<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________________ to _______________________
Commission file number 0-12255
YELLOW CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 48-0948788
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10777 Barkley, P.O.Box 7563, Overland Park, Kansas 66207
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (913) 967-4300
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1 Par Value
Preferred Stock Purchase Rights
(Title of class)
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.
Yes X No
The aggregate market value of the voting stock held by nonaffiliates of the
registrant at February 28, 1994 was $815,098,592.
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
<S> <C>
Class Outstanding at February 28, 1994
Common Stock, $1 Par Value 28,106,848 shares
</TABLE>
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated by reference into the Form 10-K:
1) 1993 Annual Report to Shareholders - Parts II and IV
2) Proxy Statement dated March 10, 1994 - Part III
<PAGE> 2
Yellow Corporation
Form 10-K
Year Ended December 31, 1993
Index
<TABLE>
<CAPTION>
Item Page
PART I
<S> <C>
1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Executive Officers of the Registrant (Unnumbered Item) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
PART II
5. Market for the Registrant's Common Stock and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
9. Disagreements on Accounting and Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
PART III
10. Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
12. Security Ownership of Certain Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
13. Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
PART IV
14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Report of Independent Public Accountants on Financial
Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
1993 Annual Report to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit (13)
Consent of Independent Public Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit (24)
</TABLE>
2
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PART I
Item 1. Business.
(a) Yellow Corporation and its wholly-owned subsidiaries are collectively
referred to as "the company". The company changed its name in 1993
from Yellow Freight System, Inc. of Delaware to Yellow Corporation.
This was done to more clearly distinguish the company as a holding
company of transportation services and to eliminate confusion with the
name of the company's principal operating subsidiary (Yellow Freight
System, Inc.). In February 1993 the company completed its acquisition
of the stock of Preston Corporation (Preston). Preston is the holding
company for three regional less-than-truckload (LTL) carriers serving
the Northeast, Upper Midwest and Southeast United States. The 1993
financial statements include the results of Preston effective March 1,
1993. The acquisition provided $497 million of operating revenue for
the company in 1993. This accounted for 21.9% of the 26.2% increase
in operating revenue over 1992.
(b) The operation of the company is conducted through one predominant
industry segment, which is the interstate transportation of general
commodity freight by motor vehicle.
(c) Yellow Corporation is a holding company providing freight
transportation services through its subsidiaries, Yellow Freight
System, Inc. (Yellow Freight), Preston Trucking Company, Inc. (Preston
Trucking), Saia Motor Freight Line, Inc. (Saia), Smalley
Transportation Company (Smalley Transportation), CSI/Reeves, Inc.
(CSI/Reeves), Yellow Logistics Services, Inc. (Yellow Logistics) and
Yellow Technology Services, Inc. (Yellow Technology). The company
employed an average of 35,000 persons in 1993.
Yellow Freight is the company's principal subsidiary, and up until the
company's completion of the Preston Corporation acquisition in
February 1993 contributed substantially all of the company's
consolidated revenue. Yellow Freight had operating revenue of $2.358
billion in 1993 (83% of the company's total revenue) and is based in
Overland Park, Kansas. It is the nation's largest provider of LTL
transportation services with direct service to over 35,000 points in
all 50 states, Puerto Rico, Canada and Mexico. Yellow Freight
services Europe via an alliance with The Royal Frans Maas Group based
in the Netherlands.
Preston Trucking is primarily a regional LTL carrier serving the
Northeast and Upper Midwest markets of the United States. Preston
Trucking had operating revenue of $338 million for the ten months
ended December 31, 1993 (12% of the company's total revenue) and is
headquartered in Preston, Maryland.
Saia is a regional LTL carrier that provides overnight and second-day
service in nine southeastern states. It had operating revenue of $102
million for the ten months ended December 31, 1993 and is based in
Houma, Louisiana.
Smalley Transportation is a regional carrier providing service to
customers in Georgia and throughout Florida. It had operating revenue
of $32 million for the ten months ended December 31, 1993 and is based
in Tampa, Florida.
CSI/Reeves is in the business of transporting, warehousing and
distributing carpet and related products. It had operating revenue of
$25 million for the ten months ended December 31, 1993 and is based in
Calhoun, Georgia.
3
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Item 1. Business. (cont.)
Yellow Logistics offers a full range of integrated logistics management
services including transportation management, warehousing, information systems,
distribution, and package design and testing. Yellow Logistics specializes in
serving the chemical, retail, computer hardware, electronic and pharmaceutical
industries. Its headquarters are in Overland Park, Kansas.
Yellow Technology supports the company's subsidiaries - primarily Yellow
Freight - with information technology. It ensures that information systems
anticipate and meet customers' needs and that the systems are an integral part
of the transportation process. Its headquarters are in Overland Park, Kansas.
The operations of the freight transportation companies are regulated by the
Interstate Commerce Commission and state regulatory bodies. Competition
includes contract motor carriers, private fleets, railroads and other motor
carriers. No single carrier has a dominant share of the motor freight market.
The company operates in a highly price-sensitive and competitive industry,
making pricing and customer service major competitive factors. Pricing
discipline and cost control are critical to improving profit levels in 1994.
Traditionally, rate increases have been implemented to offset increases in
labor and other operating costs. These increases have been difficult to retain
because of the competitive pressures on pricing. The full impact of these
increases is not realized immediately as a result of pricing that is on a
contract basis and can only be increased when the contract is renewed or
renegotiated. Pricing pressures were extremely competitive in the first half
of 1993. They moderated in the second half of the year, aided by a two percent
discount rollback implemented in August 1993 at Yellow Freight. The company's
subsidiaries are continuing to work toward improved account profitability and
maintaining pricing stability. The Yellow operating companies have implemented
rate increases of between four and five percent during the first quarter of
1994 to cover increases in operating costs.
The company attempts to control operating costs by maintaining efficient
operations, optimum capacity utilization and strict budgetary controls. During
1993, Yellow Freight began an extensive multi-year network development process
by consolidating and realigning terminals to improve customer service and
reduce costs. A charge of $18.0 million before taxes was accrued for the costs
to close certain facilities and dispose of excess property. This network
development will result in better use of assets, reduced overhead, improved
transit times and lower freight handling costs without reducing customer
service.
Salaries, wages and employees' benefits decreased as a percent of revenue in
1993 despite wage and benefit increases of approximately 3% effective April 1
for employees who are members of the International Brotherhood of Teamsters
(Teamsters). This is due to a wage reduction of 9% effective April 1 for
employees of Preston Trucking, a small decrease in the total number of
employees and a reduction in workers' compensation expense. The current labor
agreement with the Teamsters expires March 31, 1994. In the second quarter of
1993, Yellow Freight reaffiliated with Trucking Management, Inc. (TMI), a
multi-employer bargaining group representing the trucking industry in labor
contract negotiations. Preston Trucking is also a member of TMI. TMI is
currently negotiating the renewal of this contract. An agreement that allows
greater operational flexibility and the opportunity to reduce costs is
necessary to allow Yellow Freight and Preston Trucking to better compete in the
marketplace.
4
<PAGE> 5
Item 1. Business. (cont.)
In addition, Preston Trucking's wage reduction expires March 31, 1994. Preston
Trucking feels it is essential to continue this wage reduction in the near
future to maintain its progress toward restoring profitability. Extension of
the wage reduction requires a contract provision allowing the reduction and
approval of Preston's Teamster employees.
The company's differentiation strategy focuses on introducing new customer
services, improving existing services and providing service to new markets.
Yellow Freight's revenue growth was moderate in 1993 as compared to 1992.
Growth was due to increased tonnage, which grew faster than the Industrial
Production Index, and contributions from new services started in 1992. Yellow
Freight expects moderate revenue growth in 1994. A service which reduces
transit times by a full day on traditional three, four and five-day lanes
experienced good revenue growth in 1993. A guaranteed expedited service that
provides shippers an economical alternative to air freight in selected markets
experienced a healthy revenue growth rate in 1993 and operated at a very high
on-time service ratio. The Canadian and Mexican markets continued to provide
good growth for Yellow Freight in 1993. This growth is expected to continue in
1994, partly as a result of NAFTA's simplified trade provisions between those
countries and the United States. Service to and from Western Europe, through
an alliance with The Royal Frans Maas Group of The Netherlands is expected to
grow in 1994 as a result of expanded consolidation and deconsolidation points
in North America and improvements in streamlining documentation processing.
Preston Trucking continued to experience declines in both revenue and tonnage
after the acquisition by the company, but benefited in June 1993 from the
bankruptcy of a major competitor in the Northeast. Preston Trucking opened
four new terminals and increased their revenue and tonnage during the last half
of the year. They expect continued revenue growth in 1994 and are planning to
broaden service with a new distribution center in Ohio.
The company expects to benefit from Saia's expansion into Texas and Tennessee
as well as their introduction of intrastate service in Texas. Combined with
Saia's strong market position and profitable operations, revenue growth in 1994
is expected to be much improved.
The operations of the company are generally funded by cash flows generated from
operating activities except in periods of accelerated capital spending. The
company requires working capital to fund capital expenditures and pay
shareholder dividends. The rapid turnover of accounts receivable, effective
cash management and ready access to credit provided by commercial paper,
medium-term notes and flexible banking agreements allows the company to
effectively manage its working capital. It is anticipated that 1994 capital
expenditures and shareholder dividends will be primarily financed through
internally-generated funds. The company made commercial paper borrowings in
early 1993 to fund a portion of the Preston stock acquisition ($8 million) and
to repay certain Preston indebtedness ($82 million). Revisions to the
medium-term note program in 1993 provided for increased amounts outstanding and
longer maturity periods. During the last six months of 1993, $37 million was
borrowed under the medium-term note program, primarily to replace commercial
paper borrowings. Modest capital expenditures and good cash flow from
operations in 1993 enabled the company to further reduce commercial paper
borrowings to $25 million at December 31, 1993.
5
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Item 2. Properties.
At December 31, 1993, the company operated 696 freight terminals located in 50
states, Puerto Rico, parts of Canada and Mexico. Of this total, 331 were owned
terminals and 365 were leased, generally for terms of three years or less. The
number of vehicle back-in doors totaled 19,243, of which 14,802 were at owned
terminals and 4,441 were at leased terminals. The freight terminals vary in
size ranging from one to three doors at small local terminals, up to 304 doors
at Yellow Freight's largest consolidation and distribution terminal.
Substantially all of the larger terminals, containing the greatest number of
doors, are owned. In addition, the company and most of its subsidiaries own
and occupy general office buildings in their headquarters city.
The company also maintains a significant investment in revenue equipment. At
December 31, 1993, the company's subsidiaries operated the following number of
linehaul units: tractors - 4,918, 45' and 48' trailers - 7,738, and 27' and
28' trailers - 31,698. The number of city units operated were: trucks and
tractors - 8,165 and trailers - 5,535.
The above facilities and equipment are used in the company's predominant
industry, the interstate transportation of general commodity freight. The
company expects moderate growth in 1994 and has projected no significant
changes to its operational capacity. A small number of facilities will be
closed at Yellow Freight as part of the network development process started in
1993. Projected facility expenditures of $30 million will target expansion of
existing locations and the construction or purchase of new locations to improve
efficiency and enter new markets in selected areas. Equipment expenditures of
$90 million are expected to consist primarily of replacement units with some
expansion units at certain of the subsidiaries. Revenue equipment replacement
units are expected to be approximately 70% higher than in the last three years.
Other operating property expenditures of $55 million are primarily for
improving efficiency through technological enhancements and advanced
information systems.
Item 3. Legal Proceedings.
The information set forth under the caption "Commitments and Contingencies" in
the Notes to Consolidated Financial Statements on page 32 of the registrant's
Annual Report to Shareholders for the year ended December 31, 1993, is
incorporated by reference under Item 14 herein.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
6
<PAGE> 7
Executive Officers of the Registrant
The names, ages and positions of the executive officers of the company as of
March 18, 1994 are listed below. Officers are appointed annually by the Board
of Directors at their meeting which immediately follows the annual meeting of
shareholders.
<TABLE>
<CAPTION>
Name Age Position(s) Held
<S> <C> <C>
George E. Powell III 45 Chief Executive Officer of the company (since July 1990); President of the company
(since October 1987); President of Yellow Freight System, Inc. (Yellow Freight), a
subsidiary of the company (prior to May 1992)
M. Reid Armstrong 56 President of Yellow Freight (since May 1992); Executive Vice President of the company and
of Yellow Freight (December 1991 - May 1992); Senior Vice President (prior to December
1991)
Robert L. Bostick 53 Senior Vice President - Operations for Yellow Freight (since October 1992); Vice
President - Operations (May 1992 - October 1992); Vice President - Transportation and
Safety (April 1991 - May 1992); Vice President - Linehaul Operations (prior to April
1992)
Robert W. Burdick 51 Senior Vice President - Corporate Development/ Public Affairs of the company (since April
1993); Senior Vice President - Marketing of Yellow Freight (May 1984 - April 1993)
J. Michael Golden 46 Vice President - Taxation of the company (since January 1986); Vice President - Taxation
of Yellow Freight (prior to May 1992); Vice President of Overland Energy, Inc., a
subsidiary of the company (since 1986)
J. Kevin Grimsley 46 Senior Vice President - Marketing/Sales of Yellow Freight (since January 1994); Vice
President - Marketing of Yellow Freight (April 1993 - January 1994); Division Vice
President of Yellow Freight (October 1987 - April 1993)
William F. Martin, Jr. 46 Senior Vice President - Legal/Corporate Secretary of the company (since December 1993);
Vice President and Secretary of the company (October 1991 - December 1993); Vice
President and Secretary of Yellow Freight (October 1991 - May 1992); Vice President and
Assistant Secretary of the company and Yellow Freight (prior to October 1991)
</TABLE>
7
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Executive Officers of the Registrant (cont.)
<TABLE>
<CAPTION>
Name Age Position(s) Held
<S> <C> <C>
Gail A. Parris 42 Senior Vice President - Administration of Yellow Freight (since April 1993); Vice President -
Controller of Yellow Freight (January 1986 - April 1993)
Phillip A. Spangler 53 Vice President and Treasurer of the company (since 1984); Vice President and Treasurer of Yellow
Freight (1984 - May 1992)
Leo H. Suggs 54 President of Preston Corporation, a subsidiary of the company (since February 1993); Senior Vice
President - Corporate Development of the company (November 1992 - February 1993); Senior Vice
President - Operations Administration of Yellow Freight (December 1991 - November 1992); Vice
President - Operations Administration (June 1991 - December 1991); Vice President - Quality and
Labor Relations (December 1989 - June 1991); Director - Labor Relations (August 1988 - December
1989); Director of Special Projects (January 1988 - August 1988)
</TABLE>
The terms of each officer of the company designated above are scheduled to
expire April 21, 1994. The terms of each officer of the subsidiary companies
are scheduled to expire on the date of the next annual meeting of shareholders
of that company. No family relationships exist between any of the executive
officers named above.
8
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PART II
Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters.
The information set forth under the caption "Common Stock" on page 34 of the
registrant's Annual Report to Shareholders for the year ended December 31,
1993, is incorporated by reference under Item 14 herein.
Item 6. Selected Financial Data.
The information set forth under the caption "Financial Summary" on pages 18 and
19 of the registrant's Annual Report to Shareholders for the year ended
December 31, 1993, is incorporated by reference under Item 14 herein.
Additionally, long-term debt at December 31 for each of the last five years was
as follows (in thousands): 1993 - $214,176, 1992 - $123,027, 1991 - $145,584,
1990 - $163,703, 1989 - $186,680.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," appearing on pages 14 through 17 of the registrant's Annual Report
to Shareholders for the year ended December 31, 1993, is incorporated by
reference under Item 14 herein.
Item 8. Financial Statements and Supplementary Data.
The financial statements and supplementary information, appearing on pages 20
through 34 of the registrant's Annual Report to Shareholders for the year ended
December 31, 1993, are incorporated by reference under Item 14 herein.
Item 9. Disagreements on Accounting and Financial Disclosure.
None.
9
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PART III
Item 10. Directors and Executive Officers of the Registrant.
The information regarding Directors of the registrant has previously been
reported in the registrant's definitive proxy statement, filed pursuant to
Regulation 14A, and is incorporated by reference. For information with respect
to the executive officers of the registrant, see "Executive Officers of the
Registrant" at the end of Part I of this report.
Item 11. Executive Compensation.
This information has previously been reported in the registrant's definitive
proxy statement, filed pursuant to Regulation 14A, and is incorporated by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
This information has previously been reported in the registrant's definitive
proxy statement, filed pursuant to Regulation 14A, and is incorporated by
reference.
Item 13. Certain Relationships and Related Transactions.
This information has previously been reported in the registrant's definitive
proxy statement, filed pursuant to Regulation 14A, and is incorporated by
reference.
10
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PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K.
(a) (1) Financial Statements
The following information appearing in the 1993 Annual Report to
Shareholders is incorporated by reference in this Form 10-K Annual
Report as Exhibit (13):
<TABLE>
<CAPTION>
Page
<S> <C>
Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-17
Financial Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18-19
Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20-32
Report of Independent Public Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Supplementary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
With the exception of the aforementioned information, the 1993 Annual
Report to Shareholders is not deemed filed as part of this report.
Financial statements other than those listed are omitted for the
reason that they are not required or are not applicable. The
following additional financial data should be read in conjunction with
the consolidated financial statements in such 1993 Annual Report to
Shareholders.
(a) (2) Financial Statement Schedules
<TABLE>
<CAPTION>
Page
<S> <C>
Report of Independent Public Accountants on
Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
For the years ended December 31, 1993, 1992 and 1991:
Schedule II Amounts Receivable From Related Parties and Underwriters, Promoters and Employees Other Than
Related Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Schedule V Property, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Schedule VI Accumulated Depreciation, Depletion and Amortization of Property, Plant and Equipment . . . 16
Schedule VIII Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Schedule X Supplementary Income Statement Information . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
Schedules other than those listed are omitted for the reason that they
are not required or are not applicable, or the required information is
shown in the financial statements or notes thereto.
Columns omitted from schedules filed have been omitted because the
information is not applicable.
11
<PAGE> 12
(a) (3) Exhibits
(13) - 1993 Annual Report to Shareholders.
(24) - Consent of Independent Public Accountants.
The remaining exhibits required by Item 7 of Regulation S-K are
omitted for the reason that they are not applicable or have previously
been filed.
(b) Reports on Form 8-K
No reports on Form 8-K were filed for the three months ended December
31, 1993. However, on March 21, 1994, a Form 8-K was filed under Item
5, Other Events, which reported that due primarily to the impact of
severe winter weather in January and February, the company expects to
report a net loss in the first quarter of 1994 greater than the net
loss of $.06 per share recorded in the first quarter of 1993. Severe
winter weather caused significant business disruptions and higher
operating expenses for both the company's largest motor carrier
subsidiary, Yellow Freight System, Inc. and for Preston Trucking
Company, Inc. Preston Trucking, whose operations are concentrated in
the Northeast and Upper Midwest, was especially hard hit by the
weather.
12
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Report of Independent Public
Accountants on Financial Statement Schedules
To Yellow Corporation:
We have audited in accordance with generally accepted auditing
standards, the consolidated financial statements included in Yellow Corporation
and Subsidiaries' annual report to shareholders incorporated by reference in
this Form 10-K, and have issued our report thereon dated January 31, 1994. Our
report on the consolidated financial statements includes an explanatory
paragraph with respect to the change in the method of revenue recognition in
1992, as discussed in the notes to the consolidated financial statements. Our
audit was made for the purpose of forming an opinion on those statements taken
as a whole. The schedules listed in Item 14(a)(2) are the responsibility of
the company's management and are presented for purposes of complying with the
Securities and Exchange Commissions rules and are not part of the basic
consolidated financial statements. These schedules have been subjected to the
auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly state in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
ARTHUR ANDERSEN & CO.
Kansas City, Missouri,
January 31, 1994
13
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Schedule II
Yellow Corporation and Subsidiaries
Amounts Receivable From Related Parties
and Underwriters, Promoters and
Employees Other Than Related Parties
For the Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
Balance, Deductions Balance, End
Name of Debtor Beginning Additions Amounts Amounts Of Period
Of Period Collected Written Not
Off Current Current
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Year ended December 31, 1993:
- -----------------------------
Stephen P. Murphy (1) $ 463 $ - $ 18 $ - $ 18 $427
---------- -------- --------- ----- ----- -----
---------- -------- --------- ----- ----- -----
Leo H. Suggs (2) $ - $ 480 $ - $ - $ - $480
---------- -------- --------- ----- ----- -----
---------- -------- --------- ----- ----- -----
Year ended December 31, 1992:
- -----------------------------
Stephen P. Murphy (1) $ 481 $ - $ 18 $ - $ 18 $445
---------- -------- --------- ----- ----- -----
---------- -------- --------- ----- ----- -----
Year ended December 31, 1991:
- -----------------------------
Stephen P. Murphy (1) $ 499 $ - $ 18 $ - $ 18 $463
---------- -------- --------- ----- ----- -----
---------- -------- --------- ----- ----- -----
</TABLE>
(1) Represent an interest-free loan secured by real property, payable in
annual installments from January 15, 1990 to January 15, 1996 at which
time the remaining balance is due. As of December 31, 1993, Stephen
P. Murphy is no longer an employee of the company. This does not
affect the repayment terms of the loan.
(2) Represents an interest-free loan secured by real property, payable on
May 1, 2006.
14
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Schedule V
Yellow Corporation and Subsidiaries
Property, Plant and Equipment
For the Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E COL. F
Balance, Additions Other Changes- Balance,
Beginning At Retirements Add (Deduct)- End Of
Description Of Period Cost Describe (1) Period
(In Thousands)
<S> <C> <C> <C> <C> <C>
1993
- ----
Land $ 133,691 $ 2,528 $ 2,720 $ 20,765 $ 154,264
Structures 542,042 16,293 7,605 54,029 604,759
Revenue equipment 756,227 36,318 14,835 60,461 838,171
Other operating
property 142,210 21,747 6,367 11,208 168,798
----------- --------- -------- --------- -----------
$1,574,170 $ 76,886 $31,527 $146,463 $1,765,992
----------- --------- -------- --------- -----------
----------- --------- -------- --------- -----------
1992
- ----
Land $ 133,467 $ 567 $ 161 $ (182) $ 133,691
Structures 529,076 16,290 2,628 (696) 542,042
Revenue equipment 752,792 54,280 50,401 (444) 756,227
Other operating
property 135,371 15,111 8,192 (80) 142,210
----------- --------- -------- --------- -----------
$1,550,706 $ 86,248 $61,382 $ (1,402) $1,574,170
----------- --------- -------- --------- -----------
----------- --------- -------- --------- -----------
1991
- ----
Land $ 130,552 $ 4,593 $ 1,686 $ 8 $ 133,467
Structures 493,726 40,690 5,372 32 529,076
Revenue equipment 752,231 37,582 37,060 39 752,792
Other operating
property 107,912 27,632 174 1 135,371
----------- --------- -------- --------- -----------
$1,484,421 $110,497 $44,292 $ 80 $1,550,706
----------- --------- -------- --------- -----------
----------- --------- -------- --------- -----------
</TABLE>
(1) In 1993, primarily property, plant and equipment of Preston
Corporation and subsidiaries acquired in February 1993. In 1992 and
1991, foreign equity translation adjustments.
15
<PAGE> 16
Schedule VI
Yellow Corporation and Subsidiaries
Accumulated Depreciation, Depletion and Amortization of Property, Plant and
Equipment
For the Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E COL. F
Balance, Additions Other Changes- Balance,
Beginning Charged to Retirements Add (Deduct)- End Of
Description Of Period Costs and Describe (1) Period
Expenses
(In Thousands)
<S> <C> <C> <C> <C> <C>
1993
- ----
Structures $ 242,523 $ 31,132 $ 3,031 $ (395) $ 270,229
Revenue equipment 481,378 79,570 12,523 (229) 548,196
Other operating
property 75,189 22,268 5,873 113 91,697
----------- -------- -------- -------- -----------
$ 799,090 132,970 $21,427 $ (511) $ 910,122
----------- -------- -------- -----------
----------- -------- -------- -----------
<CAPTION>
Reconciliation to income statement:
Amortization and nonoperating depreciation (599)
---------
Depreciation charged to operating expense $132,371
---------
---------
<S> <C> <C> <C> <C> <C>
1992
- ----
Structures $ 216,435 $ 27,999 $ 1,597 $ (314) $ 242,523
Revenue equipment 453,944 72,605 44,869 (302) 481,378
Other operating
property 64,153 18,398 7,319 (43) 75,189
----------- -------- -------- -------- -----------
$ 734,532 119,002 $53,785 $ (659) $ 799,090
----------- -------- -------- -----------
----------- -------- -------- -----------
<CAPTION>
Reconciliation to income statement:
Amortization and nonoperating depreciation (583)
---------
Depreciation charged to operating expense $118,419
---------
---------
<S> <C> <C> <C> <C> <C>
1991
- ----
Structures $ 189,290 $ 30,042 $ 2,907 $ 10 $ 216,435
Revenue equipment 407,683 79,264 33,023 20 453,944
Other operating
property 50,849 15,837 2,533 - 64,153
----------- -------- -------- -------- -----------
$ 647,822 125,143 $38,463 $ 30 $ 734,532
----------- -------- -------- -----------
----------- -------- -------- -----------
<CAPTION>
Reconciliation to income statement:
Amortization and nonoperating depreciation (456)
---------
Depreciation charged to operating expense $124,687
---------
---------
</TABLE>
(1) Foreign equity translation adjustments.
16
<PAGE> 17
Schedule VIII
Yellow Corporation and Subsidiaries
Valuation and Qualifying Accounts
For the Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
Balance, Additions Balance,
Beginning -1- -2- Deductions- End Of
Description Of Period Charged To Charged To Describe Period
Costs And Other Accounts- (2)
Expenses Describe
(In Thousands)
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993:
- ------------------------------
Deducted from asset account -
Allowance for uncollectible
accounts $8,558 $8,521 $2,504 (1) $8,909 $10,674
------- ------- ------ ------ --------
------- ------- ------ ------ --------
Year ended December 31, 1992:
- ------------------------------
Deducted from asset account-
Allowance for uncollectible
accounts $8,299 $6,149 $ - $5,890 $ 8,558
------- ------- ------ ------ --------
------- ------- ------ ------ --------
Year ended December 31, 1991:
- ------------------------------
Deducted from asset account-
Allowance for uncollectible
accounts $7,304 $7,914 $ - $6,919 $ 8,299
------- ------- ------ ------ --------
------- ------- ------ ------ --------
</TABLE>
(1) Addition from Preston Corporation and subsidiaries acquired in
February 1993.
(2) Primarily uncollectible accounts written off - net of recoveries.
17
<PAGE> 18
Schedule X
Yellow Corporation and Subsidiaries
Supplementary Income Statement Information
For the Years Ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
COL. A COL. B
Charged to costs and expenses
Item
1993 1992 1991
(In Thousands)
<S> <C> <C> <C>
Maintenance and repairs $68,513 $45,704 $48,443
-------- ------- -------
-------- ------- -------
Depreciation and
amortization of intangible
assets, preoperating costs
and similar deferrals * * *
Taxes, other than payroll and income taxes:
Fuel taxes $64,275 $47,716 $49,729
Property and general 19,546 14,763 13,308
-------- ------- -------
$83,821 $62,479 $63,037
-------- ------- -------
-------- ------- -------
Royalties None None None
Advertising costs * * *
</TABLE>
* Less than 1% of total sales
18
<PAGE> 19
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Yellow Corporation
BY: /s/ George E. Powell III
-----------------------------------
George E. Powell III
March 21, 1994 President, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Phillip A. Spangler Vice President and Treasurer March 22, 1994
--------------------------
Phillip A. Spangler
/s/ George E. Powell, Jr. Chairman of the Board March 22, 1994
-------------------------- of Directors
George E. Powell, Jr.
/s/ M. Reid Armstrong Director March 22, 1994
-------------------------
M. Reid Armstrong
/s/ Charles A. Duboc Director March 22, 1994
- ---------------------------
Charles A. Duboc
/s/ John C. McKelvey Director March 22, 1994
- ---------------------------
John C. McKelvey
</TABLE>
19
<PAGE> 1
Exhibit (13)
Yellow Corporation
------------------
1993 Annual Report
------------------
to Shareholders
------------------
<PAGE> 1
Exhibit (24)
Consent of Independent Public Accountants
-----------------------------------------
As independent public accountants, we hereby consent to the
incorporation of our reports included and incorporated by reference in this
Form 10-K, into the company's previously filed Form S-8 Registration Statement
File No. 33-47946.
ARTHUR ANDERSEN & CO.
Kansas City, Missouri,
March 21, 1994
