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10990 Roe Avenue
Overland Park, KS 66211
Phone 913 696 6100 Fax 913 696 6116
News Release


                                           April 26, 2007

                    YRC Worldwide Announces First Quarter Earnings
                   Consolidated First Quarter Revenue Exceeded $2.3 Billion
                   Severe Weather, Slower Economy Impacts Performance
                   Cash Flow from Operations Exceeds $120 Million

OVERLAND PARK, KAN. --- YRC Worldwide Inc. (NASDAQ: YRCW) today announced first quarter
2007 adjusted diluted earnings per share (“EPS”) of $0.20, which includes adverse weather impacts
estimated at $0.17, compared to adjusted EPS of $0.72 for the first quarter 2006. First quarter 2007
adjusted EPS excludes $0.18 of losses on property disposals and reorganization charges related to
the YRC National Transportation formation and the combination of USF Reddaway and USF Bestway,
all of which were previously announced in January 2007. The company does not consider these
costs a part of core operations and excludes them when evaluating ongoing performance. Reported
EPS for first quarter 2007 was $0.02 compared to reported EPS of $0.71 in first quarter last year.

“Our results were impacted by a weaker economy and extremely difficult operating conditions during
the first quarter,” stated Bill Zollars, Chairman, President and CEO of YRC Worldwide.

YRC Worldwide reported the following consolidated results for the first quarter 2007:
▪ Quarterly operating revenue of $2.3 billion compared to first quarter last year of $2.4 billion.
▪ Adjusted operating income of $38 million compared to first quarter 2006 adjusted operating
  income of $89 million. Adjustments in 2007 included reorganization charges and losses on
  property disposals. Reported operating income was $20 million compared to reported operating
  income of $88 million in 2006.
▪ Net cash from operating activities was $123 million for the quarter.

For statistical information, refer to the company’s website at yrcw.com under Investor Relations and
then select Earnings Releases & Operating Statistics.

Outlook
“The economy grew more slowly than anticipated in the first quarter,” Zollars stated, “and the general
consensus of economists appears to be pushing out an improving economy by one quarter which will
continue to impact us as we move through 2007.”

Based on the first quarter results and the revised economic outlook, the company is updating full-year
guidance.
▪ Full year 2007 adjusted, diluted EPS between $4.00 and $4.20.
▪ Full year 2007 consolidated revenue of $10.2 billion, interest expense around $90 million and a
    consolidated income tax rate of 39.0%.
▪ Diluted average shares of around 59 million assuming an average year-to-date, through March 31,
    2007, stock price of $42 per share.
▪ 2007 gross capital expenditures in the range of $375 to $400 million.
Review of Financial Results
YRC Worldwide Inc. (NASDAQ: YRCW) will host a conference call for shareholders and the
investment community on Friday, April 27, 2007, beginning at 9:30am ET, 8:30am CT.

Investors and analysts should dial 1.888.609.3912 at least 10 minutes prior to the start of the call.
The Conference ID Number is 3836473. The conference call will be open to listeners through a live
webcast via StreetEvents at streetevents.com and via the YRC Worldwide Internet site yrcw.com.

An audio playback will be available beginning two hours after the call ends until midnight on May 11,
2007 by calling 1.800.642.1687 and then entering the access code 3836473. An audio playback also
will be available for 30 days after the call via the StreetEvents and the YRC Worldwide web sites.

                                                *    *    *    *    *

The preceding disclosures contain references to “reported” and “adjusted” operating income and earnings per
share. Reported numbers include reorganization charges and property gains and losses, while adjusted
numbers exclude these items. Management adjusts for these items when evaluating operating performance to
more accurately compare the results among periods.

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words
“expect,” “believe,” “guidance”, and similar expressions are intended to identify forward-looking statements. It is
important to note that the company’s actual future results, revenue and earnings per share could differ materially
from those projected in such forward-looking statements because of a number of factors, including (without
limitation) inflation, inclement weather, price and availability of fuel, sudden changes in the cost of fuel or the
index upon which the company bases its fuel surcharge, competitor pricing activity, expense volatility, including
(without limitation) expense volatility due to changes in rail service or pricing for rail service, ability to capture
cost reductions, including (without limitation) those cost reduction opportunities arising from acquisitions, a
downturn in general or regional economic activity, changes in equity and debt markets, effects of a terrorist
attack, and labor relations, including (without limitation) the impact of work rules, any obligations to multi-
employer health, welfare and pension plans, wage requirements and employee satisfaction.

The company’s expectations regarding its interest expense are only its expectations regarding this expense.
Actual interest expense could differ based on a number of factors including (among others) the company’s
revenue and profitability results and the factors that affect revenue and results described above, the amount,
character and interest rate on the company’s outstanding debt and any financings the company may enter into
in the future.

The company’s expectations regarding its effective tax rate are only its expectations regarding this rate. The
actual rate could differ based on (among others) the following factors: variances in pre-tax earnings on both a
consolidated and business units basis, variance in pre-tax earnings by jurisdiction, impacts on our business from
the factors described above, variances in estimates on non-deductible expenses, tax authority audit
adjustments, change in tax rates and availability of tax credits.

The company’s expectations for the amount of its diluted average shares are only its expectations regarding this
amount. Actual diluted average shares could differ based on a number of factors including (among others) the
number of employee and director stock option exercises, actual amounts of stock awarded to employees and
directors during the year, the dilutive impact of the contingent convertible notes based on the company’s
average stock price, and any unanticipated issuance of stock for currently unplanned financings or acquisitions.

The company’s expectations regarding its gross capital expenditures are only its expectations regarding these
expenditures. Actual expenditures could differ based on (among others) the following factors: impacts on our
business from the factors described above, the accuracy of our estimates of our spending requirements, the
occurrence of any unanticipated acquisition opportunities, changes in our strategic direction, the need to spend
additional capital on cost reduction opportunities, and the need to replace any unanticipated losses in capital
assets.
YRC Worldwide Inc., a Fortune 500 company and one of the largest transportation service providers in the
world, is the holding company for a portfolio of successful brands including Yellow Transportation, Roadway,
Reimer Express, Meridian IQ, New Penn, USF Holland, USF Reddaway, and USF Glen Moore. The enterprise
provides global transportation services, transportation management solutions and logistics management. The
portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and
retail goods domestically and internationally. Headquartered in Overland Park, Kansas, YRC Worldwide
employs approximately 66,000 people.


Investor Contact:   Todd M. Hacker                        Media Contact:    Suzanne Dawson
                    YRC Worldwide Inc.                                      Linden Alschuler & Kaplan
                    913.696.6108                                            212.329.1420
                    todd.hacker@yrcw.com                                    sdawson@lakpr.com
STATEMENTS OF CONSOLIDATED OPERATIONS
                            YRC Worldwide Inc. and Subsidiaries
                            For the Three Months Ended March 31
                         (Amounts in thousands except per share data)
                                         (Unaudited)


                                                             2007               2006

OPERATING REVENUE                                    $   2,328,342      $   2,374,161

OPERATING EXPENSES:
   Salaries, wages and employees' benefits               1,421,525          1,401,932
   Operating expenses and supplies                         441,928            449,927
   Purchased transportation                                251,768            253,286
   Depreciation and amortization                            58,991             73,440
   Other operating expenses                                116,324            106,866
   Losses on property disposals, net                         2,949                882
   Reorganization charges                                   14,457                  -

        Total operating expenses                         2,307,942          2,286,333

OPERATING INCOME                                            20,400            87,828

NONOPERATING (INCOME) EXPENSES:
   Interest expense                                         20,038            20,548
   Other                                                    (1,734)             (796)

        Nonoperating expenses, net                          18,304            19,752

INCOME BEFORE INCOME TAXES                                   2,096            68,076
INCOME TAX PROVISION                                           817            25,940

NET INCOME                                           $       1,279      $     42,136


AVERAGE SHARES OUTSTANDING-BASIC                            57,337            57,374
AVERAGE SHARES OUTSTANDING-DILUTED                          58,614            59,128

BASIC EARNINGS PER SHARE                             $        0.02      $        0.73

DILUTED EARNINGS PER SHARE                           $        0.02      $        0.71
SUPPLEMENTAL FINANCIAL INFORMATION
                                   YRC Worldwide Inc. and Subsidiaries
                                   For the Three Months Ended March 31
                                (Amounts in thousands except per share data)
                                                (Unaudited)




                                                                       2007                2006             %

Operating revenue:
                                                                                                   a
  YRC National Transportation                                 $   1,608,444      $   1,643,829           (2.2)
                                                                                                   a
  YRC Regional Transportation                                       575,935            592,045           (2.7)
  Logistics                                                         149,737            139,846            7.1
                                                                                                   a
  Eliminations                                                       (5,774)            (1,559)
    Consolidated                                                  2,328,342          2,374,161           (1.9)

Reported operating income (loss):
                                                                                                   a
  YRC National Transportation                                        33,126             69,217          (52.1)
                                                                                                   a
  YRC Regional Transportation                                        (5,009)            21,423         (123.4)
    Logistics                                                        (1,070)             2,477         (143.2)
                                                                                                   a
    Corporate and other                                              (6,647)            (5,289)
    Consolidated                                                     20,400             87,828          (76.8)

Adjustments to operating income by segment b :
                                                                                                   a
   YRC National Transportation                                        6,802                 (23)
                                                                                                   a
   YRC Regional Transportation                                        6,534                  10
    Logistics                                                            78                 (12)
                                                                                                   a
    Corporate and other                                               3,992                 907
    Consolidated                                                     17,406                 882

Adjusted operating income (loss) b:
                                                                                                   a
                                                                     39,928             69,194          (42.3)
   YRC National Transportation
                                                                                                   a
   YRC Regional Transportation                                        1,525             21,433          (92.9)
                                                                       (992)             2,465         (140.2)
    Logistics
                                                                                                   a
    Corporate and other                                              (2,655)            (4,382)
                                                                                                        (57.4)
    Consolidated                                              $      37,806      $      88,710

Reported operating ratio:
  YRC National Transportation                                         97.9%               95.8%
  YRC Regional Transportation                                        100.9%               96.4%
    Logistics                                                        100.7%               98.2%
    Consolidated                                                      99.1%               96.3%

Adjusted operating ratio:
   YRC National Transportation                                        97.5%               95.8%
   YRC Regional Transportation                                        99.7%               96.4%
    Logistics                                                        100.7%               98.2%
    Consolidated                                                      98.4%               96.3%

Reconciliation of reported diluted earnings per
   share (EPS) to adjusted diluted EPS:
Reported diluted EPS                                         $         0.02      $         0.71
Losses on property disposals                                           0.03                0.01
Reorganization charges                                                 0.15                 -
Adjusted diluted EPS                                         $         0.20      $         0.72


a   The 2006 amounts for YRC National Transportation, YRC Regional Transportation and Corporate and other have been
    adjusted to conform with the current year presentations, such that YRC National Transportation includes the results of Yellow
    Transportation and Roadway, including eliminations; YRC Regional Transportation excludes USF Red Star and USF Dugan as
    those business units were reallocated to the Corporate and other segment in the second quarter of 2006 and Corporate and
    other includes USF Red Star and USF Dugan and excludes any eliminations related to YRC National Transportation.

b   Management excludes these items when evaluating operating income and segment performance to more accurately compare
    the results of our core operations among periods. This measurement should not be construed as a better measurement than
    operating income as defined by generally accepted accounting principles. Adjustments presented in the 2007 period herein
    consist of property gains and losses and reorganizational charges. Adjustments presented in the 2006 period herein consist of
    property gains and losses.
Selected Financial Data
                                              YRC Worldwide Inc. and Subsidiaries
                                          (Amounts in thousands unless otherwise noted)
                                                           (Unaudited)

                                                                                     For the Three Months Ended March 31,
                                                                                                2007                     2006
Net cash from operating activities                                             $             122,982       $              704
Net cash used in investing activities                                                       (125,922)               (117,024)
Net cash provided by financing activities                                                     34,037                  88,981
Gross capital expenditures                                                                  (132,289)               (118,073)
Net capital expenditures                                                                    (125,645)               (109,365)
Proceeds from exercise of stock options                                                        6,037                   1,951
Free cash flow a                                                                               3,374                (106,710)


                                                                                            March 31,               December 31,
                                                                                                 2007                       2006
Cash and cash equivalents                                                      $              107,488        $            76,391
Accounts receivable, net                                                                    1,230,145                  1,190,818
Net property and equipment                                                                  2,337,270                  2,269,846
Total assets                                                                                6,068,534                  5,952,237
Asset backed securitization borrowings                                                        250,000                    225,000
Long-term debt, less current portion                                                        1,059,099                  1,058,496
Total debt                                                                                  1,309,099                  1,283,496
Total shareholders' equity                                                                  2,205,593                  2,192,549
Debt to capitalization b                                                                        37.2%                      36.9%
Debt to capitalization, less cash                                                               35.3%                      35.5%




a Management uses free cash flow as an indication of the cash available to fund additional capital expenditures, to reduce outstanding
  debt (including current maturities), or to invest in our growth strategies. Free cash flow is calculated as net cash from operating
  activities plus stock option proceeds less net capital expenditures. This measurement is used for internal management purposes and
  should not be construed as a better measurement than net cash from operating activities as defined by generally accepted accounting
  principles.


b We calculate debt to capitalization as total debt divided by total debt plus total shareholders' equity.

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yrc worldwide1Q07_release

  • 1. 10990 Roe Avenue Overland Park, KS 66211 Phone 913 696 6100 Fax 913 696 6116 News Release April 26, 2007 YRC Worldwide Announces First Quarter Earnings Consolidated First Quarter Revenue Exceeded $2.3 Billion Severe Weather, Slower Economy Impacts Performance Cash Flow from Operations Exceeds $120 Million OVERLAND PARK, KAN. --- YRC Worldwide Inc. (NASDAQ: YRCW) today announced first quarter 2007 adjusted diluted earnings per share (“EPS”) of $0.20, which includes adverse weather impacts estimated at $0.17, compared to adjusted EPS of $0.72 for the first quarter 2006. First quarter 2007 adjusted EPS excludes $0.18 of losses on property disposals and reorganization charges related to the YRC National Transportation formation and the combination of USF Reddaway and USF Bestway, all of which were previously announced in January 2007. The company does not consider these costs a part of core operations and excludes them when evaluating ongoing performance. Reported EPS for first quarter 2007 was $0.02 compared to reported EPS of $0.71 in first quarter last year. “Our results were impacted by a weaker economy and extremely difficult operating conditions during the first quarter,” stated Bill Zollars, Chairman, President and CEO of YRC Worldwide. YRC Worldwide reported the following consolidated results for the first quarter 2007: ▪ Quarterly operating revenue of $2.3 billion compared to first quarter last year of $2.4 billion. ▪ Adjusted operating income of $38 million compared to first quarter 2006 adjusted operating income of $89 million. Adjustments in 2007 included reorganization charges and losses on property disposals. Reported operating income was $20 million compared to reported operating income of $88 million in 2006. ▪ Net cash from operating activities was $123 million for the quarter. For statistical information, refer to the company’s website at yrcw.com under Investor Relations and then select Earnings Releases & Operating Statistics. Outlook “The economy grew more slowly than anticipated in the first quarter,” Zollars stated, “and the general consensus of economists appears to be pushing out an improving economy by one quarter which will continue to impact us as we move through 2007.” Based on the first quarter results and the revised economic outlook, the company is updating full-year guidance. ▪ Full year 2007 adjusted, diluted EPS between $4.00 and $4.20. ▪ Full year 2007 consolidated revenue of $10.2 billion, interest expense around $90 million and a consolidated income tax rate of 39.0%. ▪ Diluted average shares of around 59 million assuming an average year-to-date, through March 31, 2007, stock price of $42 per share. ▪ 2007 gross capital expenditures in the range of $375 to $400 million.
  • 2. Review of Financial Results YRC Worldwide Inc. (NASDAQ: YRCW) will host a conference call for shareholders and the investment community on Friday, April 27, 2007, beginning at 9:30am ET, 8:30am CT. Investors and analysts should dial 1.888.609.3912 at least 10 minutes prior to the start of the call. The Conference ID Number is 3836473. The conference call will be open to listeners through a live webcast via StreetEvents at streetevents.com and via the YRC Worldwide Internet site yrcw.com. An audio playback will be available beginning two hours after the call ends until midnight on May 11, 2007 by calling 1.800.642.1687 and then entering the access code 3836473. An audio playback also will be available for 30 days after the call via the StreetEvents and the YRC Worldwide web sites. * * * * * The preceding disclosures contain references to “reported” and “adjusted” operating income and earnings per share. Reported numbers include reorganization charges and property gains and losses, while adjusted numbers exclude these items. Management adjusts for these items when evaluating operating performance to more accurately compare the results among periods. This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “expect,” “believe,” “guidance”, and similar expressions are intended to identify forward-looking statements. It is important to note that the company’s actual future results, revenue and earnings per share could differ materially from those projected in such forward-looking statements because of a number of factors, including (without limitation) inflation, inclement weather, price and availability of fuel, sudden changes in the cost of fuel or the index upon which the company bases its fuel surcharge, competitor pricing activity, expense volatility, including (without limitation) expense volatility due to changes in rail service or pricing for rail service, ability to capture cost reductions, including (without limitation) those cost reduction opportunities arising from acquisitions, a downturn in general or regional economic activity, changes in equity and debt markets, effects of a terrorist attack, and labor relations, including (without limitation) the impact of work rules, any obligations to multi- employer health, welfare and pension plans, wage requirements and employee satisfaction. The company’s expectations regarding its interest expense are only its expectations regarding this expense. Actual interest expense could differ based on a number of factors including (among others) the company’s revenue and profitability results and the factors that affect revenue and results described above, the amount, character and interest rate on the company’s outstanding debt and any financings the company may enter into in the future. The company’s expectations regarding its effective tax rate are only its expectations regarding this rate. The actual rate could differ based on (among others) the following factors: variances in pre-tax earnings on both a consolidated and business units basis, variance in pre-tax earnings by jurisdiction, impacts on our business from the factors described above, variances in estimates on non-deductible expenses, tax authority audit adjustments, change in tax rates and availability of tax credits. The company’s expectations for the amount of its diluted average shares are only its expectations regarding this amount. Actual diluted average shares could differ based on a number of factors including (among others) the number of employee and director stock option exercises, actual amounts of stock awarded to employees and directors during the year, the dilutive impact of the contingent convertible notes based on the company’s average stock price, and any unanticipated issuance of stock for currently unplanned financings or acquisitions. The company’s expectations regarding its gross capital expenditures are only its expectations regarding these expenditures. Actual expenditures could differ based on (among others) the following factors: impacts on our business from the factors described above, the accuracy of our estimates of our spending requirements, the occurrence of any unanticipated acquisition opportunities, changes in our strategic direction, the need to spend additional capital on cost reduction opportunities, and the need to replace any unanticipated losses in capital assets.
  • 3. YRC Worldwide Inc., a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of successful brands including Yellow Transportation, Roadway, Reimer Express, Meridian IQ, New Penn, USF Holland, USF Reddaway, and USF Glen Moore. The enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. Headquartered in Overland Park, Kansas, YRC Worldwide employs approximately 66,000 people. Investor Contact: Todd M. Hacker Media Contact: Suzanne Dawson YRC Worldwide Inc. Linden Alschuler & Kaplan 913.696.6108 212.329.1420 todd.hacker@yrcw.com sdawson@lakpr.com
  • 4. STATEMENTS OF CONSOLIDATED OPERATIONS YRC Worldwide Inc. and Subsidiaries For the Three Months Ended March 31 (Amounts in thousands except per share data) (Unaudited) 2007 2006 OPERATING REVENUE $ 2,328,342 $ 2,374,161 OPERATING EXPENSES: Salaries, wages and employees' benefits 1,421,525 1,401,932 Operating expenses and supplies 441,928 449,927 Purchased transportation 251,768 253,286 Depreciation and amortization 58,991 73,440 Other operating expenses 116,324 106,866 Losses on property disposals, net 2,949 882 Reorganization charges 14,457 - Total operating expenses 2,307,942 2,286,333 OPERATING INCOME 20,400 87,828 NONOPERATING (INCOME) EXPENSES: Interest expense 20,038 20,548 Other (1,734) (796) Nonoperating expenses, net 18,304 19,752 INCOME BEFORE INCOME TAXES 2,096 68,076 INCOME TAX PROVISION 817 25,940 NET INCOME $ 1,279 $ 42,136 AVERAGE SHARES OUTSTANDING-BASIC 57,337 57,374 AVERAGE SHARES OUTSTANDING-DILUTED 58,614 59,128 BASIC EARNINGS PER SHARE $ 0.02 $ 0.73 DILUTED EARNINGS PER SHARE $ 0.02 $ 0.71
  • 5. SUPPLEMENTAL FINANCIAL INFORMATION YRC Worldwide Inc. and Subsidiaries For the Three Months Ended March 31 (Amounts in thousands except per share data) (Unaudited) 2007 2006 % Operating revenue: a YRC National Transportation $ 1,608,444 $ 1,643,829 (2.2) a YRC Regional Transportation 575,935 592,045 (2.7) Logistics 149,737 139,846 7.1 a Eliminations (5,774) (1,559) Consolidated 2,328,342 2,374,161 (1.9) Reported operating income (loss): a YRC National Transportation 33,126 69,217 (52.1) a YRC Regional Transportation (5,009) 21,423 (123.4) Logistics (1,070) 2,477 (143.2) a Corporate and other (6,647) (5,289) Consolidated 20,400 87,828 (76.8) Adjustments to operating income by segment b : a YRC National Transportation 6,802 (23) a YRC Regional Transportation 6,534 10 Logistics 78 (12) a Corporate and other 3,992 907 Consolidated 17,406 882 Adjusted operating income (loss) b: a 39,928 69,194 (42.3) YRC National Transportation a YRC Regional Transportation 1,525 21,433 (92.9) (992) 2,465 (140.2) Logistics a Corporate and other (2,655) (4,382) (57.4) Consolidated $ 37,806 $ 88,710 Reported operating ratio: YRC National Transportation 97.9% 95.8% YRC Regional Transportation 100.9% 96.4% Logistics 100.7% 98.2% Consolidated 99.1% 96.3% Adjusted operating ratio: YRC National Transportation 97.5% 95.8% YRC Regional Transportation 99.7% 96.4% Logistics 100.7% 98.2% Consolidated 98.4% 96.3% Reconciliation of reported diluted earnings per share (EPS) to adjusted diluted EPS: Reported diluted EPS $ 0.02 $ 0.71 Losses on property disposals 0.03 0.01 Reorganization charges 0.15 - Adjusted diluted EPS $ 0.20 $ 0.72 a The 2006 amounts for YRC National Transportation, YRC Regional Transportation and Corporate and other have been adjusted to conform with the current year presentations, such that YRC National Transportation includes the results of Yellow Transportation and Roadway, including eliminations; YRC Regional Transportation excludes USF Red Star and USF Dugan as those business units were reallocated to the Corporate and other segment in the second quarter of 2006 and Corporate and other includes USF Red Star and USF Dugan and excludes any eliminations related to YRC National Transportation. b Management excludes these items when evaluating operating income and segment performance to more accurately compare the results of our core operations among periods. This measurement should not be construed as a better measurement than operating income as defined by generally accepted accounting principles. Adjustments presented in the 2007 period herein consist of property gains and losses and reorganizational charges. Adjustments presented in the 2006 period herein consist of property gains and losses.
  • 6. Selected Financial Data YRC Worldwide Inc. and Subsidiaries (Amounts in thousands unless otherwise noted) (Unaudited) For the Three Months Ended March 31, 2007 2006 Net cash from operating activities $ 122,982 $ 704 Net cash used in investing activities (125,922) (117,024) Net cash provided by financing activities 34,037 88,981 Gross capital expenditures (132,289) (118,073) Net capital expenditures (125,645) (109,365) Proceeds from exercise of stock options 6,037 1,951 Free cash flow a 3,374 (106,710) March 31, December 31, 2007 2006 Cash and cash equivalents $ 107,488 $ 76,391 Accounts receivable, net 1,230,145 1,190,818 Net property and equipment 2,337,270 2,269,846 Total assets 6,068,534 5,952,237 Asset backed securitization borrowings 250,000 225,000 Long-term debt, less current portion 1,059,099 1,058,496 Total debt 1,309,099 1,283,496 Total shareholders' equity 2,205,593 2,192,549 Debt to capitalization b 37.2% 36.9% Debt to capitalization, less cash 35.3% 35.5% a Management uses free cash flow as an indication of the cash available to fund additional capital expenditures, to reduce outstanding debt (including current maturities), or to invest in our growth strategies. Free cash flow is calculated as net cash from operating activities plus stock option proceeds less net capital expenditures. This measurement is used for internal management purposes and should not be construed as a better measurement than net cash from operating activities as defined by generally accepted accounting principles. b We calculate debt to capitalization as total debt divided by total debt plus total shareholders' equity.