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A. YRC Worldwide reported year-over-year and continued sequential improvement in the fourth-quarter 2009 results. For the quarter ending Dec. 31. 2009, the company announced pre-tax income of $50 million, which includes a $194 million gain from our bond exchange. This compares to a pre-tax loss of $353 million for the same period in 2008. For the full year 2009, the company reported a pre-tax loss of $899 million, an improvement of $248 million over 2008.
A. We are providing pre-tax information because we are currently working on the 2009 income tax provision. The delay is caused by the time required to complete a valuation analysis, together with the underlying complexity of the accounting associated with the debt-for-equity exchange. YRCW plans to include after-tax information in the 2009 Form 10-K that we file with the SEC.
A. The successful note exchange allowed us to begin the year with a significantly improved balance sheet, additional liquidity and positive momentum. On Dec. 31, 2009, we announced we successfully reached the thresholds in our debt-for-equity exchange offers. Overall, bondholders agreed to tender 88 percent of the notes. We surpassed the threshold for the contingent convertible notes, with 94 percent of notes tendered, and achieved the 70 percent participation threshold for the USF notes. In addition to taking $470 million in debt off our balance sheet, the exchange allowed us to defer approximately $19 million in fourth-quarter interest and fees. It provided us with access to the $160 million revolver reserve subject to the terms of our credit agreement. In addition, we expect to defer lender interest and fees of $20-$25 million per quarter during 2010.
A. YRC Worldwide has entered into definitive agreements with investors who have committed to purchase $70 million in new convertible notes, subject to closing conditions. The company will use the proceeds from the issuance of these new notes to satisfy our remaining 2010 note obligations. Any excess proceeds will be used for general working capital purposes. With these agreements, we're wrapping up a key step in our comprehensive plan and putting those challenges behind us. Along with our recent announcement of continued sequential improvement in fourth-quarter and full-year results, we are continuing our positive momentum.
A. In terms of liquidity, at Dec. 31, 2009, the company reported cash of $98 million and unused credit reserves of $160 million subject to the terms of the company's credit agreement. In addition, the company has filed its 2009 estimated federal tax return using the newly available five-year carry-back legislation. YRCW expects to receive an $85 million cash refund during the first quarter of 2010 which the company would use for operating liquidity.
A. The successful note exchange did change the ownership of the company and will change the make-up of our board of directors. Our new investors came into the business expressing interest in the long-term success of YRCW: They're here for the long-term, and that's a very positive sign. We will announce the names of the new board members as soon as that information is available.
A. Shareholders as of Jan. 4 will be able to vote in an upcoming special shareholder meeting, scheduled for Wednesday, Feb. 17. The meeting will include a vote for increasing authorized shares to allow preferred stock that was issued in the exchange offer to convert to common stock. Shareholders will also vote on a subsequent reverse stock split and proportional decrease in the number of authorized shares as we attract additional investors interested in our long-term success. Both of these matters require our shareholders to approve amendments to our certificate of incorporation.
A. While some customers had concerns about doing business with YRC Worldwide as we worked through the phases of our comprehensive plan, the majority were supportive. And every day, more and more customers are committing to more and more business for us. As Bill Zollars, Chairman and CEO of YRC Worldwide, told the Dow Jones Newswire on Jan. 6, many customers are aggressively returning business to us. In January, we surveyed 5,700 customers about their 2010 business outlook. The results fall right in line with economic forecasts for modest growth and a stabilizing economy: * 62 percent said they were optimistic their business volumes would increase this year. * 85 percent said they intended to increase or maintain their YRC Worldwide shipments. Such positive feedback from customers confirms the anecdotal feedback we're receiving in notes and letters.
A. Yes. We have decades of experience across our brands and have managed through downturns before. We are committed to our customers. YRC Worldwide remains operationally and financially viable, and we've taken important steps through the implementation of our comprehensive strategic plan to improve the health of our company. We have the operational ability to deliver on our promises to our customers. The YRC network is performing at levels better than pre-integration, in terms of delivery service and customer service response. The efficiency and effectiveness improvements at our regional companies will further enhance our industry-leading next-day and regional services. Our regional companies are outperforming the industry benchmarks, scoring above 99 percent for overall on-time delivery consistently. We expect to see continual improvements from our ongoing efforts.
A. Choice in the marketplace gives you a competitive advantage. Choice means you have better options. We're good for your business. Strong YRC Worldwide brands provide you with transportation and logistics solutions--from the best regional, next-day service to comprehensive global logistics capabilities. We bring you the most comprehensive network in North America, run by the finest experts in the business.
Pretax income (loss) for 2009 and gain from the bond exchange are preliminary and subject to change in the company's Annual Report on Form 10-K for the year-ended December 31, 2009 when it is filed with the Securities and Exchange Commission ("SEC") based upon completion of the valuation analysis and accounting treatment associated with the debt for-equity exchange.
Forward-Looking Statements: This document 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 "plan," "expects," and similar expressions are intended to identify forward-looking statements. It is important to note that the company's actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including (among others) inflation, inclement weather, price and availability of fuel, sudden changes in the cost of fuel or the index upon which the company bases its fuel surcharge, competitor pricing activity, expense volatility, including (without limitation) expense volatility due to changes in rail service or pricing for rail service, ability to capture cost reductions, changes in equity and debt markets, a downturn in general or regional economic activity, effects of a terrorist attack, labor relations, including (without limitation), the impact of work rules, work stoppages, strikes or other disruptions, any obligations to multi-employer health, welfare and pension plans, wage requirements and employee satisfaction, and the risk factors that are from time to time included in the company's reports filed with the SEC, including the company's Annual Report on Form 10-K for the year ended December 31, 2008.
The company's expectations regarding its ability to raise new capital are only its expectations regarding such matter. Whether the company is able to raise new capital is dependent upon the company reaching agreement with interested investors and closing such transaction on negotiated terms and conditions, including (without limitation) any closing conditions that investors may require.
The company's expectations regarding its receipt of a federal income tax refund and the timing of receiving a refund are only its expectations regarding such matters. The actual federal income tax refund received by the company, if any, and the timing of receiving a refund could differ based on a number of factors, including (among others) whether the IRS challenges the company's refund claim or any other tax positions that the company has taken and the timing of the IRS's review, approval and payment of the company's refund claim. The company's refund claim was based on its estimated 2009 net operating loss ("NOL"). The company will adjust the refund claim based on its actual 2009 NOL when it files its final Federal income tax return for the 2009 tax year, which it expects to file with the IRS during the third quarter of 2010. If the estimated 2009 NOL was overstated, the company will have to repay a portion of any refund it receives. If the estimated 2009 NOL was understated, the company will file for an additional refund claim.
The company's expectations regarding deferred interest and fees are only its expectations regarding these matters. Actual deferred interest and fees could differ based on a number of factors, including (among others) the company's expected borrowings under its credit Agreement and the ABS facility, which is affected by revenue and profitability results and the factors that affect revenue and profitability results (including the risk factors that are from time to time included in the company's reports filed with the SEC, including the company's annual report on Form 10-K for the year ended December 31, 2008), and the company's ability to continue to defer the payment of interest and fees pursuant to the terms its credit agreement, ABS facility and pension fund contribution deferral agreement, as applicable.
The closing of the sale of new convertible notes is subject to a number of conditions, including (among others) shareholder approval of the increase in the number of the company's authorized shares, which, in turn, would permit the conversion of the company's Class A Preferred Stock into company common stock, other usual and ordinary conditions to closing.
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