Yellow Corporation · OTC:YELLQ
Yellow — YRC Worldwide — FY2007 Earnings Presentation
41 slides from Yellow's earnings presentation, Jan 28, 2008
Slide 1: Analyst Meeting
Exhibit 99.1 Analyst Meeting January 28, 2008
Slide 2: Opening
Opening • Slides covered today are available on our web site, www.yrcw.com, under the Investor Relations section • Forward looking statements Statements made by management during this meeting that are not purely historical are forward-looking statements within the meaning of the Private Litigation S
Slide 3: YRC Worldwide
YRC Worldwide • Bill Zollars Chairman, President & CEO • Mike Smid President, North American Transportation • Stephen Bruffett Executive Vice President & CFO • Sheila Taylor Vice President, Investor Relations 3
Slide 4: Meeting Agenda
Meeting Agenda • 2007 results 15 minutes • Financial position 15 minutes • Tentative labor agreement 15 minutes • 2008 action plan 15 minutes • Q&A session 30 minutes 90 minutes 4
Slide 5: 2007 Results
® YRC Worldwide 2007 Results MAKING GLOBAL COMMERCE WORK, BY CONNECTING PEOPLE. PLACES AND IN
Slide 6: 2007 Results Overview
2007 Results Overview • Economic and operating conditions were challenging throughout the year increasingly – so as the year progressed • Financial performance of Regional segment was well below expectations, particularly in the second half of 2007 • National segment executed well given the environm
Slide 7: 2007 Results Fourth Quarter
2007 Results Fourth Quarter • Fourth quarter summary Notable items recorded during the quarter • Previously disclosed non-cash impairment charges of $782 million related to intangible assets (goodwill and trade names) • Reorganization charges of $9 million primarily due to severance expenses • Techn
Slide 8: 2007 Results Full Year
2007 Results Full Year • Full year summary Notable items recorded during the year • Previously disclosed non-cash impairment charges of $782 million related to intangible assets (goodwill and trade names) • Reorganization charges of $22 million primarily due to severance expenses • Technology charge
Slide 9: 2007 Results Historical Perspective
2007 Results Historical Perspective 6.1% 5.3% 5.5% 4.5% • Improving margins at the peaks and troughs of the economic cycle 3.2% • Deep management experience in 2.3% managing a cyclical business 1.8% 1.5% • Issues with the financial performance of the Regional segment impacted 2007 results 2000 2001
Slide 10: National Segment Tonnage Trends
2007 Results National Segment Tonnage Trends -6.7% -4.8% -8.0% -3.8% 2006 2007 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr LTL Tonnage Per Day 10
Slide 11: National Segment Pricing Trends
2007 Results National Segment Pricing Trends +5.7%* +1.4% +0.9% +2.0% 2006 2007 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr LTL Revenue per Hundred Weight * The majority of the year-over-year increase was due to higher fuel surcharges. 4Q07 fuel cost per gallon was up 28% compared to 4Q06. 11
Slide 12: Regional Segment Tonnage Trends
2007 Results Regional Segment Tonnage Trends -2.0% -2.4% -2.6% -2.9% 2006 2007 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr LTL Tonnage Per Day 12
Slide 13: Regional Segment Pricing Trends
2007 Results Regional Segment Pricing Trends -1.3% +3.4%* +0.3% 2006 +1.1% 2007 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr LTL Revenue per Hundred Weight * The majority of the year-over-year increase was due to higher fuel surcharges. 13
Slide 14: Financial Position
® YRC Worldwide Financial Position NFORMATION
Slide 15: Financial Position Bank Covenant
Financial Position Bank Covenant • Leverage ratio Total debt cannot exceed 3.0x trailing 12-month EBITDA* We are well inside the covenant; 2.5x at 12/31/07 • Debt balances (in millions) 9/30/07 balance sheet debt $1,512 Repayment of floating rate notes $ (150) 4Q07 cash flows $ (128) 12/31/07 balanc
Slide 16: Financial Position Debt Levels
Financial Position Debt Levels • Total debt levels are expected to remain at or below current levels throughout 2008 Ability to control the amount and timing of capital expenditures, variable costs and discretionary expenses throughout the year Debt reduction is the predominant use of free cash flow
Slide 17: Financial Position 2008 Uses of Cash
Financial Position 2008 Uses of Cash • 2008 capital expenditures Expected range of net capital expenditures is $250 $200 million - Prudent month-to-month management of capital expenditures • Other uses of cash Jiayuacquisition • Approximately $40 million nd • Timing 2- quarter closing expected Non-u
Slide 18: Financial Position Liquidity By Quarter
Financial Position Liquidity By Quarter $689 $635 $604 $589 $565 2007 $551 2006 $478 (in millions) $452 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Ability to preserve liquidity throughout an economic cycle 18
Slide 19: Financial Position Upcoming Refinancing Activity
Financial Position Upcoming Refinancing Activity Face Maturity Value Roadway notes (8.25%) 12/01/08 $225 USF notes (6.50%) 5/01/09 $100 Total in next 24 months $325 Floating rate notes that were to mature in May 2008 were prepaid on 12/28/07 All dollar amounts are in millions 19
Slide 20: Multi-Employer Pension Plans (MEPPA)
Financial Position Multi-Employer Pension Plans (MEPPA) • Applies to our employees covered by collective bargaining agreements (approximately 50,000 employees) • Union pension expenses 2007 $578 million 2006 $542 million • These expenses are, and have been, inherent in our cost structure and cash fl
Slide 21: Non-Union Pension Plans (single employer)
Financial Position Non-Union Pension Plans (single employer) • Applies to approximately 8,000 non-union employees who were hired prior to January 1, 2004 • These expenses flow through the Salaries, Wages and Benefits line of the income statement • Non-union pension expense 2007 $44 million 2006 $62
Slide 22: Non-Union Pension Plans (single employer)
Financial Position Non-Union Pension Plans (single employer) • These obligations are reflected on our balance sheet • Funded status Unfunded at12/31/06 $303million(GAAPdefinition) Unfunded at12/31/07 $137million(GAAPdefinition) • Anticipate cash funding of approximately $50 million per year through2
Slide 23: Tentative Labor Agreement
® YRC Worldwide Tentative Labor Agreement
Slide 24: Labor Agreement
Labor Agreement • General comments A good, balanced contract • Attractive features for our employees • Opportunities for YRCW to broaden its service offering and compete effectively A YRCW-tailored agreement with the IBT; not a multi-party negotiation • Enabled a more productive approach to the proc
Slide 25: Labor Agreement Operational Competitiveness Provisions
Labor Agreement Operational Competitiveness Provisions • Utility Employee Ability to establish a driver-qualified position that works across all job classifications of local and over-the-road functions • No restrictions on type of freight handled • Can work across local jurisdictional boundaries in
Slide 26: Labor Agreement Operational Competitiveness Provisions
Labor Agreement Operational Competitiveness Provisions • Four-Hour Casual Employees (part-time employees) Ability to utilize four-hour casual employees across the YRC Worldwide companies covered by this agreement Key benefits • Improved matching of labor to business volumes • Morecompetitive ratestr
Slide 27: Labor Agreement Operational Competitiveness Provisions
Labor Agreement Operational Competitiveness Provisions • Truckload substitute service • Purchased transportation as a % of Opportunity to convert total linehaul miles increasingly expensive rail miles 28.0% 28.0% 28.0% 28.0% 28.0% to more reliable road service 4.0% 4.0% 6.5% 7.0% 9.0% Allows for gro
Slide 28: Labor Agreement Economic Provisions
Labor Agreement Economic Provisions • Wage Increases $0.50 $0.45 $0.45 Annual increases occur in April $0.40 $0.40 Compounded annual increase of 1.9% over the life of the contract (similar to current contract) 2008 2009 2010 2011 2012 Increase per hour 28
Slide 29: Labor Agreement Economic Provisions
Labor Agreement Economic Provisions • Pension and Health Care Increases $1.00 $1.00 $1.00 $1.00 $1.00 Annual increases occur in August Compounded annual increase of 7.0% over the life of the contract (compared to approximately 5.9% in the current contract) 2008 2009 2010 2011 2012 Increase per hour
Slide 30: Labor Agreement Economic Provisions
Labor Agreement Economic Provisions • Total Increases $1.50 $1.45 $1.45 Compounded annual increase of $1.40 $1.40 approximately 3.8% over the life of the contract (weighted average of wages, pension and health care increases) Net economic impact of 3.0% - 3.5% over the life of the contract,2008 2009
Slide 31: Labor Agreement Summary
Labor Agreement Summary • Contract addresses opportunities for growth, new services and contemporary network designs Benefits to customers, employees and YRC Worldwide • Contract timing allows for continued focus on serving customers without distractions • More effectively aligns resources with grow
Slide 32: 2008 Action Plan
® YRC Worldwide 2008 Action Plan NFORMATION
Slide 33: 2008 Action Plan
2008 Action Plan • Overall objectives Manage through economic downturn Continued progress in China Effectiveness of asset-based companies Further advancement toward common technology platforms 33
Slide 34: 2008 Action Plan
2008 Action Plan • Manage through economic downturn Reduction in overhead and G&A costs • $50 million target; $30 million achieved to date • Actions taken during 4Q07 will benefit 2008 • Remaining $20 million is expected across the first half of 2008 Prudent management of cash flows, capital expendi
Slide 35: 2008 Action Plan
2008 Action Plan • Effectiveness of asset-based companies North American Transportation structure • Efficient platform for prioritization and execution Improvement in the financial performance of our regional companies • $50 million improvement plan – Focus on premium 1 and 2 day service in their mo
Slide 36: 2008 Action Plan
2008 Action Plan • Effectiveness of asset-based companies Begin the transition to one corporate sales team for our asset-based companies • Positive customer response to Enterprise Solutions Group • Creates a single point of contact that can access all the resources and capabilities of YRC Worldwide
Slide 37: 2008 Action Plan
2008 Action Plan • Common technology platforms Most back office applications are now common Focusing our technology resources on operational applications • Enhanced efficiency and visibility • Better visibility and reporting for customers • Decreased maintenance costs and more time for development •
Slide 38: 2008 Action Plan Summary
2008 Action Plan Summary • We are aggressively responding to a LTL Segment* challenging economic cycle and are well positioned for 2008 and beyond Clear strategic direction YRCW New labor contract Growth opportunities Prudent management of cash flows and costs Others Significant footprint and market
Slide 39: Q&A Session
® YRC Worldwide Q&A Session MAKING GLOBAL COMMERCE WORK, BY CONNECTING PEOPLE. PLACES AND NFORMATION
Slide 40: Forward-Looking Statements
Forward-Looking Statements • Forward-Looking Statements:Pages16,17,20contain“forward-looking statements” withinthemeaningoftheSecuritiesActandtheSecurities Exchange Act, identified by the words “expected”, “anticipate”. • Forward-looking statementsonpages16and17areonlyourexpectations regarding ourde
Slide 41: GAAP vs. Non-GAAP Measures
GAAP vs. Non-GAAP Measures • The earnings per share amounts excluding the items listed on pages 7 and 8 are non-GAAP measures, which should not be construed as a better measure than the GAAP net loss or earnings per share presented on those pages. The company excludes the items above to determine th