Q4 2021 Yellow Corp Earnings Call
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.
Please note. This event is being recorded I would now like to turn the conference over to Tony Carreno, 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 Olivia Air Chief Financial Officer, and Daryl 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.
Therefore actual results may differ materially.
The format of this call does not allow us to fully discuss all of 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 my yellow Dot com.
Additionally, please see today's release for a reconciliation of net income or loss to adjusted EBITDA.
Conjunction with today's earnings release, we issued a presentation, which may be referenced during the call. The presentation was filed in an 8-K along with the earnings release and is available on our website I will now turn the call over to Darren.
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, LTM revenue per hundredweight, including fuel increased 23, 3% and favorable pricing trends have carried into Q1 of 2022.
For the month of January yellow average between eight and 9% on contract negotiations.
As we execute our yield strategy the <unk> 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 LDL tonnage per day.
Another area of emphasis in 2021 was reducing the use of purchase 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 purchase transportation expanse in certain lanes.
We made steady progress and decrease 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 one yellow recently Holland was the final operating company to be converted to the one yellow technology platform. It was completed as planned and on schedule the technology platform as the cornerstone.
<unk> of our fully integrated network and enables us to continue streamlining operations in 2022, our road map 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 Darryl.
In Q4, we wrapped up one of the largest capital expenditure plans and our company's nearly 100 year history.
Darting 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 2400, which is around 17% of the fleet and the number of trailers added has more than 3600.
<unk>, 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 expanse and help our sustainability efforts through enhanced safety and improved fuel efficiency as.
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 superregional network as we complete the transformation to one yellow.
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 LPL capacity.
I will now turn the call over to Dan who will share additional details about the quarter.
Thank you Darren and good afternoon, everyone full year 2021 operating revenue was $5, one 2 billion compared to $4 $5 1 billion in 2020.
Operating income in 2021, with $103 6 million compared to $56 5 million in the prior year, which included $45 3 million of net gains on property sales.
Adjusted EBITDA for full year, 2021, with $306 million compared to $191 9 million in 2020.
For the fourth quarter 2021, operating revenue was $1 three 1 billion compared to $1 $1 7 billion in 2020.
And the operating income was $55 8 million compared to $13 7 million in the prior year.
Adjusted EBITDA for the fourth quarter, 2021 was $115 5 million compared to $57 9 million in 2020.
Our revenue growth of 12, 4% in the fourth quarter reflects strong yield performance offset by lower volume as we continued executing our targeted pricing strategy.
Including fuel surcharge fourth quarter <unk> revenue per hundredweight was up 23, 3% and <unk> revenue per shipment was up 23% compared to the prior year.
Excluding fuel surcharge <unk> revenue per hundredweight was up 16, 2% and <unk> revenue per shipment was up 13, 4%.
LCL tonnage per day in the fourth quarter was down 10% driven by a seven 8% decrease in <unk> shipments per day, and a two 4% decrease in <unk> weight per shipment.
Sequential LCL tonnage per day trends compared to the prior year were as follows.
October down 10, 1% November down nine 5% in.
And December down 10, 2%.
On a preliminary basis January LCL tonnage per workday was down approximately 14%.
Total liquidity at year end, 2021, with $359 million compared to $440 million at year end 2020.
Total capital expenditures for the fourth quarter were $55 million compared to $99 million a year ago and full year 2021 capital expenditures were $498 million.
In 2022, we plan to return to a more normal cadence of equipment refresh and we expect our full year capital expenditures to be in the range of $325 million to $400 million.
During the fourth quarter, we took a step to derisk the balance sheet by transferring approximately $250 million of our single employer pension plan obligations and assets to an insurance company. This resulted in a noncash nonoperating settlement loss of $54 9 million.
<unk> and the accelerated recognition of unamortized losses in these plans.
Executing this transaction will help mitigate potential future volatility associated with the transferred obligations and assets.
And finally in December Moody's investors service upgraded yellows corporate family credit rating to be three with a stable outlook.
This upgrade reflects our improved operating performance as we continued to execute our one yellow strategy.
And for more on that I will turn the call over to Darryl.
Thanks, Dan and good afternoon, everyone.
As you heard from Darren we're making steady progress.
And we are well on our way to becoming one yellow in 2022.
After successfully getting the operating companies on the same technology platform the.
The journey continues with the transformation of the network.
Historically, our regional companies have operated independent networks that overlap wire sea freight North American footprint.
This results in different pickup and delivery drivers from our operating companies visiting the same customers for shipments that are varying lengths of haul.
As we transform the network to operate as a super regional carrier.
We are integrating the line haul network to support both regional and long haul service as well as optimizing pickup and delivery operations.
Like the move to a single technology platform the <unk>.
Network transformation is complex with many moving parts so.
So we're phasing in the changes by region around the country beginning in the northeast.
We plan to give you updates on how the integration is progressing throughout the year.
When completed the line haul optimization efforts will help drive speed efficiency and consistency in our network.
Over the road operations will operate as yellow.
Which will optimize trailer density and further enhance our sustainability efforts.
The city pickup and delivery optimization efforts will eliminate the overlapping coverage that currently exists between brands.
And we will have one yellow driver interacting with our customers for both regional and long haul services.
Overall, we expect the network transformation to enhance customer service.
Lead to greater efficiencies and cost savings.
And create capacity in the network without adding terminals.
Turning to the current quarter and the impact of the omicron bearing.
We started seeing a rapid increase in COVID-19 cases, among our employees and the final weeks of December .
That carried into the first quarter.
While this variant is more contagious it appears to be less severe and as a result, the majority of our employees are recovering quicker and returning to work faster.
Overall, the spike in Covid cases around the country is temporarily slowing productivity for many companies and continues to apply pressure on the supply chain.
In closing I couldnt be more excited about our path ahead.
Yellow team of more than 30000 truckers made great strides in 2021.
They remain focused on safely meeting the evolving needs of our customers.
While transforming one of the largest logistics companies in North America.
I will now turn the call back over to Darren for some closing comments. Thanks, Darryl we made tremendous progress in 2021 and like Daryl I am excited about what is ahead for our company and I remain confident that the transformation of one yellow positions us for continued operational and <unk>.
Financial improvement.
I am extremely proud of all of our yellow employees, who stand up to the supply chain challenges daily by continuing to provide a central freight transportation services to the customers and communities. We serve truckers are heroes and our employees are an important part of the U S supply chain and I am.
Grateful for their efforts. Thanks for your time. This afternoon, we would now be happy to answer any questions that you may have.
Thank you we will now begin the question and answer session.
You are using a speakerphone please pick up your handset before pressing the keys to enter the queue. At this time, we will pause momentarily to assemble our roster.
Okay.
Our first question will come from Jack Atkins with Stephens. Please go ahead.
Okay, great. Good evening, congratulations on a great quarter here guys I know I know this has been a long time in the making for Ya.
Thank you Jack we're proud of it.
You should be.
I guess, maybe maybe if we could start.
I guess.
Most obvious question and this one's probably for Dan.
But when you think about the first quarter and the idea of a stair step for a staircase of improving profitability.
There is obviously some seasonality at play in the first quarter and then you've got the January trends and omicron and all that.
I guess when you kind of put everything through the wash and you think about the yield momentum in the market.
What youre seeing with your trends and what you would expect to see what the trends plus the company specific things going on how do you think that translates into.
Quarter over quarter seasonality from an operating ratio perspective, I know, it's a long winded question, but I just would like for you to maybe give us some context there.
Sure Jack Good afternoon. Thanks for the question first let me say that I am pleased that we were able to improve our operating ratio by 60 basis points from Q3 to Q4.
When historically, it's a couple of percentage points worse that was primarily driven by continued yield strength along with cost controls around our usage of purchase transportation.
On the yield front sequentially from Q3 to Q4, our <unk> revenue per hundredweight, excluding fuel was up three 5% and <unk> revenue per shipment, excluding fuel was up 5%.
On the PD front as you heard from Darren our purchase transportation expense as a percentage of revenue was 14, 5% in Q4 compared to 15, 4% in Q3.
So now to your question as we move from Q4 to Q1, we historically see degradation in our ore of about 200 to 250 basis points. Most of the time that's weather driven.
But as Darrell referenced in his opening comments and you mentioned the surge of the omicron variance starting in late December that has carried on throughout January has put even more pressure on the entire supply chain and will have an impact on Q1 ton of Jan productivity.
Offsetting that to some degree of course is the continued yield strength that I mentioned.
So I guess net net as I sit here today with two full months still left in the quarter.
And the impact of omicron, not yet having run its full course, it's just simply too early to project, how margins will move sequentially versus what they normally do.
Yeah, and I would just tag onto that and LPL and for the 30 years I've been doing at Jack and I think about Q1.
Got to look at between Valentines day and Easter.
That's when you make your quarter, you're always dealing with that.
Normal weather events and those type things in January .
Got it.
Extenuate pandemic pieces that are in play, but when I think about 2022, and our fleet age being down two years looking at where the economy is at right now manufacturing retail wholesale anywhere I look things are good and e-commerce shining through strong the consumer standing out.
All of that contributing to LPL. It allows us to put our price out there be selective about the business that we allow into our network. Our network has got so much value with our drivers.
Physical plant facilities, the terminals and where we're located and our 316 terminals.
Or in some of the best locations. So you put all that together.
Confident about where we're headed and I like the way we've positioned and then lastly, having all of the companies on one yellow technology is something I've been working on for a few years and I couldnt be more excited about having that in the rearview mirror.
Okay Alright.
That makes that makes sense I understand the difficulty projecting that so we'll just kind of put opinion that for now.
Maybe kind of shifting gears to one yellow and the impact that could have on financial results in 2022 and beyond.
From the outside looking in if you were trying to model this from where we're all setting.
I guess.
Where will you be seeing the biggest impact.
Will it be in PT, maybe further improvements there.
Be in salaries wages and benefits per hundred weight, how should we be thinking about.
Where the impact from the savings will be showing up and also is it just cost that you are taking out or.
But also it sounds like there is a there is a real revenue opportunity here.
As you look forward. Once this is complete now that this is complete.
Jack in my opening comments. This is darrin in my opening comments when I talk about growth growing the company from a revenue aspect closing the gap on our tonnage decline being able to get yield and positive tonnage at the same time, the one yellow basis, certainly the driver of those things it's an iterative.
So the big Lynchpin for the entire one yellow was the technology that's done there's benefits there, but moving forward the big benefits come in two areas line haul and pickup and delivery operations and I'll, let there I'll speak to those.
Good afternoon, Jack Yes. This is Daryl as Darren said, there's been a tremendous effort and resources.
Spend in time and bandwidth as you can imagine on the technology component, but as <unk> always said thats the linchpin to making all of this happen and so what we're excited about is starting out the year.
Moving down this path of the network optimization, which as he mentioned the top two costs in any <unk> company is in the line haul area and the pickup and delivery area and so as we've talked before there is a tremendous amount of duplicity in redundancy in our network, particularly on the PND side, but also there's tremendous synergies to be gained with <unk>.
Line haul optimization as we start to think about providing regional and long haul services in one network.
Last piece I would just say that gets us really excited as upon the completion of this this is a growth story. This is an opportunity for us to start to leverage our network.
In ways that we werent able to leverage it in prior to the technology transition and so when you think about a lot of areas of the country, where as an example, we don't have regional services today in the future. Once we have the network optimization complete we will start to provide those services and offers an opportunity for additional.
Growth and then lastly, the whole all in one solution concept, where we're going to be able to pick up.
Both regional and long haul services with one driver one truck that's extremely attractive it's what our customers have been telling us that they want to see us do.
With our scale and size I think you can see the opportunity that's in front of us from there. So that's a lot that I just mentioned, but it's certainly something that we're excited about and it's a growth story and the end of the day.
Okay got it got it and.
Maybe I guess last question beforehand.
Back, but this one is for Dan just a question on the balance sheet and capital structure you mentioned the.
The upgrade from Moody's I believe that came late in December .
With EBITDA really improving here in the business getting its footing here finally.
That gives you I would think some optionality from a capital structure perspective.
Are you approaching that.
Could we maybe see some.
Opportunities to refinance the debt maybe take out some operating leases in 2022 can you maybe walk us through some options there.
Yeah, a couple of things on that.
Near quarters, Jack we've discussed that with no significant maturities until 2024.
Our transformation to one yellow on a staircase of financial improvement would provide us the opportunity to improve and grow into the capital structure, which ultimately then would open the door to more favorable options around the capital structure.
Up to this point I believe we've certainly made some progress there and as evidenced by the Moody's upgrade that I did reference that you mentioned.
I also do believe we still have opportunity in front of US you brought up the operating leases that is one area where over the last couple of years, we've made significant improvement in the balance sheet by buying out old leases and not entering into new leases.
When you look at our combined short and long term operating lease liabilities at the end of 2021 there.
$195 million, but that is down from $287 million, a year ago and down from $367 million at the end of 2019.
So nice improvement there and there's still more room to go part of that $325 million to $400 million Capex number for 2022 still includes a significant number of additional lease buyouts.
Okay. Thanks again for the time, guys I'll turn it back.
Thank you Jack.
Our next question will come from Scott Group with Wolfe Research. Please go ahead.
Hey, Thanks, good afternoon guys.
Hello, Scott.
A few months a few questions for me just following up on one of them from Jack.
Do you see enough to say that you'll be profitable in the.
First quarter from an operating.
The ratio perspective.
Scott I'll start with that one.
Certainly Q1 has unpredictable parts, we've talked about the pandemic and those spaces.
Yield foundation that we're starting 2022 with has me very confident about the year and also the demand environment.
Where were 316 terminal is strong right now.
<unk> got a motivated group of employees, our hiring efforts are still running wide open and so is all of our driving academies I like our position all of those 2400 tractors that we mentioned they are in the network running today, so the benefits the maintenance savings.
The yield power and then the operational efficiencies that Daryl and his team are driving you put all those together I am still not giving guidance but.
I am very confident about yellows trajectories, even at this point in the year.
Okay I missed it can you give us the contractual renewals for fourth quarter and starting the first quarter.
Yeah for the fourth quarter. So Scott this is Dan.
Our contractual renewals averaged between 9% and 10% in January there is still holding firm there in the 8% to 9% range.
So that's been the consistent story now gone all the way back to late Q1 last year, so still strong momentum on that front.
Okay and it sounds like you wanted to start growing tonnage this year when do you see.
Start to focus a little bit more on that tonnage growth.
I'll, let Dan start with some comments just on January and the beginning of the year and then I'll wrap that one Dan you go ahead, yes.
So if I go back to look sequentially from Q3 to Q4, our tonnage typically decreases about 4% and this year. It only decreased about 1% I did mentioned.
And in my prepared remarks that January is LCL tonnage per day was down approximately 14%.
Which was certainly impacted by resource constraints caused by the rapid increase in Covid cases that Darryl mentioned, if we would have seen the normal historical sequential change from December to January January is LCL tonnage per day, probably would've been down around 12% on a year over year basis.
And then for the full quarter of Q1 on a sequential basis, our tonnage per day from Q4 typically declines about three 5%.
But based on what we saw in January and that for the fact that the full impact of omicron hasnt completely subsided, yet I would say its reasonable to expect our sequential change in LCL tonnage per day at least be modestly less than our historical average.
And then I would just cap it off with when I look at where we're at and I will watch it closely daily weekly monthly to make sure that this is a balanced approach that we're taking.
From a pricing standpoint, we still got room to run from.
From a tonnage aspect I want to see it.
Add back into single digits, and I think that is more of a near term opportunity and then from there Scott.
<unk> proposition as.
Daryl.
It goes through the line haul network and the local pickup and delivery operations, which we will be reporting out on throughout 2022. This is not a multi year transformation like the technology piece was this is all happening in 2022 and that value proposition I believe allows us to.
Or have the yield momentum that we have right now, but also to move back into.
<unk> environment that trans positive as we move through this process in 2022.
Okay, and then just lastly, I wanted to just talk about the Capex plans. So is that $3 25 to 400 is that now more of a normal run rate for Capex or would you still say that thats <unk>.
<unk> relative.
Normal or maintenance.
No that's going to be and I guess in the more of like how you described it as normal.
Obviously spending $600 million in Capex over five quarters, as we've always talked about that being about double what our normal cadence of reinvestment is going to be in 2022, we're definitely going to return to that more normal level.
325 to 400 million that includes more than 450 tractors.
200 trailers some of that will be dependent on.
The mix of equipment and production slots available, but on a go forward basis. It's fair to think that that's going to be the range that we're probably going to fall into.
Okay, and then with that I guess are there are there any plans for further terminal reductions and what's the what's the operating ratio you need to get in order to be free cash flow positive with that amount of capex.
I'll answer the terminal question. So we're at 316 right now.
As Darryl moves the company through the one yellow approach that number could change slightly we would expect it to be somewhere around 309 at the end of 2022 and these wouldn't be large terminals. Scott. So it's just a few more adjustments, but the heavy lifting has already been done we're not giving up any.
Geography, we're not giving up any capacity, we want to create capacity, we think the unique opportunity about yellow in 2022, as we free up the human capital.
Daryl is example of having more than one employee at the same customer on a daily basis, and then we also improve our asset utilization and Dan just mentioned 450 tractors coming in but also we can remove some of the older tractors from the fleet is that asset utilization improves so I expect further gains on the <unk>.
Overall age of our tractors I'll, let Dan comment on the other side or choose not to comment at this time.
Yes.
Well, clearly I'm not going to give guidance on <unk>.
It takes to get cash flow positive I'll make a couple of comments around cash flow.
The path to generating free cash flow is at the top of our priority list every single day and it's got a lot of components to it I did want to call. It out that when you look at our full year operating cash flow of $10 million for 2021 compared to $122 million.
In 2020, it's important to keep in mind the year over year Delta and the FICA tax deferrals under the cares Act and the Delta in the amount of Pik interest in each of those years.
If we exclude the impact of those couple of items that will be nonrecurring on a long term basis, our operating cash flow actually improved $50 million year over year, So even though I won't provide specific guidance.
With the continued improvement in our operating performance I'm comfortable that we're well on our way to being there.
Okay.
Sure.
Alright, thanks, so much.
Our next question will come from Bruce Chan with Stifel. Please go ahead.
Hey, good afternoon, and congratulations here.
Daryl I appreciate the color and the detail around one yellow.
Maybe wondering if you could help us to understand the magnitude of that line haul in PND network consolidation as it kind.
Kind of filters through the model there because it feels like this could be pretty powerful with the labor efficiency and with the equipment efficiency.
Is it too simplistic to say that you are replacing three pnp drivers with two or three years or something like that.
Hey, Bruce it's good to talk to you.
I would say directionally that makes a lot of sense to view it in that way when you think about the opportunities that yellow has right. Now there is so many different areas from an efficiency perspective that you can talk about I mean, obviously.
We've seen some gains in the facility related cost in there as Darren mentioned Theres still some opportunity there but the.
<unk> management synergies are nearly immediate as we start to go through and convert certain regions of the country. The reduction in the city PND routes.
That's pretty clear and obvious.
And the fact that we will see additional improvement in our asset utilization.
I get more excited in this environment about the human capital component of it all as Darren mentioned is the growth story I don't feel like we have a demand issue right now what we human capital is a top priority for us. It's why we're so aggressive about our hiring initiatives our driver Academy, because finding drivers and dock workers in this environment.
It's challenging for everyone, but these synergies that we have through this network optimization are going to be meaningful for us.
In relationship to maybe where some of our competitors are and of course the reduction in line haul schedules.
That's obviously, we have folks that are driving right past each other each and every day from the wire sea freight brand and in some of our regional brands and so.
I can't give you any specific guidance at this particular point I am committed to making sure that we update everyone throughout the year as we start to take on the full consolidation here, but there is meaningful opportunity there that exist for our company in this area.
Okay.
I appreciate that and I guess.
Maybe if I could ask it another way is there.
You mentioned.
Yes.
Reductions on both the PND side in the long haul side I mean is there a target percentage of route reductions that you have whether that's.
Over a couple of years or over the life of the project.
I guess im just trying to understand if this is hundreds of basis points of reduction per year or if this is something much more incremental than that.
Bruce This is Darren and the way I think about that is 40% of our revenue right now is overlapped in those areas. So the opportunities to grow that but also those operations overlap now we've made tremendous progress in getting those operations under one roof.
For they would fit together so that's why we're not going to have a dramatic reduction in the number of terminals, but as far as the opportunity we're not talking about a multi year.
Transformation, it's phases all of the phases occur in 2022.
Opening in the northeast right now and that will continue moving across the country, because we're going to get to the greatest density first and the best opportunities. The other piece part of the long haul benefit comes from just being on one technology, which is already in play so not only do we have.
A fresher fleet for us and yield momentum going into 2022, we have the momentum of being on one technology.
That form that's already in our back pocket. So you put those together.
We devoted the majority of this call and the majority of our scripts to the one yellow subject. So we certainly think.
It's a big opportunity and.
Our customers have validated that over the time. So it's also a very methodical process that we mapped out it's not <unk>.
Slamming things together.
A very short period of time. This is a methodical process that moves across the country.
Coordinated our employees are aware and will be very steady and the way we approach it but I wanted to make clear. It's a 2022 effort and we'll provide more guidance as we go but for now.
There's a lot of opportunity and a lot of things happening there, but it is already in motion.
Got it that's super helpful. Congratulations.
Really looking forward to seeing what happens next quarter.
Thank you Bruce.
Our next question will come from Jeff Kauffman with vertical research partners. Please go ahead.
Hey, everybody congratulations.
Thank you so much Jeff good to hear your voice.
Couple of questions I, just wanted to make sure I understand.
Transaction.
<unk> some of them.
Payments for your Union plans.
Our pension plans I should say.
How does this show up in the P&L going forward I mean, essentially you're off shoring the volatility.
But where are we going to see a difference in the income statement.
Yes, Jeff So let me start with overall, we feel good about where we're at and our single employer pension plan. Our funded status has improved by nearly $200 million over the last two years and our total benefit.
Obligation, which was over $1 1 billion at the end of 2019 is now just over $800 million.
We believe the parcel of new innovation that I mentioned in the opening comment that has strengthened the balance sheet reduced the risk of volatility.
I'm not going to get a lot and the pension plan accounting on this call. There is a lot of information that'll be in the 10-K about it.
Essentially pension plan accounting at the short of it is unamortized losses in pension plans get.
Amortized over the life expectancy of the participants in the plan.
At such point that <unk> any of those pension obligations and asset.
You recognize those losses and those come through as a non operating expense that $60 million of non operating expense that you see on the income statement $54 $9 million of that was related to the fourth quarter annuities basin.
Alright, so you're outside the corridor.
<unk>.
Recognize a certain amount of that each year. So is this net net.
Other income positive in the future or is it other income neutral or is it other income negative I realize we accelerated the losses into the period. When you did this because you've done this before as a company, but it's been a while and I'm just trying to remember.
Is there how does this effect going forward.
Other income line.
Yeah again.
Other comprehensive loss relates to primarily to the pension plan accounting just for the periodic actuarial changes in the value of planned assets again, when you recognize the value of those and re measure the plans thats when you see it up in the non operating section.
Again in the 10-K Youll see the roll forward of the accumulated losses.
Unamortized losses, which are now at $185 million compared to $370 million just two years ago.
Alright, I'll follow up offline.
So capex.
A lot.
A lot of companies I've been speaking with have told me Hey, we didn't get all the tractors. We wanted we didn't get all the trailers. We wanted for whatever reason is there any portion of this $3 25 to 400 that really kind of represents.
Our role of 2021 Capex into 2022.
I know you mentioned in your earlier question that you consider this a more normal range and you stay within it but im just kind of want to get an idea for for if theres any hangover from 'twenty one in that number.
No absolutely not the 600 million that Darren referenced that was over that five quarter period. All of the equipment was actually mostly completed by the end of Q3 already in 2021. So there is no bleed over into 2022 for any of the tractors or trailers that we've been talking about for.
It feels like two years, but it's only actually 15 months now.
Okay, and Dan I'm, just thinking out loud.
At that level, you're still going to be free cash flow negative.
Probably in 'twenty, two hopefully not in 'twenty three.
Is there a minimum level that you want to keep balance sheet cash at <unk>.
You go through this process.
Bringing on more capex.
We don't have a magical target there. It is very important to us that we maintain a strong liquidity position. We finished the year at over $350 million Thats five straight quarters, where were at the elevated level and our plan is to keep it at that.
We're in a comfortable position, where we don't have to worry about the risk of short term decisions.
Okay, Great. That's all I have thank you.
Jeff. Thank you for your time today.
This concludes our earnings call I would like to turn the conference back over to the company for any closing remarks.
Thank you operator, and thanks again to everyone for joining US today, please contact Tony with any additional questions that you may have this concludes our call and operator I'm turning the call back to you.
Thank you. The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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