UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 24, 2004
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YELLOW ROADWAY CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-12255 48-0948788
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
10990 Roe Avenue, Overland Park, Kansas 66211
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (913) 696-6100
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Item 5. Other Events
On May 21, 2004, Yellow Roadway Corporation ("Yellow Roadway") replaced its
current asset backed securitization ("ABS") facility with a new ABS facility.
Similar to the previous facility, the new ABS facility will be reflected on the
Consolidated Balance Sheets of Yellow Roadway. The change in facilities will not
impact Yellow Roadway earnings per share, as the costs associated with the ABS
agreement were not significantly altered. At May 21, 2004, there were no
outstanding borrowings under either facility.
The new ABS facility is operated by Yellow Roadway Receivables Funding
Corporation ("YRRFC"), a special purpose entity and wholly owned subsidiary of
Yellow Roadway. The previous facility was a wholly owned subsidiary of Yellow
Transportation. This change provides the ability to access Roadway Express and
Yellow Transportation receivables and creates a larger base of borrowing for
YRRFC with a $300 million limit instead of the previous facility's $200 million
limit. Under the terms of the agreement, Roadway Express and Yellow
Transportation provide servicing of the receivables and retain the associated
collection risks. In addition, the previous facility dealt with the conduit of
one large financial institution, whereas YRRFC will deal with conduits of two
separate, large financial institutions, which will further diversify the funding
sources.
Yellow Roadway management will continue to evaluate the financial position of
Yellow Transportation and Roadway Express including the transferred receivables
and related borrowings. As a result, the Yellow Roadway consolidated financial
statements and segment reporting will not be impacted by this change. However,
as the receivables will be legally owned by YRRFC, separate subsidiary financial
statements filed with the Securities and Exchange Commission due to the issuance
of public debt will not reflect the transferred receivables and related
borrowings.
Financing under the new facility will occur in the same manner as the previous
facility by following two primary steps. The first step is the sale of an
ongoing pool of receivables by Yellow Transportation and Roadway Express to
YRRFC. The second step is the transfer of a portion of the receivables to the
conduits administered by the two financial institutions. The function of the
conduits is to bundle the receivables from YRRFC and numerous unrelated
companies and then sell them to investors as asset backed commercial paper. The
conduits receive proceeds from investors and forward them to YRRFC, which then
forwards the proceeds to Yellow Roadway. Repayments of these obligations, along
with related charges, occur in the reverse sequence of the steps just described.
The ability to access Roadway Express receivables and increase the ABS facility
limit was permitted under the secured credit agreement entered into by Yellow
Roadway on December 11, 2003. In accordance with that agreement, the total
revolving loan commitment under the secured credit agreement will be reduced
from $250 million to $200 million. As of May 21, 2004, there was $15 million
outstanding under that facility.
SIGNATURE
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 hereunto duly authorized.
YELLOW ROADWAY CORPORATION
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(Registrant)
Date: May 25, 2004 By: /s/ Donald G. Barger, Jr.
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Donald G. Barger, Jr.
Senior Vice President and Chief
Financial Officer