Yellow Corporation · OTC:YELLQ
Yellow — YRC Worldwide — Investor Day (April 2009)
62 slides from Yellow's investor day presentation, Apr 7, 2009
Slide 1: Sell-Side Analyst Meeting April 7-8, 2009
Sell-Side Analyst Meeting April 7-8, 2009 Sell-Side Analyst Meeting April 7-8, 2009 Exhibit 99.1
Slide 2: Welcome - Bill Zollars
Bill Zollars Chairman, President & CEO Welcome Bill Zollars Chairman, President & CEO Welcome
Slide 3: Agenda
3 Agenda Agenda • Today Updates on the operating environment and first quarter Early results from YRC integration Tour of Central Dispatch for YRC Facility tour • Tomorrow Overview of multi-employer pension funds Current legislative topics YRC Regional update YRC Logistics update
Slide 4: Operating Environment
4 Operating Environment Operating Environment • Economy remains very weak No significant signs of near-term improvement Some indications of hitting the bottom, though too early to confirm • Volume declines accelerated across our business units throughout first quarter Primarily a function of the eco
Slide 5: Internal Initiatives
5 Internal Initiatives Internal Initiatives • Integration of Yellow Transportation and Roadway, now YRC Most significant undertaking in LTL Largest, most comprehensive service offering in the industry Expected $250 million run-rate operating income improvement by early in the fourth quarter • Enhanc
Slide 6: Financial Update - Tim Wicks
Tim Wicks Executive Vice President & CFO Financial Update Tim Wicks Executive Vice President & CFO Financial Update
Slide 7: First Quarter Operating Trends – YRC National
7 7.8% 5.1% (6.1%) (3.6%) 2Q08 vs. 2Q07 3Q08 vs. 3Q07 4Q08 vs. 4Q07 1Q09 vs. 1Q08 10% 15% 20% 25% 30% 35% 40% $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 Diesel Cost LTL FSC % First Quarter Operating Trends – YRC National First Quarter Operating Trends – YRC National Total Rev/CWT – incl FSC Record fu
Slide 8: First Quarter Operating Trends – YRC National
8 (29%) (15%) (9%) (10%) 2Q08 vs. 2Q07 3Q08 vs. 3Q07 4Q08 vs. 4Q07 1Q09 vs. 1Q08 0.8% (0.9%) (1.5%) 0.1% 2Q08 vs. 2Q07 3Q08 vs. 3Q07 4Q08 vs. 4Q07 1Q09 vs. 1Q08 First Quarter Operating Trends – YRC National First Quarter Operating Trends – YRC National LTL Weight per Day LTL Mix-Adjusted Yield (excl
Slide 9: First Quarter Operating Trends – YRC Regional
9 4.1% (8.1%) (3.5%) 4.7% 2Q08 vs. 2Q07 3Q08 vs. 3Q07 4Q08 vs. 4Q07 1Q09 vs. 1Q08 (27%) (24%) (17%) (18%) (22%) 2Q08 vs. 2Q07 3Q08 vs. 3Q07 4Q08 vs. 4Q07 1Q09 vs. 1Q08 First Quarter Operating Trends – YRC Regional First Quarter Operating Trends – YRC Regional LTL Weight per Day Total Rev/CWT – incl
Slide 10: First Quarter Impacts of Strategic Decisions
10 First Quarter Impacts of Strategic Decisions First Quarter Impacts of Strategic Decisions • Given our internal initiatives and the economic environment, we expect significant charges in the first quarter Revenue, SWEB & operating expenses $50 - $60 Reserve accruals/pension settlement $161 - $185
Slide 11: 2009 Asset Sales
11 2009 Asset Sales 2009 Asset Sales • Excess Property Sales Still expect about $100 million of excess proceeds in 2009, mostly in second and third quarters Recognized about $18 million in the first quarter 2009 • Sale/Leasebacks Closed about $155 million in first quarter 2009 • $110 million closed
Slide 12: Potential Liquidity Split (per Credit Agreement)
12 NAT $150 Captive $160 Next $300 of Asset Sales Next $200 of Asset Sales $150 $160 $150 $50 $150 $150 Potential Liquidity Transactions YRCW Retains Bank Debt Repayment Company Retains 25% Company Retains 50% Company Retains 100% Company Retains 100% $810 $510 $300 (in millions) = Potential Liquidi
Slide 13: 2009 Capital Expenditures
13 2009 Capital Expenditures 2009 Capital Expenditures • 2009 expected cap ex significantly less due to integration Older equipment in process of being removed, enhancing average age of fleet • After $100 million of expected asset proceeds, expected net cap ex around $30 million • We will continue t
Slide 14: Bank Amendment Covenants/Fees
14 st Bank Amendment Covenants/Fees Bank Amendment Covenants/Fees • Financial Covenants No leverage ratio or minimum interest coverage until first quarter 2011 Minimum cumulative EBITDA starting 2nd quarter 2009 • Minimum $45 million in 2nd quarter; we expect $60 million of D&A • No earnings covenan
Slide 15: Financial Summary
15 Financial Summary Financial Summary • Multiple steps have been implemented or initiated to enhance our competitive position and reduce our cost base Integration of Yell ow and Roadway networks Redesign of Regional networks Nonunion retirement plans frozen Impl emented union and nonunion wage redu
Slide 16: Forward-Looking Statements
16 Forward-Looking Statements Forward-Looking Statements 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 words “should,” “anticipate,” “expect,”
Slide 17: YRC Integration Update - Mike Smid
Mike Smid President, YRC Inc. YRC Integration Update Mike Smid President, YRC Inc. YRC Integration Update
Slide 18: Overall Objectives
18 18 Overall Objectives Overall Objectives • Combine Yellow and Roadway into a single company using a single set of processes and systems while minimizing labor disruptions and maintaining service continuity for our customers by March 2009 Single legal entity Single management structure Single netw
Slide 19: Consolidation Approach - Get Common
19 Consolidation Build New Hybrid Status Quo Consolidation Approach - Get Common Consolidation Approach - Get Common Convert to one existing technology Select some from each Create New Leave them autonomous
Slide 20: Network Evolution
20 Network Evolution Network Evolution March 1, 2009 March 1, 2009 2003 – Interline Partnership 2004 – Cohab Arrangements 2008 – SSCs 2009 – One YRC Network!
Slide 21: Longer Term Integration Timeline
21 Synergy phase 2009 2008 2007 2006 2005 2004 2003 Roadway Acquisition (1) YRC National ESG (2) Integration phase SSCs (4) (1) Roadway acquisition closed 12/03 (2) Formed YRC National Transportation and Enterprise Solutions Group 1/07 (3) Started the transition to one corporate sales force for the
Slide 22: Size and Scale at Cutover
22 Size and Scale at Cutover Size and Scale at Cutover • Yellow and Roadway were fully integrated on March 1 • One national network initially with nearly 450 service centers throughout the US, Canada and Mexico • One workforce of around 35,000 • One sales force with over 800 professionals • One inte
Slide 23: Example of Local Impact - Chicago
23 Example of Local Impact - Chicago Example of Local Impact - Chicago • One network allows us to service more customers in more areas with more people, service centers and equipment. • This provides customers with a more local, responsive customer service experience. • It also provides YRC with mor
Slide 24: One Network with Unique Capabilities
24 One Network with Unique Capabilities One Network with Unique Capabilities
Slide 25: Service Portfolio Summary after Integration
25 North American Worldwide Service Portfolio Summary after Integration Service Portfolio Summary after Integration LTL Truckload Guaranteed Precision Expedited Precision Specialized Solutions Global Services Transportation Services Distribution Services New or improved for Yellow customers New or i
Slide 26: Integration Targets
26 Integration Targets Integration Targets • YRC has more operations than either Yellow or Roadway had individually yet over 250 fewer than at the original acquisition date. • We will continue to further optimize the network and eventually expect around 400 operations. 1Q09 2Q09 3Q09 4Q09 $0 $90 $20
Slide 27: Integration Savings Assumptions
27 Integration Savings Assumptions Integration Savings Assumptions • Integration savings assumptions were based on reasonable estimates of the potential unit cost efficiency improvements by area, for example Linehaul – 7% Pickup and delivery – 5% Dock – 2% Other employee areas – 11% overall impact •
Slide 28: Selected Statistics
28 Selected Statistics Selected Statistics 1.2 billion 1.3 billion Annual linehaul miles: 53,000 62,500 Trailers: 14,000 16,700 Trucks: 34,000 37,000 Employees: Facilities: 12/31/09 Expected* 12/31/08 Actual • Significant reductions occurred around the March 1 cutover, including nearly 2,000 employe
Slide 29: Call Centers Service Level Index
29 29 Dec Jan Feb WE 3/7 WE 3/14 WE 3/21 WE 3/28 WE 4/4 Call Centers Service Level Index Call Centers Service Level Index After a couple of weeks of significant call volume, our customer service level index has returned to a percent that is in line with our internal goal and is also performing bette
Slide 30: Service – On Time Delivery %
30 30 Dec Jan Feb WE 3/7 WE 3/14 WE 3/21 WE 3/28 WE 4/4 Service – On Time Delivery % Service – On Time Delivery % Cutover Service has continued to improve and is nearing pre-cutover levels Partially due to a technical issue related to Yellow shipments that were in-transit at cutover (issue has been
Slide 31: Productivity – Load Average
31 31 Dec Jan Feb WE 3/7 WE 3/14 WE 3/21 WE 3/28 WE 4/4 Productivity – Load Average Productivity – Load Average The first couple of days in March were impacted by inclement weather in some parts of the country and an equipment repositioning effort that carried over from February. Cutover ~600 lb. im
Slide 32: Productivity – Pickup & Delivery Bills per Hour
32 32 Dec Jan Feb WE 3/7 WE 3/14 WE 3/21 WE 3/28 WE 4/4 Productivity – Pickup & Delivery Bills per Hour Productivity – Pickup & Delivery Bills per Hour Cutover Recession continued to drive volumes lower, which created excess capacity in the two overlapping networks Newly integrated network quickly c
Slide 33: Productivity – Dock Bills per Hour
33 33 Dec Jan Feb WE 3/7 WE 3/14 WE 3/21 WE 3/28 WE 4/4 Productivity – Dock Bills per Hour Productivity – Dock Bills per Hour Cutover Learning curve more pronounced on the dock than other areas Expected productivity improvements going in were lower in dock than other areas
Slide 34: Integration Recap
34 Integration Recap Integration Recap • We have worked our way through the initial cutover with no major systemic issues • After some expected deterioration in the first couple of weeks after the cutover date, all of our performance levels showed significant improvement as we moved into the second
Slide 35: YRC Regional Transportation Update - Keith Lovetro
Keith Lovetro President, YRC Regional Transportation YRC Regional Transportation Update Keith Lovetro President, YRC Regional Transportation YRC Regional Transportation Update
Slide 36: Discussion Agenda
36 YRC Regional Transportation Discussion Agenda Discussion Agenda • Events leading up to the current state • Regional strategy • Business improvement plans & outcomes • Where we are today
Slide 37: Regional Timeline – Major Events
37 Regional Timeline – Major Events Regional Timeline – Major Events New President & CEO at USF MAY 2004 AUG 2003 USF Red Star closed; USF Holland expands into 8 Northeast terminals APR 2009 MAY 2005 OCT 2004 YRCW acquires USF; New Penn added to group; Jim Staley named president & CEO YRC Regional F
Slide 38: Regional Strategy
38 Regional Strategy Regional Strategy • Deliver premium quality next day & second day regional LTL service • Provide an exceptional customer experience • Diversify our service portfolio and the industries we serve YRC Regional Transportation
Slide 39: Business Improvement Plans
39 Business Improvement Plans Business Improvement Plans • Rationalize the Regional companies’ footprints • Increase operational productivity • Improve service quality YRC Regional Transportation
Slide 40: Regional Footprints – Feb 2007
40 Regional Footprints – Feb 2007 Regional Footprints – Feb 2007 A GA S K W W N V AR KS A A WA BC A SK M W P Joliet Des Moines Lincoln Rockford Holland Detroit Cleveland Grand Rapids Milwaukee Appleton Wausau Minneapolis Owatonna Worthington Greensboro Baltimore Reading Harrisburg Scranton Newburgh
Slide 41: Regional Footprints – Apr 2009
41 Regional Footprints – Apr 2009 Regional Footprints – Apr 2009 TX M LA M TN IL M O A V M NM A OR W Q U S IA P Joliet Des Moines Lincoln Rockford Holland Detroit Cleveland Grand Rapids Milaukee waukee Appleton Wausau Minneapolis Owatonna Worthington Greensboro Baltimore Reading Harrisburg Scranton
Slide 42: On-Time Service
42 On-Time Service Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 J/F 09 Service Quality Service Quality YRC Regional Transportation
Slide 43: Claims Ratio
43 Claims Ratio Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 J/F 09 Service Quality Service Quality YRC Regional Transportation
Slide 44: City Bills Per Hour
44 City Bills Per Hour Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 J/F 09 Operating Efficiency Operating Efficiency YRC Regional Transportation
Slide 45: Dock Bills Per Hour
45 Dock Bills Per Hour Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 J/F 09 Operating Efficiency Operating Efficiency YRC Regional Transportation
Slide 46: Load Average
46 Load Average Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 J/F 09 Operating Efficiency Operating Efficiency YRC Regional Transportation
Slide 47: Where We Are Today - Coverage
47 % Next- Day Dec-08 Lanes Measured Dec-08 Carrier % Next- Day Dec-08 Lanes Measured Dec-08 Carrier % Next- Day Dec-08 Lanes Measured Dec-08 Carrier Where We Are Today - Coverage Where We Are Today - Coverage 60.1% Central Freight 45.8% 2,401 Oak Harbor 30.1% 3,843 Saia 10.1% 4,100 Penninsula 29.8%
Slide 48: Where We Are Today
48 Where We Are Today Where We Are Today Service Days for Q1 2009 (all YRC Regional shipments) YRC Regional Transportation 8% 31% 61% Next Day 2nd Day 3 or More Days
Slide 49: Where We Are Today - Service Portfolio
49 Where We Are Today - Service Portfolio Where We Are Today - Service Portfolio Robust solutions with unparalleled guaranteed and expedited regional options LTL Truckload Guaranteed Precision ™ Expedited Precision ™ Specialized Solutions ™ • Next-Day • Intra-Metro Areas • 2nd Day / Regional • Inter
Slide 50: Where We Are Today
50 Where We Are Today Where We Are Today We’ve built a strong Regional foundation upon which we can now accelerate growth YRC Regional Transportation
Slide 51: YRC Logistics Update - John Carr
John Carr Chief Operating Officer, YRC Logistics YRC Logistics Update John Carr Chief Operating Officer, YRC Logistics YRC Logistics Update
Slide 52: Overview of YRC Logistics
52 Overview of YRC Logistics Overview of YRC Logistics • Worldwide 3PL platform opportunity of scale • Highly attractive, value-added business lines • Longstanding and diverse customer relationships, which include Fortune 500 clients with strong brand recognition • Client retention rate in excess of
Slide 53: YRC Logistics Corporate Timeline
53 2002 2007 2006 2005 2004 2003 2008 YRC Logistics Corporate Timeline YRC Logistics Corporate Timeline Named a Top 100 Logistics IT provider Acquisition of USF Logistics doubles size of YRC Logistics PowerFORWARD application deployed Meridian IQ is launched GPS North America acquired Click Logistic
Slide 54: Comprehensive Set of Worldwide Services
54 • North American operations Mix of non-asset, asset-light and asset based businesses Diverse revenue base (contractual and transactional) • Transactional - Truckload, Domestic Forwarding and Global • Contractual – Transportation Management, Dedicated Contract Carriage and Distribution • Asian ope
Slide 55: Movement Toward Asset-Lite Model
55 Non-Asset Based Non-Asset Based Non-Asset Based Mixed (Owned and Leased Equipment) Asset-Lite Mixed (Mostly O/O’s) Asset-Lite • Asset-lite conversion has significantly reduced capital requirements going forward All new equipment for Dedicated Contract Carriage (DCC) will be done through full serv
Slide 56: Refocused Sales Force
56 Refocused Sales Force Refocused Sales Force • Prior to 2008, the sales force was focused on Transportation Management, Global Services and related ancillary services • Enhanced the sales force with training and additional personnel in 2008 to drive growth • Increased number of sales resources to
Slide 57: Refocused Sales Force
57 Flow Through Dedicated Warehousing Refocused Sales Force Refocused Sales Force HISTORICAL SALES & MARKETING ORGANIZATION (PRE – 2008) RESTRUCTURED SALES & MARKETING ORGANIZATION (2008) Global Truckload Brokerage Domestic Forwarding YRC Logistics Sales Force YRC Worldwide Sales Force Global Truckl
Slide 58: What Our Clients Say
58 What Our Clients Say What Our Clients Say 0% 10% 20% 30% 40% Much better than expected Better than expected Same as expected Almost as expected Worse than expected Meeting Client Expectations 0% 10% 20% 30% 40% 50% Clients That Would Recommend 92% of YRC Logistics’ Clients say the Company meets o
Slide 59: YRC Logistics Global Network
59 YRC Logistics Global Network *YRC Logistics has locations in the U.S., in China and locations in another countries. -Approximately 5,750 employees worldwide provide global logistics expertise with local knowledge Asia-Pacific • Australia • Bangladesh • Cambodia • China* • Hong Kong* • India* • In
Slide 60: Slide 60
Slide 61: YRC Logistics Summary
61 YRC Logistics Summary YRC Logistics Summary • Add more value for our Clients in a difficult year • Aggressive approach toward organic growth • Obsess about the profit improvement initiatives (ROC) • Leverage our internal infrastructure and excess capacity • Open communication and reward our emplo
Slide 62: Wrap-Up - Bill Zollars
Bill Zollars Chairman, President & CEO Wrap-Up Bill Zollars Chairman, President & CEO Wrap-Up