Yellow Corporation · OTC:YELLQ
Yellow — Merger or Acquisition (August 2003)
20 slides from Yellow's merger presentation, Aug 8, 2003
Slide 1: Filed by Yellow Corporation Pursuant to Rule 425
Filed by Yellow Corporation Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 and Rule 14d-2(b) of the Securities Exchange Act of 1934 Subject Company: Yellow Corporation Commission File No.: 0-12255 Subject Company: Roadway Corporation Commission File No
Slide 2: Additional Information
ADDITIONAL INFORMATION Yellow and Roadway will file a proxy statement/prospectus and other relevant documents concerning the proposed merger transaction with the Securities and Exchange Commission (“SEC”). Investors are urged to read the proxy statement/prospectus when it becomes available and any o
Slide 3: Yellow Corporation July 31, 2003
[LOGO] YELLOW CORPORATION® Yellow Corporation July 31, 2003 Making global commerce work by connecting people, places, and information. 1
Slide 4: Balancing yield and tonnage growth to enhance profitability
[LOGO] YELLOW CORPORATION® Balancing yield and tonnage growth to enhance profitability [GRAPHIC] Yield and Tonnage Growth [GRAPHIC] Operating Income Growth 2
Slide 5: Yellow — Roadway Corporation: A Strategic Combination
[LOGO] YELLOW CORPORATION® [LOGO] ROADWAY® CORPORATION Yellow — Roadway Corporation A Strategic Combination Making global commerce work by connecting people, places, and information. 3
Slide 6: The Right Strategy, the Right Partner
[LOGO] YELLOW CORPORATION® [LOGO] ROADWAY® CORPORATION The Right Strategy, the Right Partner n Advances strategy n Comprehensive portfolio of transportation services (‘one-stop shopping’) · Greater penetration of premium services · Non-asset solutions to larger base of customers · Next-day opportuni
Slide 7: The Right Strategy, the Right Partner (cont'd)
[LOGO] YELLOW CORPORATION® ROADWAY® CORPORATION The Right Strategy, the Right Partner (cont’d) n Enhanced Scale and Market Position n Combined revenue of approximately $6 billion · Nearly 48,000 employees in over 700 locations n Largest North American transportation company focused on big shipments
Slide 8: The Right Time
[LOGO] YELLOW CORPORATION® ROADWAY® CORPORATION The Right Time n Both companies are solidly profitable n 5-year labor agreement n Favorable financial markets n Potential of economic recovery provides substantial upside from conservative base case n Roadway management team supportive of strategy 6
Slide 9: Mitigating the risks…
[LOGO] YELLOW CORPORATION® [LOGO] ROADWAY® CORPORATION Mitigating the risks… n Customer retention n Maintain high levels of service and quality with improvements from implementing best practices n Key customer interfaces remain in place n Ability to share the benefits of leveraging cost structure /
Slide 10: Mitigating the risks (cont'd)
[LOGO] YELLOW CORPORATION® ROADWAY® CORPORATION Mitigating the risks (cont’d) n Employee Retention / Union Relations n Retaining key employees is a top priority n Communication is the key · Both CEOs filmed joint video for staff of both companies · Presentations by senior and local leadership to dis
Slide 11: ...While Capturing Meaningful Synergies
[LOGO] YELLOW CORPORATION® [LOGO] ROADWAY® CORPORATION ...While Capturing Meaningful Synergies n Approximately $30 million of cost synergies required to be accretive in 2004, which represents: n Less than 0.5% of operating expenses n Less than 1.6% of non-labor costs n Conservative case of $45 milli
Slide 12: Projected synergies – conservative
[LOGO] YELLOW CORPORATION® [LOGO] ROADWAY® CORPORATION Projected synergies – conservative Cumulative Conservative Savings by Year – in millions Year 1 Year 2 Year 3 Year 4 Year 5 5-Year Total Revenue impact +/-1%(1) $ 9.9 $ 10.4 $ 10.8 $ 10.3 $ 11.7 $ 54.1 Potential cost synergies Operational Mexico
Slide 13: Total potential cost synergies
14.7 21.3 22.0 22.0 22.0 102.0 Total potential cost synergies $ 25.5 $ 41.3 $ 43.0 $ 44.0 $ 44.0 $ 197.8 (1) Assumes 15% incremental margin. 10
Slide 14: Projected integration costs – conservative
[LOGO] YELLOW CORPORATION® [LOGO] ROADWAY® CORPORATION Projected integration costs – conservative Annual Costs of Integration by Year – in millions Year 1 Year 2 Year 3 Year 4 Year 5 5-Year Total Potential implementation costs Severance (excluding executive triggers) $ 1.7 $ 0.6 $ 0.2 $ 2.5 Stay bon
Slide 15: Longer-term potential synergies
[LOGO] YELLOW CORPORATION® [LOGO] ROADWAY® CORPORATION Longer-term potential synergies n Overview n $5.8 billion of costs · Target 5% – 10% cost savings without impacting the customer n Linehaul network · $2 billion annual expense — 10% savings achievable · Continued optimization of networks — Reduc
Slide 16: Pro Forma Leverage
[LOGO] YELLOW CORPORATION® ROADWAY® CORPORATION Pro Forma Leverage [GRAPHIC] Debt to EBITDA [GRAPHIC] Debt to Capital n Both companies will continue to reduce debt between now and year-end n Strength of current balance sheets support transaction financing n Free cash flow generation allows for rapid
Slide 17: Transaction terms and structure
[LOGO] YELLOW® CORPORATION [LOGO] ROADWAY® CORPORATION Transaction terms and structure Transaction value n $48 per share n Equity value: $961 million n Total enterprise value: $1.2 billion n Adjusted total enterprise value: $1.5 billion(1) Consideration n 50 percent cash and 50 percent Yellow stock
Slide 18: Transaction terms and structure (cont'd)
Transaction terms and structure (cont’d) [LOGO] YELLOW CORPORATION® [LOGO] ROADWAY® CORPORATION Value per Roadway share assuming 50% stock/50% cash consideration [GRAPHIC] 15
Slide 19: Summary
[LOGO] YELLOW CORPORATION® [LOGO] ROADWAY® CORPORATION Summary n Consistent with strategy n Increased scale of operations and stronger market position n Low risk integration strategy that will minimize lost revenues while providing significant synergies n Strong brand equity preserved n Non-asset op
Slide 20: Forward looking statements
[LOGO] YELLOW CORPORATION® [LOGO] ROADWAY® CORPORATION Forward looking statements n This presentation (and oral statements made regarding the subjects of this presentation, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21