Yellow Corporation

Tony Carreno - VP, IR James Welch - CEO Jamie Pierson - CFO Darren Hawkins - President, YRC Freight

David Ross - Stifel Scott Group - Wolfe Research Jeff Kauffman - Aegis Capital Corp Brad Delco - Stephens

Thank you, operator, and good afternoon, everyone. Welcome to YRC Worldwide’s third quarter 2016 earnings conference call.

James Welch, Chief Executive Officer of YRC Worldwide; Jamie Pierson, CFO of YRC Worldwide; and Darren Hawkins, President of YRC Freight, will provide comments on our third quarter 2016 results and will be available during the question-and-answer portion of today’s call. Before we begin, I must remind you of the inherent uncertainties in any forward-looking statements in our discussion this afternoon.

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 thus, actual results may differ materially.

This includes statements regarding the Company’s expectations, assumptions of future events, and intentions on strategies regarding the future. The format of this call does not allow us to fully discuss all of the risk factors.

For a full discussion of the risk factors that could cause 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 available on our website at yrcw.com.

Additionally, please see today’s release for a reconciliation of net income to adjusted EBITDA on a consolidated basis, and operating income to adjusted EBITDA on a segment basis. During this call, we may refer to our non-GAAP measure of adjusted EBITDA simply as EBITDA.

Finally, in conjunction with today’s earnings release, we have issued a presentation, which will be referenced during the call. The presentation was filed in the 8-K along with the earnings release, and is available on our website at yrcw.com.

I will now turn the call over to James.

Thanks Tony, and good afternoon, everyone. I'll make a few comments followed by Jamie who will discuss our financial results.

And Darren who will provide an update on YRC Freight. Our results for the quarter were impacted by the economic environment especially on the industrial front.

For the third quarter of 2016, we reported adjusted EBITDA of $85.5 million compared to the $99.1 million for the same period of 2015. Factors impacting the quarter results compared to year ago included the low price of fuel and its impact on the associated fuel surcharge, softer volume with year-over-year tonnage per day results that run favorable but declined at a more moderate rate compared to recent quarters, increased operating lease expense for revenue equipment and increases in contractual wages and healthcare cost.

Overall, we believe the pricing environment remains rationale in the LTL space. Consistent with the industry, our four operating companies implemented general rate increase of 4.9% in early September.

On a segment basis, YRC Freight actually improved its operating ratio by 60 basis points and its operating income by 25% to nearly $21 million in the third quarter. The regional segment reported a 2.6% decline in revenue primarily driven by decrease in fuel surcharge.

However, total operating expenses remain flat when compared to the third quarter of 2015 and were impacted by increases in operating lease expense and contractual wages and healthcare cost. Keep in mind that regional segment reported a strong third quarter 2015 including an operating ratio of 92.6% compared to a solid 95.1% this year.

On a broader basis and in some pockets of the country, we are also working through some driver shortages. To mitigate this issue, we are working with our military partnerships, conducting driving schools, using online and social media campaigns and adjusting routes when possible.

One of the investments that you've heard us talk about recently is the addition of in-cab safety technology which consisted of retrofitting our fleet of approximately 15,000 tractors and acquire new tractors with the latest excellent awards into technology. While it is still fairly early in the information getting process, we are nonetheless encouraged by the preliminary results that we are seeing.

So far the types of accident that we expected to mitigate are down approximately 30% across the YRCW family of companies compared to last year. We need to collect more data as we move forward, but we believe the preliminary results are direct benefit from our investments.

In addition to improving safety on our roadways and reducing cost, information that we are gathering will allow us to better train our drivers and in some cases exonerate them when they are not at fault. As we look ahead, we are in the process of piloting our new pick up and delivery route optimization solution at a handful of YRC Freight locations with a larger rollout plan in 2017.

You will hear more about this from Darren but we expect this initiative to deliver measurable results. We remain committed to reinvesting in our company with several other technology projects as well and we are encouraged about what the future holds with expected efficiency gains from these types of investments.

Earlier this month, YRC Freight added a new terminal in South Atlanta to its already extensive network. Across our four operating companies, we have more than 380 terminal serving North America in a way that positions us to move freight either 30 miles or 3,000 miles.

When you consider the potential capacity constraints from government regulation and driver shortages in addition to the rapid changes that are taking place throughout the supply chain distribution process, we believe that our networks and coverage will allow us to continue providing the service that our customers expect. Finally, while the financial results in our third quarter did not meet our expectations, our four operating companies YRC Freight, Holland, Reddaway and New Penn continue to focus what they can control in this economic environment and are holding their own.

Our plan is to manage through the near term headwinds while executing in the long-term strategy reinvesting in the company, delivering award winning customer service, enhancing the safety of our employees and improving productivity. The investments that we've made over the past couple of years and continue to make today, position our company so that when capacity tightens and the industrial economy improves, we believe that our talented employees and networks that cover North America put our company in a strong position to respond and deliver results.

With these comments I'll now turn the call over to Jamie for the review of our financial results.

Thanks James. Good afternoon, everyone.

And thank you for joining us. For the third quarter of 2016, we reported consolidated revenue of $1.22 billion, down from the $1.24 billion reported in the third quarter of 2015.

The decrease can primarily be attributable to decline in fuel surcharge revenue where the price of diesel decreased approximately 10% in the third quarter of 2016 compared to the same period in 2015. In terms of consolidated operating results, we reported operating income of $38.8 million, including $200,000 loss on property disposals compared to $47.7 million reported in the third quarter of 2015 that included a $900,000 loss on property disposals.

We also reported adjusted EBITDA of $85.5 million or 14% decrease compared to the $99.1 million, reported in 3Q, 2015. Our consolidated adjusted EBITDA margin was 7% this quarter compared to 8% for the same period last year.

As Tony mentioned, we posted a presentation on our website and filed it in an 8-K along with the earnings release that includes most of our key stats. However, there are few stats that I would like to highlight.

First, YRC Freight’s tonnage per day was down 1.3% this quarter when compared to the third quarter of 2015. This was comprised of year-over-year decreases of 0.8% in July, 1.2% in August, and 1.8% in September.

And before you ask, through yesterday YRC Freight tonnage per day was down approximately 0.1% or essentially flat on year-over-year basis. Revenue per hundredweight including fuel surcharge decreased by 1.4% this quarter, while revenue per hundredweight excluding fuel surcharge was up by 0.3% when compared to last year.

Second, at the regional segment, tonnage per day was down 1.5% compared to the third quarter of 2015. This was comprised of year-over-year decreases of 2.4% in July, 1.1% in August and 1.1% in September, through earlier this week; the regional segment's tonnage per day was down approximately 2.6% when compared to this same period last year.

Revenue per hundredweight including fuel surcharge increased by 0.3% this quarter, while revenue per hundredweight excluding fuel surcharge was up by 1.5% when compared to last year. Now, for the third quarter 2016 financial results by segment.

YRC Freight’s operating income was $20.8 million compared to the $16.7 million in the third quarter of 2015. Adjusted EBITDA for the quarter was $45.3 million, for a margin of 5.8% compared to $45.2 million and a 5.7% margin in the same period last year.

The regional segment reported operating income of $21.9 million for the third quarter of 2016 compared to $33.6 million in the third quarter of 2015 and adjusted EBITDA of $40.2 million for a margin of 9.1% compared to a strong third quarter of 2015 when it reported $52.9 million and 11.6% margin. In terms of liquidity, our cash, cash equivalents, and managed accessibility under the ABL facility at September 30, 2016, was $290.1 million, which was an increase of $45 million compared to a year ago.

And as usual, I would like to leave you with a few parting takeaways. First, we are firmly focused on reinvesting back into the company.

And preliminary results from in-cab safety technology that you heard from James are good example why this is such an important part of our strategy. We believe we are seeing some of the expected safety benefits from this recent investment and eventually expect to see this translate to cost savings once a result begin to impact the liability claim reserves through the actuarial process.

In a third quarter of 2016, we invested $72.2 million in CapEx and new operating leases for revenue equipment which is equivalent to about 6% of our third quarter revenue. The $72.2 million is an increase of $10.1 million over the third quarter of 2015 and more than 2.5x increase compared to the third quarter of 2014.

We took delivery of approximately 220 lease tractors and 680 lease trailers during the quarter. And since the beginning of 2015, we have taken delivery of more than 1,800 tractors and 3,800 trailers.

Second, given the economic environment, while we’re disappointed with this quarter’s financial results, we are not that surprised either. Tonnage has been comping down for the entire LTL space for the past several quarters and while the year-over-year impact is moderating, fuel surcharge is still lower on a year-over-year basis.

As we finish out the year, we intend to weather the storm by focusing on what we can control and staying committed to investing in our company and our future. Finally, we ended the quarter with a gross debt to adjusted EBITDA of 3.4x against a maximum credit facility covenant of 3.75x which gave us a $25 million cushion.

As everyone knows, the covenant tights a quarter turn to 3.5x as they ended the year and another quarter turn to 3.2x at the end of March of 2017 and stays there until they increasing again to 3x at the end of 2017. Our pre insurance and statutory guys who want the previous call but we update our annual forecast every 30 days.

And we call this our outlook. And given the continued soft industrial economic environment and a resulting tonnage decline for the past five quarters, and the fuel surcharge headwinds, our forecast now indicate that as corrective actions we may not be in compliant with our leverage covenant in one or more quarters over the next 12 months.

The good news is as a result of our improved cash flow from operations and the restricted cash that was freed up as a result of our ABL engagement earlier this year, our liquidity position had improve to a point to where we are now considering repurchasing or paying down our portion of term loan in addition to continuing our commitment of reinvesting back into the business. We are pleased that our results of our operations over the past several years have put us in a position to consider this option as we continue focusing on our operational turnaround, focusing on what we can control and eagerly awaiting a more robust industrial economic environment.

At this point, I'll turn the call over to Darren to discuss YRC Freight results.

Thanks Jamie. And good afternoon, everyone.

YRC Freight delivered Q3 2016 adjusted EBITDA results that were in line with Q3 2015 as we continue to work through the sluggish economic environment. While shipments were down for the quarter, our weight per shipments was up and our year-over-year declines in tonnage per day continue to moderate sequentially.

Solid cost controls along with improvements in productivity and yield enabled us to improve our profitability levels even with the lower tonnage and contractual wage and benefit increases. Operational highlight in Q3 included, first, YRC Freight's new accelerated service that continues to meet our expectations while our standard service remain a staple in the marketplace for linehaul economy service.

Customers have embraced our fast track accelerated service, and we believe it to be an important part of service portfolio going forward. From an efficiency standpoint, the YRC Freight operations team delivered year-over-year improvement in doc, city pickup and delivery, office operations and at linehaul load average metrics for the second consecutive quarter.

These improvements help to partially offset higher wage and healthcare cost for our union employees. We also continue to benefit from improved maintenance expense and fuel efficiency from the ongoing upgrade to our fleet.

On the investment front, technology and change management work continues in our two largest cost buckets which are linehaul and pickup and delivery operations. Benefits from these investments were come in phases during the rest of the year and throughout 2017 with linehaul project being further along at this point.

As James mentioned, we have begun piloting our new pickup and delivery route optimization solution. The software from Quintiq will allow us to optimize trailer loading and route sequencing by interfacing dispatch with the doc to help prioritize how trailers should be loaded based on the order that the freight needs to be delivered.

This termination of the loading sequence impacts how the trailer will be unloaded. It will also help us know when we have pickups throughout the day that they get called in at the last minute and who is the closest driver that has capacity on their trailer to pickup that freight on the most timely basis.

Over time, we are confident that this should help up increase our stops per day decrease our miles per trip and enhance our customer experience. The final operational highlight that I want to mention is we were also very pleased to make an investment that will benefit both our customers and YRC Freight.

We opened our 259 terminal in the South Atlanta City of Conley, Georgia. It is a 75 door facility that has over 80 employees.

This facility should allow us to strengthen our customer service and in around the congested Atlanta area in a cost effective manner. And as a good example of our ability to strategically grow and invest in our company when we identify the right opportunity.

I would like to thank all of our employees at YRC Freight for their continued efforts to improve our results and enhance our award winning customer experience. They have the right attitude about being safe, being reliable and making it difference for themselves, our customers and our communities.

Thanks for your time this afternoon. We would now be happy to answer any questions that you may have.

Yes. Good afternoon, everyone.

Few questions. I guess start with regional that was the biggest negative surprise in the quarter.

What was going on there in terms of why the costs were not able to flux down with the lower volume? Because it was more than just the one fewer working day that was an issue there.

Yes. Good question.

Number one we got a fuel surcharge headwind obviously. Number two, $6 million of the $12 million reduction came from an increased utilization NPT and then operating leases.

Third, we had some driver shortages and some certain markets that too out of the three companies. They were very service oriented companies.

They continue to apply whatever resources they needed to keep their networks moving and deliver the service that their customer expect that resulted in higher over time, extra labor and they certainly had a results. Obviously, the wage and benefit and inflation factor played in there.

I guess I'd say well David our past cadence has indicated that we plan to get the regional operating companies operating in that 93 to 94 OR range. Certainly they had 92.6 last year as you were pointed, it was a great quarter with a weaker economic environment that we are having, 95.1 is not a great quarter but its solid so I can encapsulate your question had about six items that I discussed.

And if you talk a lilt bit more about the driver shortages. Whether they were near term, just for a month or two, have they been resolved, are they getting worse?

How are the regional companies looking at that issue and addressing it?

Good question. I think these will be ongoing drive shortages because they are not broad in the sense but they are isolated to some specific areas of their networks or they just had a harder time trying to find drivers out of Southern California, Chicago especially.

They are certainly working with military partners, driving schools, doctor driver programs. But that shortage did cause them, they have to use in increase local cartridge and increase PT.

I think two out of the three companies that I am referring to have done a really nice job over the last several months of bringing own driver, so I feel much better today than I felt at the beginning of the summer. But I suspect this will be a problem we will continue to have to emphasis and work on as we move forward.

Okay. Kind of led to my next question is which was why the PT cost went up on lower volume and daily lower pricing in the truckload sector that was mainly concentrated in the regional.

Yes. It was and at one of the regional companies PT and those particular lines that they were short end was actually more expensive and running our own linehaul schedule so that doubly hurt us.

And then just little neat on YRC Freight average linked to haul, where it end up in 3Q, I think it was 13.06 third quarter last year.

David, this is Darren. We landed at 12.78 but when you look at apples-to-apples comparison year-over-year our linked to haul was down by 0.6%, so relatively flat.

And David this is James, one interesting trend about YRC Freight is that their weight per shipment continues to buck the overall industry trends. For example they were up another 1% in the third quarter of 2016 and they have seen that trend really backing bucking the industry trend over the last several quarter.

So we like our revenue per shipment numbers that we are turning and we liked to freight mix up we are starting to build, he never call back in 2014 or 2015 but company went on it pretty good effort to exit less 300 pound shipments and so I like how they manage their freight mix and everyone looks at yield and revenue for per hundredweight but we take also revenue for shipment is an important factor to look at, we also -- I like to kind of freight, that we are actually freight starting to handle several ways to go but it is certainly better than what it was three four years ago.

Yes. And YRC Freight is also close or lease month to date seeing some positive tonnage comp.

David, those would be welcomed.

Hey, thanks. Good afternoon, guys.

Can you share with us the kind of what are you seeing on pricing renewals right now?

Our pricing renewals continued to be on that 3% to 4%, Scott. And they are harder to come by than they were certainly a year ago, well certainly two years ago but we still try to position that increases or those increases the best we can but we are still increases net 3% to 4%.

Right. So can you kind of help me bridge that 3%to 4% with what we are seeing in terms of the yield?

I think 100 basis basically flat I think per shipment up 1% so why we are seeing the reported yields coming at lower than that?

Well, certainly as you heard on some of the other calls so far the customer specific increases that you get don't always flow through; sometimes you lose or gain business through net process. The other thing I think that's hurting us is we have come after some awfully big comps last year for example at freight revenue per hundredweight was up 5.8% excluding fuel surcharge in the third quarter of 2015.

Revenue per shipment was up 7%. So we are coming after some pretty big comps from a year ago that were some of the best in the industry.

Your weight per shipments different, weight mix continues to change as the industry evolves and changes but those are being the primary factors.

Yes. What I would up to say Scott is I think the way the industry reports and we certainly do is that 3% to 4% is a gross basis and that's what you get into contract.

And as the business comes on some of that business rotate up so it will net down probably about one or two points. And that's what we have seen it evolves over time but I think the most recent trend is we are seeing on the net number probably something closer to 2% when it is all said and done.

Okay. That's helpful.

And then Jamie do you have -- I know you gave October tonnage, do you have October yield churns?

I thought you are about to asking for November. No, we are not public with that Scott.

I think what we've reported with the tonnage trend is pretty consistent what we've done in the past, I think for we are relatively to where we have been in the past is certainly moderating relatively where we've been I think it is actually positively comping relative to where the space is to date.

Okay. One more Jamie just in terms of the covenant issues that you are talking about.

Are you -- I know you said one of the options is paying down debt but maybe can you talk -- are you in discussions with the banks about getting amendments sooner rather than later and confidence in your ability to get that?

We ended the quarter at little less than 3.5, call it 3.45x on a covenant of 3 and 3.25 so it gives us a cushion of $25 million bucks. I think it would be premature to start talking about any formal negotiations, as I said on the call I mean you guys know how the covenant trends.

We even reported in 10-Q and it is 3.5 at the end of the year, 3.25 for the next three quarters and then decreases again to 3, starting at the end of 2017, that really probably the tightest point. Also mentioned our liquidity has improved to a point where we are now considering paying down debt and for the first time in a long time have the optionality at deleveraging the balance sheet just a little to maintain compliance, while we are still reinvesting back in business.

So from my perspective it is truly a win-win.

And so you are saying you are comfortable in the next -- it is more a few quarters out so you are kind of think EBITDA can be flattish fourth quarter or grow first quarter tonnage is stabilizing.

Yes. What I am saying is that we've got almost $300 million of liquidity at our disposal that if we needed to would certainly help deleverage the balance sheet that it helps maintain compliance.

Thank you guys.

You know we don't give guidance, sorry. I can't give you the denominator of that equation.

Hi, guys. How are you?

You address my -- I had one question on rent and PT. I was just surprised it was up so much and I think you are attributing most of that to the shortage of drivers that you had.

Was there anything else that was driving that up?

Yes. So the two pieces of this equation, Jeff, one, that's where we fit our conditional over the road cartridge in rail but we also, yes we could, our operating lease expense as we kind of consolidated the results.

So this is a strange quarter where we've seen some increases in traditional PT the way the most people look at it. But we've also continue to see an increase in the operating lease expense as we continue to take on new equipment.

But that hasn't probably changed in a last year or two. And I don't anticipate it to change in the foreseeable future either.

Okay. And that also where you have the inter model PT correct?

Yes.

Okay. What are the trends in that?

We have a math we can use for our contract with them, we can use 26% of our road miles via rail and our purchase transportation and we can over the road purchase transportation and we can exceed over the road purchase transportation of more than 6%. So it depends on how we want to run our inter model and over the road purchase transportation operations depending on time of year, time of month, time of week et cetera.

Okay. Was there any weather related impacts?

I know a lot of companies have told us about the effect of flooding in the south in the rain that was hit in the Louisiana, Texas, some in South Carolina. Was that negligible or did that drive PT a little bit?

It was negligible, few some PT, Jeff, but overall we are very proud of how we communicated with our customers and our employees and good to see we had no facilities or no employees are harmed in any meaningful way. But it had some effects but not material.

Okay. I just want to switch gears for a sec.

Weight per shipment; I've always thought that this is as potentially being an economic dull weather. You go from 49 to 59 boxes of widgets on the palette, the palette gets a little heavier but I also understand you have been focused on improving utilization so this increase in weight per shipment, you haven't had one in a while.

Do you read into this at all from an economic standpoint that the weight per shipments starting to go up again or do you think it is more a function of your ability to control your utilization?

Yes. I'll make a couple of comments then let Jamie speak.

You are absolutely right. Historically, it has been a bellwether for kind of judging I think it is getting better from an economic standpoint or freight standpoint.

But I'll let Jamie jump in with some other comments about specifics.

Yes. If you look only at YRC Freight, we can also give the regional numbers as well, but even the YRC Freight as an indicator of that, there has only been two of the last three quarters it has been negative.

You go back one, two, three, four, five, six, seven, eight, nine, 10 and 12 so that's 14 quarters before that we've actually positively comping industry weight for shipment for YRC Freight had been positive including this most recent quarter. The first quarter and second quarter 2016 are the only outliers to that.

So to answer your question directly on the economic leading indicators stand, I think you are saying is I think 100% validates what we've been saying what's going on with the type of recovery or the type of economy we are operating in. Because retail sales for the quarter were up 1.9%, yet if you look at PMI and you excluded utilities and money, I can make a very strong argument that the industrial economy shrunk by probably 2%.

So I think that's what you are seeing manifesting in the industry numbers. What we've got going on is specific to YRC Freight and their ability to better manage their mix of their freight.

Good afternoon, James. Good afternoon, Jamie.

Good afternoon, gentlemen. I am curious about the driver turnover challenges in light of reduced tonnage, what's driving that or what do you perceive is driving that?

I think there are several things. And our driver turnover has crept up; some certainly the age of our employees has facilitated some of that turnover.

And some parts of the country, some employees have left for higher wage paying driving jobs, it has been harder to recruit. Some people decide they want to do it then after month or two or three they decided they don't want to do it.

So I don't think anything has materially changed over the last six months or year other than that it keeps us on our toes and some specific areas were challenge but and others we have plenty of drivers and so we are continuously looking at our network and linehaul flow and looking how do we run different routes and different ways to be sure that we've got the right kind of manpower to handle our service. I'll let Darren comment if he has anything specific about YRC Freight he wants to talk about.

Thanks. This is a good example when you look at regional operations versus national.

We see shortage opportunities just in specific market. So in the third quarter YRC Freight we hired over 1,500 employees.

We still have driver turnover that's in the high single digit which is very good from an LTL industry aspect and excellent compared to any other parts of truck-in. So we can get the drivers in the areas and many of those -- we create the driver by the doctor driver program, pop up driver training schools and permanent driver training school.

So we made the investment but it is more difficult to get drivers and versus previous times that we've seen in this industry especially over the last 18 months. But we are certainly prepared for the future on that aspect.

We can get the drivers we need but it does take more work and time to place those drivers especially in some of the markets that James mentioned earlier.

And these are mostly linehaul drivers, is that correct?

We've got some senior driver challenges and some of those specific areas I called as well but primarily it is over the road driver yes.

And then Jamie just a question another on the balance sheet. I understand the liquidity and what you have available under the ABL facility.

Was that not count in the numerator of total debt?

No. It's gross.

But the catch phrase is gross not net.

Okay. So drawn on your ABL facility wouldn't necessarily increase your --

No. We drew on it.

It absolutely would but right now what I am saying is that we've got $270 million out of cash; it is only $14 million or $15 million of that of the $290 million that's coming off the ABL, very, very small.

Okay, got you. And your point was if you felt like all else being equal you are going to trip a covenant, you would be willing to use cash to pay down debt to prevent that from occurring in the next 12 months?

It is absolutely an option to it that we probably we didn't have in the past. And if you look at it Brad on a net basis and send those some of the companies in the space do, that's probably takes our gross debt minus total cash and liquidity which is probably closer to 2.5x maybe 2.7x

Yes, okay. That makes sense.

And then -- I don't know who is best to answer this, Jamie, maybe you could because I know you are a good numbers guy but hypothetically speaking tonnage remain flat based on the investments you are making and let's assume a stable LTL pricing environment where we are now, do these investments help you offset inflationary cost pressures and margin stay flat or do these investments actually help not only offset inflationary cost pressures but will allow you to drive margin improvement? Flat tonnage

Brad, this is Darren. And I'll speak to that just as YRC Freight is an example without giving any forward guidance but just looking back at the improvements from YRC Freight.

That's where they came from regardless of what was happening in the economy even in a downward tonnage environment which typically it's very difficult to improve productivity and efficiency and we just did that two quarter in a row. So I think that's a good example of what these types of investments would do.

And then the two investments that I mentioned just the P&D and linehaul, would that be in our largest two calls bucket is definitely putting the dollars in the right place at the right time regardless of what the economic future looks like.

And Brad this is James. I might add just in those two important categories of YRC Freight, P&D and linehaul, in over two year period we are going to be investing about now between $20 million and $25 million just in line optimization and P&D route optimization.

So we expected to have measurable benefits and will certainly going to help hold ourselves a kind of more towards that end.

And you know better than most people but to be able to improve productivity and getting done in an environment where tonnage is actually decreasing is incredibly difficult, usually doesn't even happen. So I think the investments we've made over the last two years are foundational to actually put these companies in a position that when we do get incremental density in the network, they will disproportionately triangulate to the bottom line.

Now that makes sense. I guess maybe just a point that if you could in the future; I know you are making investments in tractors, linehaul optimization, P&D optimization.

To the extent you could ever put numbers around, and here is an example are MPG is here to day and based on these investments we think we are getting this in our newer tractors, I think it would help investors bridge to say excluding what's going on in the macro environment there still a lot of self help cost saving opportunities in the story. So just a though.

Brad, that's not lost a message always, it is actually very helpful because that is one of the areas that we will be able to do that. I think probably in the middle part of 2017 is what we've got going in the in-cab.

If you look at across the YRCW family of companies knowing they rolled this technology out in different phases, we are already seeing results that on a year-over-year basis that's 30% better than they were the year prior. Now that doesn't immediately translate into the income statement because as we discussed the actuaries are generally pretty slow to respond to the trend, but there is no reason in my mind that within a year or so of that trend persisting assuming that trend does persist, we will be able to see that ship and financial statement and then we will be able to share with you what we believe those returns are.

So that is a very good addressing something that we will be able to do.

Yes. Just real quick on the linked to haul again.

Darren you said it was down 0.6% year-over-year but the number I have for last year was 13.06, that means it is down 2.1% if dropped to all 78? Was that a wrong number from a year ago or what is -?

No. It is not David.

And it is something that Tony can probably take up with you after the call. It's actually the data source on the 2.1%.

That's why I said the apples-to-apples on the 0.6% so the data source that comes from the adjustment in it and caused to actual reduction was 0.6% but Tony can close that gap for you.

Yes. We will do David.

We follow up with you guys, sometimes we quote LTL stat and sometimes we quote total stat, so we are queuing it up with you post call.

All right. And then the October weakness are regional, October looks good at freight but then it dropped in the regional side.

Was that concentrated any one of the companies or how do you read that?

It is more in one company than the other two but it's been hard for them to really forecast these last couple months. I mean best around throughout the quarter and then it got a little worse in October but the second of October is getting a little bit better so it is -- and one particular company has been down a little bit more.

But also think that some of that David maybe because they are pushing on yield than they are on the tonnage piece. Look, it's -- we hate quoting on the intric month stat, we are not monthly investors, we are not in quarterly investors, we are long term investors.

And we think doing it at a point time difficult but we understand how you guys build your model and we are just trying to be responsive.

Thanks operator. This is James, in closing we will continue to focus on a things that we can control.

Have the best impact that we are going to have on the company. Obviously, we would love to see some improvement in the economy once we get passed the presidential election.

And as many companies start planning for 2017. I have to shout out to our employees.

We have some of the best and most experienced freight employees in the industry. I appreciate their efforts to continue to providing award winning customer service.

We appreciate all of you have taken the time to join our call today. Contact Tony if you have any other questions.

And we look forward to talking to you during the quarter. Thanks a lot.

I'll turn the call back over to you operator.