SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

For the quarterly period ended ~~September~~June 30, ~~2017~~

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	YELL	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesý ☒ No o

☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yesý ☒ No o

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

~~Yes~~ o.Yes ☐ No ý

☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Item		Page
	PART I – FINANCIAL INFORMATION
1	Financial Statements	4
	Consolidated Balance Sheets - June 30, 2023 and December 31, 2022	4
	Statements of Consolidated Comprehensive Income (Loss) – Three and Six Months Ended June 30, 2023 and 2022	5
	Statements of Consolidated Cash Flows - Six Months Ended June 30, 2023 and 2022	6
	Statements of Consolidated Shareholders’ Deficit - Three and Six Months Ended June 30, 2023 and 2022	7
	Notes to Consolidated Financial Statements	8
2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
3	Quantitative and Qualitative Disclosures About Market Risk	30
4	Controls and Procedures	30
	PART II – OTHER INFORMATION
1	Legal Proceedings	31
1A	Risk Factors	31
2	Not Applicable
3	Not Applicable
4	Not Applicable
5	Other Information	31
6	Exhibits	31
	Signatures	33

INTRODUCTORY NOTE

On August 6, 2023 (the “Petition Date”), Yellow Corporation (the “Company”) and certain of its direct and indirect subsidiaries (collectively, the “Company Parties”) filed a voluntary petition (the “Chapter 11 Cases”) under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). On the Petition Date, the Company Parties filed a motion with the Bankruptcy Court seeking to jointly administer the Chapter 11 Cases under the caption “In re:Yellow Corporation, et al.”

On August 9, 2023, the Bankruptcy Court entered an order approving for the Company Parties to make payments upon, or otherwise honor, certain obligations that arose prior to the Petition Date, including certain obligations related to employee wages, salaries and benefits, taxes, and certain vendors and other providers of goods and services that were, and in some cases continue to be, essential to the Company Parties’ businesses.

The Company Parties continue to manage their businesses and properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Except as otherwise specifically stated herein, the description and disclosures presented elsewhere in this Quarterly Report on Form 10-Q reflect the Company’s business as of June 30, 2023, prior to the filing of the Chapter 11 Cases. As a result of the filing of the Chapter 11 Cases, the Company no longer has any operations, other than those relating to the wind down of its business and the completion of the Chapter 11 process.

PART I—FINANCIAL INFORMATION

Item 1.Financial Statements

CONSOLIDATED BALANCE SHEETS

~~YRC Worldwide Inc.~~

Yellow Corporation and Subsidiaries

~~(Amounts in millions except share and per share data)~~

September 30,
2017 December 31,
2016
(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 160.8
$ 136.7
Restricted amounts held in escrow 54.0
126.7
Accounts receivable, net 528.5
448.7
Prepaid expenses and other 66.6
68.7
Total current assets 809.9
780.8
Property and Equipment:
Cost 2,751.7
2,787.0
Less – accumulated depreciation (1,932.6 ) (1,916.4 )
Net property and equipment 819.1
870.6
Intangibles, net 27.8
27.2
Restricted amounts held in escrow —
12.3
Deferred income taxes, net —
24.9
Other assets 44.8
54.2
Total Assets $ 1,701.6
$ 1,770.0
Liabilities and Shareholders’ Deficit
Current Liabilities:
Accounts payable $ 175.0
$ 160.6
Wages, vacations and employee benefits 212.1
191.0
Deferred income taxes, net —
24.9
Claims and insurance accruals 116.0
114.9
Other accrued taxes 27.6
27.6
Other current and accrued liabilities 24.2
26.1
Current maturities of long-term debt 28.5
16.8
Total current liabilities 583.4
561.9
Other Liabilities:
Long-term debt, less current portion 913.0
980.3
Deferred income taxes, net 3.1
3.6
Pension and postretirement 316.3
358.2
Claims and other liabilities 289.5
282.2
Commitments and contingencies

Shareholders’ Deficit:
Preferred stock, $1 par value per share —
—
Common stock, $0.01 par value per share 0.3
0.3
Capital surplus 2,322.1
2,319.2
Accumulated deficit (2,221.1 ) (2,217.8 )
Accumulated other comprehensive loss (412.3 ) (425.2 )
Treasury stock, at cost (410 shares) (92.7 ) (92.7 )
Total shareholders’ deficit (403.7 ) (416.2 )
Total Liabilities and Shareholders’ Deficit $ 1,701.6
$ 1,770.0


(Amounts in millions except share and per share data)	June 30, 2023			December 31, 2022
	(Unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	112.8		$	235.1
Restricted amounts held in escrow		19.6			3.9
Accounts receivable, less allowances of $20.4 and $23.7, respectively		535.1			599.7
Prepaid expenses and other		151.1			75.4
Total current assets		818.6			914.1
Property and Equipment:
Cost		3,065.9			3,109.0
Less – accumulated depreciation		(1,926.2	)		(1,940.0	)
Net property and equipment		1,139.7			1,169.0
Deferred income taxes, net		—			0.3
Pension		35.5			34.5
Operating lease right-of-use assets		123.1			139.7
Other assets		30.7			21.7
Total Assets	$	2,147.6		$	2,279.3
Liabilities and Shareholders’ Deficit
Current Liabilities:
Accounts payable	$	175.7		$	188.6
Wages, vacations and employee benefits		235.1			221.4
Current operating lease liabilities		43.0			53.1
Claims and insurance accruals		117.2			116.6
Other accrued taxes		30.8			27.9
Other current and accrued liabilities		40.3			37.6
Current maturities of long-term debt		1,274.5			71.8
Total current liabilities		1,916.6			717.0
Other Liabilities:
Long-term debt, less current portion		202.9			1,466.2
Deferred income taxes, net		0.5			—
Pension and postretirement		137.4			134.0
Operating lease liabilities		89.2			94.6
Claims and other liabilities		248.8			249.0
Commitments and contingencies
Shareholders’ Deficit:
Cumulative preferred stock, $1 par value per share - authorized 5,000,000 shares		—			—
Common stock, $0.01 par value per share - authorized 95,000,000 shares, issued 52,126,000 and 51,601,000 shares, respectively		0.5			0.5
Capital surplus		2,396.6			2,393.4
Accumulated deficit		(2,522.5	)		(2,453.2	)
Accumulated other comprehensive loss		(229.7	)		(229.5	)
Treasury stock, at cost		(92.7	)		(92.7	)
Total shareholders’ deficit		(447.8	)		(381.5	)
Total Liabilities and Shareholders’ Deficit	$	2,147.6		$	2,279.3

The accompanying notes are an integral part of these statements.

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

~~YRC Worldwide Inc.~~ (LOSS)

Yellow Corporation and Subsidiaries

For the Three ~~Months~~ and ~~Nine~~Six Months Ended ~~September~~June 30

~~(Amounts in millions except per share data, shares in thousands)~~


	Three Months						Six Months
(Amounts in millions except per share data; shares in thousands)	2023			2022			2023			2022
Operating Revenue	$	1,126.8		$	1,423.7		$	2,285.4		$	2,684.1
Operating Expenses:
Salaries, wages and employee benefits		686.3			736.7			1,358.8			1,447.7
Fuel, operating expenses and supplies		227.0			287.3			467.6			530.9
Purchased transportation		150.7			206.1			302.7			391.5
Depreciation and amortization		35.8			35.5			71.1			71.2
Other operating expenses		64.0			62.1			132.0			143.1
Gains on property disposals, net		(75.9	)		(3.2	)		(76.4	)		(8.7	)
Total operating expenses		1,087.9			1,324.5			2,255.8			2,575.7
Operating Income		38.9			99.2			29.6			108.4
Nonoperating Expenses:
Interest expense		48.3			38.0			94.8			75.7
Non-union pension and postretirement benefits		1.1			(0.5	)		2.3			(0.9	)
Other, net		0.1			(0.1	)		(0.1	)		0.1
Nonoperating expenses, net		49.5			37.4			97.0			74.9
Income (loss) before income taxes		(10.6	)		61.8			(67.4	)		33.5
Income tax expense		4.1			1.8			1.9			1.0
Net income (loss)		(14.7	)		60.0			(69.3	)		32.5
Other comprehensive income (loss), net of tax		2.4			1.5			(0.2	)		3.8
Comprehensive Income (Loss)	$	(12.3	)	$	61.5		$	(69.5	)	$	36.3

Average Common Shares Outstanding - Basic		52,010			51,342			51,871			51,217
Average Common Shares Outstanding - Diluted		52,010			52,135			51,871			52,183

Income (Loss) Per Share - Basic	$	(0.28	)	$	1.17		$	(1.34	)	$	0.64
Income (Loss) Per Share - Diluted	$	(0.28	)	$	1.15		$	(1.34	)	$	0.62

The accompanying notes are an integral part of these statements.

STATEMENTS OF CONSOLIDATED CASH FLOWS

~~YRC Worldwide Inc.~~

Yellow Corporation and Subsidiaries

For the ~~Nine~~Six Months Ended ~~September~~June 30

~~(Amounts in millions)~~


(in millions)	2023			2022
Operating Activities:
Net income (loss)	$	(69.3	)	$	32.5
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation and amortization		71.1			71.2
Lease amortization and accretion expense		38.7			52.8
Lease payments		(38.1	)		(53.4	)
Paid-in-kind interest		11.3			4.7
Debt-related amortization		11.7			11.7
Equity-based compensation and employee benefits expense		6.9			7.4
Non-union pension settlement charges		0.1			—
Gains on property disposals, net		(76.4	)		(8.7	)
Deferred income taxes, net		1.0			—
Other non-cash items, net		0.3			(0.2	)
Changes in assets and liabilities, net:
Accounts receivable		64.7			(120.5	)
Accounts payable		(31.0	)		44.9
Other operating assets		7.9			13.6
Other operating liabilities		8.8			(19.4	)
Net cash provided by (used in) operating activities		7.7			36.6
Investing Activities:
Acquisition of property and equipment		(45.6	)		(72.6	)
Proceeds from disposal of property and equipment		3.5			9.4
Net cash provided by (used in) investing activities		(42.1	)		(63.2	)
Financing Activities:
Repayment of debt		(71.9	)		(12.4	)
Payments for tax withheld on equity-based compensation		(0.3	)		(0.6	)
Net cash provided by (used in) financing activities		(72.2	)		(13.0	)
Net Increase (Decrease) In Cash and Cash Equivalents and Restricted Amounts Held in Escrow		(106.6	)		(39.6	)
Cash and Cash Equivalents and Restricted Amounts Held in Escrow, Beginning of Period		239.0			314.8
Cash and Cash Equivalents and Restricted Amounts Held in Escrow, End of Period	$	132.4		$	275.2


Supplemental Cash Flow Information:
Interest paid	$	(86.2	)	$	(71.0	)

The accompanying notes are an integral part of these statements.

~~STATEMENT~~

STATEMENTS OF CONSOLIDATED SHAREHOLDERS’ DEFICIT

~~YRC Worldwide Inc.~~

Yellow Corporation and Subsidiaries

For the ~~Nine~~Three and Six Months ~~Ended September~~ended June 30 ~~2017~~

~~(Amounts in millions)~~


(in millions)	Preferred Stock		Common Stock		Capital Surplus		Accumulated Deficit			Accumulated Other Comprehensive Loss			Treasury Stock, At Cost			Total Shareholders' Deficit
Balances at December 31, 2022	$	—	$	0.5	$	2,393.4	$	(2,453.2	)	$	(229.5	)	$	(92.7	)	$	(381.5	)
Equity-based compensation		—		—		2.1		—			—			—			2.1
Net loss		—		—		—		(54.6	)		—			—			(54.6	)
Pension, net of tax:
Amortization of prior net losses		—		—		—		—			1.9			—			1.9
Amortization of prior service credit		—		—		—		—			(0.1	)		—			(0.1	)
Settlement adjustment		—		—		—		—			0.1			—			0.1
Net actuarial loss		—		—		—		—			(4.4	)		—			(4.4	)
Foreign currency translation, net of tax		—		—		—		—			(0.1	)		—			(0.1	)
Balances at March 31, 2023	$	—	$	0.5	$	2,395.5	$	(2,507.8	)	$	(232.1	)	$	(92.7	)	$	(436.6	)
Equity-based compensation		—		—		1.1		—			—			—			1.1
Net income		—		—		—		(14.7	)		—			—			(14.7	)
Pension, net of tax:
Amortization of prior net losses		—		—		—		—			1.9			—			1.9
Amortization of prior service credit		—		—		—		—			(0.1	)		—			(0.1	)
Foreign currency translation, net of tax		—		—		—		—			0.6			—			0.6
Balances at June 30, 2023	$	—	$	0.5	$	2,396.6	$	(2,522.5	)	$	(229.7	)	$	(92.7	)	$	(447.8	)


(in millions)	Preferred Stock		Common Stock		Capital Surplus		Accumulated Deficit			Accumulated Other Comprehensive Loss			Treasury Stock, At Cost			Total Shareholders' Deficit
Balances at December 31, 2021	$	—	$	0.5	$	2,388.3	$	(2,475.0	)	$	(184.6	)	$	(92.7	)	$	(363.5	)
Equity-based compensation		—		—		1.8		—			—			—			1.8
Net loss		—		—		—		(27.5	)		—			—			(27.5	)
Pension, net of tax:
Amortization of prior net losses		—		—		—		—			2.2			—			2.2
Amortization of prior service credit		—		—		—		—			(0.1	)		—			(0.1	)
Foreign currency translation, net of tax		—		—		—		—			0.2			—			0.2
Balances at March 31, 2022	$	—	$	0.5	$	2,390.1	$	(2,502.5	)	$	(182.3	)	$	(92.7	)	$	(386.9	)
Equity-based compensation		—		—		1.3		—			—			—			1.3
Net income		—		—		—		60.0			—			—			60.0
Pension, net of tax:
Amortization of prior net losses		—		—		—		—			2.2			—			2.2
Amortization of prior service credit		—		—		—		—			(0.1	)		—			(0.1	)
Foreign currency translation, net of tax		—		—		—		—			(0.6	)		—			(0.6	)
Balances at June 30, 2022	$	—	$	0.5	$	2,391.4	$	(2,442.5	)	$	(180.8	)	$	(92.7	)	$	(324.1	)

The accompanying notes are an integral part of these statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~YRC Worldwide Inc.~~

Yellow Corporation and Subsidiaries

Certain of these Notes to Consolidated Financial Statements contain forward-looking statements, as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Cautionary Note Regarding Forward-Looking Statements.”

1. Description of Business

~~YRC Worldwide Inc.~~

Yellow Corporation (also referred to as ~~“YRC Worldwide,~~“Yellow,” the “Company,” “we,” “us” or “our”) is a holding company that, through ~~wholly owned~~its operating subsidiaries, offers its customers a wide range of transportation services. ~~YRC Worldwide has~~We have one of the largest, most comprehensive, less-than-truckload (“LTL”) networks in North America with local, regional, national and international capabilities. Through our team of experienced service professionals, we offer expertise in LTL shipments and flexible supply chain solutions, ensuring customers can ship industrial, commercial and retail goods with confidence. ~~Our reporting segments include the following:~~

~~At September 30, 2017, approximately 78%~~Canada. We also offer services through Yellow Logistics, Inc. (“Yellow Logistics”), our customer-specific logistics solutions provider, specializing in truckload, residential and warehouse solutions.

The Company offers a full range of ~~our~~services for the transportation of industrial, commercial and retail goods in national, regional and international markets, primarily through the operation of owned or leased equipment in its North American ground distribution network. Transportation services are provided for various categories of goods, which may include (among others) apparel, appliances, automotive parts, chemicals, food, furniture, glass, machinery, metal, metal products, non-bulk petroleum products, rubber, textiles, wood and other manufactured products or components. The Company provides both LTL services, which combine shipments from multiple customers on a single trailer, and truckload services. Deliveries are predominately LTL shipments with truckload services offered to maximize equipment utilization and reduce empty miles (the distance empty or partially full trailers travel to balance the network). The Company also provides higher-margin specialized services, including guaranteed expedited services, time-specific deliveries, cross-border services, exhibit services, product returns and government material shipments.

The Company's labor force is subject to collective bargaining agreements with the International Brotherhood of Teamsters ("the IBT"), which ~~predominantly~~ expire inon March ~~2019.~~31, 2024.

2. ~~Principles~~Basis of ~~Consolidation~~

The accompanying ~~Consolidated Financial Statements~~unaudited consolidated financial statements include the accounts of ~~YRC Worldwide~~Yellow and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. We report on a calendar year basis. The quarters of the Regional Transportation companies (with the exception of New Penn) consist of thirteen weeks that end on a Saturday either before or after the end of March, June and September, whereas all other operating segment quarters end on the natural calendar quarter end. For ease of reference, the calendar quarter end dates are used herein.

We make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and notes. Actual results could differ from those estimates. We have prepared the Consolidated Financial Statements, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In our opinion, we have made all

All normal recurring adjustments necessary for a fair ~~statement~~presentation of the consolidated financial ~~position, results of operations and cash flows~~statements for the interim periods included herein have been made. These unaudited interim consolidated financial statements of the Company have been prepared in ~~these~~accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial ~~statements.~~information, the instructions to Quarterly Report on Form 10-Q and the applicable rules and regulations. Certain information and note disclosures normally included in financial statements prepared in accordance with ~~generally accepted accounting principles in the United States (“GAAP”)~~GAAP have been condensed or omitted from these ~~statements pursuant to SEC rules and regulations. Accordingly, the~~statements. The accompanying ~~Consolidated Financial Statements~~consolidated financial statements should be read in conjunction with the ~~Consolidated Financial Statements included in our~~Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016~~2022 (the "2022 Form 10-K”).

~~Fair Value of Financial Instruments~~

Restricted amounts held in escrow are invested in money market accounts and are recorded at fair value based on quoted market prices. The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate their fair value due to the short-term nature of these instruments.

~~Equity Method Investment~~

On October 23, 2015, the Company entered into a sale and purchase agreement to sell its fifty percent equity interest in its Chinese joint venture, JHJ International Transportation Co., Ltd. (“JHJ”), for a purchase price of $16.3 million, which subsequently closed on March 30, 2016. At closing, we received proceeds of $16.3 million and paid transaction fees of $1.7 million. As of March 30, 2016, the carrying value of the investment was $22.7 million with an offsetting cumulative foreign translation adjustment of $10.4 million, resulting in a net gain on the transaction of $2.3 million. The gain on the transaction is included in “Nonoperating expenses - Other, net” in the accompanying statement of consolidated comprehensive loss Operating results for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016.~~

~~Reclassifications Out~~2023, are not necessarily indicative of ~~Accumulated Other Comprehensive Loss~~

~~For~~ the ~~three and nine months ended September 30, 2017, we reclassified the amortization~~results of our prior net pension losses, net of tax, totaling $(0.9) million and $6.9 million, respectively, from accumulated other comprehensive loss to net income (loss). For the three and nine months ended September 30, 2016, we reclassified the amortization of our prior net pension losses, net of tax, totaling $3.5 million and $10.3 million, respectively, from accumulated other comprehensive loss to net income. This reclassification is a component of net periodic pension cost and is discussed in the “Employee Benefits” footnote to the consolidated financial statements. In addition,operations that may be expected for the ~~three~~year ended December 31, 2023 or other reporting periods.

Debt Maturity and ~~nine months ended September 30, 2016, we also reclassified foreign currency translation adjustments of $10.4 million related~~Covenants, Liquidity, Bankruptcy, and Ability to ~~our investment in JHJ from accumulated other comprehensive loss to net income,~~Continue as ~~discussed in the “Equity Method Investment” section above.~~

~~Impact of Recently Issued Accounting Standards~~

~~In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-14,~~ ~~Revenue from Contracts with Customers, Deferral of the Effective Date,~~ ~~which defers the effective date of ASU 2014-9,~~ ~~Revenue from Contracts with Customers. The new standard introduces~~ a five-step model to determine when and how revenue is recognized. The premise of the new model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard will be effective for the Company for its annual reporting period beginning January 1, 2018, including interim periods within that reporting period. Entities are allowed to transition to the new standard by either recasting prior periods or recognizing the cumulative effect using a modified retrospective approach. Going Concern

The Company has completed the process of reviewing customer contracts and we believe the model in which our transportation revenue is recognized under the new standard will not be materially impacted. The Company will formalize an assessment, including the impacts of new expanded disclosure requirements and the impacts on the Company’s internal control over financial reporting, in the fourth quarter of 2017 and will adopt the new standard in the first quarter of 2018 using the modified retrospective transition approach.

~~In November 2015, the FASB issued ASU 2015-17,~~ ~~Balance Sheet Classification of Deferred Taxes, which requires entities~~current debt with a ~~classified balance sheet to present all deferred tax assets~~par value of $1,303.8 million, of which $566.8 million has a stated maturity of June 30, 2024 and liabilities as noncurrent. The ASU allows entities to choose either prospective or retrospective transition. The Company adopted the standard in the first quarter of 2017 and elected prospective application; accordingly, historical periods were not adjusted. There was no material impact on its consolidated financial statements.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases, which requires lessees to recognize~~$737.0 million has a right-to-use asset and a lease obligation for all leases. Lessees are permitted to make an accounting policy election to not recognize an asset and liability for leases with a term of twelve months or less. Additional qualitative and quantitative disclosures, including significant judgments made by management, will be required. The new standard will become effective for the Company for its annual reporting period beginning January 1, 2019, including interim periods within that reporting period and requires a modified retrospective transition approach. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

~~In March 2017, the FASB issued ASU 2017-07,~~ ~~Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cos~~t, which requires companies to present the service cost component of net benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. All other components of net benefit cost are presented outside of any subtotal for operating income, if one is presented. The new standard is effective for the Company for its annual reporting period beginning January 1, 2018, including interim periods within that reporting period with retrospective application. Early application is permitted for the first quarter of 2017. The Company will adopt the standard in the first quarter of 2018. For the three and nine months ended September 30, 2017, the amount to be reclassified to “Other, net” in nonoperating expenses from “Salaries, wages and employee benefits” in operating expenses is $1.9 million and $5.7 million, respectively, if adopted. Accordingly, the Company does not believe the adoption of this standard will have a material impact on its consolidated financial statements.

~~3. Debt and Financing~~

As of September 30, 2017 (in millions) Par Value Discount Debt Issuance Costs
Book
Value

Stated
Interest Rate

Average Effective
Interest Rate
Term Loan $ 599.1
$ (11.0 ) $ (8.5 ) $ 579.6
9.7 %
^(a)
10.1 %
ABL Facility —
—
—
—
N/A
N/A
Secured Second A&R CDA 26.9
—
(0.1 ) 26.8
4.3-18.3%
7.5 %
Unsecured Second A&R CDA 73.2
—
(0.3 ) 72.9
4.3-18.3%
7.5 %
Lease financing obligations 263.2
—
(1.0 ) 262.2
9.0-18.2%
12.0 %
Total debt $ 962.4
$ (11.0 ) $ (9.9 ) $ 941.5

Current maturities of Term Loan (17.0 ) —
—
(17.0 )
Current maturities of lease financing obligations (11.5 ) —
—
(11.5 )
Long-term debt $ 933.9
$ (11.0 ) $ (9.9 ) $ 913.0

~~ABL Facility Availability~~

~~Our principal sources of liquidity are cash and cash equivalents, available borrowings under our asset-based loan facility (the~~

~~“ABL Facility”) and any prospective net cash flow from operations. As~~stated maturity of September 30, ~~2017, our availability under our ABL Facility was $94.0 million, which~~2024. However, all of this debt is ~~derived by reducing~~presented as current on the ~~amount that may be advanced against eligible receivables plus eligible borrowing base cash by certain reserves imposed by~~consolidated balance sheet, as further described below. As of June 30, 2023, the ABL Agent and our $356.0 million of outstanding letters of credit. Of the $94.0 million in availability, we do not expect to access more than $49.0 million (“Managed Accessibility”) based on our springing fixed charge coverage ratio (as set forth in our ABL Facility). OurCompany had cash and cash equivalents and Managed Accessibility ~~was $209.8 million~~of $102.2 million.

The table below summarizes cash and cash equivalents and Managed Accessibility as of ~~September~~June 30, ~~2017.~~2023 and December 31, 2022:


(in millions)	June 30, 2023			December 31, 2022
Cash and cash equivalents	$	112.8		$	235.1
Less: amounts placed into restricted cash subsequent to period end		(15.0	)		—
Managed Accessibility		4.4			6.7
Total cash and cash equivalents and Managed Accessibility	$	102.2		$	241.8

~~Term Loan Amendment~~

~~On July 26, 2017,~~

Beginning in the fourth quarter of 2022 and continuing through the second quarter of 2023, the freight industry and the Company ~~entered into Amendment No. 4 (the “Amendment”~~experienced a decline in freight volumes on a year-over-year basis. The economic impact of this decline, coupled with the delay in the implementation of Phase Two of One Yellow (“Phase Two”), has negatively impacted our current and forecasted liquidity levels. As freight volumes began to decline, to maintain adequate liquidity, the ~~credit agreement (the “Term Loan Agreement”) governing~~Company took actions including layoffs, non-union reductions in workforce, reductions in capital expenditures, and requests for the deferment of payments to various parties, including union health, welfare, and pension fund payments.

The decline in freight volumes and delay in implementing Phase Two has negatively impacted income and EBITDA in 2023. Under each of our ~~term loan facility (the “Term Loan”), which extended the maturity date~~debt agreements we are required to July 26, 2022 subject to the extension of the Secured and Unsecured Second Amended and Restated Contribution Deferral Agreement (the “Second A&R CDA”) on or before November 1, 2019 to a date that ismaintain at least ~~91 days after~~$200.0 million in Adjusted EBITDA on a trailing-twelve-month (“TTM”) basis measured each quarter until maturity. In anticipation of our inability to satisfy this covenant in the ~~final maturity date of~~second quarter, the ~~Term Loan.~~

IfCompany amended our relevant debt agreements to waive the ~~Second A&R CDA is not extended, the maturity date of~~Adjusted EBITDA covenant for certain reporting periods. Specifically, the Term Loan ~~will spring back~~covenant was waived for the quarters ending June 30, 2023, and September 30, 2023, and the UST Loans for the quarter ending June 30, 2023. As a result of these amendments, we remained in compliance with our debt agreements as of June 30, 2023, however, in anticipation of not complying with the UST Loans covenants for September 30, 2023, have classified that debt as current.

As a result of deferring payment to ~~November 1, 2019.~~certain of our union health and welfare, and pension funds on July 15, 2023, those funds determined to cease certain benefits coverage. On July 17, 2023, the IBT cited that cessation as its basis to issue a 72-hour strike notice, and that such strike activity shall commence any time on or after Monday July 24, 2023. On July 23, 2023, these certain union health, welfare and pension funds determined to extend health care benefits coverage for 30 days; the IBT then recalled the strike notice. However, the threat of a strike led to drastic and unprecedented shipment declines the week of July 17 as customers needed to ensure their shipments could be serviced without interruption and not caught up in a strike of undetermined length. The ~~Amendment provided~~significant negative impact on cash flows resulting from the diversion of freight to other carriers, in addition to the forecasted payment of the deferred union health, welfare and pension fund payments, resulted in the Company projecting to fall below the $35 million minimum liquidity requirement under the amended debt agreements.

As discussed further in Note 8- Subsequent Events, on August 6, 2023 (the “Petition Date”), the Company and certain of its subsidiaries (collectively, the “Company Parties”) commenced a voluntary petition (the “Chapter 11 Cases”) under Chapter 11 of the U.S. Bankruptcy Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The commencement of the Chapter 11 Cases constitutes an event of default or termination event under all debt agreements of the Company.

Pursuant to Section 362 of the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed most actions against the Company Parties, including actions to collect indebtedness incurred prior to the Petition Date or to exercise control over the Company Parties' property.Subject to certain exceptions under the Bankruptcy Code, the filing of the Company Parties' Chapter 11 Cases also automatically stayed the filing of most legal proceedings and other actions against or on behalf of the Company Parties or their property to recover on, collect or secure a claim arising prior to the Petition Date or to exercise control over property of the Company Parties' bankruptcy estates, unless and until the Court modifies or lifts the automatic stay as to any such claim.

payments from 1% to 3% per annum and increased the applicable interest rate, at either the applicable LIBOR (subject to a floor of 1%), plus a margin of 8.50% or an alternative base rate (as defined in the Term Loan Agreement) plus a margin of 6.50%. In connection with the Amendment, the Company paid $35.2 million in principal and incurred $9.7 million in original issuance discount and an estimated $8.1 million in transaction costs for third party fees.

The Amendment resulted in a partial extinguishment of $1.5 million in capitalized original issuance discount and unamortized deferred debt issuance costs relating to the existing Term Loan. The $9.7 million in original issuance discount relating to the Amendment was capitalized and will be amortized through interest expense over the life of the Term Loan. Of the $8.1 million in transaction fees, $6.7 million was expensed as debt issuance costs in proportion to the Term Loan that was modified in the third quarter (presented within “Other, net” on the statement of consolidated comprehensive income)managed accessibility, forecasted future cash flows and the ~~remaining $1.4 million was capitalized and will be amortized over the life of the Term Loan.~~

Company’s obligations due before August 14, 2024. As a result of the ~~extension~~Chapter 11 Cases, the realization of assets and the satisfaction of liabilities are subject to significant uncertainty. While operating as a debtor-in-possession entity pursuant to the Bankruptcy Code, we may sell, or otherwise dispose of or liquidate, assets or settle liabilities, subject to the approval of the Bankruptcy Court or as otherwise permitted in the ~~maturity date~~ordinary course of business, for amounts other than those reflected in the accompanying unaudited Interim Consolidated Financial Statements. Further, the Chapter 11 plan is likely to materially change the amounts and classifications of assets and liabilities reported in our unaudited Interim Consolidated Balance Sheet as of June 30, 2023 going forward. In performing this evaluation, we concluded that under the ~~Term Loan,~~standards of ASC 205-40, substantial doubt exists about our ability to continue as a going concern due to the risks and uncertainties surrounding the Chapter 11 Cases, the

defaults under our debt agreements and our financial condition. Our future plans, including those in connection with the Chapter 11 Cases, are not yet finalized, fully executed or approved by the Bankruptcy Court, and therefore cannot be deemed probable of mitigating this substantial doubt within 12 months of the date of issuance of these financial statements. Our consolidated financial statements included herein do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern and instead have been prepared assuming that the Company will continue as a going concern and contemplating the realization of assets and the satisfaction of our liabilities and commitments incurred in the normal course of business.

A potential result of the Company ceasing its ongoing contributions in the multi-employer pension plan funds in which our union employees participate (the “MEPP Funds”) is exposure to penalties including potential withdrawal liabilities from those MEPP Funds. The assertion and communication of a withdraw liability by the MEPP Funds would result in a material adverse effect on the Company’s liability balances, as the estimated withdrawal liabilities which may be asserted are in excess of $6.5 billion. It is unclear by what extent this amount may be reduced by the American Rescue Plan Special Financial Assistance Program that has awarded over $50 billion in financial assistance to funds, including many of the MEPP Funds.

Use of Estimates

Management makes estimates and assumptions when preparing the financial statements in conformity with GAAP which affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Property and Equipment

In connection with its network optimization, without sacrificing geographical service coverage, Yellow plans to close and sell excess owned facilities that have overlapping service territories. On May 17, 2023, the Company entered a sales-type lease with a third party for one of these excess terminals on a short-term basis. We recognized an immaterial amount of lease income from the intervening periods in our June 30, 2023 Statements of Consolidated Comprehensive Income (Loss). On July 7, 2023, the Company closed on the sale of this same terminal for a price of $80.0 million and a resulting gain of approximately $75.9 million, reported as "Gains on property disposals, net" on the Statements of Consolidated Comprehensive Income (Loss). The net proceeds of $79.5 million were used to pay down a portion of the term loan. As of June 30, 2023, a receivable of $79.8 million, which is the sale price net of rent received prior to the report date, is included in "Prepaid expenses and Other" on the Consolidated Balance Sheets.

Disaggregation of Revenue

The Company’s revenue is summarized below with LTL shipments defined as shipments less than 10,000 pounds that move in our network:


	Three Months				Six Months
(in millions)	2023		2022		2023		2022
LTL revenue	$	1,022.2	$	1,282.8	$	2,077.2	$	2,412.4
Other revenue (a)		104.6		140.9		208.2		271.7
Total revenue	$	1,126.8	$	1,423.7	$	2,285.4	$	2,684.1

(a) Other revenue is primarily comprised of truckload shipments.

Accounting Standards

While there are recently issued accounting standards that are applicable to the Company, none of these standards are expected to have a material impact on our consolidated financial statements and accompanying notes.

~~Credit Facility Covenants~~

~~The Term Loan Agreement governing our Term Loan has certain financial~~related covenants as amended on July 26, 2017, that, among other things, restrict certain capital expenditures and require us to comply with a maximum total leverage ratio covenant (defined as Consolidated Total Debt divided by Consolidated Adjusted EBITDA as defined below).

~~Our total maximum leverage ratio covenants are as follows:~~



~~Four Consecutive Fiscal Quarters Ending~~	~~Maximum Total~~ ~~Leverage Ratio~~	~~Four Consecutive Fiscal Quarters Ending~~	~~Maximum Total~~ ~~Leverage Ratio~~
~~September 30, 2017~~	~~3.75 to 1.00~~	~~September 30, 2019~~	~~3.25 to 1.00~~
~~December 31, 2017~~	~~3.50 to 1.00~~	~~December 31, 2019~~	~~3.00 to 1.00~~
~~March 31, 2018~~	~~3.50 to 1.00~~	~~March 31, 2020~~	~~3.00 to 1.00~~
~~June 30, 2018~~	~~3.50 to 1.00~~	~~June 30, 2020~~	~~3.00 to 1.00~~
~~September 30, 2018~~	~~3.50 to 1.00~~	~~September 30, 2020~~	~~2.75 to 1.00~~
~~December 31, 2018~~	~~3.50 to 1.00~~	~~December 31, 2020~~	~~2.75 to 1.00~~
~~March 31, 2019~~	~~3.25 to 1.00~~	~~March 31, 2021~~	~~2.75 to 1.00~~
~~June 30, 2019~~	~~3.25 to 1.00~~	~~June 30, 2021 and thereafter~~	~~2.50 to 1.00~~

Consolidated Adjusted EBITDA, defined in our Term Loan Agreement as “Consolidated EBITDA,” is a measure that reflects our earnings before interest, taxes, depreciation, and amortization expense, and is further adjusted for, among other things, letter of credit fees, equity-based compensation expense, net gains or losses on property disposals, restructuring professional fees and other transaction costs related to issuances of debt, non-recurring consulting fees, expenses associated with certain lump sum payments to our union employees and the gains or losses from permitted dispositions and discontinued operations. Consolidated Total Debt, as defined in our Term Loan Agreement, is the aggregate principal amount of indebtedness outstanding. Our total leverage ratio for the ~~four consecutive fiscal quarters ending~~ September 30, ~~2017 was 3.52 to 1.00.~~

~~We believe that our results of operations will be sufficient to allow us to comply~~2023 period with the covenants in the Term Loan Agreement, fund our operations, increase working capital as necessary to support our planned revenue growth and fund capital expenditures for at least the next twelve months. To maintain compliance with the maximum total leverage ratio over the tenor of the Term Loan and satisfy our liquidity needs, we would have to achieve operating results that reflect a slight improvement to our 2016 Adjusted EBITDA. Means for improving our profitability may include streamlining our support structure, as well as ongoing successful implementation and realization of pricing, productivity and efficiency initiatives, in addition to increased volume, some of which are outside of our control.no covenant waiver.

Fair Value Measurement

The book value and estimated fair values of our long-term debt, including current maturities, ~~and other financial instruments,~~ are summarized as follows:


	June 30, 2023				December 31, 2022
(in millions)	Book Value		Fair Value		Book Value		Fair Value
UST Loans	$	720.0	$	709.5	$	701.4	$	703.6
Term Loan		547.0		562.2		556.8		523.6
Second A&R CDA		—		—		66.0		66.3
Lease financing obligations		210.4		211.9		213.8		213.7
Total debt	$	1,477.4	$	1,483.6	$	1,538.0	$	1,507.2

The fair value of the UST Loans is estimated using certain inputs that are unobservable (level three input for fair value measurement), which are based on the discounted amount of future cash flows using our current estimated incremental rate of borrowing for similar liabilities or assets. The fair values of the Term Loan and ~~the~~ Second A&R CDA were estimated based on thinly traded, but observable prices (level two inputs for fair value measurements). The fair value of the lease financing obligations isare estimated using a ~~publicly-traded~~publicly traded secured loan with similar characteristics (level three input for fair value measurement).

Amendment No. 3 and Limited Waiver to Amended and Restated Credit Agreement

On July 7, 2023, the Company and certain of its subsidiaries entered into Amendment No. 3 and Limited Waiver to the Amended and Restated Credit Agreement, with lenders party to our Term Loan Agreement. Among other things, the amendment provides for a waiver of the minimum Consolidated EBITDA financial covenant for the covenant testing periods ending on June 30, 2023 and September 30, ~~2017, our operating lease~~2023, as well inclusion of the minimum liquidity requirement of $35 million. The terms of this amendment are effective June 30, 2023, and as a result of this amendment the Company is in compliance with the covenants of the agreement as of June 30, 2023. In connection with this amendment, the Company incurred an exit fee equal to $11.3 million (two percent of the outstanding Term Loan as of June 30, 2023), which is payable upon successful termination, conversion or full payment of the Term Loan. The exit fee amount is accounted for as a debt issuance cost and is accrued in "Other current and accrued liabilities" on the Consolidated Balance Sheets as of June 30, 2023. This debt issuance costs reduces the book value of the debt and will be amortized into interest expense over the remaining term of the Term Loan. Additional details of this material definitive agreement were filed on July 7, 2023.

Waiver Under UST Credit Agreements

On July 7, 2023, the Company entered into a Waiver Agreement that provides for a waiver of the minimum Consolidated EBITDA financial covenant set forth in the UST Credit Agreements for the covenant testing period ending on June 30, 2023. The terms of this amendment are effective June 30, 2023, and as a result of this amendment the Company was in compliance with the covenants of the agreement as of June 30, 2023.

Commencement of Chapter 11

The commencement of the Chapter 11 Cases constitutes an event of default or termination event under all debt agreements of the Company. Any efforts to enforce payment obligations ~~through 2030 totaled $282.5 million~~related to the Company’s outstanding debt have been automatically stayed as a result of the filing of the Chapter 11 Cases, and the creditors’ rights of enforcement are ~~expected~~subject to ~~increase as we lease additional revenue equipment. Additionally, for~~ the ~~nine months ended September 30, 2017, we entered into new operating leases for revenue equipment totaling $26.2~~applicable provisions of the Bankruptcy Code. As result of the Chapter 11 Cases, the UST and Term loan are due upon demand and cause acceleration of non-cash expense related to deferred debt discounts, commitment fees, and issuance costs of $27.0 million in ~~future~~the third quarter 2023.

4. Leases


Leases (in millions)	June 30, 2023			December 31, 2022
Assets
Operating lease right-of-use assets	$	123.1		$	139.7
Liabilities
Current operating lease liabilities	$	43.0		$	53.1
Noncurrent operating lease liabilities		89.2			94.6
Total lease liabilities	$	132.2		$	147.7

Other Information
Weighted-average remaining lease term - operating leases (years)		5.3			5.4
Weighted-average discount rate - operating leases		10.7	%		10.7	%


	Three Months				Six Months
Lease Cost (in millions)	2023		2022		2023		2022
Operating lease cost(a)	$	18.9	$	25.6	$	38.7	$	52.8
Short-term cost(b)		6.2		7.3		13.0	12.3
Variable lease cost(b)	1.6		1.9		3.3		6.6
Total lease cost	$	26.7	$	34.8	$	55.0	$	71.7

(a)

Operating lease ~~payments, payable~~cost represents non-cash amortization of ROU assets and accretion of the discounted lease liabilities and is segregated on the statements of consolidated cash flows.

(b)

These operating expenses are classified and recorded primarily within purchased transportation.


	Three Months				Six Months
Other Information (in millions)	2023		2022		2023		2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	18.6	$	24.7	$	37.9	$	53.2
Leased assets obtained in exchange for new operating lease liabilities	$	1.8	$	3.3	$	4.8	$	4.2

The maturities over ~~an average~~the next five years and thereafter of lease ~~term~~liabilities as of ~~five years.~~

~~Our capital expenditures for the nine months ended September~~June 30, 2017 and 2016 were $70.8 million and $75.4 million, respectively. These amounts were principally used to fund the purchase of used tractors and trailers, to refurbish engines for our revenue fleet, and for capitalized costs to improve our technology infrastructure.2023 are as follows:


Remaining Maturities of Lease Liabilities (in millions)	Operating Leases
2023 - remaining portion	$	36.3
2024		39.8
2025		26.3
2026		20.7
2027		16.4
After 2027		39.6
Total lease payments	$	179.1
Less: Imputed interest		46.9
Present value of lease liabilities	$	132.2

5. Employee Benefits

~~Qualified and Nonqualified Defined Benefit~~

Non-Union Pension Plans

Three Months Nine Months
(in millions) 2017 2016 2017 2016
Service cost $ 1.3
$ 1.6
$ 3.9
$ 4.8
Interest cost 12.8
14.0
38.4
42.0
Expected return on plan assets (14.8 ) (14.2 ) (44.4 ) (42.4 )
Amortization of prior net pension loss 3.9
3.5
11.7
10.3
Total periodic pension cost $ 3.2
$ 4.9
$ 9.6
$ 14.7

~~We expect to contribute $54.1 million to our Company-sponsored pension plans in~~ ~~2017~~ ~~of which we have contributed $39.9 million through September 30, 2017.~~

Our effective tax rate for the three and nine months ended September 30, 2017 was 23.1% and (13.8)%, respectively, compared to 3.5% and 10.5% for the three and nine months ended September 30, 2016, respectively. The significant items impacting the 2017 rates include a benefit recognized due to the application of ASC 740, ~~Income Taxes~~ (“ASC 740”), guidance regarding intra-period tax allocation, a net state and foreign tax provision, foreign withholding taxes related to a dividend from a foreign subsidiary, certain permanent items, and a change in the valuation allowance established for the net deferred tax asset balance projected for December 31, 2017. The significant items impacting the 2016 rates include a provision for federal alternative minimum tax, a refund from a prior year amended return, a net state and foreign tax provision, certain permanent items, and a change in the

valuation allowance established for the net deferred tax asset balance that had been projected for December 31, 2016. We recognize valuation allowances on deferred tax assets if, based on the weight of the evidence, we determine it is more likely than not such assets will not be realized. Changes in valuation allowances are included in our tax provision in the period of change. In determining whether a valuation allowance is warranted, we evaluate factors such as prior years’ earnings history, expected future earnings, loss carry-back and carry-forward periods, reversals of existing deferred tax liabilities and tax planning strategies that potentially enhance the likelihood of the realization of a deferred tax asset. At September 30, 2017 and December 31, 2016, substantially all of our net deferred tax assets were subject to a valuation allowance.

6. ~~Shareholders’ Deficit~~

7. Earnings (Loss) Per Share

We calculate basic earnings (loss) per share by dividing our net ~~earnings~~income (loss) available to common shareholders by our basic weighted-average shares ~~outstanding at the end of the period.~~outstanding. The calculation for diluted earnings (loss) per share adjusts the weighted average shares outstanding for our dilutive unvested shares and stock units using the treasury stock method. Our calculations for basic and dilutive earnings (loss) per share for three and six months ended June 30, 2023 and 2022 are as follows:


	Three Months					Six Months
(dollars in millions, except per share data; shares and stock units in thousands)	2023			2022		2023			2022
Basic and dilutive net income (loss) available to common shareholders	$	(14.7	)	$	60.0	$	(69.3	)	$	32.5

Basic weighted average shares outstanding		52,010			51,342		51,871			51,217
Effect of dilutive securities:
Unvested shares and stock units(a)		—			793		—			966
Dilutive weighted average shares outstanding		52,010			52,135		51,871			52,183
Basic earnings (loss) per share(b)	$	(0.28	)	$	1.17	$	(1.34	)	$	0.64
Diluted earnings (loss) per share(b)	$	(0.28	)	$	1.15	$	(1.34	)	$	0.62

(a) Includes unvested shares of Common Stock, unvested stock units and vested stock units for which the underlying Common Stock has not been distributed.(b) Earnings (loss) per share is based on unrounded figures and not the rounded figures presented.

Given our net losses incurred during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023, we do not report dilutive securities for these periods. At June 30, 2023 and ~~2016 are as follows:~~

Three Months Nine Months
(dollars in millions, except per share data, shares and stock units in thousands) 2017 2016 2017 2016
Basic and dilutive net income (loss) available to common shareholders $ 3.0
$ 13.9
$ (3.3 ) $ 29.0

Basic weighted average shares outstanding 32,723
32,466
32,550
32,398
Effect of dilutive securities:
Unvested shares and stock units 869
728
—
517
Dilutive weighted average shares outstanding 33,592
33,194
32,550
32,915

Basic earnings (loss) per share^(a)
$ 0.09
$ 0.43
$ (0.10 ) $ 0.89
Diluted earnings (loss) per share^(a)
$ 0.09
$ 0.42
$ (0.10 ) $ 0.88

~~At September 30, 2017 and 2016,~~2022, our anti-dilutive unvested shares, options, and stock units were approximately ~~80,000~~992,000 and ~~213,000,~~635,000, respectively.

~~8. Business Segments~~

We report financial and descriptive information about our reporting segments on a basis consistent with that used internally for evaluating segment performance and allocating resources to segments. We evaluate segment performance primarily on external revenue, operating income (loss), and operating ratio.

We charge management fees and other corporate service fees to our reporting segments based on the benefits received or an overhead allocation basis. Corporate and other operating losses represent residual operating expenses of the holding company. Corporate identifiable assets primarily consist of cash and cash equivalents and restricted cash. Intersegment revenue primarily relates to transportation services between our segments.

~~The following table summarizes our operations by business segment:~~

(in millions) YRC Freight
Regional
Transportation

Corporate/
Eliminations
Consolidated
As of September 30, 2017
Identifiable assets $ 1,075.3
$ 711.6
$ (85.3 ) $ 1,701.6
As of December 31, 2016
Identifiable assets $ 1,208.7
$ 642.9
$ (81.6 ) $ 1,770.0
Three Months Ended September 30, 2017
External revenue $ 787.8
$ 463.5
$ (0.1 ) $ 1,251.2
Operating income (loss) $ 20.3
$ 21.5
$ (1.7 ) $ 40.1
Nine Months Ended September 30, 2017
External revenue $ 2,306.2
$ 1,376.5
$ (0.3 ) $ 3,682.4
Operating income (loss) $ 37.8
$ 59.0
$ (9.7 ) $ 87.1
Three Months Ended September 30, 2016
External revenue $ 777.9
$ 443.7
$ (0.3 ) $ 1,221.3
Operating income (loss) $ 20.8
$ 21.9
$ (3.9 ) $ 38.8
Nine Months Ended September 30, 2016
External revenue $ 2,228.6
$ 1,321.3
$ (0.7 ) $ 3,549.2
Operating income (loss) $ 53.3
$ 64.9
$ (8.8 ) $ 109.4

7. Commitments, Contingencies and Uncertainties

~~California Labor Law Change~~

In October 2015, California adopted new rules governing the payment of piece-rate compensation. New California Labor Code section 226.2 sets forth requirements for the payment of a separate hourly wage for “nonproductive” time worked by piece-rate employees, and separate payment for compensable rest and recovery periods to those employees. The Company continues to assess the impact of this new law and ongoing compliance measures. We believe the possible loss or range of loss is not material to our consolidated financial statements.

~~Other~~

Legal Matters

We are involved in litigation or proceedings that arise in ordinary business activities. When possible, we insure against these risks to the extent we deem prudent, but no assurance can be given that the nature or amount of such insurance will be sufficient to fully indemnify us against liabilities arising out of pending and future legal proceedings. Many of these insurance policies contain self-insured retentions in amounts we deem prudent. Based on our current assessment of information available as of the date of these consolidated financial statements, we believe that our consolidated financial statements include adequate provisions for estimated costs and losses that may be incurred within the litigation and proceedings to which we are a party.

International Brotherhood of Teamsters Lawsuit/Petition for Injunctive Relief

On June 27, 2023, Yellow sued the IBT, its negotiating committee, and several local unions in the U.S. District Court for the District of Kansas, alleging that the parties had breached the collective bargaining agreement. The lawsuit seeks $137 million in damages for the Union’s obstruction of Phase 2 as well as the loss of Yellow’s enterprise value which it estimates at approximately $1.5 billion.

Chapter 11 Cases

Cautionary Note Regarding Forward-Looking Statements

The following Management’s Discussion and Analysis of the Financial ~~Condition~~Conditions and Results of Operations (“MD&A”) of the Company should be read in conjunction with the Consolidated Financial Statements and the Notes ~~to Consolidated Financial Statements~~thereto included both elsewhere in this ~~report.~~ report and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

This ~~report~~Quarterly Report on Form 10-Q includes 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 (“Exchange Act”). Forward-looking statements include those preceded by, followed by or characterized by words such as “will,” “expect,” “intend,” “anticipate,” “believe,” “could,” “should,” “may,” “project,” “forecast,” “propose,” “plan,” “designed,” “estimate,” “enable” and similar expressions which speak only as of the date the statement was made. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements.

Forward-looking statements are inherently uncertain ~~are based upon current beliefs, assumptions~~ and ~~expectations of Company management~~cover, among other things, statements made about our general economic and ~~current~~ market conditions, objectives and ~~are subject to significant business, economic, competitive, regulatory~~results and ~~other risks, uncertainties~~our belief regarding the effect of liquidity and ~~contingencies, known~~funding sources, various legal proceedings, management expectations, credit risk and ~~unknown,~~our relationship with the IBT, many of which are beyond our control. ~~Readers are cautioned not to place undue reliance on any forward-looking statements.~~ Our future financial condition and results could differ materially from those predicted in such forward-looking statements ~~because of a number of~~resulting from business, financial and liquidity, and common stock related factors, including (without limitation):

•

our indebtedness and cash interest payment obligations, lease obligations, pension funding obligations and our liquidity position;

•

our ability to refinance our existing and future indebtedness on terms and conditions which would allow us to satisfy our indebtedness without which we may be forced to take one or more actions, which may not be successful;

~~general economic~~•

our ability to service all of our indebtedness and satisfy all of our other obligations depends on factors ~~including (without limitation) customer demand~~beyond our control, if we cannot generate enough cash to service our indebtedness and satisfy our other obligations, we may be forced to take one or more actions, which may not be successful;

•

restrictive and financial covenants contained in our existing indebtedness may limit our current and future operations, particularly our ability to respond to changes in our business or to pursue certain business strategies;

•

our failure to comply with or agree to future amendments and/or waivers to the restrictive and financial covenants contained in the ~~retail~~agreements governing our existing and ~~manufacturing sectors;~~future indebtedness;

~~business risks and~~ •

increasing labor costs, ~~associated with the transportation industry, including increasing equipment, operational and technology costs and disruption from natural disasters;~~

~~competition and competitive pressure on pricing;~~

~~the risk of labor~~ disruptions or stoppages if our relationship with our employees and unions were to deteriorate;

~~changes~~•

our ability attracting and retaining qualified drivers and the resulting increases in ~~pension expense~~driver compensation and ~~funding obligations, subject to interest rate volatility;~~purchased transportation costs;

~~increasing costs relating to our self-insurance claims expenses;~~

•

our ability to ~~finance~~ retain key managements and employees;

•

the ~~maintenance, acquisition~~general uncertainty of our customers;

•

our dependence on key employees or the inability to hire additional personnel;

•

increasing operating costs and ~~replacement of revenue equipment~~reduction in our ability to offer intermodal services resulting from our dependency on third-party capacity providers and ~~other necessary capital expenditures;~~their and services;

•

our ability to ~~comply~~adapt to industry competition and the cost of compliance with, or liability resulting from violation of, federal, state, local and foreign laws and regulations, including (without limitation) labor laws and laws and regulations regarding the environment;competitive pricing;

~~impediments to our operations and business resulting from anti-terrorism measures;~~

~~the impact of claims and litigation expense to which we are or may become exposed;~~

~~our ability to attract and retain qualified drivers~~•

business risks and increasing costs associated with the transportation industry that are largely beyond our control any of ~~driver compensation;~~which could have a material adverse effect on our business, financial condition, results of operations, cash flows and liquidity;

•

significant ongoing capital expenditure requirements;

•

seasonality and impact of the weather;

•

changes in fuel prices and shortages of fuel;

•

damage to our corporate reputation resulting in a ~~significant~~decreased demand for our services;

•

ongoing self-insurance and claim expenses;

•

current or future litigation, including ongoing litigation with the IBT, may result in a material adverse effect;

•

operating in an industry subject to extensive governmental regulations, and costs of compliance with, or liability for violation of existing or future regulations;

•

disruptions of our computer and information technology systems, privacy ~~breach~~breaches and sophisticated cyber attacks;

•

the impact of a reoccurrence of global pandemic or ~~IT system disruption;~~any other widespread outbreak of an illness, communicable disease, as well as regulatory measures implemented in response to such events;

~~risks of operating~~•

doing business in foreign countries;

~~our dependence on key employees;~~

~~seasonality;~~

•

~~changes in the cost of fuel or the index upon which we base our fuel surcharge and the effectiveness of our fuel surcharge program in protecting us against fuel price volatility;~~

our ability to generate sufficient liquidity to satisfy our cash needs and future cash commitments, including (without limitation) our obligations related to our indebtedness and lease and pension funding requirements, and our ability to achieve increased cash flows through improvement in operations;

limitations on our operations, our financing opportunities, potential strategic transactions, acquisitions or dispositions resulting from restrictive covenants in the documents governing our existing and future indebtedness;

~~our failure to comply with the covenants in the documents governing our existing and future indebtedness;~~

significant fluctuations in the price of our ~~common stock;~~Common Stock that may make it difficult to resell our Common Stock at attractive prices;

~~dilution from~~ •

future issuances of our ~~common stock;~~Common Stock or equity-related securities in the public market could adversely affect the price of our Common Stock and our ability to raise funds in future offerings;

•

our ~~intention not~~continuing ability to ~~pay~~meet the NASDAQ listing standard to avoid our Common Stock to be delisted;

•

the restrictive covenant that prevents us from paying dividends on our ~~common stock;~~Common Stock in the foreseeable future may impact our ability to raise funds in future offerings;

~~that we have the~~•

our ability to issue preferred stock that may adversely affect the rights of holders of our ~~common stock;~~Common Stock;

•

our ability to reach an agreement with the IBT on our current and future collective bargaining agreements in a timely manner; and

•

other risks and contingencies, including (without limitation) the risk factors that are included in our reports filed with the SEC, including those described under “Risk Factors” in our annual report on Form 10-K and quarterly reports on Form 10-Q, including this quarterly report.

We are subject to the risks and uncertainties associated with our Chapter 11 Cases.

As previously reported, the Company Parties commenced the Chapter 11 Cases on August 6, 2023. For the duration of the Chapter 11 Cases, our operations and our ability to develop and execute our business plan, as well as our ability to continue as a going concern, are subject to risks and uncertainties associated with bankruptcy and the Chapter 11 Cases.

In certain instances, a Chapter 11 case may be converted to a case under Chapter 7 of the Bankruptcy Code.

If the Bankruptcy Court finds that it would be in the best interest of creditors and/or the Company Parties, the Bankruptcy Court may convert our Chapter 11 Cases to cases under Chapter 7 of the Bankruptcy Code. In such event, a Chapter 7 trustee would be appointed or elected to liquidate the Company Parties’ assets for distribution in accordance with the priorities established by the Bankruptcy Code. The Company Parties believe that liquidation under Chapter 7 would result in significantly smaller distributions being made to the Company Parties’ creditors than those provided for in a Chapter 11 plan or reorganization because of (i) the likelihood that the assets would have to be sold or otherwise disposed of in a disorderly fashion over a short period of time rather than reorganizing or selling in a controlled manner the Company Parties’ businesses as a going concern, (ii) additional administrative expenses involved in the appointment of a Chapter 7 trustee, and (iii) additional expenses and claims, some of which would be entitled to priority, that would be generated during the liquidation and from the rejection of leases and other executory contracts in connection with a cessation of operations.

Recent Developments

Bankruptcy Filing and Going Concern

As a result of the commencement of the Chapter 11 Cases on August 6, 2023, we are operating as a debtor-in-possession pursuant to the authority granted under Chapter 11 of the Bankruptcy Code. Pursuant to the Chapter 11 Cases, we intend to liquidate the Company’s assets and wind down the business. Additionally, as a debtor in possession, certain of the Company’s activities are subject to review and approval by the Bankruptcy Court, including, among other things, the incurrence of secured indebtedness, material asset dispositions, and other transactions outside the ordinary course of business.

We have concluded that the Company’s financial condition and projected operating results, the defaults under the Company’s debt agreements subsequent to June 30, 2023 and the risks and uncertainties surrounding the Chapter 11 Cases result in there being substantial doubt as to our ability to continue as a going concern. See Note 8—Subsequent Events for further discussion.

Delisting of our Common Stock from NASDAQ

On August 7, 2023, the Company received a letter from Nasdaq indicating that as a result of the Company Parties filing the Chapter 11 Cases on August 6, 2023, and in accordance with Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, the Nasdaq Staff determined that the Company’s securities will be delisted from The Nasdaq Stock Market. The letter advises that Nasdaq will suspend trading of the Company’s common stock at the opening of business on August 16, 2023 and that Nasdaq will file a Form 25-NSE with the Securities and Exchange Commission to effect the delisting of the common stock unless the Company requests an appeal of this determination. The Company does not intend to appeal Nasdaq’s decision.

Overview

The Company's MD&A includes the following sections:

Our ~~Business~~ —Business: a brief description of our business and a discussion of how we assess our operating results.

Consolidated Results of ~~Operations~~ —Operations: an analysis of our consolidated results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~.

~~Reporting Segment Results of Operations~~ ~~— an analysis of our results of operations for the three and nine months ended September 30, 2017 and~~ ~~2016~~ ~~for our YRC Freight and Regional Transportation reporting segments.~~

2022.

Certain Non-GAAP Financial ~~Measures~~ —Measures: presentation and an analysis of selected non-GAAP financial measures for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022 and ~~trailing twelve months~~trailing-twelve-months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~

2022.

Financial ~~Condition/~~Condition, Liquidity and Capital ~~Resources~~ —Resources: a discussion of our major sources and uses of cash and an analysis of our cash flows and, ~~aggregate~~if applicable, material changes in our contractual obligations and commercial commitments.

The “~~third quarter~~”"second quarter" and ~~“first three quarters”~~"first half" of the years discussed below refer to the three and ~~nine~~six months ended ~~September~~June 30,, respectively.

Our Business

~~YRC Worldwide~~

Yellow Corporation is a holding company that, through ~~wholly owned~~its operating subsidiaries, offers our customers a wide range of transportation services. ~~YRC Worldwide~~The Company has one of the largest, most comprehensive LTL networks in North America with local, regional, national and international capabilities. Through its team of experienced service professionals, ~~YRC Worldwide~~the Company offers industry-leading expertise in LTL shipments and flexible supply chain solutions, ensuring customers can ship industrial, commercial and retail goods with confidence.

We measure the performance of our business ~~on both a consolidated basis and a reporting segment basis. We use~~using several ~~performance~~ metrics but rely primarily upon (without limitation) operating revenue, operating income (loss), and operating ratio. We also use certain non-GAAP financial measures as secondary measures to assess our operating performance.

•

Operating Revenue: Our operating revenue has two primary components: volume (commonly evaluated using tonnage, tonnage per day, number of shipments, ~~and~~shipments per day or weight per shipment) and yield or price (commonly evaluated ~~on a dollar-per-hundred weight basis and a dollar-per-shipment basis)~~using picked up revenue, revenue per hundredweight or revenue per shipment). Yield includes fuel surcharge revenue, which is common in the trucking industry and represents an amount charged to customers that adjusts with changing fuel prices. We base our fuel surcharges on ~~a published national~~the U.S. Department of Energy fuel index and adjust them weekly. Rapid material changes in the index or our cost of fuel can positively or negatively impact our revenue and operating income ~~(loss) versus prior periods,~~ as ~~there is~~ a ~~lag~~result of changes in our ~~adjustment of base rates in response to changes in~~ fuel surcharge. We believe that fuel surcharge is an accepted and important component of the overall pricing of our services to our customers. Without an ~~industry accepted~~industry-accepted fuel surcharge program, our base pricing for our transportation services would require ~~numerous~~ changes. We believe the distinction between base rates and fuel surcharge has ~~blurred~~diminished over time, and it is impractical to clearly separate all the different factors that influence the price that our customers are willing to pay. In general, under our present fuel surcharge program, we believe rising fuel costs are beneficial to us and falling fuel costs are detrimental to ~~us.~~us in the short term, the effects of which are mitigated over time.

•

Operating Income (Loss): Operating income (loss) is ~~our~~ operating revenue less operating expenses. ~~Our consolidated operating income (loss) includes certain corporate charges that are not allocated to our YRC Freight and Regional Transportation reporting segments.~~

•

Operating Ratio: Operating ratio is a common operating performance ~~metric~~measure used in the trucking industry. It is calculated as (i) 100 percent (ii) minus the result of dividing operating income by operating revenue or (iii) plus the result of dividing operating loss by operating revenue and is expressed as a percentage.

•

Non-GAAP Financial Measures: We use EBITDA and Adjusted EBITDA, which are non-GAAP financial measures, to assess the following:

EBITDA: a non-GAAP measure that reflects our earnings before interest, taxes, depreciation, and amortization expense. EBITDA is used for internal management purposes as a financial measure that reflects our core operating performance.


◦	~~EBITDA:~~ a non-GAAP measure that reflects our earnings before interest, taxes, depreciation, and amortization expense. EBITDA is used for internal management purposes as a financial measure that reflects our core operating performance.

◦

~~Adjusted EBITDA:~~ a non-GAAP measure that reflects EBITDA, and further adjusts for letter of credit fees, equity-based compensation expense, net gains or losses on property disposals, restructuring professional fees and other transaction costs related to issuances of debt, non-recurring consulting fees, expenses associated with certain lump sum payments to our union employees and gains or losses from permitted dispositions and discontinued operations, among other items, as defined in our credit facilities. Adjusted EBITDA is used for internal management purposes as a financial measure that reflects our core operating performance, to measure compliance with financial covenants in our credit facilities and to determine certain executive bonus compensation.

Adjusted EBITDA: a non-GAAP measure that reflects EBITDA, and further adjusts for letter of credit fees, equity-based compensation expense, net gains or losses on property disposals, restructuring charges, transaction costs related to issuances of debt, non-recurring consulting fees, non-cash impairment charges and the gains or losses from permitted dispositions, discontinued operations, and certain non-cash expenses, charges and losses (provided that if any of such non-cash expenses, charges or losses represents an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period will be subtracted from Consolidated EBITDA in such future period to the extent paid). All references to “Adjusted EBITDA” throughout this section and the rest of this report refer to “Adjusted EBITDA” calculated under our UST Credit Agreements and the Term Loan Agreement (collectively, the “TL Agreements”) (defined therein as “Consolidated EBITDA”) unless otherwise specified. Consolidated EBITDA is also a defined term in our ABL Facility and the definition there aligns with the prior definition of Consolidated EBITDA under the Prior Term Loan Agreement. Adjusted EBITDA is used for internal management purposes as a financial measure that reflects our core operating performance, to measure compliance with financial covenants in our TL Agreements and to determine certain management and employee bonus compensation.

We believe our presentation of EBITDA and Adjusted EBITDA is useful to investors and other users as these measures represent key supplemental information our management uses to compare and evaluate our core underlying business results, ~~both on a consolidated basis and across our business segments,~~ particularly in light of our leverage position and the capital-intensive nature of our business. Further, EBITDA is a measure that is commonly used by other companies in our industry and provides a comparison for investors to evaluate the performance of the companies in the industry. Additionally, Adjusted EBITDA helps investors to understand how the company is tracking against our financial ~~covenants~~covenant in our ~~term loan credit agreement~~TL Agreements as this measure is calculated as ~~prescribed~~defined in our ~~term loan credit agreement~~TL Agreements and serves as a driving component of our key financial covenants.

Our non-GAAP financial measures have the following limitations:

EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or fund principal payments on our outstanding debt;


◦	~~EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or fund principal payments on our outstanding debt;~~


◦	Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to fund restructuring professional fees and other transaction costs related to issuances of debt, non-recurring consulting fees, letter of credit fees, service interest, principal payments on our outstanding debt or lump sum payments to our union employees required under the Memorandum of Understanding;


◦	Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;


◦	Equity-based compensation is an element of our long-term incentive compensation package, although Adjusted EBITDA excludes employee equity-based compensation expense when presenting our ongoing operating performance for a particular period; and


◦	~~Other companies in our industry may calculate Adjusted EBITDA differently than we do, potentially limiting its usefulness as a comparative measure.~~

Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or fund principal payments on our outstanding debt, letter of credit fees, restructuring charges, transaction costs related to the issuance of debt, non-cash expenses, charges or losses, or nonrecurring consulting fees, among other items;

Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will generally need to be replaced in the future and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;

Equity-based compensation is an element of our long-term incentive compensation package, although Adjusted EBITDA excludes employee equity-based compensation expense when presenting our ongoing operating performance for a particular period; and

Other companies in our industry may calculate Adjusted EBITDA differently than we do, potentially limiting its usefulness as a comparative measure.

Because of these limitations, our non-GAAP measures should not be considered a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and use our non-GAAP measures as secondary measures. ~~For additional information~~

Business Strategy Overview

As a result of the filing of the Chapter 11 Cases, the Company no longer has any operations, other than those relating to the wind down of its business and ~~a reconciliation~~the completion of ~~our non-GAAP measures and GAAP results, see~~ the ~~“Certain Non-GAAP Financial Measures” section below.~~

Chapter 11 process. Our future plans, including those in connection with the Chapter 11 Cases, are not yet finalized or approved by the Bankruptcy Court.

Consolidated Results of Operations

Our consolidated results include the consolidated results of our YRC Freight and Regional Transportation reporting segments as well as any unallocated corporate charges. A more detailed discussion of the operating results of our segments is presented in the “Reporting Segment Results of Operations” section below.

The table below provides summary consolidated financial information for the ~~third~~second quarter and first ~~three quarters~~half of ~~2017~~2023 and ~~2016:~~

Third Quarter First Three Quarters
(in millions) 2017 2016 Percent Change 2017 2016 Percent Change
Operating revenue $ 1,251.2
$ 1,221.3
2.4 % $ 3,682.4
$ 3,549.2
3.8 %
Operating income $ 40.1
$ 38.8
3.4 % $ 87.1
$ 109.4
(20.4 )%
Nonoperating expenses, net $ 36.2
$ 24.4
48.4 % $ 90.0
$ 77.0
16.9 %
Net income (loss) $ 3.0
$ 13.9
(78.4 )% $ (3.3 ) $ 29.0
*NM

~~(*) not~~2022:


	Second Quarter												First Half
	2023						2022						2023						2022						Percentage Change 2023 vs 2022
(in millions)	$			%			$			%			$			%			$			%			Second Quarter %			First Half %
Operating Revenue	$	1,126.8			100.0		$	1,423.7			100.0		$	2,285.4			100.0		$	2,684.1			100.0			(20.9	)		(14.9	)
Operating Expenses:
Salaries, wages and employee benefits		686.3			60.9			736.7			51.7			1,358.8			59.5			1,447.7			53.9			(6.8	)		(6.1	)
Fuel, operating expenses and supplies		227.0			20.1			287.3			20.2			467.6			20.5			530.9			19.8			(21.0	)		(11.9	)
Purchased transportation		150.7			13.4			206.1			14.5			302.7			13.2			391.5			14.6			(26.9	)		(22.7	)
Depreciation and amortization		35.8			3.2			35.5			2.5			71.1			3.1			71.2			2.7			0.8			(0.1	)
Other operating expenses		64.0			5.7			62.1			4.4			132.0			5.8			143.1			5.3			3.1			(7.8	)
Gains on property disposals, net		(75.9	)		(6.7	)		(3.2	)		(0.2	)		(76.4	)		(3.3	)		(8.7	)		(0.3	)	NM*			NM*
Total operating expenses		1,087.9			96.5			1,324.5			93.0			2,255.8			98.7			2,575.7			96.0			(17.9	)		(12.4	)
Operating Income		38.9			3.5			99.2			7.0			29.6			1.3			108.4			4.0			(60.8	)		(72.7	)
Nonoperating Expenses:
Nonoperating expenses, net		49.5			4.4			37.4			2.6			97.0			4.2			74.9			2.8			32.4			29.5
Income (loss) before income taxes		(10.6	)		(0.9	)		61.8			4.3			(67.4	)		(2.9	)		33.5			1.2			(117.2	)		(301.2	)
Income tax expense		4.1			0.4			1.8			0.1			1.9			0.1			1.0			0.0		NM*			NM*
Net income (loss)	$	(14.7	)		(1.3	)	$	60.0			4.2		$	(69.3	)		(3.0	)	$	32.5			1.2			(124.5	)		(313.2	)

*Not meaningful

~~Third~~

Second Quarter of ~~2017~~2023 Compared to the ~~Third~~Second Quarter of ~~2016~~

~~Our~~2022

Consolidated operating revenue. Consolidated operating revenue including fuel surcharge, decreased $296.9 million compared to the second quarter of 2022. Fuel surcharge revenue decreased compared to the second quarter of 2022 primarily due to fewer shipments and lower fuel prices. Excluding fuel surcharge revenue, consolidated operating revenue ~~increased $29.9 million, or 2.4%, during the third quarter of~~ ~~2017~~ ~~compared to the same period in~~ ~~2016. The increase in revenue is primarily attributed to an increase in fuel surcharge revenue and yield, combined with an improvement in volume at our Regional Transportation segment.~~

Total operating expenses increased $28.6 million, or 2.4%, for the third quarter of 2017 compared to the third quarter of 2016, and consisted primarily of an increase in contractual wages and employee benefit costs, higher fuel costs, and an increase in purchased transportation expense.

In spite of the increase in revenues, our third quarter 2017 results were negatively impacted by the hurricanes in late August and September. Our volume and tonnage were unfavorably impacted, primarily at YRC Freight and Holland,declined due to ~~closures at our customer operations, as well as~~decreased shipping demand primarily driven from continued capacity in the closure or reduced operations at certain of our own terminals. Due to delayed deliveries and disruption within the network, our operating expenses were also negatively impacted, driven by the reduction in labor productivity, higher local purchased transportation costs, and an increase in costs to relocate revenue equipment, among other items.

market.

Salaries, wages and employee benefits. Salaries, wages and employee benefits ~~increased $11.0~~decreased $50.4 million ~~or 1.5%,~~primarily due to impacts of headcount reductions as a result of shipping volume decreases and reductions to short-term incentives. These decreases are partially offset by the October 1, 2022, and April 1, 2023 contractual wage and benefit increases.

Fuel, operating expenses and supplies. Fuel, operating expenses and supplies decreased $60.3 million primarily due to a ~~$7.7 million increase in wages and an $8.2 million increase in employee benefit costs, which are primarily related to contractual rate increases for union employees, partially offset by a $4.0~~$47.6 million decrease in ~~bonus compensation.~~

~~Operating~~fuel expense resulting from a combination of lower fuel prices and fewer miles driven, and a $6.6 million decrease in uncollectible receivables and expected customer credit losses. Additional decreases resulted from lower travel expenses, facility maintenance, and ~~supplies.~~ ~~Operating expenses and supplies increased $9.7~~rebranding.

Purchased transportation. Purchased transportation decreased $55.4 million ~~or 4.7%,~~ primarily due to ~~a $6.5 million increase in fuel expense, which was largely driven~~decreased miles from second quarter 2022, as well as continued targeted efforts by ~~higher fuel prices on a per gallon basis and a $4.8 million increase in technology and operating supply costs.~~

~~Purchased transportation. Purchased transportation increased $12.3 million, or 7.8%, primarily due~~the Company to ~~a $7.5 million increase in vehicle rent expense due to equipment shortages and higher usage of operating leases for revenue equipment, a $4.1 million increase in local~~reduce over-the-road purchased transportation ~~due to increased volume~~usage and ~~hurricane-related impacts,~~equipment lease expense, and fewer miles driven. These decreases include a ~~$2.5~~$17.0 million ~~increase~~decrease in over-the-road purchased transportation expense, a $10.8 million decrease in rail purchased transportation ~~due~~and a $7.4 million decrease in local cartage. Equipment lease expense declined $8.7 million, and third-party logistics expenses decreased $8.1 million as a result of fewer customer-specific logistics solutions.

~~Other operating expense.~~ ~~Other operating expense decreased $1.9 million, or 3.0%, primarily due~~make a reliable estimate of the annual effective tax rate, ASC 740 Income Taxes permits the use of the actual effective tax rate for the year-to-date period. During the quarter ended June 30, 2023, the Company has deemed the actual approach to be appropriate to determine the interim tax provision as a ~~reduction in property damage and liability claims expense of $1.5 million due to favorable development of current year claims.~~

~~Gains/losses on property disposals. Net losses on disposals of property were $1.3 million~~small change in the ~~third quarter of 2017 compared to $0.2 million~~forecasted income/(loss) before income taxes could cause significant change in the ~~third~~estimated annual effective tax rate. For the second quarter ~~of 2016 primarily due~~ended June 30, 2023, the Company applied the actual effective tax rate to ~~losses on~~year-to-date results to determine the ~~sale of revenue equipment.~~

~~Nonoperating expenses, net.~~ ~~Nonoperating expenses, net, increased $11.8 million in~~interim tax provision. For the ~~third~~second quarter ~~of 2017 compared~~ended June 30, 2022, the annual effective tax rate approach was used to determine the third quarter of 2016 primarily driven by $6.7 million in transaction costs related to the Term Loan Amendment, which is more fully described in the “Debt and Financing” footnote to the consolidated financial statements, and a $3.4 million increase in foreign currency transaction losses.

interim tax provision. Our effective tax rate for the ~~third~~second quarter of ~~2017~~2023 and ~~2016~~2022 was ~~23.1%~~(38.7)% and ~~3.5%~~2.9%, respectively. ~~Significant items impacting~~The effective tax rate for 2023 differed from the ~~2017~~U.S. federal statutory rate ~~include~~primarily as a ~~benefit recognized due~~result of the change from the annual effective tax rate approach in the first quarter to application of ASC 740 guidance regarding intra-period tax allocation, a net state and foreign tax provision, foreign withholding taxes related to a dividend from a foreign subsidiary, certain permanent items, and a change inthe actual approach for year-to-date second quarter. Additional contributing factors are the valuation allowance ~~established for the~~on our domestic net deferred tax asset, ~~balance projected~~as well as foreign and state income tax provisions. The effective rate for ~~December 31, 2017. The significant items impacting~~2022 differed from the ~~2016~~U.S. federal statutory rate ~~include a provision for federal alternative minimum tax, a refund from a prior year amended return, a net state and foreign tax provision, certain permanent items, and a change in~~primarily due to the valuation allowance ~~established~~

~~for the net deferred tax asset balance that had been projected for December 31, 2016. We recognize valuation allowances~~ on ~~deferred tax assets if, based on the weight of the evidence, we determine it is more likely than not that such assets will not be realized. Changes in valuation allowances are included in~~ our tax provision in the period of change. In determining whether a valuation allowance is warranted, we evaluate factors such as prior years’ earnings history, expected future earnings, loss carry-back and carry-forward periods, reversals of existing deferred tax liabilities and tax planning strategies that potentially enhance the likelihood of the realization of a deferred tax asset. At September 30, 2017 and December 31, 2016, substantially all of ourdomestic net deferred tax assets ~~were subject to~~partially offset by foreign and state

income taxes. The Company maintained a ~~valuation allowance.~~

~~First Three Quarters of 2017 Compared to the First Three Quarters of 2016~~

Our consolidated operating revenue increased $133.2 million, or 3.8%, during the first three quarters of 2017 compared to the same period in 2016. The increase in revenue is primarily attributed to an increase in volume, fuel surcharge revenue, and yield, excluding fuel surcharge.

Total operating expenses for the first three quarters of 2017 increased $155.5 million, or 4.5%, compared to the same period in 2016, and consisted primarily of an increase in contractual wages and employee benefit costs, higher fuel costs, and an increase in purchased transportation expense.

~~Salaries, wages and employee benefits.~~ Salaries, wages and employee benefits increased $55.5 million, or 2.6%, primarily due to a $29.6 million increase in wages and a $26.4 million increase in employee benefit costs, which are primarily related to contractual rate increases for union employees, combined with an increase in shipping volumes, which required more employee hours to process freight.

~~Operating expenses and supplies.~~ Operating expenses and supplies increased $46.9 million, or 7.9%, primarily due to a $34.6 million increase in fuel expense, which was largely driven by higher fuel prices on a per gallon basis. Also, operating expenses increased $13.3 million due to higher technology and operating supply costs.

~~Purchased transportation~~. Purchased transportation increased $54.2 million, or 13.3%, primarily due to a $26.1 million increase in vehicle rent expense due to higher usage of leased revenue equipment and equipment shortages, a $16.5 million increase in rail purchased transportation due to an increase in rail miles and higher rail rates which were impacted by increased fuel surcharges, and a $12.1 million increase in the use of local purchased transportation due to higher usage of third-party providers.

~~Other operating expense.~~ Other operating expense decreased $6.8 million, or 3.5%, primarily due to a reduction in property damage and liability claims expense of $9.3 million due to unfavorable development of prior year claims that negatively impacted 2016.

~~Gains/losses on property disposals~~. Net losses on disposals of property were $3.0 million in the first three quarters of 2017 compared to net gains of $11.2 million in the first three quarters of 2016 primarily due to the sale of excess real properties.

~~Nonoperating expenses, net.~~ Nonoperating expenses, net, increased $12.9 million in the first three quarters of 2017 compared to the first three quarters of 2016 primarily driven by a primarily driven by $6.7 million in transaction costs related to the Term Loan Amendment and a $3.7 million increase in foreign currency transaction losses in 2017. A $2.3 million gain on the disposal of JHJ was recorded in the first three quarters of 2016, with no corresponding gain in the first three quarters of 2017.

Our effective tax rate for the first three quarters of 2017 and 2016 was (13.8)% and 10.5%, respectively. The significant items impacting the 2017 rate include a benefit recognized due to application of ASC 740 guidance regarding intra-period tax allocation, a net state and foreign tax provision, foreign withholding taxes related to a dividend from a foreign subsidiary, certain permanent items, and a change in thefull valuation allowance ~~established for the~~on our domestic net deferred tax asset balance projected for December 31, 2017. The significant items impacting the 2016 rate include a provision for federal alternative minimum tax, a refund from a prior year amended return, a net state and foreign tax provision, certain permanent items, and a change in the valuation allowance established for the net deferred tax asset balance that had been projected for December 31, 2016.

~~Reporting Segment Results~~assets as of ~~Operations~~

~~We evaluate our operating performance using our YRC Freight and Regional Transportation reporting segments:~~

~~YRC Freight~~ is the reporting segment that focuses on longer haul business opportunities with national, regional and international services. YRC Freight provides for the movement of industrial, commercial and retail goods, primarily through centralized management. This reporting segment includes our LTL subsidiaries YRC Freight and YRC Reimer.

YRC Reimer is a subsidiary located in Canada that specializes in shipments into, across and out of Canada. In addition to the United States and Canada, YRC Freight also serves parts of Mexico and Puerto Rico.

~~Regional Transportation~~ is the reporting segment for our transportation service providers focused on business opportunities in the regional and next-day delivery markets. Regional Transportation is comprised of Holland, New Penn and Reddaway. These companies each provide regional, next-day ground services in their respective regions through a network of facilities located across the United States, Canada, and Puerto Rico.

~~YRC Freight Results~~

~~YRC Freight represented 63.0% of consolidated operating revenue for the third quarter of~~ ~~2017, as compared to 63.7% for the third quarter of~~ ~~2016~~. YRC Freight represented 62.6% of consolidated operating revenue for the first three quarters of 2017, as compared to 62.8% for the first three quarters of 2016. The table below provides summary financial information for YRC Freight for the ~~third quarter~~ ~~and first three quarters of~~ ~~2017~~ ~~and~~ ~~2016~~:

Third Quarter First Three Quarters
(in millions) 2017 2016 Percent Change 2017 2016 Percent Change
Operating revenue $ 787.8
$ 777.9
1.3% $ 2,306.2
$ 2,228.6
3.5%
Operating income $ 20.3
$ 20.8
(2.4)% $ 37.8
$ 53.3
(29.1)%
Operating ratio^(a)
97.4 % 97.3 % (0.1) pp 98.4 % 97.6 % (0.8) pp


~~(a)~~	~~pp represents the change in percentage points~~

~~Third Quarter of~~ ~~2017~~ ~~Compared to the Third Quarter of 2016~~

~~YRC Freight reported operating revenue of $787.8 million in the third quarter of 2017, an increase of $9.9 million, or 1.3%, compared to the same period in~~ ~~2016. The increase in revenue is primarily attributed to an increase in fuel surcharge revenue, combined with an improvement in yield, excluding fuel surcharge.~~ periods presented.

The table below summarizes the key revenue metrics for the ~~YRC Freight reporting segment for the third~~second quarter of ~~2017~~2023 compared to the ~~third~~second quarter of ~~2016:~~

2022:


	Second Quarter
	2023			2022			Percent Change(a)
Workdays		63.5			63.5

Operating ratio		96.5	%		93.0	%	(3.5) pp

LTL picked up revenue (in millions)	$	1,023.9		$	1,278.4			(19.9	%)
LTL tonnage (in thousands)		1,728			2,082			(17.0	%)
LTL tonnage per workday (in thousands)		27.22			32.80			(17.0	%)
LTL shipments (in thousands)		3,153			3,719			(15.2	%)
LTL shipments per workday (in thousands)		49.65			58.56			(15.2	%)
LTL picked up revenue per hundred weight	$	29.62		$	30.69			(3.5	%)
LTL picked up revenue per hundred weight (excluding fuel surcharge)	$	24.88		$	23.88			4.2	%
LTL picked up revenue per shipment	$	325		$	344			(5.5	%)
LTL picked up revenue per shipment (excluding fuel surcharge)	$	273		$	267			2.0	%
LTL weight per shipment (in pounds)		1,096			1,120			(2.1	%)

Total picked up revenue (in millions)(b)	$	1,111.7		$	1,401.1			(20.7	%)
Total tonnage (in thousands)		2,219			2,659			(16.5	%)
Total tonnage per workday (in thousands)		34.95			41.87			(16.5	%)
Total shipments (in thousands)		3,235			3,820			(15.3	%)
Total shipments per workday (in thousands)		50.95			60.16			(15.3	%)
Total picked up revenue per hundred weight	$	25.05		$	26.35			(4.9	%)
Total picked up revenue per hundred weight (excluding fuel surcharge)	$	21.19		$	20.72			2.3	%
Total picked up revenue per shipment	$	344		$	367			(6.3	%)
Total picked up revenue per shipment (excluding fuel surcharge)	$	291		$	288			0.8	%
Total weight per shipment (in pounds)		1,372			1,392			(1.5	%)


(in millions)	2023			2022
(b) Reconciliation of operating revenue to total picked up revenue:
Operating revenue	$	1,126.8		$	1,423.7
Change in revenue deferral and other		(15.1	)		(22.6	)
Total picked up revenue	$	1,111.7		$	1,401.1

(a)

Percent change based on unrounded figures and not the rounded figures presented.

Third Quarter
2017 2016
Percent Change^(b)
Workdays 62.5
64.0

Total picked up revenue (in millions)^(a)
$ 776.3
$ 763.6
1.7 %
Total tonnage (in thousands) 1,592
1,620
(1.7 )%
Total tonnage per day (in thousands) 25.47
25.31
0.7 %
Total shipments (in thousands) 2,623
2,678
(2.1 )%
Total shipments per day (in thousands) 41.96
41.84
0.3 %
Total picked up revenue per hundred weight $ 24.38
$ 23.57
3.4 %
Total picked up revenue per hundred weight (excluding fuel surcharge) $ 21.81
$ 21.31
2.4 %
Total picked up revenue per shipment $ 296
$ 285
3.8 %
Total picked up revenue per shipment (excluding fuel surcharge) $ 265
$ 258
2.8 %
Total weight per shipment (in pounds) 1,214
1,210
0.4 %

(b)

Does not equal financial statement revenue due to revenue recognition adjustments between accounting periods and the impact of other revenue.

Third Quarter
(in millions) 2017 2016
^(a)Reconciliation of operating revenue to total picked up revenue:

Operating revenue $ 787.8
$ 777.9
Change in revenue deferral and other (11.5 ) (14.3 )
Total picked up revenue $ 776.3
$ 763.6


~~(a)~~	~~Does not equal financial statement revenue due to revenue recognition adjustments between accounting periods and the impact of other revenue~~


~~(b)~~	~~Percent change based on unrounded figures and not the rounded figures presented~~

~~Operating income for YRC Freight was $20.3~~

First Half of 2023 Compared to the First Half of 2022

Consolidated operating revenue. Consolidated operating revenue, including fuel surcharge, decreased $398.7 million ~~in the third quarter of 2017~~ compared to ~~operating income~~the first half of ~~$20.8 million in~~2022. Fuel surcharge revenue decreased compared to the ~~third quarter~~first half of ~~2016. Operating expenses increased $10.4 million, or 1.4%,~~2022 primarily due to ~~an increase~~fewer shipments and lower fuel prices. Excluding fuel surcharge revenue, consolidated operating revenue declined due to decreased shipping demand primarily driven from continued capacity in ~~contractual wages and employee benefit costs, higher fuel costs and an increase in purchased transportation expense.~~

the market.

Salaries, wages and employee benefits. Salaries, wages and employee benefits ~~increased $1.2~~decreased $88.9 million ~~or 0.3%,~~primarily due to impacts of headcount reductions resulting from shipping volume decreases and reductions to short-term incentives. These decreases are partially offset by the October 1, 2022, and April 1, 2023 contractual wage and benefit increases.

Fuel, operating expenses and supplies. Fuel, operating expenses and supplies decreased $63.3 million primarily due to a ~~$1.5~~$44.7 million ~~increase in employee benefits, which are primarily related to contractual rate increases for union employees.~~

~~Operating expenses and supplies. Operating expenses and supplies increased $3.3 million, or 2.5%, primarily due to a $2.1 million increase~~decrease in fuel expense, which was ~~driven by higher~~largely a result of lower fuel prices ~~on a per gallon basis.~~

and fewer miles driven, and an $8.6 million decrease in uncollectible receivables and expected customer credit losses. Additional decreases resulted from lower travel expenses, facility maintenance and rebranding.

Purchased ~~transportation~~.transportation. Purchased transportation ~~increased $7.9~~decreased $88.8 million ~~or 6.6%,~~primarily due to targeted efforts by the Company to reduce over-the-road purchased transportation usage and equipment lease expense, and fewer miles driven. These decreases include a $28.8 million decrease in over-the-road purchased transportation expense, a $10.3 million decrease in rail purchased transportation and a $11.3 million decrease in local cartage. Equipment lease expense declined $17.8 million, and third-party logistics expenses decreased $16.3 million as a result of fewer customer-specific logistics solutions.

Other operating expenses. Other operating expenses decreased $11.1 million primarily due to a ~~$4.8~~$7.6 million ~~increase~~decrease in ~~vehicle rent expense due~~operating taxes and a $3.2 million decrease in other insurance costs.

Income tax. The Company’s tax provision or benefit for income taxes for interim periods has generally been determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any. Under certain circumstances, where a Company is unable to make a reliable estimate of the annual effective tax rate, ASC 740 Income Taxes permits the use of the actual effective tax rate for the year-to-date period. During the quarter ended June 30, 2023, the Company has deemed the actual approach to be appropriate to determine the interim tax provision as a small change in the forecasted income/(loss) before income taxes could cause significant change in the estimated annual effective tax rate. For the first half of 2023, the Company applied the actual effective tax rate to year-to-date results to determine the interim tax provision. For the first half of 2022, the annual effective tax rate approach was used to determine the interim tax provision. Our effective tax rate for the first half of 2023 and 2022 was (2.8)% and 3.0%, respectively. The effective tax rate for 2023 differed from the U.S. federal statutory rate primarily ~~to equipment shortages, a $2.5 million increase in rail purchased transportation~~ due to ~~an increase in rail miles,~~the valuation allowance on our domestic net deferred tax assets, along with our foreign and ~~a $1.8 million increase in local purchased transportation~~state income provisions. The effective rate for 2022 differed from the U.S. federal statutory rate primarily due to ~~increased volume~~the valuation allowance on our domestic net deferred tax assets partially offset by foreign and ~~hurricane-related impacts.~~

~~First Three Quarters~~state income taxes. The Company maintained a full valuation allowance on our domestic net deferred tax assets as of ~~2017 Compared to~~ the ~~First Three Quarters of 2016~~

YRC Freight reported operating revenue of $2,306.2 million in the first three quarters of 2017, an increase of $77.6 million, or 3.5%, compared to the same period in 2016. The increase in revenue is primarily attributed to an increase in volume, fuel surcharge revenue, and yield, excluding fuel surcharge revenue. reporting periods presented.

The table below summarizes the key revenue metrics for the ~~YRC Freight reporting segment for the~~ first ~~three quarters~~half of ~~2017~~2023 compared to the first ~~three quarters~~half of ~~2016:~~

First Three Quarters
2017 2016
Percent Change^(b)
Workdays 190.0
191.5

Total picked up revenue (in millions)^(a)
$ 2,285.3
$ 2,208.9
3.5 %
Total tonnage (in thousands) 4,766
4,701
1.4 %
Total tonnage per day (in thousands) 25.08
24.55
2.2 %
Total shipments (in thousands) 7,976
7,875
1.3 %
Total shipments per day (in thousands) 41.98
41.12
2.1 %
Total picked up revenue per hundred weight $ 23.97
$ 23.49
2.0 %
Total picked up revenue per hundred weight (excluding fuel surcharge) $ 21.47
$ 21.34
0.6 %
Total picked up revenue per shipment $ 287
$ 280
2.2 %
Total picked up revenue per shipment (excluding fuel surcharge) $ 257
$ 255
0.7 %
Total weight per shipment (in pounds) 1,195
1,194
0.1 %

First Three Quarters
(in millions) 2017 2016
^(a)Reconciliation of operating revenue to total picked up revenue:

Operating revenue $ 2,306.2
$ 2,228.6
Change in revenue deferral and other (20.9 ) (19.7 )
Total picked up revenue $ 2,285.3
$ 2,208.9


~~(a)~~	~~Does not equal financial statement revenue due to revenue recognition adjustments between accounting periods and the impact of other~~


	~~revenue~~


~~(b)~~	~~Percent change based on unrounded figures and not the rounded figures presented~~

Operating income for YRC Freight was $37.8 million in the first three quarters of 2017 compared to $53.3 million in the first three quarters of 2016. Operating expenses increased $93.1 million, or 4.3%, primarily due to an increase in contractual wages and

~~employee benefit costs, higher fuel costs, an increase in purchased transportation expense, and an increase in loss on property disposal expense.~~

~~Salaries, wages and employee benefits.~~ Salaries, wages and employee benefits increased $22.8 million, or 1.8%, primarily due to a $13.8 million increase in wages and an $9.7 million increase in employee benefit costs, which are primarily related to contractual rate increases for union employees, combined with an increase in shipping volumes, which required more employee hours to process freight.

~~Operating expenses and supplies~~. Operating expenses and supplies increased $26.7 million, or 7.0%, primarily due to a $19.0 million increase in fuel expense, which was largely driven by higher fuel prices on a per gallon basis. Also, operating expenses increased by $8.5 million due to higher technology and operating supply costs.

~~Purchased transportation~~. Purchased transportation increased $39.4 million, or 12.7%, primarily due to a $16.5 million increase in rail purchased transportation due to an increase in rail miles and higher rail rates which were impacted by increased fuel surcharges. Vehicle rent expense increased $12.3 million due to higher usage of operating leases and short-term rental expense due to equipment shortages, and local and over-the-road purchased transportation expense increased $8.9 million due to higher usage of third-party providers.

~~Other operating expense.~~ Other operating expense decreased $5.2 million, or 4.3%, primarily due to a reduction in property damage and liability claims expense of $5.2 million due to unfavorable development of prior year claims that negatively impacted the second quarter of 2016.

~~Gains/losses on property disposals~~. Net losses on disposals of property were $1.7 million in the first three quarters of 2017 compared to net gains of $12.0 million in the first three quarters of 2016, primarily due to the sale of excess real properties.

~~Regional Transportation Results~~

Regional Transportation represented 37.0% of consolidated operating revenue for the third quarter of 2017, as compared to 36.3% for the third quarter of 2016. Regional Transportation represented 37.4% of consolidated operating revenue for the first three quarters of 2017, as compared to 37.2% for the first three quarters of 2016. The table below provides summary financial information for Regional Transportation for the ~~third quarter~~ ~~and first three quarters of 2017 and 2016:~~

Third Quarter First Three Quarters
(in millions) 2017 2016 Percent Change 2017 2016 Percent Change
Operating revenue $ 463.5
$ 443.7
4.5% $ 1,376.5
$ 1,321.3
4.2%
Operating income $ 21.5
$ 21.9
(1.8)% $ 59.0
$ 64.9
(9.1)%
Operating ratio^(a)
95.4 % 95.1 % (0.3) pp 95.7 % 95.1 % (0.6) pp


~~(a)~~	~~pp represents the change in percentage points~~

~~Third Quarter of 2017 Compared to the Third Quarter of 2016~~

Regional Transportation reported operating revenue of $463.5 million for the third quarter of 2017, an increase of $19.8 million, or 4.5%, from the third quarter of 2016. The increase in revenue is primarily attributed to an increase in volume and fuel surcharge revenue, while yield, excluding fuel surcharge, is comparable to prior year. The table below summarizes the key revenue metrics for the Regional Transportation reporting segment for the third quarter of 2017 compared to the third quarter of 2016:

Third Quarter
2017 2016
Percent Change^(b)
Workdays 62.5
63.0

Total picked up revenue (in millions)^(a)
$ 463.4
$ 443.6
4.5 %
Total tonnage (in thousands) 1,975
1,914
3.2 %
Total tonnage per day (in thousands) 31.60
30.38
4.0 %
Total shipments (in thousands) 2,631
2,622
0.3 %
Total shipments per day (in thousands) 42.10
41.62
1.1 %
Total picked up revenue per hundred weight $ 11.73
$ 11.59
1.2 %
Total picked up revenue per hundred weight (excluding fuel surcharge) $ 10.52
$ 10.49
0.3 %
Total picked up revenue per shipment $ 176
$ 169
4.1 %
Total picked up revenue per shipment (excluding fuel surcharge) $ 158
$ 153
3.2 %
Total weight per shipment (in pounds) 1,501
1,460
2.8 %

Third Quarter
(in millions) 2017 2016
^(a)Reconciliation of operating revenue to total picked up revenue:

Operating revenue $ 463.5
$ 443.7
Change in revenue deferral and other (0.1 ) (0.1 )
Total picked up revenue $ 463.4
$ 443.6


~~(a)~~	~~Does not equal financial statement revenue due to revenue recognition adjustments between accounting periods~~


~~(b)~~	~~Percent change based on unrounded figures and not the rounded figures presented~~

Operating income for Regional Transportation was $21.5 million for the third quarter of 2017 compared to $21.9 million for the third quarter of 2016. Operating expenses increased $20.2 million, or 4.8%, primarily due to an increase in contractual wages and employee benefit costs, higher fuel costs and higher usage of purchased transportation.

~~Salaries, wages and employee benefits.~~ Salaries, wages and employee benefits increased $12.2 million, or 4.6%, primarily due to a $6.9 million increase in wages and a $6.9 million increase in employee benefit costs, which are primarily related to contractual rate increases for union employees, combined with an increase in shipping volumes, which required more employee hours to process freight.

~~Operating expenses and supplies.~~ ~~Operating expenses and supplies increased $6.4 million, or 7.9%, primarily due to a $4.3 million increase in fuel expense, which was largely driven by higher fuel prices on a per gallon basis.~~

~~Purchased transportation~~. Purchased transportation increased $4.2 million, or 11.7%, primarily due to a $2.7 million increase in vehicle rent expense due to higher usage of operating leases for revenue equipment, and a $2.3 million increase in local purchased transportation expense due to increased volume.

~~Other operating expenses~~. Other operating expenses decreased $0.7 million, or 2.9%, due to a $1.7 million decrease in our property damage and liability claims as a result of favorable development on current year claims which positively impacted the third quarter of 2017 and unfavorable development of prior year claims that negatively impacted the third quarter of 2016, which was partially offset by increased cargo claims.

~~First Three Quarters of 2017 Compared to the First Three Quarters of 2016~~

Regional Transportation reported operating revenue of $1,376.5 million for the first three quarters of 2017, an increase of $55.2 million, or 4.2%, from the first three quarters of 2016. The increase in revenue is primarily attributed to an increase in volume and fuel surcharge revenue, while yield, excluding fuel surcharge, is comparable to prior year. The table below summarizes the key revenue metrics for the Regional Transportation reporting segment for the first three quarters of 2017 compared to the first three quarters of 2016:

First Three Quarters
2017 2016
Percent Change^(b)
Workdays 190.0
191.5

Total picked up revenue (in millions)^(a)
$ 1,378.8
$ 1,323.6
4.2 %
Total tonnage (in thousands) 5,935
5,794
2.4 %
Total tonnage per day (in thousands) 31.24
30.26
3.2 %
Total shipments (in thousands) 7,902
7,876
0.3 %
Total shipments per day (in thousands) 41.59
41.13
1.1 %
Total picked up revenue per hundred weight $ 11.61
$ 11.42
1.7 %
Total picked up revenue per hundred weight (excluding fuel surcharge) $ 10.43
$ 10.40
0.3 %
Total picked up revenue per shipment $ 174
$ 168
3.8 %
Total picked up revenue per shipment (excluding fuel surcharge) $ 157
$ 153
2.4 %
Total weight per shipment (in pounds) 1,502
1,471
2.1 %

First Three Quarters
(in millions) 2017 2016
^(a)Reconciliation of operating revenue to total picked up revenue:

Operating revenue $ 1,376.5
$ 1,321.3
Change in revenue deferral and other 2.3
2.3
Total picked up revenue $ 1,378.8
$ 1,323.6


~~(a)~~	~~Does not equal financial statement revenue due to revenue recognition adjustments between accounting periods~~


~~(b)~~	~~Percent change based on unrounded figures and not the rounded figures presented~~

Operating income for Regional Transportation was $59.0 million for the first three quarters of 2017, as compared to $64.9 million for the first three quarters of 2016. Operating expenses increased by a $61.1 million, or 4.9%, primarily due to an increase in contractual wages and employee benefit costs, higher fuel costs and higher usage of purchased transportation.

~~Salaries, wages and employee benefits.~~ Salaries, wages and employee benefits increased $30.5 million, or 3.8%, primarily due to a $15.2 million increase in wages and a $19.0 million increase in employee benefit costs, which are primarily related to contractual rate increases for union employees, combined with an increase in shipping volumes, which required more employee hours to process freight.

~~Operating expenses and supplies.~~ ~~Operating expenses and supplies increased $21.7 million, or 9.1%, primarily due to a $15.7 million increase in fuel expense, which was largely driven by higher fuel prices on a per gallon basis.~~

~~Purchased transportation. Purchased transportation increased $14.5 million, or 14.7%, primarily due to a $13.8 million increase in vehicle rent expense due to higher usage of operating leases for revenue equipment.~~

~~Other operating expenses~~. Other operating expenses decreased $1.7 million, or 2.3%, due to a $4.1 million decrease in our property damage and liability claims as a result of favorable development on current year claims which positively impacted the first three quarters of 2017 and unfavorable development of prior year claims that negatively impacted the first three quarters of 2016. This was partially offset by a $1.4 million increase in operating taxes, primarily due to more fuel gallons purchased, and a $1.1 million increase in cargo claims expense.

2022:


	First Half
	2023			2022			Percent Change(a)
Workdays		127.5			127.0

Operating ratio		98.7	%		96.0	%	(2.7) pp

LTL picked up revenue (in millions)	$	2,077.1		$	2,415.6			(14.0	%)
LTL tonnage (in thousands)		3,484			4,062			(14.2	%)
LTL tonnage per workday (in thousands)		27.33			31.99			(14.6	%)
LTL shipments (in thousands)		6,264			7,279			(14.0	%)
LTL shipments per workday (in thousands)		49.13			57.32			(14.3	%)
LTL picked up revenue per hundred weight	$	29.81		$	29.73			0.3	%
LTL picked up revenue per hundred weight (excluding fuel surcharge)	$	24.69		$	23.86			3.5	%
LTL picked up revenue per shipment	$	332		$	332			(0.1	%)
LTL picked up revenue per shipment (excluding fuel surcharge)	$	275		$	266			3.2	%
LTL weight per shipment (in pounds)		1,112			1,116			(0.3	%)

Total picked up revenue (in millions)(b)	$	2,252.7		$	2,653.4			(15.1	%)
Total tonnage (in thousands)		4,453			5,203			(14.4	%)
Total tonnage per workday (in thousands)		34.93			40.96			(14.7	%)
Total shipments (in thousands)		6,416			7,473			(14.1	%)
Total shipments per workday (in thousands)		50.32			58.85			(14.5	%)
Total picked up revenue per hundred weight	$	25.29		$	25.50			(0.8	%)
Total picked up revenue per hundred weight (excluding fuel surcharge)	$	21.11		$	20.65			2.2	%
Total picked up revenue per shipment	$	351		$	355			(1.1	%)
Total picked up revenue per shipment (excluding fuel surcharge)	$	293		$	288			1.9	%
Total weight per shipment (in pounds)		1,388			1,392			(0.3	%)


(in millions)	2023			2022
(b) Reconciliation of operating revenue to total picked up revenue:
Operating revenue	$	2,285.4		$	2,684.1
Change in revenue deferral and other		(32.7	)		(30.7	)
Total picked up revenue	$	2,252.7		$	2,653.4

Certain Non-GAAP Financial Measures

As previously discussed in the “Our Business” section, we use certain non-GAAP financial measures to assess ~~performance.~~performance including EBITDA and Adjusted EBITDA. We believe our presentation of EBITDA and Adjusted EBITDA is useful to investors and other users as these measures represent key supplemental information our management uses to compare and evaluate our core underlying business results, particularly in light of our leverage position and the capital-intensive nature of our business. These secondary measures should be considered in addition to the results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, our GAAP financial measures. ~~For segment~~

Adjusted EBITDA ~~we present the reconciliation from operating income (loss) to Adjusted EBITDA as it is consistent with how we measure performance.~~

~~Consolidated Adjusted EBITDA~~

The reconciliation of net ~~income (loss)~~loss to EBITDA and EBITDA to Adjusted EBITDA (defined in our ~~Term Loan Agreement~~TL Agreements as “Consolidated EBITDA”) for the ~~third~~second quarter and first ~~three quarters~~half of ~~2017~~2023 and ~~2016~~,2022, and the trailing twelve months ended ~~September~~June 30, ~~2017~~2023, and ~~2016,~~2022, is as follows:


	Second Quarter						First Half						Trailing-Twelve-Months Ended
(in millions)	2023			2022			2023			2022			June 30, 2023			June 30, 2022
Reconciliation of net loss to Adjusted EBITDA:
Net loss	$	(14.7	)	$	60.0		$	(69.3	)	$	32.5		$	(80.0	)	$	(3.9	)
Interest expense, net		47.8			37.9			94.0			75.6			180.0			152.6
Income tax expense		4.1			1.8			1.9			1.0			5.6			2.9
Depreciation and amortization		35.8			35.5			71.1			71.2			143.3			146.5
EBITDA		73.0			135.2			97.7			180.3			248.9			298.1
Adjustments for TL Agreements:
Gains on property disposals, net		(75.9	)		(3.2	)		(76.4	)		(8.7	)		(105.7	)		(9.3	)
Non-cash reserve changes(a)		0.3			5.6			3.4			3.7			(2.8	)		12.4
Letter of credit expense		1.7			2.2			3.4			4.3			7.5			8.6
Transaction costs related to debt		1.2			—			1.2			—			1.2			—
Permitted dispositions and other		—			—			0.1			0.3			0.2			0.3
Equity-based compensation expense		1.0			1.0			3.3			3.3			5.3			5.0
Non-union pension settlement charge		—			—			0.1			—			12.2			64.4
Other, net		0.2			0.5			0.5			1.2			0.5			2.3
Expense amounts subject to 10% threshold(b):
Department of Defense settlement charge		—			—			—			5.3			—			5.3
Other, net		5.5			4.6			8.0			8.2			19.2			19.6
Adjusted EBITDA prior to 10% threshold		7.0			145.9			41.3			197.9			186.5			406.7
Adjustments pursuant to TTM calculation(b)		(2.5	)		—			(2.5	)		—			(2.5	)		—
Adjusted EBITDA	$	4.5		$	145.9		$	38.8		$	197.9		$	184.0		$	406.7

(a)

Non-cash reserve changes reflect the net charges for union and nonunion vacation, with such adjustments to be reduced by cash charges in a future period when paid.

(b)

Third Quarter First Three Quarters Trailing Twelve Months Ended
(in millions) 2017 2016 2017 2016 September 30, 2017 September 30, 2016
Reconciliation of net income (loss) to Adjusted EBITDA:
Net income (loss) $ 3.0
$ 13.9
$ (3.3 ) $ 29.0
$ (10.8 ) $ 5.5
Interest expense, net 25.9
25.5
76.7
77.6
102.1
103.8
Income tax expense (benefit) 0.9
0.5
0.4
3.4
0.1
(12.1 )
Depreciation and amortization 36.7
40.3
111.0
119.5
151.3
159.6
EBITDA 66.5
80.2
184.8
229.5
242.7
256.8
Adjustments for Term Loan Agreement:
(Gains) losses on property disposals, net 1.3
0.2
3.0
(11.2 ) (0.4 ) (10.8 )
Letter of credit expense 1.7
1.7
5.1
6.0
6.8
8.2
Restructuring professional fees —
—
2.2
—
2.2
—
Transaction costs related to issuances of debt 6.7
—
6.7
—
6.7
—
Permitted dispositions and other 0.3
2.2
1.1
1.8
2.3
1.9
Equity-based compensation expense 1.3
1.5
5.3
6.0
6.6
8.0
Amortization of ratification bonus —
—
—
4.6
—
9.1
Non-union pension settlement charge —
—
—
—
—
28.7
Other, net^(a)
3.6
(0.3 ) 7.5
3.1
6.5
3.9
Adjusted EBITDA $ 81.4
$ 85.5
$ 215.7
$ 239.8
$ 273.4
$ 305.8


~~(a)~~	~~As required under our Term Loan Agreement, Other, net shown above consists of the impact of certain items to be included in Adjusted EBITDA.~~

~~Segment~~Pursuant to the TL Agreements, Adjusted EBITDA

~~The following represents~~ limits certain adjustments in aggregate to 10% of the trailing-twelve-month ("TTM") Adjusted EBITDA, ~~by segment~~prior to the inclusion of amounts subject to the 10% threshold, for ~~the~~ ~~third quarter~~each period ending. Such adjustments include, but are not limited to, restructuring charges, integration costs, severance, and ~~first three quarters of~~ ~~2017~~ ~~and~~ ~~2016~~:

Third Quarter First Three Quarters
(in millions) 2017 2016 2017 2016
Adjusted EBITDA by segment:
YRC Freight $ 42.6
$ 45.3
$ 105.8
$ 119.3
Regional Transportation 38.7
40.2
110.3
121.3
Corporate and other 0.1
—
(0.4 ) (0.8 )
Adjusted EBITDA $ 81.4
$ 85.5
$ 215.7
$ 239.8

non-recurring charges. The ~~reconciliation of operating income (loss), by segment, to~~limitation calculation is updated quarterly based on TTM Adjusted EBITDA, ~~for~~and any necessary adjustment resulting from this limitation, if applicable, will be presented here. The sum of the ~~third quarter~~ ~~and first three~~ quarters may not necessarily equal TTM Adjusted EBITDA due to the expiration of ~~2017~~ ~~and~~ ~~2016, is as follows:~~

adjustments from prior periods.

Third Quarter First Three Quarters
YRC Freight segment (in millions) 2017 2016 2017 2016
Reconciliation of operating income to Adjusted EBITDA:
Operating income $ 20.3
$ 20.8
$ 37.8
$ 53.3
Depreciation and amortization 21.1
22.9
63.6
67.9
(Gains) losses on property disposals, net 1.0
—
1.7
(12.0 )
Letter of credit expense 1.1
1.1
3.3
3.9
Amortization of ratification bonus —
—
—
3.0
Other, net^(a)
(0.9 ) 0.5
(0.6 ) 3.2
Adjusted EBITDA $ 42.6
$ 45.3
$ 105.8
$ 119.3

Third Quarter First Three Quarters
Regional Transportation segment (in millions) 2017 2016 2017 2016
Reconciliation of operating income to Adjusted EBITDA:
Operating income $ 21.5
$ 21.9
$ 59.0
$ 64.9
Depreciation and amortization 15.6
17.4
47.4
51.6
Losses on property disposals, net 0.3
0.3
1.3
0.9
Letter of credit expense 0.5
0.6
1.6
2.0
Amortization of ratification bonus —
—
—
1.6
Other, net^(a)
0.8
—
1.0
0.3
Adjusted EBITDA $ 38.7
$ 40.2
$ 110.3
$ 121.3

Third Quarter First Three Quarters
Corporate and other (in millions) 2017 2016 2017 2016
Reconciliation of operating loss to Adjusted EBITDA:
Operating loss $ (1.7 ) $ (3.9 ) $ (9.7 ) $ (8.8 )
Gains on property disposals, net —
(0.1 ) —
(0.1 )
Letter of credit expense 0.1
—
0.2
0.1
Restructuring professional fees —
—
2.2
—
Permitted dispositions and other 0.3
2.2
1.1
1.8
Equity-based compensation expense 1.3
1.5
5.3
6.0
Other, net^(a)
0.1
0.3
0.5
0.2
Adjusted EBITDA $ 0.1
$ —
$ (0.4 ) $ (0.8 )


~~(a)~~	~~As required under our Term Loan Agreement, Other, net shown in the above tables consists of the impact of certain items to be included in Adjusted EBITDA.~~

Financial Condition,Liquidity and Capital Resources

The following sections provide aggregated information regarding our financial condition, liquidity and capital resources. As of June 30, 2023, and December 31, 2022, our total debt was $1,477.4 million and $1,538.0 million, respectively.

Liquidity

Our principal sources of liquidity are cash and cash equivalents, any prospective net cash flow from operations and available borrowings under our ABL ~~Facility and any prospective cash flow from operations.~~Facility. As of ~~September~~June 30, ~~2017,~~2023, our ~~availability~~cash and cash equivalents, exclusive of restricted amounts held in escrow, was $112.8 million.

As of June 30, 2023, our Availability under our ABL Facility was ~~$94.0~~$44.8 million, ~~which~~and our Managed Accessibility (as defined below) was $4.4 million. Availability is ~~derived~~calculated by reducing the amount that may be advanced against eligible receivables plus eligible borrowing base cash by certain reserves imposed by the ABL Agent and our ~~$356.0~~$359.3 million of outstanding letters of credit. ~~Of the $94.0 million in availability, our~~Our Managed Accessibility ~~was $49.0~~represents the maximum amount we would access on the ABL Facility and is adjusted for eligible receivables plus eligible borrowing base cash measured as of June 30, 2023. The credit agreement governing the ABL Facility permits adjustments from eligible borrowing base cash to restricted cash prior to the compliance measurement date of July 14, 2023. As of July 14, 2023, we had less than 10% of the borrowing line in eligible receivables and moved $15.0 million ~~based on~~of cash into restricted cash, as permitted under the ABL Facility, which effectively put our ~~springing fixed charge coverage ratio (as set forth in our ABL Facility). Our~~ cash and cash equivalents and Managed Accessibility ~~was $209.8~~to $102.2 million as of ~~September~~the report date.

As of December 31, 2022, our Availability under our ABL Facility was $47.7 million, and our Managed Accessibility was $6.7 million. Cash and cash equivalents and Managed Accessibility totaled $241.8 million as of December 31, 2022.

The table below summarizes cash and cash equivalents and Managed Accessibility as of June 30, ~~2017.~~

~~Outside~~2023 and December 31, 2022:


(in millions)	June 30, 2023			December 31, 2022
Cash and cash equivalents	$	112.8		$	235.1
Less: amounts placed into restricted cash subsequent to period end		(15.0	)		—
Managed Accessibility		4.4			6.7
Total cash and cash equivalents and Managed Accessibility	$	102.2		$	241.8

As detailed in Footnote 3 to the financial statements, the Company has current debt with a par value of ~~funding normal operations, our principal uses~~$1,303.8 million, of ~~cash include making contributions to our single-employer pension plans~~which $566.8 million has a stated maturity date of June 30, 2024 and various multi-employer pension funds and meeting our other cash obligations including, but not limited to, paying principal and interest on our funded debt, making payments on our equipment leases, and funding capital expenditures.

As$737.0 million has a stated maturity date of September 30, ~~2017,~~2024. However all of this current debt, as a result of the Company projecting a violation of UST Loans covenants for the September 30, 2023 period with no covenant waiver.

Beginning in the fourth quarter of 2022 and continuing through the second quarter 2023, the freight industry and the Company experienced a period over same period decline in freight volumes. The related economic impact of this decline, coupled with the delay in the implementation of Phase Two, has negatively impacted our current and forecasted liquidity levels. As freight volumes began to decline in the fourth quarter of 2022, to maintain adequate liquidity, the Company took actions including layoffs, non-union reductions in workforce, reductions in capital expenditures, and has sought deferment of payments to various parties, including payments to our multiemployer health, welfare, and pension funds.

The decline in freight volumes and the ongoing delay in the implementation of Phase Two negatively impacted income and EBITDA in 2023. Under each of our debt agreements we ~~had $962.4~~are required to maintain at least $200.0 million in ~~aggregate par value~~Consolidated EBITDA on a trailing-twelve-month (“TTM”) basis measured each quarter until maturity. In anticipation of not meeting this covenant for the second quarter the Company has worked with our lenders to amend each of our debt agreements to waive the Adjusted EBITDA covenant. The covenant is waived for the Term Loan for quarters ending June 30, 2023, and September 30, 2023, and for the UST Loans for the quarter ending June 30, 2023. As a result of these amendments to waive this covenant, we remain in compliance with our debt covenants on June 30, 2023.

Although our UST Loans are not due until September 30, 2024, we are not projecting to be in compliance with the Adjusted EBITDA covenant for the quarter ending September 30, 2023 and without a waiver of the Consolidated EBITDA covenant for the quarter ending September 30, 2023 we have classified the UST Loans as current for the period ending June 30, 2023 in accordance with GAAP.

As a result of deferring payment to certain of our union health and welfare, and pension funds on July 15, 2023, those funds determined to cease certain benefits coverage. On July 17, 2023, the IBT cited that cessation as its basis to issue a 72-hour strike notice, and that such strike activity shall commence any time on or after Monday July 24, 2023. On July 23, 2023, these certain

union health, welfare and pension funds determined to extend health care benefits coverage for 30 days; the IBT then recalled the strike notice. However, the threat of a strike led to drastic and unprecedented shipment declines the week of July 17 as customers needed to ensure their shipments could be serviced without interruption and not caught up in a strike of undetermined length. The significant negative impact on cash flows resulting from the diversion of freight to other carriers, in addition to the forecasted payment of the deferred union health, welfare and pension fund payments, resulted in the Company projecting to fall below the $35 million minimum liquidity requirement under the amended debt agreements.

Pursuant to Section 362 of the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed most actions against the Company Parties, including actions to collect indebtedness incurred prior to the ~~majority~~Petition Date or to exercise control over the Company Parties' property. Subject to certain exceptions under the Bankruptcy Code, the filing of ~~which matures~~the Company Parties' Chapter 11 Cases also automatically stayed the filing of most legal proceedings and other actions against or on behalf of the Company Parties or their property to recover on, collect or secure a claim arising prior to the Petition Date or to exercise control over property of the Company Parties' bankruptcy estates, unless and until the Court modifies or lifts the automatic stay as to any such claim.

In accordance with ASC Subtopic 205-40, Presentation of Financial Statements-Going Concern (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet our obligations as they become due within one year after the date that the financial statements are issued. Management considered the Company’s current financial condition and liquidity sources, including cash and managed accessibility, forecasted future cash flows and the Company’s obligations due before August 2, 2024. As a result of the Chapter 11 Cases, the realization of assets and the satisfaction of liabilities are subject to significant uncertainty. While operating as a debtor-in-possession entity pursuant to the Bankruptcy Code, we may sell, or otherwise dispose of or liquidate, assets or settle liabilities, subject to the approval of the Bankruptcy Court or as otherwise permitted in ~~3-5 years. We also~~the ordinary course of business, for amounts other than those reflected in the accompanying unaudited Interim Consolidated Financial Statements. Further, a Chapter 11 plan of reorganization is likely to materially change the amounts and classifications of assets and liabilities reported in our unaudited Interim Consolidated Balance Sheet as of June 30, 2023. In performing this evaluation, we concluded that under the standards of ASC 205-40, substantial doubt exists about our ability to continue as a going concern due to the risks and uncertainties surrounding the Chapter 11 Cases, the defaults under our debt agreements and our financial condition. Our future plans, including those in connection with the Chapter 11 Cases, are not yet finalized, fully executed or approved by the Bankruptcy Court, and therefore cannot be deemed probable of mitigating this substantial doubt within 12 months of the date of issuance of these financial statements. Our consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. As required under ASC 205-40, Management’s evaluation does not take into consideration the potential mitigating effect of Management’s plans that have ~~future funding obligations for~~not been fully implemented or are not within control of the Company, including amending, restructuring or refinancing our ~~single-employer pension plans and various~~debt or entering into other financing arrangements.

A potential result of the Company ceasing its ongoing contributions in the multi-employer pension ~~funds. We expect~~plan funds in which our ~~funding obligations~~union employees participate (the “MEPP Funds”) is exposure to penalties including potential withdrawal liabilities from those MEPP Funds. The assertion and communication of a withdraw liability by the MEPP Funds would result in a material adverse effect on the Company’s liability balances, as the estimated withdrawal liabilities which may be asserted are in excess of $6.5 billion. It is unclear by what extent this amount may be reduced by the American Rescue Plan Special Financial Assistance Program that has awarded over $50 billion in financial assistance to funds, including many of the MEPP Funds.

Covenants

Pursuant to our existing debt agreements, the Company is required to maintain a trailing twelve month Adjusted EBITDA of $200.0 million through the maturity of those agreements. On July 7, 2023, but effective as of June 30, 2023, the Company and certain of its subsidiaries entered into Amendment No. 3 and Limited Waiver to the Amended and Restated Credit Agreement (“Amendment No. 3”), which further amended its Amended and Restated Credit Agreement (as previously amended by that certain Amendment No. 1 to the Amended and Restated Credit Agreement, dated as of April 7, 2020 and that certain Amendment No. 2 to the Amended and Restated Credit Agreement, dated as of July 7, 2020, and as amended by Amendment No. 3, the “A&R Credit Agreement”), dated as of September 11, 2019, by and among the Company, certain of the Company’s subsidiaries party thereto, the lenders party thereto and Alter Domus Products Corp., as administrative agent and collateral agent. Amendment No.

3, among other things, provides for a waiver of the minimum Consolidated EBITDA financial covenant set forth in the A&R Credit Agreement for the ~~remainder of 2017 for our single-employer pension plans~~covenant testing periods ending on June 30, 2023, and ~~multi-employer pension funds will be $14.2 million and $23.8 million, respectively. In addition, we have, and will continue to have, operating lease obligations. As of~~ September 30, ~~2017, our~~2023.

On July 7, 2023, the Company entered into a Waiver Agreement (the “Waiver”) under (i) that certain UST Tranche A Term Loan Credit Agreement (the “Tranche A UST Credit Agreement”) with The Bank of New York Mellon, as administrative agent and collateral agent, and (ii) that certain UST Tranche B Term Loan Credit Agreement (the “Tranche B UST Credit Agreement” and together with the Tranche A UST Credit Agreement, the “UST Credit Agreements”) with The Bank of New York Mellon, as administrative agent and collateral agent. The Waiver provides for a waiver of the minimum Consolidated EBITDA financial covenant set forth in the UST Credit Agreements for the covenant testing period ending on June 30, 2023.

All capitalized terms used above but not defined herein shall have the meaning ascribed to such terms in the A&R Credit Agreement and UST Credit Agreements. The foregoing description is qualified in its entirety by the full text of the Waiver.

Cash Flows

For the first half of 2023 and 2022:


	First Half
(in millions)	2023			2022
Net cash provided by (used in) operating activities	$	7.7		$	36.6
Net cash provided by (used in) investing activities		(42.1	)		(63.2	)
Net cash provided by (used in) financing activities		(72.2	)		(13.0	)

Operating Cash Flow

Cash provided by operating ~~lease payment obligations through 2030 totaled $282.5~~activities was $7.7 million during the first half of 2023, compared to $36.6 million provided during the first half of 2022. The decrease in cash provided was primarily attributable to a $101.8 million increase in net loss which includes a $67.7 million increase in gains on property disposals. Additionally, the Company experienced changes in working capital, including a $185.2 million increase in accounts receivable collected and ~~are expected~~a $28.2 million increase in cash due to other operating liabilities primarily related to lower short term incentive payments, partially offset by an increase ~~as we lease additional~~in cash used of $75.9 million in accounts payable.

Investing Cash Flow

Cash used in investing activities was $42.1 million during the first half of 2023 compared to $63.2 million of cash used during the first half of 2022. The decrease of $21.1 million in cash used was primarily driven by a decrease in cash outflows on revenue ~~equipment. Additionally,~~equipment acquisitions.

Financing Cash Flow

Cash used in financing activities was $72.2 million during the first half of 2023, compared to $13.0 million used during the first half of 2022. The increase in cash used by financing activities for the first ~~three quarters~~half of ~~2017, we entered into new operating leases for revenue equipment totaling $26.2 million in future lease payments, payable over an average lease term~~2023 as compared to 2022 was primarily related to the paydown of ~~five years.~~

our A&R CDA.

Capital Expenditures

Our capital expenditures for the first ~~three quarters~~half of ~~2017~~2023 and ~~2016~~2022 were ~~$70.8~~$45.6 million and ~~$75.4~~$72.6 million, respectively. These amounts were principally used to fund the purchase of ~~used tractors~~revenue equipment, to improve our technology infrastructure and ~~trailers,~~ to refurbish engines for our revenue ~~fleet, and for capitalized costs to improve our technology infrastructure.~~

As of September 30, 2017, our Standard & Poor’s Corporate Family Rating was “B-” with a stable outlook and Moody’s Investor Service Corporate Family Rating was “B3” with a positive outlook.

~~Credit Facility Covenants~~

Our Term Loan Agreement has certain financial covenants that, among other things, restricts certain capital expenditures and requires us to not exceed a maximum total leverage ratio (defined as Consolidated Total Debt divided by Consolidated Adjusted EBITDA). These covenants were modified as part of the Term Loan Amendment on July 26, 2017, which is more fully described in the “Debt and Financing” footnote to the consolidated financial statements. At September 30, 2017, we were in compliance with all such covenants.

We believe that our results of operations will be sufficient to allow us to comply with the covenants in the Term Loan Agreement, fund our operations, increase working capital as necessary to support our planned revenue growth and fund capital expenditures for at least the next twelve months. To maintain compliance with the maximum total leverage ratio over the tenor of the Term Loan and satisfy our liquidity needs, we would have to achieve operating results that reflect a slight improvement to our 2016 Adjusted EBITDA. Means for improving our profitability may include streamlining our support structure, as well as ongoing successful implementation and realization of pricing, productivity and efficiency initiatives, in addition to increased volume, some of which are outside of our control. During the first half of 2017, the Company strategically identified opportunities to streamline overhead costs and reduce operational inefficiencies and those cost reductions continue to be expected through the remainder of 2017.

~~Cash Flows~~

~~Operating Cash Flow~~

~~Cash flows provided by operating activities were $64.2 million during the~~ ~~first three quarters~~ ~~of 2017, compared to $86.0 million during the~~ ~~first three quarters~~ of 2016. The decrease in operating cash flows was primarily attributable to a $29.1 million increase in accounts receivable, impacted by growth in operating revenue and an increase to days sales outstanding, a $23.5 million decrease in cash from net income (adjusted for non-cash operating items), partially offset by a $30.8 million decrease to other working capital accounts primarily related to the timing of payments.

~~Investing Cash Flow~~

~~Cash flows provided by investing activities was $22.4 million during the~~ ~~first three quarters~~ of 2017 compared to $44.9 million during the first three quarters of 2016, largely driven by a net receipt of $85.0 million in restricted escrow refunds in 2017 compared to a net receipt of $79.2 million in 2016. Offsetting this increase, net proceeds from the disposal of property decreased $18.3 million during the ~~first three quarters~~ ~~of 2017 as compared to the first three quarters of 2016, and cash flows in 2016 included $14.6 million in net proceeds from the sale of JHJ with no similar cash flow in 2017.~~

~~Financing Cash Flow~~

~~Cash flows used in financing activities for the~~ ~~first three quarters~~ of ~~2017~~ ~~and 2016 was~~ ~~$62.5 million~~ ~~and $28.3 million, respectively, which consists primarily of repayments on our long-term debt as well as the payment of debt issuance costs in 2017.~~

equipment fleet.

Contractual Obligations and Other Commercial Commitments

The following sections ~~provide aggregated~~summarize consolidated information regarding our contractual cash obligations and other commercial commitments ~~as of~~ ~~September~~for any updates for material changes during the reporting period ended June 30, ~~2017~~.

2023.

Contractual Cash Obligations

The ~~following table reflects~~Company has completed a review of our material cash requirements to analyze and disclose material changes, if any, in those requirements between those expected cash outflows as of December 31, 2022, as detailed in the Form 2022 10-K, and those as of June 30, 2023.

All changes in our cash requirements for cash outflows that we are contractually obligated to make aswere considered by the Company and determined to be reasonably expected based upon our prior financial statement disclosures or in the ordinary course of ~~September 30, 2017~~:

Payments Due by Period
(in millions) Total Less than 1 year 1-3 years 3-5 years More than 5 years
ABL Facility^(a)
$ 28.4
$ 7.1
$ 14.3
$ 7.0
$ —
Term Loan^(b)
865.8
75.6
148.5
641.7
—
Lease financing obligations^(c)
110.8
42.9
39.7
14.1
14.1
Pension deferral obligations^(d)
117.1
7.6
109.5
—
—
Workers’ compensation, property damage and liability claims obligations^(e)
365.8
99.0
117.1
52.0
97.7
Operating leases^(f)
282.5
99.7
127.2
41.7
13.9
Other contractual obligations^(g)
17.6
17.0
0.6
—
—
Capital expenditures and other ^(h)
101.2
101.2
—
—
—
Total contractual obligations $ 1,889.2
$ 450.1
$ 556.9
$ 756.5
$ 125.7


~~(a)~~	~~The ABL Facility includes future payments for the letter of credit and unused line fees and are not included on the Company’s consolidated balance sheets.~~


~~(b)~~	~~The Term Loan includes principal and interest payments, but excludes unamortized discounts. The extended maturity date to July 26, 2022 is subject to the extension of the Second A&R CDA.~~


~~(c)~~	The lease financing obligations include interest payments of $70.9 million and principal payments of $39.9 million. The remaining principal obligation is offset by the estimated book value of leased property at the expiration date of each lease agreement.


~~(d)~~	~~Pension deferral obligations includes principal and interest payments on the Second A&R CDA.~~


~~(e)~~	~~The workers’ compensation, property damage and liability claims obligations represent our estimate of future payments for these obligations, not all of which are contractually required.~~


~~(f)~~	Operating leases represent future payments, which include interest, under contractual lease arrangements primarily for revenue equipment and are not included on the Company’s consolidated balance sheets.


~~(g)~~	~~Other contractual obligations includes future service agreements and certain maintenance agreements and are not included on the Company’s consolidated balance sheets.~~


~~(h)~~	~~Capital expenditure obligations primarily includes noncancelable purchase and lease orders for revenue equipment not yet delivered and are not included in the Company’s consolidated balance sheets.~~

business.

Other Commercial Commitments

The ~~following table reflects~~Company has completed a review of our other commercial commitments ~~or potential cash outflows~~in order to analyze and disclose material changes, if any, in those commitments between those as of December 31, 2022, as detailed in the 2022 Form 10-K, and those as of June 30, 2023. As a result, the Company determined that ~~may result from a contingent event, such as a need~~there were no material changes to ~~borrow short-term funds due to insufficient free cash flow.~~

Amount of Commitment Expiration Per Period
(in millions) Total Less than 1 year 1-3 years 3-5 years More than 5 years
ABL Facility availability ^(a)
$ 94.0
$ —
$ —
$ 94.0
$ —
Letters of credit^(b)
356.0
—
—
356.0
—
Surety bonds^(c)
128.7
115.2
13.5
—
—
Total commercial commitments $ 578.7
$ 115.2
$ 13.5
$ 450.0
$ —


~~(a)~~	Availability under the ABL Facility is derived by reducing the amount that may be advanced against eligible receivables plus eligible borrowing base cash by certain reserves imposed by the ABL Agent and our outstanding letters of credit. Managed Accessibility was $49.0 million.


~~(b)~~	Letters of credit outstanding are generally required as collateral to support self-insurance programs and do not represent additional liabilities as the underlying self-insurance accruals are already included in our consolidated balance sheets.


~~(c)~~	Surety bonds are generally required for workers’ compensation to support self-insurance programs, which include certain bonds that do not have an expiration date but are redeemable on demand, and do not represent additional liabilities as the underlying self-insurance accruals are already included in our consolidated balance sheets.

~~Off-Balance Sheet Arrangements~~

disclose.

We have no off-balance sheet arrangements ~~other than operating leases,~~except for other contractual obligations for ~~service agreements and capital purchases,~~ letters of credit and surety bonds and normal course service agreements and capital purchases, which ~~are reflected~~were disclosed in the ~~above tables.~~

2022 Form 10-K. Additionally, there have been no material changes to these arrangements subsequent to December 31, 2022.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

We are primarily exposed to the market risk associated with unfavorable movements in interest rates, foreign currencies, and fuel price volatility. The risk inherent in our market risk-sensitive instruments and positions is the potential loss or increased expense arising from adverse changes in those factors. There have been no material changes to our market risk policies or our market risk-sensitive instruments and positions as described in ~~our annual report on~~the 2022 Form ~~10-K for the year ended December 31, 2016.~~

10-K.

Item 4.Controls and Procedures

As required by the Exchange Act, we maintain disclosure controls and procedures designed to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our principal executive and financial officers, has evaluated our disclosure controls and procedures as of ~~September~~June 30, ~~2017~~2023 and ~~have~~has concluded that our disclosure controls and procedures were effective as of ~~September~~June 30, ~~2017~~.

We are in the process of implementing the human resources and payroll modules of a new comprehensive enterprise resource planning (ERP) system across most of our operating companies, with a phased-in implementation approach, in which the first phase goes live January 1, 2018. The system implementation was designed, in part, to enhance the overall system of internal control over financial reporting through enhanced automation and streamlining business processes across operating companies. Although the processes that constitute our internal control over financial reporting will be affected by the implementation, the Company is performing pre-implementation procedures as part of its assessment of the effectiveness of internal control over financial reporting. We do not believe that the implementation will have a material adverse effect on our internal controls over financial reporting.

~~Other than as described above, there~~2023.

There were no changes in our internal ~~controls~~control over financial reporting that occurred during the fiscal quarter ended ~~September~~June 30, ~~2017~~2023 that ~~have~~ materially affected, or are reasonably likely to materially affect, our internal ~~controls~~control over financial reporting.

PART II—OTHER INFORMATION

Item 1.Legal Proceedings

We discuss legal proceedings in the “Commitments, Contingencies and Uncertainties” note to our consolidated financial statements included with this quarterly report on Form 10-Q, and that discussion is incorporated by reference herein.

Item 1A.Risk Factors

~~There were no material changes during~~

You should carefully consider the ~~quarter to the Risk Factors disclosed~~factors discussed in Part I, Item ~~1A -~~IA. “Risk Factors” in our ~~annual report~~Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

2022, which could materially affect our business, financial condition or future results. The risks in our Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may eventually prove to materially adversely affect our business, financial condition and/or operating results.

If our relationship with our employees and unions were to deteriorate, we may be faced with increased labor costs, labor disruptions or stoppages or general uncertainty by our customers, which could have a material adverse effect on our business, financial condition, results of operations and cash flows, result in a loss of customers, and place us at a disadvantage relative to competitors.

Each of our operating subsidiaries has employees who are represented by the IBT. These employees represented approximately 82% of our workforce on December 31, 2022. Salaries, wages, and employee benefits for both union and non-union employees compose over half of our operating costs, which for union employees include multi-employer pension and health and welfare plans. The labor and benefit expenses associated with the union employees are subject to regular negotiation with the IBT, primarily upon the expiration of union labor agreements. Each of our YRC Freight, New Penn, Holland and Reddaway subsidiaries employ most of their unionized employees under the terms of a common master collective bargaining agreement and related supplemental agreements that remain in effect through March 31, 2024. The IBT also represents a number of employees at YRC Freight in Canada under more localized agreements, which have wages, benefit contributions and other terms and conditions that we believe better fit the cost structure and operating models of this entity.

The collective bargaining agreements also include work rules that govern certain aspects of our operations, including limiting the scope of changes we can make to our operations. The changes necessary to execute our One Yellow Super-Regional strategy are limited, in part, by the collective bargaining agreement. Lack of an agreement with the IBT on the changes needed to execute One Yellow would have a material adverse effective on our business, financial condition, liquidity and results of operations.

Our subsidiaries are regularly subject to grievances, arbitration proceedings and other claims concerning alleged past and current non-compliance with applicable labor laws and collective bargaining agreements. We cannot predict the outcome of any of these matters. These matters, if resolved in a manner unfavorable to us, could have a material adverse effect on our business, financial condition, liquidity and results of operations.

In certain instances, a Chapter 11 case may be converted to a case under chapter 7 of the Bankruptcy Code.

If the Bankruptcy Court finds that it would be in the best interest of creditors and/or the Company Parties, the Bankruptcy Court may convert our anticipated Chapter 11 bankruptcy case to a case under chapter 7 of the Bankruptcy Code. In such event, a chapter 7 trustee would be appointed or elected to liquidate the Company Parties’ assets for distribution in accordance with the priorities established by the Bankruptcy Code. The Company Parties believe that liquidation under chapter 7 would result in significantly smaller distributions being made to the Company Parties’ creditors than those provided for in a Chapter 11 plan because of (i) the likelihood that the assets would have to be sold or otherwise disposed of in a disorderly fashion over a short period of time rather than reorganizing or selling in a controlled manner the Company Parties’ businesses as a going concern, (ii) additional administrative expenses involved in the appointment of a chapter 7 trustee, and (iii) additional expenses and claims, some of which would be entitled to priority, that would be generated during the liquidation and from the rejection of leases and other executory contracts in connection with a cessation of operations.

Item 6.Exhibits



~~10.1~~ 31.1*	Amendment No. 4 and Refinancing Amendment to Credit Agreement by and among the Company, certain of its subsidiaries, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K, filed on July 26, 2017, File No. 000-12255).

31.1*	Certification of ~~James L. Welch~~Darren D. Hawkins filed pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



31.2*		Certification of ~~Stephanie D. Fisher~~Daniel L. Olivier filed pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of ~~James L. Welch~~Darren D. Hawkins furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of ~~Stephanie D. Fisher~~Daniel L. Olivier furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Interline XBRL document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

~~__________________________~~

__________________________

* Indicates documents filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, ~~as amended,~~ the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		~~YRC WORLDWIDE INC.~~ YELLOW CORPORATION


Date: ~~November 2, 2017~~August 14, 2023		/s/ ~~James L. Welch~~Darren D. Hawkins
		~~James L. Welch~~ Darren D. Hawkins
		Chief Executive Officer

Date: ~~November 2, 2017~~August 14, 2023		/s/ ~~Stephanie D. Fisher~~Daniel L. Olivier
		~~Stephanie D. Fisher~~ Daniel L. Olivier
		Chief Financial Officer



Delaware		48-0948788
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~10990 Roe Avenue, Overland Park, Kansas~~ 501 Commerce Street, Suite 1120, Nashville, Tennessee		~~66211~~ 37203
(Address of principal executive offices)		(Zip Code)



Large accelerated filer	☐	o			Accelerated filer	ý ☒

Non-accelerated filer	☐	o ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐	o

			Emerging growth company		o ☐



Preferred Stock:
Beginning and ending balance	$	—
Common Stock:
Beginning and ending balance	$	0.3
Capital Surplus:
Beginning balance	$	2,319.2
Equity-based compensation	2.9
Ending balance	$	2,322.1
Accumulated Deficit:
Beginning balance	$	(2,217.8	)
Net loss	(3.3		)
Ending balance	$	(2,221.1	)
Accumulated Other Comprehensive Loss:
Beginning balance	$	(425.2	)
Reclassification of prior net pension actuarial losses, net of tax	6.9
Foreign currency translation adjustments	6.0
Ending balance	$	(412.3	)
Treasury Stock, At Cost:
Beginning and ending balance	$	(92.7	)
Total Shareholders’ Deficit	$	(403.7	)



~~(shares in thousands)~~	~~2017~~
~~Beginning balance~~	~~32,473~~
~~Issuance of equity awards~~	~~253~~
~~Ending balance~~	~~32,726~~



ý ☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o ☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Class		Outstanding at ~~October 27, 2017~~July 28, 2023
Common Stock, $0.01 par value per share		~~33,518,313~~ 52,128,887 shares



	September 30, 2017			December 31, 2016
	(Unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	160.8		$	136.7
Restricted amounts held in escrow	54.0			126.7
Accounts receivable, net	528.5			448.7
Prepaid expenses and other	66.6			68.7
Total current assets	809.9			780.8
Property and Equipment:
Cost	2,751.7			2,787.0
Less – accumulated depreciation	(1,932.6		)	(1,916.4		)
Net property and equipment	819.1			870.6
Intangibles, net	27.8			27.2
Restricted amounts held in escrow	—			12.3
Deferred income taxes, net	—			24.9
Other assets	44.8			54.2
Total Assets	$	1,701.6		$	1,770.0
Liabilities and Shareholders’ Deficit
Current Liabilities:
Accounts payable	$	175.0		$	160.6
Wages, vacations and employee benefits	212.1			191.0
Deferred income taxes, net	—			24.9
Claims and insurance accruals	116.0			114.9
Other accrued taxes	27.6			27.6
Other current and accrued liabilities	24.2			26.1
Current maturities of long-term debt	28.5			16.8
Total current liabilities	583.4			561.9
Other Liabilities:
Long-term debt, less current portion	913.0			980.3
Deferred income taxes, net	3.1			3.6
Pension and postretirement	316.3			358.2
Claims and other liabilities	289.5			282.2
Commitments and contingencies
Shareholders’ Deficit:
Preferred stock, $1 par value per share	—			—
Common stock, $0.01 par value per share	0.3			0.3
Capital surplus	2,322.1			2,319.2
Accumulated deficit	(2,221.1		)	(2,217.8		)
Accumulated other comprehensive loss	(412.3		)	(425.2		)
Treasury stock, at cost (410 shares)	(92.7		)	(92.7		)
Total shareholders’ deficit	(403.7		)	(416.2		)
Total Liabilities and Shareholders’ Deficit	$	1,701.6		$	1,770.0



	Three Months					Nine Months
	2017		2016			2017			2016
Operating Revenue	$	1,251.2	$	1,221.3		$	3,682.4		$	3,549.2
Operating Expenses:
Salaries, wages and employee benefits	726.8		715.8			2,188.1			2,132.6
Operating expenses and supplies	216.6		206.9			642.6			595.7
Purchased transportation	169.1		156.8			463.2			409.0
Depreciation and amortization	36.7		40.3			111.0			119.5
Other operating expenses	60.6		62.5			187.4			194.2
(Gains) losses on property disposals, net	1.3		0.2			3.0			(11.2		)
Total operating expenses	1,211.1		1,182.5			3,595.3			3,439.8
Operating Income	40.1		38.8			87.1			109.4
Nonoperating Expenses:
Interest expense	25.9		25.6			77.0			77.9
Other, net	10.3		(1.2		)	13.0			(0.9		)
Nonoperating expenses, net	36.2		24.4			90.0			77.0
Income (loss) before income taxes	3.9		14.4			(2.9		)	32.4
Income tax expense	0.9		0.5			0.4			3.4
Net income (loss)	3.0		13.9			(3.3		)	29.0
Other comprehensive income, net of tax	2.5		2.3			12.9			2.9
Comprehensive Income	$	5.5	$	16.2		$	9.6		$	31.9

Average Common Shares Outstanding – Basic	32,723		32,466			32,550			32,398
Average Common Shares Outstanding – Diluted	33,592		33,194			32,550			32,915

Income (loss) Per Share – Basic	$	0.09	$	0.43		$	(0.10	)	$	0.89
Income (loss) Per Share – Diluted	$	0.09	$	0.42		$	(0.10	)	$	0.88



			Fair Value Measurement Hierarchy
(in millions)	Total Carrying Value		Quoted prices in active market (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Restricted amounts held in escrow-current	$	54.0	$	54.0	$	—	$	—
Total assets at fair value	$	54.0	$	54.0	$	—	$	—



As of September 30, 2017 (in millions)	Par Value			Discount			Debt Issuance Costs			Book Value			Stated Interest Rate			Average Effective Interest Rate
Term Loan	$	599.1		$	(11.0	)	$	(8.5	)	$	579.6		9.7	%	^(a)	10.1	%
ABL Facility	—			—			—			—			N/A			N/A
Secured Second A&R CDA	26.9			—			(0.1		)	26.8			4.3-18.3%			7.5	%
Unsecured Second A&R CDA	73.2			—			(0.3		)	72.9			4.3-18.3%			7.5	%
Lease financing obligations	263.2			—			(1.0		)	262.2			9.0-18.2%			12.0	%
Total debt	$	962.4		$	(11.0	)	$	(9.9	)	$	941.5
Current maturities of Term Loan	(17.0		)	—			—			(17.0		)
Current maturities of lease financing obligations	(11.5		)	—			—			(11.5		)
Long-term debt	$	933.9		$	(11.0	)	$	(9.9	)	$	913.0


~~(a)~~	~~Variable interest rate of 1, 3 or 6-month LIBOR, with a floor of 1.0%, plus a fixed margin of 8.50%.~~


(in millions)	Principal Maturity Amount
2023 - remaining portion	$	3.9
2024(a)		1,311.2
2025		9.5
2026		10.2
2027		13.3
Thereafter		166.2
Total	$	1,514.3



	September 30, 2017				December 31, 2016
(in millions)	Book Value		Fair value		Book Value		Fair value
Term Loan	$	579.6	$	590.8	$	627.2	$	638.1
Lease financing obligations	262.2		212.3		268.6		259.1
Second A&R CDA	99.7		98.7		101.3		101.8
Total debt	$	941.5	$	901.8	$	997.1	$	999.0


~~(a)~~	~~Earnings (loss) per share is based on unrounded figures and not the rounded figures presented.~~



(in millions)	YRC Freight		Regional Transportation		Corporate/ Eliminations			Consolidated
As of September 30, 2017
Identifiable assets	$	1,075.3	$	711.6	$	(85.3	)	$	1,701.6
As of December 31, 2016
Identifiable assets	$	1,208.7	$	642.9	$	(81.6	)	$	1,770.0
Three Months Ended September 30, 2017
External revenue	$	787.8	$	463.5	$	(0.1	)	$	1,251.2
Operating income (loss)	$	20.3	$	21.5	$	(1.7	)	$	40.1
Nine Months Ended September 30, 2017
External revenue	$	2,306.2	$	1,376.5	$	(0.3	)	$	3,682.4
Operating income (loss)	$	37.8	$	59.0	$	(9.7	)	$	87.1
Three Months Ended September 30, 2016
External revenue	$	777.9	$	443.7	$	(0.3	)	$	1,221.3
Operating income (loss)	$	20.8	$	21.9	$	(3.9	)	$	38.8
Nine Months Ended September 30, 2016
External revenue	$	2,228.6	$	1,321.3	$	(0.7	)	$	3,549.2
Operating income (loss)	$	53.3	$	64.9	$	(8.8	)	$	109.4



	Third Quarter						First Three Quarters
(in millions)	2017		2016		Percent Change		2017			2016		Percent Change
Operating revenue	$	1,251.2	$	1,221.3	2.4	%	$	3,682.4		$	3,549.2	3.8	%
Operating income	$	40.1	$	38.8	3.4	%	$	87.1		$	109.4	(20.4	)%
Nonoperating expenses, net	$	36.2	$	24.4	48.4	%	$	90.0		$	77.0	16.9	%
Net income (loss)	$	3.0	$	13.9	(78.4	)%	$	(3.3	)	$	29.0	*NM



	Third Quarter					First Three Quarters						Trailing Twelve Months Ended
(in millions)	2017		2016			2017			2016			September 30, 2017			September 30, 2016
Reconciliation of net income (loss) to Adjusted EBITDA:
Net income (loss)	$	3.0	$	13.9		$	(3.3	)	$	29.0		$	(10.8	)	$	5.5
Interest expense, net	25.9		25.5			76.7			77.6			102.1			103.8
Income tax expense (benefit)	0.9		0.5			0.4			3.4			0.1			(12.1		)
Depreciation and amortization	36.7		40.3			111.0			119.5			151.3			159.6
EBITDA	66.5		80.2			184.8			229.5			242.7			256.8
Adjustments for Term Loan Agreement:
(Gains) losses on property disposals, net	1.3		0.2			3.0			(11.2		)	(0.4		)	(10.8		)
Letter of credit expense	1.7		1.7			5.1			6.0			6.8			8.2
Restructuring professional fees	—		—			2.2			—			2.2			—
Transaction costs related to issuances of debt	6.7		—			6.7			—			6.7			—
Permitted dispositions and other	0.3		2.2			1.1			1.8			2.3			1.9
Equity-based compensation expense	1.3		1.5			5.3			6.0			6.6			8.0
Amortization of ratification bonus	—		—			—			4.6			—			9.1
Non-union pension settlement charge	—		—			—			—			—			28.7
Other, net^(a)	3.6		(0.3		)	7.5			3.1			6.5			3.9
Adjusted EBITDA	$	81.4	$	85.5		$	215.7		$	239.8		$	273.4		$	305.8



	Third Quarter					First Three Quarters
YRC Freight segment (in millions)	2017			2016		2017			2016
Reconciliation of operating income to Adjusted EBITDA:
Operating income	$	20.3		$	20.8	$	37.8		$	53.3
Depreciation and amortization	21.1			22.9		63.6			67.9
(Gains) losses on property disposals, net	1.0			—		1.7			(12.0		)
Letter of credit expense	1.1			1.1		3.3			3.9
Amortization of ratification bonus	—			—		—			3.0
Other, net^(a)	(0.9		)	0.5		(0.6		)	3.2
Adjusted EBITDA	$	42.6		$	45.3	$	105.8		$	119.3



	Third Quarter				First Three Quarters
Regional Transportation segment (in millions)	2017		2016		2017		2016
Reconciliation of operating income to Adjusted EBITDA:
Operating income	$	21.5	$	21.9	$	59.0	$	64.9
Depreciation and amortization	15.6		17.4		47.4		51.6
Losses on property disposals, net	0.3		0.3		1.3		0.9
Letter of credit expense	0.5		0.6		1.6		2.0
Amortization of ratification bonus	—		—		—		1.6
Other, net^(a)	0.8		—		1.0		0.3
Adjusted EBITDA	$	38.7	$	40.2	$	110.3	$	121.3



	Third Quarter						First Three Quarters
Corporate and other (in millions)	2017			2016			2017			2016
Reconciliation of operating loss to Adjusted EBITDA:
Operating loss	$	(1.7	)	$	(3.9	)	$	(9.7	)	$	(8.8	)
Gains on property disposals, net	—			(0.1		)	—			(0.1		)
Letter of credit expense	0.1			—			0.2			0.1
Restructuring professional fees	—			—			2.2			—
Permitted dispositions and other	0.3			2.2			1.1			1.8
Equity-based compensation expense	1.3			1.5			5.3			6.0
Other, net^(a)	0.1			0.3			0.5			0.2
Adjusted EBITDA	$	0.1		$	—		$	(0.4	)	$	(0.8	)



			Payments Due by Period
(in millions)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
ABL Facility^(a)	$	28.4	$	7.1	$	14.3	$	7.0	$	—
Term Loan^(b)	865.8		75.6		148.5		641.7		—
Lease financing obligations^(c)	110.8		42.9		39.7		14.1		14.1
Pension deferral obligations^(d)	117.1		7.6		109.5		—		—
Workers’ compensation, property damage and liability claims obligations^(e)	365.8		99.0		117.1		52.0		97.7
Operating leases^(f)	282.5		99.7		127.2		41.7		13.9
Other contractual obligations^(g)	17.6		17.0		0.6		—		—
Capital expenditures and other ^(h)	101.2		101.2		—		—		—
Total contractual obligations	$	1,889.2	$	450.1	$	556.9	$	756.5	$	125.7