Yellow Corporation

Good afternoon and welcome to the Yellow Corporation's fourth quarter 2021 earnings call. All participants will be in a listen-only mode. After today's presentation, there will be a question and answer session. Please note this event is being recorded. I would now like to turn the conference over to Tony Carino, Vice President of Investor Relations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to Yellow Corporation's fourth quarter 2021 Earnings Conference Call. Joining us on the call today are Darren Hawkins, Chief Executive Officer, Dan Olivier, Chief Financial Officer, and Darrell Harris, President and Chief Operating Officer. During this call, we may make some forward-looking statements within the meaning of federal securities law. These forward-looking statements and all other statements that might be made on this call, which are not historical facts, are subject to uncertainty and a number of risks. And therefore, extra results may differ materially. The format of this call does not allow us to fully discuss all these risk factors. For a full discussion of the risk factors that could cause our results to differ, please refer to this afternoon's earnings release and our most recent SEC filings, including our forms 10-K and 10-Q. These items are also available on our website at myyellow.com. Additionally, please see today's release for a reconciliation of net income or loss to adjusted EBITDA. In conjunction with today's earnings release, we issued a presentation which may be referenced during the call. The presentation was filed in an AK along with the earnings release and is available on our website. I will now turn the call over to Darren. DARREN GILMORE.

Thanks, Tony, and good afternoon, everyone. Thank you for joining our call. We ended 2021 by staying on course and executing the initiatives that were laid out early in the year. Sticking to our strategy helped deliver strong results. And for Q4, we reported adjusted EBITDA of 115.5 million, which is double what we reported in Q4 2020. We also reported an operating ratio of 95.7, which is the lowest in three years. In a capacity-constrained freight environment, we remain focused on ensuring The right freight is flowing through the network, and the price reflects the value and capacity that yellow brings to the market. In Q4, year over year, LTL revenue per hundredweight, including fuel, increased 23.3%, and favorable pricing trends have carried into Q1 of 2022. For the month of January, yellow averaged between eight and nine percent on contract negotiations. As we execute our yield strategy, the LTL tonnage per day decrease that we saw in Q4 was in line with expectations. We have the capacity to take on freight that fits our network and that is priced appropriately. As we transform the network to operate as a super regional carrier, we expect to return to growing LTL tonnage per day. Another area of emphasis in 2021 was reducing the use of purchased transportation. Actions we took included purging the network of short-term rentals as we acquired revenue equipment and adjusting our line haul network to minimize the use of more expensive purchased transportation expense in certain lanes. We made steady progress and decreased the amount of PT expense as a percentage of revenue each quarter during the year. In Q4, it was down to 14.5%, which was 220 basis points better than Q1. We are also executing key steps on the multi-year transformation to OneYellow. Recently, Holland was the final operating company to be converted to the OneYellow technology platform. It was completed as planned and on schedule. The technology platform is the cornerstone of our fully integrated network and enables us to continue streamlining operations. In 2022, our roadmap to One Yellow includes the integration of the line haul network to support both regional and long haul service, as well as the optimization of pickup and delivery operations. You will hear more about this from Darrell. In Q4, we wrapped up one of the largest capital expenditure plans in our company's nearly 100-year history. Starting with the fourth quarter 2020 through the end of 2021, we have invested nearly $600 million. Those investments include tractors, trailers, technology, box trucks, containers, lift gates, and other assets. The number of tractors acquired over this timeframe was more than 2,400, which is around 17% of the fleet, and the number of trailers added is more than 3,600, which was roughly 9% of the fleet. The additions have lowered the average age of the tractor fleet by approximately two years and are expected to mitigate maintenance expense and help our sustainability efforts through enhanced safety, and improved fuel efficiency. As we look ahead, we expect to carry the momentum that we have generated into 2022. We will be enhancing the customer experience with a modernized super regional network as we complete the transformation to One Yellow. By providing customers with an all-in-one solution, we expect to grow our company and deliver a steady staircase of financial improvement. Overall, the economy remains healthy with strong consumer and industrial demand, while constraints from a tight labor market and supply chain disruptions attributable to the COVID-19 pandemic are keeping a lid on LTL capacity. I will now turn the call over to Dan, who will share additional details about the quarter.