide regional, next-day ground services in their respective regions through a network of facilities located across the United States, Canada, Mexico and Puerto Rico.
|
(in millions)
|
YRC Freight
|
|
Regional
Transportation
|
|
Corporate/
Eliminations
|
|
Consolidated
|
||||||||
As of March 31, 2014
|
|
|
|
|
|
|
|
||||||||
Identifiable assets
|
$
|
1,563.2
|
|
|
$
|
753.4
|
|
|
$
|
(101.5
|
)
|
|
$
|
2,215.1
|
|
As of December 31, 2013
|
|
|
|
|
|
|
|
||||||||
Identifiable assets
|
$
|
1,513.4
|
|
|
$
|
698.4
|
|
|
$
|
(146.9
|
)
|
|
$
|
2,064.9
|
|
Three Months Ended March 31, 2014
|
|
|
|
|
|
|
|
||||||||
External revenue
|
$
|
756.8
|
|
|
$
|
454.1
|
|
|
$
|
—
|
|
|
$
|
1,210.9
|
|
Operating income (loss)
|
$
|
(32.5
|
)
|
|
$
|
7.9
|
|
|
$
|
(7.8
|
)
|
|
$
|
(32.4
|
)
|
Three Months Ended March 31, 2013
|
|
|
|
|
|
|
|
||||||||
External revenue
|
$
|
753.8
|
|
|
$
|
408.7
|
|
|
$
|
—
|
|
|
$
|
1,162.5
|
|
Operating income (loss)
|
$
|
2.4
|
|
|
$
|
12.0
|
|
|
$
|
(4.5
|
)
|
|
$
|
9.9
|
|
•
|
our ability to generate sufficient liquidity to satisfy our cash needs and future cash commitments, including (without limitation) our obligations related to our indebtedness and lease and pension funding requirements, and our ability to achieve increased cash flows through improvement in operations;
|
•
|
the pace of recovery in the overall economy, including (without limitation) customer demand in the retail and manufacturing sectors;
|
•
|
the success of our management team in implementing its strategic plan and operational and productivity improvements, including (without limitation) our continued ability to meet high on-time and quality delivery performance standards and our ability to increase volume and yield, and the impact of those improvements on our future liquidity and profitability;
|
•
|
our ability to comply with scheduled increases in financial performance-related debt covenants;
|
•
|
our ability to finance the maintenance, acquisition and replacement of revenue equipment and other necessary capital expenditures;
|
•
|
our dependence on our information technology systems in our network operations and the production of accurate information, and the risk of system failure, inadequacy or security breach;
|
•
|
changes in equity and debt markets;
|
•
|
inclement weather;
|
•
|
price of fuel;
|
•
|
sudden changes in the cost of fuel or the index upon which we base our fuel surcharge and the effectiveness of our fuel surcharge program in protecting us against fuel price volatility;
|
•
|
competition and competitive pressure on pricing;
|
•
|
expense volatility, including (without limitation) volatility due to changes in rail service or pricing for rail service;
|
•
|
our ability to comply and the cost of compliance with federal, state, local and foreign laws and regulations, including (without limitation) laws and regulations for the protection of employee safety and health (including new hours-of-service regulations) and the environment;
|
•
|
terrorist attack;
|
•
|
labor relations, including (without limitation) the continued support of our union employees for our strategic plan, the impact of work rules, work stoppages, strikes or other disruptions, our obligations to multi-employer health, welfare and pension plans, wage requirements and employee satisfaction;
|
•
|
the impact of claims and litigation to which we are or may become exposed; and
|
•
|
other risks and contingencies, including (without limitation) the risk factors that are included in our reports filed with the SEC, including those described under “Risk Factors” in our annual report on Form 10-K and quarterly reports on Form 10-Q, including this quarterly report.
|
•
|
Operating Revenue:
Our operating revenue has two primary components: volume (commonly evaluated using number of shipments and weight per shipment) and yield or price (commonly evaluated on a dollar per hundredweight basis and a dollar per shipment basis). Yield includes fuel surcharge revenue, which is common in the trucking industry and represents an amount charged to customers that adjusts with changing fuel prices. We base our fuel surcharges on a published national index and adjust them weekly. Rapid material changes in the index or our cost of fuel can positively or negatively impact our revenue and operating income versus prior periods, as there is a lag in our adjustment of base rates in response to changes in fuel surcharge. We believe that fuel surcharge is an accepted and important component of the overall pricing of our services to our customers. Without an industry accepted fuel surcharge program, our base pricing for our transportation services would require numerous changes. We believe the distinction between base rates and fuel surcharge has blurred over time, and it is impractical to clearly separate all the different factors that influence the price that our customers are willing to pay. In general, under our present fuel surcharge program, we believe rising fuel costs are beneficial to us and falling fuel costs are detrimental to us in the short term.
|
•
|
Operating Income (Loss):
Operating income (loss) is our operating revenue less operating expenses. Our consolidated operating income (loss) includes certain corporate charges that are not allocated to our YRC Freight and Regional Transportation reporting segments.
|
•
|
Operating Ratio:
Operating ratio is a common operating performance metric used in the trucking industry. It is calculated as (i) 100 percent (ii) minus the result of dividing operating income by operating revenue or (iii) plus the result of dividing operating loss by operating revenue, and expressed as a percentage.
|
•
|
Non-GAAP Financial Measures:
We use certain non-GAAP financial measures to assess our performance. These include (without limitation) adjusted EBITDA and adjusted free cash flow (deficit):
|
◦
|
Adjusted EBITDA:
a non-GAAP measure that reflects our earnings before interest, taxes, depreciation, and amortization expense, and further adjusted for letter of credit fees, equity-based compensation expense, net gains or losses on property disposals and certain other items, including restructuring professional fees, expenses associated with certain lump sum payments to our IBT employees and the results of permitted dispositions and
|
◦
|
Adjusted Free Cash Flow (Deficit):
a non-GAAP measure that reflects our net cash provided by (used in) operating activities minus gross capital expenditures and excludes restructuring professional fees included in operating cash flow.
|
◦
|
Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to fund restructuring professional fees, letter of credit fees, service interest, principal payments on our outstanding debt or lump sum payments to our IBT employees required under the ratified MOU;
|
◦
|
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and adjusted EBITDA does not reflect any cash requirements for such replacements;
|
◦
|
Equity based compensation is an element of our long-term incentive compensation package, although adjusted EBITDA excludes employee equity-based compensation expense when presenting our ongoing operating performance for a particular period;
|
◦
|
Adjusted free cash flow (deficit) excludes the cash usage by our restructuring professional fees, debt issuance costs, equity issuance costs and principal payments on our outstanding debt and the resulting reduction in our liquidity position from those cash outflows; and
|
◦
|
Other companies in our industry may calculate adjusted EBITDA and adjusted free cash flow (deficit) differently than we do, potentially limiting their usefulness as comparative measures.
|
|
|
First Quarter
|
|||||||||
(in millions)
|
|
2014
|
|
2013
|
|
Percent Change
|
|||||
Operating revenue
|
|
$
|
1,210.9
|
|
|
$
|
1,162.5
|
|
|
4.2
|
%
|
Operating income (loss)
|
|
$
|
(32.4
|
)
|
|
$
|
9.9
|
|
|
NM*
|
|
Nonoperating expenses, net
|
|
$
|
41.9
|
|
|
$
|
38.9
|
|
|
7.7
|
%
|
Net loss
|
|
$
|
(70.2
|
)
|
|
$
|
(24.5
|
)
|
|
(186.5
|
)%
|
•
|
The
$44.7 million
increase
in salaries, wages and employees’ benefits was primarily due to a $36.1 million increase in wages and benefits in the first quarter of 2014 compared to the first quarter of 2013. This increase was largely driven
|
•
|
The
$17.0 million
increase
in purchased transportation was primarily driven by increased shipping volumes and increased purchased rail miles used to balance our network load in response to the service disruptions related to the severe winter weather experienced during the first quarter. We also experienced an increase in purchased road miles in part due to the same service delays previously noted as well as changes in our purchased transportation options as permitted in our modified labor agreement that went into effect in February of 2014. Finally, we had higher vehicle rent expense as our percentage of leased units has increased since last year due to our current strategy of using operating leases to acquire new revenue equipment.
|
•
|
The
$15.9 million
increase
in operating expenses and supplies was primarily driven by higher fuel expense of $8.4 million and an increase in vehicle maintenance of $4.2 million. The increase in fuel expense is primarily a result of increased miles driven due to higher shipping volumes and freight diversions caused by weather. The increase in vehicle maintenance is primarily driven by higher costs needed to support our aging fleet and an increase in miles driven.
|
•
|
The
$11.0 million
increase
in other operating expenses was primarily driven by a $8.0 million increase in our bodily injury and property damage claims expense and a $3.2 million increase in cargo claims expense. The increase in both our bodily injury and property damage claims and our cargo claims expense was driven by an increase in the number of claims driven largely by adverse weather conditions as well as favorable development experienced in the first quarter of 2013.
|
•
|
YRC Freight
is the reporting segment for our transportation service providers focused on business opportunities in national, regional and international services. YRC Freight provides for the movement of industrial, commercial and retail goods, primarily through centralized management and customer facing organizations. This unit includes our LTL subsidiary YRC Inc. and Reimer Express, a subsidiary located in Canada that specializes in shipments into, across and out of Canada. In addition to the United States and Canada, YRC Freight also serves parts of Mexico, Puerto Rico and Guam.
|
•
|
Regional Transportation
is the reporting segment for our transportation service providers focused on business opportunities in the regional and next-day delivery markets. The Regional Transportation companies each provide regional, next-day ground services in their respective regions through a network of facilities located across the United States, Canada, Mexico and Puerto Rico.
|
|
|
First Quarter
|
|||||||||
(in millions)
|
|
2014
|
|
2013
|
|
Percent
Change
|
|||||
Operating revenue
|
|
$
|
756.8
|
|
|
$
|
753.8
|
|
|
0.4
|
%
|
Operating income (loss)
|
|
$
|
(32.5
|
)
|
|
$
|
2.4
|
|
|
NM*
|
|
Operating ratio
(a)
|
|
104.3
|
%
|
|
99.7
|
%
|
|
(4.6
|
) pp
|
(a)
|
pp represents the change in percentage points
|
|
First Quarter
|
|
|
|||||||
|
2014
|
|
2013
|
|
Percent Change
(b)
|
|||||
Workdays
|
63.0
|
|
|
62.5
|
|
|
|
|||
|
|
|
|
|
|
|||||
Total picked up revenue (in millions)
(a)
|
$
|
755.9
|
|
|
$
|
756.9
|
|
|
(0.1
|
)%
|
Total tonnage (in thousands)
|
1,646
|
|
|
1,605
|
|
|
2.5
|
%
|
||
Total tonnage per day (in thousands)
|
26.13
|
|
|
25.69
|
|
|
1.7
|
%
|
||
Total shipments (in thousands)
|
2,772
|
|
|
2,764
|
|
|
0.3
|
%
|
||
Total shipments per day (in thousands)
|
44.00
|
|
|
44.23
|
|
|
(0.5
|
)%
|
||
Total picked up revenue per hundred weight
|
$
|
22.96
|
|
|
$
|
23.57
|
|
|
(2.6
|
)%
|
Total picked up revenue per shipment
|
$
|
273
|
|
|
$
|
274
|
|
|
(0.4
|
)%
|
Total weight per shipment (in pounds)
|
1,188
|
|
|
1,162
|
|
|
2.3
|
%
|
|
First Quarter
|
||||||
(in millions)
|
2014
|
|
2013
|
||||
(a)
Reconciliation of operating revenue to total picked up revenue:
|
|
|
|
||||
Operating revenue
|
$
|
756.8
|
|
|
$
|
753.8
|
|
Change in revenue deferral and other
|
(0.9
|
)
|
|
3.1
|
|
||
Total picked up revenue
|
$
|
755.9
|
|
|
$
|
756.9
|
|
•
|
The $15.0 million increase in salary, wages and employees’ benefits in the
first quarter
of
2014
was primarily the result of an $11.8 million increase in wages and benefits in the first quarter of 2014 compared to the first quarter of 2013. This increase was largely driven by the negative impact the severe winter weather had on the productivity of our workforce which, among other things, increased our overtime and linehaul delay pay and, to a lesser extent, by higher shipping volumes.
|
•
|
The $11.0 million increase in purchased transportation was primarily driven by increased purchased rail miles used to balance our network load in response to the service disruptions related to the severe winter weather experienced during the first quarter as well as increased shipping volumes. We also experienced an increase in purchased road miles in part due to the same service delays previously noted as well as a slight increase in purchased miles driven as we began to utilize our new over the road purchased transportation option as permitted in our modified labor agreement that went into effect in February of 2014. Finally, we had higher vehicle rent expense as our percentage of leased units has increased since last year due to our current strategy of using operating leases to acquire new revenue equipment.
|
•
|
The $7.0 million increase in other operating expenses in the
first quarter
of
2014
was primarily driven by a $6.3 million increase in our bodily injury and property damage expense due to more claims compared to the
first quarter
of 2013 as well as favorable development experienced in the first quarter of 2013.
|
|
|
First Quarter
|
|||||||||
(in millions)
|
|
2014
|
|
2013
|
|
Percent
Change
|
|||||
Operating revenue
|
|
$
|
454.1
|
|
|
$
|
408.7
|
|
|
11.1%
|
|
Operating income
|
|
$
|
7.9
|
|
|
$
|
12.0
|
|
|
(34.2)%
|
|
Operating ratio
(a)
|
|
98.3
|
%
|
|
97.1
|
%
|
|
(1.2
|
) pp
|
(a)
|
pp represents the change in percentage points
|
|
First Quarter
|
|
|
|||||||
|
2014
|
|
2013
|
|
Percent Change
(b)
|
|||||
Workdays
|
67.0
|
|
|
62.5
|
|
|
|
|||
|
|
|
|
|
|
|||||
Total picked up revenue (in millions)
(a)
|
$
|
454.4
|
|
|
$
|
409.0
|
|
|
11.1
|
%
|
Total tonnage (in thousands)
|
2,015
|
|
|
1,831
|
|
|
10.0
|
%
|
||
Total tonnage per day (in thousands)
|
30.08
|
|
|
29.30
|
|
|
2.6
|
%
|
||
Total shipments (in thousands)
|
2,706
|
|
|
2,480
|
|
|
9.1
|
%
|
||
Total shipments per day (in thousands)
|
40.38
|
|
|
39.68
|
|
|
1.8
|
%
|
||
Total picked up revenue per hundred weight
|
$
|
11.28
|
|
|
$
|
11.17
|
|
|
1.0
|
%
|
Total picked up revenue per shipment
|
$
|
168
|
|
|
$
|
165
|
|
|
1.9
|
%
|
Total weight per shipment (in pounds)
|
1,490
|
|
|
1,477
|
|
|
0.9
|
%
|
|
First Quarter
|
||||||
(in millions)
|
2014
|
|
2013
|
||||
(a)
Reconciliation of operating revenue to total picked up revenue:
|
|
|
|
||||
Operating revenue
|
$
|
454.1
|
|
|
$
|
408.7
|
|
Change in revenue deferral and other
|
0.3
|
|
|
0.3
|
|
||
Total picked up revenue
|
$
|
454.4
|
|
|
$
|
409.0
|
|
•
|
The $25.8 million increase in salary, wages and employees’ benefits in the
first quarter
of
2014
was primarily the result of a $24.4 million increase in wages and benefits in the first quarter of 2014 compared to the first quarter of 2013. This increase was largely driven higher shipping volumes and by the negative impact the severe winter weather had on the productivity of our workforce which, among other things, increased our overtime and linehaul delay pay.
|
•
|
The $10.8 million increase in operating expenses and supplies in the
first quarter
of
2014
was primarily driven by a $6.3 million increase in fuel costs and a $1.2 million increase in vehicle maintenance primarily due to an increase in miles driven.
|
•
|
The $6.1 million increase in purchased transportation was primarily driven by an increase in purchased road miles in part due to the same service disruptions previously noted. Finally, we had higher vehicle rent expense as our percentage of leased units has increased since last year due to our strategy of using operating leases to acquire new revenue equipment.
|
|
|
First Quarter
|
||||||
(in millions)
|
|
2014
|
|
2013
|
||||
Reconciliation of operating income (loss) to adjusted EBITDA:
|
|
|
|
|
||||
Operating income (loss)
|
|
$
|
(32.4
|
)
|
|
$
|
9.9
|
|
Depreciation and amortization
|
|
41.0
|
|
|
43.6
|
|
||
(Gains) losses on property disposals, net
|
|
0.2
|
|
|
(4.5
|
)
|
||
Letter of credit expense
|
|
5.2
|
|
|
8.9
|
|
||
Restructuring professional fees
|
|
1.1
|
|
|
1.3
|
|
||
Permitted dispositions and other
|
|
0.1
|
|
|
0.1
|
|
||
Equity based compensation expense
|
|
6.6
|
|
|
1.0
|
|
||
Other nonoperating, net
|
|
1.6
|
|
|
0.4
|
|
||
Adjusted EBITDA
|
|
$
|
23.4
|
|
|
$
|
60.7
|
|
|
|
First Quarter
|
||||||
(in millions)
|
|
2014
|
|
2013
|
||||
Adjusted EBITDA
|
|
$
|
23.4
|
|
|
$
|
60.7
|
|
Total restructuring professional fees
|
|
(1.1
|
)
|
|
(1.3
|
)
|
||
Cash paid for interest
|
|
(39.4
|
)
|
|
(28.5
|
)
|
||
Cash paid for letter of credit fees
|
|
(4.0
|
)
|
|
(6.0
|
)
|
||
Working Capital cash flows excluding income tax, net
|
|
(48.7
|
)
|
|
(53.4
|
)
|
||
Net cash used in operating activities before income taxes
|
|
(69.8
|
)
|
|
(28.5
|
)
|
||
Cash received for income taxes, net
|
|
13.6
|
|
|
14.6
|
|
||
Net cash used in operating activities
|
|
(56.2
|
)
|
|
(13.9
|
)
|
||
Acquisition of property and equipment
|
|
(11.7
|
)
|
|
(17.2
|
)
|
||
Total restructuring professional fees
|
|
1.1
|
|
|
1.3
|
|
||
Adjusted Free Cash Flow (Deficit)
|
|
$
|
(66.8
|
)
|
|
$
|
(29.8
|
)
|
|
|
First Quarter
|
||||||
(in millions)
|
|
2014
|
|
2013
|
||||
Adjusted EBITDA by segment:
|
|
|
|
|
||||
YRC Freight
|
|
$
|
(3.7
|
)
|
|
$
|
33.6
|
|
Regional Transportation
|
|
25.9
|
|
|
29.0
|
|
||
Corporate and other
|
|
1.2
|
|
|
(1.9
|
)
|
||
Adjusted EBITDA
|
|
$
|
23.4
|
|
|
$
|
60.7
|
|
|
|
First Quarter
|
||||||
YRC Freight segment (in millions)
|
|
2014
|
|
2013
|
||||
Reconciliation of operating income (loss) to adjusted EBITDA:
|
|
|
|
|
||||
Operating income (loss)
|
|
$
|
(32.5
|
)
|
|
$
|
2.4
|
|
Depreciation and amortization
|
|
24.7
|
|
|
28.0
|
|
||
Gains on property disposals, net
|
|
(0.2
|
)
|
|
(4.5
|
)
|
||
Letter of credit expense
|
|
3.6
|
|
|
7.4
|
|
||
Other nonoperating expenses, net
|
|
0.7
|
|
|
0.3
|
|
||
Adjusted EBITDA
|
|
$
|
(3.7
|
)
|
|
$
|
33.6
|
|
|
|
First Quarter
|
||||||
Regional Transportation segment (in millions)
|
|
2014
|
|
2013
|
||||
Reconciliation of operating income to adjusted EBITDA:
|
|
|
|
|
||||
Operating income
|
|
$
|
7.9
|
|
|
$
|
12.0
|
|
Depreciation and amortization
|
|
16.4
|
|
|
15.5
|
|
||
Losses on property disposals, net
|
|
0.4
|
|
|
—
|
|
||
Letter of credit expense
|
|
1.2
|
|
|
1.4
|
|
||
Other nonoperating expenses, net
|
|
—
|
|
|
0.1
|
|
||
Adjusted EBITDA
|
|
$
|
25.9
|
|
|
$
|
29.0
|
|
|
|
First Quarter
|
||||||
Corporate and other segment (in millions)
|
|
2014
|
|
2013
|
||||
Reconciliation of operating loss to adjusted EBITDA:
|
|
|
|
|
||||
Operating loss
|
|
$
|
(7.8
|
)
|
|
$
|
(4.5
|
)
|
Depreciation and amortization
|
|
(0.1
|
)
|
|
0.1
|
|
||
Letter of credit expense
|
|
0.4
|
|
|
0.1
|
|
||
Restructuring professional fees
|
|
1.1
|
|
|
1.3
|
|
||
Permitted dispositions and other
|
|
0.1
|
|
|
0.1
|
|
||
Equity based compensation expense
|
|
6.6
|
|
|
1.0
|
|
||
Other nonoperating income, net
|
|
0.9
|
|
|
—
|
|
||
Adjusted EBITDA
|
|
$
|
1.2
|
|
|
$
|
(1.9
|
)
|
Four Consecutive Fiscal Quarters Ending
|
Maximum Total
Leverage Ratio
|
|
Four Consecutive Fiscal Quarters Ending
|
Maximum Total
Leverage Ratio
|
June 30, 2014
|
6.00 to 1.00
|
|
June 30, 2016
|
3.50 to 1.00
|
September 30, 2014
|
5.00 to 1.00
|
|
September 30, 2016
|
3.50 to 1.00
|
December 31, 2014
|
4.50 to 1.00
|
|
December 31, 2016
|
3.25 to 1.00
|
March 31, 2015
|
4.00 to 1.00
|
|
March 31, 2017
|
3.25 to 1.00
|
June 30, 2015
|
3.75 to 1.00
|
|
June 30, 2017
|
3.25 to 1.00
|
September 30, 2015
|
3.75 to 1.00
|
|
September 30, 2017
|
3.25 to 1.00
|
December 31, 2015
|
3.75 to 1.00
|
|
December 31, 2017 and thereafter
|
3.00 to 1.00
|
March 31, 2016
|
3.50 to 1.00
|
|
|
|
•
|
we must achieve improvements in our operating results, primarily at our YRC Freight operating segment, which rely upon pricing and shipping volumes and network efficiencies;
|
•
|
we must continue to implement and realize cost saving measures, including those identified in the new MOU, to match our costs with business levels and in a manner that does not harm operations and our productivity and efficiency initiatives must be successful; and
|
•
|
we must be able to generate operating cash flows that are sufficient to meet the cash requirements for pension contributions to our single and multi-employer pension funds, cash interest and principal payments on our funded debt, payments on our equipment leases, and for capital expenditures or additional lease payments for new revenue equipment
|
|
Payments Due by Period
|
|
|
|
||||||||||||||||
(in millions)
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
After 5 years
|
|
Total
|
|
||||||||||
Balance sheet obligations:
(a)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
ABL borrowings, including interest and unused line fees
|
$
|
0.3
|
|
|
$
|
0.6
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
1.5
|
|
|
Long-term debt, including interest
|
166.9
|
|
|
124.5
|
|
|
779.8
|
|
|
—
|
|
|
1,071.2
|
|
|
|||||
Lease financing obligations
|
41.5
|
|
|
83.4
|
|
|
80.9
|
|
|
43.2
|
|
|
249.0
|
|
(b)
|
|||||
Multi-employer pension deferral obligations, including interest
|
9.0
|
|
|
18.1
|
|
|
142.3
|
|
|
—
|
|
|
169.4
|
|
|
|||||
Workers’ compensation, property damage and liability claims obligations
|
100.0
|
|
|
122.7
|
|
|
59.1
|
|
|
107.0
|
|
|
388.8
|
|
(c)
|
|||||
Off balance sheet obligations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating leases
|
54.7
|
|
|
55.1
|
|
|
23.9
|
|
|
15.6
|
|
|
149.3
|
|
|
|||||
Letter of credit fees
|
9.8
|
|
|
19.6
|
|
|
18.3
|
|
|
—
|
|
|
47.7
|
|
|
|||||
Capital expenditures
|
5.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.3
|
|
|
|||||
Total contractual obligations
|
$
|
387.5
|
|
|
$
|
424.0
|
|
|
$
|
1,104.9
|
|
|
$
|
165.8
|
|
|
$
|
2,082.2
|
|
|
(a)
|
Total liabilities for unrecognized tax benefits as of
March 31, 2014
were
$27.4 million
and are classified on our consolidated balance sheet within “Claims and Other Liabilities” and are excluded from the table above.
|
(b)
|
The
$249.0 million
of lease financing obligation payments represent interest payments of
$183.8 million
and principal payments of
$65.2 million
. The remaining principle obligation is offset by the estimated book value of leased property at the expiration date of each lease agreement.
|
(c)
|
The workers’ compensation, property damage and liability claims obligations represent our estimate of future payments for these obligations, not all of which are contractually required.
|
|
Amount of Commitment Expiration Per Period
|
|
|
||||||||||||||||
(in millions)
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
After 5 years
|
|
Total
|
||||||||||
Unused line of credit
|
|
|
|
|
|
|
|
|
|
||||||||||
New ABL Facility
(a)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
82.5
|
|
|
$
|
—
|
|
|
$
|
82.5
|
|
Letters of credit
|
—
|
|
|
—
|
|
|
367.5
|
|
|
—
|
|
|
367.5
|
|
|||||
Surety bonds
|
122.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122.2
|
|
|||||
Total commercial commitments
|
$
|
122.2
|
|
|
$
|
—
|
|
|
$
|
450.0
|
|
|
$
|
—
|
|
|
$
|
572.2
|
|
(a)
|
At March 31, 2014 we held
$82.0 million
in restricted escrow, which represents cash collateral on our New ABL Facility.
|
Votes For
|
Votes Against
|
Votes Abstaining
|
Broker Non-Votes
|
12,688,455
|
2,233,080
|
24,429
|
3,210,685
|
Votes For
|
Votes Against
|
Votes Abstaining
|
Broker Non-Votes
|
13,290,377
|
1,633,110
|
22,477
|
3,210,685
|
Votes For
|
Votes Against
|
Votes Abstaining
|
17,954,193
|
100,138
|
102,318
|
3.1.1
|
Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K, filed on September 16, 2011, File No. 000-12255).
|
3.1.2
|
Certificate of Elimination of Series B Convertible Preferred Stock (incorporated by reference to Exhibit 3.2 to Current Report on Form 8-K, filed on December 1, 2011, File No. 000-12255).
|
3.1.3
|
Certificate of Designations of Series A Voting Preferred Stock (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K, filed on July 25, 2011, File No. 000-12255).
|
3.1.4
|
Certificate of Designations of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K, filed on January 31, 2014, File No. 000-12255).
|
3.1.5
|
Certificate of Amendment to the Certificate of Incorporation of the Company increasing the number of authorized shares (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K, filed on March 17, 2014, File No. 000-12255).
|
|
|
4.1
|
Third Supplemental Indenture, dated as of January 31, 2014, among the Company, as issuer, the subsidiaries party thereto as guarantors and U.S. Bank National Association, as trustee, supplementing the Indenture, dated as of July 22, 2011 (as supplemented and in effect as of the date of the Supplemental Indenture), relating to the Company’s 10% Series B Convertible Senior Secured Notes due 2015 (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K, filed on January 31, 2014, File No. 000-12255).
|
|
|
10.1
|
Amendment No. 5 to Credit Agreement dated as of January 30, 2014 by and among YRCW Receivables LLC, as borrower, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to current report on Form 8-K, filed on February 5, 2014, File No. 000-12255).
|
10.2
|
Extension of the Agreement for the Restructuring of the YRC Worldwide Inc. Operating Companies, dated February 7, 2014, by and among YRC Inc. (d/b/a YRC Freight), USF Holland Inc., New Penn Motor Express, Inc., USF Reddaway Inc. and the Teamsters National Freight Industry Negotiating Committee of the International Brotherhood of Teamsters (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K, filed on February 7, 2014, File No. 000-12255).
|
10.3
|
Consent and Second Amendment to the Amended and Restated Contribution Deferral Agreement, dated as of January 31, 2014, among YRC Inc., USF Holland Inc., New Penn Motor Express, Inc. and USF Reddaway Inc., collectively as primary obligors, the Trustees for the Central States, Southeast and Southwest Areas Pension Fund, the Wilmington Trust Company, as agent, and the other funds party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on January 31, 2014, File No. 000-12255).
|
10.4
|
Letter Agreement, dated as of January 29, 2014 and effective as of January 31, 2014, among Central States, Southeast and Southwest Areas Pension Fund, YRC, Inc., USF Holland Inc., New Penn Motor Express, Inc., USF Reddaway Inc., as primary obligors, YRC Worldwide Inc., as primary guarantor, and certain additional guarantors (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K, filed on January 31, 2014, File No. 000-12255).
|
10.5
|
Credit Agreement dated as of February 13, 2014, by and among the Company, as borrower, the subsidiaries of the borrower party thereto from time to time, the lenders from time to time party thereto, and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent for the lenders (incorporated by reference to Exhibit 10.10 to Annual Report on Form 10-K for the year ended December 31, 2013, File No. 000-12255).
|
10.6†
|
Loan and Security Agreement, dated as of February 13, 2014, among the Company, as administrative borrower, the other borrowers named therein, the guarantors named therein, certain financial institutions, as lenders, and RBS Citizens Business Capital a division of RBS Asset Finance, Inc., a subsidiary of RBS Citizens, N.A., as agent, and RBS Citizens, N.A., Merrill Lynch, Pierce, Fenner & Smith and CIT Finance LLC, as joint lead arrangers and joint bookrunners (incorporated by reference to Exhibit 10.11 to Annual Report on Form 10-K for the year ended December 31, 2013, File No. 000-12255).
|
10.7*
|
YRC Worldwide Inc. Amended and Restated 2011 Incentive and Equity Award Plan
|
|
|
31.1*
|
Certification of James L. Welch filed pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2*
|
Certification of Jamie G. Pierson filed pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1*
|
Certification of James L. Welch furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2*
|
Certification of Jamie G. Pierson furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101.INS**
|
XBRL Instance Document
|
101.SCH**
|
XBRL Taxonomy Extension Schema
|
101.CAL**
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF**
|
XBRL Taxonomy Extension Definition Linkbase
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101.LAB**
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XBRL Taxonomy Extension Label Linkbase
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101.PRE**
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XBRL Taxonomy Extension Presentation Linkbase
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†
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Confidential portions of this exhibit have been filed separately with the SEC pursuant to a request for confidential treatment.
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*
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Indicates documents filed herewith
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**
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XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
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YRC WORLDWIDE INC.
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Date: May 1, 2014
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/s/ James L. Welch
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James L. Welch
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Chief Executive Officer
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Date: May 1, 2014
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/s/ Jamie G. Pierson
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Jamie G. Pierson
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Executive Vice President and
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Chief Financial Officer
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(a)
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an Option;
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(b)
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a SAR;
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(c)
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Restricted Stock;
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(d)
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a Restricted Stock Unit;
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(e)
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a Performance Award;
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(f)
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an Other Stock-Based Award; or
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(g)
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a Cash Award.
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1.5.
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“Board”
means the Board of Directors of the Company.
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1.6.
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“Cash Award”
means a cash incentive payment described in Section 14.
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1.7.
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“Code”
means the Internal Revenue Code of 1986, as amended.
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(1)
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I have reviewed this quarterly report on Form 10-Q of YRC Worldwide Inc.;
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(2)
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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(3)
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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(4)
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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(5)
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: May 1, 2014
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/s/ James L. Welch
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James L. Welch
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Chief Executive Officer
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(1)
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I have reviewed this quarterly report on Form 10-Q of YRC Worldwide Inc.;
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(2)
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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(3)
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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(4)
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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(5)
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: May 1, 2014
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/s/ Jamie G. Pierson
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Jamie G. Pierson
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Executive Vice President and Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of YRC Worldwide Inc.
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Date: May 1, 2014
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/s/ James L. Welch
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James L. Welch
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Chief Executive Officer
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(1)
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The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of YRC Worldwide Inc.
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Date: May 1, 2014
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/s/ Jamie G. Pierson
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Jamie G. Pierson
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Chief Financial Officer
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