Outcome-blind decision packet. Evidence closes at
2010-03-16T23:59:59Z; the simulated long-only committee decision occurs one second later. No filing, amendment, or other evidence first public after the cutoff is used, and this is not represented as an actual YRC or investment-committee decision.
Executive Summary
- Do not initiate or add exposure. Escalate any existing exposure for human
re-underwriting under the approved mandate. The packet prescribes neither an
allocation nor a trade; every external action requires human approval
(
judgment.yrc.cutoff.exposure-escalation). - Network density is a mechanism, not a demonstrated advantage. YRC combined
the former Yellow Transportation and Roadway networks, but FY2009 National and
Regional volume, pricing, revenue, and operating ratios do not establish
service-preserving density economics (
claim.yrc.cutoff.network-economics;conflict.yrc.cutoff.integration-benefit-versus-service). - Liquidity must fail closed. Negative operating cash flow, a disclosed
unrestricted unused facility-capacity deficit, future covenants, fixed
obligations, and the auditor's going-concern paragraph outweigh unverified
exchange and asset-transaction offsets (
claim.yrc.cutoff.cash-and-liquidity;claim.yrc.cutoff.going-concern). - Valuation and sizing abstain. The cutoff record lacks a verified price,
complete diluted capitalization, approved forecast, maintenance-capex policy,
mandate, current exposure, and risk budget. It cannot support a target price,
price-attractiveness conclusion, position size, or trade instruction
(
judgment.yrc.cutoff.valuation-abstention).
Knowledge boundary and reference class
The FY2009 Form 10-K is the latest issuer filing in the packet. EDGAR reports it
accepted on March 16, 2010 at 17:02:54 EDT, normalized once to
2010-03-16T21:02:54Z, inside the cutoff. The completed-exchange Form 8-K was
accepted January 7 at 16:42:33 EST, normalized to 2010-01-07T21:42:33Z. No
filing or amendment first public after the cutoff is included.
source · sec.yrc.cutoff.fy2009-10k-index source · sec.yrc.cutoff.exchange-8k-index
A Transport Topics article dated August 24, 2009 reported simultaneous tonnage
and pricing declines across nine public LTL carriers, but also wide operating-
ratio dispersion. This bounds a common industry shock without assigning YRC's
results to one cause. The acquired live page carries a later modification date
and no pre-cutoff snapshot was located, so it is non-decision-critical context
subject to CMS-revision risk, never sole lineage for a material point-in-time
fact (claim.yrc.cutoff.industry-common-shock).
source · tt.yrc.cutoff.ltl-pricing
No matched cutoff-valid carrier sample provides a calibrated base rate. The 20%
service-density-recovery, 45% partial-stabilization, and 35% service-liquidity-
strain weights are explicit uncalibrated assumptions
(assumption.yrc.cutoff.scenario-weights), not empirical frequencies and not a
valuation model.
Density creates value only when service and handling economics hold
The filing described LTL carriers consolidating many small shipments at local
service centers and moving them through distribution centers and relay networks.
Direct moves between service centers can reduce handling; national coverage also
requires equipment, facilities, technology, and enough shipment density to
absorb that network. This is the relevant economic mechanism, not proof that the
issuer captured it (claim.yrc.cutoff.network-economics).
source · yrc.cutoff.fy2009-10k
YRC began common local management and pickup-and-delivery functions in October 2008 and fully combined the former networks on March 1, 2009 into one management structure, route set, and technology platform. At year end National Transportation reported 22,000 employees, more than 225,000 shipments in transit, an approximate 1,200-pound shipment traveling roughly 1,200 miles, 339 facilities, and 18,470 doors. The scale is economically relevant, but none of those gross measures establish contribution, service quality, or route profitability. source · yrc.cutoff.fy2009-10k
The recovery plan reduced operated terminals from 711 to 511, approximately
28.1%, and approximate workforce from 55,000 to 36,000, approximately 34.5%.
Those percentages are calculations from reported counts, with the workforce
inputs expressly approximate. A smaller footprint can improve density or damage
coverage and service; the public packet cannot adjudicate that tension without
lane, terminal, handling, claims, and customer-cohort records
(claim.yrc.cutoff.integration-and-footprint).
source · yrc.cutoff.fy2009-10k
FY2009 operating evidence does not clear the service-density gate
The reported segment evidence is adverse on both volume and price:
- National revenue was USD 3,489.3 million versus USD 6,304.9 million, a decline of about 44.7% calculated from issuer-rounded inputs. Its operating ratio worsened from 111.9% to 121.3%; picked-up tonnage per day declined 38.7%, shipments per day 36.0%, weight per shipment 4.3%, and revenue per hundredweight 9.3%.
- Regional revenue was USD 1,322.6 million versus USD 1,974.1 million, a decline of about 33.0% calculated from issuer-rounded inputs. Its operating ratio worsened from 107.5% to 109.6%; weight per day declined 24.9%, shipments per day 22.1%, weight per shipment 3.7%, and revenue per hundredweight 10.2%.
These are within-segment annual revenue and picked-up-per-day operating measures;
they are not converted into consolidated shipment totals or cross-company volume
equivalents. The filing attributes the pattern to several factors, including the
economy, competition, customer diversion, integration uncertainty, financial-
stability concerns, service-center closures, fuel surcharge, pricing, and rerates.
Those are issuer explanations, not causal shares. Neither union arrangements nor
acquisitions are treated as a sole cause (claim.yrc.cutoff.segment-deterioration;
conflict.yrc.cutoff.common-shock-versus-execution).
source · yrc.cutoff.fy2009-10k
The segment operating ratios above are issuer-reported for National and Regional
Transportation. The model's approximately 116.7% result is instead a statement-derived
consolidated operating-expense ratio using total operating expenses and revenue.
It spans Logistics, Truckload, and corporate items and must not be compared with
a pure-play LTL operating ratio (table.yrc.cutoff.segment-comparison;
table.yrc.cutoff.deterministic-checks).
Cash and availability require a fail-closed gate
At the cutoff filing perimeter, FY2009 revenue was USD 5,282.778 million versus
USD 8,940.401 million, an approximately 40.9% deterministic decline from exact statement
inputs. Operating loss was USD 883.951 million and net loss USD 622.019 million.
Operating cash flow was negative USD 378.297 million versus positive USD 219.820
million, a USD 598.117 million deterioration
(table.yrc.cutoff.consolidated-financials).
source · yrc.cutoff.fy2009-10k
Gross cash property-and-equipment additions were USD 37.292 million, while
property-and-equipment disposal proceeds were USD 133.061 million. They remain
separate. Operating cash flow less gross cash additions was negative USD 415.589
million, but that narrow perimeter excludes disposal proceeds, acquisitions,
leased equipment, and other asset transactions and does not identify maintenance
capex. It is not free cash flow and is not a matched-company cash residual
(claim.yrc.cutoff.cash-and-liquidity).
source · yrc.cutoff.fy2009-10k
Year-end cash was USD 97.788 million, current assets USD 858.820 million, and
current liabilities USD 1,009.828 million, producing an approximately 0.85 current ratio.
The facility table showed a USD 1.7 million unrestricted unused capacity deficit
after ABS limitations and a revolver reserve. Gross commitment amounts are not
available liquidity. The credit agreement also imposed forward minimum EBITDA,
capital-expenditure, and available-cash requirements, including at least USD 25
million available cash beginning April 1, 2010 and USD 50 million beginning
October 1 (conflict.yrc.cutoff.cash-versus-availability).
source · yrc.cutoff.fy2009-10k
Lease-financing transactions generated USD 331.5 million of rounded proceeds,
but USD 11.5 million was escrowed, USD 4.5 million paid as transaction costs, and
USD 93.1 million remitted to the revolver reserve, leaving USD 222.4 million
reported available for working-capital purposes. The deterministic reconciliation
matches that rounded disclosure; it does not convert transaction financing into
recurring operating cash (table.yrc.cutoff.deterministic-checks).
source · yrc.cutoff.fy2009-10k
KPMG's audit report contained an explanatory paragraph stating that significant
declines in operations, cash flows, and liquidity raised substantial doubt about
YRC's ability to continue as a going concern. This is decision-critical cutoff
evidence, not a prediction of one inevitable outcome
(claim.yrc.cutoff.going-concern).
source · yrc.cutoff.fy2009-10k
Exchange relief, dilution, and remaining obligations are separate
The December exchange solicited approximately USD 536.8 million eligible face value and received USD 470.209 million tendered par. Calculations from those rounded disclosed inputs produce about 87.6% tendered and about USD 66.6 million eligible face untendered; neither is stated to more precision in the decision narrative, and the remainder is not total post-exchange debt. source · yrc.cutoff.exchange-8k
Consideration comprised 36,504,043 common shares and 4,345,514 preferred shares,
with the preferred equal to 957,229,823.92 common shares on the disclosed as-if-
converted basis. Together, exchange securities represented approximately 94% of
total common ownership on that basis. Common, preferred, as-if-converted
equivalents, and approximate pro-forma ownership remain separate. The transaction
was debt for equity—not cash proceeds or forgiveness—and does not provide a
cutoff market capitalization (claim.yrc.cutoff.exchange-and-dilution;
conflict.yrc.cutoff.exchange-relief-versus-dilution).
source · yrc.cutoff.exchange-8k
The remaining obligation perimeters must not be interchanged:
- USD 1,132.909 million is a deterministic carrying-debt total from current maturities, long-term debt, and ABS borrowing balance-sheet lines.
- USD 1,131.5 million is the filing's principal-table total.
- USD 2,170.4 million is the contractual-obligation schedule, which includes interest and other obligations and is not balance-sheet debt.
- Lease-financing debt was USD 318.9 million, while related contractual payments including interest were USD 413.2 million. Operating-lease contractual payments were USD 234.1 million off balance sheet.
- Pension-contribution deferral debt was USD 153.0 million. Another USD 10.7 million was accrued outside the agreement, while contractual pension-deferral payments including interest were USD 169.8 million.
The packet does not add those overlapping figures or infer an unreported
liability (claim.yrc.cutoff.fixed-obligation-perimeters;
table.yrc.cutoff.liquidity-obligations).
source · yrc.cutoff.fy2009-10k
Recommendation and gates
Select alternative.yrc.no-add-escalate at moderate confidence. Do not initiate
or add. Escalate any existing exposure for human re-underwriting under the
approved mandate, without prescribing an allocation or trade. The human reviewer
must apply these gates:
- Service: require sustained on-time pickup, transit, and delivery improvement without damage, claims, rehandling, or customer-concentration masking.
- Density: require lane and terminal shipment density, direct moves, loaded miles, handling count, and cash contribution to improve together.
- Segment economics: require volume and revenue per hundredweight to stabilize and operating ratio to improve for two matched quarters on stable definitions.
- Cash and reinvestment: keep GAAP operating cash flow, gross cash additions, disposal proceeds, leases, and asset transactions separate; escalate if required reinvestment cannot be funded from approved unrestricted liquidity.
- Liquidity and covenants: count only verified unrestricted cash and executed facility availability after reserves, borrowing limits, draw conditions, maturities, payroll, working capital, required payments, and covenant tests.
- Fixed obligations: reconcile carrying debt, principal, interest, leases, pension deferrals, and other contractual payments without double counting.
- Valuation readiness: permit no initiate, add, sizing, target price, or trade
instruction until market, capitalization, forecast, maintenance-capex,
valuation, mandate, exposure, and risk-budget inputs are complete and human
approved (
judgment.yrc.cutoff.service-liquidity-gates).
Further questions
The decision could change if a governed review supplies stable lane-level service
and contribution cohorts, a reconciliation across the network integration, a
complete unrestricted-liquidity and fixed-payment stress schedule, a complete
post-exchange capitalization, and a point-in-time market price with an approved
operating forecast. Until then, the gaps in
table.yrc.cutoff.underwriting-abstentions are abstention triggers, not values to
estimate in prose.
Caveats and calculation status
The three scenario weights expose branches but do not produce expected share value. Industry context has revision risk. Issuer explanations are not causal proof. Segment and consolidated perimeters differ. Approximate and one-decimal reported inputs are displayed at appropriate decision precision even though the deterministic engine retains exact Decimal outputs for reproducibility.
models/cutoff_metrics.py uses Decimal inside an isolated precision-40 local
context, rounds half up to six places, and passes a hostile ambient-precision
self-check. Its code SHA-256 is
8ee1d1893f53caadd1637e127f283fb1af566f9401fa94375ca79ca1d77303ae;
the canonical invocation digest is
0f8d6f056880366e899c95305c30b5b5a35c1179f46b002c6a8a126eed339c3d
and result digest is
a8428022a0aacafcda89ba13a609d7ce8e891d8682f7fee088ddebf6b860425b.
The run is transparent but non-authoritative because no frozen registry execution
receipt exists. All reported values retain fact and evidence lineage.