Slide 1: Analysts Meeting
Analysts Meeting Exhibit 99.2
Slide 2: Stephen Bruffett
Stephen Bruffett Vice President and Treasurer, Yellow Corporation
Slide 3: Forward-looking Statements
Forward-looking Statements 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 21E of the Securities Exchange Act of 1934, as amended. The
Slide 4: Analysts Meeting
Analysts Meeting
Slide 5: Bill Zollars
Bill Zollars Chairman, President and CEO, Yellow Corporation
Slide 6: Yes We Can: Roadway
WeLtow) Roadway, YES WE CAN:
Slide 7: Charles Darwin quote on change
“It is not the strongest of the species that survive, nor the most intelligent, but those most responsive to change.” - Charles Darwin
Slide 8: William "Refrigerator" Perry
William “Refrigerator” Perry Height: 6-2 Speed: Slow Power: Enormous Weight: 315 Agility: None Versatility: Low
Slide 9: The Old Yellow
The Old Yellow Big Slow U.S.A. Only One Trick Pony Regulated Inwardly Obsessed Technology Aware 75 Year History
Slide 10: Yellow Worst of '97
Yellow Worst of ‘97
Slide 11: Barry Sanders (The New Team Yellow)
Barry Sanders (The New Team Yellow) Height: 5-8 Speed: Lightning Fast Power: Focused Weight: 200 Agility: Nimble Versatility: High
Slide 12: The New Yellow
The New Yellow Big Nimble/Flexible Global Service Portfolio Highly Competitive Customer Centric Technology Driven Strong Brand
Slide 13: Change everything fast and all at once
“Change everything fast and all at once.” - Gordon Bethune Continental Airlines
Slide 14: At Yellow, Everything Starts With The Customer
At Yellow, Everything Starts With The Customer
Slide 15: Before and After
Before and After Our business used to be: Trucking Freight Movement Less Than Truckload (LTL) Now our business is: Services that satisfy consumer needs Services that give consumers peace of mind Services that deliver on promises
Slide 16: Slide 16
Slide 17: Where To Start?
Where To Start?
Slide 18: Need A Light On The Hill
“Need A Light On The Hill”
Slide 19: Our Core Purpose
Our Core Purpose To make global commerce work by connecting people, places and information.
Slide 20: Our Vision
Our Vision Yellow will be the leading provider of guaranteed, time-definite, defect-free, hassle-free transportation services for business customers worldwide.
Slide 21: How Do We Get To The Vision?
How Do We Get To The Vision?
Slide 22: How Do We Get To The Vision?
How Do We Get To The Vision? People Process Technology
Slide 23: People
People Challenge – Create a High Performance / Customer Centric Culture
Slide 24: People
People Changing Culture Is Like Changing The Company’s DNA
Slide 25: People: Management Team
People Management Team Well-balanced Yellow, Kodak, Ryder, P&G, Bristol Myers, FedEx, General Electric, Hillenbrand, Motorola, Baker Hughes, Hertz, SABRE, Honeywell
Slide 26: People: Relentless Repetition of Vision
People Relentless Repetition of Vision
Slide 27: People: Enabling Organization
People Enabling Organization
Slide 28: People: Fallacy
People Fallacy - “Any Organizational Structure Will Work With The Right People.”
Slide 29: People: Truth
People Truth - “The Best People Operating In The Best Structure Will Always Win.”
Slide 30: New Structure At Yellow
New Structure At Yellow (or anywhere)
Slide 31: Destroy Silos / Build Teams
New Structure At Yellow (or anywhere) Destroy Silos / Build Teams
Slide 32: Decisions Close To Customers
New Structure At Yellow (or anywhere) Decisions Close To Customers
Slide 33: Demand Entrepreneurship
New Structure At Yellow (or anywhere) Demand Entrepreneurship Without Sub-optimizing
Slide 34: Create Passion
New Structure At Yellow (or anywhere) Create Passion
Slide 35: Train, Train, Train
New Structure At Yellow (or anywhere) Train, Train, Train
Slide 36: Reinforce Right Behavior With Incentives
New Structure At Yellow (or anywhere) Reinforce Right Behavior With Incentives
Slide 37: Process
Process
Slide 38: Process: Engineer From The Ground Up
Process Engineer From The Ground Up 2-year effort Identify best practices Focus on short interval scheduling Certify and audit Institutionalize
Slide 39: Process: Results
Process Engineer From The Ground Up Results Faster More consistent More predictable
Slide 40: Process: Train, Train, Train
Process Train, Train, Train
Slide 41: Technology
Technology
Slide 42: Technology: Get Focused
Technology Get Focused
Slide 43: Technology: Make The Investment
Technology Make The Investment
Slide 44: Technology: Stay Light On Your Feet
Technology Stay Light On Your Feet
Slide 45: Technology: Development vs. Maintenance
Technology Relentless On Development vs. Maintenance
Slide 46: Technology: Train, Train, Train
Technology Train, Train, Train
Slide 47: How Do We Get To The Vision?
How Do We Get To The Vision? People Process Technology
Slide 48: Highest Customer Satisfaction Ever
Progress Satisfaction Likelihood to Recommend Intent to Purchase Secure Highest Customer Satisfaction Ever
Slide 49: Progress: Employee Satisfaction
Progress Highest Employee Satisfaction Lowest Voluntary Turnover
Slide 50: Portfolio of Time Definite Services
One Trick Pony Portfolio of Time Definite Services
Slide 51: Recognition - Number One In Our Industry
Recognition - Number One In Our Industry B ERKSHIRE H ATHAWAY INC. Industry Ranking 2003 Social Responsibility Innovation Investment Value Use of Corporate Assets Employee Talent Financial Soundness Quality of Services Quality of Management Overall
Slide 52: Yellow Technologies Innovative & Award-winning Solutions
Yellow Technologies Innovative & Award-winning Solutions 22,029 54,936 130,000 Registrants
Slide 53: Market Value
Market Value $ 200 Million SCST $ 140 Million SCST $ 350 Million $ 800 Million $2.0 Billion
Slide 54: A Bold Strategic Combination
A Bold Strategic Combination Building for the Future
Slide 55: Roadway Transaction – The Right Strategy, the Right Partner
Roadway Transaction – The Right Strategy, the Right Partner Right Strategy World-class transportation brands Broader capabilities Increased capacity Non-asset solutions to larger base of customers More effective technology investment Focus on growth Right Partner Strong brand equity Strong operating
Slide 56: Roadway Transaction – The Right Time
Roadway Transaction – The Right Time Right Time Both companies are solidly profitable Roadway management team supportive of strategy 5-year labor agreement Favorable financial markets Potential of economic recovery Substantial operating leverage Incremental margins of 15 – 20%
Slide 57: Ensuring Success
Ensuring Success Maintain separate networks Maintain customer contacts Invest and build brands Implement incremental technology change Focus on growth
Slide 58: Analysts Meeting
Analysts Meeting
Slide 59: Dan Churay and Don Barger
Dan Churay Senior Vice President, General Counsel and Secretary, Yellow Corporation Don Barger Senior Vice President and Chief Financial Officer, Yellow Corporation
Slide 60: Transaction Timeline
Transaction Tim —— 2003 October, November ‘Shareholder Meetings (both companies) Date a Completion oft are Haresote Review Late Noworatly Dec. High Yield Offering 2 sank anc Sipeesiens, Merger sing Ose afer
Slide 61: Acquisition Timeline Update
Acquisition Timeline Update Department of Justice review Second request received on August 18 Currently providing responses SEC process Preliminary proxy filed on August 19 Record date established for October 16 Shareholder vote likely in fourth quarter Closing targeted for fourth quarter
Slide 62: Financing Timeline Update
Financing Timeline Update July 8 - Agreement announced August 4 - $250 million 5% Contingent Convertible Senior Notes DOJ Clearance - $150 million High Yield Senior Notes At Closing Secured facility (revolver, term loan, LOC collateral) $300 million liquidity
Slide 63: Anticipated Capital Structure at Closing
Anticipated Capital Structure at Closing (millions) (1) - $225 million of notes marked to fair value of $252 million as part of purchase accounting. (2) - Total debt amount may vary. Debt structure provides flexibility at attractive terms ABS borrowings $103 Term loan Convertible notes New senior un
Slide 64: Pro Forma Leverage
Pro Forma Leverage Both companies will continue to reduce debt Free cash flow generation allows for rapid debt reduction NOPAT return on capital above cost of capital within 12 months of closing Debt to EBITDA Debt to Capital
Slide 65: Required Accretion Synergies
Required Accretion Synergies 2004 Consensus Yellow $2.74/share Roadway $3.10/share Yellow Roadway assumptions Shares 50 million Interest expense $65 million Required synergies $30 million
Slide 66: Required Accretion Synergies (cont'd)
Required Accretion Synergies (cont’d) Required synergies for NOPAT return to be greater than WACC Yellow Roadway expected WACC 10% Pro Forma committed capital at June 30, 2003 Debt $950 million Equity $850 million Capital $1,800 million Consensus synergy requirement $30 million
Slide 67: Synergy Update
Synergy Update Early September - Synergy cost reduction teams established 13 teams - joint Yellow Roadway Cost reduction run rate $45 - $125 million within one year Update on third quarter 2003 conference call Target is at least 5% of costs ($300+ million)
Slide 68: Near-Term and Longer-Term Synergies
Near-Term and Longer-Term Synergies Examples of near-term conservative case synergies: Purchased transportation (rail, ocean, air, cartage) Duplicate support infrastructure Equipment and parts purchasing Technology acquisition & licensing (no systems integration required) Best practices opportunitie
Slide 69: Market Reaction: Yellow Stock Performance
Market Reaction Yellow stock performance since announcement
Slide 70: Market Reaction: Convertible Note Pricing
Market Reaction Yellow 5% convertible senior note pricing
Slide 71: Transaction Terms and Structure
Transaction Terms and Structure Transaction value Consideration (1) Leases capitalized at 5.0x. $48 per share Equity value: $961 million Total enterprise value: $1.2 billion Adjusted total enterprise value: $1.5 billion (1) 50% cash and 50% Yellow stock Roadway shareholders will be given a right to
Slide 72: Transaction Terms and Structure (cont'd)
Transaction Terms and Structure (cont’d) $51.60 $24.95 60-day avg price as of 7/8/03 20-day avg price Value per Roadway share assuming 50% stock / 50% cash consideration $44.00 $45.00 $46.00 $47.00 $48.00 $49.00 $50.00 $51.00 $52.00 $53.00 $54.00 $18.00 $20.00 $22.00 $24.00 $26.00 $28.00 $30.00 $32.
Slide 73: Questions & Answers
Questions & Answers
Slide 74: Analysts Meeting
Analysts Meeting
Slide 75: James Welch and Mike Smid
James Welch President and CEO, Yellow Transportation Mike Smid Executive Vice President and Chief Administrative Officer, Yellow Transportation
Slide 76: The Yellow Transportation Mission
The Yellow Transportation Mission To be the leading provider of guaranteed, time-definite, defect-free, hassle-free transportation services for business customers worldwide.
Slide 77: Reengineering the Business
Reengineering the Business Design a network to support a multiple service portfolio Reduce fixed costs Optimize variable cost Improve customer focus and quality of services
Slide 78: The Path
The Path The variable speed network Capital optimization Variable cost component management Standard engineered process
Slide 79: Variable Speed Network
Variable Speed Network
Slide 80: System Bills by Service Standard
System Bills by Service Standard
Slide 81: Exact Express Weekly Revenue History
Exact Express Weekly Revenue History First Quarter 1999-2003
Slide 82: Network Systems: Sysnet Demonstration
Network Systems Sysnet Demonstration
Slide 83: Capital Optimization
Capital Optimization Reduce capital demand Improve utilization
Slide 84: Tractor Count at Year End
Tractor Count at Year End * includes leased sleepers ** year-end projection Yellow Transportation, Inc. - Combined L/H Tractors* and City Power 7,000 8,000 9,000 10,000 11,000 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003**
Slide 85: Trailer Count at Year End
Trailer Count at Year End * includes 2003 L/H and city trailer purchases made in 2002 ** year-end projection Yellow Transportation, Inc. - Combined L/H and City Trailers 28,000 30,250 32,500 34,750 37,000 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002* 2003**
Slide 86: Mechanic Count at Year End
Mechanic Count at Year End * year-end projection Yellow Transportation, Inc. 1,000 1,100 1,200 1,300 1,400 1,500 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003*
Slide 87: Variable Cost Management
Variable Cost Management Labor optimization Service performance
Slide 88: CGB Breakbulk Status Report
CGB Breakbulk Status Report – 9/01/03-9/14/03
Slide 89: Vital Signs Demonstration
Variable Cost Management Vital Signs Demonstration
Slide 90: Engineered Systems - ISO 9001-2000
Engineered Systems - ISO 9001-2000
Slide 91: Consumer Centric Initiative (CCI)
Consumer Centric Initiative (CCI) Sample E-mail Sample Key Initiative Sample Archive
Slide 92: Terminal Operating System
Terminal Operating System
Slide 93: Yes We Can
YES WE CAN:
Slide 94: Analysts Meeting
Analysts Meeting
Slide 95: Lynn Caddell
Lynn Caddell President, Yellow Technologies
Slide 96: The Yellow Core Purpose
The Yellow Core Purpose To make global commerce work by connecting people, places and information.
Slide 97: The Yellow Technologies Mission
The Yellow Technologies Mission To provide innovative information solutions and exceptional technology services that create a competitive advantage for Yellow businesses.
Slide 98: The Yellow Technologies Difference
The Yellow Technologies Difference Driven by the business Prioritized by the business No technology for technology’s sake Technology has a seat at the table Management teams tightly integrated Part of the decision-making process
Slide 99: Innovative Information Solutions: Customers
Innovative Information Solutions Customers MyYellow.com Customer Service Centers Exact Express -- ease of engagement
Slide 100: Innovative Information Solutions: Operations
Innovative Information Solutions Operations Sysnet Stats and Docs Manpower planning Employees Sales information tools Intranet
Slide 101: Exceptional Technology Services
Exceptional Technology Services System availability Enterprise architecture Leverage domain expertise Easy to do business with Secure environment
Slide 102: Creating a Competitive Advantage
Creating a Competitive Advantage 130,000 registered customers Operational Efficiency Efficient variable-speed network Industry-leading cost management systems Impact One network serving multiple markets 80% of costs variable with business volumes Customer Interface World-class Customer Service Cente
Slide 103: An inside look at the Yellow Customer Service Centers
An inside look at the Yellow Customer Service Centers
Slide 104: Recognized for Excellence
Recognized for Excellence
Slide 105: Looking Ahead
Looking Ahead RFID Data warehouse Joint applications with Roadway
Slide 106: Analysts Meeting
Analysts Meeting
Slide 107: Jim Ritchie
Jim Ritchie President and CEO, Meridian IQ
Slide 108: The Meridian IQ Mission
The Meridian IQ Mission To be the recognized leader in transportation solutions management.
Slide 109: Covering the Basics
Covering the Basics What is Meridian IQ? A global transportation management company What do you do? We plan and coordinate the movement of goods throughout the world How do you create value? We design, implement and manage global transportation solutions via any mode, anywhere, any time that provide
Slide 110: Meridian IQ
Meridian IQ Formed in 2002 as a non-asset transportation solutions provider Combined several existing businesses within the Yellow company portfolio Headquartered in Overland Park 445 employees 8,500 customers 10 dedicated global offices Gross billings have doubled to a 2003 projection of $200 MM Pr
Slide 111: Understanding the Needs of the Market
Understanding the Needs of the Market Insourcing A large gap between the ROI promised and reality Lack of transportation management expertise exacerbates the ROI failure Too much investment sitting on a shelf Outsourcing Outsourcing requires actions that are difficult to reverse should a customer be
Slide 112: Meridian IQ Business Structure and Target Market
Transportation Management Hosted Technology Managed Transportation Consulting Services Global Freight Forward’g / Brokerage Multi-Modal Brokerage Services Domestic Forwarding & Expedited Services Business Structure Target Market Fortune 300 and below
Slide 113: The Services We Provide
Global Freight Forward’g / Brokerage Domestic Forwarding & Expedited Services Multi-Modal Brokerage Services Transportation Management Hosted Technology Managed Transportation Consulting Services The Services We Provide Transactual Contractual Farming transactual clients to establish contractual sol
Slide 114: Meridian IQ Strategy
Meridian IQ Strategy Bridging the gap between insourcing and outsourcing Outsource Insource Logistics Managers Fortune 300 Fortune 300 - 2000 Less Than Fortune 2000 (<$300M Rev) Meridian IQ 100s Software Companies 100s Logistics Providers Technology Developers Solutions for an underserved market
Slide 115: Value Drivers for the Client
Value Drivers for the Client Ability to acquire industry-leading technology at very competitive pricing Key personnel are focused on strategies other than transportation management Flexible solutions focused on business processes vs. full functional outsourcing required by traditional 3PLs Leveraged
Slide 116: Sales Process
Sales Process Highly complex buy process with multiple buyers and stakeholders Decision is usually made at a VP level or higher Process usually takes a minimum of six months Significant cost to prepare a proposal Each contract is customized to the client’s specific requirements Finishing second pays
Slide 117: Value Model
Value Model Strategic Planning Network Configuration Manage Operations Business Intelligence Continuous Improvement Value Drivers Best practice Meet predefined objectives Measure results, not activity Target Value Express results in customer-centered metrics A defined approach ensures we deliver the
Slide 118: Case Study
Case Study
Slide 119: Consumer Products and Auto Supplier
Consumer Products and Auto Supplier Aggressive growth via acquisition Moving from a decentralized to centralized environment 17 U.S. and Mexico plants that managed transportation independent of each other Outsourced one of their plants to MegaSys 7 years ago Typical shipper from mode perspective
Slide 120: Consumer Products and Auto Supplier: Client Objectives
Consumer Products and Auto Supplier Client Objectives: Reduce transportation expenses by 10% Create a compliant environment Gain access to leading technology without the investment Achieve ROI in 2003 Establish framework to standardize processes and share best practices
Slide 121: Intercompany Synergy
Intercompany Synergy Current modal usage: air expedite, ground expedite, customs brokerage, international, freight brokerage, auditing fees, truckload, LTL, small package, vendor truck, inter-plant Current spend: in excess of $65 million Yellow/Roadway current revenue: less than 1% Potential Yellow
Slide 122: Value Proposition
Value Proposition Transportation savings of 14% Technology ensures compliance Client gains optimization efficiencies from Power TMS ROI begins in Q-4 of this year! Management team standardizes processes and shares best practices Economic results are guaranteed
Slide 123: Analysts Meeting
Analysts Meeting
Slide 124: Greg Reid
Greg Reid Senior Vice President and Chief Marketing Officer, Yellow Corporation
Slide 125: Marketing
Marketing Understand market trends and customer need Monitor customer behavior Create strategic direction Translate into communication positioning
Slide 126: Brand
Brand The promise and delivery of an experience that the target market finds engaging and fulfilling Goal not to simply meet expectations but to exceed expectations
Slide 127: Customer (Consumer)
Customer (Consumer)
Slide 128: Service Profit Chain
Service Profit Chain Profit and Growth Build External Consumer Satisfaction and Loyalty Create Service Quality and Value Build Internal Customer Satisfaction Len Slesinger
Slide 129: Fact-Based Decision Making
Fact-Based Decision Making Consumer-oriented metrics are at the heart of our ongoing Transformation Ensures listening to all audiences Statistically valid performance monitoring Challenge conventional thinking
Slide 130: Voice of the Consumer Research
Voice of the Consumer Research Monthly Consumer Satisfaction Tracking (CSAT) Over 500 monthly phone interviews Respondents have “most day-to-day contact” with transportation providers Respondents evaluate all services: Standard Ground, Exact Express, Definite Delivery, Yellow GPS, and Canada service
Slide 131: Voice of the Consumer Research (cont.)
Voice of the Consumer Research (cont.) Consumer Value Analysis (CVA) Quarterly market/competitor analysis involving over 700 decision makers All key companies evaluated Blind study Projectable results
Slide 132: Key Findings
Key Findings Time constrained professionals with multiple responsibilities Value “One Stop Shop” concept Needs for multiple services beyond traditional LTL Requires the value of premium specialty services Superior value creates loyalty
Slide 133: Consumer Value Model
Consumer Value Model The weight of the line denotes the impact of that attribute on Overall Quality and Competitively Priced Interactions Overall Quality Competitively Priced SOURCE: 2002 Fall CVA Handling Tracking Info Transit Times Pick Up Willing to Negotiate Price Market Breadth
Slide 134: Consumer Value Model
Consumer Value Model Quality + Price = Value Overall Quality Value Competitively Priced 34% 66% SOURCE: 2002 Fall CVA
Slide 135: Relative Price vs Relative Quality: Superior Value
20 10 Relative Price 10 20 Relative Quality Superior Value 30
Slide 136: Relative Price vs Relative Quality: Inferior Value
Inferior Value Relative Price Relative Quality
Slide 137: Positioning
Positioning
Slide 138: Yes We Can
YES WE CAN:
Slide 139: The Boss Chose Our Color
T HE B OSS C HOSE O UR C OLOR . T HE B OSS W AS C OLOR B LIND. I N 1924 Y OU D IDN’T C ORRECT T HE B OSS.
Slide 140: Yellow: Great At Shipping. Terrible At Color.
Y ELLOW Y ELLOW G REAT A T S HIPPING . T ERRIBLE A T C OLOR . B LUE G REEN
Slide 141: Makes You Want To Ship Something
M AKES Y OU W ANT T O S HIP S OMETHING. D OESN’T I T.
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Slide 144: Cause Marketing
Cause Marketing
Slide 145: Sponsorship Marketing
Sponsorship Marketing
Slide 146: Motorsports Schedule
Motorsports Schedule 2003 NASCAR BUSCH SERIES SCHEDULE Feb. 15: Daytona International Speedway Feb. 22: North Carolina Speedway March 1: Las Vegas Motor Speedway March 15: Darlington Raceway March 22: Bristol Motor Speedway March 29: Texas Motor Speedway April 5: Talladega Superspeedway April 12: Na
Slide 147: Competitive Positioning
Competitive Positioning
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Slide 150: Slide 150
Slide 151: A no-fee money-back guarantee on LTL shipments
A no-fee money- back guarantee on LTL shipments.
Slide 152: Definite Delivery
‘or ne Definite LDSELOLY,
Slide 153: Analysts Meeting
Analysts Meeting