UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, ~~2018~~2019

Commission File Number 001-34734

ROADRUNNER TRANSPORTATION SYSTEMS, INC.

(Exact Name of Registrant as Specified in Its Charter)



Delaware		20-2454942
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

1431 Opus Place, Suite 530 Downers Grove, Illinois		60515
(Address of Principal Executive Offices)		(Zip Code)

(414) 615-1500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbols(s)	Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share	RRTS	The New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark ifwhether ~~disclosure~~the ofregistrant ~~delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter)~~ is ~~not~~a ~~contained~~large ~~herein,~~accelerated ~~and will not be contained~~filer, toan ~~the~~accelerated ~~best of registrant’s knowledge~~filer, ina ~~definitive proxy or information statements incorporated by reference in Part III of this Form 10~~non-Kaccelerated orfiler, ~~any~~a ~~amendment~~smaller toreporting ~~this~~company, ~~Form 10-K. o~~or

~~Indicate by check mark whether the registrant is a large accelerated filer,~~ an ~~accelerated filer, a non-accelerated filer, a smaller reporting company, or an~~ emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth ~~company” in Rule 12b-2 of the Exchange Act.~~

~~Large~~company” ~~accelerated~~in ~~filer~~Rule ~~o Accelerated filer x Non~~12b-~~accelerated~~2 ~~filer~~of othe ~~Smaller~~Exchange ~~reporting company x Emerging growth company o~~Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No ý

As of June 30, ~~2018~~2019, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s voting common stock held by non-affiliates of the registrant was approximately $5633.95 million based on the closing price of such stock as reported on The New York Stock Exchange on such date.

As of March 527, ~~2019~~2020, there were outstanding ~~939~~37,~~038~~892,~~286~~ 603 shares of the registrant’s Common Stock, par value $.01 per share.

Portions of the registrant’s definitive Proxy Statement for its 2019 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant's fiscal year ended December 31, 2018.

ROADRUNNER TRANSPORTATION SYSTEMS, INC.

ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

	PART I
ITEM 1.	BUSINESS	1
ITEM 1A.	RISK FACTORS	1315
ITEM 1B.	UNRESOLVED STAFF COMMENTS	2931
ITEM 2.	PROPERTIES	3031
ITEM 3.	LEGAL PROCEEDINGS	3031
ITEM 4.	MINE SAFETY DISCLOSURES	3233
	PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	3334
ITEM 6.	SELECTED FINANCIAL DATA	3435
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3738
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	5458
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	5458
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	5458
ITEM 9A.	CONTROLS AND PROCEDURES	5559
ITEM 9B.	OTHER INFORMATION	6266
	PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	6366
ITEM 11.	EXECUTIVE COMPENSATION	6371
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	6379
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	6381
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	6385
	PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	6486
ITEM 16.	FORM 10-K SUMMARY	6790

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (“Form 10-K”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact, contained in this Form 10-K are forward-looking statements, including, but not limited to, statements regarding our strategy, prospects, plans, objectives, future operations, future revenue and earnings, projected margins and expenses, markets for our services, potential acquisitions or strategic alliances, financial position, and liquidity and anticipated cash needs and availability. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would,” and similar expressions or the negatives thereof are intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These forward-looking statements represent our current reasonable expectations and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We cannot guarantee the accuracy of the forward-looking statements, and you should be aware that results and events could differ materially and adversely from those contained in the forward-looking statements due to a number of factors including, but not limited to, those described in the section entitled “Risk Factors” included in this Form 10-K. Furthermore, such forward-looking statements speak only as of the date of this Form 10-K. Except as required by law, we do not undertake publicly to update or revise these statements, even if experience or future changes make it clear that any projected results expressed in this Form 10-K or future quarterly reports, press releases or company statements will not be realized. In addition, the inclusion of any statement in this Form 10-K does not constitute an admission by us that the events or circumstances described in such statement are material. We qualify all of our forward-looking statements by these cautionary statements. In addition, the industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors including those described in the section entitled “Risk Factors.” These and other factors could cause our results to differ materially from those expressed in this Form 10-K.

Unless otherwise indicated, information contained in this Form 10-K concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity, and market size, is based on information from various sources, on assumptions that we have made that are based on those data and other similar sources, and on our knowledge of the markets for our services. This information includes a number of assumptions and limitations, and you are cautioned not to give undue weight to such information. In addition, projections, assumptions, and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled “Risk Factors” and elsewhere in this Form 10-K. These and other factors could cause results to differ materially from those expressed in the estimates made by third parties and by us.

Unless otherwise indicated or unless the context requires otherwise, all references in this document to “RRTS,” “our company,” “we,” “us,” “our,” and similar names refer to Roadrunner Transportation Systems, Inc. and, where appropriate, its subsidiaries.

“Roadrunner Transportation Systems,” our logo, and other trade names, trademarks, and service marks of Roadrunner Transportation Systems appearing in this Form 10-K are the property of Roadrunner Transportation Systems. Other trade names, trademarks, and service marks appearing in this Form 10-K are the property of their respective holders.

PART I



ITEM 1.	BUSINESS

Overview

We are a leading asset-right transportation and asset-light logistics service provider offering a ~~full~~ suite of solutions under the Roadrunner, ~~Active On-Demand~~ and Ascent Global Logistics brands. The Roadrunner brand offers less-than-truckload, ~~temperature controlled~~ and ~~intermodal~~truckload services. ~~Active On-Demand offers premium mission critical air and ground transportation solutions.~~ Ascent Global Logistics offers domestic freight management and brokerage, ~~warehousing and retail consolidation,~~ international freight forwarding, ~~and~~ customs brokerage and premium mission critical air and ground expedite solutions. We serve a diverse customer base in terms of end-market focus and annual freight expenditures. We are headquartered in Downers Grove, Illinois with operations primarily in the United States.

Effective ~~January~~April 1, ~~2018~~2019, we changed our segment reporting ~~when~~to weseparate ~~integrated~~ our ~~truckload~~Ascent ~~brokerage~~On-Demand ~~business~~air ~~into~~and ~~our~~ground ~~Ascent~~expedite ~~domestic~~business ~~freight~~from ~~management~~our truckload business. Segment information for all prior periods has been revised to align with the new segment structure. ~~Our three segments are as follows:~~

Truckload & Express Services. Within our Truckload & Express Services (“TES”) segment we serve customers throughout North America. We provide air and ground expedite services, scheduled truckload services, intermodal services, temperature-controlled truckload services, and other truckload and logistics services. We specialize in the transport of automotive and industrial parts, frozen and refrigerated foods including dairy, poultry and meat, and consumer products including foods and beverages. Our ~~Active~~four ~~On-Demand~~segments ~~ground~~are ~~and~~as air expedited services business features proprietary bid technology supported by our fleets of ground and air assets. Roadrunner Intermodal Services and Roadrunner Temperature Controlled businesses provide specialized truckload services to beneficial cargo owners and freight management partners and brokers. We believe this array of technology, services, and specialization best serves our customers and provides us with more consistent shipping volumes in any given year.follows:

~~Less-than-Truckload.~~Ascent ~~Our~~Global ~~Less-than-Truckload~~Logistics. ~~(“LTL”)~~Within ~~segment~~our ~~involves~~Ascent ~~the~~Global ~~pickup,~~Logistics ~~consolidation,~~(or ~~linehaul,~~“Ascent”) ~~deconsolidation~~business, ~~and~~we ~~delivery~~offer ~~of LTL shipments throughout the United States and parts of Canada. With~~ a ~~large~~full ~~network~~portfolio of ~~LTL~~domestic ~~service centers~~ and ~~third-party~~international ~~pick-up~~transportation and ~~delivery~~logistics ~~agents~~solutions, weincluding ~~are~~access ~~designed~~ to ~~provide customers with high reliability at an economical~~ cost.-effective Weand ~~generally employ a point~~time-~~to-point~~sensitive ~~LTL~~modes ~~model~~of ~~that~~transportation wewithin ~~believe~~our ~~serves~~broad asnetwork. aOur ~~competitive~~Ascent ~~advantage~~business ~~over~~is ~~the~~reported ~~traditional hub and spoke LTL model~~ in ~~terms~~two ~~of lower incidence of damage and reduced fuel consumption~~segments.

~~Ascent~~• ~~Global~~Our ~~Logistics. Within our~~ Ascent ~~Global~~Transportation ~~Logistics~~Management segment (“Ascent TM”) segment, we offer a full portfolio of domestic and international transportation and logistics solutions, including access to cost-effective and time-sensitive modes of transportation within our broad network. Ascent provides domestic freight management solutions including asset-backed truckload brokerage, specialized/heavy haul, LTL shipment execution, LTL carrier rate negotiations, access to our Transportation Management System ~~(“TMS”)~~ and freight audit/payment services. Ascent TM also provides clients with international freight forwarding, customs brokerage, regulatory compliance services and project ~~management. We also specialize in retail consolidation, with approximately 2.3 million square feet of our own food-grade warehousing space (both dry~~ and ~~temperature~~order ~~controlled) and full truckload consolidation to retailers to improve On Time in Full (“OTIF”) compliance~~management. Ascent TM serves its customers through either its direct sales force or through a network of independent agents. Our customized Ascent TM offerings are designed to allow our customers to reduce operating costs, redirect resources to core competencies, improve supply chain efficiency, and enhance customer service.

•

Our Ascent On-Demand segment (“Ascent OD”), formerly Active On-Demand, provides ground and air expedited services featuring proprietary bid technology, supported by our fleets of ground and air assets. We specialize in the transport of automotive and industrial parts. On-Demand air charter is the segment of the air cargo industry focused on the time-critical movement of goods that requires the timely launch of an aircraft to move freight. These critical movements of freight are typically necessary to prevent a disruption in the supply chain due to lack of components. The primary users of on-demand charter services are just-in-time manufacturers, including auto manufacturers, component manufacturers and heavy equipment makers.

Less-than-Truckload. Our Less-than-Truckload (“LTL”) segment involves the pickup, consolidation, linehaul, deconsolidation, and delivery of LTL shipments throughout the United States and parts of Canada. With a large network of LTL service centers and third-party pick-up and delivery agents, we are designed to provide customers with high reliability at an economical cost. We generally employ a point-to-point LTL model that we believe serves as a competitive advantage over the traditional hub and spoke LTL model in terms of fewer handlings and reduced fuel consumption.

Truckload. Within our Truckload (“TL”) segment we serve customers throughout North America. We provide the following services: scheduled and expedited dry van truckload, temperature controlled truckload and other transportation and warehouse operations. We specialize in the transport of automotive and industrial parts, frozen and refrigerated foods, including dairy, poultry, meat, beverages and other consumer products. Our dry van and temperature controlled businesses provide specialized truckload services to beneficial cargo owners, freight management partners and brokers.

Our Industry

Over-the-Road Freight

The over-the-road freight sector includes both private fleets (Company drivers) and “for-hire” carriers. According to the American Trucking Associations (“ATA”), the U.S. freight sector represented revenue of approximately $~~967~~833.97 billion in ~~2018~~2019 and accounted for approximately 80% of domestic freight transportation spend. The ATA estimates that U.S. freight transportation will increase to over $1.76 trillion by ~~2029~~2030. Private fleets consist of tractors and trailers owned and operated by shippers that move their own goods and, according to the ATA, accounted for revenue of approximately $~~351~~374.79 billion in ~~2018~~2019. For-hire carriers transport truckload and LTL freight belonging to others and, according to the ATA, accounted for revenue of approximately $~~417~~458.48 billion in ~~2018~~2019.

Truckload carriers generally dedicate an entire trailer to one shipper from origin to destination and are categorized by the type of equipment they use to haul a shipper’s freight, such as temperature-controlled, dry van, tank, or flatbed trailers. According to the ATA, excluding private fleets, revenue in the U.S. Truckload market was approximately $356.4 billion in 2018.

~~two-day~~of orequipment ~~longer~~they ~~service~~use ~~across~~to ~~distances~~haul ~~greater~~a ~~than~~shipper’s 1freight,~~000 miles~~ ~~and~~such ~~often~~as ~~operate without time~~temperature-~~definite delivery~~controlled, ~~while~~dry ~~regional~~van, ~~carriers~~tank, ~~typically~~or ~~offer~~flatbed ~~time-definite delivery in less than two days~~trailers. According to the ATA, excluding private fleets, revenue in the U.S. ~~LTL~~Truckload market ~~generated~~was ~~revenue of~~ approximately $61394.06 billion in ~~2018~~2019.

LTL carriers specialize in consolidating shipments from multiple shippers into truckload quantities for delivery to multiple destinations. LTL carriers are traditionally divided into two categories — national and regional. National carriers typically focus on two-day or longer service across distances greater than 1,000 miles, while regional carriers typically offer delivery in less than two days. According to the ATA, the U.S. LTL market generated revenue of approximately $64.2 billion in 2019.

On Demand Air Charter

On-demand air charter is the segment of the air cargo industry focused on the time critical movement of goods that requires the timely launch of an aircraft to move freight. These critical movements of freight are typically necessary to prevent a disruption in the supply chain due to lack of components. There are approximately 50 certified airlines providing ~~this~~ on-demand service in North America. The primary users of on-demand air charter services are just-in-time manufacturers, including auto manufacturers, component manufacturers, and ~~other~~ heavy equipment makers ~~or just-in-time manufacturers~~.

Third-Party Logistics

Third-party logistics (“3PL”) providers offer transportation management solutions and distribution services, including the movement and storage of freight and the assembly of inventory. The U.S. 3PL sector revenue increased from approximately $~~103~~113.76 billion in ~~2005~~2006 to approximately $~~184~~213.35 billion in ~~2017~~2018 (and experienced growth each year during such period other than from 2008 to 2009), according to Armstrong & Associates, Inc., a leading supply chain market research firm. In addition, only 1113.60% of logistics expenditures by U.S. businesses were outsourced in ~~2017~~2018, according to Armstrong & Associates. In fiscal ~~2017~~2018, U.S. 3PL sector revenues were approximately $~~184~~213.35 billion, a 1015.58% increase from approximately $~~166~~184.83 billion in ~~2016~~2017. We believe that the market penetration of 3PL providers will expand in the future as companies increasingly redirect their resources to core competencies and outsource their transportation and logistics requirements as they realize the cost-effectiveness of 3PL providers.

Factors Important to Our Business

Our success principally depends on our ability to generate revenues through our dedicated sales personnel, long-standing Company relationships, and independent agent network and to deliver freight in all modes safely, on time, and cost-effectively through a suite of solutions tailored to the needs of each customer. Customer shipping demand, over-the-road freight tonnage levels, events leading to expedited shipping requirements, and equipment capacity ultimately drive increases or decreases in our revenues. Our ability to operate profitably and generate cash is also impacted by purchased transportation costs, personnel and related benefits costs, fuel costs, pricing dynamics, customer mix, and our ability to manage costs effectively.

Sales Personnel and Agent Network. In our ~~TES~~TL business, we arrange the pickup and delivery of freight either through our direct sales force or other Company relationships including management, dispatchers, or customer service representatives. In our LTL business, we market and sell our LTL services through a sales force of ~~approximately~~over 8060 people, consisting of account executives, sales managers, inside sales representatives, and commissioned sales representatives. In our Ascent business, we have approximately 6050 direct salespeople located in 2523 Company offices, commissioned sales representatives, and a network of approximately 5060 independent agents. Agents complement our Company sales force by bringing pre-existing customer relationships, new customer prospects, and/or access to new geographic markets. Furthermore, agents typically provide immediate revenue and do not require us to invest in incremental overhead. Agents own or lease their own office space and pay for other costs associated with running their operations.

Tonnage Levels and Capacity. Competition intensifies in the transportation industry as tonnage levels decrease and equipment capacity increases. Our ability to maintain or grow existing tonnage levels is impacted by overall economic conditions, shipping demand, over-the-road freight capacity in North America, and capacity in domestic air freight, as well as by our ability to compete effectively in terms of pricing, safety, and on-time delivery. We do business with a broad base of third-party carriers, including independent contractors (“ICs”) and purchased power providers, together with a blend of our own ground and air capacity, which reduces the impact of tightening capacity on our business.

Purchased Transportation Costs. Purchased transportation costs within our ~~TES~~TL business are generally based either on negotiated rates for each load hauled or spot market rates for ground ~~and~~transportation ~~air~~ services. Purchased transportation costs within our LTL business represent payments to ICs, over-the-road purchased power providers, intermodal service providers, brokers and agents, based on a combination of contractually agreed-upon and spot market rates. Within our Ascent business, purchased transportation costs represent payments made to ground, ocean, and air carriers, ICs, brokers and agents, based on a combination of contractually agreed-upon and spot market rates. Purchased transportation costs are the largest component of our cost structure. Our purchased transportation costs typically increase or decrease in proportion to revenues.

Personnel and Related Benefits. Personnel and related benefits costs are a large component of our overall cost structure. We employ approximately ~~1,400~~800 Company drivers who are paid either per mile or at an hourly rate. In addition, we employ approximately 800 dock and warehouse workers and approximately 2,400 operations and other administrative personnel to support our day-to-day business activities. Personnel and related benefits costs could vary significantly as we may be required to adjust staffing levels to match our business needs.

~~Fuel.~~800 ~~The~~dock ~~transportation industry is dependent upon the availability of adequate fuel supplies~~ and ~~the~~warehouse ~~price~~workers ~~of fuel. Fuel prices have fluctuated dramatically over recent years. Within our TES~~ and ~~Ascent~~approximately ~~businesses~~2,000 weoperations ~~generally~~and ~~pass~~other ~~fuel~~administrative ~~costs~~personnel ~~through~~ to ~~our~~support ~~customers. As a result,~~ our ~~operating~~day-to-day ~~income~~business ~~in these businesses is less impacted by rises in fuel prices~~activities. ~~Within~~Personnel ~~our LTL business, our ICs~~ and ~~purchased~~related ~~power~~benefits ~~providers~~costs ~~pass~~could ~~along~~vary ~~the~~significantly ~~cost~~as ~~of diesel fuel to us, and~~ we in turn attempt to pass along some or all of these costs to our customers through fuel surcharge revenue programs. Although revenues from fuel surcharges generally offset increases in fuel costs, other operating costs have been, and may ~~continue to~~ be, ~~impacted~~required byto ~~fluctuating~~adjust ~~fuel~~staffing ~~prices.~~levels ~~The total impact of higher energy prices on other nonfuel-related expenses is difficult~~ to ~~ascertain.~~match We cannot predict future fuel price fluctuations, the impact of higher energy prices on other cost elements, recoverability of higher fuel costs through fuel surcharges, and the effect of fuel surcharges on our ~~overall~~business ~~rate structure or the total price that we will receive from our customers~~needs. ~~Depending on the changes in the fuel rates and the impact on costs in other fuel- and energy-related areas, our operating margins could be impacted.~~

~~Pricing~~Fuel. The ~~pricing environment in the~~ transportation industry ~~also~~is ~~impacts~~dependent ~~our~~upon ~~operating~~the ~~performance.~~availability ~~Within~~of ~~our~~adequate ~~TES~~fuel ~~business,~~supplies weand ~~typically~~the ~~charge~~price aof ~~flat~~fuel. ~~rate~~Fuel ~~negotiated~~prices onhave ~~each~~fluctuated ~~load~~dramatically ~~hauled.~~over ~~Pricing~~recent ~~within~~years. Within our ~~TES~~TL ~~business~~and isAscent ~~typically~~businesses, ~~driven~~we bygenerally ~~shipment~~pass ~~frequency~~fuel ~~and~~costs ~~consistency,~~through ~~length~~to ofour ~~haul,~~customers. ~~and~~As ~~customer~~a ~~and~~result, ~~geographic~~our ~~mix,~~operating ~~but~~income ~~generally~~in ~~has~~these ~~fewer~~businesses ~~influential~~is ~~factors~~less ~~than~~impacted ~~pricing~~by ~~within~~changes ~~our~~in ~~LTL~~fuel ~~business~~prices. Within our LTL business, weour ~~typically~~ICs ~~generate~~and ~~revenues~~purchased bypower ~~charging~~providers ~~our~~pass ~~customers~~along athe ~~rate~~cost ~~based~~of ondiesel ~~shipment~~fuel ~~weight,~~to ~~distance hauled~~us, and ~~commodity~~we ~~type.~~in ~~This~~turn ~~amount~~attempt isto ~~comprised~~pass ofalong asome ~~base~~or ~~rate,~~all aof ~~fuel~~these ~~surcharge,~~costs ~~and~~to ~~any~~our ~~applicable~~customers ~~accessorial~~through ~~fees~~fuel ~~and~~surcharge ~~surcharges~~revenue programs. ~~Our~~Although ~~LTL~~revenues ~~pricing~~from isfuel ~~dictated~~surcharges ~~primarily~~generally byoffset ~~factors~~increases ~~such~~in asfuel ~~shipment size~~costs, ~~shipment~~other ~~frequency,~~operating ~~length~~costs ofhave ~~haul~~been, ~~freight density, customer requirements~~ and ~~geographical~~may ~~location.~~continue ~~Within~~to ~~our Ascent business~~be, weimpacted ~~typically~~by ~~charge~~fluctuating afuel ~~variable~~prices. ~~rate~~The ontotal ~~each~~impact ~~shipment~~of inhigher ~~addition~~energy toprices ~~transaction~~on orother ~~service~~nonfuel-related ~~fees~~expenses ~~appropriate~~is ~~for~~difficult ~~the solution we have provided~~ to ~~meet a specific customer’s needs~~ascertain. ~~Since~~We wecannot ~~offer~~predict ~~both~~future ~~truckload~~fuel ~~and~~price ~~LTL~~fluctuations, ~~shipping~~the asimpact ~~part~~ of ~~our~~higher ~~Ascent~~energy ~~offering,~~prices ~~pricing~~on ~~within~~other ~~our~~cost ~~Ascent~~elements, ~~business~~recoverability isof ~~impacted~~higher byfuel ~~similar~~costs ~~factors.~~through ~~The~~fuel ~~pricing~~surcharges, ~~environment~~and ~~for~~the ~~all~~effect of ~~our~~fuel ~~operations~~surcharges ~~generally~~on ~~becomes~~our ~~more~~overall ~~competitive~~rate ~~during~~structure ~~periods of lower industry tonnage levels and/~~or ~~increased capacity within~~ the ~~over-the-road~~total ~~freight~~price ~~sector.~~that ~~In addition, when~~ we ~~provide~~will ~~international~~receive ~~freight~~from ~~forwarding services in~~ our ~~Ascent~~customers. ~~business,~~Depending weon ~~also~~the ~~contract~~changes ~~with~~in ~~airlines,~~the ~~ocean~~fuel ~~carriers,~~rates and ~~agents~~the asimpact ~~needed.~~on ~~The~~costs ~~international~~in ~~shipping~~other ~~markets~~fuel- ~~are very dynamic~~ and weenergy-related ~~must~~areas, ~~therefore~~our ~~adjust~~operating ~~rates~~margins ~~regularly~~could ~~based~~be ~~on market conditions~~impacted.

Pricing. The pricing environment in the transportation industry also impacts our operating performance. Within our TL business, we typically charge a flat rate negotiated on each load hauled. Pricing within our TL business is typically driven by shipment frequency and consistency, length of haul, and customer and geographic mix, but generally has fewer influential factors than pricing within our LTL business. Within our LTL business, we typically generate revenues by charging our customers a rate based on shipment weight, distance hauled, and commodity type. This amount is comprised of a base rate, a fuel surcharge, and any applicable accessorial fees and surcharges. Our LTL pricing is dictated primarily by factors such as shipment size, shipment frequency, length of haul, freight density, customer requirements and geographical location. Within our Ascent business, we typically charge a variable rate on each shipment in addition to transaction or service fees appropriate for the solution we have provided to meet a specific customer’s needs. Since we offer both truckload and LTL shipping as part of our Ascent offering, pricing within our Ascent business is impacted by similar factors. The pricing environment for all of our operations generally becomes more competitive during periods of lower industry tonnage levels and/or increased capacity within the over-the-road freight sector. In addition, when we provide international freight forwarding services in our Ascent business, we also contract with airlines, ocean carriers, and agents as needed. The international shipping markets are very dynamic and we must therefore adjust rates regularly based on market conditions.

Our Strategy

Our goal is to be the leading asset-right transportation and asset-light logistics service provider in North America. Our strategy includes ~~continuing to~~:

~~Generate~~Gain ~~Free~~New ~~Cash Flows~~Customers. Our ~~scalable~~goal ~~business~~is ~~model~~to expand our customer base and ~~low~~increase ~~capital~~our ~~expenditures~~market ~~(as~~share ain ~~percentage~~the ofAscent ~~our~~TM, ~~revenues)~~Ascent ~~enhance~~OD ~~our~~and LTL markets. Our expansive geographic reach and broad service offering provides us with the ability to ~~generate~~add ~~strong~~new ~~free~~customers ~~cash~~seeking ~~flows~~transportation and ~~returns~~logistics onsolutions. ~~our~~We ~~invested~~also ~~capital~~believe ~~and~~the ~~assets.~~pool of potential new customers will grow as the benefits of third-party transportation management solutions continue to be embraced.

Gain New Customers. We continue to expand our customer base, and we will continue to pursue increased market share in the TES, LTL, and Ascent markets. Our expansive geographic reach and broad service offering provides us with the ability to add new customers seeking transportation and logistics solutions. We also believe the pool of potential new customers will grow as the benefits of third-party transportation management solutions continue to be embraced.

Increase Penetration with Existing Customers. With our comprehensive service offering and large global network, we have substantial cross-selling opportunities and the potential to capture a greater share of existing customers' annual transportation and logistics expenditures.

Increase Levels of Integration. We adopted a long-term brand and go-to-market service offering plan in the fourth quarter of 2016. Over the next three years, in order to implement this plan, we expect to increase the level of integration within each of our ~~three~~four segments in order to improve our ability to serve customers. For example, in November of 2016, we re-branded our Roadrunner LTL business as Roadrunner Freight and in January of 2017, we re-branded our Global Solutions business as Ascent Global Logistics. In the first quarter of 2018, we announced the integration and rebranding of several operating companies, including Roadrunner Truckload Plus, into Ascent Global Logistics and in the second quarter of 2018, we restructured our temperature-controlled truckload business by completing the integration of multiple operating companies into one operating unit. In the fourth quarter of 2019, we began a de-emphasis and divestiture of our TL business. These are first steps in the implementation of our long-term brand and go-to-market service offering plan. In the first quarter of 2020, we re-branded our Active On-Demand air and ground expedite business as Ascent On-Demand.

Generate Free Cash Flows. Our ~~Services~~scalable business model and low capital expenditures (as a percentage of our revenues) enhance our ability to generate free cash flows and returns on our invested capital and assets.

WeFocus ~~are~~on aLogistics ~~leading asset-right transportation~~ and ~~asset~~Asset-~~light~~Right ~~logistics~~LTL ~~service~~Businesses. ~~provider~~We ~~offering~~plan ato ~~full~~divest ~~suite of solutions. In each of~~ our ~~service~~business ~~offerings,~~in wethe ~~utilize~~Truckload asegment ~~blend of Company-owned~~ and ~~third-party~~narrow ~~owned equipment to provide the most cost-effective service for~~ our ~~customers. Because~~strategic ~~of this blend, we are able to~~ focus ~~primarily on providing quality service rather than on asset utilization. Our customers generally communicate their freight needs~~ to ~~one~~the ~~of our transportation specialists on a shipment~~value-~~by-shipment~~added ~~basis~~logistics ~~via~~and ~~telephone, fax, Internet, e~~asset-~~mail,~~right orLTL ~~electronic data interchange (“EDI”)~~businesses. WeThe ~~leverage~~goal ~~a diverse group~~ of ~~third-party~~this ~~carriers~~strategy ~~and~~is ~~ICs~~ to ~~provide~~improve ~~scalable~~our ~~capacity~~operating ~~and~~performance, ~~reliable~~increase ~~service~~our toreturns ~~our~~on ~~extensive~~invested ~~customer~~capital, ~~base~~and inadd ~~North~~significant ~~America~~value-creation opportunities.

~~Truckload~~Our ~~& Express~~ Services

We ~~provide~~are a ~~comprehensive~~leading ~~range~~asset-right oftransportation ~~TES~~and ~~solutions~~asset-light ~~for~~logistics ~~our~~service ~~customers~~provider byoffering ~~leveraging our Company drivers, ICs, and~~ a ~~broad~~full ~~base~~suite of ~~third-party carriers who operate dry van, temperature-controlled, and/or flatbed capacity~~solutions. WeIn ~~arrange~~each ~~the pickup and delivery~~ of ~~TES freight through~~ our ~~35 TES~~ service ~~centers~~offerings, ~~located~~we ~~throughout~~utilize ~~the United States. We provide~~ a ~~variety~~blend of ~~transportation~~Company-owned ~~solutions~~and ~~for~~third-party ~~dry~~owned ~~goods~~equipment ~~ranging from paper products~~ to ~~steel,~~provide ~~refrigerated~~the ~~foods~~most ~~like~~cost-effective ~~meat, poultry and beverages, as well as flatbed~~ service for ~~larger~~our ~~industrial load requirements~~customers. ~~Our~~Because ~~intermodal~~of ~~capabilities~~this ~~include drayage~~blend, ~~which~~we isare ~~the~~able ~~transport~~to offocus ~~freight~~primarily ~~between~~on ~~ocean~~providing ~~ports~~quality orservice ~~rail~~rather ~~ramps~~than ~~and~~on ~~shipping~~asset ~~docks~~utilization. WeOur ~~also~~customers ~~have~~generally acommunicate ~~strong~~their ~~presence~~freight inneeds ~~TES~~to ~~expedited~~one ~~services~~of ~~for~~ our ~~customers~~transportation ~~with~~specialists ~~just~~on a shipment-inby-~~time~~shipment ~~and~~basis ~~time~~via ~~critical~~telephone, ~~transportation~~fax, ~~needs.~~Internet, ~~Expedited~~e-mail, ~~offerings~~electronic ~~include~~data ~~ground~~interchange ~~and~~(“EDI”), ~~air~~or ~~cargo~~Application ~~services~~Programming ~~which~~Interface ~~are~~(“API”). ~~spot~~We ~~bid~~leverage bya ~~qualified~~diverse ~~and~~group ~~certified~~of ~~ground or air cargo asset~~third-~~based~~party carriers ~~including our fleet of over 900 trucks~~ and 12ICs ~~cargo jets. In addition~~ to ~~our~~provide ~~spot~~scalable ~~bid~~capacity ~~model for expedited offerings, we also offer direct services utilizing our trucks. In either case, we track all shipments using our proprietary technology~~ and ~~our~~reliable ~~dedicated~~ service ~~team.~~to ~~This~~our ~~hybrid~~extensive ~~solution~~customer ~~provides~~base ain ~~unique~~North ~~business model ensuring customers a competitive price, expanded coverage and on-time delivery~~America.

Company Salespeople. Internal sales personnel are responsible for managing existing customer relationships and generating new customer relationships. Because the performance of these individuals is essential to our success, we offer attractive incentive-based compensation packages that we believe keep our sales force motivated, focused, and service-oriented. We supplement our internal salespeople with direct customer relationships from our management, dispatchers, or customer service representatives.

Less-than-Truckload

Based on our industry knowledge, we believe we are one of the largest asset-light providers of LTL transportation services in North America in terms of revenue. We provide LTL service originating from points within approximately 150 miles of our service centers to most destinations throughout the United States and parts of Canada. Within the United States, we offer national, long-haul service (1,000 miles or greater), inter-regional service (between 500 and 1,000 miles), and regional service (500 miles or less). We serve a diverse group of customers within a variety of industries, including retail, industrial, paper goods, manufacturing, food and beverage, health care, chemicals, computer hardware, and general commodities.

We use approximately 150 third-party LTL delivery agents to complement our service center footprint and to provide cost-effective full state, national, and North American delivery coverage. Delivery agents also enhance our ability to handle special needs of the final consignee, such as scheduled deliveries and specialized delivery equipment.

We generally utilize a point-to-point LTL model that is differentiated from the traditional, asset-based hub and spoke LTL model. Our model does not require intermediate handling at a break-bulk hub (a large terminal where freight is offloaded, sorted, and reloaded), which we believe represents a competitive advantage.

Key aspects of our LTL service offering include the following:

• Pickup. In order to stay as close as possible to our customers, we prefer to directly pick up freight whenever cost-effective. We generally directly pick up freight within 150 miles of one of our service centers, primarily utilizing local ICs. Although we generally do not own the tractors or other powered transportation equipment used to transport our customers’ freight, we own or lease trailers for use in local city pickup and delivery. In 2018, we picked up approximately 79% of our customers’ LTL shipments. The remainder was handled by agents with whom we generally have long-standing relationships.

• Consolidation at Service Centers. Key to our model are our 40 LTL service centers that we lease in strategic markets throughout the United States. At these service centers, numerous smaller LTL shipments are unloaded, consolidated into truckload shipments, and loaded onto a linehaul unit scheduled for a destination city. In order to continuously emphasize optimal load building and enhance operating margins, dock managers review every load before it is dispatched from one of our service centers.

• Linehaul. Linehaul is the longest leg of the LTL shipment process. In dispatching a load, a linehaul coordinator uses our technology system to optimize cost-efficiency and service by assigning the load to the appropriate IC, Company driver, or purchased power. In 2018, approximately 53% of our linehaul shipments were handled by over 420 ICs with the remainder shipped via Company driver, purchased power, or rail.

• De-consolidation and Delivery. Within our unique model, linehaul shipments are transported to our service centers, delivery agents, or direct to end users without stopping at a break-bulk hub, as is often necessary under the traditional, asset-based hub and spoke LTL model. This generally reduces physical handling and damage claims. In 2018, we delivered approximately 41% of LTL shipments through our service centers and approximately 59% through our delivery agents.

• Benefits of a Delivery Agent Network. While many national asset-based LTL providers are encumbered by the fixed overhead associated with owning or leasing most or all of their de-consolidation and delivery facilities, we maintain our variable cost structure through the extensive use of delivery agents.

Ascent Global Logistics

Ascent provides domestic freight management, international freight forwarding, and ~~retail~~expedite ~~consolidation~~transportation ~~services~~for ground, air charter, air freight and haul carry. We provide the necessary operational expertise, information technology capabilities, and relationships with third-party transportation providers to meet the unique needs of our customers. For customers that require the most comprehensive service plans, we complement their internal logistics and transportation management personnel and operations, enabling them to redirect resources to core competencies, reduce internal transportation management personnel costs, and, in many cases, achieve substantial annual freight savings. Key aspects of our Ascent capabilities include the following:

• Sales. We have Company brokers that not only engage in the routing and selection of our transportation providers, but also supplement our internal Ascent sales force. Company brokers are responsible for managing existing customer relationships and generating new customer relationships. We also maintain a network of independent brokerage agents, who primarily focus on truckload shipments, which complement our network of Company brokers by bringing pre-existing customer relationships, new customer prospects, and/or access to new geographic markets. Furthermore, they typically provide immediate revenue and do not require us to invest in incremental overhead. Brokerage agents own or lease their own office space and pay for their own communications equipment, insurance, and any other costs associated with running their operation. We ~~only~~ invest in the working capital required to execute our quick pay strategy and generally pay a commission to our brokerage agents of the margin we earn on an Ascent shipment. Similar to Company brokers, our brokerage agents engage in the routing and selection of transportation providers for our customer base and perform sales and customer service functions on our behalf. We believe we offer brokerage agents aan ~~very~~ attractive partnership opportunity as we offer access to our reliable network of purchased power providers and we invest in the working capital required to pay these carriers promptly and assume collection responsibility. As of December 31, ~~2018~~2019, our brokerage agent network consisted of over 5060 agents. Additionally, 2317 of our brokerage agents generated more than $1 million in revenue in ~~2018~~2019. We believe our increased development efforts and attractive value proposition will allow us to further expand our brokerage agent network and enhance the growth of our Ascent business.

• Procurement. After ana ~~in-depth~~ consultation and analysis with our customer to identify cost savings opportunities, we develop an estimate of our customer’s potential savings and design a plan for implementation. If necessary, we manage a targeted bid process based on the customer’s traffic lanes, shipment volumes, and product characteristics, and negotiate rates with reputable carriers. In addition to a cost-efficient rate, the customer receives a summary of projected savings as well as our carrier recommendation.

• Shipment Planning. Utilizing our technology systems and an expansive multi-modal network of third-party transportation providers, we determine the appropriate mode of transportation and select the ideal provider. In addition, we provide load optimization services based on freight patterns and consolidation opportunities. We also provide rating and routing services, either on-site with one of our transportation specialists, ~~off-site~~ through our centralized truckload pricing, or ~~online~~ through our website. Finally, we offer merge-in-transit coordination to synchronize the arrival and pre-consolidation of high-value components integral to a customer’s production process, enabling them to achieve reduced cycle times, lower inventory holding costs, and improved supply chain visibility.

•

Customs Brokerage Services. We provide customs brokerage services to clients importing goods. Our team of highly knowledgeable professionals assist importers in meeting all requirements governing imports by maintaining a detailed knowledge of all customs regulations, tariff schedules, proper classifications, dutiable values, quotas, and other admissibility requirements with other government agency requirements such as the U.S. Food and Drug Administration (“FDA”), Environmental Protection Agency, U.S. Department of Agriculture (“USDA”), and U.S. Fish and Wildlife Services (“FWS”). We submit all required documentation and make appropriate payments to the Bureau of Customs and Border Protection (“CBP”) on behalf of our clients and charge them a fee for this service. We also can provide foreign-trade zone entries/withdrawals and facilitate all in-bond entry types. In addition to processing documents for import clearance and payment of duties, our knowledgeable staff can assist with customs compliance issues, provide information on C-TPAT certification, assist with import bonds, and provide duty drawback services.

• International Freight Forwarding. We provide comprehensive air (import/export) and ocean (import/export) freight forwarding solutions. For customers requiring ocean freight solutions, we are an Ocean Transportation Intermediary acting as either an ocean freight forwarder (arranging ocean shipments on our client’s behalf on their ocean contracts) or a non-vessel-operating common carrier (moving shipments on our ocean carrier contracts). We provide full-container-load, less-than-container-load, charters, bulk, refrigerated service, or other unique solutions based on our customers' requirements.

vessel-operating common carrier (moving shipments on our ocean carrier contracts). We provide full-container-load, less-than-container-load, charters, bulk, refrigerated service, or other unique solutions based on our customers' requirements. For customers requiring air freight solutions, we can provide express, standard and deferred air freight service. We arrange airport-to-airport, airport-to-door, door-to-airport, or door-to-door shipments. We are well-versed in the many technical aspects of government regulations, state and commerce department licensing requirements, foreign government forms, transportation documents, and international collection and banking procedures. We are an authorized International Air Transport Association (“IATA”) agent and also an Indirect Air Carrier authorized by the Transportation Security Administration (“TSA”). We also provide clients a robust Order Management Solution that includes Vendor Compliance/Education, Purchase Order Management, Regulatory Compliance Management, Origin Logistics, Transportation Management (Origin/Destination), and Global Information Management.

•

Shipment Execution. Our transportation specialists are adept at managing all types of shipments (full truckload, LTL, partial truckload, expedited, and specialized). With our technology and large carrier base, we are able to provide our clients with route, rate, and mode optimization to reduce their costs and meet their pickup and delivery requirements. We also provide the ability to track and trace shipments either online or by phone through one of our transportation specialists.


•	Audit and Payment Services. We capture and consolidate our customers’ entire shipping activity and offer weekly electronic billing. We also provide freight bill audit and payment services designed to eliminate excessive or incorrect charges from our customers’ bills.

• Performance Reporting and Improvement Analysis. Customers utilizing our web reporting system have the ability to review freight bills, develop customized reports online, and access data to assist in financial and operational reporting and planning. Our specialists are also actively driving process improvement by ~~continuously~~ using our technology to identify incremental savings opportunities and efficiencies for our customers.

• ~~Retail~~Expedited ~~Consolidation Solutions~~solutions. We ~~have~~believe ~~five~~that ~~Company-operated~~we ~~facilities~~are ~~with~~a ~~approximately~~premier ~~2.3~~provider ~~million square feet~~ of ~~warehousing~~expedite ~~space~~transportation ~~strategically~~for ~~located~~ground, inair ~~the~~charter, ~~United~~airfreight ~~States. All of our facilities are authorized Food Grade Warehouses with both dry~~ and ~~refrigerated~~hand ~~storage.~~carry Wewhere ~~have~~we ~~“Superior”~~leverage ~~ratings~~over ~~with~~25 ~~the~~years ~~American Institute~~ of ~~Baking~~managing ~~and~~on-demand ~~are~~air ~~cGMP~~charter ~~Certified. Retail suppliers ship their inventory~~ to ~~our~~create ~~warehouses~~a ~~for~~culture ~~storage. Supplier orders are received and consolidated~~ with ~~other~~a ~~supplier~~sense ~~orders~~of ~~based~~urgency onacross ~~the~~all ~~retailer's~~service ~~order write~~offerings. ~~Consolidated~~Ascent ~~orders~~OD ~~are~~is ~~then~~committed ~~moved by full truckload~~ to ~~the~~customer ~~retailer~~service ~~within~~and the ~~OTIF~~execution ~~requirements.~~of Byeach ~~having access to multiple locations to hold inventory~~ and ~~moving~~every orders by truckload versus less-than-truckload, suppliers are able to shorten lead times, reduce their outbound miles, significantly lower their transportation costs, reduce damage, and increase their fill rates thereby improving their ability to meet retailers on shelf availability requirementsmission. WeAscent ~~believe~~OD's weportal ~~operate~~solution ~~best in class warehouse management systems and transportation management systems, which also~~ provides ~~customers~~market-driven ~~with~~pricing ~~complete~~for ~~online~~clients ~~visibility~~on toevery ~~inventory~~shipment ~~and~~through ~~receiving/shipping~~proprietary ~~historical~~spot ~~activity,~~bid ~~along with customized reporting capabilities~~technology. WeOur ~~also~~Ascent ~~have~~OD ~~an experienced~~ service ~~assurance~~offices ~~team~~are ~~that~~located ~~helps~~in ~~clients improve retail compliance by conducting detailed forensic analysis into OTIF~~Belleville, ~~looking~~Michigan at ~~root~~Willow ~~causes~~Run toAirport ~~any~~(HQ) ~~failures-~~and ~~late~~Aguascalientes, ~~early~~Mexico orwhich ~~unfilled.~~manage ~~The team monitors~~ all ~~agreed~~expedite ~~upon~~transportation ~~key~~services ~~performance indicators and creates trend analysis by customer, pool, carrier and lane, reviewing all opportunities~~ for ~~improvement~~our clients.

With a broad Ascent offering, we believe we can accommodate a shipper’s unique needs with any combination of services along our entire spectrum, and cater to their preferred means of shipment processing and communication.

We believe our comprehensive service approach and focus on building long-term customer relationships lead to greater retention of existing business compared to a more short-term gain sharing model employed by many 3PL providers. Before becoming fully operational with a customer, we conduct thorough feasibility and cost savings analyses and collaborate with the customer to create a project scope and timeline with measurable milestones. We believe this approach enables us to identify ~~any~~ potential issues, ensure a smooth integration process, and set the stage for long-term customer satisfaction. Within our Ascent operation, we have consistently met customer implementation deadlines and achieved anticipated levels of freight savings.

Less-than-Truckload

We believe we are one of the largest asset-right providers of LTL transportation services in North America in terms of revenue. We provide LTL service originating from points within approximately 150 miles of our service centers to most destinations throughout the United States and parts of Canada. Within the United States, we offer national, long-haul service (1,000 miles or greater), inter-regional service (between 500 and 1,000 miles), and regional service (500 miles or less). We serve a diverse group of customers within a variety of industries, including retail, industrial, paper goods, manufacturing, food and beverage, health care, chemicals, computer hardware, and general commodities.

We use approximately 140 third-party LTL delivery agents to complement our service center footprint and to provide cost-effective full state, national, and North American delivery coverage. Delivery agents also enhance our ability to handle special needs of the final consignee, such as scheduled deliveries and specialized delivery equipment.

Key aspects of our LTL service offering include the following:

•

Pickup. In order to stay as close as possible to our customers, we prefer to directly pick up freight whenever cost-effective. We generally directly pick up freight within 150 miles of one of our service centers, primarily utilizing local ICs. Although we generally do not own the tractors or other powered transportation equipment used to transport our customers’ freight, we own or lease trailers for use in local city pickup and delivery. In 2019, we picked up approximately 79% of our customers’ LTL shipments. The remainder was handled by agents with whom we generally have long-standing relationships.

•

Consolidation at Service Centers. Key to our model are our 27 LTL service centers that we lease in strategic markets throughout the United States. At these service centers, numerous smaller LTL shipments are unloaded, consolidated into truckload shipments, and loaded onto a linehaul unit scheduled for a destination city. In order to continuously emphasize optimal load building and enhance operating margins, dock managers review every load before it is dispatched from one of our service centers.

•

Linehaul. Linehaul is the longest leg of the LTL shipment process. In dispatching a load, a linehaul coordinator uses our technology system to optimize cost-efficiency and service by assigning the load to the appropriate IC, Company driver, or purchased power. In 2019, approximately 50% of our linehaul shipments were handled by over 350 ICs with the remainder shipped via Company driver, purchased power, or rail.

•

De-consolidation and Delivery. Within our unique model, linehaul shipments are transported to our service centers, delivery agents, or direct to end users without stopping at a break-bulk hub, as is often necessary under the traditional, asset-based hub and spoke LTL model. This generally reduces physical handling and damage claims. In 2019, we delivered approximately 46% of LTL shipments through our service centers and approximately 54% through our delivery agents.

Truckload

We provide a range of TL solutions for our customers by leveraging our Company drivers, ICs, and a broad base of third-party carriers who operate dry van and temperature-controlled capacity. We arrange the pickup and delivery of TL freight through our 30 TL service centers located throughout the United States. We provide a variety of transportation solutions for dry goods ranging from paper products to steel, refrigerated foods like meat, poultry and beverages. We track all shipments using our proprietary technology and our dedicated service team.

Sales. Our senior management teams are responsible for managing existing customer relationships and generating new customer relationships. Because the performance of these individuals is essential to our success, we offer attractive incentive-based compensation packages that we believe keep our senior management teams motivated, focused, and service-oriented. We supplement our customer relationships with direct customer contact from our broader management teams, dispatchers or customer service representatives.

Capacity

We offer scalable capacity and reliable service to our extensive customer base in North America through a diverse third-party network of transportation providers and Company drivers and pilots. Our various transportation modes include Truckload, LTL, intermodal, and domestic and international air. Only one third-party carrier accounted for more than 23% of our ~~2018~~2019 purchased transportation costs. We ensure that each carrier is properly licensed and we regularly monitor each carrier's safety, capacity, reliability, and pricing trends. Enhanced visibility provided by our technology systems allows us to leverage the competitive dynamics within our network to renegotiate freight rates and provide our customers with more cost-effective transportation solutions while enhancing our operating margins.

We continuously focus on building and enhancing our relationships with reliable transportation providers to ensure that we not only secure competitive rates, but that we also gain access to consistent capacity. These relationships are critical to our success based on our asset-right transportation and asset-light logistics service provider business model. We typically pay our third-party carriers either a contracted per mile rate or the cost of a shipment less our contractually agreed-upon commission, and generally pay within seven to ten days from the date the shipment is delivered. We pay our third-party carriers promptly in order to drive loyalty and reliable capacity.

carriers either a contracted per mile rate or the cost of a shipment less our contractually agreed-upon commission, and generally pay within seven to ten days from the date the shipment is delivered. We pay our third-party carriers promptly in order to drive loyalty and reliable capacity.

Our network of transportation providers can be divided into the following groups:

Independent Contractors. ICs are a key part of our long-term strategy to maintain service and provide cost stability. As of December 31, ~~2018~~2019, we had over 1,~~900~~300 ICs, which consisted of over ~~1,500~~900 linehaul, ~~truckload,~~ and ~~intermodal~~truckload ~~services ICs~~ and over 400 local delivery ICs. In selecting our ICs, we adhere to specific screening guidelines in terms of safety records, length of driving experience, and evaluations. In the event of tightening of over-the-road freight capacity, we believe we are well positioned to increase our utilization of ICs as a cost-effective and reliable solution.

To enhance our relationship with our ICs, we offer per mile rates that we believe are highly competitive and often above prevailing market rates. In addition, we focus on keeping our ICs fully utilized in order to limit the number of “empty” miles they drive. We regularly communicate with our ICs and seek new ways to enhance their quality of life. We believe our efforts increase IC retention, which we believe ultimately leads to better service for our customers.6

~~Purchased~~To ~~Power~~maintain ~~Providers. In~~our ~~addition~~relationships towith our ~~large base of~~ ICs, we ~~have~~offer ~~access~~rates tothat awe ~~broad~~believe ~~base~~are ~~of purchased power providers~~competitive. WeIn ~~have~~addition, ~~established~~we ~~relationships~~focus ~~with~~on ~~carriers~~keeping ofour ~~all~~ICs ~~sizes,~~fully ~~including~~utilized ~~large~~in ~~national~~order ~~trucking companies and small~~ to ~~mid-size~~limit ~~regional fleets. With~~ the ~~exception~~number of ~~safety~~“empty” ~~incentives,~~miles ~~purchased~~they ~~power~~drive. ~~providers~~We ~~are~~regularly ~~generally~~communicate ~~paid~~with ~~under~~our ~~a similar structure as~~ ICs ~~within our LTL~~ and ~~TES~~seek ~~businesses.~~new Inways ~~contrast~~ to ~~contracts~~enhance ~~established~~their ~~with~~quality ~~our~~of ~~ICs,~~life. ~~who~~We ~~operate~~believe ~~under~~our ~~one~~efforts ofincrease ~~our~~IC ~~DOT authorities~~retention, which we dobelieve ~~not~~ultimately ~~cover~~leads ~~the~~to ~~cost~~better ofservice ~~liability insurance~~ for our ~~purchased power providers~~customers.

~~Company~~Purchased ~~Drivers~~Power Providers. In addition to our large base of ICs, we have access to a broad base of purchased power providers. We ~~employ~~have ~~approximately~~established 1relationships with carriers of all sizes,~~400~~ ~~drivers~~including ~~across~~large national trucking companies and small to mid-size regional fleets. With the exception of safety incentives, purchased power providers are generally paid under a similar structure as ICs within our LTL and TL businesses. In contrast to contracts established with our ICs, who operate under one of our DOT authorities, we do not cover the cost of liability insurance for our purchased power providers.

~~Delivery~~Company ~~Agents~~Drivers. ~~For~~ ~~the~~We ~~de-consolidation~~employ ~~and delivery stages of our LTL shipment process, our 40 LTL service centers are complemented by~~ approximately ~~150~~800 ~~third-party~~drivers ~~delivery~~across ~~agents. The use of delivery agents is also a key part of~~ our ~~long-term strategy to maintain a variable cost and scalable operating model with minimal overhead~~businesses.

~~Flight~~Delivery ~~Operations~~Agents. We For ~~support~~the ~~air~~de-consolidation ~~freight~~and ~~services,~~delivery ~~including~~stages ~~expedited~~of ~~delivery~~our LTL shipment process, ~~with~~our 1227 ~~cargo~~LTL ~~jets,~~service 68centers ~~flight~~are ~~operations~~complemented ~~personnel,~~by ~~including~~approximately ~~pilots,~~140 ~~ground~~third-party ~~crew,~~delivery ~~and~~agents. ~~flight~~The ~~coordinators,~~use ~~and~~of delivery agents is also a ~~network~~key part of ~~third~~our ~~party~~long-term ~~air~~strategy ~~cargo~~to ~~providers~~maintain a variable cost and scalable operating model with minimal overhead.

Flight Operations. We support air freight services, including expedited delivery, with 12 cargo jets, 60 flight operations personnel, including pilots, ground crew, and flight coordinators, and a network of third party air cargo providers.

Ground Expedite. We utilize proprietary bid technology supported by our logistics personnel and our network of Company drivers, ICs and purchased power providers.

Customers

Our goal is to establish long-term customer relationships and achieve year-over-year growth in recurring business by providing reliable, timely, and cost-effective transportation and logistics solutions. We possess the scale, operational expertise, and capabilities to serve shippers of all sizes. We serve an extensive customer base within a variety of end markets, with one direct customer, General Motors, accounting for approximately 1216% of our ~~2018~~2019 revenue. Our diverse customer base reduces our exposure to a decline in shipping demand from any one customer and a cyclical downturn within any particular end market.

Sales and Marketing

We currently market and sell our transportation and logistics solutions through sales personnel located throughout the United States. We are focused on actively expanding our sales force to new geographic markets ~~where we lack a strong presence~~.

We have a sales team consisting of both sales managers and inside sales representatives. We believe that this sales structure enables our salespeople to better serve our customers by developing an understanding of local, regional, national and international market conditions, as well as the specific transportation and logistics issues facing individual customers. Our sales team seeks additional business from existing customers and pursues new customers based on this knowledge and an understanding of the value proposition we can provide.

As of December 31, ~~2018~~2019, our sales force extends into each segment as follows:

• ~~Truckload~~Ascent ~~and Express Services~~TM. We ~~arrange~~have ~~the~~approximately ~~pickup~~50 ~~and delivery of freight either through our~~ direct ~~sales~~salespeople, ~~force~~Company orbrokers, ~~other~~and ~~Company~~approximately ~~relationships~~60 ~~including~~independent ~~management,~~brokerage ~~dispatchers~~agents, orcommissioned ~~customer~~sales ~~service~~ representatives, and agents.

• ~~Less-than-Truckload~~Ascent OD. Our ~~LTL~~direct sales ~~team~~force ofworks ~~over~~in 80conjunction ~~people~~with ~~consists~~Ascent ofTM ~~account~~and ~~executives,~~leverages ~~sales~~Ascent ~~managers,~~TM's ~~inside~~infrastructure ~~sales~~of ~~representatives,~~independent ~~and~~brokerage agents, commissioned sales representatives, and agents.

• ~~Ascent Global Logistics~~Less-than-Truckload. WeOur ~~have~~LTL ~~approximately~~sales 60team ~~direct~~of ~~salespeople,~~over ~~Company~~60 ~~brokers,~~people ~~and~~consists ~~approximately~~of 50account ~~independent~~executives, ~~brokerage~~sales ~~agents~~managers, ~~commissioned~~inside sales representatives, and ~~agents~~commissioned sales representatives.

7• Truckload. Our direct sales force works in conjunction with direct customer contacts, management, dispatchers or customer service representatives.

Competition

We compete in the North American transportation and logistics services sector. Our marketplace is extremely competitive and highly fragmented. We compete with a large number of other asset-light logistics companies, asset-based carriers, integrated logistics companies, and third-party freight brokers, many of whom have larger customer bases and more resources than we do.

In our markets, we compete with global asset-based integrated logistics companies such as FedEx Corporation, United Parcel Service, Inc., and XPO Logistics, Inc., against whom we compete in all of our service lines; asset-based freight haulers, such as Arkansas Best Corporation, Old Dominion Freight Line Inc., Daseke, Inc., Werner Enterprises, Inc., and YRC Worldwide, Inc., against whom we compete in our core TES and LTL service offerings; non-asset based and asset-light freight brokerage companies, such as C.H. Robinson Worldwide, Inc., Echo Global Logistics, Inc., Hub Group, Inc., Forward Air Corporation, and Landstar System, Inc., against whom we compete in all of our service offerings; 3PL providers ~~that offer comprehensive transportation management solutions~~, such as ~~Schneider~~ArcBest Logistics, Inc. and Transplace, Inc., against whom we compete in our Ascent offering; and smaller, niche transportation and logistics companies that provide services within a specific geographic region or end market. In our international freight forwarding business, we compete with a large number of service providers. Depending on the trade lane and solution, these competitors include large multi-national providers, such as Expeditors International of Washington, Inc., Kuehne & Nagel International AG / ADR, and DHL Global Supply Chain; regional providers, such as Mallory Alexander International Logistics and Laufer Group International; and local or niche providers. As a result, our focus remains on continuing to provide our customers with exceptional service.

Corporation, Old Dominion Freight Line Inc., Werner Enterprises, Inc., and YRC Worldwide, Inc., against whom we compete in our core TL and LTL service offerings; non-asset based and asset-light freight brokerage companies, such as C.H. Robinson Worldwide, Inc., Echo Global Logistics, Inc., Hub Group, Inc., Forward Air Corporation, and Landstar System, Inc., against whom we compete in all of our service offerings; 3PL providers that offer comprehensive transportation management solutions, such as Schneider Logistics, Inc. and Transplace, Inc., against whom we compete in our Ascent offering; and smaller, niche transportation and logistics companies that provide services within a specific geographic region or end market. In our international freight forwarding business, we compete with a large number of service providers. Depending on the trade lane and solution, these competitors include large multi-national providers, such as Expeditors International of Washington, Inc., Kuehne & Nagel International AG / ADR, and DHL Global Supply Chain; regional providers, such as Mallory Alexander International Logistics and Laufer Group International; and local or niche providers. As a result, our focus remains on continuing to provide our customers with exceptional service.

We believe we compete favorably by offering shippers attractive transportation and logistics solutions designed to deliver the optimal combination of cost and service. To that end, we believe our most significant competitive advantages include:


•	our comprehensive suite of transportation and logistics services, which allows us to offer à la carte or a full portfolio value proposition to shippers of varying sizes and to accommodate their diverse needs and preferred means of processing and communication;

• our asset-right transportation and asset-light logistics service provider, variable cost business model, which ~~allows~~will allow us to generate ~~strong~~ free cash flows and focus greater attention on providing optimal customer service than on asset utilization;


•	our technology systems, which allow us to provide scalable capacity and a high level of customer service across a variety of transportation modes; and

• our knowledgeable management team with experience leading ~~high-growth~~ logistics companies and/or business units, which allows us to benefit from a collective entrepreneurial culture focused on growth.

Seasonality

Our operations are subject to seasonal trends that have been common in the North American over-the-road, ocean, and air freight sectors for many years. ~~Our~~Typically, our results of operations for the quarter ending in March are on average lower than the quarters ending in June, September, and December. ~~Typically,~~This ~~this~~ pattern has been the result of factors such as inclement weather, national holidays, customer demand, and economic conditions.

Technology

We believe the continued development and innovation of our technology systems is important to providing our customers with the most cost-effective, timely, and reliable transportation and logistics solutions. Our objective is to allow our customers and vendors to easily do business with us via technology. Our customers have the ability, through a paperless process, to receive immediate pricing, place orders, track shipments, process remittance, receive updates, and review historical shipping data through a variety of reports over the Internet. We provide flexibility for customers and vendors by utilizing multiple technologies, including web, mobile, workflow and EDI.

Our ~~TES~~Ascent ~~operations~~operation ~~teams~~uses ~~use~~a ~~technology~~variety of software applications and systems customized to ~~dispatch~~meet orthe ~~broker~~unique needs of our customers~~’ freight~~. ~~Our~~We ~~software~~continuously ~~enhances~~enhance our ~~ability~~applications toand ~~track~~systems ~~Company~~to ~~and~~help ~~third-party~~improve ~~drivers,~~our ~~tractors~~productivity, ~~and~~increase ~~trailers~~customer visibility, ~~which~~and ~~provides~~improve ~~customers~~collaboration with ~~visibility~~our ~~into~~service ~~their~~providers, ~~supply~~all ~~chains.~~while ~~Additionally,~~offering customizable content for our ~~systems~~customers. ~~allow~~Our usweb-based totechnology ~~operate~~approach asallows aour ~~paperless~~Ascent ~~environment~~operation ~~through~~to ~~electronic~~process ~~order~~and ~~entry,~~service ~~resource~~customer ~~planning~~orders, ~~and~~track ~~dispatch.~~shipments ~~Our~~in ~~TES~~real ~~expedited~~time, ~~air~~select ~~and~~optimal ~~ground~~modes ~~operations~~of ~~utilize~~transportation, ~~proprietary~~execute ~~bid~~customer ~~technology~~billing, ~~which~~provide ~~provides~~carrier ~~customers~~rates, ~~with~~establish ~~real~~customer-~~time~~specific ~~market~~profiles, ~~pricing~~ and ~~logistics~~retain ~~options~~critical information for ~~time~~analysis ~~sensitive~~while ~~shipments,~~providing ~~supported~~a byCompany ~~our~~branded ~~fleets~~solution. We ofutilize ~~ground~~this approach to maximize supply chain efficiency through mode, carrier, and ~~air~~route ~~assets~~optimization.

Our ~~LTL~~expedited ~~operation~~air ~~utilizes~~and aground ~~web-based~~operations ~~system~~utilize ~~with~~proprietary ~~our~~bid ~~transportation management applications. Additionally~~technology, wewhich ~~make~~provides ~~use~~customers ~~of EDI and API's to allow our service centers to communicate electronically~~ with ~~our~~real-time ~~carriers’~~market pricing and ~~customers’~~logistics ~~internal~~options ~~systems.~~for Wetime ~~offer~~sensitive ~~our customers a paperless process~~shipments, ~~including~~supported ~~document~~by ~~imaging~~our ~~and~~fleets ~~shipment~~of ~~tracking~~ground and ~~tracing.~~air assets.

Our ~~Ascent~~LTL operation ~~uses~~utilizes a ~~variety~~web-based ofsystem ~~software~~with our transportation management applications. ~~and~~Additionally, ~~systems~~we ~~customized~~make touse ~~meet~~of ~~the~~EDI ~~unique~~and ~~needs~~API's ofto allow our ~~customers.~~service Wecenters ~~continuously~~to ~~enhance~~communicate electronically with our ~~applications~~carriers’ and ~~systems~~customers’ tointernal ~~help~~systems. ~~improve~~We offer our ~~productivity~~customers a paperless process, ~~increase~~including ~~customer~~quoting, ~~visibility~~bills of lading, document imaging and ~~improve~~shipment tracking and tracing.

Our TL operations teams use technology to dispatch or broker our customers’ freight. Our software enhances our ability to track Company and third-party drivers, tractors, and trailers, which provides customers with visibility into their supply chains. Additionally, our systems allow us to operate as a paperless environment through electronic order entry, resource planning, and dispatch.

collaboration with our service providers, all while offering customizable content for our customers. Our web-based technology approach allows our Ascent operation to process and service customer orders, track shipments in real time, select optimal modes of transportation, execute customer billing, provide carrier rates, establish customer-specific profiles, and retain critical information for analysis while providing a Company branded solution. We utilize this approach to maximize supply chain efficiency through mode, carrier, and route optimization.

Employees

As of December 31, ~~2018~~2019, we employed approximately 43,600 full-time and part-time personnel, which included drivers, pilots, and warehouse, dock and maintenance workers as well as personnel in our management, sales and marketing, brokerage, logistics, customer service, operations, finance, information technology and human resources functions. None of our employees are covered by a collective bargaining agreement and we consider relations with our employees to be good.

Regulation

The federal government substantially deregulated the provision of ground transportation and logistics services via the enactment of the Motor Carrier Act of 1980, the Trucking Industry Regulatory Reform Act of 1994, the Federal Aviation Administration Authorization Act of 1994, and the ICC Termination Act of 1995. Prices and services are now largely free of regulatory controls, although states have the right to require compliance with safety and insurance requirements, and interstate motor carriers remain subject to regulatory controls imposed by the U.S. Department of Transportation (“DOT”) and its agencies, such as the Federal Motor Carrier Safety Administration (“FMCSA”). Motor carrier, freight forwarding, and freight brokerage operations are subject to safety, insurance, and bonding requirements prescribed by the DOT and various state agencies. Any air freight business is subject to commercial standards set forth by the IATA and federal regulations issued by the TSA.

We are also subject to the Compliance, Safety, and Accountability Program (“CSA”), which is the FMCSA safety program designed to improve large truck and bus safety and ultimately reduce crashes. CSA is an enforcement and compliance model that involves assessments of a motor carrier's on-road performance and investigation results for a 24-month period using roadside stops and inspections, resulting in safety performance in the following categories: unsafe driving; hours-of-service compliance; driver fitness; controlled substances/alcohol; vehicle maintenance; hazardous material compliance; and crash indicator. The evaluations are then used by the FMCSA to select carriers for audit and other interventions.

We own USA Jet Airlines (“USA Jet”), which holds certificates of public convenience and necessity issued by the DOT pursuant to 49 U.S.C. § 41102 and an air carrier certificate granted by the Federal Aviation Administration (“FAA”) pursuant to Part 119 of the federal aviation regulations. The DOT, the FAA, and the U.S. Department of Homeland Security (“DHS”), through the TSA, have regulatory authority over USA Jet’s air transportation services. The Federal Aviation Act of 1958, as amended, is the statutory basis for DOT and the FAA authority and the Aviation and Transportation Security Act of 2001, as amended, is the basis for TSA aviation security authority.

The FAA’s authority relates primarily to operational aspects of air transportation, including aircraft standards and maintenance, as well as personnel and ground facilities, which may from time to time affect the ability of USA Jet to operate its aircraft in the most efficient manner. The air carrier certificate granted to USA Jet by the FAA remains in effect so long as we meet the safety and operational requirements of the applicable FAA regulations.

The DOT’s authority relates primarily to economic licensing aspects of air transportation. The DOT’s jurisdiction extends to authorized types of operations and aviation route authority and to other regulatory matters, including the transfer of route authority between carriers. USA Jet holds various certificates issued by the DOT, including a domestic certificate authorizing USA Jet to engage in U.S. air transportation and a foreign certificate authorizing international air transportation of property. In addition, USA Jet is subject to non-U.S. government regulation of aviation rights involving non-U.S. jurisdictions, and non-U.S. customs regulation.

The TSA has responsibility for aviation security. The TSA ~~continues~~requires ~~to require~~ USA Jet to comply with a Full All-Cargo Aircraft Operator Standard Security Program and the Twelve-Five Standard Security Program, which contain evolving and strict security requirements. These requirements are not static, but change periodically as the result of regulatory and legislative requirements, imposing additional security costs and creating a level of uncertainty for our operations.

We are also subject to various environmental and safety requirements, including those governing the handling, disposal, and release of hazardous materials, which we may be asked to transport in the course of our operations. If hazardous materials are released into the environment while being transported, we may be required to participate in, or may have liability for response costs and the remediation of such a release. In such a case, we also may be subject to claims for personal injury, property damage, and damage to natural resources. Our business is also subject to changes in legislation and regulations, which can affect our operations and those of our competitors. For example, new laws and initiatives to reduce and mitigate the effects of greenhouse gas emissions could significantly impact the transportation industry. Future environmental laws in this area could adversely affect our ICs’ costs and practices and, consequently, our operations.

We are also subject to regulations to combat terrorism that the DHS and other agencies impose.

The international freight forwarding and customs brokerage services provided by our Ascent business are regulated by a variety of regulatory agencies and bodies including, but not limited to: the U.S. Federal Maritime Commission (“FMC”), the CBP and the TSA within the DHS (customs brokerage and security issues); the IATA; the DOT; the FDA; the USDA; the FWS; the Bureau of Alcohol, Tobacco Products and Firearms (“BATF”); the U.S. Census Bureau; and other agencies or world governing bodies regulating international trade and compliance. Regulations and requirements must be strictly adhered to and can change periodically. Additionally, our Ascent business manages customer activities in numerous countries. As such, there may be risk associated with sudden fluctuations in currency, changes in economic policy, political unrest, changes to tariffs and trade policies/restrictions that are all outside of our control. Compliance with these changes may have a material impact on our operations and may increase our costs to service our customers.

Alcohol, Tobacco Products and Firearms (“BATF”); the U.S. Census Bureau; and other agencies or world governing bodies regulating international trade and compliance. Regulations and requirements must be strictly adhered to and can change periodically. Additionally, our Ascent business manages customer activities in numerous countries. As such, there may be risk associated with sudden fluctuations in currency, changes in economic policy, political unrest, changes to tariffs and trade policies/restrictions that are all outside of our control. Compliance with these changes may have a material impact on our operations and may increase our costs to service our customers.

Insurance

We insure our ICs and Company drivers against third-party claims for accidents or damaged shipments and we bear the risk of such claims. We maintain insurance for auto liability, general liability, and cargo damage claims. We maintain an aggregate of $100 million of auto liability and general liability insurance. We maintain auto liability insurance coverage for claims in excess of $1.0 million per occurrence and cargo coverage for claims in excess of $100,000 per occurrence. ~~Because~~ weIf ~~maintain insurance for~~ our ~~ICs, if our~~ insurance does not cover all or any portion of the claim amount, we may be forced to bear the financial loss. We attempt to mitigate this risk by carefully selecting ~~carriers~~IC's ~~with~~and Company drivers using quality control procedures ~~and~~employing safety ~~ratings~~assessments.

In addition to auto liability, general liability, and cargo claim coverage, our insurance policies also cover other standard industry risks related to workers’ compensation and other property and casualty risks. We are self-insured up to $1.0 million per occurrence for workers compensation. We believe our insurance coverage is comparable in terms and amount of coverage to other companies in our industry. We establish insurance reserves for anticipated losses and expenses and periodically evaluate and adjust the reserves to reflect current trends and our historical experience.

Financial Information About Segments

See Note 1516, “Segment Reporting” to the consolidated financial statements in this Form 10-K for financial information about our segments. Effective ~~January~~April 1, ~~2018~~2019, we changed our segment reporting ~~when~~to weseparate ~~integrated~~ our ~~truckload~~Ascent ~~brokerage~~OD ~~business~~(formerly ~~into~~Active ~~our~~On-Demand) ~~Ascent~~air ~~domestic~~and ~~freight~~ground ~~management~~expedite business from our truckload business. Segment information for prior periods has been revised to align with the new segment structure.

~~2019~~Significant ~~Developments~~Events in Fiscal Year 2019

Rights Offering

On February 26, 2019, we closed our previously announced fully backstopped $450 million rights offering, pursuant to which we issued and sold an aggregate of ~~900~~36 million new shares of our common stock at the subscription price of $012.50 per share. An aggregate of ~~177~~7,~~676~~107,~~223~~049 shares of our common stock were purchased pursuant to the exercise of basic subscription rights and over-subscription rights from stockholders of record during the subscription period, including from the exercise of basic subscription rights by stockholders who are affiliates of Elliott Management Corporation (“Elliott”). In addition, Elliott purchased an aggregate of ~~722~~28,~~323~~892,~~777~~951 additional shares pursuant to the previously announced commitment from Elliott to purchase all unsubscribed shares of our common stock in the rights offering pursuant to a standby purchase agreement (the “Standby Purchase Agreement”) that we entered into with Elliott dated November 8, 2018, as amended (the “backstop commitment”). Overall, Elliott purchased a total of ~~843~~33,~~632~~745,~~693~~308 shares of our common stock in the rights offering between its basic subscription rights and the backstop commitment, and following the closing of the rights offering beneficially owned approximately 90.4% of our common stock.

The net proceeds from the rights offering and backstop commitment were used to fully redeem the outstanding shares of our preferred stock and to pay related accrued and unpaid dividends. Proceeds were also used to pay fees and expenses in connection with the rights offering and backstop commitment. We retained in excess of $30 million of net cash proceeds to be used for general corporate purposes. The purpose of the rights offering was to improve and simplify our capital structure in a manner that gave our existing stockholders the opportunity to participate on a pro rata basis.

Stockholders’ Agreement

On February 26, 2019, we entered into a Stockholders’ Agreement with Elliott (the “Stockholders’ Agreement”). Our execution and delivery of the Stockholders’ Agreement was a condition to Elliott’s backstop commitment. Pursuant to the Stockholders’ Agreement, we granted Elliott the right to designate nominees to our board of directors and access to available financial information.

Amended and Restated Registration Rights Agreement

On February 26, 2019, we entered into an Amended and Restated Registration Rights Agreement with Elliott and investment funds affiliated with HCI Equity Partners (the “A&R Registration Rights Agreement”), which amended and restated the Registration Rights Agreement (the “Registration Rights Agreement”), dated as of May 2, 2017, between our Company and the parties thereto. Our execution and delivery of the A&R Registration Rights Agreement was a condition to Elliott’s backstop commitment. The A&R Registration Rights Agreement amended the Registration Rights Agreement to provide the Elliott Stockholders (as defined therein)

~~On February 26, 2019, we entered into an Amended~~ and ~~Restated Registration Rights Agreement with Elliott and investment funds affiliated with HCI Equity Partners (~~the “A&R Registration Rights Agreement”), which amended and restated the Registration Rights Agreement (the “Registration Rights Agreement”), dated as of May 2, 2017, between our Company and the parties thereto. Our execution and delivery of the A&R Registration Rights Agreement was a condition to Elliott’s backstop commitment. The A&R Registration Rights Agreement amended the Registration Rights Agreement to provide the Elliott Stockholders (as defined therein) and the HCI Stockholders (as defined therein) with unlimited Form S-1 registration rights in connection with Company securities owned by them.

Asset-Based Lending Credit Agreement

On February 28, 2019, we and our direct and indirect domestic subsidiaries entered into a credit agreement ~~(the “ABL Credit Agreement”)~~ with BMO Harris Bank N.A., as Administrative Agent, Lender, Letter of Credit Issuer and Swing Line Lender, Wells Fargo Bank, National Association and Bank of America, National Association, as Lenders, and the Joint Lead Arrangers and Joint Book Runners party thereto (the “ABL Credit Facility”). WeThe ABL Credit Facility consists of a $200.0 million asset-based revolving line of credit, of which up to (i) $15.0 million may be used for FILO Loans (as defined in the ~~initial~~ABL ~~proceeds~~Credit ~~from~~Facility), (ii) $20.0 million may be used for Swing Line Loans (as defined in the ABL Credit Facility), and (iii) $30.0 million may be used for letters of credit. The ABL Credit Facility provides that the revolving line of credit may be increased by up to an additional $100.0 million under certain circumstances. We initially borrowed $91.5 million under the ABL Credit Facility and used the initial proceeds for working capital purposes and to repay inour ~~full~~prior ~~our~~ABL ~~existing~~Facility. ~~credit~~The ~~facility~~ABL Credit Facility matures on February 28, 2024. We had adjusted excess availability under the ABL Credit Facility of $34.8 million as of December 31, 2019.

~~The~~On ~~ABL~~August ~~Credit~~2, ~~Facility~~2019, ~~consists~~we ofand aour ~~$200.0~~direct ~~million~~and ~~asset-based~~indirect ~~revolving~~domestic ~~line~~subsidiaries ofentered ~~credit,~~into ofa ~~which~~First upAmendment to ~~(i) $15.0~~Credit ~~million~~Agreement ~~may be used for FILO Loans~~ (~~as defined in~~ the “ABL ~~Credit~~Facility ~~Agreement~~Amendment”), ~~(ii) $20.0~~with ~~million~~respect ~~may~~to ~~be used for Swing Line Loans (as defined in~~ the ABL Credit ~~Agreement), and (iii) $30~~Facility.0 ~~million~~Pursuant ~~may~~to bethe ~~used for letters of credit. The~~ ABL ~~Credit~~Facility ~~Agreement~~Amendment, ~~provides that~~ the ~~revolving line of credit may be increased by up to an additional $100.0 million under certain circumstances. The~~ ABL Credit Facility ~~matures~~was onamended ~~February 28~~to, ~~2024.~~among ~~Advances~~other ~~under~~things, ~~the~~add ~~ABL~~Acceptable ~~Credit~~Letters ~~Facility~~of ~~bear~~Credit ~~interest at either:~~ (~~a) the LIBOR Rate (~~as defined in the ABL ~~Credit~~Facility ~~Agreement~~Amendment), ~~plus an applicable margin ranging from 1.50%~~ to ~~2.00% for~~ the ~~non-FILO~~Borrowing ~~Loans and 2.50% to 3.00 for the FILO Loans; or (b) the~~ Base ~~Rate~~ (as defined in the ABL Credit ~~Agreement),~~Facility ~~plus~~as anamended ~~applicable~~by ~~margin ranging from 0.50% to 1.00% for~~ the ~~non-FILO~~ABL ~~Loans~~Facility ~~and 1~~Amendment).~~50%~~ ~~to 2.00% for the FILO Loans.~~

On September 17, 2019, we and our direct and indirect domestic subsidiaries entered into a Second Amendment to Credit Agreement, effective as of September 13, 2019 (the “Second ABL Facility Amendment”), with respect to the ABL Credit Facility. Pursuant to the Second ABL Facility Amendment, the ABL Credit Facility was amended to, among other things, (i) extend the deadline for providing a reasonably detailed plan for achieving our stated liquidity goals and objectives in connection with our go-forward business plan and strategy, and (ii) eliminate one of the exceptions to the limitation on Dispositions (as defined the ABL Credit Facility).

On October 21, 2019, we and our direct and indirect domestic subsidiaries entered into a Third Amendment to Credit Agreement (the “Third ABL Facility Amendment”) with respect to the ABL Credit Facility. Pursuant to the Third ABL Facility Amendment, the ABL Credit Facility was amended to, among other things, (i) increase the amount of Acceptable Letters of Credit that can be added to the Borrowing Base from $30 million to $45 million, (ii) increase the Applicable Margin by 100 basis points, (iii) permit certain Specified Dispositions provided that the Net Cash Proceeds are used to pay down the Revolving Credit Facility or the Term Loan Obligations as specified, (iv) increase the Availability Block from the Specified Dispositions, (v) extend the applicable date for the Fixed Charge Trigger Period from October 31, 2019 to March 31, 2020, and (vi) add baskets for additional permitted Indebtedness consisting of Junior Lien Debt or unsecured Indebtedness in an aggregate amount not to exceed $100 million provided that, among other things, such Junior Lien Debt or unsecured Indebtedness has a maturity date that is at least 180 days after February 28, 2024.

On November 27, 2019, we and our direct and indirect domestic subsidiaries entered in a Fourth Amendment and Waiver to Credit Agreement (the “Fourth ABL Facility Amendment”) with respect to the ABL Credit Facility. Pursuant to the Fourth ABL Facility Amendment, the ABL Credit Facility was amended to, among other things, (i) revise certain schedules, and (ii) waive the Specified Defaults that arose from the failure to previously update a schedule of aircraft owned by the Loan Parties (as defined in the ABL Credit Facility).

Term Loan Credit Agreement

On February 28, 2019, we and our direct and indirect domestic subsidiaries entered into a credit agreement ~~(the “Term Loan Credit Agreement”)~~ with BMO Harris Bank N.A., as Administrative Agent and Lender, Elliott Associates, L.P. and Elliott International, L.P., as Lenders, and BMO Capital Markets Corp., as Lead Arranger and Book Runner (the “Term Loan Credit Facility”). WeThe ~~used~~Term Loan Credit Facility consists of an approximately $61.1 million term loan facility, consisting of (i) approximately $40.3 million of Tranche A Term Loans (as defined in the ~~initial~~Term ~~proceeds~~Loan ~~from~~Credit Facility), (ii) approximately $2.5 million of Tranche A FILO Term Loans (as defined in the Term Loan Credit Facility), (iii) approximately $8.3 million of Tranche B Term Loans (as defined in the Term Loan Credit Facility), and (iv) a $10.0 million asset-based facility available to finance future capital expenditures. We initially borrowed $51.1 million under the Term Loan Credit Facility and used the proceeds for working capital purposes and to repay inour ~~full~~prior ~~our~~ABL ~~existing~~Facility. ~~credit~~The ~~facility~~Term Loan Credit Facility matures on February 28, 2024.

~~The~~On ~~Term~~August ~~Loan~~2, ~~Credit Facility consists of an approximately $61.1 million term loan facility~~2019, ~~consisting~~we ofand ~~(i)~~our ~~approximately~~direct ~~$40.3~~and ~~million~~indirect ofdomestic ~~Tranche~~subsidiaries Aentered ~~Term~~into ~~Loans~~a ~~(as~~First ~~defined~~Amendment into ~~the Term Loan~~ Credit Agreement), (~~ii) approximately $2.5 million of Tranche A FILO Term Loans (as defined in~~ the “Term Loan ~~Credit~~Facility ~~Agreement~~Amendment”), ~~(iii)~~with ~~approximately~~respect ~~$8.3~~to ~~million of Tranche B Term Loans (as defined in~~ the Term Loan Credit ~~Agreement), and (iv) a $10~~Facility.0 ~~million~~Pursuant ~~asset-based facility available~~ to ~~finance~~the ~~future capital expenditures. The~~ Term Loan ~~Credit~~ Facility ~~matures on February 28~~Amendment, ~~2024. Principal on each of~~ the ~~Tranche A~~ Term ~~Loans~~Loan ~~and~~Credit ~~the~~Facility ~~Tranche~~was Bamended ~~Term~~to, ~~Loans~~among isother ~~due~~things: ~~in quarterly installments based upon a 4.5-year amortization schedule~~ (i~~.e.~~) ~~each~~defer ~~installment is 1/18th of~~ the ~~original principal amount of the Tranche A Term Loans and the Tranche B Term Loans), commencing on~~ September 1, 2019. ~~Principal~~quarterly onamortization ~~the~~payments ~~Tranche~~otherwise ~~A FILO Term Loans is~~ due ~~on the maturity date of the Term Loan Credit Facility, unless earlier accelerated~~ thereunder. ~~Principal~~to onDecember ~~each draw under the capital expenditure facility is due in quarterly installments based upon a five-year amortization schedule (i.e. each installment shall be~~ 1~~/20th~~, ~~of the original principal amount of any capital expenditure loan)~~2019, ~~commencing~~and ~~on the first day of the first full fiscal quarter immediately following the making of each such capital expenditure loan. The loans under the Term Loan Credit Facility bear interest at either:~~ (aii) ~~the~~provide ~~LIBOR~~that ~~rate~~CapX ~~(as defined in the Term Loan Credit Agreement), plus an applicable margin of 7.50% for Tranche A Term~~ Loans, ~~Tranche B Term Loans and capital expenditure loans, and 8.50% for Tranche A FILO Term Loans; or~~ (~~b) the Base Rate (~~as defined in the Term Loan Credit ~~Agreement~~Facility), ~~plus~~shall ~~an applicable margin of 6.50% for Tranche A Term Loans, Tranche B Term Loans and capital expenditure loans, and 7.50% for Tranche A FILO Term Loans.~~

not be available during the period commencing on August 2, 2019 and continuing until payment of the December 1, 2019 quarterly amortization payments.

On September 17, 2019, we and our direct and indirect domestic subsidiaries entered into a Second Amendment to Credit Agreement, effective as of September 13, 2019 (the “Second Term Loan Facility Amendment”), with respect to the Term Loan Credit Facility. Pursuant to the Second Term Loan Facility Amendment, the Term Loan Credit Facility was amended to, among other things, (i) add a requirement to deliver a reasonably detailed plan for achieving our stated liquidity goals and objectives in connection with our go-forward business plan and strategy, and (ii) eliminate one of the exceptions to the limitation on Dispositions (as defined the Term Loan Credit Facility).

On October 21, 2019, we and our direct and indirect domestic subsidiaries entered into a Third Amendment to Credit Agreement (the “Third Term Loan Facility Amendment”) with respect to the Term Loan Credit Facility. Pursuant to the Third Term Loan Facility Amendment, the Term Loan Credit Facility was amended to, among other things, (i) permit certain Specified Dispositions, (ii) eliminate our ability to request new CapX Loans, and (iii) add baskets for additional permitted Indebtedness consisting of Junior Lien Debt or unsecured Indebtedness in an aggregate amount not to exceed $100 million provided that, among other things, such Junior Lien Debt or unsecured Indebtedness has a maturity date that is at least 180 days after February 28, 2024.

On November 27, 2019, we entered into a Fourth Amendment to Credit Agreement (the “Fourth Term Loan Facility Amendment”) with respect to the Term Loan Credit Facility. Pursuant to the Fourth Term Loan Facility Amendment, the Term Loan Credit Facility was amended to, among other things, (i) revise certain schedules and (ii) waive the Specific defaults that arose from the failure to previously update a schedule of Aircraft owned by the Loan parties (as defined in the Term Loan Credit Facility).

Our prior ABL Facility was paid off with the proceeds from the ABL Credit Facility and the Term Loan Credit Facility. We recognized a $2.3 million loss on debt restructuring for the year ended December 31, 2019 related to these transactions.

Fee Letter

On August 2, 2019, we entered into a fee letter with Elliott (the “Fee Letter”). Pursuant to the Fee Letter, Elliott agreed to arrange for Letters of Credit in an aggregate face amount of $20 million to support our obligations under our ABL Credit Facility. As consideration for Elliott providing the Letters of Credit, we agreed to (i) pay Elliott a fee on the LC Amount, accruing from the date of issuance through the date of expiration (or if drawn, the date of reimbursement by us of the LC Amount to Elliott), at a rate equal to the LIBOR Rate (as defined in the ABL Credit Facility) plus 7.50%, which will be payable in kind by adding the amount then due to the then outstanding LC Amount, and (ii) reimburse Elliott for any draw on the Letters of Credit, including the amount of such draw and any taxes, fees, charges, or other costs or expenses reasonably incurred by Elliot in connection with such draw, promptly after receipt of notice of any such drawing under the Letters of Credit, in each case subject to the terms and conditions of the Fee Letter.

On August 20, 2019, we entered into a First Amendment to the Fee Letter (the “Fee Letter Amendment”), pursuant to which the maximum face amount of the Letters of Credit (as defined in the Fee Letter Amendment) that may be used to support our obligations under the ABL Credit Facility was increased from $20 million to $30 million.

On October 21, 2019, we entered a Second Amendment to the Fee Letter (the “Second Fee Letter Amendment”). Pursuant to the Second Fee Letter Amendment, the Fee Letter was amended to, among other things, increase the maximum face amount of the Letters of Credit (as defined in the Second Fee Letter Amendment) that may be used to support our obligations under the ABL Credit Facility from $30 million to $45 million.

Third Lien Credit Facility

On November 5, 2019, we and our direct and indirect domestic subsidiaries entered into a credit agreement (the “Third Lien Credit Agreement”) with U.S. Bank National Association, as Administrative Agent, and Elliott Associates, L.P. and Elliott International, L.P, as Lenders (the “Third Lien Credit Facility”). We used the initial $20 million Term Loan Commitment (as defined in the Third Lien Credit Agreement) under the Third Lien Credit Facility to refinance our $20 million principal amount of unsecured debt to the Lenders. We have $40.5 million of outstanding borrowings under this facility as of December 31, 2019.

The loans under the Third Lien Credit Facility bear interest at either: (a) the LIBOR rate (as defined in the Third Lien Credit Agreement), plus an applicable margin of 7.50%; or (b) the Base Rate (as defined in the Third Lien Credit Agreement), plus an applicable margin of 6.50%. Interest under the Third Lien Credit Facility shall be paid in kind by adding such interest to the principal amount of the applicable Term Loans on the applicable Interest Payment Date; provided that to the extent permitted by the ABL Credit Facility, the Term Loan Credit Facility and an Intercreditor Agreement, we may elect that all or a portion of interest due on an Interest Payment Date shall be paid in cash by providing written notice to the Administrative Agent at least five Business Days prior to the applicable Interest Payment Date specifying the amount of interest to be paid in cash. The Third Lien Credit Facility matures on August 26, 2024.

The obligations under the Third Lien Credit Agreement are guaranteed by each of our domestic subsidiaries pursuant to a guaranty included in the Third Lien Credit Agreement. As security for our obligations under the Third Lien Credit Agreement, we have granted a third priority lien on substantially all of our assets (including their equipment (including, without limitation, rolling stock, aircraft, aircraft engines and aircraft parts)) and proceeds and accounts related thereto, and substantially all of our other tangible and intangible personal property, including the capital stock of certain of our direct and indirect subsidiaries.

The Third Lien Credit Agreement contains negative covenants limiting, among other things, additional indebtedness, transactions with affiliates, additional liens, sales of assets, dividends, investments and advances, prepayments of debt, mergers and acquisitions, and other matters customarily restricted in such agreements. The Third Lien Credit Agreement also contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the Third Lien Credit Agreement to be in full force and effect, and a change of control.

Trading of the Company's common stock on the New York Stock Exchange

On October 4, 2018, we received a notice from the New York Stock Exchange (the “NYSE”) that we had fallen below the NYSE’s continued listing standards relating to minimum average global market capitalization and total stockholders’ investment, which require that either our average global market capitalization be not less than $50 million over a consecutive 30 trading day period, or our total stockholders’ investment be not less than $50 million. Pursuant to the NYSE continued listing standards, we timely notified the NYSE that we intended to submit a plan to the NYSE demonstrating how we intended to regain compliance with the continued listing standards within the required 18-month time frame. We timely submitted our plan, which was subsequently accepted by the NYSE. During the 18-month cure period, our shares continued to be listed and traded on the NYSE, subject to our compliance with other listing standards. The NYSE notification did not affect our business operations or our reporting requirements with the Securities and Exchange Commission (the “SEC”).

On October 12, 2018, we received a notice from the NYSE that we had fallen below the NYSE’s continued listing standard related to price criteria for common stock, which requires the average closing price of our common stock to equal at least $1.00 per share over a 30 consecutive trading day period. The NYSE notification did not affect our business operations or our SEC reporting requirements. As a result of our 1-for- 25 Reverse Stock Split that took effect on April 4, 2019, we received a notice from the NYSE on April 12, 2019 that a calculation of our average stock price for the 30-trading days ended April 12, 2019, indicated that our stock price was above the NYSE's minimum requirements of $1.00 based on a 30-trading day average. Accordingly, we are now in compliance with the $1.00 continued listed criterion. On September 10, 2019, we received a notice from the NYSE that we were back in compliance with the NYSE quantitative listing standards. This decision came as a result of our achievement of compliance with the NYSE's minimum market capitalization and stockholders' equity requirements over the prior two consecutive quarters.

All references to numbers of common shares and per common share data in this Form 10-K have been retroactively adjusted to account for the effects of the Reverse Stock Split for all periods presented.

See Note 6, “Debt” to our consolidated financial statements in this Form 10-K for additional information regarding the ABL Credit Facility, the Term Loan Credit Facility, the Fee Letter, and the Third Lien Credit Facility.

Sale of Intermodal

On November 5, 2019, we completed the sale of our Roadrunner Intermodal Services (“Intermodal”) business to Universal Logistics Holdings, Inc., based in Warren, Michigan, for $51.3 million in cash, subject to customary purchase price and working capital adjustments. The business had revenue of approximately $125.2 million for the trailing 12-months ended September 30, 2019 and was part of our TL segment.

Sale of Flatbed

On December 9, 2019, we completed the sale of our Flatbed business unit (“Flatbed”), for $30.0 million in cash, subject to customary purchase price and working capital adjustments. Flatbed had operated as D&E Transport, based in Clearwater, Minnesota. The business had revenue of over $50.0 million for the trailing 12-month ended September 30, 2019 and was part of our TL segment.

Available Information

Our principal executive offices are located at 1431 Opus Place, Suite 530, Downers Grove, Illinois 60515, and our telephone number is (414) 615-1500. Our website address is www.rrts.com. The information contained on our website or that can be accessed through our website is not part of, and is not incorporated by reference into, this Form 10-K or in any other report or document we file with the ~~Securities and Exchange Commission (“~~SEC”).

We file reports with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any other filings required by the SEC. Through our website, we make available free of charge our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

The SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

1214



ITEM 1A.	RISK FACTORS

You should carefully consider the risk factors set forth below as well as the other information contained in this Form 10-K, including our consolidated financial statements and related notes. Any of the following risks could materially and adversely affect our business, financial condition, or results of operations. In such a case, you may lose all or part of your investment. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially adversely affect our business, financial condition, or results of operations.

We have identified material weaknesses in our internal control over financial reporting which could, if not remediated, adversely affect our ability to report our financial condition and results of operations in a timely and accurate manner, investor confidence in our Company, and the value of our common stock.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act and based upon the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO framework”). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and preparation of our financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”). Management is also responsible for reporting on the effectiveness of internal control over financial reporting.

We ~~have~~did not ~~maintained~~maintain an effective control environment based on the criteria established in the COSO framework. We have identified deficiencies in the principles associated with the control environment of the COSO framework. Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to: (i) our commitment to integrity and ethical values, (ii) the ability of our board of directors to effectively exercise oversight of the development and performance of internal control, as a result of failure to communicate relevant information within our organization and, in some cases, withholding information, (iii) appropriate organizational structure, reporting lines, and authority and responsibilities in pursuit of objectives, (iv) our commitment to attract, develop, and retain competent individuals, and (v) holding individuals accountable for their internal control related responsibilities. ~~These material weaknesses resulted in material accounting errors.~~

We ~~have~~did not ~~maintained~~maintain an effective control environment to enable the identification and mitigation of risks of material accounting errors, ~~based~~as onresult of the contributing factors to the material ~~weakness~~weaknesses in the control environment, including:

• The tone from ~~former~~ executive management was insufficient to create the proper environment for effective internal control over financial reporting and to ensure that (i) there were adequate processes for oversight, (ii) there was accountability for the performance of internal control over financial reporting responsibilities, (iii) identified issues and concerns were raised to appropriate levels within our organization, (iv) corrective activities were appropriately applied, prioritized, and implemented in a timely manner, and (v) relevant information was communicated within our organization and not withheld from our independent directors, our Audit Committee, and our independent auditors.

• In certain operating companies and at our corporate headquarters there were inconsistent accounting systems, policies, and procedures. Additionally, in certain locations we did not attract, develop, and retain competent management, accounting, financial reporting, internal audit, and information systems personnel or resources to ensure that internal control responsibilities were performed and that information systems were aligned with internal control objectives.

•

Our oversight processes and procedures that guide individuals in applying internal control over financial reporting were not adequate in preventing or detecting material accounting errors, or omissions due to inadequate information and, in certain instances, management override of internal controls, including recording improper accounting entries, recording accounting entries that were inconsistent with information known by management at the time, not communicating relevant information within our organization and, in some cases, withholding information from our independent directors, our Audit Committee, and our independent auditors.

Additionally, we have identified control deficiencies that constituted material weaknesses in the principles associated with the risk assessment, control activities, information and communication and monitoring activities components of the COSO framework. Refer to Item 9A. “Controls and Procedures” of this Form 10-K for more information.

As a result of such material weaknesses, our management concluded that our disclosure controls and procedures and internal control over financial reporting were not effective as of December 31, ~~2018~~2019. There were no changes during the quarter ended December 31, 2019 in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

AAs ~~“material~~discussed ~~weakness” is a deficiency~~above, orwe ahave ~~combination~~identified ofmaterial ~~deficiencies,~~weaknesses in our internal control over financial reporting,. ~~such~~Although ~~that~~we ~~there~~have isnot afully ~~reasonable~~remediated ~~possibility~~the ~~that a~~ material ~~misstatement~~weaknesses as of ~~our~~December ~~annual~~31, or2019, ~~interim~~we ~~consolidated~~have ~~financial~~made, ~~statements~~and will ~~not~~continue ~~be prevented or detected on a timely basis. We are actively engaged in developing and implementing a remediation plan designed~~ to ~~address these material weaknesses~~make, ~~but~~improvements to our ~~remediation~~policies ~~efforts are not complete~~ and ~~are~~procedures ~~ongoing.~~as ~~Although~~well weas ~~are working to remedy~~ the ~~ineffectiveness~~oversight of ~~our~~these ~~internal~~policies ~~control~~and ~~over financial reporting~~procedures, ~~there~~staffing ~~can~~of bepositions nowhich ~~assurance~~play asa tosignificant ~~when the remediation~~

1315

~~plan~~role ~~will~~in beinternal ~~fully~~control. ~~developed~~We oralso ~~implemented,~~have ~~the effectiveness of the remediation plan~~made, ~~when~~and it will becontinue ~~fully~~to ~~implemented~~make, orimprovements ~~the~~in ~~aggregate~~our ~~cost~~communication of ~~implementation.~~relevant ~~Until~~and ~~our~~accurate ~~remediation~~information ~~plan~~both isinternally ~~fully~~and ~~implemented~~externally, ~~our~~identification ~~management~~of ~~will~~risks ~~continue to devote significant time~~ and ~~attention~~enhancement toof ~~these efforts. If we do not complete~~ our ~~remediation~~risk inassessment aprocedures. ~~timely~~Design ~~fashion,~~and orimplementation atof ~~all,~~control oractivities ~~if our remediation plan is inadequate, there will continue to be an increased risk~~ that weaddress ~~will~~objectives ~~be unable to timely file future periodic reports with the SEC~~ and ~~that~~risks ~~our future consolidated financial statements could contain errors that~~ will becontinue ~~undetected. If we are unable to report our results~~ in a2020 ~~timely~~ and ~~accurate~~subsequent ~~manner~~years, weas ~~may not be able to comply with the applicable covenants in our financing arrangements~~necessary, and ~~may~~we bewill ~~required~~continue ~~to seek additional amendments or waivers under these financing arrangements, which could adversely impact~~ our ~~liquidity~~evaluation and ~~financial~~assessment ~~condition.~~of ~~Further and continued determinations that there are material weaknesses in~~ the ~~effectiveness of our internal~~ control ~~over~~environment ~~financial~~and ~~reporting~~efforts ~~could reduce our ability~~ to ~~obtain~~identify ~~financing~~and orremediate ~~could increase~~ the ~~cost~~underlying ofcauses ~~any financing we obtain and require additional expenditures~~ of ~~both~~the ~~money~~identified ~~and~~material ~~our management’s time to comply with applicable requirements~~weaknesses.

A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. We are actively engaged in developing and implementing a remediation plan designed to address these material weaknesses, but our remediation efforts are not complete and are ongoing. Although we are working to remedy the ineffectiveness of our internal control over financial reporting, there can be no assurance as to when the remediation plan will be fully developed or implemented, the effectiveness of the remediation plan, when it will be fully implemented, or the aggregate cost of implementation. Until our remediation plan is fully implemented, our management will continue to devote significant time and attention to these efforts. If we do not complete our remediation in a timely fashion, or at all, or if our remediation plan is inadequate, there will continue to be an increased risk that we will be unable to timely file future periodic reports with the SEC and that our future consolidated financial statements could contain errors that will be undetected. If we are unable to report our results in a timely and accurate manner, we may not be able to comply with the applicable covenants in our financing arrangements, and may be required to seek additional amendments or waivers under these financing arrangements, which could adversely impact our liquidity and financial condition. Further and continued determinations that there are material weaknesses in the effectiveness of our internal control over financial reporting could reduce our ability to obtain financing or could increase the cost of any financing we obtain and require additional expenditures of both money and our management’s time to comply with applicable requirements.

Any failure to implement or maintain required new or improved controls, or any difficulties we encounter in their implementation, could result in additional material weaknesses or material misstatements in our consolidated financial statements. Any new misstatement could result in a further restatement of our consolidated financial statements, cause us to fail to meet our reporting obligations, reduce our ability to obtain financing, increase the cost of the financing we obtain, or cause investors to lose confidence in our reported financial information, leading to a decline in our stock price. We cannot assure you that we will not discover additional weaknesses in our internal control over financial reporting.

Further, we may be the subject of negative publicity focusing on the restatement of our previously issued financial results and related matters, and may be adversely impacted by negative reactions from our stockholders, creditors, or others with which we do business. This negative publicity may impact our ability to attract and retain customers, employees, drivers, and vendors. The occurrence of any of the foregoing could harm our business and reputation and cause the price of our securities to decline.

The restatement of our previously issued financial results has resulted in private litigation, derivative lawsuits, and government agency investigations and actions, and could result in additional litigation, government agency investigations, and enforcement actions.

~~Following~~In ~~our press release on January 30,~~ 2017, three putative class actions were filed in the United States District Court for the Eastern District of Wisconsin against us and our former officers, Mark A. DiBlasi and Peter R. Armbruster. On May 19, 2017, the Court consolidated the actions under the caption In re Roadrunner Transportation Systems, Inc. Securities Litigation (Case No. 17-cv-00144), and appointed Public Employees’ Retirement System as lead plaintiff. On March 12, 2018, the lead plaintiff filed a Consolidated Amended Complaint (the “CAC”) on behalf of a class of persons who purchased our common stock between March 14, 2013 and January 30, 2017, inclusive. The CAC ~~alleges~~asserted ~~(i)~~claims wearising ~~and~~out ~~Messrs. DiBlasi and Armbruster violated Section 10(b)~~ of ~~the Exchange Act and Rule 10b-5, and (ii) Messrs. DiBlasi and Armbruster,~~ our ~~former~~January ~~Chairman~~2017 ~~Scott~~announcement ~~Rued,~~that ~~HCI~~we ~~Equity~~would ~~Partners, L.L.C., and HCI Equity Management, L.P. violated Section 20(a) of the Exchange Act, by making or causing to~~ be ~~made~~restating ~~materially~~our ~~false~~prior orperiod ~~misleading statements, or failing to disclose material facts, regarding (a) the accuracy of our~~ financial statements; ~~(b) our true earnings~~ and ~~expenses;~~sought (c) the effectiveness of our disclosure controls and controls over financial reporting; (d) the true nature and depth of financial risk associated with our tractor lease guaranty program; (e) our leverage ratios and compliance with our credit facilities; and (f) the value of the goodwill we carried on our balance sheet. The CAC seeks certification as a class action, compensatory damages, and attorney'’s fees and costs. On ~~November~~March 1929, ~~2018~~2019, the parties entered into a ~~binding~~Stipulation ~~term~~of ~~sheet~~Settlement agreeing to settle the action for $20 million, $17.9 million of which will be funded by our D&O carriers ($4.8 million of which is by way of a pass through of the D&O carriers’ payment to us in connection with the settlement of the Federal Derivative Action described below). ~~The~~On ~~parties~~September ~~are~~26, ~~finalizing~~2019, the ~~Stipulation~~Court ofentered ~~Settlement.~~an ~~The~~Order ~~settlement~~finally isapproving ~~conditioned~~the ~~on a~~ settlement ~~of the Federal Derivative Action described below, dismissal of the State Derivative Action described below,~~ and a final ~~court~~judgment. ~~approval~~All ~~of the~~ settlements inhave ~~this~~been ~~action and in the Federal Derivative Action~~paid.

On May 25, 2017, Richard Flanagan filed a complaint alleging derivative claims on our behalf in the Circuit Court of Milwaukee County, State of Wisconsin (Case No. 17-cv-004401) against Scott Rued, Mark DiBlasi, Christopher Doerr, John Kennedy, III, Brian Murray, James Staley, Curtis Stoelting, William Urkiel, Judith Vijums, Michael Ward, Chad Utrup, Ivor Evans, Peter Armbruster, and Brian van Helden (the “State Derivative Action”). ~~Count~~The IComplaint ofasserted ~~the~~claims ~~complaint~~arising ~~alleges~~out ~~the~~of ~~Director~~our ~~Defendants~~January ~~breached~~2017 ~~their~~announcement ~~fiduciary duties by “knowingly failing to ensure~~ that ~~the~~we ~~Company~~would ~~implemented~~be ~~and~~restating ~~maintained~~our ~~adequate~~prior ~~internal~~period ~~controls over its accounting and~~ financial ~~reporting functions,” and seeks unspecified damages~~statements. ~~Count~~On IIOctober ~~of the complaint alleges the Officer Defendants DiBlasi~~15, ~~Armbruster~~2019, ~~and van Helden received substantial performance-based compensation and bonuses for fiscal year 2014 that should be disgorged. The action has been stayed pending~~ the ~~District~~ Court’s ~~approval~~entered ofan ~~the~~Order ~~proposed~~dismissing ~~settlement of~~ the ~~Federal Derivative Action, following which the defendants would move to dismiss this~~ action aswith ~~moot~~prejudice. ~~While the case was stayed, the plaintiff obtained permission to file an amended complaint adding claims against two former Company employees: Bret Naggs and Mark Wogsland.~~

1416

filed a complaint alleging derivative claims on our behalf in the United States District Court for the Eastern District of Wisconsin. On March 21, 2018, the Court entered an order consolidating the Kent and Chester County actions under the caption Kent v. Stoelting et al (Case No. 17-cv-00893) (the “Federal Derivative Action”). On March 28, 2018, plaintiffs filed their Verified Consolidated Shareholder Derivative Complaint alleging claims on ~~our~~ behalf of us against Peter Armbruster, Mark DiBlasi, Scott Dobak, Christopher Doerr, Ivor Evans, Brian van Helden, John Kennedy III, Ralph Kittle, Brian Murray, Scott Rued, James Staley, Curtis Stoelting, William Urkiel, Chad Utrup, Judith Vijums, and Michael Ward. ~~Count~~ IThe ~~alleges~~Complaint ~~that~~asserted ~~several~~claims ofarising ~~the~~out ~~defendants violated Section 14(a)~~ of ~~the Exchange Act and Rule 14a-9 based upon alleged misrepresentations and omissions in several of~~ our ~~proxy~~January ~~statements. Count~~2017 IIannouncement ~~alleges~~ that ~~all~~we ~~the~~would ~~defendants~~be ~~breached~~restating ~~their~~our ~~fiduciary~~prior ~~duty. Count~~period ~~III~~financial ~~alleges that all the defendants wasted corporate assets~~statements. ~~Count~~ ~~IV alleges that certain of the defendants were unjustly enriched.~~ The Complaint ~~seeks~~sought monetary damages, improvements to our corporate governance and internal procedures, an accounting from defendants of the damages allegedly caused by them and the improper amounts the defendants allegedly obtained, and punitive damages. ~~The~~On ~~parties~~March ~~are~~28, ~~currently~~2019, ~~finalizing~~ the ~~terms~~parties ofentered into a Stipulation of Settlement, which provides for certain corporate governance changes and a $6.9 million payment, $4.8 million of which will be paid by our D&O carriers into an escrow account to be used by us to settle the class action described above and $2.1 million of which will be paid by our D&O carriers to cover plaintiffs attorney’s fees and expenses. On September 26, ~~subject~~2019, tothe ~~court~~Court ~~approval~~entered an Order finally approving the settlement and a final judgment. All settlements have been paid.

~~Given~~In addition, subsequent to our announcement that certain previously filed financial statements should not be relied upon, we were contacted by the ~~status~~SEC, Financial Industry Regulatory Authority (“FINRA”), and the Department of Justice (“DOJ”). The DOJ and Division of Enforcement of the ~~matters~~SEC ~~above,~~have wecommenced ~~concluded~~investigations ininto the events giving rise to the restatement. We received formal requests for documents and other information. In June 2018, ~~that~~two aof ~~liability~~our isformer ~~probable~~employees were indicted on charges of conspiracy, securities fraud, and ~~recorded~~wire ~~the~~fraud ~~estimated~~as ~~loss~~part of ~~$22~~the ~~million~~ongoing DOJ investigation. In April 2019, the indictment was superseded with an indictment against those two former employees as well as our former Chief Financial Officer. In the superseding indictment, Count I alleges that all defendants engaged in conspiracy to fraudulently influence accountants and make false entries in a ~~corresponding~~public ~~insurance~~company’s ~~reimbursement~~books, ~~receivable~~records and accounts. Counts II-V allege specific acts by all defendants to fraudulently influence accountants. Counts VI through IX allege specific acts by all defendants to falsify entries in a public company’s books, records, and accounts. Count X alleges that all defendants engaged in conspiracy to commit securities fraud and wire fraud. Counts XI - XIII allege specific acts by all defendants of ~~$20~~securities ~~million~~fraud. Counts XIV - XVII allege specific acts by all defendants of wire fraud. Count XVIII alleges bank fraud by our former Chief Financial Officer. Count XIX alleges securities fraud by one of the former employees.

InAdditionally, ~~addition~~in April 2019, ~~subsequent~~the toSEC ~~our~~filed ~~announcement~~suit against the same three former employees. The SEC listed us as an uncharged related party. Counts I-V allege that ~~certain~~all ~~previously~~defendants ~~filed~~engaged ~~financial~~in ~~statements~~a ~~should~~fraudulent ~~not~~scheme beto ~~relied~~manipulate ~~upon~~our financial results. In particular, weCount ~~were~~I ~~contacted~~alleges bythat ~~the~~all ~~SEC,~~defendants violated Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5(a) and (c). Count II alleges that our former Chief Financial ~~Industry~~Officer ~~Regulatory~~and ~~Authority,~~one ~~Inc~~of the former employees violated Section 17(a)(1) and (3) of the Securities Act. Count III alleges our former Chief Financial Officer violated Section 10(~~“FINRA”~~b), of the Exchange Act and Exchange Act Rule 10b-5(b). Count IV alleges that the ~~Department~~two former employees aided and abetted our violation of ~~Justice~~Section 10(~~“DOJ”~~b) of the Exchange Act and Exchange Act Rule 10-5(b). ~~The~~ ~~DOJ~~Count V alleges that our former Chief Financial Officer and ~~Division~~one of ~~Enforcement~~our former employees violated Section 17(a)(2) of the ~~SEC~~Securities ~~have~~Act. ~~commenced~~Count ~~investigations~~VI ~~into~~alleges that one of the ~~events~~former ~~giving~~employees ~~rise~~engaged toin insider trading in violation of Section 10(b) of the ~~restatement~~Exchange Act and Exchange Act Rule 10b-5(a) and (c). We ~~have~~Counts ~~received~~VII ~~formal~~alleges ~~requests~~that ~~for~~all ~~documents~~defendants engaged in aiding and ~~other~~abetting ~~information~~our reporting violations of Section 13(a) of the Exchange Act. In ~~addition,~~Count VIII alleges that all defendants engaged in ~~June~~aiding ~~2018~~and ~~two~~abetting our record-keeping violations of Section 13(b)(2)(A) of the Exchange Act. Count IX alleges that our former ~~employees~~Chief ~~were~~Financial ~~indicted~~Officer onengaged ~~charges~~in aiding and abetting our record-keeping violations of ~~conspiracy,~~Section ~~securities~~13(b)(2)(B) ~~fraud,~~of the Exchange Act. Count X alleges that all defendants engaged in falsification of records and ~~wire~~circumvention ~~fraud~~of ascontrols ~~part~~in violation of Section 13(b) (5) of the ~~ongoing~~Exchange ~~DOJ~~Act and ~~SEC~~Rule ~~investigation~~13b2-1. We ~~are~~Count ~~cooperating~~XI ~~fully~~alleges ~~with~~that all defendants engaged in false statements to accountants in violation of Rule 13b2-2 of the ~~joint~~Exchange ~~DOJ~~Act. ~~and~~Count ~~SEC~~XIII ~~investigation~~alleges that our former Chief Financial Officer engaged in certification violations of rule 3a-14 of the Exchange Act. ~~Given~~Count XIII alleges that we violated (i) Section 10(b) of the ~~status~~Exchange Act and Rule 10b-5; (ii) Section 13(a) of ~~this~~the ~~matter~~Exchange Act and Rules 12b-20, we13a-1, ~~are~~13a-11, ~~unable~~and to13a-13; ~~reasonably~~and ~~estimate~~(iii) Sections 13(b)(2)(A) and 13(b)(2)(B) of the ~~potential~~Exchange ~~costs~~Act. orIt ~~range~~further alleges that our former Chief Financial Officer's acts subject him to control person liability for these violations. Count XIV alleges violation of ~~costs~~Section at304 ~~this~~of ~~time~~the Sarbanes-Oxley Act of 2002 against our former Chief Financial Officer.

We ~~cannot~~are ~~predict~~cooperating ~~the~~fully ~~outcome~~with ofthe ~~these~~joint ~~matters,~~DOJ orand ~~whether~~SEC ~~any~~investigation. ~~other~~Even ~~actions~~though orwe ~~proceedings~~are ~~will~~not benamed ~~filed against us~~ in ~~the~~this ~~future~~investigation, ~~and~~we ~~the~~have ~~cost~~an ofobligation ~~defending~~to ~~such~~indemnify ~~actions~~the orformer ~~proceedings~~employees ~~could be material. Furthermore, defending such actions or proceedings could divert our management~~ and ~~key personnel from our business operations~~directors. If weHowever, ~~are~~given ~~found~~the ~~liable~~status inof ~~any~~this ~~actions or proceedings~~matter, we ~~may~~are ~~have~~unable to ~~pay~~reasonably ~~substantial~~estimate ~~damages or change~~ the ~~way~~potential wecosts ~~conduct~~or ~~our~~range ~~business, either~~ of ~~which~~costs ~~may~~at ~~have~~this atime. ~~material~~Any ~~adverse~~costs ~~effect~~will onbe our ~~business,~~responsibility ~~operating~~as ~~results,~~we ~~financial~~have ~~condition,~~exhausted ~~and~~all ~~prospects. There~~of ~~may~~our ~~also~~insurance becoverage ~~negative~~for ~~publicity~~costs ~~associated~~related ~~with~~to ~~litigation~~legal oractions ~~regulatory~~as ~~proceedings~~part ~~that~~of ~~could harm our business and reputation and cause~~ the ~~price of our securities to decline~~restatement.

The restatement of our previously issued financial statements was time-consuming and expensive and could expose us to additional risks that could adversely affect our financial position, results of operations, and cash flows.

As described in Amendment No. 1 to our Annual Report on Form 10-K/A for the year ended December 31, 2015, Amendment No. 1 to our Quarterly Reports on Form 10-Q/A for the quarters ended March 31, 2016, June 30, 2016, and September 30, 2016, and Note 15 “Restatement of Previously Issued Financial Statements” to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2016, we restated our previously issued consolidated financial statements for the years ended December 31, 2015, 2014, and 2013, and each of the quarters ended March 31, 2016, June 30, 2016, and September 30, 2016, as well as the quarters in the years ended December 31, 2015 and 2014. The restatement was time-consuming and expensive ~~and could expose us to a number of additional risks that could adversely affect our financial position, results of operations, and cash flows.~~

In particular, we have incurred significant expense, including audit, legal, consulting, and other professional fees, as well as fees related to amendments to our prior senior credit facilities, the 2017 Investment Agreement (defined below), the Series E-1 Investment Agreement (defined below) and the Prior ABL Facility (defined below), in connection with the restatement of our previously issued consolidated financial statements and the ongoing remediation of material weaknesses in our internal control over financial reporting. We have taken a number of steps, including both adding internal personnel and hiring outside consultants, and intend to continue to take appropriate and reasonable steps to strengthen our accounting function and reduce the risk of additional misstatements in our financial statements. For more details about our remediation plan, see Item 9A. “Controls and Procedures” of this Form 10-K. To the extent these steps are not successful, we may have to incur additional time and expense. Our management’s attention has also been, and may further be, diverted from the operation of our business in connection with the restatement and ongoing remediation of material weaknesses in our internal controls. 17

and could expose us to a number of additional risks that could adversely affect our financial position, results of operations, and cash flows.

In particular, we have incurred significant expense, including audit, legal, consulting, and other professional fees, as well as fees related to amendments to our prior senior credit facilities, the 2017 Investment Agreement (defined below), the Series E-1 Investment Agreement (defined below) and our prior ABL Facility, in connection with the restatement of our previously issued consolidated financial statements and the ongoing remediation of material weaknesses in our internal control over financial reporting. We have taken a number of steps, including both adding internal personnel and hiring outside consultants, and intend to continue to take appropriate and reasonable steps to strengthen our accounting function and reduce the risk of additional misstatements in our financial statements. For more details about our remediation plan, see Item 9A. “Controls and Procedures” of this Form 10-K. To the extent these steps are not successful, we may have to incur additional time and expense. Our management’s attention has also been, and may further be, diverted from the operation of our business in connection with the restatement and ongoing remediation of material weaknesses in our internal controls.

We are also subject to claims, investigations, and proceedings arising out of the errors in our previously issued financial statements, including securities class action litigation, derivative lawsuits, and government agency investigations.

One or more significant claims or the cost of maintaining our insurance could have an adverse effect on our results of operations.

We employ approximately ~~1,400~~800 drivers and use the services of thousands of ICs and transportation companies and their drivers in connection with our transportation operations. We also provide air freight services with our fleet of 12 cargo jets. From time to time, these drivers or pilots are, or may be, involved in accidents which may cause injuries and in which goods carried by them are lost or damaged. Such accidents usually result in equipment damage and, unfortunately, can also result in injuries or death. Although most of these drivers are ICs or work for third-party carriers, from time to time claims may be asserted against us for their actions or for our actions in retaining them. Claims against us may exceed the amount of our insurance coverage, or may not be covered by insurance at all. Our involvement in the transportation of certain goods, including, but not limited to, hazardous materials, could also increase our exposure in the event of an accident resulting in injuries or contamination. The resulting types and/or amounts of damages may under any of these circumstances be excluded by or exceed the amount of our insurance coverage or the insurance coverage maintained by the contracted carrier. A material increase in the frequency or severity of accidents, claims for lost or damaged goods, liability claims, workers' compensation claims, or unfavorable resolutions of any such claims could adversely affect our results of operations to the extent claims are not covered by our insurance or such losses exceed our reserves. Significant increases in insurance costs or the inability to purchase insurance as a result of these claims could also reduce our profitability and have an adverse effect on our results of operations. The timing of the incurrence of these costs could also significantly and adversely impact our operating results compared to prior periods.

Increased insurance premium costs could have an adverse effect on our results of operations.

Insurance carriers may increase premiums for transportation companies generally. We could also experience additional increases in our insurance premiums in the future if our claims experience worsens. If our insurance or claims expense increases and we are unable to offset the increase with higher freight rates, our results of operations could be adversely affected. Furthermore, we may not be able to maintain or obtain sufficient or desired levels of insurance at reasonable rates. In some instances, certain insurance could become unavailable or available only for reduced amounts of coverage. If we were to incur a significant liability for which we were not fully insured, it could have an adverse effect on our results of operations and financial position.

The cost of compliance with, liability for violations of, or modifications to existing or future governmental laws and regulations could adversely affect our business and results of operations.

Our operations are regulated and licensed by various federal and state agencies in the United States and similar governmental agencies in foreign countries in which we operate. These regulatory agencies have authority and oversight of domestic and international transportation services and related activities, licensure, motor carrier operations, safety and security, and other matters. We must comply with various insurance and surety bond requirements to act in the capacities for which we are licensed. Our subsidiaries and ICs must also comply with applicable regulations and requirements of such agencies.

Through our subsidiaries, we hold various licenses required to carry out our domestic and international services. These licenses permit us to provide services as a motor carrier, property broker, air carrier, indirect air carrier, ocean transportation intermediary, non-vessel operating common carrier, freight forwarder, and ocean freight forwarder. We also are subject to regulations and requirements promulgated by, among others, the DOT, FMCSA, DHS, CBP, TSA, FMC, IATA, USDA, FDA, FWS, BATF, FAA and various other international, domestic, state, and local agencies and port authorities. Our failure to maintain our required licenses, or to comply with applicable regulations, could materially and adversely affect our business, results of operations, or financial condition. See the section entitled “Regulation” in Item 1 of this Form 10-K for more information.

In addition, DHS regulations applicable to our customers who import goods into the United States and our contracted ocean carriers may impact our ability to provide and/or receive services with and from these parties. Enforcement measures related to violations of these regulations can slow and/or prevent the delivery of shipments, which may negatively impact our operations.

We incur significant costs to operate our business and monitor our compliance with applicable laws and regulations. The regulatory requirements governing our operations are subject to change based on new legislation and regulatory initiatives, which could affect the economics of the transportation industry by requiring changes in operating practices or influencing the demand for, and the cost of providing, transportation services. We cannot predict what impact future regulations may have on our business. Compliance with existing, new, or more stringent measures could disrupt or impede the timing of our deliveries and our ability to satisfy the needs of our customers. We have adopted various policies and procedures intended to ensure our compliance with regulatory requirements. We cannot provide assurance that these policies and procedures will be adequate or effective. Additionally, we are also subject to the risk that our employees may inadvertently or deliberately circumvent established controls. The financial and reputational impact of control failures could be significant.

In addition, we may experience an increase in operating costs, such as security costs, as a result of governmental regulations that have been and will be adopted in response to terrorist activities and potential terrorist activities. The cost of compliance with existing or future measures could adversely affect our results of operations. Further, we could become subject to liabilities as a result of a failure to comply with applicable regulations.

We are subject to various income and other taxes, primarily in the U.S. and its political subdivisions. Compliance with ever-changing tax statutes and regulations is complex, time-consuming, and subject to examination by taxing authorities. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into United States law, and most changes became effective as of January 1, 2018. Overall, we expect that the Tax Reform Act will be financially and cash flow beneficial to us. The corporate income tax rate was reduced from 35% to 21%, the corporate alternative minimum tax system was eliminated, and net operating losses carry forward indefinitely. The ability to accelerate depreciation deductions provides us flexibility with respect to the timing of deductions related to capital expenditures. Though interest expense deductions may be limited annually, any disallowed interest expense carries forward indefinitely. Future changes to current tax laws could adversely affect our business, results of operations, and financial condition.

Jeffrey Cox (“Cox”) and David Chidester (“Chidester”) filed a complaint against certain of our subsidiaries in state court in California in a post-acquisition dispute (the “Central Cal Matter”). The complaint alleges contract, statutory and tort-based claims arising out of the Stock Purchase Agreement, dated November 2, 2012, between the defendants, as buyers, and the plaintiffs, as sellers, for the purchase of the shares of Central Cal Transportation, Inc. and Double C Transportation, Inc. (the “Central Cal Agreement”). The plaintiffs claim that a contingent purchase obligation payment is due and owing pursuant to the Central Cal Agreement, and that defendants have furnished fraudulent calculations to the plaintiffs to avoid payment. The plaintiffs also claim violations of California’s Labor Code related to the plaintiffs’ respective employment with Central Cal Transportation, LLC. On October 27, 2017, the state court granted our motion to compel arbitration of all non-employment claims alleged in the complaint. The parties selected a settlement accountant to determine the contingent purchase obligation pursuant to the Central Cal Agreement. The settlement accountant provided a final determination that a contingent purchase obligation of $2.1 million is due to the plaintiffs. ItOn isJuly ~~our~~5, ~~position~~2019, ~~that~~the ~~this~~Court ~~contingent~~entered ~~purchase~~a ~~obligation~~judgment isconfirming ~~subject~~the toarbitration ~~offset~~award. ~~for~~We ~~certain~~satisfied ~~indemnification~~the ~~claims~~principal ~~owed~~amount toof usthe byjudgment. On July 10, 2019, the plaintiffs ~~ranging~~filed ~~from~~an ~~approximately~~application ~~$0.3~~for ~~million~~an toaward of their fees in costs, seeking a minimum of $1.0.7 million. ~~Accordingly~~in fees, weand ~~have~~requesting ~~recorded~~that the Court apply a ~~contingent~~lodestar ~~purchase~~multiplier ~~obligation~~to ~~liability~~enhance the fees to an award of either $1.81 million inor ~~accrued~~$1.5 ~~expenses~~million ~~and~~based ~~other~~upon ~~current~~the ~~liabilities~~complexity of the case. WeOn ~~intend~~January to17, ~~pursue~~2020, ~~indemnification~~the ~~and~~Court ~~other~~awarded ~~claims~~the asplaintiffs it$0.5 ~~relates~~million toin total fees. With outstanding interest, the ~~Central~~total ~~Cal~~amount ~~Matter~~owed ~~and~~by ~~other~~us ~~related~~was ~~matters~~$0.6 ~~involving~~million, ~~these~~which ~~plaintiffs~~we paid on March 3, 2020. In February 2018, ~~Plaintiff David~~ Chidester agreed to dismiss his employment-related claims from the Los Angeles Superior Court matter, while ~~Plaintiff Jeffrey~~ Cox transferred his employment claims from Los Angeles Superior Court to the related employment case pending in the Eastern District of California. ~~The~~There ~~parties~~have been two summary judgment motions filed thus far, one by Cox and one by us. We successfully defeated Cox’s motion for summary judgment, which resulted in a Court Order holding that Cox’s non-compete was enforceable as to time and limited to the geographic are ~~proceeding~~of ~~with~~California, ~~discovery~~Nevada, and Oregon where Central Cal conducts business. Cox filed a motion for reconsideration of the ~~consolidated~~Court’s ~~case~~order, iswhich ~~currently~~was ~~set~~denied. The Court thereafter granted partial summary judgment as to all claims except for the two whistleblower/retaliation claims and the public policy wrongful termination claim. The court then vacated the pre-trial onconference ~~November~~and 5,trial ~~2019~~dates and has not reset them.

In addition to the legal proceeding described above, we are a defendant in various purported class-action lawsuits alleging violations of various California labor laws and one purported class-action lawsuit alleging violations of the Illinois Wage Payment and Collection Act. Additionally, the California Division of Labor Standards and Enforcement has brought administrative actions against us alleging that we violated various California labor laws. In 2017 and 2018, we reached settlement agreements on a number of these labor related lawsuits and administrative actions. As of December 31, ~~2018~~2019 and ~~2017~~2018, we recorded a liability for settlements, litigation, and defense costs related to these labor matters, the Central Cal Matter and the Warren Matter (defined below) of approximately $101.80 million and $1310.28 million, respectively, which are recorded in accrued expenses and other current liabilities.

In December 2018, a class action lawsuit was brought against us in the Superior Court of the State of California by Fernando Gomez, on behalf of himself and other similarly situated persons, alleging violation of California labor laws. This is a new lawsuit and we are currently determining its effects. We intend to vigorously defend against such claims; however, there can be no assurance that we will be able to prevail. In light of the relatively early stage of the proceedings, we are unable to predict the potential costs or range of costs at this time.19

In December 2018, a class action lawsuit was brought against us in the Superior Court of the State of California by Fernando Gomez, on behalf of himself and other similarly situated persons, alleging violation of California labor laws. We intend to vigorously defend against such claims; however, there can be no assurance that we will be able to prevail. In light of the relatively early stage of the proceedings, we are unable to predict the potential costs or range of costs at this time.

Our operations are subject to various environmental laws and regulations, the violation of which could result in substantial fines or penalties.

From time to time, we arrange for the movement of hazardous materials at the request of our customers. As a result, we are subject to various environmental laws and regulations relating to the handling, transport, and disposal of hazardous materials. If our customers or carriers are involved in an accident involving hazardous materials, or if we are found to be in violation of applicable laws or regulations, we could be subject to substantial fines or penalties, remediation costs, or civil and criminal liability, any of which could have an adverse effect on our business and results of operations. In addition, current and future laws and regulations relating to carbon emissions and the effects of global warming can be expected to have a significant impact on the transportation sector generally and the operations and profitability of some of our carriers in particular, which could adversely affect our business and results of operations.

A decrease in levels of capacity in the over-the-road freight sector could have an adverse impact on our business.

The current operating environment in the over-the-road freight sector resulting from fluctuating fuel costs, industry-specific regulations (such as the CSA and hours-of-service rules and the changes implemented under Moving Ahead for Progress in the 21st Century (“MAP-21”)), a shortage of qualified drivers, and other economic factors are causing a tightening of capacity in the sector generally, and in our carrier network specifically, which could have an adverse impact on our ability to execute our business strategy and on our business.

We have not successfully managed, and may not in the future manage, our growth or operations.

We have ~~grown substantially, including by expanding our internal resources, making acquisitions, and entering into new markets. We have~~ experienced, and may in the future experience, difficulties and higher-than-expected expenses in ~~executing~~integrating ~~this~~business ~~strategy~~units and managing business processes as a result of unfamiliarity with new markets, change in revenue and business models, and entering into new geographic areas. For example, as described in Part II, Item 9A. “Controls and Procedures” of this Form 10-K, based on the Audit Committee Investigation, current management determined that there were deficiencies in the design and/or execution of internal controls that constituted material weaknesses, with one of the contributing factors being the increased size and complexity of our Company arising from the acquisition of 25 non-public companies between February 2011 and September 2015.

In 2018, we ~~devised~~implemented strategies to improve our operational performance, integrate and expand certain of our segments, invest in the long-term recovery of our business and position our business for long-term growth and shareholder value creation. We have, and may in the future, experience delay in the implementation and realization of these strategies. The success of our strategies depends on many factors, some of which are out of our control. There is no assurance that we will be able to successfully implement these strategies or that these strategies will be successful.

Our growth has placed, and will in the future place, a significant strain on our management and our operational and financial resources. We need to continually improve existing procedures and controls as well as implement new transaction processing, operational and financial systems, and procedures and controls to expand, train, and manage our employee base. Our working capital needs have increased substantially as our operations have grown. Failure to manage growth effectively, or obtain necessary working capital, has in the past had, and could in the future have, a material adverse effect on our business, results of operations, financial position, and cash flows.

Our outstanding debt ~~and preferred stock~~ could adversely affect our business and limit our ability to expand our business or respond to changes, and we may be unable to generate sufficient cash flow to satisfy our debt service and preferred stock obligations.

As of December 31, ~~2018~~2019, we had debt of $~~171~~207.9 million ~~and preferred stock of $402.9 million~~, which is classified as a liability on the consolidated financial statements. See Note 56, “Debt” ~~and Note 6 “Preferred Stock”~~ to the consolidated financial statements in this Form 10-K for further information. On May 1, 2017, we entered into an Investment Agreement (the “2017 Investment Agreement”) with Elliott, pursuant to which we issued and sold shares of our preferred stock and issued warrants for an aggregate purchase price of $540.5 million. On March 1, 2018, we entered into a Series E-1 Preferred Stock Investment Agreement (as amended, the “Series E-1 Investment Agreement”) with Elliott, pursuant to which we agreed to issue and sell to Elliott from time to time until July 30, 2018, an aggregate of up to 54,750 shares of a newly created class of preferred stock designated as Series E-1 Cumulative Redeemable Preferred Stock, par value $0.01 per share (“Series E-1 Preferred Stock”), at a purchase price of $1,000 per share for the first 17,500 shares of Series E-1 Preferred Stock, $960 per share for the next 18,228 shares of Series E-1 Preferred Stock, and $920 per share for the final 19,022 shares of Series E-1 Preferred Stock. On March 1, 2018, the parties held an initial closing pursuant to which we issued and sold to Elliott 17,500 shares of Series E-1 Preferred Stock for an aggregate purchase price of $17.5 million. On April 24, 2018, the parties held a closing pursuant to the Series E-1 Investment Agreement, pursuant to which we issued and sold to Elliott 18,228 shares of Series E-1 Preferred Stock for an aggregate purchase price of approximately $17.5 million. On February 26, 2019, we closed our previously announced fully backstopped $450 million rights offering, pursuant to which we issued and sold an aggregate of 900 million new shares of our common stock at the subscription price of $0.50 per share. The net proceeds from the rights offering and backstop commitment were used to fully redeem the outstanding shares of our preferred stock and to pay related accrued and unpaid dividends. Proceeds were also used to pay fees and expenses in connection with the rights offering and backstop commitment. We retained in excess of $30 million of net cash proceeds to be used for general corporate purposes.

On July 21, 2017, we entered into an Asset-Based Lending Facility with BMO Harris Bank, N.A. and certain other lenders (as amended, the “Prior ABL Facility”). On February 28, 2019, we entered into the ABL Credit Facility and the Term Loan Credit Facility, which replaced the Prior ABL Facility.20

WeSeries ~~may~~E-1 ~~incur~~Investment ~~additional indebtedness in the future~~Agreement, ~~including~~pursuant ~~any~~to ~~additional~~which ~~borrowings~~we ~~available~~issued ~~under the ABL Credit Facility~~ and ~~Term~~sold ~~Loan~~to ~~Credit~~Elliott ~~Facility.~~18,228 ~~Any~~shares ~~substantial debt and the fact that a substantial portion~~ of ~~our~~Series ~~cash~~E-1 ~~flow~~Preferred ~~from~~Stock ~~operating~~for ~~activities~~an ~~could~~aggregate bepurchase ~~needed~~price toof ~~make~~approximately ~~payments~~$17.5 onmillion. ~~our debt could have adverse consequences, including the following:~~

On August 3, 2018, September 19, 2018, November 8, 2018, and January 9, 2019, we entered into amendments to the Series E-1 Investment Agreement, which, among other things, (i) extended the termination date thereunder from July 30, 2018 to March 2, 2019 for the remaining 19,022 shares available to issue and sell to Elliott for $17.5 million, and (ii) provided that if the Series E-1 Investment Agreement was not already terminated, the Series E-1 Investment Agreement would automatically terminate upon the Rights Offering Effective Date (as defined in our prior ABL Facility). Upon the closing of the rights offering described elsewhere in this Form 10-K, the Series E-1 Investment Agreement was automatically terminated.

On February 26, 2019, we closed our previously announced fully backstopped $450 million rights offering, pursuant to which we issued and sold an aggregate of 36 million new shares of our common stock at the subscription price of $12.50 per share. The net proceeds from the rights offering and backstop commitment were used to fully redeem the outstanding shares of our preferred stock and to pay related accrued and unpaid dividends. Proceeds were also used to pay fees and expenses in connection with the rights offering and backstop commitment. We retained in excess of $30 million of net cash proceeds to be used for general corporate purposes.

On February 28, 2019, we entered into the ABL Credit Facility and the Term Loan Credit Facility which replaced our prior ABL Facility. On August 2, 2019, we entered into the Fee Letter. On November 5, 2019, we entered into the Third Lien Credit Facility.

We may incur additional indebtedness in the future, including any additional borrowings available under the ABL Credit Facility and the Third Lien Credit Facility. Any substantial debt and the fact that a substantial portion of our cash flow from operating activities could be needed to make payments on our debt could have adverse consequences, including the following:


•	reducing the availability of our cash flow for our operations, capital expenditures, future business opportunities, and other purposes;


•	limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate, which would place us at a competitive disadvantage compared to our competitors that may have less debt;


•	limiting our ability to borrow additional funds; and


•	increasing our vulnerability to general adverse economic and industry conditions.

Our ability to borrow ~~any~~ funds needed to ~~operate~~fund our negative operating cash flows and expand our business will depend in part on our ability to generate cash. Our ability to generate cash is subject to the performance of our business as well as general economic, financial, competitive, legislative, regulatory, and other factors that are beyond our control. If our business does not generate sufficient cash flow from operating activities or if future borrowings are not available to us under our ABL Credit Facility and~~/or~~ ~~Term~~Third ~~Loan~~Lien Credit Facility or otherwise in amounts sufficient to enable us to fund our liquidity needs, our operating results, financial condition, and ability to maintain or expand our business may be adversely affected. Moreover, our inability to make scheduled payments on our debt obligations in the future would require us to refinance all or a portion of our debt on or before maturity, sell assets, delay capital expenditures, or seek additional equity.

We have had, and may have in the future, difficulties integrating acquired companies.

For acquisitions, success is also dependent upon efficiently integrating the acquired business into our existing operations. We are required to integrate these businesses into our internal control environment, which may present challenges that are different than those presented by organic growth and that may be difficult to manage. For example, as described in Part II, Item 9A. “Controls and Procedures” of this Form 10-K, based on the Audit Committee Investigation, current management determined that there were deficiencies in the design and/or execution of internal controls that constituted material weaknesses, with one of the contributing factors being the increased size and complexity of our Company arising from the acquisition of 25 non-public companies between February 2011 and September 2015. The possible difficulties of integration include, among others: retention of customers and key employees; unanticipated issues in the assimilation and consolidation of information, communications, technology, and other systems; inefficiencies and difficulties that arise because of unfamiliarity with potentially new geographic areas and new assets and the businesses associated with them; consolidation of corporate and administrative infrastructures; the diversion of management's attention from ongoing business concerns; the effect on internal controls and compliance with the regulatory requirements under the Sarbanes-Oxley Act of 2002; and unanticipated issues, expenses, and liabilities. The diversion of management's attention from our current operations to the acquired operations and any difficulties encountered in combining operations has prevented us, and could in the future prevent us, from realizing the full benefits anticipated to result from the acquisitions and has adversely impacted, and could in the future adversely impact, our results of operations and financial condition.

Also, following an acquisition, we may discover previously unknown liabilities associated with the acquired business for which we have no recourse under applicable indemnification provisions. In addition, the former owners of the businesses we acquire may seek additional consideration under contingent purchase obligations resulting in increased purchase prices. See “-The cost of compliance with, liability for violations of, or modifications to existing or future governmental laws and regulations could adversely affect our business and results of operations.” If we are unable to successfully integrate and grow these acquisitions and to realize contemplated revenue synergies and cost savings, our business, prospects, results of operations, financial position, and cash flows could be materially and adversely affected.21

Also, following an acquisition, we may discover previously unknown liabilities associated with the acquired business for which we have no recourse under applicable indemnification provisions. In addition, the former owners of the businesses we acquire may seek additional consideration under contingent purchase obligations resulting in increased purchase prices. See - “The cost of compliance with, liability for violations of, or modifications to existing or future governmental laws and regulations could adversely affect our business and results of operations.” If we are unable to successfully integrate and grow these acquisitions and to realize contemplated revenue synergies and cost savings, our business, prospects, results of operations, financial position, and cash flows could be materially and adversely affected.

Any acquisitions that we undertake could be difficult to integrate, disrupt our business, dilute stockholder value, and adversely affect our results of operations.

We may seek to increase our revenue and expand our offerings in the market regions that we serve through the acquisition of complementary businesses. We cannot guarantee that we will be able to identify suitable acquisitions or investment candidates. Even if we identify suitable candidates, we cannot guarantee that we will make acquisitions or investments on commercially acceptable terms, if at all. In addition, we may incur debt or be required to issue equity securities to pay for future acquisitions or investments. The issuance of any equity securities could be dilutive to our stockholders.

Strategic acquisitions involve numerous risks, including the following:


•	failure of the acquired company to achieve anticipated revenues, earnings, or cash flows;


•	assumption of liabilities that were not disclosed to us or that exceed our estimates;


•	problems integrating the purchased operations with our own, which could result in substantial costs and delays or other operational, technical, or financial problems;


•	potential compliance issues with regard to acquired companies that did not have adequate internal controls;


•	diversion of management's attention or other resources from our existing business;


•	risks associated with entering markets in which we have limited prior experience; and


•	potential loss of key employees and customers of the acquired company.

19Our ABL Credit Facility and Third Lien Credit Facility contain financial and other restrictive covenants with which we may be unable to comply. A default under these financing arrangements could cause a material adverse effect on our liquidity, financial condition, and results of operations.

~~Our~~The obligations under the ABL Credit ~~Agreement~~Facility are guaranteed by each of our domestic subsidiaries pursuant to a guaranty included in the ABL Credit Facility. As security for our and our subsidiaries’ obligations under the ABL Credit Facility, we and each of our domestic subsidiaries have granted: (i) a first priority lien on substantially all of our domestic subsidiaries’ tangible and intangible personal property (other than the assets described in the following clause (ii)), including the capital stock of certain of our direct and indirect subsidiaries; and (ii) a second-priority lien on our and our domestic subsidiaries’ equipment (including, without limitation, rolling stock, aircraft, aircraft engines and aircraft parts) and proceeds and accounts related thereto. The priority of the liens is described in an intercreditor agreement between BMO Harris Bank N.A. as ABL Agent and BMO Harris Bank N.A. as Term Loan Agent. The ABL Credit ~~Agreement~~Facility ~~contain~~contains a minimum fixed charge coverage ratio financial ~~and~~covenant ~~other~~that ~~restrictive~~must be maintained when excess availability falls below a specified amount. In addition, the ABL Credit Facility contains negative covenants limiting, among other things, additional indebtedness, transactions with ~~which~~affiliates, weadditional ~~may~~liens, besales ~~unable~~of toassets, ~~comply~~dividends, investments and advances, prepayments of debt, mergers and acquisitions, and other matters customarily restricted in such agreements. AThe ABL Credit Facility also contains customary events of default, ~~under~~including ~~these~~payment ~~financing~~defaults, ~~arrangements~~breaches ~~could~~of ~~cause~~representations aand ~~material~~warranties, ~~adverse~~covenant ~~effect~~defaults, onevents ~~our~~of ~~liquidity~~bankruptcy and insolvency, ~~financial~~failure ~~condition~~of any guaranty or security document supporting the ABL Credit Facility to be in full force and effect, and ~~results~~a change of ~~operations~~control of our business.

The obligations under ~~the~~our ~~ABL~~Term Loan Credit ~~Agreement~~Facility are guaranteed by each of our domestic subsidiaries pursuant to a guaranty included in the ~~ABL~~Term Loan Credit ~~Agreement~~Facility. As security for our and our subsidiaries’ obligations under the ~~ABL~~Term Loan Credit ~~Agreement~~Facility, we and each of our domestic subsidiaries have granted: (i) a first priority lien on ~~substantially all of~~ our ~~domestic~~equipment ~~subsidiaries’ tangible and intangible personal property~~ (~~other~~including, ~~than~~without ~~the~~limitation, ~~assets~~rolling ~~described~~stock, ~~in the following clause (ii))~~aircraft, ~~including~~aircraft ~~the~~engines ~~capital~~and ~~stock~~aircraft ofparts) ~~certain~~and ofproceeds ~~our direct~~ and ~~indirect~~accounts ~~subsidiaries;~~related thereto, and (ii) a second- priority lien on substantially all of our and our domestic subsidiaries’ ~~equipment~~other ~~(including,~~tangible ~~without~~and ~~limitation,~~intangible ~~rolling~~personal ~~stock~~property, ~~aircraft,~~including ~~aircraft~~the ~~engines~~capital ~~and~~stock ~~aircraft~~of ~~parts)~~certain ~~and~~of ~~proceeds~~our direct and ~~accounts~~indirect ~~related thereto~~subsidiaries. The priority of the liens is described in an intercreditor agreement between BMO Harris Bank N.A. as ABL Agent and BMO Harris Bank N.A. as Term Loan Agent. The ~~ABL~~Term ~~Credit~~Loan ~~Agreement contains a minimum fixed charge coverage ratio financial covenant that must be maintained when excess availability falls below a specified amount. In addition, the ABL~~ Credit ~~Agreement~~Facility contains negative covenants limiting, among other things, additional indebtedness, transactions with affiliates, additional liens, sales of assets, dividends, investments and advances, prepayments of debt, mergers and acquisitions, and other matters customarily restricted in such agreements. The ~~ABL~~Term Loan Credit ~~Agreement~~Facility also contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the ABL Credit Agreement to be in full force and effect, and a change of control of our business.

The obligations under our Term Loan Credit Agreement are guaranteed by each of our domestic subsidiaries pursuant to a guaranty included in the Term Loan Credit Agreement. As security for our and our subsidiaries’ obligations under the Term Loan Credit Agreement, we and each of our domestic subsidiaries have granted: (i) a first priority lien on our equipment (including, without limitation, rolling stock, aircraft, aircraft engines and aircraft parts) and proceeds and accounts related thereto, and (ii) a second priority lien on substantially all of our and our domestic subsidiaries’ other tangible and intangible personal property, including the capital stock of certain of our direct and indirect subsidiaries. The priority of the liens is described in an intercreditor agreement between BMO Harris Bank N.A. as ABL Agent and BMO Harris Bank N.A. as Term Loan Agent. The Term Loan Credit Agreement contains negative covenants limiting, among other things, additional indebtedness, transactions with affiliates, additional liens, sales of assets, dividends, investments and advances, prepayments of debt, mergers and acquisitions, and other matters customarily restricted in such agreements. The Term Loan Credit Agreement also contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the Term Loan Credit Agreement to be in full force and effect, and a change of control of our business.22

~~If we incur defaults under the terms~~ of ~~the~~representations ~~ABL Credit Agreement or the Term Loan Credit Agreement~~ and ~~fail~~warranties, tocovenant ~~obtain appropriate amendments to or waivers under the applicable financing arrangement~~defaults, ~~our~~events ~~borrowings~~of ~~against~~bankruptcy ~~these facilities could be immediately declared due~~ and ~~payable. If we fail to pay the amount due~~insolvency, ~~the~~failure ~~lenders~~of ~~could~~any ~~proceed~~guaranty ~~against the collateral by which our loans are secured, our borrowing capacity may be limited,~~ or ~~the~~security ~~facilities~~document ~~could~~supporting ~~be terminated. If acceleration of outstanding borrowings occurs or if~~ the ~~facilities~~Term ~~are~~Loan ~~terminated,~~Credit weFacility ~~may have difficulty borrowing additional funds sufficient~~ to ~~refinance~~be ~~the~~in ~~accelerated~~full ~~debt~~force ~~or entering into new credit or debt arrangements,~~ and, ~~if available~~effect, ~~the terms of the financing may not be acceptable. A default under our ABL Credit Facility~~ and~~/or~~ ~~Term Loan Credit Facility could have~~ a ~~material~~change ~~adverse~~of ~~effect~~control onof our ~~liquidity and financial condition~~business.

The obligations under the Third Lien Credit Facility are guaranteed by each of our domestic subsidiaries pursuant to a guaranty included in the Third Lien Credit Facility. As security for our obligations under the Third Lien Credit Facility, we have granted a third priority lien on substantially all of our assets (including our equipment (including, without limitation, rolling stock, aircraft, aircraft engines and aircraft parts)) and proceeds and accounts related thereto, and substantially all of our other tangible and intangible personal property, including the capital stock of certain of our direct and indirect subsidiaries. The Third Lien Credit Facility contains negative covenants limiting, among other things, additional indebtedness, transactions with affiliates, additional liens, sales of assets, dividends, investments and advances, prepayments of debt, mergers and acquisitions, and other matters customarily restricted in such agreements. The Third Lien Credit Facility also contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the Third Lien Credit Facility to be in full force and effect, and a change of control.

If we incur defaults under the terms of the ABL Credit Facility, the Term Loan Credit Facility or the Third Lien Credit Facility and fail to obtain appropriate amendments to or waivers under the applicable financing arrangement, our borrowings against these facilities could be immediately declared due and payable. If we fail to pay the amount due, the lenders could proceed against the collateral by which our loans are secured, our borrowing capacity may be limited, or the facilities could be terminated. If acceleration of outstanding borrowings occurs or if the facilities are terminated, we may have difficulty borrowing additional funds sufficient to refinance the accelerated debt or entering into new credit or debt arrangements, and, if available, the terms of the financing may not be acceptable. A default under our ABL Credit Facility, Term Loan Credit Facility and/or Third Lien Credit Facility could have a material adverse effect on our liquidity and financial condition.

Fluctuations in the price or availability of fuel and limitations on our ability to collect fuel surcharges may adversely affect our results of operations.

We are subject to risks associated with fuel charges from our ICs, purchased power providers, and aircraft in our ~~TES~~Ascent ~~and~~OD, LTL ~~businesses~~and TL segments. The availability and price of fuel are subject to political, economic, and market factors that are outside of our control. Fuel prices have fluctuated dramatically over recent years. Over time we have been able to mitigate the impact of the fluctuations through our fuel surcharges which are closely linked to the market price for fuel. There can be no assurance that our fuel surcharge revenue programs will be effective in the future. Market pressures may limit our ability to assess our fuel surcharges. At the request of our customers, we have at times temporarily capped the fuel surcharges at a fixed percentage pursuant to contractual arrangements that vary by customer. Currently, a minimal number of our customers have contractual arrangements with varying levels of capped fuel surcharges. If fuel surcharge revenue programs, base freight rate increases, or other cost-recovery mechanisms do not offset our exposure to rising fuel costs, our results of operations could be adversely affected.

A significant or prolonged economic downturn in the transportation industry, or a substantial downturn in our customers' business, could adversely affect our revenue and results of operations.

The transportation industry has historically experienced cyclical fluctuations in financial results due to, among other things, economic recession, downturns in business cycles, increasing costs and taxes, fluctuations in energy prices, price increases by carriers, changes in regulatory standards, license and registration fees, interest rate fluctuations, “Acts of God” and other economic factors beyond our control. All of these factors could increase the operating costs of a vehicle and impact capacity levels in the transportation industry. Our ICs or purchased power providers may charge higher prices to cover higher operating expenses, and our operating income may decrease if we are unable to pass through to our customers the full amount of higher purchased transportation costs. Additionally, economic conditions may adversely affect our customers, their need for our services, or their ability to pay for our services.

20In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China. In January 2020, this coronavirus spread to other countries, including the United States, and efforts to contain the spread of this coronavirus intensified. The outbreak and any preventative or protective actions that governments or we may take in respect of this coronavirus may result in a period of business disruption. Any resulting financial impact cannot be reasonably estimated at this time but may materially affect our business, financial condition and results of operations. The extent to which the coronavirus impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among others.

our control. All of these factors could increase the operating costs of a vehicle and impact capacity levels in the transportation industry. Our ICs or purchased power providers may charge higher prices to cover higher operating expenses, and our operating income may decrease if we are unable to pass through to our customers the full amount of higher purchased transportation costs. Additionally, economic conditions may adversely affect our customers, their need for our services, or their ability to pay for our services.

We operate in a highly competitive industry and, if we are unable to adequately address factors that may adversely affect our revenue and costs, our business could suffer.

Competition in the transportation services industry is intense. We face significant competition in local, regional, national, and international markets. Increased competition may lead to revenue reductions, reduced profit margins, or a loss of market share, any ~~one of which could harm our business. There are many factors that could impair our ability to maintain our current profitability, including the following:~~

one of which could harm our business. There are many factors that could impair our ability to maintain our current profitability, including the following:


•	competition with other transportation services companies, some of which have a broader coverage network, a wider range of services, and greater capital resources than we do;


•	reduction by our competitors of their freight rates to gain business, especially during times of declining growth rates in the economy, which reductions may limit our ability to maintain or increase freight rates, maintain our operating margins, or maintain significant growth in our business;


•	solicitation by shippers of bids from multiple carriers for their shipping needs and the resulting depression of freight rates or loss of business to competitors;


•	development of a technology system similar to ours by a competitor with sufficient financial resources and comparable experience in the transportation services industry; and


•	establishment by our competitors of cooperative relationships to increase their ability to address shipper needs.

WeOur ~~have~~operating ~~experienced~~results ~~significant~~could ~~turnover~~make init ~~our~~difficult ~~executive~~for ~~leadership~~us ~~team~~to retain and attract executives. If we fail to effectively integrate and retain ~~these new~~ executives, we may not be able to accomplish our growth strategy and our financial performance may suffer.

~~Since~~A the beginning of 2017, we have experienced significant turnover in our senior management ranks, including the appointment of our new Chief Executive Officer and President and Chief Operating Officer and the hiring of our new Chief Financial Officer. In April 2017, Curtis W. Stoelting was appointed our Chief Executive Officer and Michael L. Gettle was appointed our President and Chief Operating Officer. In May 2017, Terence R. Rogers was appointed our Chief Financial Officer. We also hired a new Corporate Controller, Vice President of Finance and Treasurer, and Director of Internal Audit. In addition, during 2018, our Chief Information Officer resigned and we hired a new Chief Information Officer. This lack of management continuity could adversely affect our ability to successfully execute our ~~growth strategy~~strategies, as well as result in operational and administrative inefficiencies and added costs~~, and may make recruiting for future management positions more difficult~~.

In addition, we must successfully integrate any new management personnel into our organization in order to achieve our operating objectives, and changes in other key management positions may affect our financial performance and results of operations while new management becomes familiar with our business. Accordingly, our future financial performance will depend to a significant extent on our ability to motivate and retain key management personnel. Competition for senior management is intense, and we may not be able to retain our management team or attract additional qualified personnel. The loss of a member of senior management would require our remaining executive officers to divert immediate and substantial attention to fulfilling the duties of the departing executive and to seeking a replacement. The inability to adequately fill vacancies in our senior executive positions on a timely basis could negatively affect our ability to implement our business strategy, which could adversely impact our results of operations.

Our business will be adversely impacted if we fail to develop, implement, maintain, upgrade, enhance, protect, and integrate our information technology systems.

We rely heavily on our information technology systems to efficiently run our business, and they are a key component of our customer-facing and ~~internal~~ growth strategy. In general, we expect our customers to continue to demand more sophisticated, fully integrated information systems from their transportation and logistics providers. To keep pace with changing technologies and customer demands, we must correctly interpret and address market trends and enhance the features and functionality of our technology systems in response to these trends. This process of continuous enhancement may lead to significant ongoing technology development costs which will continue to increase if we pursue new acquisitions of companies and their current systems. In addition, we may fail to accurately determine the needs of our customers or trends in the transportation services and logistics industries or we may fail to design and implement the appropriate responsive features and functionality for our technology systems in a timely and cost-effective manner. Any such failures could result in decreased demand for our services and a corresponding decrease in our revenues.

and cost-effective manner. Any such failures could result in decreased demand for our services and a corresponding decrease in our revenues.

We must maintain and enhance the reliability and speed of our information technology systems to remain competitive and effectively handle higher volumes of freight through our network and the various service modes we offer. If our information technology systems are unable to manage additional volume for our operations as our business grows, or if such systems are not suited to manage the various service modes we offer, our service levels and operating efficiency could decline. In addition, if we fail to hire and retain qualified personnel to implement, protect, and maintain our information technology systems or if we fail to upgrade our systems to meet our customers’ demands, our business and results of operations could be harmed. This could result in a loss of customers or a decline in the volume of freight we receive from customers.

A failure of our information technology infrastructure or a breach of our information security systems, networks or processes may materially adversely affect our business.

The efficient operation of our business depends on our information technology systems. We rely on our information technology systems to effectively manage our sales and marketing, accounting and financial and legal and compliance functions, communications, supply chain, order entry, and fulfillment and other business processes. We also rely on third parties and virtualized infrastructure to operate and support our information technology systems. Despite testing, external and internal risks, such as malware, code anomalies, “Acts of God,” data leakage, and human error pose a direct threat to the stability or effectiveness of our information technology systems and operations. The failure of our information technology systems to perform as we anticipate has in the past, and could in the future, adversely affect our business through transaction errors, billing and invoicing errors, internal recordkeeping and reporting errors, processing inefficiencies and loss of sales, receivables collection and customers, in each case, which could result in harm to our reputation and have an ongoing adverse impact on our business, results of operations and financial condition, including after the underlying failures have been remedied.

We have been, and in the future may be, subject to cybersecurity attacks and other intentional hacking. Any failure to identify and address such defects or errors or prevent a cyber-attack could result in service interruptions, operational difficulties, loss of revenues or market share, liability to our customers or others, the diversion of corporate resources, injury to our reputation and increased service and maintenance costs. On May 30, 2018, we became aware of unauthorized access into our information technology systems, and on July 2, 2018, we became aware of additional unauthorized access, each as a result of a phishing campaign attack upon our employees. After an investigation conducted by third party forensic investigators, we discovered a significant breach and loss of information regarding a substantial portion of our ICs and employees, including, but not limited to, their names, addresses, Social Security numbers, financial account information, medical information, insurance information, and other types of identifying or sensitive information. On November 7, 2018, we were sued in a class action in the United States District Court for the Northern District of Illinois in connection with the foregoing cybersecurity attacks, alleging we failed to adequately safeguard and secure the identifying information of our employees and failed to provide timely notice as to how and when sensitive information regarding our employees had been given to unknown persons. We have referred this claim to our cybersecurity insurance provider and have obtained counsel to defend us in this suit. While we do not expect our exposure under this matter to be material, we cannot guarantee that this matter will not have a material adverse effect on our liquidity, financial condition, and results of operations.24

information technology systems and operations. The failure of our information technology systems to perform as we anticipate has in the past, and could in the future, adversely affect our business through transaction errors, billing and invoicing errors, internal recordkeeping and reporting errors, processing inefficiencies and loss of sales, receivables collection and customers, in each case, which could result in harm to our reputation and have an ongoing adverse impact on our business, results of operations and financial condition, including after the underlying failures have been remedied.

We have been, and in the future may be, subject to cybersecurity and malware attacks and other intentional hacking. Any failure to identify and address such defects or errors or prevent a cyber- or malware-attack could result in service interruptions, operational difficulties, loss of revenues or market share, liability to our customers or others, the diversion of corporate resources, injury to our reputation and increased service and maintenance costs. In September 2019, we suffered a server and applications quarantine caused by a malware attack, which negatively impacted our revenue for the year ended December 31, 2019 by approximately $10.9 million and caused delays in invoicing which led to increased costs, including bad debt. In the fourth quarter of 2019, we filed insurance claims to attempt to recover the impact on lost business.

On other occasions, we have experienced other phishing attacks, social engineering and wire fraud affecting our employees and suppliers, which has resulted in leakage of personally identifiable information and loss of funds. Addressing such issues could prove to be impossible or very costly and responding to resulting claims or liability could similarly involve substantial cost. In addition, recently, there has also been heightened regulatory and enforcement focus on data protection in the United States and abroad, and failure to comply with applicable U.S. or foreign data protection regulations or other data protection standards may expose us to litigation, fines, sanctions or other penalties, which could harm our reputation and adversely impact our business, results of operations and financial condition.

We have invested and continue to invest in technology security initiatives, employee training, information technology risk management and disaster recovery plans. The development and maintenance of these measures is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become increasingly more sophisticated. Despite our efforts, we are not fully insulated from data breaches, technology disruptions or data loss, which could adversely impact our competitiveness and results of operations.

Our reliance on ICs to provide transportation services to our customers could impact our operations and ability to expand.

Our transportation services are conducted in part by ICs, who are generally responsible for ~~paying for~~ their own equipment, fuel, and other operating costs. Our ICs are responsible for providing the tractors and generally the trailers they use related to our business. Certain factors such as increases in fuel costs, insurance costs and the cost of new and used tractors, reduced financing sources available to ICs for the purchase of equipment, or the impact of CSA and hours-of-service rules could create a difficult operating environment for ICs. Turnover and bankruptcy among ICs in the over-the-road freight sector often limit the pool of qualified ICs and increase the competition among carriers for their services. If we are required to increase the amounts paid to ICs in order to obtain their services, our results of operations could be adversely affected to the extent increased expenses are not offset by higher freight rates. Additionally, our agreements with our ICs are terminable by either party upon short notice and without penalty. Consequently, we regularly need to recruit qualified ICs to replace those who have left our pool. If we are unable to retain our existing ICs or recruit new ICs, our results of operations and ability to expand our business could be adversely affected.

qualified ICs and increase the competition among carriers for their services. If we are required to increase the amounts paid to ICs in order to obtain their services, our results of operations could be adversely affected to the extent increased expenses are not offset by higher freight rates. Additionally, our agreements with our ICs are terminable by either party upon short notice and without penalty. Consequently, we regularly need to recruit qualified ICs to replace those who have left our pool. If we are unable to retain our existing ICs or recruit new ICs, our results of operations and ability to expand our business could be adversely affected.

Our third-party carriers must meet our needs and expectations, and those of our customers, and their inability to do so could adversely affect our results of operations.

Our business depends to a large extent on our ability to provide consistent, high quality, technology-enabled transportation and logistics solutions. We generally do not own or control the transportation assets that deliver our customers' freight, and we generally do not employ the people directly involved in delivering the freight. We rely on third parties to provide less-than-truckload, truckload and intermodal brokerage, and domestic and international air services and to report certain information to us, including information relating to delivery status and freight claims. This reliance could cause delays in providing our customers with timely delivery of freight and important service data, as well as in the financial reporting of certain events, including recognizing revenue and recording claims. Carrier bankruptcy may also disrupt our business by delaying movement of the cargo, creating an inability to get access to equipment, and increasing our rates. If we are unable to secure sufficient transportation services to meet our customer commitments, or if any of the third parties we rely on do not meet our needs or expectations, or those of our customers, our results of operations could be adversely affected, and our customers could switch to our competitors temporarily or permanently.

If our ICs are deemed to be employees, our business and results of operations could be adversely affected.

We are a defendant in various purported class-action lawsuits alleging violations of various labor laws. We are a defendant in a number of purported class-action lawsuits alleging violations of various California labor laws and one purported class-action lawsuit alleging violations of the Illinois Wage Payment and Collection Act. Additionally, the California Division of Labor Standards and Enforcement has brought administrative actions against us alleging that we violated various California labor laws. In 2017 and 2018, we reached settlement agreements on a number of these labor related lawsuits and administrative actions. As of December 31, 2018 and 2017, we recorded a liability for settlements, litigation, and defense costs related to these labor matters, the Central Cal Matter, and the Warren Matter (defined below) of approximately $10.8 million and $13.2 million, respectively, which are recorded in accrued expenses and other current liabilities.

2019 and 2018, we recorded a liability for settlements, litigation, and defense costs related to these labor matters, the Central Cal Matter, and the Warren Matter (defined below) of approximately $1.0 million and $10.8 million, respectively, which are recorded in accrued expenses and other current liabilities.

In addition, tax and other regulatory authorities have in the past sought to assert that independent contractors in the trucking industry are employees rather than independent contractors. There can be no assurance that these authorities will not successfully assert this position against us or that tax and other laws that currently consider these persons ICs will not change. If our ICs are determined to be our employees, we would incur additional exposure under federal and state tax, workers' compensation, unemployment benefits, labor, employment, and tort laws, including for prior periods, as well as potential liability for employee benefits, tax withholdings, and penalties and interest. Our business model relies on the fact that our ICs are independent contractors and not deemed to be our employees, and exposure to any of the above factors could have an adverse effect on our business and results of operations.

California continues to present potential reclassification exposure to our Company’s operations in that state, especially in light of the recent California Supreme Court decision in Dynamix Operations West, Inc. v. Lee, which found that the defendant’s independent contractors were properly classified as employees using the ABC test. Under the ABC test, a worker is presumed to be an employee unless the business proves that (A) the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact; (B) the worker performs work that is outside the usual course of the hiring entity’s business; and (C) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity. However, as noted by the Court in Dynamix, any reclassification analysis under the ABC test is subject to the unique facts of each case and thus does not necessarily mean that our contractors in California would be reclassified as employees under California law. In September 2019, the State of California enacted California Assembly Bill 5 codifying the ABC test into California law.

If California interprets individual owner-operators to be in the same business as motor carriers, the individual owner-operators under lease to our companies would be considered employees for purposes of claims governed by wage order number 9, including minimum wage, overtime, meal and rest breaks, and wage statements. We have approximately 300 non-employee drivers in California that may be impacted by this interpretation.

Our financial results may be adversely impacted by potential future changes in accounting practices.

Future changes in accounting standards or practices, and related legal and regulatory interpretations of those changes, may adversely impact public companies in general, the transportation industry, or our operations specifically. New accounting standards or requirements could change the way we record revenues, expenses, assets, and/or liabilities or could be costly to implement. These types of regulations could have a negative impact on our financial position, liquidity, results of operations, and/or access to capital.

Seasonal sales fluctuations and weather conditions could have an adverse impact on our results of operations.

The transportation industry is subject to seasonal sales fluctuations as shipments are generally lower during and after the winter holiday season. The productivity of our carriers historically decreases during the winter season because companies have the tendency to reduce their shipments during that time and inclement weather can impede operations. At the same time, our operating expenses could increase because harsh weather can lead to increased accident frequency rates and increased claims, as well as reduced commodity production (i.e. poultry, beef, fruit, produce). These commodities and other products we transport are also subject to disease, crop failure, reduction in production quantities or adjustments to automotive model changeovers. Any of the fluctuations could have an adverse effect on our revenues. If we were to experience lower-than-expected revenue during any such period, our expenses may not be offset, which could have an adverse impact on our results of operations.

Terrorist attacks, anti-terrorism measures, and war could have broad detrimental effects on our business operations.

As a result of the potential for terrorist attacks, federal, state, and municipal authorities have implemented and continue to follow various security measures, including checkpoints and travel restrictions on large trucks. Such measures may reduce the productivity of our ICs or increase the costs associated with their operations, which we could be forced to bear. For example, security measures imposed at bridges, tunnels, border crossings, and other points on key trucking routes may cause delays and increase the non-driving time of our ICs, which could have an adverse effect on our results of operations. War, risk of war, or a terrorist attack also may have an adverse effect on the economy. A decline in economic activity could adversely affect our revenues or restrict our future growth. Instability in the financial markets as a result of terrorism or war also could impact our ability to raise capital. In addition, the insurance premiums charged for some or all of the coverage currently maintained by us could increase dramatically or such coverage could be unavailable in the future.

~~Our Ascent business derives a portion of its revenues from inventory management, the loss of which could have a negative impact on our financial condition, results of operations, and cash flows.~~26

AAlthough ~~portion of~~ our ~~Ascent~~operations ~~business~~are isprimarily ~~involved~~in ~~with~~the ~~inventory~~United ~~and~~States, ~~freight~~we ~~management for customers whose products~~ are ~~shipped~~subject to ainternational ~~limited~~operational ~~number of big box retailers. Should these big box retailers change their supply chain practices~~ and ~~direct~~financial ~~our customers to deliver product via another source, such change could have a negative impact on our Ascent business~~risks.

~~Our~~We ~~international~~provide ~~operations~~transportation ~~subject~~and uslogistics services to ~~operational~~and from international locations (Canada and ~~financial~~Mexico) and are, therefore, subject to risks. of international business, including, but not limited to, the following:

We provide transportation and logistics services to and from international locations and are, therefore, subject to risks of international business, including, but not limited to, the following:


•	changes in tariffs, trade restrictions, trade agreements, and taxations;


•	difficulties in managing or overseeing foreign operations and agents;


•	limitations on the repatriation of funds because of foreign exchange controls;

• different liability standards; ~~and~~

• intellectual property laws of countries which do not protect our rights in our intellectual property, including, but not limited to, our proprietary information systems, to the same extent as the laws of the United States.; and


•	uncertain impacts of the severity of the coronavirus.

We are also subject to compliance with the Foreign Corrupt Practices Act (“FCPA”), any sanctions administered or enforced by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), and applicable money laundering statutes, rules, and regulations. Failure to comply with the FCPA, OFAC sanctions, money laundering statutes, and local regulations in the conduct of our international business operations may result in legal claims against us.

The occurrence or consequences of any of these factors may restrict our ability to operate in the affected region and/or decrease the profitability of our operations in that region.

As we expand our business in foreign countries, we will be exposed to increased risk of loss from foreign currency fluctuations and exchange controls as well as longer accounts receivable payment cycles. We have limited control over these risks, and if we do not correctly anticipate changes in international economic and political conditions, we may not alter our business practices in time to avoid adverse effects.

Our ability to raise capital in the future may be limited, and our failure to raise capital when needed could prevent us from achieving our growth objectives.

We may in the future be required to raise capital through public or private financing or other arrangements. Such financing may not be available on acceptable terms, or at all, due to general economic conditions, our capital structure, any operations difficulties which we may face, and other factors, and our failure to raise capital when needed could harm our business. Additional equity financing may dilute the interests of our stockholders, and debt financing, if available, may involve restrictive covenants and could reduce our profitability. If we cannot raise funds on acceptable terms, we may not be able to grow our business or respond to competitive pressures.

difficulties which we may face, and other factors, and our failure to raise capital when needed could harm our business. Additional equity financing may dilute the interests of our stockholders, and debt financing, if available, may involve restrictive covenants and could reduce our profitability. If we cannot raise funds on acceptable terms, we may not be able to grow our business or respond to competitive pressures. Our ability to raise capital in the future may also be limited if our common stock were delisted from the New York Stock Exchange (“NYSE”). See “- The NYSE could commence procedures to delist our common stock, in which case the market price of our shares might decline and become more volatile and our stockholders’ ability to trade in our stock could be adversely affected."

Our total assets include goodwill, intangibles and other long-lived assets. If we determine that these items have become impaired in the future, our earnings could be adversely affected.

As of December 31, ~~2018~~2019, we had recorded goodwill of $~~264~~97.83 million and other intangible assets, net of accumulated amortization, of $4226.50 million. Goodwill represents the excess of purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets of a business acquired. Goodwill is evaluated for impairment annually or more frequently, if indicators of impairment exist. If the impairment evaluations for goodwill indicate the carrying amount exceeds the estimated fair value, an impairment loss is recognized in an amount equal to that excess. Our annual impairment evaluations of goodwill are performed at least annually as of July 1 and periodically if indicators of impairment are present.

WeIn ~~changed~~connection ~~our~~with ~~segment~~the ~~reporting~~change ~~effective~~in ~~January~~segments, we conducted an impairment analysis as of April 1, ~~2018~~2019. ~~when~~Due weto ~~integrated~~the inability of our ~~truckload~~Truckload ~~brokerage~~and ~~business~~Express ~~into~~Services ~~the~~(“TES”) ~~Ascent~~businesses ~~domestic~~to ~~freight~~meet ~~management~~forecast ~~business.~~results, Inwe ~~connection~~determined ~~with~~the carrying value exceeded the ~~change~~fair invalue ~~segments~~for the TES reporting unit. Accordingly, we ~~conducted~~recorded ana goodwill impairment ~~analysis~~charge as of ~~January~~$92.9 1million, ~~2018~~which ~~and~~represents ~~determined~~a ~~there~~write ~~was~~off noof ~~impairment~~all the TES goodwill. WeGiven ~~conducted~~the ~~our~~fact ~~annual~~that ~~goodwill~~all ~~impairment~~of ~~analysis~~the ~~for~~goodwill ~~each~~was ofimpaired, ~~our~~there ~~four~~was ~~reporting~~no ~~units~~remaining asTES ofgoodwill ~~July~~to 1,allocate ~~2018~~to the TL and ~~determined~~Ascent ~~that~~OD segments. As of April 1, 2019, the fair ~~values~~value of the ~~TES,~~ Domestic and International Logistics, reporting unit and the Warehousing & Consolidation reporting ~~units~~unit exceeded their respective carrying values by 53.1%, ~~12.8%,~~ and ~~112~~109.20%, respectively; thus no impairment was indicated for these reporting units. The goodwill balances of the Domestic and International Logistics reporting unit and the Warehousing & Consolidation reporting unit as of June 30, 2019 were $98.5 million and $73.4 million, respectively. The LTL reporting unit had no remaining goodwill as of ~~July~~April 1, ~~2018~~2019.

~~The~~After ~~sale~~the ofchange ~~our~~in ~~wholly~~segments, ~~owned~~we ~~subsidiary~~have ~~Unitrans,~~five ~~Inc.~~reporting ~~(“Unitrans”),~~units ~~which~~for ~~was~~our ~~included~~four insegments: ~~the~~one ~~Ascent~~ reporting unit, ~~resulted~~for inour anTL ~~incremental~~segment; ~~impairment~~one ~~analysis~~reporting onunit ~~the~~for ~~remaining~~our ~~net~~LTL ~~assets~~segment; ofone ~~the Ascent~~ reporting unit. Wefor ~~evaluated~~our ~~the remaining carrying value of the~~ Ascent ~~reporting~~OD ~~unit~~segment; and ~~compared~~two itreporting tounits ~~the~~for ~~fair~~our ~~value of the remaining businesses in the~~ Ascent ~~reporting~~TM ~~unit. As a result of this evaluation~~segment, wewhich ~~determined~~are the ~~carrying~~Domestic ~~value~~and ~~exceeded~~International ~~the~~Logistics ~~fair~~reporting ~~value~~unit and ~~recorded a $4.4 million impairment charge in~~ the ~~third~~Warehousing ~~quarter~~& ofConsolidation ~~2017~~reporting unit.

As a result of the first step of our goodwill impairment analysis as of July 1, 2016, we determined that the fair value of the Domestic and International Logistics reporting unit exceeded its carrying value by 8.4%; thus, no impairment was indicated for this reporting unit. However, resulting from a combination of the weakened environment, the inability to meet forecast results, and the lower share price, we determined that the fair value of the TES, LTL, and Warehousing & Consolidation reporting units were less than their respective carrying values, requiring us to perform the second step of the goodwill impairment analysis for our TES, LTL, and Warehousing & Consolidation reporting units. We completed the second step of the goodwill impairment analysis for our TES, LTL, and Warehousing & Consolidation reporting units and recorded in the third quarter of 2016 non-cash goodwill impairment charges of $132.4 million, $197.3 million, and $42.4 million for our TES, LTL, and Warehousing & Consolidation reporting units, respectively. 27

We conduct goodwill impairment analysis for each of our five reporting units as of July 1 of each year. Since the carrying value of the Domestic and International Logistics reporting unit was more than fair value, we recorded a goodwill impairment charge of $34.5 million. The fair value of the Warehousing & Consolidation reporting unit exceeded its carrying value, thus no impairment was indicated for this reporting unit. The Ascent OD, LTL and TL units had no remaining goodwill as of April 1, 2019.

Due to fourth quarter results, we identified a triggering event and conducted an interim test of impairment at December 31, 2019 for the Domestic and International Logistics reporting unit. As the carrying value of the reporting unit was more than fair value, we recorded an impairment charge to goodwill of $40.1 million in the fourth quarter. After these impairment charges, the Domestic and International Logistics reporting unit has remaining goodwill of $23.9 million as of December 31, 2019. The Warehousing and Consolidation reporting unit had remaining goodwill of $73.4 million at December 31, 2019.

We changed our segment reporting effective January 1, 2018 when we integrated our truckload brokerage business into the Ascent domestic freight management business. In connection with the change in segments, we conducted an impairment analysis as of January 1, 2018 and determined there was no impairment.

In addition, throughout the year we may update our assumptions used in the calculation of the fair value of each reporting unit. Changes to our forecasts or the discount rate and/or growth rate assumptions based on current market conditions could affect the fair value of the reporting units and result in an indication of impairment for one or more of our reporting units. If we determine that our goodwill and intangible assets in any reporting units have become impaired in the future, our results of operations could be adversely affected.

We recorded intangible asset impairment charges of $9.5 million for the year ended December 31, 2019, which is comprised of an intangible asset impairment charge of $9.1 million within our TL segment and an intangible asset impairment charge of $0.4 million within our LTL segment.

Within property and equipment, we recorded asset impairment charges of $20.0 million for the year ended December 31, 2019, which is comprised of asset impairment charges of $14.1 million within Corporate, $5.3 million within our TL segment, and $0.6 million within our LTL segment. The asset impairment charge recorded within the TL and LTL segments is primarily related to rolling stock equipment. The asset impairment charges recorded within Corporate are related to software development that was abandoned, primarily in favor of alternative customized software solutions.

If we are unable to expand the number of our sales representatives, or if a significant number of our existing sales representatives leave us, our ability to increase our revenue could be negatively impacted.

Our ability to expand our business will depend, in part, on our ability to attract additional sales representatives and brokerage agents. Competition for qualified sales representatives can be intense, and we may be unable to attract such persons. Any difficulties we experience in expanding the number of our sales representatives could have a negative impact on our ability to expand our customer base, increase our revenue, and continue our growth.

In addition, we must retain our current sales representatives and properly incentivize them to obtain new customers and maintain existing customer relationships. If a significant number of our sales representatives leave us, our revenue could be negatively impacted. A significant increase in the turnover rate among our current sales representatives could also increase our recruiting costs and decrease our operating efficiency.

Changes in our relationships with our significant customers, including the loss or reduction in business from one or more of them, could have an adverse impact on us.

We had one direct customer that accounted for approximately 1216% of our ~~2018~~2019 revenue. Our contractual relationships with customers generally are terminable at will by the customers on short notice and do not require the customer to provide any minimum commitment. Our customers could choose to divert all or a portion of their business with us to one of our competitors, demand rate reductions for our services, require us to assume greater liability that increases our costs, or develop their own logistics capabilities. Failure to retain our existing customers or enter into relationships with new customers could materially impact the growth in our business and the ability to meet our current and long-term financial forecasts.

We are a smaller reporting company and may elect to comply with reduced public company reporting requirements applicable to smaller reporting companies, which could make our common stock less attractive to investors.

We are a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act. As a “smaller reporting company,” we are subject to reduced disclosure obligations in our filings with the SEC compared to other issuers, including with respect to disclosure obligations regarding executive compensation in our periodic reports and proxy statements. Until such time as we cease to be a “smaller reporting company,” such reduced disclosure in our filings with the SEC may make it harder for investors to analyze our operating results and financial prospects.

If some investors find our common stock less attractive as a result of any choices to reduce future disclosure we may make, there may be a less active trading market for our common stock and our stock price may be more volatile.

The market value of our common stock may fluctuate and could be substantially affected by various factors.

The price of our common stock on the NYSE constantly changes and has recently experienced a general decline. We expect that the market price of our common stock will continue to fluctuate or may decline further. Our share price may fluctuate or decline as a result of a variety of factors, many of which are beyond our control. These factors include, among others:


•	actual or anticipated variations in earnings, financial or operating performance, or liquidity;


•	changes in analysts' recommendations or projections;


•	failure to meet analysts' projections;


•	general economic and capital market conditions;


•	announcements of developments related to our business;


•	operating and stock performance of other companies deemed to be peers;


•	actions by government regulators;


•	news reports of trends, concerns, and other issues related to us or our industry, including changes in regulations; and


•	other factors described in this “Risk Factors” section.

~~Additionally,~~General onmarket ~~December~~price ~~27,~~declines ~~2018,~~or wemarket ~~filed~~volatility ain ~~registration~~the ~~statement~~future oncould ~~Form~~adversely ~~S-1~~affect ~~for~~ the ~~offer~~price ~~and sale~~ of ~~up to 7,810,625 shares of~~ our common stock, byand ~~investment~~the ~~funds~~current ~~affiliated~~market ~~with~~price ~~HCI Equity Partners (“HCI”). The sale~~ of our common stock bymay ~~HCI~~not ~~could~~be ~~impact~~indicative ~~the market price~~ of ~~our~~future ~~common~~market ~~stock~~prices.

~~Our~~As ~~common~~of ~~stock~~December ~~price~~31, ~~may~~2019, ~~fluctuate~~Elliott orbeneficially ~~decline~~owned ~~significantly~~approximately in90.7% ~~the~~of ~~future,~~our ~~and~~common ~~these~~stock. ~~changes~~As ~~may~~a beresult, ~~unrelated to~~ our ~~performance.~~other ~~General~~stockholders ~~market~~are ~~price~~minority ~~declines~~stockholders orin ~~market~~a ~~volatility~~company incontrolled ~~the~~by ~~future~~Elliott. ~~could~~There ~~adversely~~may ~~affect~~be ~~the~~very ~~price~~limited ofliquidity for our common stock, and ~~the~~there ~~current~~may ~~market~~be ~~price~~more oflimited ~~our~~opportunities ~~common~~for ~~stock~~our ~~may~~stockholders ~~not~~to berealize ~~indicative~~a ofcontrol ~~future market prices~~premium.

~~The~~As ~~NYSE~~of ~~could~~December ~~commence~~31, ~~procedures~~2019, toElliott ~~delist~~beneficially owned approximately 90.7% of our common stock. As a result, inElliott ~~which~~is ~~case~~able to exercise substantial control over all matters requiring stockholder approval, including the ~~market~~election ~~price~~of directors, mergers, consolidations and acquisitions, the sale of all or substantially all of our ~~shares~~assets ~~might~~and ~~decline~~other decisions affecting our capital structure, the amendment of our certificate of incorporation and ~~become~~bylaws, ~~more~~and ~~volatile~~our winding up and dissolution. In addition, our stockholders’ ~~ability~~approved certain corporate governance proposals at our 2018 Annual Meeting of Stockholders held on December 19, 2018. The corporate governance changes resulting from such approvals are beneficial to ~~trade~~Elliott inas such changes allow any controlling stockholder to exercise greater control over our ~~stock~~Company ~~could~~than beit ~~adversely~~otherwise ~~affected~~would have. The interests of our stockholders may differ from the interests of Elliott.

The continued listing of our common stock on the NYSE is subject to our compliance with a number of quantitative listing standards, including market capitalization criteria and price per share criteria. On October 4, 2018, we received notice from the NYSE that we were not in compliance with respect to the applicable listing standard set forth in Section 802.01B of the NYSE Listed Company Manual (“Section 802.01B”), because our average global market capitalization over a consecutive 30 trading-day period was less than $50,000,000, and at the same time stockholders’ investment was less than $50,000,000. We timely notified the NYSE that we would submit a plan within 45 calendar days from receipt of the notice, advising the NYSE of definitive action we are taking that will bring us into compliance with Section 802.01B within 18 months from receipt of the notice. We timely submitted our plan which was subsequently accepted by the NYSE. There can be no guarantee that we will regain compliance

within the 18-month cure period. If we are unable to regain compliance within the 18-month cure period, we will be subject to suspension and delisting procedures.

On October 12, 2018, we receive an additional notice from the NYSE that we were not in compliance with respect to the listing standard set forth in Section 802.01C of the NYSE Listed Company Manual (“Section 802.01C”) because the average closing price of our common stock over the previous 30 consecutive trading-day period had fallen below $1.00 per share. We timely notified the NYSE that we intended to cure the deficiency and regain compliance with Section 802.01C within the 6-month cure period. There can be no guarantee that we will be able to regain compliance within the 6-month cure period. If we do not regain compliance with Section 802.01C, we will be subject to suspension and delisting procedures.

In addition to the above continued listing standards, if our average global market capitalization over any consecutive 30 trading-day period is less than $15 million, the NYSE may promptly initiate procedures to suspend and delist our common stock from trading on the NYSE. As of March 5, 2019, our global market capitalization was approximately $432 million.

If our common stock were delisted, there could be no assurance whether or when it would again be listed for trading on NYSE or any other exchange. A delisting of our common stock could negatively impact us by, among other things: reducing the liquidity and market price and increasing the volatility of our common stock, which may adversely affect the ability of stockholders to trade in our common stock; reducing the number of investors, including institutional investors, willing to hold or acquire our common stock, including institutions whose charters do not allow them to hold securities in unlisted companies, which might sell our shares, perhaps very promptly, which could negatively impact our ability to raise equity financing and have a further adverse effect on the price of our stock; decreasing the amount of news and analyst coverage of us; limiting our ability to issue additional securities, obtain additional financing or pursue strategic restructuring, refinancing or other transactions; impairing our ability to provide equity incentives to our employees; and impacting our reputation and, as a consequence, our ability to attract new business.

Following the closing of our rights offering, Elliott beneficially owns approximately 90.4% of our common stock. As a result, our stockholders have become minority stockholders in a company controlled by Elliott. There may be very limited liquidity for our common stock, and there may be more limited opportunities for our stockholders to realize a control premium.

On February 26, 2019, we closed our previously announced fully backstopped $450 million rights offering, pursuant to which we issued and sold an aggregate of 900 million new shares of our common stock at the subscription price of $0.50 per share. Elliott purchased a total of 843,632,693 shares of our common stock in the rights offering between its basic subscription rights and the backstop commitment, and following the closing of the rights offering beneficially owned approximately 90.4% of our common stock. As a result, Elliott is able to exercise substantial control over all matters requiring stockholder approval, including the election of directors, mergers, consolidations and acquisitions, the sale of all or substantially all of our assets and other decisions affecting our capital structure, the amendment of our certificate of incorporation and bylaws, and our winding up and dissolution. In addition, our stockholders approved certain corporate governance proposals at our 2018 Annual Meeting of Stockholders held on December 19, 2018. The corporate governance changes resulting from such approvals are beneficial to Elliott as such changes allow any controlling stockholder to exercise greater control over our Company than it otherwise would have. The interests of our stockholders may differ from the interests of Elliott.

Elliott is not subject to any lock-up with respect to its shares of our common stock. Elliott therefore has the ability to sell its controlling position in a privately negotiated transaction and realize a control premium for the shares of our common stock held by it if it is able to find a buyer that is willing to pay such a premium. Our stockholders should not assume that in connection with such a sale of control by Elliott there would be a concurrent offer for the shares held by other stockholders or that our stockholders would otherwise be able to realize any control premium for their shares. Additionally, if Elliott privately sells a significant equity interest in us, we may become subject to the control of a presently unknown third party. Such third party may have conflicts of interest with the interests of other stockholders.

In addition, we expect that a significant portion of the shares of our common stock held by Elliott may be pledged as part of the collateral securing certain of Elliott’s secured borrowing arrangements. Upon certain events of default, the secured lenders under these arrangements may take possession, hold, collect, sell, lease, deliver, grant options to purchase or otherwise retain, liquidate or dispose of all or any portion of the collateral. Any such enforcement action by Elliott’s secured lenders may result in a change in control of our Company. In addition, upon such events of default, the registration rights we granted to Elliott will immediately and automatically be assigned in full to the secured lenders with respect to any registrable securities held by such secured lenders. We have no obligation to maintain Elliott’s financial viability and Elliott may not remain current on its obligations under its secured borrowing arrangements.

Since Elliott ~~now~~ owns a significant majority of our outstanding common stock ~~following the closing of the rights offering~~, the liquidity for our common stock may be adversely affected. Elliott is not required to cause the Company to maintain the listing of our common stock on the NYSE. If we were to decide to discontinue the listing of our common stock, this may further adversely affect the liquidity in our common stock. Any such reduced liquidity is likely to materially and adversely affect the trading price for our common stock. Other actions that

2729

~~for our common stock. Other actions that~~ we may take now that we are controlled by Elliott could have additional material and adverse effects on the liquidity in our common stock and our stock price.

We are a “controlled company” within the meaning of the NYSE listing standards. Consequently, our stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance rules and requirements.

~~Following~~As ~~the closing~~ of ~~our~~December ~~rights~~31, ~~offering~~2019, Elliott beneficially owned approximately 90.47% of our common stock. As a result, we are a controlled company within the meaning of the NYSE listing standards. Under the NYSE listing standards, a controlled company may elect to not comply with certain NYSE corporate governance standards, including the requirements that (i) a majority of the board of directors consist of independent directors, (ii) it maintain a nominating and corporate governance committee that is composed entirely of independent directors with a written charter address addressing the committee’s purpose and responsibilities, (iii) it have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities, and (iv) it have an annual performance evaluation of the nominating and corporate governance and compensation committees. Although Elliott has indicated that we will not utilize these exemptions and others afforded to controlled companies, Elliott could change its intention and take advantage of the controlled company standards. Consequently, our stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance rules and requirements. In addition, our status as a controlled company could make our common stock less attractive to some investors or otherwise harm our stock price.

Since Elliott ~~owns~~owned greater than 35% of our common stock after the closing of the rights offering, the acquisition of shares by Elliott in the rights offering was deemed a change in control under certain management compensation plans and agreements, which could cause a material adverse effect on our liquidity, financial condition, and results of operations. In addition, the ownership by Elliott of a substantial percentage of our common stock after the closing of the rights offering may be deemed a change in control under certain of our other arrangements and agreements with customers, suppliers, or other parties, which could cause a material adverse effect on our liquidity, financial condition, and results of operations.

Following the closing of our rights offering, Elliott beneficially owned approximately 90.4% of our common stock, which was deemed a change in control under certain management compensation plans and agreements. A change in control under certain of our management compensation plans and agreements requires the accelerated vesting of all outstanding and unvested equity awards. In addition, upon such change in control, certain members of management are now entitled to cash-based severance payments, health and welfare benefits, and bonus payments if such members of senior management are terminated without cause or for good reason (each as defined in their respective employment agreements) within twenty-four months following the change in control. Such cash payments and benefits would be difficult for us to make given our current liquidity constraints and would further constrain our liquidity. While we have obtained waivers to these provisions from members of our senior management and directors, we have not obtained waivers from other employees and plan participants. If we are required to make any payments due to a change in control, such payments and provision of benefits could have a material adverse effect on our liquidity and financial condition.

In addition, the ownership by Elliott of a substantial percentage of our common stock after the closing of the rights offering may be deemed a change in control under certain of our other arrangements and agreements with customers, suppliers, or other parties, which could cause a material adverse effect on our liquidity, financial condition, and results of operations. ~~We are continuing to analyze the effects, if any, such a change in control may have on any such arrangements or agreements.~~

Provisions in our certificate of incorporation, our bylaws, and Delaware law could make it more difficult for a third party to acquire us, discourage a takeover, and adversely affect existing stockholders.

Our certificate of incorporation, our bylaws, and the Delaware General Corporation Law contain provisions that may make it more difficult or delay attempts by others to obtain control of our Company, even when these attempts may be in the best interests of our stockholders. These include provisions limiting the stockholders' powers to remove directors or take action by written consent instead of at a stockholders' meeting. Our certificate of incorporation also authorizes our board of directors, without stockholder approval, to issue one or more series of preferred stock, which could have voting and conversion rights that adversely affect or dilute the voting power of the holders of common stock. On May 2, 2017, we issued shares of our preferred stock to affiliates of Elliott pursuant to the 2017 Investment Agreement. On March 1 and April 24, 2018 we issued additional shares of our preferred stock to affiliates of Elliott pursuant to the Series E-1 Investment Agreement. See Note 67, “Preferred Stock” to the consolidated financial statements in this Form 10-K for further information. In addition, our certificate of incorporation provides for our board to be divided into three classes, serving staggered terms. The classified board provision could have the effect of discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us. Delaware law also imposes conditions on the voting of “control shares” and on certain business combination transactions with “interested stockholders.”

28These provisions and others that could be adopted in the future could deter unsolicited takeovers or delay or prevent changes in our control or management, including transactions in which stockholders might otherwise receive a premium for their shares over then-current market prices. These provisions may also limit the ability of stockholders to approve transactions that they may deem to be in their best interests. Further, our stockholders approved the Corporate Governance Proposals at the 2018 Annual

These provisions and others that could be adopted in the future could deter unsolicited takeovers or delay or prevent changes in our control or management, including transactions in which stockholders might otherwise receive a premium for their shares over then-current market prices. These provisions may also limit the ability of stockholders to approve transactions that they may deem to be in their best interests. Further, our stockholders approved the Corporate Governance Proposals at the 2018 Annual Meeting of Stockholders held on December 19, 2018. Such provisions could make it more difficult for a third party to acquire us, discourage a takeover, and could adversely affect existing stockholders.30

Meeting of Stockholders held on December 19, 2018. Such provisions could make it more difficult for a third party to acquire us, discourage a takeover, and could adversely affect existing stockholders.

We intend to voluntarily delist our common stock from the NYSE and deregister our common stock under the Exchange Act.

On March 26, 2020, a special committee of our board of directors approved to voluntarily delist our common stock from the NYSE and to deregister our common stock under the Exchange Act. We intend to file a Form 25 with the SEC on or about April 6, 2020 in order to delist our common stock from the NYSE, which will terminate the registration of our common stock under Section 12(b) of the Exchange Act ten days thereafter. We anticipate that the last day of trading on the NYSE will be on or about April 16, 2020. Our common stock may thereafter be eligible for trading on an over-the-counter market, if one or more brokers chooses to make a market for our common stock; however, there can be no assurances regarding any such trading.

On or about April 17, 2020, we intend to file a Form 15 with the SEC, at which time we anticipate that our obligation to file periodic reports under the Exchange Act, including annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K will be suspended, and that all requirements associated with being an Exchange Act-registered company, including the requirement to file current and periodic reports, will terminate 90 days thereafter. Accordingly, there will be significantly less information regarding us available to stockholders and potential investors.

Following delisting and deregistration, the combination of this reduced amount of information and the likelihood of reduced liquidity in the over-the-counter trading environment may impact the value of our common stock.



ITEM 1B.	UNRESOLVED STAFF COMMENTS

None.



ITEM 2.	PROPERTIES

We lease space for our corporate headquarters in Downers Grove, Illinois, which provides our executive management team and LTL management team a central location for easier travel to both customers and geographically dispersed business locations. We also lease space in Cudahy, Wisconsin to house key business and support functions.

For our ~~TES~~TL business, we own ~~two~~one and lease ~~eight~~seven Company dispatch offices and lease five cross-dock and drop yard locations throughout the United States and Canada. We own ~~four~~three and lease 3127 ~~TES~~TL service centers, and own ~~one~~two and lease seven warehouses throughout the United States. For our LTL business, we lease 2925 service centers throughout the United States. Each service center manages and is responsible for the freight that originates and delivers in its service area, and the typical service center is configured to perform origin consolidation and cross-dock functions. For our Ascent business, we own two and lease 1422 locations to support our international freight forwarding and domestic 3PL business. ~~We also lease six distribution facilities used to support our warehousing and consolidation business.~~

We believe that our current facilities are in good working order and are capable of supporting our operations for the foreseeable future; however, we will continue to evaluate leasing additional space as needed to accommodate our growth.



ITEM 3.	LEGAL PROCEEDINGS

Auto, Workers Compensation and General Liability Reserves

In the ordinary course of business, we are a defendant in several legal proceedings arising out of the conduct of our business. These proceedings include claims for property damage or personal injury incurred in connection with our services. Although there can be no assurance as to the ultimate disposition of these proceedings, we do not believe, based upon the information available at this time, that these property damage or personal injury claims, in the aggregate, will have a material impact on our consolidated financial statements. We maintain insurance for auto liability, general liability, and cargo damage claims. We maintain an aggregate of $100.0 million of auto liability and general liability insurance. We maintain auto liability insurance coverage for claims in excess of $1.0 million per occurrence and cargo coverage for claims in excess of $100,000 per occurrence. We are self-insured up to $1.0 million per occurrence for workers compensation. We believe we have adequate insurance to cover losses in excess of our self-insured and deductible amount. As of December 31, ~~2018~~2019 and ~~2017~~2018, we had reserves for estimated uninsured losses of $2631.85 million and $2826.48 million, respectively, included in accrued expenses and other current liabilities on the consolidated balance sheets.

General Litigation Proceedings

~~Jeffrey~~ Cox and ~~David~~ Chidester filed a complaint against certain of our subsidiaries in state court in California in a post-acquisition dispute. The complaint alleges contract, statutory and tort-based claims arising out of the Central Cal Agreement. The plaintiffs claim that a contingent purchase obligation payment is due and owing pursuant to the Central Cal Agreement, and that defendants have furnished fraudulent calculations to the plaintiffs to avoid payment. The plaintiffs also claim violations of California’s Labor Code related to the plaintiffs’ respective employment with Central Cal Transportation, LLC. On October 27, 2017, the state court granted our motion to compel arbitration of all non-employment claims alleged in the complaint. The parties selected a settlement accountant to determine the contingent purchase obligation pursuant to the Central Cal Agreement. The settlement accountant provided a final determination that a contingent purchase obligation of $2.1 million is due to the plaintiffs. It is our position that this contingent purchase obligation is subject to offset for certain indemnification claims owed to us by the plaintiffs ranging from approximately $0.3 million to $1.0 million. Accordingly, we have recorded a contingent purchase obligation liability of $1.8 million in accrued expenses and other current liabilities. We intend to pursue indemnification and other claims as it relates to the Central Cal Matter and other related matters involving these plaintiffs. In February 2018, Plaintiff David Chidester agreed to dismiss his employment-related claims from the Los Angeles Superior Court matter, while Plaintiff Jeffrey Cox transferred his employment claims from Los Angeles Superior Court to the related employment case pending in the Eastern District of California. The parties are proceeding with discovery and the consolidated case is currently set for trial on November 5, 2019.

We received a letter dated April 17, 2018 from legal counsel representing Warren Communications News, Inc. (“Warren”) in which Warren made certain allegations against us of copyright infringement concerning an electronic newsletter published by Warren (the “Warren Matter”). Specifically, Warren alleged that an employee of ours had, for several years, forwarded that electronic newsletter to third parties in violation of corresponding subscription agreements. After discussions with Warren, we received a second letter dated July 30, 2018 in which counsel for Warren offered to settle its claim for a monetary payment by us. We subsequently sent a counter-offer to Warren, which was rejected.

against us alleging that we violated various California labor laws. In 2017 and 2018, we reached settlement agreements on a number of these labor related lawsuits and administrative actions. As of December 31, 2018 and 2017, we recorded a liability for settlements, litigation, and defense costs related to these labor matters, the Central Cal Matter and the Warren Matter of $10.8 million and $13.2 million, respectively, which are recorded in accrued expenses and other current liabilities on the consolidated balance sheets.

Securities Litigation Proceedings

Following our press release on January 30, 2017, three putative class actions were filed in the United States District Court for the Eastern District of Wisconsin against us and our former officers, Mark A. DiBlasi and Peter R. Armbruster. On May 19, 2017, the Court consolidated the actions under the caption In re Roadrunner Transportation Systems, Inc. Securities Litigation (Case No. 17-cv-00144), and appointed Public Employees’ Retirement System as lead plaintiff. On March 12, 2018, the lead plaintiff filed the CAC on behalf of a class of persons who purchased our common stock between March 14, 2013 and January 30, 2017, inclusive. The CAC alleges (i) we and Messrs. DiBlasi and Armbruster violated Section 10(b) of the Exchange Act and Rule 10b-5, and (ii) Messrs. DiBlasi and Armbruster, our former Chairman Scott Rued, HCI Equity Partners, L.L.C., and HCI Equity Management, L.P. violated Section 20(a) of the Exchange Act, by making or causing to be made materially false or misleading statements, or failing to disclose material facts, regarding (a) the accuracy of our financial statements; (b) our true earnings and expenses; (c) the effectiveness of our disclosure controls and controls over financial reporting; (d) the true nature and depth of financial risk associated with our tractor lease guaranty program; (e) our leverage ratios and compliance with our credit facilities; and (f) the value of the goodwill we carried on our balance sheet. The CAC seeks certification as a class action, compensatory damages, and attorney’s fees and costs. On November 19, 2018, the parties entered into a binding term sheet agreeing to settle the action for $20 million, $17.9 million of which will be funded by our D&O carriers ($4.8 million of which is by way of a pass through of the D&O carriers’ payment to us in connection with the settlement of the Federal Derivative Action described below). The parties are finalizing the Stipulation of Settlement. The settlement is conditioned on a settlement of the Federal Derivative Action described below, dismissal of the State Derivative Action described below, and final court approval of the settlements in this action and in the Federal Derivative Action.

On May 25, 2017, Richard Flanagan filed a complaint alleging derivative claims on our behalf in the Circuit Court of Milwaukee County, State of Wisconsin (Case No. 17-cv-004401) against Scott Rued, Mark DiBlasi, Christopher Doerr, John Kennedy, III, Brian Murray, James Staley, Curtis Stoelting, William Urkiel, Judith Vijums, Michael Ward, Chad Utrup, Ivor Evans, Peter Armbruster, and Brian van Helden (the “State Derivative Action”). Count I of the complaint alleges the Director Defendants breached their fiduciary duties by “knowingly failing to ensure that the Company implemented and maintained adequate internal controls over its accounting and financial reporting functions,” and seeks unspecified damages. Count II of the complaint alleges the Officer Defendants DiBlasi, Armbruster, and van Helden received substantial performance-based compensation and bonuses for fiscal year 2014 that should be disgorged. The action has been stayed pending the District Court’s approval of the proposed settlement of the Federal Derivative Action, following which the defendants would move to dismiss this action as moot. While the case was stayed, the plaintiff obtained permission to file an amended complaint adding claims against two former Company employees: Bret Naggs and Mark Wogsland.

On June 28, 2017, Jesse Kent filed a complaint alleging derivative claims on our behalf and class action claims in the United States District Court for the Eastern District of Wisconsin. On December 22, 2017, Chester County Employees Retirement Fund filed a complaint alleging derivative claims on our behalf in the United States District Court for the Eastern District of Wisconsin. On March 21, 2018, the Court entered an order consolidating the Kent and Chester County actions under the caption Kent v. Stoelting et al (Case No. 17-cv-00893) (the “Federal Derivative Action”). On March 28, 2018, plaintiffs filed their Verified Consolidated Shareholder Derivative Complaint alleging claims on our behalf against Peter Armbruster, Mark DiBlasi, Scott Dobak, Christopher Doerr, Ivor Evans, Brian van Helden, John Kennedy III, Ralph Kittle, Brian Murray, Scott Rued, James Staley, Curtis Stoelting, William Urkiel, Chad Utrup, Judith Vijums, and Michael Ward. Count I alleges that several of the defendants violated Section 14(a) of the Exchange Act and Rule 14a-9 based upon alleged misrepresentations and omissions in several of our proxy statements. Count II alleges that all the defendants breached their fiduciary duty. Count III alleges that all the defendants wasted corporate assets. Count IV alleges that certain of the defendants were unjustly enriched. The complaint seeks monetary damages, improvements to our corporate governance and internal procedures, an accounting from defendants of the damages allegedly caused by them and the improper amounts the Defendants allegedly obtained, and punitive damages. The parties are currently finalizing the terms of a Stipulation of Settlement, which provides for certain corporate governance changes and a $6.9 million payment, $4.8 million of which will be paid by our D&O carriers into an escrow account to be used by us to settle the class action described above and $2.1 million of which will be paid by our D&O carriers to cover plaintiffs attorney’s fees and expenses, subject to court approval.

~~Given~~fraudulent calculations to the ~~status~~plaintiffs to avoid payment. The plaintiffs also claim violations of California’s Labor Code related to the ~~matters~~plaintiffs’ ~~above~~respective employment with Central Cal Transportation, weLLC. ~~concluded~~On October 27, 2017, the state court granted our motion to compel arbitration of all non-employment claims alleged in ~~2018~~the complaint. The parties selected a settlement accountant to determine the contingent purchase obligation pursuant to the Central Cal Agreement. The settlement accountant provided a final determination that a ~~liability~~contingent purchase obligation of $2.1 million is ~~probable~~due ~~and~~to ~~recorded~~the plaintiffs. On July 5, 2019, the ~~estimate~~Court ~~loss~~entered a judgment confirming the arbitration award. We satisfied the principal amount of the judgment. On July 10, 2019, the plaintiffs filed an application for an award of their fees in costs, seeking a minimum of $220.7 million in fees, and requesting that the Court apply a ~~corresponding~~lodestar ~~insurance~~multiplier ~~reimbursement~~to ~~receivable~~enhance the fees to an award of either $201.1 million or $1.5 million based upon the complexity of the case. On January 17, 2020, the Court awarded the plaintiffs $0.5 million in total fees. With outstanding interest, the total amount owed by us was $0.6 million, which we paid on March 3, 2020. In February 2018, Chidester agreed to dismiss his employment-related claims from the Los Angeles Superior Court matter, while Cox transferred his employment claims from Los Angeles Superior Court to the related employment case pending in the Eastern District of California. There have been two summary judgment motions filed thus far, one by Cox and one by us. We successfully defeated Cox’s motion for summary judgment, which resulted in a Court Order holding that Cox’s non-compete was enforceable as to time and limited to the geographic are of California, Nevada, and Oregon where Central Cal conducts business. Cox filed a motion for reconsideration of the Court’s order, which was denied. The Court thereafter granted partial summary judgment as to all claims except for the two whistleblower/retaliation claims and the public policy wrongful termination claim. The court then vacated the pre-trial conference and trial dates and has not reset them.

In addition to the legal proceeding described above, we are a defendant in various purported class-action lawsuits alleging violations of various California labor laws and one purported class-action lawsuit alleging violations of the Illinois Wage Payment and Collection Act. Additionally, the California Division of Labor Standards and Enforcement has brought administrative actions against us alleging that we violated various California labor laws. In 2017 and 2018, we reached settlement agreements on a number of these labor related lawsuits and administrative actions. As of December 31, 2019 and 2018, we recorded a liability for settlements, litigation, and defense costs related to these labor matters, the Central Cal Matter and the Warren Matter of $1.0 million and $10.8 million, respectively, which are recorded in accrued expenses and other current liabilities on the consolidated balance sheets.

In December 2018, a class action lawsuit was brought against us in the Superior Court of the State of California by Fernando Gomez, on behalf of himself and other similarly situated persons, alleging violation of California labor laws. We intend to vigorously defend against such claims; however, there can be no assurance that we will be able to prevail. In light of the relatively early stage of the proceedings, we are unable to predict the potential costs or range of costs at this time.

Securities Litigation Proceedings

In 2017, three putative class actions were filed in the United States District Court for the Eastern District of Wisconsin against us and our former officers, Mark A. DiBlasi and Peter R. Armbruster. On May 19, 2017, the Court consolidated the actions under the caption In re Roadrunner Transportation Systems, Inc. Securities Litigation (Case No. 17-cv-00144), and appointed Public Employees’ Retirement System as lead plaintiff. On March 12, 2018, the lead plaintiff filed the CAC on behalf of a class of persons who purchased our common stock between March 14, 2013 and January 30, 2017, inclusive. The CAC asserted claims arising out of our January 2017 announcement that we would be restating our prior period financial statements and sought certification as a class action, compensatory damages, and attorney’s fees and costs. On March 29, 2019, the parties entered into a Stipulation of Settlement agreeing to settle the action for $20 million, $17.9 million of which will be funded by our D&O carriers ($4.8 million of which is by way of a pass through of the D&O carriers’ payment to us in connection with the settlement of the Federal Derivative Action described below). On September 26, 2019, the Court entered an Order finally approving the settlement and a final judgment. All settlements have been paid.

On March 21, 2018, the Court entered an order consolidating the Kent and Chester County actions under the caption Kent v. Stoelting et al (Case No. 17-cv-00893) (the “Federal Derivative Action”). On March 28, 2018, plaintiffs filed their Verified Consolidated Shareholder Derivative Complaint alleging claims on behalf of us against Peter Armbruster, Mark DiBlasi, Scott Dobak, Christopher Doerr, Ivor Evans, Brian van Helden, John Kennedy III, Ralph Kittle, Brian Murray, Scott Rued, James Staley, Curtis Stoelting, William Urkiel, Chad Utrup, Judith Vijums, and Michael Ward. The Complaint asserted claims arising out of our January 2017 announcement that we would be restating its prior period financial statements. The Complaint sought monetary damages, improvements to our corporate governance and internal procedures, an accounting from defendants of the damages allegedly caused by them and the improper amounts the defendants allegedly obtained, and punitive damages. On March 28, 2019, the parties entered into a Stipulation of Settlement, which provides for certain corporate governance changes and a $6.9 million payment, $4.8 million of which will be paid by our D&O carriers into an escrow account to be used by us to settle the class action described above and $2.1 million of which will be paid by our D&O carriers to cover plaintiffs attorney’s fees and expenses. On September 26, 2019, the Court entered an Order finally approving the settlement and a final judgment. All settlements have been paid.

In addition, subsequent to our announcement that certain previously filed financial statements should not be relied upon, we were contacted by the SEC, FINRA, and the DOJ. The DOJ and Division of Enforcement of the SEC have commenced investigations into the events giving rise to the restatement. We have received formal requests for documents and other information. In addition, in June 2018 two of our former employees were indicted on charges of conspiracy, securities fraud, and wire fraud as part of the ongoing DOJ and SEC investigation. We are cooperating fully with the joint DOJ and SEC investigation. Given the status of this matter, we are unable to reasonably estimate the potential costs or range of costs at this time.



ITEM 4.	MINE SAFETY DISCLOSURES

Not applicable.

3233

PART II



ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information on Common Stock

Our common stock has been trading on the NYSE under the symbol “RRTS” since May 13, 2010. Prior to that time, there was no public market for our common stock.

On ~~October 4~~March 7, ~~2018~~2019, weour ~~received~~board ~~notice~~of ~~from~~directors and the ~~NYSE~~holders ~~that~~of wea ~~were~~majority ~~not~~of inthe ~~compliance~~issued ~~because~~and ~~our~~outstanding ~~average~~shares ~~global~~of ~~market~~our ~~capitalization~~common ~~over~~stock approved a ~~consecutive 30 trading~~1-~~day~~for-25 ~~period~~reverse ~~was~~split ~~less~~of ~~than~~our ~~$50,000,000,~~issued and atoutstanding ~~the~~shares ~~same~~of ~~time~~common ~~stockholders’~~stock. ~~investment~~The ~~was~~1-for-25 ~~less~~reverse ~~than~~stock ~~$50,000,000.~~split Wewas ~~timely~~effective ~~notified~~upon the ~~NYSE~~filing ~~that~~and weeffectiveness ~~would~~of ~~submit~~ a ~~plan~~Certificate ~~within~~of 45Amendment ~~calendar~~to ~~days~~our ~~from~~Certificate ~~receipt~~ of ~~the~~Incorporation ~~notice,~~after ~~advising~~ the ~~NYSE~~market ofclosed ~~definitive~~on ~~action~~April 4, we2019, ~~are~~and ~~taking~~our ~~that~~common ~~will~~stock ~~bring~~began ustrading ~~into~~on ~~compliance~~a ~~within~~split-adjusted 18basis ~~months~~on ~~from~~April 5, ~~receipt of the notice~~2019. WeSee ~~timely~~Note ~~submitted~~1, ~~our~~“Organization, ~~plan~~Nature ~~which~~of ~~was~~Business ~~subsequently~~and ~~accepted~~Significant byAccounting ~~the~~Policies” ~~NYSE.~~in ~~There~~our ~~can~~consolidated befinancial nostatements ~~guarantee~~for ~~that~~more weinformation ~~will~~on ~~regain compliance within~~ the ~~18-month~~reverse ~~cure~~stock ~~period~~split. ~~If we are unable to regain compliance within the 18-month cure period, we will be subject to suspension and delisting procedures.~~

OnIn October ~~12,~~ 2018, we received antwo ~~additional~~notices ~~notice~~ from the NYSE that we ~~were~~had ~~not~~fallen inbelow ~~compliance~~(1) ~~because~~the NYSE’s continued listing standards related to the minimum average ~~closing~~global market capitalization and total stockholders’ investment and (2) the NYSE’s continued listing standard related to price ofcriteria ~~our~~for common stock, ~~over~~which requires the ~~previous~~average 30closing ~~consecutive~~price ~~trading-day~~of ~~period~~a ~~had~~company's ~~fallen~~common ~~below~~stock to equal at least $1.00 per share. Weover ~~timely~~a ~~notified~~30 ~~the~~consecutive ~~NYSE~~trading ~~that~~day period. On April 12, 2019, we ~~intended~~received toa ~~cure~~notice from the ~~deficiency~~NYSE ~~and~~that ~~regain~~a ~~compliance~~calculation ~~within~~of the ~~6-month~~average ~~cure~~stock ~~period.~~price ~~There~~for ~~can~~the be30-trading nodays ~~guarantee~~ended ~~that~~April 12, we2019 ~~will~~indicated bethat ~~able~~we towere ~~regain~~back in compliance ~~within~~with the ~~6-month cure period~~$1.00 Ifcontinued welisted docriterion. ~~not~~On ~~regain~~September ~~compliance~~10, 2019, we ~~will~~received bea ~~subject~~notice tofrom ~~suspension~~the ~~and~~NYSE ~~delisting~~that ~~procedures.~~we Inwere ~~addition~~back toin compliance with the ~~above~~NYSE's ~~continued~~quantitative listing standards,. ifThis ~~our~~decision ~~average~~came ~~global~~as ~~market~~a ~~capitalization~~result ~~over~~of ~~any~~our ~~consecutive~~achievement 30of ~~trading-day~~compliance ~~period~~with ~~is less than $15 million,~~ the NYSE's ~~may~~minimum ~~promptly~~market ~~initiate~~capitalization ~~procedures to suspend~~ and ~~delist~~stockholders' ~~our~~equity ~~common~~requirements ~~stock~~over ~~from~~the ~~trading~~prior ontwo ~~the~~consecutive ~~NYSE~~quarters.

Stockholders

As of March 527, ~~2019~~2020, there were ~~127~~59 holders of record of our common stock and the closing price of our common stock as reported on the NYSE was $04.4655 per share.

Unregistered Sales of Equity Securities

From October 1, 2018 to December 31, 2018, we issued and sold 379,572 shares of common stock that were not registered under the Securities Act pursuant to the exercise of warrants to purchase common stock at an exercise price of $0.01, for an aggregate amount of $3,796. The issuance and sale of these shares was exempt from registration under the Securities Act in reliance upon Section 4(a)(2) of the Securities Act (or Regulation D promulgated thereunder) as a transaction by an issuer not involving any public offering.

Dividends

We have never declared or paid cash dividends on our common stock. We currently plan to retain any earnings to finance the growth of our business rather than to pay cash dividends on our common stock. Payments of any cash dividends on our common stock in the future will depend on our financial condition, results of operations, and capital requirements, as well as other factors deemed relevant by our board of directors. Our ABL Credit Facility, ~~and~~ Term Loan Credit Facility and Third Lien Credit Facility restrict us from paying dividends on our common stock unless certain payment conditions are satisfied.

Equity Compensation Plan Information

For equity compensation plan information, refer to Item 12 in Part III of this Form 10-K.

3334



ITEM 6.	SELECTED FINANCIAL DATA

The following tables present selected financial data for each fiscal year in the five-year period ended December 31, ~~2018~~2019. The selected financial data below should be read in conjunction with Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and related notes contained elsewhere in this Form 10-K, including Note 3 “~~Acquisitions and~~ Divestitures” in our consolidated financial statements thereto. The consolidated statement of operations data includes the results of operations of our divested companies through the date of divestiture.

We have derived the consolidated statements of operations and other data for the years ended December 31, ~~2018~~2019, ~~2017~~2018, and ~~2016~~2017 and the consolidated balance sheet data as of December 31, ~~2018~~2019 and ~~2017~~2018 from our audited consolidated financial statements included elsewhere in this Form 10-K. We have derived the consolidated statements of operations data and other data for the years ended December 31, ~~2015~~2016 and ~~2014~~2015 and the consolidated balance sheet data as of December 31, ~~2016~~2017, ~~2015~~2016, and ~~2014~~2015 from our Annual Report on Form 10-K for the ~~year~~years ended December 31, 2017 and 2016. Our historical results are not necessarily indicative of the results that should be expected in the future and the selected financial data is not intended to replace the consolidated financial statements and related notes included elsewhere in this Form 10-K. Per share data has been adjusted to reflect the reverse merger that took effect on April 4, 2019.

CONSOLIDATED STATEMENTS OF OPERATIONS DATA

(In thousands, except per share amounts)	Year Ended December 31,
	2018			2017			2016			2015			2014
	2019			2018			2017			2016			2015
Consolidated Statement of Operations Data:
Revenues	$	21,~~216~~847,~~141~~862		$	2,~~091~~216,~~291~~141		$	2,~~033~~091,~~200~~291		$	12,~~992~~033,~~166~~200		$	1,~~872~~992,~~470~~166
Purchased transportation costs	1,~~518~~246,~~415~~565			1,~~430~~518,~~378~~415			1,~~364~~430,~~055~~378			1,~~310~~364,~~396~~055			1,~~294~~310,~~724~~396
Personnel and related benefits	~~309~~313,~~753~~541			~~296~~309,~~925~~753			~~286~~296,~~134~~925			~~263~~286,~~254~~134			~~213~~263,~~661~~254
Other operating expenses	~~397~~370,~~468~~213			~~393~~397,~~731~~468			~~374~~393,~~979~~731			~~323~~374,~~955~~979			~~271~~323,~~210~~955
Depreciation and amortization	4259,~~767~~004			3742,~~747~~767			3837,~~145~~747			3138,~~626~~145			2431,~~254~~626
Impairment charges	1197,~~582~~096			41,~~402~~582			~~373~~4,~~661~~402			—373,661			—
Gain on sale of Unitrans	—			(35,440		)	—			—			—
Gain on sale of businesses	(37,221		)	—			(35,440		)	—			—
Acquisition transaction expenses	—			—			—			~~564~~—			~~2,305~~564
Operations restructuring costs	420,~~655~~579			—4,655			—			—			—
Operating (loss) income	(58321,~~499~~915		)	(3658,~~452~~499		)	(~~403~~36,~~774~~452		)	62(403,~~371~~774		)	6662,~~316~~371
Interest on debt	1120,~~224~~412			1411,~~345~~224			2214,~~827~~345			1922,~~439~~827			1319,~~363~~439
Interest on preferred stock	~~105,688~~—			49105,~~704~~688			—49,704			—			—
Loss on debt extinguishment	—			15,876			—			—			—
Loss on debt restructuring	2,270			—			15,876			—			—
(Loss) income before (benefit from) provision for income taxes	(~~175~~344,~~411~~597		)	(~~116~~175,~~377~~411		)	(~~426~~116,~~601~~377		)	42(426,~~932~~601		)	5242,~~953~~932
(Benefit from) provision for income taxes	(93,~~814~~660		)	(259,~~191~~814		)	(6625,~~281~~191		)	17(66,~~312~~281		)	2017,~~243~~312
Net (loss) income	$(340,937	~~(165,597~~	)	$(165,597	~~(91,186~~	)	$(91,186	~~(360,320~~	)	$(360,320	~~25,620~~	)	$25,620	~~32,710~~
(Loss) earnings per share:
Basic	$	(410.3062	)	$	(2107.3739	)	$	(959.4037	)	$	0(235.6704	)	$	016.8678
Diluted	$	(410.3062	)	$	(2107.3739	)	$	(959.4037	)	$	0(235.6504	)	$	016.8335
Weighted average common stock outstanding:
Basic	3832,~~552~~098			381,~~405~~542			381,~~318~~536			381,~~179~~533			371,~~852~~527
Diluted	3832,~~552~~098			381,~~405~~542			381,~~318~~536			391,~~180~~533			391,~~259~~567

3435

CONSOLIDATED BALANCE SHEET DATA

(in thousands)	December 31,
(In thousands)	December 31,
	2018			2017			2016		2015		2014
	2019			2018			2017		2016		2015
Total assets	$	~~853~~670,~~457~~397		$	~~876~~853,~~043~~457		$	~~933~~876,~~554~~043	$	1933,~~307,753~~554	$	1,~~250~~307,~~638~~753
Adjusted working capital (1)	7956,~~853~~056			~~123~~79,~~469~~853			~~138~~123,~~692~~469		~~153~~138,~~626~~692		~~155~~153,~~950~~626
Total debt (including current maturities)	~~168~~204,~~767~~760			~~199~~168,~~410~~767			~~445~~199,~~589~~410		~~432~~445,~~830~~589		~~423~~432,~~945~~830
Preferred stock	~~402,884~~—			~~263~~402,~~317~~884			—263,317		—		—
Capital lease obligation	50,966			9,565			6,245		12,464		1,730
Finance lease obligation	66,938			50,966			9,565		6,245		12,464
Total stockholders’ (deficit) investment	(52,155		)	110,847			197,468		556,439		524,287
Total stockholders’ investment (deficit)	55,832			(52,155		)	110,847		197,468		556,439

(1) Adjusted working capital, calculated as current assets less current liabilities, excluding current maturities of debt and short-term ~~capital~~ lease obligations, is not a financial measure presented in accordance with GAAP. Our management uses adjusted working capital to evaluate how well short-term assets and liabilities are being utilized to run our operations. Our calculation of adjusted working capital excludes current maturities of debt and short-term ~~capital~~ lease obligations (i.e. financing items) from the traditional measure of working capital. Management believes adjusted working capital provides useful supplemental information for investors since it relates purely to the operational aspects of our business. ~~The following is a reconciliation of adjusted working capital from current assets:~~

(in thousands)	December 31,
	2018		2017		2016		2015		2014
Current assets	$	351,038	$	398,386	$	374,487	$	346,564	$	349,139
Less: Current liabilities	297,585		287,264		684,037		630,918		617,367
Plus: Short-term capital lease obligation	13,229		2,397		2,653		5,150		233
Plus: Current maturities of debt	13,171		9,950		445,589		432,830		423,945
Adjusted working capital	$	79,853	$	123,469	$	138,692	$	153,626	$	155,950

The following is a reconciliation of adjusted working capital from current assets:

ADJUSTED ~~EBITDA~~WORKING CAPITAL



(In thousands)	December 31,
	2019		2018		2017		2016		2015
Current assets	$	264,501	$	351,038	$	398,386	$	374,487	$	346,564
Less: Current liabilities	274,136		297,585		287,264		684,037		630,918
Plus: Current finance lease liability	15,600		13,229		2,397		2,653		5,150
Plus: Current operating lease liability	38,566		—		—		—		—
Plus: Current maturities of debt	2,291		13,171		9,950		445,589		432,830
Plus: Current maturities of indebtedness to related party	9,234		—		—		—		—
Adjusted working capital	$	56,056	$	79,853	$	123,469	$	138,692	$	153,626

The following is a reconciliation of Adjusted EBITDA from net (loss) income:

	Year Ended December 31,
(In thousands)	2018			2017 (1)			2016 (1)			2015 (1)			2014 (1)
Net (loss) income	$	(165,597	)	$	(91,186	)	$	(360,320	)	$	25,620		$	32,710
Plus: Total interest expense	116,912			64,049			22,827			19,439			13,363
Plus: (Benefit from) provision for income taxes	(9,814		)	(25,191		)	(66,281		)	17,312			20,243
Plus: Depreciation and amortization	42,767			37,747			38,145			31,626			24,254
Plus: Impairment charges	1,582			4,402			373,661			—			—
Plus: Long-term incentive compensation expenses	2,696			2,450			2,232			2,500			2,255
Plus: Gain on sale of Unitrans	—			(35,440		)	—			—			—
Plus: Loss on debt extinguishments	—			15,876			—			—			—
Plus: Corporate restructuring and restatement costs	22,224			32,321			—			—			—
Plus: Operations restructuring costs	4,655			—			—			—			—
Plus: Adjustments for contingent purchase obligations	1,840			—			(2,458		)	(2,931		)	(1,722		)
Adjusted EBITDA(2)	$	17,265		$	5,028		$	7,806		$	93,566		$	91,103

ADJUSTED EBITDA

(1) Adjusted EBITDA for the years ended December 31, 2017, 2016, 2015 and 2014 included Adjusted EBITDA from Unitrans, which was divested in September of 2017, of $6.6 million, $9.3 million, $9.8 million, $7.7 million, respectively.



(In thousands)	Year Ended December 31,
	2019			2018			2017			2016			2015
Net (loss) income	$	(340,937	)	$	(165,597	)	$	(91,186	)	$	(360,320	)	$	25,620
Plus: Total interest expense	20,412			116,912			64,049			22,827			19,439
Plus: (Benefit from) provision for income taxes	(3,660		)	(9,814		)	(25,191		)	(66,281		)	17,312
Plus: Depreciation and amortization	59,004			42,767			37,747			38,145			31,626
Plus: Impairment charges	197,096			1,582			4,402			373,661			—
Plus: Long-term incentive compensation expenses	14,790			2,696			2,450			2,232			2,500
Plus: Gain on sale of businesses	(37,221		)	—			(35,440		)	—			—
Plus: Loss on debt restructuring	2,270			—			15,876			—			—
Plus: Corporate restructuring and restatement costs	13,721			22,224			32,321			—			—
Plus: Operations restructuring costs	20,579			4,655			—			—			—
Plus: Contingent purchase obligations	360			1,840			—			(2,458		)	(2,931		)
Adjusted EBITDA ^{(1) (2) (3) (4)}	$	(53,586	)	$	17,265		$	5,028		$	7,806		$	93,566

3536

(21) EBITDA represents earnings before interest, taxes, depreciation and amortization. We use Adjusted EBITDA, which excludes impairment and other non-cash gains and losses, long-term incentive compensation expenses, gains on sale of businesses, losses from debt extinguishments, corporate restructuring and restatement costs associated with legal matters (including our internal investigation, SEC compliance, and debt restructuring costs), operations restructuring costs, and adjustments to contingent purchase obligations, as a supplemental measure in evaluating our operating performance and when determining executive incentive compensation. We believe Adjusted EBITDA is useful to investors in evaluating our performance compared to other companies in our industry because it assists in analyzing and benchmarking the performance and value of a business. The calculation of Adjusted EBITDA eliminates the effects of financing, income taxes, impairments, and the accounting effects of capital spending. These items may vary for different companies for reasons unrelated to the overall operating performance of a company’s business. Adjusted EBITDA is not a financial measure presented in accordance with GAAP. Although our management uses Adjusted EBITDA as a financial measure to assess the performance of our business compared to that of others in our industry, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:


•	Adjusted EBITDA does not reflect our cash expenditures, future requirements for capital expenditures, or contractual commitments;


•	Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;


•	Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt or dividend payments on our preferred stock;


•	Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and


•	Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our results of operations under GAAP. See the consolidated statements of operations included in our consolidated financial statements included elsewhere in this Form 10-K.

36(2) Adjusted EBITDA for the years ended December 31, 2017, 2016 and 2015 included Adjusted EBITDA from Unitrans, which was divested in September of 2017, of $6.6 million, $9.3 million, $9.8 million, respectively.

⁽³⁾Adjusted EBITDA for the years ended December 31, 2019, 2018, 2017, 2016 and 2015 included Adjusted EBITDA from Intermodal, which was divested in November 2019, of $(0.6) million, $2.1 million, $0.9 million, $(9.4) million and $4.7 million, respectively.

⁽⁴⁾Adjusted EBITDA for the years ended December 31, 2019, 2018, 2017, 2016 and 2015 included Adjusted EBITDA from D&E Transport, which was divested in December 2019, of $4.4 million, $4.7 million, $4.0 million, $4.1 million and $4.7 million, respectively.



ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion and analysis presents our operating results for each of our three most recent fiscal years and our financial condition as of December 31, ~~2018~~2019. You should read the following discussion and analysis in conjunction with “Selected Financial Data” and our consolidated financial statements and related notes contained elsewhere in this Form 10-K. This discussion and analysis of our financial condition and results of operations also contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those set forth under Item 1A. “Risk Factors.”

Overview

We are a leading asset-right transportation and asset-light logistics service provider offering a full suite of solutions under the Roadrunner, ~~Active On-Demand~~ and Ascent Global Logistics brands. The Roadrunner brand offers less-than-truckload, ~~temperature controlled~~ and ~~intermodal~~truckload services. ~~Active On-Demand offers premium mission critical air and ground transportation solutions.~~ Ascent Global Logistics offers domestic freight management and brokerage, ~~warehousing and retail consolidation,~~ international freight forwarding, ~~and~~ customs brokerage and premium mission critical air and ground logistics solutions. We serve a diverse customer base in terms of end-market focus and annual freight expenditures. We are headquartered in Downers Grove, Illinois with operations primarily in the United States.

Effective ~~January~~April 1, ~~2018~~2019, we changed our segment reporting when we ~~integrated~~separated our ~~truckload~~Ascent ~~brokerage~~OD ~~business~~air ~~into~~and ~~our~~ground ~~Ascent~~expedite ~~domestic~~business ~~freight~~from ~~management~~our ~~business~~TL businesses. Segment information for all prior periods has been revised to align with the new segment structure. ~~Our three segments are as follows:~~

Truckload & Express Services. Within our TES segment we serve customers throughout North America. We provide air and ground expedite services, scheduled truckload services, intermodal services, temperature-controlled truckload services, and other truckload and logistics operations services. We specialize in the transport of automotive and industrial parts, frozen and refrigerated foods including dairy, poultry and meat, and consumer products including foods and beverages. Our ~~Active~~four ~~On-Demand~~segments ~~ground~~are ~~and~~as air expedited services business features proprietary bid technology supported by our fleets of ground and air assets. Roadrunner Intermodal Services and Roadrunner Temperature Controlled businesses provide specialized truckload services to beneficial cargo owners and freight management partners and brokers. We believe this array of technology, services, and specialization best serves our customers and provides us with more consistent shipping volumes in any given year.follows:

~~Less-than-Truckload~~Ascent Global Logistics. ~~Our~~Within ~~LTL~~our ~~segment~~Ascent ~~involves~~Global ~~the~~Logistics ~~pickup,~~(or ~~consolidation,~~“Ascent”) ~~linehaul~~business, ~~deconsolidation,~~we ~~and~~offer ~~delivery of LTL shipments throughout the United States and parts of Canada. With~~ a ~~large~~full ~~network~~portfolio of ~~LTL~~domestic ~~service centers~~ and ~~third-party~~international ~~pick-up~~transportation and ~~delivery~~logistics ~~agents~~solutions, weincluding ~~are~~access ~~designed~~ to ~~provide customers with high reliability at an economical~~ cost.-effective Weand ~~generally employ a point~~time-~~to-point~~sensitive ~~LTL~~modes ~~model~~of ~~that~~transportation wewithin ~~believe~~our ~~serves~~broad asnetwork. aOur ~~competitive~~Ascent ~~advantage~~business ~~over~~is ~~the~~reported ~~traditional hub and spoke LTL model~~ in ~~terms~~two ~~of lower incidence of damage and reduced fuel consumption~~segments.

~~Ascent~~• ~~Global~~Our ~~Logistics.~~Ascent ~~Within~~Transportation ~~our~~Management ~~Ascent~~ segment, ~~we offer a full portfolio of domestic and international transportation and logistics solutions, including access to cost-effective and time-sensitive modes of transportation within our broad network.~~ (“Ascent TM”) provides domestic freight management solutions including asset-backed truckload brokerage, specialized/heavy haul, LTL shipment execution, LTL carrier rate negotiations, access to our ~~TMS~~Transportation Management System and freight audit/payment services. Ascent TM also provides clients with international freight forwarding, customs brokerage, regulatory compliance services and project ~~management. We also specialize in retail consolidation, with approximately 2.3 million square feet of our own food-grade warehousing space (both dry~~ and ~~temperature~~order ~~controlled) and full truckload consolidation to retailers to improve OTIF compliance~~management. WeAscent ~~serve~~TM ~~our~~serves its customers through either ~~our~~its direct sales force or through a network of independent agents. Our customized Ascent TM offerings are designed to allow our customers to reduce operating costs, redirect resources to core competencies, improve supply chain efficiency, and enhance customer service.

•

Our Ascent On-Demand, formerly Active On-Demand (“Ascent OD”) segment provides ground and air expedited services featuring proprietary bid technology, supported by our fleets of ground and air assets. We specialize in the transport of automotive and industrial parts. On-Demand air charter is the segment of the air cargo industry focused on the time-critical movement of goods that requires the timely launch of an aircraft to move freight. These critical movements of freight are typically necessary to prevent a disruption in the supply chain due to lack of components. The primary users of on-demand charter services are just-in-time manufacturers, including auto manufacturers, component manufacturers and heavy equipment makers.

Less-than-Truckload. Our LTL segment involves the pickup, consolidation, linehaul, deconsolidation, and delivery of LTL shipments throughout the United States and parts of Canada. With a large network of LTL service centers and third-party pick-up and delivery agents, we are designed to provide customers with high reliability at an economical cost. We generally employ a point-to-point LTL model that we believe serves as a competitive advantage over the traditional hub and spoke LTL model in terms of fewer handlings and reduced fuel consumption.

Truckload. Within our TL segment we serve customers throughout North America. We provide the following services: scheduled and expedited dry van truckload, temperature controlled truckload, flatbed (divested on December 6, 2019), intermodal drayage (divested on November 5, 2019) and other warehouse operations. We specialize in the transport of automotive and industrial parts, frozen and refrigerated foods, including dairy, poultry and meat and consumers products, including foods and beverages. Roadrunner Dry Van, Temperature Controlled, Intermodal (divested on November 5, 2019) and Flatbed (divested on December 6, 2019) provide specialized truckload services to beneficial cargo owners, freight management partners and brokers. We believe this array of technology, services and specialization best serves our customers and provides us with more consistent shipping volumes in any given year.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires that we make estimates and assumptions. In certain circumstances, those estimates and assumptions can affect amounts reported in the accompanying consolidated financial statements and notes. In preparing our financial statements, we have made our best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable. Application of the accounting policies described below involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. The following is a brief discussion of our critical accounting policies and estimates.

Goodwill and Other Intangibles

Goodwill represents the excess of the purchase price of all acquisitions over the estimated fair value of the net assets acquired. We evaluate goodwill and intangible assets for impairment at least annually on July 1st or more frequently whenever events or changes in circumstances indicate that the asset may be impaired, or in the case of goodwill, the fair value of the reporting unit is below its carrying amount. The analysis of potential impairment of goodwill requires us to compare the estimated fair value at each of its reporting units to its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds the estimated fair value of the reporting unit, a non-cash goodwill impairment loss is recognized as an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.

For purposes of the impairment analysis, the fair value of our reporting units is estimated based upon an average of the market approach and the income approach, both of which incorporate numerous assumptions and estimates such as company forecasts, discount rates and growth rates, among others. The determination of the fair value of the reporting units and the allocation of that value to individual assets and liabilities within those reporting units requires us to make significant estimates and assumptions. These estimates and assumptions primarily include, but are not limited to, the selection of appropriate peer group companies, control premiums appropriate for acquisitions in the industries in which we compete, the discount rate, terminal growth rates, and forecasts of revenue, operating income, and capital expenditures. The allocation requires several analyses to determine fair value of assets and liabilities including, among others, customer relationships and property and equipment. Although we believe our estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fair value of the reporting units, the amount of the goodwill impairment charge, or both. Future declines in the overall market value of our stock may also result in a conclusion that the fair value of one or more reporting units has declined below its carrying value.

WePrior ~~have~~to the change in segments, we had four reporting units for our three segments: one reporting unit for our ~~TES~~TL segment; one reporting unit for our LTL segment; and two reporting units for our Ascent TM segment, which are the Domestic and International Logistics reporting unit and the Warehousing & Consolidation reporting unit.

In connection with the change in segments, we conducted an impairment analysis as of ~~January~~April 1, ~~2018~~2019. ~~and~~Due to the inability of the TES businesses to meet forecast results, we determined ~~there~~the ~~was~~carrying novalue ~~impairment.~~exceeded Wethe ~~also~~fair ~~conducted~~value ~~our~~for ~~annual~~the TES reporting unit. Accordingly, we recorded a goodwill impairment ~~analysis~~charge ~~for~~of ~~each~~$92.9 million which represents a write off of ~~our~~all ~~four~~the ~~reporting~~TES ~~units~~goodwill. asGiven the fact that all of ~~July~~the 1goodwill was impaired, ~~2018~~there ~~and~~was ~~determined~~no ~~that~~remaining TES goodwill to allocate to the TL and Ascent OD segments. The fair ~~values~~value of the ~~TES,~~ Domestic and International Logistics, reporting unit and the Warehousing & Consolidation reporting ~~units~~unit exceeded their respective carrying values by 53.1%, ~~12.8%,~~ and ~~112~~109.20%, respectively; thus no impairment was indicated for these reporting units. The ~~LTL~~goodwill balances of the Domestic and International Logistics reporting unit and the Warehousing & Consolidation reporting unit as of April 1, 2019 were $98.5 million and $73.4 million, respectively. The fair value of the Warehousing & Consolidation reporting unit exceeded its carrying value, thus no impairment was indicated for this reporting unit. The Ascent OD, LTL and TL segments had no remaining goodwill as of ~~July~~April 1, ~~2018~~2019.

~~The~~After ~~table~~the ~~below~~change ~~provides~~in asegments, ~~sensitivity~~we ~~analysis~~have five reporting units for ~~the~~our ~~TES~~four segments: one reporting unit for our TL segment; one reporting unit for our LTL segment; one reporting unit for our Ascent OD segment; and two reporting units for our Ascent TM segment, which are the Domestic and International Logistics, reporting unit and the Warehousing & Consolidation reporting unit. We conduct our goodwill impairment analysis for each of our five reporting units, ~~which~~as ~~shows~~of July 1 of each year. Since the ~~estimated~~carrying value of the Domestic and International Logistics reporting unit was more than fair value, ~~impacts~~we ~~related~~recorded to a ~~50-basis~~goodwill ~~point~~impairment ~~increase~~charge orof ~~decrease~~$34.5 inmillion. The fair value of the ~~discount~~Warehousing ~~and~~& ~~long-term~~Consolidation ~~growth~~reporting ~~rates~~unit ~~used~~exceeded inits ~~the~~carrying ~~valuation~~value, thus no impairment was indicated for this reporting unit. The Ascent OD, LTL and TL units had no remaining goodwill as of July 1, ~~2018~~2019.

	Approximate Percent Change in Estimated Fair Value
	+/- 50 bps Discount Rate	+/- 50bps Growth Rate
TES reporting unit	(5.4%) / 5.0%	3.6% / (3.2%)
Domestic and International Logistics reporting unit	(5.6%) / 4.9%	3.5% / (2.8%)
Warehousing & Consolidation reporting unit	(4.3%) / 4.3%	3.1% / (3.1%)

The sale of Unitrans, which was included in the Domestic and International Logistics reporting unit, resulted in an incremental impairment analysis on the remaining net assets of the Domestic and International Logistics reporting unit. We evaluated the remaining carrying value of the Domestic and International Logistics reporting unit and compared it to the fair value of the remaining businesses in the Domestic and International Logistics reporting unit. As a result of this evaluation, we determined the carrying value exceeded the fair value and recorded a $4.4 million impairment charge in the third quarter of 2017 within our Ascent segment. 39

~~As a result of the first step of our goodwill impairment analysis as of July 1, 2016, we determined that the fair value of the Domestic~~ and International Logistics reporting unit ~~exceeded~~has ~~its~~remaining ~~carrying~~goodwill ~~value~~of ~~by 8~~$23.~~4%;~~9 ~~thus,~~million noas ~~impairment was indicated for this reporting unit. However, resulting from a combination~~ of ~~the~~December ~~weakened environment~~31, ~~the~~2019. ~~inability~~The toWarehousing ~~meet forecast results,~~ and ~~the lower share price, we determined that the fair value of the TES, LTL, and Warehousing &~~ Consolidation reporting ~~units~~unit ~~were~~had ~~less~~remaining ~~than~~goodwill ~~their respective carrying values, requiring us to perform the second step~~ of ~~the~~$73.4 ~~goodwill~~million ~~impairment~~at ~~analysis~~December ~~for our TES~~31, ~~LTL, and Warehousing & Consolidation reporting units~~2019. We ~~completed~~After the ~~second~~fourth ~~step~~quarter of2019 ~~the goodwill~~ impairment ~~analysis for our TES~~charge, ~~LTL,~~the ~~and~~consolidated ~~Warehousing~~goodwill ~~& Consolidation reporting units~~ and ~~recorded~~intangible inassets ~~the~~value ~~third~~was ~~quarter~~$123.2 ofmillion. ~~2016 non-cash goodwill impairment~~

38The fair value of the Warehousing & Consolidation reporting unit exceeded its respective carrying values, thus no impairment was indicated for this reporting unit. The TL, LTL, and Ascent OD reporting units had no remaining goodwill as of December 31, 2019. As the carrying value of the Domestic and International Logistics reporting equaled fair value, if future results fall below projections or changes in the discount rate occur, further impairments could result. The table below shows the estimated fair value impacts related to a 50-basis point increase or decrease in the discount and long-term growth rates used in the valuation as of December 31, 2019. If future results fall below projections or changes in the discount rate occur, further impairments could result.

charges of $132.4 million, $197.3 million, and $42.4 million for our TES, LTL, and Warehousing & Consolidation reporting units, respectively.



	Approximate Percent Change in Estimated Fair Value
	+/- 50 bps Discount Rate	+/- 50bps Growth Rate
Domestic and International Logistics reporting unit	(1.7%) / 3.4%	1.7% / (0.9%)

Other intangible assets recorded ~~consist~~consisted primarily of definite lived customer relationships. We evaluate our other intangible assets for impairment when current facts or circumstances indicate that the carrying value of the assets to be held and used may not be recoverable. Indicators of impairment were identified in connection with the ~~shut-down~~operating performance of one of our ~~business~~businesses ~~operations~~ within the ~~TES~~LTL segment and astwo of our businesses within the TL segment. As a result, $19.65 million of non-cash impairment charges ~~were~~was recorded infor the ~~fourth~~year ~~quarter~~ended ofDecember ~~2016. We identified indicators of impairment with certain other business operations and performed the required impairment analysis~~31, ~~but no impairment was identified~~2019.

Revenue Recognition (effective January 1, 2018)

Our revenues are primarily derived from transportation services which includes providing freight and carrier services both domestically and internationally via land, air, and sea. We disaggregate revenue among our ~~three~~four segments, ~~TES~~Ascent TM, Ascent OD, LTL and ~~Ascent~~TL, as presented in Note 1516, Segment Reporting, to our consolidated financial statements.

Performance Obligations - A performance obligation is created once a customer agreement with an agreed upon transaction price exists. The terms and conditions of our agreements with customers are generally consistent within each segment. The transaction price is typically fixed and determinable and is not contingent upon the occurrence or non-occurrence of any other event. The transaction price is generally due 30 to 60 days from the date of invoice. Our transportation service is a promise to move freight to a customer’s destination, with the transit period typically being less than one week. We view the transportation service we provide to our customers as a single performance obligation. This performance obligation is satisfied and recognized in revenue over the requisite transit period as the customer’s goods move from origin to destination. We determine the period to recognize revenue in transit based upon the departure date and the delivery date, which may be estimated if delivery has not occurred as of the reporting date. Determining the transit period and the percentage of completion as of the reporting date requires management to make judgments that affect the timing of revenue recognized. We have determined that revenue recognition over the transit period provides a reasonable estimate of the transfer of goods and services to our customers as our obligation is performed over the transit period.

Principal vs. Agent Considerations - We utilize independent contractors and third-party carriers in the performance of some transportation services. We evaluate whether our performance obligation is a promise to transfer services to the customer (as the principal) or to arrange for services to be provided by another party (as the agent) using a control model. Our evaluation determined that we are in control of establishing the transaction price, managing all aspects of the shipments process and taking the risk of loss for delivery, collection, and returns. Based on our evaluation of the control model, we determined that all of our major businesses act as the principal rather than the agent within their revenue arrangements and such revenues are reported on a gross basis.

Contract Balances and Costs - We apply the practical expedient in Accounting Standards Update ("ASU") No. 2014-09, which was updated in August 2015 by ASU No. 2015-14, Revenue from Contracts with Customers ("Topic 606") that permits us to not disclose the aggregate amount of transaction price allocated to performance obligations that are unsatisfied as of the end of the period as our contracts have an expected length of one year or less. We also apply the practical expedient in Topic 606 that permits the recognition of incremental costs of obtaining contracts as an expense when incurred if the amortization period of such costs is one year or less. These costs are included in purchased transportation costs in the consolidated financial statements.

Self-Insurance Accruals

We use a combination of purchased insurance and self-insurance programs to provide for the cost of auto liability, cargo damage, workers’ compensation claims, and benefits paid under employee health care programs. Insurance reserves are established for estimates of the loss that we will ultimately incur on reported claims, as well as estimates of claims that have been incurred but not yet reported. Recorded balances are based on reserve levels, which incorporate historical loss experience and judgments about the present and expected levels of cost per claim. We believe our estimated reserves for such claims are adequate, but actual experience in claim frequency and/or severity could materially differ from our estimates and affect our results of operations. We have engaged a third-party actuary to review our incurred but not yet reported reserves and development factors to ensure they are appropriate.

in claim frequency and/or severity could materially differ from our estimates and affect our results of operations. We have engaged a third-party actuary to review our incurred but not yet reported reserves and development factors to ensure they are appropriate.

A number of factors can affect the actual cost of a claim, including the length of time the claim remains open, trends in health care costs, accident frequency and severity, and the results of related litigation. Furthermore, claims may emerge in future years for events that occurred in a prior year at a rate that differs from previous projections. All of these factors can result in revisions to prior projections and produce a material difference between estimated and actual costs.

Accounts Receivable and Related Reserves

Accounts receivable are uncollateralized customer obligations due under normal trade terms. We extend credit to certain customers in the ordinary course of business based on the customer's credit history. The carrying amount of accounts receivable is reduced by an allowance for doubtful accounts that reflects management's best estimate of amounts that will not be collected. The allowance is based on historical loss experience and any specific risks identified in customer collection matters. Accounts receivable are charged off against the allowance for doubtful accounts when it is determined that the receivable is uncollectible.

Preferred Stock

We have elected to measure our preferred stock at fair value pursuant to ASC 820, Fair Value Measurement. The fair value of the preferred stock is the estimated amount that would be paid to redeem the liability in an orderly transaction between market participants at the measurement date. We calculate the fair value of:

• the Series B Preferred Stock using a lattice model that takes into consideration our call right on the instrument based on simulated future interest rates;

• the Series C Preferred Stock using a lattice model that takes into consideration the future redemption value on the instrument, which is tied to our stock price;

• the Series D Preferred Stock using a static discounted cash flow approach, where the expected redemption value of the instrument is based on the value of our stock as of the measurement date grown at the risk-free rate; and

• the Series E and E-1 Preferred Stock via application of both (i) a static discounted cash flow approach and (ii) a lattice model that takes into consideration our call right on this instrument based on simulated future interest rates.

These valuations are considered to be Level 3 fair value measurements as the significant inputs are unobservable and require significant management judgment or estimation. Considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, our estimates are not necessarily indicative of the amounts that we, or holders of the instruments, could realize in a current market exchange. Significant assumptions used in the fair value models include: the estimates of the redemption dates; credit spreads; dividend payments; and the market price of our common stock. The use of different assumptions and/or estimation methodologies could have a material effect on the estimated fair values.

Rights Offering

On February 26, 2019, we closed our previously announced fully backstopped $450 million rights offering, pursuant to which we issued and sold an aggregate of ~~900~~36 million new shares of our common stock at the subscription price of $012.50 per share. The net proceeds from the rights offering and backstop commitment were used to, among other things, fully redeem the outstanding shares of our preferred stock and to pay related accrued and unpaid dividends. See Note 1715, to“Related Party Transactions” in our consolidated financial statements included elsewhere in this Form 10-K for additional information.

Sale of Intermodal

On November 5, 2019, we completed the sale of Intermodal to Universal Logistics Holdings, Inc., based in Warren, Michigan, for $51.3 million in cash, subject to customary purchase price and working capital adjustments. Proceeds from the sale were used primarily to pay off a portion of outstanding debt amounts and to provide funding for operations. The results of operations and financial condition of Intermodal have been included in our consolidated financial statements within our TL segment until the date of sale.

Sale of Flatbed

On December 9, 2019, we completed the sale of Flatbed, for $30.0 million in cash, subject to customary purchase price and working capital adjustments. Proceeds from the sale were used primarily to pay off a portion of outstanding debt amounts and to provide funding for operations. The results of operations and financial condition of Flatbed have been included in our consolidated financial statements within our TL segment until the date of sale.

Sale of Prime

On January 28, 2020, we entered into a definitive agreement to sell our subsidiary Prime Distribution Services, Inc. to C.H. Robinson Worldwide Inc. for $225 million. The transaction closed March 2, 2020. The results of operations and financial condition of Prime have been included in our consolidated financial statements within our Ascent TM segment until the date of closing.

Sale of Unitrans

On September 15, 2017, we completed the sale of Unitrans. We received net proceeds of $88.5 million and recognized a gain of $35.4 million. Proceeds from the sale were used primarily to redeem a portion of the Series E Preferred Stock and to provide funding for operations. The results of operations and financial condition of Unitrans have been included in our consolidated financial statements within our Ascent TM segment until the date of sale.

Results of Operations

The following tables set forth, for the periods indicated, summary TES, LTL, Ascent, corporate, and consolidated statement of operations data. Such revenue data for our TES, LTL, and Ascent segments are expressed as a percentage of consolidated revenues. Other statement of operations data for our TES, LTL, and Ascent segments are expressed as a percentage of segment revenues. We have also provided a reconciliation of net loss to Adjusted EBITDA and provided Adjusted EBITDA for TES, LTL, Ascent, and corporate for the periods indicated.

(In thousands, except for %’s)	Year ended December 31, 2018
	TES		%		LTL			%		Ascent		%		Corporate/ Eliminations			Total
Revenues	$	1,207,677	54.5	%	$	452,281		20.4	%	$	573,072	25.9	%	$	(16,889	)	$	2,216,141
Operating expenses:
Purchased transportation costs	791,237		65.5	%	323,019			71.4	%	421,048		73.5	%	(16,889		)	1,518,415
Personnel and related benefits	160,547		13.3	%	70,551			15.6	%	52,273		9.1	%	26,382			309,753
Other operating expenses (1)	223,407		18.5	%	81,749			18.1	%	66,237		11.6	%	30,730			402,123
Depreciation and amortization	28,807		2.4	%	3,854			0.9	%	5,049		0.9	%	5,057			42,767
Impairment charges	1,582		0.1	%	—			—	%	—		—	%	—			1,582
Total operating expenses	1,205,580		99.8	%	479,173			105.9	%	544,607		95.0	%	45,280			2,274,640
Operating income (loss)	2,097		0.2	%	(26,892		)	(5.9	)%	28,465		5.0	%	(62,169		)	(58,499		)
Total interest expense																	116,912
Loss before income taxes																	(175,411		)
Benefit from income taxes																	(9,814		)
Net loss																	$	(165,597	)

(In thousands)	Year ended December 31, 2018
	TES		LTL			Ascent		Corporate/ Eliminations			Total
Net (loss) income	$	1,782	$	(27,009	)	$	28,226	$	(168,596	)	$	(165,597	)
Plus: Total interest expense	315		117			108		116,372			116,912
Plus: Benefit from income taxes	—		—			131		(9,945		)	(9,814		)
Plus: Depreciation and amortization	28,807		3,854			5,049		5,057			42,767
Plus: Fleet impairment charges	1,582		—			—		—			1,582
Plus: Long-term incentive compensation expenses	—		—			—		2,696			2,696
Plus: Operations restructuring costs	4,655		—			—		—			4,655
Plus: Corporate restructuring and restatement costs	—		—			—		22,224			22,224
Plus: Adjustments for contingent purchase obligation	—		—			—		1,840			1,840
Adjusted EBITDA(3)	$	37,141	$	(23,038	)	$	33,514	$	(30,352	)	$	17,265

(In thousands, except for %’s)	Year ended December 31, 2017
	TES		%		LTL			%		Ascent		%		Corporate/ Eliminations			Total
Revenues	$	1,067,145	51.0	%	$	463,519		22.2	%	$	570,223	27.3	%	$	(9,596	)	$	2,091,291
Operating expenses:
Purchased transportation costs	690,620		64.7	%	331,177			71.4	%	418,170		73.3	%	(9,589		)	1,430,378
Personnel and related benefits	150,581		14.1	%	70,521			15.2	%	58,196		10.2	%	17,627			296,925
Other operating expenses (2)	194,420		18.2	%	83,851			18.1	%	60,997		10.7	%	19,023			358,291
Depreciation and amortization	25,535		2.4	%	4,353			0.9	%	5,965		1.0	%	1,894			37,747
Impairment charges	—		—	%	—			—	%	4,402		0.8	%	—			4,402
Total operating expenses	1,061,156		99.4	%	489,902			105.7	%	547,730		96.1	%	28,955			2,127,743
Operating income (loss)	5,989		0.6	%	(26,383		)	(5.7	)%	22,493		3.9	%	(38,551		)	(36,452		)
Total interest expense																	64,049
Loss on early extinguishment of debt																	15,876
Loss before income taxes																	(116,377		)
Benefit from income taxes																	(25,191		)
Net loss																	$	(91,186	)

Results of Operations

(In thousands)	Year ended December 31, 2017
	TES			LTL			Ascent		Corporate/ Eliminations			Total			Less: Unitrans		Total w/o Unitrans
Net (loss) income	$	6,033		$	(26,578	)	$	22,350	$	(92,991	)	$	(91,186	)	$	3,497	$	(94,683	)
Plus: Total interest expense	(44		)	195			143		63,755			64,049			—		64,049
Plus: Benefit from income taxes	—			—			—		(25,191		)	(25,191		)	2,295		(27,486		)
Plus: Depreciation and amortization	25,535			4,353			5,965		1,894			37,747			819		36,928
Plus: Impairment charges	—			—			4,402		—			4,402			—		4,402
Plus: Long-term incentive compensation expenses	—			—			—		2,450			2,450			—		2,450
Plus: Gain on sale of Unitrans	—			—			—		(35,440		)	(35,440		)	—		(35,440		)
Plus: Loss on debt extinguishments	—			—			—		15,876			15,876			—		15,876
Plus: Corporate restructuring and restatement costs	—			—			—		32,321			32,321			—		32,321
Adjusted EBITDA(3)	$	31,524		$	(22,030	)	$	32,860	$	(37,326	)	$	5,028		$	6,611	$	(1,583	)

The following tables set forth, for the periods indicated, summary Ascent TM, Ascent OD, LTL, TL, corporate, and consolidated statement of operations data.

Note: Adjusted EBITDA for the Ascent segment for the year ended December 31, 2017, excluding Unitrans, was $26.2 million.



(In thousands)	Year ended December 31, 2019
	Ascent TM			Ascent OD		LTL			TL			Corporate/ Eliminations			Total
Revenues	$	505,753		$	465,512	$	430,806		$	475,074		$	(29,283	)	$	1,847,862
Operating expenses:
Purchased transportation costs	$	361,733		$	396,660	$	302,605		$	214,850		(29,283		)	1,246,565
Personnel and related benefits	55,932			35,717		74,012			108,226			39,654			313,541
Other operating expenses	65,173			20,021		83,258			168,225			33,536			370,213
Depreciation and amortization	6,318			8,664		5,422			28,918			9,682			59,004
Gain from sales of businesses	—			—		—			—			(37,221		)	(37,221		)
Impairment charges	74,636			—		1,076			107,261			14,123			197,096
Operations restructuring costs	—			—		—			20,579			—			20,579
Total operating expenses	563,792			461,062		466,373			648,059			30,491			2,169,777
Operating (loss) income	(58,039		)	4,450		(35,567		)	(172,985		)	(59,774		)	(321,915		)
Total interest expense															20,412
Loss from debt extinguishment															2,270
Loss before income taxes															(344,597		)
Benefit from income taxes															(3,660		)
Net loss															$	(340,937	)



(In thousands)	Year ended December 31, 2019
	Ascent TM			Ascent OD		LTL			TL			Corporate/ Eliminations			Total
Net (loss) income	$	(58,249	)	$	4,450	$	(36,469	)	$	(176,023	)	$	(74,646	)	$	(340,937	)
Plus: Total interest expense	359			—		902			3,038			16,113			20,412
Plus: Benefit from income taxes	(149		)	—		—			—			(3,511		)	(3,660		)
Plus: Depreciation and amortization	6,318			8,664		5,422			28,918			9,682			59,004
Plus: Impairment charges	74,636			—		1,076			107,261			14,123			197,096
Plus: Long-term incentive compensation expenses	—			—		—			—			14,790			14,790
Less: Gain on sales of business	—			—		—			—			(37,221		)	(37,221		)
Plus: Loss on debt restructuring	—			—		—			—			2,270			2,270
Plus: Corporate restructuring and restatement costs	—			—		—			—			13,721			13,721
Plus: Operations restructuring costs	—			—		—			20,579			—			20,579
Plus: Contingent purchase obligation	—			—		—			—			360			360
Adjusted EBITDA	$	22,915		$	13,114	$	(29,069	)	$	(16,227	)	$	(44,319	)	$	(53,586	)

(In thousands, except for %’s)	Year ended December 31, 2016
(In thousands)	Year ended December 31, 2018
	TES			%			LTL			%		Ascent			%			Corporate/ Eliminations				Total
	Ascent TM				Ascent OD				LTL			TL				Corporate/ Eliminations				Total
Revenues	$	~~990~~573,~~665~~072		~~48.7~~	%$	672,965	$	~~461,540~~	$	~~22.7~~452,281	%	$	~~597~~572,~~159~~701		~~29.4~~	%$	(54,878	$)	~~(16,164~~	)$	2,216,141	$	~~2,033,200~~
Operating expenses:
Purchased transportation costs	~~613~~421,~~847~~048			~~62.0~~	%573,483		~~320,439~~		323,019	~~69.4~~	%	~~445~~255,~~935~~743			~~74.7~~	%(54,878		~~(16,166~~)		)1,518,415		~~1,364,055~~
Personnel and related benefits	~~146~~52,~~494~~273			~~14.8~~	%37,376		~~67,663~~		70,551	~~14.7~~	%	59123,~~648~~171			~~10.0~~	%26,382		~~12,329~~		309,753		~~286,134~~
Other operating expenses	~~187~~66,~~009~~237			~~18.9~~	%23,412		~~75,674~~		81,749	~~16.4~~	%	70195,~~675~~340			~~11.8~~	%30,730		~~41,621~~		397,468		~~374,979~~
Depreciation and amortization	255,~~872~~049			~~2.6~~	%8,230		~~4,052~~		3,854	~~0.9~~	%	620,~~688~~577			~~1.1~~	%5,057		~~1,533~~		42,767		~~38,145~~
Impairment charges	133,988			13.5	%		197,312			42.8	%	42,361			7.1	%		—				373,661
Gain on sales of businesses	—				—				—			—				—				—
Total operating expenses	1,107,210			111.8	%		665,140			144.1	%	625,307			104.7	%		39,317				2,436,974
Impairment charges	—				—				—			1,582				—				1,582
Operating income (loss)	(116,545		)	(0.3	)%		(203,600		)	(4.4	)%	(28,148		)	5.1	%		(55,481		)		(403,774		)
Operations restructuring costs	—				—				—			4,655				—				4,655
Total interest expense																						22,827
Total operating expenses	544,607				642,501				479,173			601,068				7,291				2,274,640
Loss before income taxes																						(426,601		)
Operating income (loss)	28,465				30,464				(26,892		)	(28,367		)		(62,169		)		(58,499		)
Benefit from income taxes																						(66,281		)
Total interest expense																				116,912
Net loss																						$	(360,320	)
Loss before income taxes																				(175,411		)
Benefit from income taxes																				(9,814		)
Net loss																				$	(165,597	)

(In thousands)	Year ended December 31, ~~2016~~2018
	TES			LTL			Ascent			Corporate/ Eliminations			Total			Less: Unitrans			Total w/o Unitrans
	Ascent TM			Ascent OD			LTL			TL			Corporate/ Eliminations			Total
Net (loss) income	$	~~(116~~28,~~482~~226	)	$	~~(203~~30,~~882~~464	)	$	(2827,~~300~~009	)	$	(1128,~~656~~682	)	$	(~~360~~168,~~320~~596	)	$	5(165,~~025~~597	)	$	~~(365,345~~	)
Plus: Total interest expense	~~(63~~108		)	~~282~~—			~~152~~117			~~22,456~~315			22116,~~827~~372			—116,912			~~22,827~~
Plus: (Benefit from) provision for income taxes	—131			—			—			~~(66,281~~—		)	(669,~~281~~945		)	3(9,~~106~~814		)	~~(69,387~~		)
Plus: Depreciation and amortization	255,~~872~~049			48,~~052~~230			63,~~688~~854			120,~~533~~577			385,~~145~~057			142,~~150~~767			~~36,995~~
Plus: Impairment charges	133,988			197,312			42,361			—			373,661			—			373,661
Plus: Fleet impairment charges	—			—			—			1,582			—			1,582
Plus: Long-term incentive compensation expenses	—			—			—			~~2,232~~—			2,~~232~~696			—2,696			~~2,232~~
Plus: Adjustments for contingent purchase obligation	(2,458		)	—			—			—			(2,458		)	—			(2,458		)
Plus: Corporate restructuring and restatement costs	—			—			—			—			22,224			22,224
Adjusted EBITDA(3)	$	40,857		$	(2,236	)	$	20,901		$	(51,716	)	$	7,806		$	9,281		$	(1,475	)
Plus: Operations restructuring costs	—			—			—			4,655			—			4,655
Plus: Contingent purchase obligation	—			—			—			—			1,840			1,840
Adjusted EBITDA	$	33,514		$	38,694		$	(23,038	)	$	(1,553	)	$	(30,352	)	$	17,265

Note: Adjusted EBITDA for the Ascent segment for the year ended December 31, 2016, excluding Unitrans, was $11.6 million.

(1) Operations restructuring costs of $4.7 million are included in other operating expenses within the TES segment. See Note 16 to our consolidated financial statements included elsewhere in this Form 10-K for additional information.

(2) The gain from sale of Unitrans of $35.4 million is included in other operating expenses within Corporate. See Note 3 to our consolidated financial statements included elsewhere in this Form 10-K for additional information.

(3) EBITDA represents earnings before interest, taxes, depreciation and amortization. We calculate Adjusted EBITDA as EBITDA excluding impairment and other non-cash gains and losses, other long-term incentive compensation expenses, losses from debt extinguishments, corporate restructuring and restatement costs associated with legal matters (including our internal investigation, SEC compliance, and debt restructuring costs), operations restructuring costs, and adjustments to contingent purchase obligations. We use Adjusted EBITDA as a supplemental measure in evaluating our operating performance and when determining executive incentive compensation. We believe Adjusted EBITDA is useful to investors in evaluating our performance compared to other companies in our industry because it assists in analyzing and benchmarking the performance and value of a business. The calculation of Adjusted EBITDA eliminates the effects of financing, income taxes, and the accounting effects of capital spending. These items may vary for different companies for reasons unrelated to the overall operating performance of a company’s business. Adjusted EBITDA is not a financial measure presented in accordance with GAAP. Although our management uses Adjusted EBITDA as a financial measure to assess the performance of our business compared to that of others in our industry, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:



(In thousands)	Year ended December 31, 2017
	Ascent TM		Ascent OD		LTL			TL			Corporate/Eliminations			Total
Revenues	$	570,223	$	548,059	$	463,519		$	553,184		$	(43,694	)	$	2,091,291
Operating expenses:
Purchased transportation costs	418,170		468,749		331,177			255,969			(8,247		)	1,465,818
Personnel and related benefits	58,196		33,275		70,521			117,306			17,627			296,925
Other operating expenses	60,997		16,418		83,851			178,002			19,023			358,291
Depreciation and amortization	5,965		7,985		4,353			17,550			1,894			37,747
Gain on sales of businesses	—		—		—			—			(35,440		)	(35,440		)
Impairment charges	4,402		—		—			—			—			4,402
Operations restructuring costs	—		—		—			—			—			—
Total operating expenses	547,730		526,427		489,902			568,827			(5,143		)	2,127,743
Operating income (loss)	22,493		21,632		(26,383		)	(15,643		)	(38,551		)	(36,452		)
Total interest expense														64,049
Loss on early extinguishment of debt														15,876
Loss before income taxes														(116,377		)
Benefit from income taxes														(25,191		)
Net loss														$	(91,186	)

• Adjusted EBITDA does not reflect our cash expenditures, future requirements for capital expenditures, or contractual commitments;



(In thousands)	Year ended December 31, 2017
	Ascent TM		Ascent OD		LTL			TL			Corporate/Eliminations			Total			Less: Unitrans		Total w/o Unitrans
Net (loss) income	$	22,350	$	21,632	$	(26,578	)	$	(15,599	)	$	(92,991	)	$	(91,186	)	$	3,497	$	(94,683	)
Plus: Total interest expense	143		—		195			(44		)	63,755			64,049			—		64,049
Plus: Benefit from income taxes	—		—		—			—			(25,191		)	(25,191		)	2,295		(27,486		)
Plus: Depreciation and amortization	5,965		7,985		4,353			17,550			1,894			37,747			819		36,928
Plus: Impairment charges	4,402		—		—			—			—			4,402			—		4,402
Plus: Long-term incentive compensation expenses	—		—		—			—			2,450			2,450			—		2,450
Less: Gain on sale of Unitrans	—		—		—			—			(35,440		)	(35,440		)	—		(35,440		)
Plus: Loss on debt extinguishments	—		—		—			—			15,876			15,876			—		15,876
Plus: Corporate restructuring and restatement costs	—		—		—			—			32,321			32,321			—		32,321
Adjusted EBITDA ⁽¹⁾	$	32,860	$	29,617	$	(22,030	)	$	1,907		$	(37,326	)	$	5,028		$	6,611	$	(1,583	)

•(1) Adjusted EBITDA ~~does~~for ~~not~~the ~~reflect~~Ascent ~~changes~~TM ~~in,~~segment orfor ~~cash~~the ~~requirements~~year ~~for~~ended December 31, ~~our~~2017, ~~working~~excluding ~~capital~~Unitrans, ~~needs;~~was $26.2 million.

• Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt or dividend payments on our preferred stock;

• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and

• Other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

A summary of operating statistics for our LTL segment for the years ended December 31, 2019 and 2018, is shown below:

	2018		2017			% Change
(In thousands, except for percentages)	2019		2018			% Change
Revenue	$	~~452~~430,~~281~~806	$	~~463~~452,~~519~~281		(2.4.7	)%)
Less: Backhaul Revenue	(73,~~336~~126)		—(7,336		)
Less: Eliminations	—508		~~243~~—
Adjusted Revenue(1)	~~444,945~~$	428,188	~~463,762~~$	444,945		(43.18	%)
Adjusted Revenue excluding fuel(1)	~~390,224~~$	376,648	~~409,333~~$	390,224		(43.75	%)
Adjusted Revenue per hundredweight (incl. fuel)	$	21.3341	$	2021.0233		60.64	%
Adjusted Revenue per hundredweight (excl. fuel)	$	18.7183	$	1718.6771		50.96	%
Adjusted Revenue per shipment (incl. fuel)	$	~~243~~246.6956	$	~~217~~243.3169		~~12.~~1.2	%
Adjusted Revenue per shipment (excl. fuel)	$	~~213~~216.7488	$	~~191~~213.8074		111.45	%
Weight per shipment (lbs.)	1,~~143~~152		1,~~086~~143			50.38	%
Shipments per day	76,~~159~~810		87,~~369~~159			(144.59	%)

(1) Our management uses Adjusted Revenue and Adjusted Revenue excluding fuel to calculate the above statistics as they believe it is a more useful measure to investors since backhaul revenue and eliminations are not included in our LTL standard pricing model which is based on weights and shipments.

Year Ended December 31, ~~2018~~2019 Compared to Year Ended December 31, ~~2017~~2018

Consolidated Results

Our consolidated revenues ~~increased~~decreased to $21,~~216~~847.19 million in ~~2018~~2019 compared to $2,~~091~~216.31 million in ~~2017~~2018. ~~Higher~~ Lower revenues in ~~the~~all ~~TES and Ascent~~ segments contributed to the ~~increase, which were partially offset by lower revenue in the LTL segment~~decrease. ~~Unitrans contributed revenue of $67.6 million to the Ascent segment in 2017.~~

Our consolidated operating loss increased to $58321.59 million in ~~2018~~2019 compared to $3658.5 million in ~~2017~~2018. The 2019 operating loss ~~in 2018~~ included operations restructuring costs of $420.76 million related to ~~the restructuring of~~ our ~~temperature-controlled~~dry van truckload business and asset impairment charges of $1197.61 million. The 2018 operating loss inincluded ~~2017~~operations ~~included~~restructuring acosts of $~~35.~~4.7 million ~~gain~~related onto ~~the~~our ~~sale~~temperature ofcontrolled ~~Unitrans and goodwill impairment charges of $4~~business.4 ~~million.~~ Lower consolidated operating results in ~~2018~~2019 were attributable ~~higher~~to ~~corporate~~decreased ~~expenses~~revenues, ~~and~~increased ~~lower~~impairment ~~results~~charges ~~in our TES~~ and ~~LTL~~restructuring ~~segments~~costs, partially offset by anlower ~~improvement~~purchased intransportation ~~operating~~costs, ~~results~~other ~~within~~operating ~~our~~expenses, ~~Ascent~~and ~~segment.~~gain ~~Unitrans~~on ~~contributed~~sale ~~operating income~~ of $5businesses.~~8 million to the Ascent segment in 2017.~~

Our consolidated net loss ~~was~~increased to $~~165~~340.69 million in ~~2018~~2019 compared to $91165.26 million in ~~2017~~2018. In addition to the operating results within our segments and corporate, our net loss ~~was~~reflected ~~impacted~~a bydecrease ~~higher~~in interest expense ofto $5220.4 million in 2019 from $116.9 million, ~~partially~~in ~~offset~~2018 bydue to the absence of ainterest ~~loss~~on ~~from~~the ~~debt~~preferred ~~extinguishment~~stock of(which ~~$15.9~~was ~~million~~fully redeemed in ~~2017.~~the first quarter of 2019 after completion of the rights offering).

~~Interest~~Income ~~expense~~tax ~~increased~~benefit towas $~~116~~3.97 million in ~~2018~~2019 ~~from~~compared to $649.08 million in ~~2017~~2018. ~~due~~The toeffective ~~higher~~tax ~~interest~~rate ~~expense~~was ~~from~~1.1% ~~our~~in ~~preferred~~2019 ~~stock,~~and ~~partially~~5.6% ~~offset~~in by2018. ~~lower~~The ~~interest~~effective ~~expense~~tax onrate ~~debt~~varies ~~attributable~~from tothe afederal ~~lower~~statutory ~~principal~~rate ~~balance~~of 21. ~~Included~~0% inprimarily ~~interest~~due ~~expense~~to ~~from~~adjustments ~~preferred~~for ~~stock~~permanent ~~was~~differences, ~~higher~~state ~~expense~~income taxes (net of ~~$86.2~~federal ~~million~~tax ~~due~~effect), toand the change in ~~the~~valuation ~~fair~~allowance ~~value~~for ofdeferred ~~the~~tax ~~preferred~~assets. ~~stock,~~Significant ~~partially~~permanent ~~offset~~differences byfor ~~$15.0~~2019 ~~million~~included non-deductible goodwill impairment charges and a basis difference related to the sale of ~~lower~~our Intermodal business. Significant permanent differences for 2018 included the non-deductible interest expense ~~from~~associated ~~preferred~~with ~~stock~~our ~~issuance~~preferred ~~costs~~stock.

~~Income tax benefit was $9.8 million in 2018 compared to $25.2 million in 2017.~~ The ~~effective~~rest ~~tax rate was 5.6% in 2018 and 21.6% in 2017. The annual effective income tax rate varies from the federal statutory rate~~ of ~~21.0% and 35.0%, respectively, primarily due to state income taxes (net of federal tax effect), adjustments for permanent differences (primarily the non-deductible interest expense associated with~~ our ~~preferred~~discussion ~~stock),~~will ~~and~~focus ~~adjustments~~on to the ~~valuation~~operating ~~allowance. Additionally,~~results ~~for 2017, our income tax benefit and effective tax rate were impacted by a basis difference related to the sale~~ of ~~Unitrans, a one-time tax benefit recorded as a result of recalculating the carrying value of~~ our ~~deferred~~four ~~tax assets and liabilities to reflect the reduced 21% U.S. federal corporate tax rate effective January 1, 2018 pursuant to the Tax Reform Act, and non-deductible goodwill impairment charges.~~ segments:

~~The~~Ascent ~~rest of our discussion will focus on the operating results of our three segments:~~TM

~~Truckload~~Operating &results ~~Express~~declined ~~Services~~in our Ascent TM segment to an operating loss of $58.0 million in 2019 as compared to operating income of $28.5 million in 2018. Ascent TM revenues decreased $67.3 million in 2019 compared to 2018 due to lower revenues from domestic freight management, partially offset by increases in retail consolidation. Ascent TM personnel and related benefits increased slightly by $3.7 million primarily due to increased wages in retail consolidation and international. Other operating expenses decreased $1.1 million primarily due to lower commissions, fuel, partially offset by increased bad debt expense and repairs and maintenance expense. The Ascent TM segment also recorded $74.6 million in non-cash charges for goodwill impairment.

~~Operating~~Ascent results in our TES segment declined to operating income of $2.1 million in 2018 compared to $6.0 million in 2017. TES revenues increased $140.5 million while purchased transportation costs increased $100.6 million. TES revenues were higher due primarily to increased ground and air expedited freight and related brokerage coupled with a strong demand environment which drove higher rates across most of the segment. Purchased transportation costs and yield were negatively impacted by capacity reductions in intermodal services and over-the-road operations, including dry van and temperature controlled. Operating results in 2018 included the restructuring of our temperature-controlled truckload business, which resulted in operations restructuring costs of $4.7 million related to fleet and facilities right-sizing and relocation costs, severance costs, and the write-down of assets to fair market value. Also included in TES operating results for 2018 was an asset impairment charge of $1.6 million related to tractors that were classified as "held for sale." TES personnel and related benefits increased $10.0 million due primarily to higher driver wages, while other operating expenses increased $29.0 million. The increase in TES operating expenses was due to increased equipment lease and maintenance costs of $8.9 million, higher IT costs of $5.3 million, the previously mentioned operations restructuring costs of $4.7 million, and higher fuel costs of $4.0 million.OD

Operating results in our Ascent OD segment declined to operating income of $4.5 million in the year ended 2019 compared to operating income of $30.5 million in the year ended 2018. Ascent OD revenues decreased $207.5 million and purchased transportation decreased $176.8 million primarily attributable to lower market demand for both air and ground expedite, which negatively impacted volumes and rates. Ascent OD revenues were approximately $40.1 million lower due to the impact of the strike at a customer, GM, which began in mid-September 2019 and continued into late October 2019. Ascent OD personnel and related benefits decreased $1.7 million, while other operating expenses decreased $3.4 million.

Less-than-Truckload

Operating results in our LTL segment declined ~~slightly~~ to an operating loss of $2635.96 million in ~~2018~~2019 compared to an operating loss of $26.49 million in ~~2017~~2018. LTL revenues decreased $1121.25 million due to alower ~~decrease in~~ shipping volumes ~~and~~driven by a targeted reduction in ~~selected~~ service areas, infocused ~~order~~on tothe ~~eliminate~~elimination of unprofitable freight ~~and focus on key lanes~~, partially offset by higher rates ~~and fuel surcharge revenue~~. Purchased transportation costs decreased $820.24 million, which were driven by a decrease in shipping volumes, partially offset by market conditions resulting in rate increases from ~~purchase~~purchased power providers and higher spot prices paid to brokers which negatively impacted linehaul expense. LTL personnel and related benefits ~~were~~increased ~~flat~~$3.4 ~~year~~million ~~over year~~ while other operating expenses ~~decreased~~increased $2.1.5 million primarily due to ~~lower~~increases ~~cargo~~in ~~claims and~~ bad debt expense~~, partially offset by increased equipment lease costs~~.

~~Ascent Global Logistics~~Truckload

Operating results ~~improved~~ in our ~~Ascent~~TL segment asdeclined to operating ~~income~~loss ~~was~~of $28173.50 million in ~~2018~~2019 compared to an operating loss of $2228.54 million in ~~2017~~2018. ~~Operating~~ TL operating results infor ~~2017~~2019 included a goodwill impairment charge of $92.9 million, an intangible asset impairment of $9.1 million, and a property and equipment impairment charge of $5.83 million, primarily related to rolling stock equipment, as well as operations restructuring costs of ~~operating~~$20.6 ~~income~~million ~~from~~related ~~Unitrans~~to ~~which~~fleet ~~was~~reductions, ~~sold~~terminal closings, and severance costs at our dry van business. Operating results in 2018 included the ~~third~~restructuring ~~quarter~~of our temperature controlled truckload business, which resulted in operations restructuring costs of $4.7 million related to fleet reductions and severance costs, as well as an asset

~~2017 and a goodwill~~ impairment charge of $41.46 million ~~which~~related ~~resulted~~to ~~from~~tractors ~~comparing~~that ~~the~~were ~~remaining~~classified ~~carrying~~as ~~value~~“held ~~of goodwill~~ for ~~the Domestic and International Logistics reporting unit after the~~ sale ~~of Unitrans~~.” ~~Excluding~~Revenues ~~Unitrans~~ and ~~the~~purchased ~~impact~~transportation ofdeclined ~~the~~$97.6 ~~goodwill~~million ~~impairment charge, improved Ascent operating results were driven by growth in our retail consolidation business~~ and ~~our domestic freight management business, partially offset by a slight decline in international freight forwarding. Ascent revenues increased~~ $240.89 million, inrespectively, ~~2018~~primarily ~~compared~~attributable to ~~2017~~declines ~~due~~in toour ~~higher~~dry ~~revenue~~van ~~from domestic freight management (truckload~~ and ~~LTL~~intermodal ~~brokerage)~~businesses. ~~and~~TL ~~retail~~personnel ~~consolidation (growth from existing~~ and ~~new~~related ~~customers).~~benefits ~~Included~~decreased ~~in Ascent revenue in 2017 was~~ $6714.69 million ~~of revenue from Unitrans. Ascent personnel~~ and ~~related~~other ~~benefits~~operating expenses decreased $531.98 million ~~primarily~~ due to ~~the~~downsizing ~~absence~~ of ~~Unitrans~~our indry ~~2018.~~van ~~Excluding~~truckload ~~the~~business ~~impact~~in ~~of Unitrans~~2019, ~~personnel~~the ~~and~~sale ~~related~~of ~~benefits~~Intermodal ~~increased~~and ~~$3.9~~Flatbed ~~million. Other~~during ~~operating~~the ~~expenses~~fourth ~~increased~~quarter ~~$5.2 million primarily due to increased IT costs~~ of ~~$4.1~~2019, ~~million~~ and ~~higher~~the ~~commissions~~restructuring of ~~$2.2~~our ~~million,~~temperature ~~partially~~controlled ~~offset~~business byin ~~lower bad debt expense of $1~~2018.8 ~~million.~~

Other Operating Expenses

Other operating expenses that were not allocated to our ~~TES~~Ascent TM, ~~LTL~~Ascent OD, orLTL ~~Ascent~~and TL segments increased to $3033.75 million in ~~2018~~2019 compared to $1930.07 million in ~~2017,~~2018. ~~primarily~~Higher ~~due~~insurance toclaims aand ~~$35.4~~professional ~~million~~fees ~~gain~~were onpartially ~~the~~offset ~~sale~~by ofreduced ~~Unitrans~~restructuring inand ~~September~~restatement ~~of 2017~~costs. ~~Also~~Restructuring ~~included in other operating expenses are corporate restructuring~~ and restatement costs associated with legal, consulting and accounting matters, including internal and external investigations, and SEC and accounting compliance ofwere $2213.27 million and $3222.32 million in ~~2018~~2019 and ~~2017~~2018, respectively. ~~Also impacting 2018 were lower insurance claims reserves of $7.6 million and lower legal settlements of $5.2 million.~~

Year Ended December 31, ~~2017~~2018 Compared to Year Ended December 31, ~~2016~~2017

Consolidated Results

Our consolidated revenues increased to $2,~~091~~216.31 million in ~~2017~~2018 compared to $2,~~033~~091.23 million in ~~2016~~2017. Higher revenues in the ~~TES~~TL and ~~LTL~~Ascent TM segments contributed to the increase, which were partially offset by lower revenue in the ~~Ascent~~LTL segment. ~~Excluding~~Unitrans ~~the~~contributed revenue ~~from Unitrans~~ of $67.6 million into ~~2017, revenue increased in~~ the Ascent TM segment in 2017.

~~Consolidated~~Our ~~operating~~consolidated ~~results improved to an~~ operating loss ofincreased to $3658.5 million in ~~2017~~2018 ~~from~~compared anto ~~operating loss of~~ $~~403~~36.85 million in ~~2016~~2017. ~~Operating~~The operating loss in ~~2017~~2018 included aoperations ~~$35.4~~restructuring ~~million~~costs ~~gain on the sale~~ of ~~Unitrans and impairment charges of~~ $4.47 million, ~~while~~related to the ~~operating~~restructuring ~~loss in 2016 included impairment charges~~ of ~~$373.7~~our ~~million.~~temperature-controlled Intruckload ~~2017~~business and ~~2016,~~asset ~~we recorded total~~ impairment charges of $41.46 million ~~and $373~~.7 ~~million, respectively.~~ The ~~impairment~~operating ~~charge~~loss ~~recognized~~ in 2017 ~~was~~included ~~attributable to our Ascent reporting unit and was the result of evaluating the remaining carrying value of goodwill for the Ascent reporting unit after the sale of Unitrans. As~~ a ~~result of this evaluation, we determined the remaining carrying value exceeded the fair value and recorded a~~ $435.4 million ~~non-cash~~gain ~~goodwill~~on ~~impairment charge in~~ the ~~third~~sale ~~quarter~~ of ~~2017.~~Unitrans Asand ~~a result of the~~ goodwill impairment ~~analysis performed during 2016, non-cash goodwill impairment~~ charges of $~~132~~4.4 million~~, $197~~.3 ~~million,~~Lower ~~and~~consolidated ~~$42.4~~operating ~~million~~results ~~were~~in ~~recognized~~2018 ~~for~~were ~~our~~attributable ~~TES,~~higher ~~LTL,~~corporate expenses and ~~Warehousing~~lower &results ~~Consolidation~~in ~~reporting~~our ~~units,~~TL ~~respectively.~~and ~~Other~~LTL ~~intangible~~segments, ~~assets~~partially ~~consist~~offset ~~primarily~~by ofan ~~definite~~improvement ~~lived customer relationships. Indicators of impairment were identified~~ in ~~connection~~operating ~~with~~results ~~the~~within ~~shut-down of one of~~ our ~~business~~Ascent ~~operations,~~TM ~~and~~segment. asUnitrans acontributed ~~result,~~operating aincome ~~non-cash impairment charge for the customer relationship intangible~~ of $15.68 million ~~was~~to ~~recorded~~the inAscent ~~2016~~TM ~~for~~segment ~~our~~in ~~TES segment~~2017.

Our consolidated net loss was $91165.26 million in ~~2017~~2018 ~~and~~compared to $~~360~~91.32 million in ~~2016 resulting from the factors described above~~2017. In addition to the ~~items~~operating ~~previously~~results ~~discussed~~within our segments and corporate, our net loss ~~in 2017~~ was ~~also~~ impacted by ahigher interest expense of $1552.9 million, ~~loss~~partially ~~from~~offset ~~debt~~by ~~extinguishment associated with~~ the ~~repayment~~absence of ~~our~~a ~~prior~~loss ~~senior~~from ~~credit~~debt ~~facility~~extinguishment ~~and the payment~~ of ~~early~~$15.9 ~~redemption~~million ~~premiums~~in ~~on our preferred stock~~2017.

Interest expense increased to $64116.09 million in ~~2017~~2018 from $2264.80 million in ~~2016~~2017 due to higher interest expense from our preferred stock, ~~primarily~~partially asoffset by lower interest expense on debt attributable to a ~~result~~lower ofprincipal ~~the~~balance. ~~change~~Included in ~~fair~~interest ~~value~~expense offrom ~~the~~ preferred stock ofwas ~~$18.4~~higher ~~million~~expense ~~and~~of $1686.12 million ofdue ~~preferred~~to ~~stock~~the ~~issuance~~change ~~costs.~~in Wethe ~~account~~fair ~~for~~value of the preferred stock, ~~issued~~partially inoffset ~~May~~by ~~2017~~$15.0 atmillion ~~fair~~of ~~value~~lower ~~and~~interest ~~changes~~expense infrom ~~fair~~preferred ~~value~~stock ~~are~~issuance ~~recorded in interest expense~~costs.

Income tax benefit was $259.28 million in ~~2017~~2018 compared to $6625.32 million in ~~2016~~2017. The effective tax rate was 215.6% in ~~2017~~2018 ~~compared~~and ~~to 15~~21.56% in ~~2016~~2017. The annual effective income tax rate varies from the federal statutory rate of 21.0% and 35.0%, respectively, primarily due to state income taxes as(net ~~well as the impact~~ of ~~items~~federal ~~causing~~tax ~~permanent~~effect), ~~differences.~~adjustments ~~Significant~~for permanent differences ~~for~~(primarily ~~2017~~the ~~include~~ non-deductible interest expense associated with ~~the~~our preferred stock), ~~non-deductible~~and ~~preferred~~adjustments ~~stock~~to ~~issuance~~the ~~costs,~~valuation ~~non-deductible~~allowance. ~~loss~~Additionally, onfor ~~partial~~2017, ~~redemption~~our ofincome ~~preferred~~tax ~~stock,~~benefit and effective tax rate were impacted by a basis difference related to the sale of Unitrans., Aa one-time tax benefit ~~was~~ recorded ~~in 2017~~ as a result of recalculating the carrying value of our deferred tax assets and liabilities to reflect the reduced 21% U.S. federal corporate tax rate effective January 1, 2018 pursuant to the Tax Reform Act~~. Additionally~~, ~~goodwill~~and ~~impairment charges are primarily~~ non-deductible ~~and~~goodwill ~~affected~~impairment ~~the effective income tax rate and benefit from income taxes for both 2017 and 2016~~charges.

The rest of our discussion will focus on the operating results of our ~~three~~four segments:

~~Truckload~~Ascent ~~& Express Services~~TM

Operating results improved in our ~~TES~~Ascent TM segment ~~improved~~as to operating income ofwas $628.05 million in ~~2017~~2018 ~~from~~compared anto ~~operating loss of~~ $~~116~~22.5 million in ~~2016~~2017. ~~TES~~Operating results in 2017 included $5.8 million of operating ~~loss~~income from Unitrans which was sold in ~~2016~~the ~~included~~third quarter of 2017 and a goodwill impairment ~~charges~~charge of $~~134~~4.04 million. ~~TES~~which ~~revenues~~resulted ~~increased~~from bycomparing ~~$76.4~~the ~~million~~carrying ~~primarily~~value ~~due~~of the Domestic and International Logistics reporting unit to anfair ~~increase~~value after the sale of Unitrans. Excluding Unitrans and the impact of the goodwill impairment charge, improved Ascent TM operating results were driven by growth in ~~ground~~our retail consolidation business and ~~air~~our ~~expedited~~domestic freight management business, partially offset by ~~lower~~a ~~revenues~~slight ~~from~~decline ~~temperature~~in ~~control~~international ~~and~~freight ~~intermodal customers~~forwarding. ~~Purchased~~Ascent ~~transportation~~TM ~~costs~~revenues increased by $762.8 million ~~primarily~~in 2018 compared to 2017 due to anhigher ~~increase~~revenue infrom ~~ground~~domestic freight management (truckload and ~~air~~LTL ~~expedited~~brokerage) ~~freight~~and ~~costs~~retail consolidation (growth from existing and new customers). ~~TES~~Included in Ascent TM revenue in 2017 was $67.6 million of revenue from Unitrans. Ascent TM personnel and related benefits ~~increased~~decreased $45.19 million ~~due~~ primarily due to ~~higher~~the ~~driver~~absence ~~wages~~of Unitrans in 2018. Excluding the impact of Unitrans, ~~while~~personnel ~~other~~and related benefits increased $3.9 million. Other operating expenses increased by $75.42 million primarily due to increased ~~fuel~~IT costs of $94.31 million and higher ~~claims~~commissions ~~expense~~ of $92.2 million, partially offset by alower ~~decrease in~~ bad debt expense of $61.78 million.

Ascent OD

Operating results in our Ascent OD segment improved to operating income of $30.5 million in 2018 compared to $21.6 million in 2017. Ascent OD revenues increased $124.9 million while purchased transportation costs increased $104.7 million. Ascent OD revenues and purchased transportation costs were higher due primarily to increased ground and air expedited freight and related brokerage coupled with a strong demand environment which drove higher rates. Ascent OD personnel and related benefits increased $4.1 million due primarily to higher wages, while other operating expenses increased $7.0 million primarily due to higher temporary labor charges.

Less-than-Truckload

Operating results in our LTL segment ~~improved~~declined slightly to an operating loss of $26.49 million in ~~2017~~2018 ~~from~~compared to an operating loss of $~~203~~26.64 million in ~~2016~~2017. LTL ~~operating loss in 2016 included impairment charges of $197.3 million. LTL~~ revenues ~~increased~~decreased by $211.02 million indue ~~2017 when compared~~ to ~~2016.~~a ~~LTL~~decrease ~~revenues~~in ~~were~~shipping ~~favorably impacted by revenue from new customers, partially offset by lower~~ volumes ~~across~~and ~~our~~a ~~customer~~reduction ~~base.~~in ~~Purchased~~selected ~~transportation~~service ~~costs~~areas ~~increased~~in byorder ~~$10.8 million due~~ to ~~higher~~eliminate ~~purchased~~unprofitable ~~power~~freight ~~spot~~and ~~prices,~~focus ~~which~~on ~~negatively~~key ~~impacted linehaul expense~~lanes, partially offset by ~~lower~~higher ~~volumes.~~rates ~~LTL personnel~~ and ~~related~~fuel ~~benefits~~surcharge ~~increased $2.9 million while other operating expenses increased $8.2 million primarily due to increased bad debt expense of $3.4 million and equipment lease and maintenance costs of $1.7 million.~~

Ascent Global Logistics

~~Operating results improved in our Ascent segment as operating income increased to $22~~revenue.5 ~~million~~Purchased in 2017 from an operating loss of $28.1 million in 2016. Ascent operating loss in 2016 included impairment charges of $42.4 million. Ascent revenues decreased by $27.0 million in 2017 compared to 2016 while purchased transportation costs decreased by $278.72 million., ~~Both~~which ~~decreases~~ were ~~primarily~~driven ~~due~~by toa ~~the~~decrease ~~absence of revenue and purchased transportation costs~~ in ~~the~~shipping ~~fourth quarter of 2017 associated with Unitrans~~volumes, ~~which was sold in the third quarter of 2017,~~ partially offset by anmarket ~~increase~~conditions resulting in ~~volumes~~rate increases from ~~international~~purchase ~~freight~~power ~~forwarding~~providers ~~customers.~~and ~~The~~higher ~~absence~~spot ofprices ~~Unitrans~~paid into ~~the~~brokers ~~fourth~~which ~~quarter~~negatively ofimpacted ~~2017~~linehaul ~~also~~expense. ~~contributed~~LTL ~~to lower~~ personnel and related benefits ofwere ~~$1.5~~flat ~~million~~year ~~and~~over ~~lower~~year while other operating expenses ofdecreased $92.71 million. ~~Also~~primarily ~~impacting~~due ~~lower~~to ~~other operating expenses were~~ lower ~~losses~~cargo ~~from~~claims ~~the sale of property~~ and ~~equipment~~bad ofdebt ~~$2.8~~expense, ~~million~~partially ~~and~~offset ~~lower~~by ~~bad~~increased ~~debt~~equipment ~~expense~~lease ~~of $1~~costs.9 ~~million.~~

Truckload

Operating results in our TL segment declined to an operating loss of $28.4 million in 2018 compared to an operating loss of 15.6 million in 2017. TL revenues increased $19.5 million while purchased transportation costs were essentially flat. TL revenues were higher due primarily to increased ground expedited freight coupled with a strong demand environment which drove higher rates across most of the segment. Purchased transportation costs and yield were negatively impacted by capacity reductions in intermodal services and over-the-road operations, including dry van and temperature controlled. Operating results in 2018 included the restructuring of our temperature-controlled truckload business, which resulted in operations restructuring costs of $4.7 million related to fleet and facilities right-sizing and relocation costs, severance costs, and the write-down of assets to fair market value. Also included in TL operating results for 2018 was an asset impairment charge of $1.6 million related to tractors that were classified as “held for sale.” TL personnel and related benefits increased $5.9 million due primarily to higher driver wages, while other operating expenses increased $22.0 million, primarily due to increased equipment lease and maintenance costs of $7.0 million, the previously mentioned operations restructuring costs of $4.7 million, insurance related expenses of $1.8 million, fuel costs of $4.0 million and IT costs of $2.5 million.

Other Operating Expenses

Other operating expenses that were not allocated to our ~~TES~~Ascent TM, ~~LTL~~Ascent OD, TL or ~~Ascent~~LTL segments ~~decreased~~increased to $2230.67 million in 2018 compared to $19.0 million in 2017, primarily due to a $35.4 million gain on the sale of Unitrans in September of 2017. ~~and~~Also ~~lower~~included ~~equipment~~in ~~lease~~other ~~expense~~operating ofexpenses ~~$14.0~~are ~~million,~~corporate ~~partially offset by~~ restructuring and restatement costs ~~of $32.3 million incurred in 2017~~ associated with legal, consulting and accounting matters, including internal and external investigations, and SEC and accounting compliance of $22.2 million and $32.3 million in 2018 and 2017, respectively. Also impacting 2018 were lower insurance claims reserves of $7.6 million and ~~restructuring~~lower legal settlements of $5.2 million.

Liquidity and Capital Resources

Our primary sources of cash have been borrowings under our credit facilities, ~~the~~proceeds from divestitures, issuance of preferred stock, and cash flows from operations. Our primary cash needs are and have been to fund operating losses and normal working capital requirements, repay our indebtedness and finance capital expenditures. As of December 31, ~~2018~~2019, we had $114.28 million in cash and cash equivalents, $34.8 ~~Our~~million ~~ability~~of toadjusted ~~access~~excess ~~our~~availability ~~cash may be limited from time to time if doing so would result in a default~~ under ~~our credit facilities, as was~~ the ~~case~~ABL inCredit ~~September 2018~~Facility, ~~when~~and ~~our lenders agreed to waive~~ the ~~resulting~~ability ~~default as reported in our Current Report on Form 8-K filed on September 20, 2018. We may also decide~~ to ~~divest business units to further reduce our indebtedness~~request, ~~and/or~~subject ~~reinvest in our business. Further, depending on market conditions, we may from time~~ to ~~time~~approval ~~issue~~by ~~new equity or debt~~Elliott, inadditional ~~private~~financing orup ~~public offerings,~~ to ~~finance~~$59.5 ~~acquisitions,~~million ~~strengthen~~under ~~our~~the ~~balance~~Third ~~sheet,~~Lien ~~reduce~~Credit ~~our~~Facility ~~cost~~as ofdiscussed ~~capital or fund capital expenditures~~below.

OnWe ~~May~~have 1,taken ~~2017~~a number of actions to continue to support our operations and meet our obligations in light of the incurred losses and negative cash flows experienced over the past several years. In February 2019, we entered into ~~the~~a ~~Investment~~$200 ~~Agreement~~million ~~with~~ABL ~~Elliott~~Credit Facility and entered into a $61.1 million Term Loan Credit Facility, ~~pursuant~~both tomaturing ~~which~~on February 28, 2024. In August 2019, we ~~issued~~entered ~~and~~into ~~sold~~a ~~shares~~Fee ofLetter ~~our~~with ~~preferred~~entities ~~stock~~affiliated ~~and~~with ~~issued~~Elliott ~~warrants~~to arrange for Letters of Credit in an aggregate ~~purchase~~Face ~~price~~Amount of $~~540.5~~20 million to support our obligations under the ABL Credit Facility. The ~~proceeds~~Face Amount was subsequently increased to $30 million later in August 2019. In September 2019, we issued Revolving Notes to entities affiliated with Elliott. Pursuant to the Revolving Notes, we may borrow from time to time up to $20 million from Elliott on a revolving basis. On October 21, 2019, we entered into the ~~sale~~Second ofFee Letter Amendment with Elliott with respect to the ~~preferred~~Fee ~~stock~~Letter ~~were~~to ~~used~~increase the Face Amount from $30 million to ~~pay~~$45 ~~off~~million. ~~and~~On ~~terminate~~November ~~our~~5, ~~prior~~2019, ~~senior~~we ~~credit~~entered ~~facility~~into amendments to the ABL Credit Facility and the Term Loan Credit Facility which enabled us to ~~provide~~enter ~~working~~into ~~capital~~the Third Lien Credit Facility with Elliott Associates, L.P. and Elliott International, L.P, as Lenders, and U.S. Bank National Association, as Administrative Agent. The Third Lien Credit Facility allows us to ~~support~~request, ~~our~~subject ~~current~~to ~~operations~~approval by the Lenders, additional financing up to $100 million and ~~future~~matures ~~growth~~on August 24, 2026. We used the initial $20 million Term Loan Commitment under the Third Lien Credit Facility to refinance our Revolving Notes. These financing transactions are discussed in further detail later in this section.

On ~~March 1~~November 5, ~~2018~~2019, we ~~entered~~completed ~~into~~ the ~~Series~~sale ~~E-1 Investment Agreement with Elliott, pursuant to which we agreed to issue and sell to Elliott from time to time until July 30, 2018, an aggregate~~ of upIntermodal to ~~54,750~~Universal ~~shares~~Logistics ~~of Series E-1 Preferred Stock at a purchase price of $1~~Holdings,~~000~~ ~~per~~Inc. ~~share~~ for ~~the first 17,500 shares of Series E-1 Preferred Stock,~~ $~~960 per share for the next 18,228 shares of Series E-1 Preferred Stock, and $920 per share for the final 19,022 shares of Series E-1 Preferred Stock~~51.25 Onmillion ~~March~~in 1cash, ~~2018,~~subject ~~the parties held an initial closing pursuant~~ to ~~which~~customary ~~we issued and sold to Elliott 17,500 shares of Series E-1 Preferred Stock for an aggregate~~ purchase price ofand ~~$17.5 million. The proceeds of the sale of such shares of Series E-1 Preferred Stock were used to provide~~ working capital ~~to support our current operations and future growth and to repay a portion of the indebtedness under the Prior ABL Facility as required by the credit agreement governing that facility~~adjustments.

On ~~April~~December 249, ~~2018~~2019, ~~the~~we ~~parties~~completed ~~held a closing pursuant to~~ the ~~Series~~sale ~~E-1 Investment Agreement, pursuant to which we issued and sold to Elliott 18,228 shares~~ of ~~Series~~Flatbed ~~E-1 Preferred Stock~~ for ~~an aggregate purchase price of approximately~~ $1730.50 million. ~~The~~in ~~proceeds~~cash, ofsubject ~~the~~to ~~sale~~customary ofpurchase ~~such~~price ~~shares~~and ~~of Series E-1 Preferred Stock were used to provide~~ working capital ~~to support our current operations and future growth and to repay a portion of the indebtedness under the Prior ABL Facility as required by the credit agreement governing that facility~~adjustments.

On ~~August 3, 2018, September 19, 2018, November 8, 2018, and~~ January 928, ~~2019~~2020, we entered into ~~amendments~~a todefinitive ~~the~~agreement ~~Series~~to ~~E-1~~sell ~~Investment~~our ~~Agreement,~~subsidiary ~~which,~~Prime ~~among~~Distribution ~~other things~~Services, ~~(i) extended~~Inc. ~~the~~to ~~termination~~C.H. ~~date~~Robinson ~~thereunder from July 30~~Worldwide, ~~2018~~Inc. ~~to March 2, 2019~~ for ~~the~~$225 ~~remaining 19~~million,~~022~~ ~~shares~~subject ~~available~~ to ~~issue~~customary ~~and~~purchase ~~sell~~price toand ~~Elliott~~working ~~for~~capital ~~$17~~adjustments.5 ~~million,~~We ~~and~~closed ~~(ii) provided that if~~ the ~~Series~~transaction ~~E-1~~on ~~Investment~~March ~~Agreement was not already terminated~~2, ~~the~~2020 ~~Series~~and ~~E-1~~repaid ~~Investment~~in ~~Agreement~~full ~~would~~and ~~automatically~~terminated ~~terminate upon~~ the ~~Rights Offering Effective Date (as defined in the Prior~~ ABL ~~Facility). Upon~~Credit ~~the~~and ~~closing~~Term ofLoan ~~the~~Credit ~~rights~~Facilities ~~offering~~that ~~described~~originated ~~elsewhere~~ in ~~this~~February ~~Form~~of ~~10-K, the Series E-1 Investment Agreement was automatically terminated~~2019.

On March 2, 2020, we and our direct and indirect domestic subsidiaries entered into a new credit agreement with BMO Harris Bank.

We have implemented or are in the process of implementing cost reductions and taken other actions including; headcount reductions, voluntary delisting and deregistration with the SEC, business restructuring, and sales of operating companies and other assets, to reduce our liquidity needs. We expect to utilize the financing available under the Third Lien Credit Facility and the new ABL Credit Facility, subject to approval by the Lenders, avail ourselves of the available tax benefits of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), and take further actions such as additional headcount reductions and other cost cutting measures, to satisfy our liquidity needs. We believe that these actions are probable of occurring and mitigate the liquidity risk raised by our historical operating results and will satisfy our estimated liquidity needs during the next 12 months from the date of the issuance of the consolidated financial statements.

If we continue to experience operating losses in excess of the additional liquidity generated through the actions described above or through some combination of other actions, while not expected, then our liquidity needs may exceed availability and we might need to secure additional sources of funds, which may or may not be available. Additionally, a failure to generate additional liquidity could negatively impact our ability to perform the services important to the operation of our business.

Rights Offering and Preferred Stock

On February 26, 2019, we closed our $450 million rights offering, pursuant to which we issued and sold an aggregate of 36 million new shares of our common stock at the subscription price of $12.50 per share. An aggregate of 7,107,049 shares of our common stock were purchased pursuant to the exercise of basic subscription rights and over-subscription rights from stockholders of record during the subscription period, including from the exercise of basic subscription rights by stockholders who are funds affiliated with Elliott. In addition, Elliott purchased an aggregate of 28,892,951 additional shares pursuant to the commitment from Elliott to purchase all unsubscribed shares of our common stock in the rights offering pursuant to the Standby Purchase Agreement that we entered into with Elliott dated November 8, 2018, as amended. Overall, Elliott purchased a total of 33,745,308 shares of our common stock in the rights offering between its basic subscription rights and the backstop commitment, and following the closing of the rights offering beneficially owned approximately 90.4% of our common stock.

~~Certain~~The ~~terms~~net ofproceeds from the rights offering and backstop commitment were used to fully redeem the outstanding shares of our preferred stock asand to pay related accrued and unpaid dividends. Proceeds were also used to pay fees and expenses in connection with the rights offering and backstop commitment. We retained in excess of ~~December 31,~~$30 ~~2018~~million ~~are~~of asfunds ~~follows:~~to be used for general corporate purposes. The purpose of the rights offering was to improve and simplify our capital structure in a manner that gave our existing stockholders the opportunity to participate on a pro rata basis.

The preferred stock was mandatorily redeemable and, as such, was presented as a liability on the consolidated balance sheets. At each preferred stock dividend payment date, we had the option to pay the accrued dividends in cash or to defer them. Deferred dividends earned dividend income consistent with the underlying shares of preferred stock. We elected to measure the value of the preferred stock using the fair value method. Under the fair value method, issuance costs were expensed as incurred. The fair value of the preferred stock increased by $104.6 million during the year ended 2018, which was reflected in interest expense - preferred stock.

Certain Terms of the Preferred Stock as of December 31, 2018



	Series B	Series C	Series D	Series E	Series E-1
Shares at $0.01 Par Value at Issuance	155,000	55,000	100	90,000	35,728
Shares Outstanding at December 31, 2018	155,000	55,000	100	37,500	35,728
Price / Share	$1,000	$1,000	$1.00	$1,000	$1,000/$960
Dividend Rate	Adjusted LIBOR + 3.00% + Additional Rate (4.75-12.50%) based on leverage. Additional 3.00% upon certain triggering events.	Adjusted LIBOR + 3.00% + Additional Rate (4.75-12.50%) based on leverage. Additional 3.00% upon certain triggering events.	Right to participate equally and ratably in all cash dividends paid on common stock.	Adjusted LIBOR + 5.25% + Additional Rate (8.50%). Additional 3.00% upon certain triggering events.	Adjusted LIBOR + 5.25% + Additional Rate (8.50%). Additional 3.00% upon certain triggering events.
Dividend Rate at December 31, 2018	17.780%	17.780%	N/A	16.030%	16.030%
Redemption Term	8 Years	8 Years	8 Years	6 Years	6 Years
Redemption Rights	From Closing Date: 12-24 months: 105% 24-36 months: 103%	65% premium (subject to stock movement)		From Closing Date: 0-12 months: 106.5% 12-24 months: 103.5%	From Closing Date: 0-12 months: 106.5% 12-24 months: 103.5%

~~Redemption~~On ~~rights~~March ~~are~~1, at2018, ~~our~~we ~~option~~entered orinto the Series E-1 Investment Agreement with Elliott, ~~upon~~pursuant ato ~~change~~which inwe ~~control~~agreed to issue and sell to Elliott from time to time until July 30, 2018, an aggregate of up to 54,750 shares of Series E-1 Preferred Stock at a purchase price of $1,000 per share for the ~~option~~first 17,500 shares of Series E-1 Preferred Stock, $960 per share for the ~~holder. The~~next ~~holders~~18,228 shares of Series CE-1 Preferred Stock, and $920 per share for the final 19,022 shares of Series DE-1 Preferred Stock. ~~have~~On March 1, 2018, the ~~right~~parties held an initial closing pursuant to ~~participate~~which ~~equally~~we issued and ~~ratably~~sold ~~with~~to ~~holders~~Elliott 17,500 shares of ~~common~~Series ~~stock~~E-1 inPreferred ~~all~~Stock ~~cash~~for ~~dividends~~an ~~paid~~aggregate onpurchase price of $17.5 million. The proceeds of the sale of such shares of ~~common~~Series ~~stock~~E-1 Preferred Stock were used to provide working capital to support our current operations and future growth and to repay a portion of the indebtedness under our prior ABL Facility as required by the credit agreement governing that facility.

AtOn ~~each~~April ~~preferred~~24, ~~stock~~2018, ~~dividend~~the ~~payment~~parties ~~date~~held a closing pursuant to the Series E-1 Investment Agreement, pursuant to which we ~~have~~issued ~~the~~and ~~option~~sold to ~~pay~~Elliott ~~the~~18,228 ~~accrued~~shares ~~dividends~~of inSeries ~~cash~~E-1 orPreferred toStock ~~defer~~for ~~them. Deferred~~an ~~dividends~~aggregate ~~accrue~~purchase ~~dividend~~price ~~expense~~of ~~consistent~~approximately ~~with~~$17.5 million. The proceeds of the ~~underlying~~sale of such shares of ~~preferred~~Series ~~stock.~~E-1 Preferred Stock were used to provide working capital to support our current operations and future growth and to repay a portion of the indebtedness under our prior ABL Facility as required by the credit agreement governing that facility.

OnThe ~~July~~final 2119,022 ~~2017,~~shares weof ~~entered~~Series E-1 ~~into~~Preferred Stock remained unissued when the ~~Prior~~Series ~~ABL~~E-1 ~~Facility.~~Investment WeAgreement ~~used~~was ~~the~~terminated ~~initial~~in ~~proceeds~~connection ~~from~~with the ~~Prior~~closing ~~ABL~~of ~~Facility~~the ~~for~~rights ~~working~~offering. ~~capital~~The ~~purposes~~Company ~~and~~incurred to$1.1 ~~redeem~~million ~~all~~ of ~~the~~issuance ~~outstanding~~costs ~~shares~~associated with the issuance of ~~our~~the Series FE-1 Preferred Stock for the year ended December 31, 2018, which was reflected in interest expense - preferred stock.

~~The Prior ABL Facility consisted of a:~~51

Credit Facilities

ABL Credit Facility

On February 28, 2019, we and our direct and indirect domestic subsidiaries entered into the ABL Credit Facility. The ABL Credit Facility consists of a $200.0 million asset-based revolving line of credit, of which up to (i) $15.0 million may be used for FILO Loans (as defined in the ABL Credit Facility), (ii) $20.0 million may be used for Swing Line Loans (as defined in the ABL Credit Facility), and (iii) $30.0 million may be used for letters of credit. The ABL Credit Facility provides that the revolving line of credit may be increased by up to an additional $100.0 million under certain circumstances. We initially borrowed $91.5 million under the ABL Credit Facility and used the initial proceeds for working capital purposes and to repay our prior ABL Facility. The ABL Credit Facility matures on February 28, 2024. We had adjusted excess availability under the ABL Credit Facility of $34.8 million as of December 31, 2019.

On August 2, 2019, we and our direct and indirect domestic subsidiaries entered into the ABL Facility Amendment. Pursuant to the ABL Facility Amendment, the ABL Credit Facility was amended to, among other things, add Acceptable Letters of Credit (as defined in the ABL Facility Amendment) to the Borrowing Base (as defined in the ABL Credit Facility as amended by the ABL Facility Amendment).

On September 17, 2019, we and our direct and indirect domestic subsidiaries entered into the Second ABL Facility Amendment effective as of September 13, 2019. Pursuant to the Second ABL Facility Amendment, the ABL Credit Facility was amended to, among other things, (i) extend the deadline for providing a reasonably detailed plan for achieving our stated liquidity goals and objectives in connection with our go-forward business plan and strategy, and (ii) eliminate one of the exceptions to the limitation on Dispositions (as defined the ABL Credit Facility).

On October 21, 2019, we and our direct and indirect domestic subsidiaries entered into the Third ABL Facility Amendment. Pursuant to the Third ABL Facility Amendment, the ABL Credit Facility was amended to, among other things, (i) increase the amount of Acceptable Letters of Credit that can be added to the Borrowing Base from $30 million to $45 million, (ii) increase the Applicable Margin by 100 basis points, (iii) permit certain Specified Dispositions provided that the Net Cash Proceeds are used to pay down the Revolving Credit Facility or the Term Loan Obligations as specified, (iv) increase the Availability Block from the Specified Dispositions, (v) extend the applicable date for the Fixed Charge Trigger Period from October 31, 2019 to March 31, 2020, and (vi) add baskets for additional permitted Indebtedness consisting of Junior Lien Debt or unsecured Indebtedness in an aggregate amount not to exceed $100 million provided that, among other things, such Junior Lien Debt or unsecured Indebtedness has a maturity date that is at least 180 days after February 28, 2024.

On November 27, 2019, we and our direct and indirect domestic subsidiaries entered into the Fourth ABL Facility Amendment. Pursuant to the Fourth ABL Facility Amendment, the ABL Credit Facility was amended to, among other things, (i) revise certain schedules, and (ii) waive the Specified Defaults that arose from the failure to previously update a schedule of aircraft owned by the Loan Parties (as defined in the ABL Credit Facility).

On March 2, 2020, we and our direct and indirect domestic subsidiaries entered into an amended and restated credit agreement (the “new ABL Credit Agreement”) with BMO Harris Bank N.A., as Administrative Agent, Lender, Letter of Credit Issuer and Swing Line Lender (the “new ABL Credit Facility”). The new ABL Credit Facility consists of a $50.0 million asset-based revolving line of credit, of which up to (i) $1.0 million may be used for Swing Line Loans (as defined in the new ABL Credit Agreement), and (ii) $13.0 million may be used for letters of credit. The new ABL Credit Facility matures on April 1, 2021. Advances under the new ABL Credit Facility bear interest at either: (a) the LIBOR Rate (as defined in the new ABL Credit Agreement), plus an applicable margin of 4.00%; or (b) the Base Rate (as defined in the new ABL Credit Agreement), plus an applicable margin of 3.00%. The Company’s ability to borrow under the new ABL Credit Facility is reduced by credit availability blocks, currently in the amount of $18.5 million, and the amount of outstanding letters of credit, approximately $13 million. As of March 30, 2020, the Company has $18.5 million available under the new ABL Credit Facility.

Term Loan Credit Facility

Loans (as defined in the Term Loan Credit Facility), (iii) approximately $8.3 million of Tranche B Term Loans (as defined in the Term Loan Credit Facility), and (iv) a $10.0 million asset-based facility available to finance future capital expenditures. We initially borrowed $51.1 million under the Term Loan Credit Facility and used the proceeds for working capital purposes and to repay our prior ABL Facility. The Term Loan Credit Facility matures on February 28, 2024.

On August 2, 2019, we and our direct and indirect domestic subsidiaries entered into the Term Loan Facility Amendment. Pursuant to the Term Loan Facility Amendment, the Term Loan Credit Facility was amended to, among other things: (i) defer the September 1, 2019 quarterly amortization payments otherwise due thereunder to December 1, 2019, and (ii) provide that CapX Loans (as defined in the Term Loan Credit Facility) shall not be available during the period commencing on August 2, 2019 and continuing until payment of the December 1, 2019 quarterly amortization payments.

On September 17, 2019, we and our direct and indirect domestic subsidiaries entered into the Second Term Loan Facility Amendment effective as of September 13, 2019. Pursuant to the Second Term Loan Facility Amendment, the Term Loan Credit Facility was amended to, among other things, (i) add a requirement to deliver a reasonably detailed plan for achieving our stated liquidity goals and objectives in connection with our go-forward business plan and strategy, and (ii) eliminate one of the exceptions to the limitation on Dispositions (as defined the Term Loan Credit Facility).

On October 21, 2019, we and our direct and indirect domestic subsidiaries entered into the Third Term Loan Facility Amendment. Pursuant to the Third Term Loan Facility Amendment, the Term Loan Credit Facility was amended to, among other things, (i) permit certain Specified Dispositions, (ii) eliminate our ability to request new CapX Loans, and (iii) add baskets for additional permitted Indebtedness consisting of Junior Lien Debt or unsecured Indebtedness in an aggregate amount not to exceed $100 million provided that, among other things, such Junior Lien Debt or unsecured Indebtedness has a maturity date that is at least 180 days after February 28, 2024.

On November 27, 2019, we entered into the Fourth Term Loan Facility Amendment. Pursuant to the Fourth Term Loan Facility Amendment, the Term Loan Credit Facility was amended to, among other things, (i) revise certain schedules and (ii) waive the Specific defaults that arose from the failure to previously update a schedule of Aircraft owned by the Loan parties (as defined in the Term Loan Credit Facility).

The Term Loan Facility was paid in full and terminated on March 2, 2020.

Fee Letter

On August 2, 2019, we entered into the Fee Letter. Pursuant to the Fee Letter, Elliott agreed to arrange for Letters of Credit in an aggregate face amount of $20 million to support our obligations under our ABL Credit Facility. As consideration for Elliott providing the Letters of Credit, we agreed to (i) pay Elliott a fee on the LC Amount, accruing from the date of issuance through the date of expiration (or if drawn, the date of reimbursement by us of the LC Amount to Elliott), at a rate equal to the LIBOR Rate (as defined in the ABL Credit Facility) plus 7.50%, which will be payable in kind by adding the amount then due to the then outstanding LC Amount, and (ii) reimburse Elliott for any draw on the Letters of Credit, including the amount of such draw and any taxes, fees, charges, or other costs or expenses reasonably incurred by Elliot in connection with such draw, promptly after receipt of notice of any such drawing under the Letters of Credit, in each case subject to the terms and conditions of the Fee Letter.

On August 20, 2019, we entered into a First Amendment to the Fee Letter, pursuant to which the maximum face amount of the Letters of Credit (as defined in the Fee Letter Amendment) that may be used to support our obligations under the ABL Credit Facility was increased from $20 million to $30 million.

On October 21, 2019, we entered into the Second Fee Letter Amendment. Pursuant to the Second Fee Letter Amendment, the Fee Letter was amended to, among other things, increase the maximum face amount of the Letters of Credit (as defined in the Fee Letter Amendment) that may be used to support our obligations under the ABL Credit Facility from $30 million to $45 million.

Revolving Notes

On September 20, 2019, we issued Revolving Notes to entities affiliated with Elliott. Pursuant to the Revolving Notes, we may borrow from time to time up to $20 million from Elliott on a revolving basis. Interest on any advances under the Revolving Notes will bear interest at a rate equal to the LIBOR Rate (as defined therein) plus 7.50%, and interest shall be payable on a quarterly basis beginning on December 1, 2019. On November 5, 2019, these notes were refinanced as part of the Third Lien Credit Facility.

Third Lien Credit Facility

On November 5, 2019, we entered into the Third Lien Credit Facility with U.S. Bank National Association, as the Administrative Agent, and Elliott Associates, L.P. and Elliott International, L.P, as Lenders. We used the initial $20 million Term Loan Commitment (as defined in the Third Lien Credit Agreement) under the Third Lien Credit Facility to refinance its $20 million principal amount

of unsecured debt to the Lenders. The Company has $40.5 million of outstanding borrowings under this facility as of December 31, 2019.

The loans under the Third Lien Credit Facility bear interest at either: (a) the LIBOR rate (as defined in the Third Lien Credit Agreement), plus an applicable margin of 7.50%; or (b) the Base Rate (as defined in the Third Lien Credit Agreement), plus an applicable margin of 6.50%. Interest under the Third Lien Credit Facility shall be paid in kind by adding such interest to the principal amount of the applicable Term Loans on the applicable Interest Payment Date; provided that to the extent permitted by the ABL Loan Agreement, the Senior Term Loan Credit Agreement and the Intercreditor Agreement, we may elect that all or a portion of interest due on an Interest Payment Date shall be paid in cash by providing written notice to the Administrative Agent at least five Business Days prior to the applicable Interest Payment Date specifying the amount of interest to be paid in cash. The Third Lien Credit Facility matures on August 26, 2024.

See Note 6, “Debt” and Note 7, “Preferred Stock” to our consolidated financial statements in this Form 10-K for additional information regarding the ABL and Term Loan Credit Facilities, the Fee Letter, the Revolving Credit Notes, and preferred stock, respectively.

We do not believe that the limitations imposed by the terms of our debt agreements have any significant impact on our liquidity, financial condition, or results of operations. We believe that these resources will be sufficient to meet our working capital, debt service, and capital investment obligations for the foreseeable future.

Prior ABL Facility

Our prior ABL Facility consisted of a:


•	$200.0 million asset-based revolving line of credit, of which $20.0 million may be used for swing line loans and $30.0 million may be used for letters of credit;


•	$56.8 million term loan facility; and

• $35.0 million asset-based facility available to finance future capital expenditures, which was subsequently terminated before ~~being~~ utilized.

~~We initially borrowed $141.7 million under the revolving line of credit and $56.8 million under the term loan facility.~~ As ofpreviously ~~December 31~~mentioned, ~~2018,~~our ~~total~~prior ~~availability under the Prior~~ ABL Facility was ~~$31.2~~paid ~~million~~off ~~but~~with wethe ~~could~~proceeds ~~not~~from ~~draw~~the ~~more~~ABL ~~than~~Credit ~~$11.8~~Facility ~~million~~and ~~as of that date to maintain at least $19.4 million of Adjusted Excess Availability in order to avoid~~ the ~~commencement~~Term ofLoan aCredit ~~Fixed Charge Trigger Period~~Facility.

On February 28, 2019, we and our direct and indirect domestic subsidiaries entered into the ABL Credit Facility. The ABL Credit Facility consists of a $200.0 million asset-based revolving line of credit, of which up to (i) $15.0 million may be used for FILO Loans (as defined in the ABL Credit Agreement), (ii) $20.0 million may be used for Swing Line Loans (as defined in the ABL Credit Agreement), and (iii) $30.0 million may be used for letters of credit. The ABL Credit Agreement provides that the revolving line of credit may be increased by up to an additional $100.0 million under certain circumstances. The ABL Credit Facility matures on February 28, 2024.

On February 28, 2019, we and our direct and indirect domestic subsidiaries entered into the Term Loan Credit Facility. The Term Loan Credit Facility consists of an approximately $61.1 million term loan facility, consisting of (i) approximately $40.3 million of Tranche A Term Loans (as defined in the Term Loan Credit Agreement), (ii) approximately $2.5 million of Tranche A FILO Term Loans (as defined in the Term Loan Credit Agreement), (iii) approximately $8.3 million of Tranche B Term Loans (as defined in the Term Loan Credit Agreement), and (iv) a $10.0 million asset-based facility available to finance future capital expenditures. The Term Loan Credit Facility matures on February 28, 2024.

See Note 5, Debt, and Note 6, Preferred Stock, to our consolidated financial statements in this Form 10-K for additional information regarding the Prior ABL Facility and preferred stock, respectively. We do not believe that the limitations imposed by the terms of our debt agreement have any significant impact on our liquidity, financial condition or results of operations. We believe that these resources, along with the net proceeds from the rights offering described below, will be sufficient to meet our working capital, debt service, and capital investment obligations for the foreseeable future.

Rights Offering

On September 19, 2018, we filed a registration statement on Form S-1 with the SEC for a rights offering to raise $450 million. The purpose of the rights offering was to deleverage our balance sheet and provide us with additional liquidity to fund our operations. On December 10, 2018, we filed Pre-Effective Amendment No. 1 to our registration statement on Form S-1 with the SEC to, among other things, specify that the rights offering would consist of an aggregate of 900,000,000 new shares of our common stock issuable upon exercise of rights at a subscription price equal to $0.50 per share.

On November 8, 2018, in connection with the rights offering, we entered into the Standby Purchase Agreement with Elliott to ensure that the rights offering was fully subscribed and that we raised $450 million.

On December 19, 2018, we held our 2018 Annual Meeting of Stockholders at which our stockholders approved, among other proposals, the following proposals in connection with the proposed rights offering: (i) an amendment to our Amended and Restated Certificate of Incorporation authorizing additional shares of our common stock for issuance in the rights offering, (ii) the rights offering, (iii) the Standby Purchase Agreement and potential change of control that may result from the purchase of shares of our common stock by Elliott, and (iv) amendments to our Amended and Restated Certificate of Incorporation to implement certain corporate governance changes requested by Elliott in connection with providing the backstop commitment.

On January 11, 2019, we filed Pre-Effective Amendment No. 2 to our registration statement on Form S-1 with the SEC, which registration statement on Form S-1 became effective on January 31, 2019. In the rights offering, we distributed to stockholders of record as of January 30, 2019 (the “record date”) transferable subscription rights to purchase an aggregate of 900,000,000 new shares of our common stock. Each stockholder received one right for every share of common stock such holder owned on the record date. Each transferable subscription right entitled the holder to purchase approximately 23.1379497159 shares of our common stock at a subscription price of $0.50 per share (the “basic subscription right”). Holders who fully exercised their basic subscription rights were entitled to subscribe for additional shares of our common stock that remain unsubscribed as a result of any unexercised basic subscription rights (the “over-subscription right”). The over-subscription right allowed a holder to subscribe for additional shares of our common stock up to the number of shares purchased under such holder’s basic subscription right at the subscription price. Elliott agreed to exercise its basic subscription rights in full and purchase all unsubscribed shares of common stock in the rights offering pursuant to the backstop commitment, although Elliott was not entitled to the over-subscription privilege. We obtained the backstop commitment from Elliott to ensure that the rights offering would be fully subscribed and that we would raise $450 million in gross proceeds.

On February 26, 2019, we closed the right offering. An aggregate of 177,676,223 shares of our common stock were purchased pursuant to the exercise of basic subscription rights and over-subscription rights from stockholders of record during the subscription period, including from the exercise of basic subscription rights by Elliott. In addition, Elliott purchased an aggregate of 722,323,777 additional shares pursuant to the backstop commitment from Elliott. Overall, Elliott purchased a total of 843,632,693 shares of our common stock in the rights offering between its basic subscription rights and the backstop commitment, and following the closing of the rights offering beneficially owned approximately 90.4% of our common stock.

Trading of the Company's common stock on the New York Stock Exchange

On October 4, 2018, we received a notice from the NYSE that we had fallen below the NYSE’s continued listing standards relating to minimum average global market capitalization and total stockholders’ investment, which require that either our average global market capitalization be not less than $50 million over a consecutive 30 trading day period, or our total stockholders’ investment be not less than $50 million. Pursuant to the NYSE continued listing standards, we timely notified the NYSE that we intended to submit a plan to the NYSE demonstrating how we intended to regain compliance with the continued listing standards within the required 18-month time frame. We timely submitted our plan, which was subsequently accepted by the NYSE. During the 18-month cure period, our shares continued to be listed and traded on the NYSE, subject to our compliance with other listing standards. The NYSE notification did not affect our business operations or our reporting requirements with the SEC.

52On October 12, 2018, we received a notice from the NYSE that we had fallen below the NYSE’s continued listing standard related to price criteria for common stock, which requires the average closing price of our common stock to equal at least $1.00 per share over a 30 consecutive trading day period. The NYSE notification did not affect our business operations or our SEC reporting requirements. As a result of our 1-for- 25 Reverse Stock Split that took effect on April 4, 2019, we received a notice from the NYSE

global market capitalization be not less than $50 million over a consecutive 30 trading day period, or our total stockholders’ investment be not less than $50 million. Pursuant to the NYSE continued listing standards, we timely notified the NYSE that we intended to submit a plan to the NYSE demonstrating how we intend to regain compliance with the continued listing standards within the required 18-month timeframe. We timely submitted our plan, which was subsequently accepted by the NYSE. During the 18-month cure period, our shares will continue to be listed and traded on the NYSE, subject to our compliance with other listing standards. The NYSE notification does not affect our business operations or our SEC reporting requirements. 54

Onon ~~October~~April 12, ~~2018,~~2019 wethat ~~received~~ a ~~notice~~calculation ~~from~~of ~~the~~our ~~NYSE~~average ~~that~~stock weprice ~~had~~for ~~fallen below~~ the ~~NYSE’s~~30-trading ~~continued~~days ~~listing~~ended ~~standard~~April ~~related~~12, to2019, ~~price~~indicated ~~criteria~~that ~~for~~our ~~common~~ stock, ~~which~~price ~~requires~~was above the ~~average~~NYSE’s ~~closing~~minimum ~~price~~requirements of ~~our common stock to equal at least~~ $1.00 ~~per~~based ~~share~~on ~~over~~ a 30 ~~consecutive~~ -trading day ~~period~~average. ~~Pursuant~~ ~~to the NYSE listing standards~~Accordingly, we ~~timely~~are ~~notified~~now ~~the~~in ~~NYSE that we intend to cure the deficiency and regain~~ compliance with the ~~continued listing standard~~$1.00 Wecontinued ~~have~~listed ~~six months from our receipt of the notice to regain compliance with the listing standard~~criterion. We ~~can~~On ~~regain~~September ~~compliance~~10, ~~with the standard if~~2019, onwe ~~the~~received ~~last~~a ~~trading day of any calendar month during the six-month period following receipt of the~~ notice orfrom ~~on April 12, 2019, which is~~ the ~~date~~NYSE that iswe ~~six~~were ~~months~~back ~~following~~in ~~receipt~~compliance ofwith the ~~notice,~~NYSE ~~our~~quantitative ~~common~~listing ~~stock has a closing price of at least $1~~standards.00 ~~per~~This ~~share~~decision ~~and~~came anas ~~average~~a ~~closing~~result ~~price~~ of ~~at least $1.00 per share over the previous 30 consecutive trading day period. During the six-month cure period,~~ our ~~shares~~achievement of ~~common stock will continue to be listed and traded on the NYSE, subject to our~~ compliance with ~~other~~the ~~listing standards. The~~ NYSE's ~~notification~~minimum ~~does~~market ~~not~~capitalization ~~affect~~and ~~our~~stockholders' ~~business~~equity ~~operations~~requirements orover ~~our~~the ~~SEC~~prior ~~reporting~~two ~~requirements~~consecutive quarters.

See Note 6, Debt, and Note 7, Preferred Stock, to our consolidated financial statements in this Form 10-K for additional information regarding our prior ABL Facility and preferred stock, respectively. We do not believe that the limitations imposed by the terms of our debt agreement have any significant impact on our liquidity, financial condition or results of operations.

Cash Flows

A summary of operating, investing, and financing activities are shown in the following table (in thousands):

	Year Ended December 31,
	2018			2017			2016
	2019			2018			2017
Net cash (used in) provided by:
Operating activities	$	5(97,~~594~~075	)	$	~~(45~~5,~~552~~594	)	$	28(45,~~854~~552	)
Investing activities	~~(22~~60,~~715~~905		)	77(22,~~631~~715		)	(977,~~593~~631		)
Financing activities	229,~~598~~768			~~(35~~2,~~890~~598		)	2(35,~~322~~890		)
Net change in cash and cash equivalents	$	(146,~~523~~402	)	$	(314,~~811~~523	)	$	21(3,~~583~~811	)

Cash Flows from Operating Activities

Cash used in operating activities was $97.1 million during 2019. The difference between our $340.9 million net loss and the $97.1 million of cash used by operating activities was primary attributable to the impairment charge of $207.7 million and depreciation and amortization of $59.8 million.

Cash provided by operating activities was $5.6 million during 2018. The difference between our $165.6 million net loss and the $5.6 million of cash provided by operating activities during 2018 was primarily attributable to the change in the fair value of our preferred stock of $104.6 million, and $43.5 million of depreciation and amortization expense, partially offset by a deferred tax benefit of $10.6 million. The remainder is primarily attributable to changes in working capital.

Cash used in operating activities was $45.6 million in 2017. The difference between our $91.2 million net loss and the $45.6 million of cash used in operating activities during 2017 was primarily attributable to $38.9 million of depreciation and amortization expense, the change in the fair value of our preferred stock of $18.4 million, and an impairment charge of $4.4 million, partially offset by a deferred tax benefit of $27.1 million. The remainder is primarily attributable to changes in working capital.

Cash provided by operating activities was $28.9 million in 2016. The difference between our $360.3 million net loss and the $28.9 million of cash provided by operating activities during 2016 was primarily attributable to $373.7 million of non-cash impairment charges and $40.7 million of depreciation and amortization expense, partially offset by a deferred tax benefit of $43.4 million. The remainder is primarily attributable to changes in working capital.

Cash Flows from Investing Activities

Cash ~~used~~provided inby investing activities was $2260.79 million, ~~during~~primarily ~~2018,~~due ~~which~~to ~~reflects~~proceeds from sales of businesses of $2584.58 million and building and equipment of ~~capital~~$3.9 ~~expenditures~~million. ~~used~~A tomajority ~~support~~of our ~~operations. These~~2019 capital expenditures were ~~partially~~funded ~~offset~~with byfinance ~~the~~leases ~~proceeds~~as ~~from~~opposed ~~the~~to ~~sale~~up-front ~~of equipment of $2~~cash.8 ~~million.~~ We expect to use approximately $20 million of cash in ~~2019~~2020 to fund ~~expected total~~ capital expenditures of $6020 to $7025 million~~, excluding conversions of operating leases to capital leases~~. ~~A majority of our 2019 capital expenditures are expected to be funded with capital leases as opposed to up-front cash.~~

Cash used in investing activities was $22.7 million during 2018, which reflects $25.5 million of capital expenditures used to support our operations. These capital expenditures were partially offset by the proceeds from the sale of equipment of $2.8 million.

Cash provided by investing activities was $77.6 million in 2017, which reflects $88.5 million of proceeds from the sale of Unitrans, which was partially offset by $14.5 million of capital expenditures used to support our operations. These capital expenditures were partially offset by proceeds from the sale of equipment of $3.6 million.

Cash used in investing activities was $9.6 million in 2016, which reflects $17.6 million of capital expenditures used to support our operations. These payments were offset by proceeds from the sale of equipment of $7.0 million and proceeds from the sale of

non-core business of $1.0 million.

Cash Flows from Financing Activities

Cash provided by financing activities was $229.68 million ~~during~~for ~~2018, which primarily reflects~~ the ~~issuance~~year ofended ~~Series~~2019, ~~E-1~~primarily ~~Preferred~~as ~~Stock~~a result of ~~$35.0 million and~~ net proceeds from ~~insurance~~the ~~premium~~issuance ~~financing~~of common stock of $5450.60 million, ~~partially~~ offset by athe ~~reduction~~payment ~~in borrowings~~ of ~~$31.0~~preferred ~~million~~stock ~~and a reduction~~ of ~~our capital lease obligation of~~ $5402.59 million.

Cash ~~used~~provided inby financing activities was $352.96 million during ~~2017~~2018, which primarily reflects the issuance ~~costs~~of ~~from~~Series ~~debt~~E-1 Preferred Stock of $35.0 million and ~~preferred~~net ~~stock~~proceeds from insurance premium financing of $205.86 million, ~~debt~~partially ~~extinguishment~~offset ~~costs~~by a reduction in borrowings of $1131.0 million, and a reduction of ~~capital~~our finance lease ~~obligations~~obligation of $35.75 million.

Cash ~~provided~~used byin financing activities was $235.39 million induring ~~2016~~2017, which primarily reflects ~~net~~issuance ~~borrowings~~costs offrom ~~$11.1~~debt ~~million~~and ~~under~~preferred ~~our~~stock ~~prior credit facility, which were offset by a reduction~~ of ~~capital lease obligations of~~ $520.18 million, ~~the~~debt ~~payment~~extinguishment ofcosts ~~contingent purchase obligations~~ of $211.50 million, and ~~issuance~~a ~~costs~~reduction of ~~$0.9~~finance ~~million~~lease ~~associated~~obligations ~~with~~of ~~the~~$3.7 ~~amendments to our prior credit agreement~~million.

Quarterly Results of Operations

The following table presents unaudited consolidated statement of operations data for each of the four quarters ended December 31, ~~2018~~2019 and ~~2017~~2018. We believe that all necessary adjustments have been included to fairly present the quarterly information when read in conjunction with our annual consolidated financial statements and related notes. The operating results for any quarter are not necessarily indicative of the results for any subsequent quarter.

(In thousands, except per share data)	FirstQuarter			SecondQuarter			ThirdQuarter			FourthQuarter
2019:
Total revenues	$	507,148		$	480,688		$	459,147		$	400,879
Net revenues (total revenues less purchased transportation costs)	164,373			162,903			152,785			121,236
Total interest expense	3,882			4,632			5,480			6,418
Loss before income taxes	(26,928		)	(142,473		)	(98,305		)	(76,891		)
Net loss available to common stockholders	(26,999		)	(141,949		)	(97,751		)	(74,238		)
Loss per share:
Basic	$	(1.78	)	$	(3.77	)	$	(2.60	)	$	(1.97	)
Diluted	$	(1.78	)	$	(3.77	)	$	(2.60	)	$	(1.97	)
2018:
Total revenues	$	569,984		$	558,026		$	536,584		$	551,547
Net revenues (total revenues less purchased transportation costs)	169,021			177,954			170,906			179,845
Total interest expense	9,543			34,232			35,798			37,339
Loss before income taxes	(22,973		)	(45,607		)	(46,619		)	(60,212		)
Net loss available to common stockholders	(23,643		)	(41,955		)	(41,561		)	(58,438		)
Loss per share:
Basic	$	(015.6137	)	$	(127.0924	)	$	(126.0899	)	$	(137.5232	)
Diluted	$	(015.6137	)	$	(127.0924	)	$	(126.0899	)	$	(137.5232	)
2017:
Total revenues	$	478,920		$	530,579		$	521,433		$	560,359
Net revenues (total revenues less purchased transportation costs)	162,635			172,147			162,953			163,178
Total interest expense	6,525			28,355			10,502			18,667
Loss before income taxes	(24,435		)	(45,675		)	(5,265		)	(41,002		)
Net loss available to common stockholders	(19,943		)	(37,863		)	(10,053		)	(23,327		)
Loss per share:
Basic	$	(0.52	)	$	(0.99	)	$	(0.26	)	$	(0.61	)
Diluted	$	(0.52	)	$	(0.99	)	$	(0.26	)	$	(0.61	)

AsOur ~~previously discussed, our~~ operating results infor the first, second, ~~quarter~~third ofand ~~2018 include operations restructuring costs of $4.7 million. Our operating results in the~~ fourth ~~quarter~~quarters of ~~2018~~2019 include asset impairment charges of $10.68 million, $108.3 ~~Our~~million, ~~operating results in the third quarter of 2017 include goodwill impairment charges of~~ $439.47 million and ~~the gain from the sale of Unitrans of~~ $3548.43 million, respectively.

Our operating results in the second quarter of 2018 include operations restructuring costs of $4.7 million. Our operating results in the fourth quarter of 2018 include asset impairment charges of $1.6 million.

The above table reflects adjustment for the reverse stock split that occurred on April 4, 2019.

Off-Balance Sheet Arrangements

We do not have any transactions, arrangements, or other relationships with unconsolidated entities that are reasonably likely to materially affect our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, or capital resources. We have no special purpose or limited purpose entities that provide off-balance sheet financing, liquidity, or market or credit risk support; engage in leasing, hedging, or research and development services; or have other relationships that expose us to liability that is not reflected in the financial statements. However, we provide a guarantee for a portion of the value of certain IC leased tractors. The potential maximum exposure under these lease guarantees was approximately $7.26 million as of December 31, ~~2018~~2019.

Seasonality

Our operations are subject to seasonal trends that have been common in the North American over-the-road freight sector for many years. ~~Our~~Typically our results of operations for the quarter ending in March are on average lower than the quarters ending in June, September, and December. ~~Typically,~~This ~~this~~ pattern has been the result of factors such as inclement weather, national holidays, customer demand, and economic conditions.

5357

Effects of Inflation

Based on our analysis of the periods presented, we believe that inflation has not had a material effect on our operating results as inflationary increases in fuel and labor costs have generally been offset through fuel surcharges and price increases.



ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.



ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Reference is made to the financial statements, the notes thereto, and the report of our independent registered public accounting firm commencing at page F-1 of this Form 10-K, which financial statements, notes, and report are incorporated herein by reference. For the Quarterly Results of Operations, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”



ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

5458



ITEM 9A.	CONTROLS AND PROCEDURES

Background

As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2017, an independent internal investigation was undertaken in 2017 by the Audit Committee of our Board of Directors (the “Audit Committee”), with assistance from outside counsel and outside consultants to provide forensic and investigative support (the “Audit Committee Investigation”) that included detailed reviews of financial records at operating companies and our corporate headquarters. Based on the Audit Committee Investigation, along with matters identified by the Company’s management and internal audit function, management determined that there were deficiencies in the design and/or execution of internal controls that constituted material weaknesses.

Evaluation of Disclosure Controls and Procedures

In connection with the filing of this Form 10-K for the year ended December 31, ~~2018~~2019, our Chief Executive Officer (“CEO”), serving as our Principal Executive Officer, and our Chief Financial Officer (“CFO”), serving as our Principal Financial Officer and Principal Accounting Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). As a result of this evaluation, our CEO and CFO concluded that those material weaknesses previously identified in Item 9A. “Controls and Procedures” of our Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018 were still present as of December 31, ~~2018~~2019 (the “Evaluation Date”). Based on those material weaknesses, and the evaluation of our disclosure controls and procedures, our CEO and CFO concluded that our disclosure controls and procedures were not effective as of the Evaluation Date.

Deficiencies in internal controls contributed to material accounting errors identified and corrected prior to 2017. Deficiencies in internal control activities contribute to the potential for there to be material accounting errors in substantially all financial statement account balances and disclosures. Notwithstanding the identified material weaknesses, management believes that the consolidated financial statements and unaudited interim financial information included in this Form 10-K fairly present in all material respects our financial condition, results of operations, and cash flows as of and for the periods presented based on a number of factors including, but not limited to, (a) substantial resources expended (including the use of internal audit personnel and external consultants) in response to the findings of material weaknesses, (b) internal reviews to identify material accounting errors, and (c) the ~~commencement~~continuation of certain remediation actions, as discussed further below.

Management's Report on Internal Control Over Financial Reporting

Management, including our CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act and based upon the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO framework”)). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with GAAP.

An effective internal control system, no matter how well designed, has inherent limitations, including the possibility of human error or overriding of controls, and therefore can provide only reasonable assurance with respect to reliable financial reporting. Because of its inherent limitations, our internal control over financial reporting may not prevent or detect all misstatements, including the possibility of human error, the circumvention or overriding of controls, or fraud. Effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that a reasonable possibility exists that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis.

Under the supervision and with the participation of our management, including our CEO and CFO, we have conducted an evaluation of the effectiveness of our internal control over financial reporting based on the COSO framework. Based on evaluation under these criteria, management determined, based upon the existence of the material weaknesses described below, that we did not maintain effective internal control over financial reporting as of the Evaluation Date.

Control Environment

We did not maintain an effective control environment based on the criteria established in the COSO framework. We have identified deficiencies in the principles associated with the control environment of the COSO framework. Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to: (i) our commitment to integrity and ethical values, (ii) the ability of our board of directors to effectively exercise oversight of the development and performance of internal control, as a result of failure to communicate relevant information within our organization and, in some cases, withholding information, (iii) appropriate organizational structure, reporting lines, and authority and responsibilities in pursuit of objectives, (iv) our commitment to attract, develop, and retain competent individuals, and (v) holding individuals accountable for their internal control related responsibilities.

We did not maintain an effective control environment to enable the identification and mitigation of risks of material accounting errors as result of the contributing factors to the material weaknesses in the control environment, including:

performance of internal control over financial reporting responsibilities, (iii) identified issues and concerns were raised to appropriate levels within our organization, (iv) corrective activities were appropriately applied, prioritized, and implemented in a timely manner, and (v) relevant information was communicated within our organization and not withheld from our independent directors, our Audit Committee, and our independent auditors.

•

In certain operating companies and at our corporate headquarters there were inconsistent accounting systems, policies and procedures. Additionally, in certain locations we did not attract, develop, and retain competent management, accounting, financial reporting, internal audit, and information systems personnel or resources to ensure that internal control responsibilities were performed and that information systems were aligned with internal control objectives.

•

Risk Assessment

We did not design and implement an effective risk assessment based on the criteria established in the COSO framework. We have identified deficiencies in the principles associated with the risk assessment component of the COSO framework. Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to: (i) identifying, assessing, and communicating appropriate objectives, (ii) identifying and analyzing risks to achieve these objectives, (iii) contemplating fraud risks, and (iv) identifying and assessing changes in the business that could impact our system of internal controls.

Control Activities

We did not design and implement effective control activities based on the criteria established in the COSO framework. We have identified deficiencies in the principles associated with the control activities component of the COSO framework. Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to: (i) selecting and developing control activities and information technology that contribute to the mitigation of risks and support achievement of objectives and (ii) deploying control activities through policies that establish what is expected and procedures that put policies into action.

Deficiencies in control activities contributed to material accounting errors identified and corrected prior to 2018. Deficiencies in control activities contributed to the potential for there to have been material accounting errors in substantially all financial statement account balances and disclosures.

Information and Communication

We did not generate and provide quality information and communication based on the criteria established in the COSO framework. We have identified deficiencies in the principles associated with the information and communication component of the COSO framework. Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to: (i) obtaining, generating, and using relevant quality information to support the function of internal control, and (ii) communicating accurate information internally and externally, including providing information pursuant to objectives, responsibilities, and functions of internal control.

Monitoring Activities

We did not design and implement effective monitoring activities based on the criteria established in the COSO framework. We have identified deficiencies in the principles associated with the monitoring component of the COSO framework. Specifically, these control deficiencies constitute material weaknesses, either individually or in the aggregate, relating to: (i) selecting, developing, and performing ongoing evaluation to ascertain whether the components of internal controls are present and functioning, and (ii) evaluating and communicating internal control deficiencies in a timely manner to those parties responsible for taking corrective action.

The following were contributing factors to the material weaknesses in monitoring activities:


•	Internal audit staffing levels were insufficient to keep pace with the size and complexity of our business structure and organization, which limited our ability to effectively monitor internal controls.


•	Failure to effectively communicate relevant information and internal control deficiencies to our Audit Committee for appropriate oversight, monitoring and enforcement of corrective action.


•	Not communicating relevant information within our organization and, in some cases, withholding information from our independent directors, our Audit Committee, and our independent auditors.

Deloitte & Touche LLP, our independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2018. Deloitte & Touche LLP's opinion, as stated in their report which appears on page 60 ~~of this Form 10-K, is consistent with management's report on internal control over financial reporting as set forth above.~~

Deloitte & Touche LLP, our independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2019. Deloitte & Touche LLP's report, which expresses an adverse opinion on the Company’s internal control over financial reporting because of material weaknesses, which appears on page 64 of this Form 10-K, is consistent with management's report on internal control over financial reporting as set forth above.

Changes in Internal Control Over Financial Reporting

There were no changes during the quarter ended December 31, ~~2018~~2019 in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

As discussed above, we have identified material weaknesses in our internal control over financial reporting. Although we have not fully remediated the material weaknesses as of December 31, ~~2018~~2019, we have made, and will continue to make, improvements to our policies and procedures as well as the oversight of these policies and procedures, staffing of positions which play a significant role in internal control. We also have made, and will continue to make, improvements in our communication of relevant and accurate information both internally and externally, identification of risks and enhancement of our risk assessment procedures. Design and implementation of control activities that address objectives and risks will continue in ~~2019~~2020 and subsequent years, as necessary, and we will continue our evaluation and assessment of the control environment and efforts to identify and remediate the underlying causes of the identified material weaknesses. The following provides further details regarding each material weakness identified above and the remedial action taken and planned as of the date of this Form 10-K.

Remediation Plan and Status

~~Our~~Remediation ~~remediation~~ efforts ~~are~~continued ~~ongoing~~in ~~and~~2019, weincluding ~~will~~implementation ~~continue~~of ~~our initiatives to implement and document~~ policies, procedures, and internal controls. In ~~the second half of 2018, we intensified our efforts to strengthen our internal control environment and remediate the identified material weaknesses.~~ This remediation effort ~~will~~remains be a multi-year process, continuing ininto ~~2019~~2020 and subsequent years as necessary. We will test the ongoing operating effectiveness of the new and existing controls in future periods. The material weaknesses cannot be considered completely remediated until the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are designed and operating effectively.

While we believe the steps taken to date and those planned for implementation will improve the effectiveness of our internal control over financial reporting, we have not completed all remediation efforts, including those identified herein. Accordingly, as we continue to monitor the effectiveness of our internal control over financial reporting in the areas affected by the material weaknesses described above, we ~~have and will~~ continue to perform additional procedures prescribed by management, including the use of manual mitigating control procedures and employing any ~~additional tools and~~ resources deemed necessary, to ensure that our consolidated financial statements are fairly stated in all material respects. The following remediation activities highlight our commitment to remediating our identified material weaknesses, although management has not yet concluded that any of these internal controls are operating effectively:

Control Environment

~~We have undertaken steps to address material weaknesses in the control environment.~~ Our Chief Executive Officer, President and Chief Operating Officer, General Counsel and Chief Compliance Officer, Chief Financial Officer, Vice President and Corporate Controller, Vice President of Finance and Treasurer, Chief Information Officer, and the Chief Audit Executive are committed to implementing and maintaining an effective control environment that will drive a high level of ethical standards and integrity over internal control over financial reporting. Our Audit Committee, our Board of Directors, and management have ~~emphasized~~undertaken ~~and~~certain ~~continue~~steps to ~~emphasize~~set the ~~importance~~proper oftone ~~internal~~at ~~control~~the ~~over~~top ~~financial~~that ~~reporting,~~establishes ~~as well as~~ the ~~integrity~~Company’s ofguiding ~~our~~values ~~financial~~and ~~statements. Our executive management team has enhanced compliance with~~ ethical ~~standards~~climate ~~by,~~in ~~among~~order ~~other~~to ~~things,~~empower ~~issuing~~ and ~~emphasizing~~properly ~~corporate~~resource ~~governance~~the ~~policies,~~employees ~~and~~that ~~improving~~have ~~communication~~day ~~practices~~to ~~among~~day ~~employees~~responsibilities ~~with~~to ~~internal~~mitigate ~~control~~risk ~~over~~and ~~financial~~build ~~reporting~~organization ~~responsibilities~~trust. asThose ~~follows~~actions include:

• ~~Executive~~Recurring ~~management communicates~~leadership, ~~and will continue to communicate~~operations, ~~steps~~strategy ~~to ensure a proper~~planning, ~~consistent~~staff ~~tone throughout our organization, with distinct emphasis on the expectation that control deficiencies will be remediated through the implementation of uniform accounting~~ and ~~internal~~departmental ~~control policies and procedures with the proper oversight that promotes strict compliance with GAAP and regulatory requirements. Recurring~~ meetings are held ~~with corporate, operations and finance leaders~~ to discuss important Company updates as well as progress on the remediation of material weaknesses and the importance of an effective control environment.

• ~~Certain~~Periodic ~~policies~~communications ~~and~~from ~~procedures~~CEO, ~~have~~CFO, ~~been~~Chief ~~developed~~Information ~~and distributed to applicable personnel across the organization~~Officer, ~~and~~Chief ~~additional~~Compliance ~~policies~~Officer and ~~procedures~~other ~~will~~leaders beare ~~developed~~sent ~~and distributed in 2019 and subsequent years as necessary. In order~~ to ~~drive~~all ~~consistency~~employees inon ~~our~~important ~~reporting~~Company ~~across all accounting systems~~updates, aincluding ~~standard~~core ~~chart~~values ofand ~~accounts~~mission ~~was~~statement ~~developed~~and atinternal ~~the~~control ~~consolidated level~~compliance.

• ~~Our~~In ~~internal~~2019, ~~ethics~~corporate ~~task~~governance ~~force~~policies ~~meets~~were atdeveloped ~~least monthly~~ and/or ~~includes~~updated ~~members~~in ~~from~~the ~~key~~areas ~~functional~~of ~~areas~~whistleblower, ~~who~~nepotism, ~~are~~insider ~~responsible~~trading, ~~for~~media ~~reviewing~~communications, and ~~addressing~~record ~~compliance~~retention. ~~matters~~In asaddition, ~~they~~we ~~arise.~~updated ~~Compliance~~our ~~matters~~employee handbook and ~~resolutions~~furthermore, ~~are~~all ~~regularly~~employees ~~shared~~are ~~with~~required ~~Executive~~annually ~~Management~~to ~~and~~acknowledge ~~reviewed~~they ~~with~~have ~~the~~read ~~Audit~~and ~~Committee~~understand onour aCore ~~quarterly~~Values ~~basis. Clear~~ and ~~transparent~~the ~~communication~~Code ~~with~~of ~~respect~~Conduct, toWhistleblower, ~~compliance~~Anti-Corruption, and ~~ethical~~Nepotism ~~values~~Policies. ~~continue~~Semi-annual toreminders ~~emphasize~~are ~~our~~sent ~~commitment~~to all employees to ~~ethics~~review ~~and~~corporate ~~compliance~~governance policies.

• ~~Finance~~Information ~~team~~technology ~~members~~and ~~with~~accounting/finance ~~the~~policies ~~appropriate~~were ~~experience,~~issued ~~certifications,~~for ~~education~~fixed assets, ~~and~~driver ~~training~~advances ~~for~~and ~~key~~loans, ~~financial~~intercompany ~~reporting~~transactions, travel and ~~accounting~~entertainment, ~~positions~~project ~~have~~management ~~been hired~~framework, ~~promoted~~patch ormanagement ~~reassigned~~and ~~from~~security ~~within~~incident ~~our Company~~management. ~~This~~All ~~has~~policies ~~allowed~~are usposted toonline ~~initiate~~where ~~selection~~they ~~and~~are ~~development~~accessible ~~of appropriate policies, procedures, and controls~~ to ~~strengthen our control environment~~employees.

• ~~Executive~~We ~~management~~have ~~continues~~expanded toour ~~evaluate~~training ~~the~~and ~~resources~~education ~~required~~related to ~~right-size~~internal ~~our~~controls ~~accounting~~to ~~and~~include ~~financial~~workshops ~~reporting, internal audit,~~ and ~~information~~training ~~technology~~sessions ~~functions.~~to ~~Evaluation~~improve ofcontrol ~~the~~awareness ~~effectiveness~~and ofeducate ~~these~~all applicable personnel ~~and~~at ~~appropriateness~~the ofbusiness ~~reporting~~unit ~~lines~~level ~~across~~on ~~the~~internal ~~Company~~control ~~is ongoing~~topics.

• We have enhanced our compliance practices, including our code of conduct, whistleblower, and ethics policies, which required acknowledgment by all employees in 2018 and will require periodic acknowledgement going forward. Our key executives and finance and operations personnel from our corporate headquarters and operating companies completed quarterly sub-certifications in 2018 to support the CEO/CFO certification as part of our Form 10-Q and Form 10-K filings.61


•	The ethics task force reviews all reported violations, investigates and assigns a lead investigator, ensures investigations are conducted and resolved on a timely basis, and decides appropriate disciplinary actions, as needed. Reports are regularly shared with executive management and reviewed with the Audit Committee at least quarterly.


•	Executive management continues to evaluate the effectiveness of our accounting and financial reporting, internal audit, and information technology functions. Evaluation of the effectiveness of these personnel and appropriateness of reporting lines across the Company is ongoing.


•	Our key executives and finance and operations personnel from our corporate headquarters and operating companies completed quarterly sub-certifications in 2019 to support the CEO/CFO certification as part of our Form 10-Q and Form 10-K filings.

Risk Assessment

We performed monthly detailed reviews of financial records at our corporate headquarters and the operating company level for the purpose of ensuring compliance with GAAP and regulatory compliance requirements, identifying unusual or non-recurring items and correcting accounting errors, if any. We have and will continue to identify risks and enhance risk assessment procedures. This has enabled us to ~~effectively~~begin to identify and develop controls and procedures to address ~~risks. Our~~key ~~Chief~~financial ~~Information~~reporting ~~Officer continues to assess our information technology control environment~~ and ~~adequacy~~fraud ofrisks. ~~personnel,~~The ~~including~~following ~~responding~~activities toare ~~information technology risks appropriately.~~performed:

•

On a monthly basis, we perform detailed reviews of financial records at the corporate headquarters and the business unit level with the objective of ensuring compliance with GAAP and regulatory compliance requirements, identifying unusual or non-recurring items and correcting accounting errors, if any. We utilize the results of these reviews to assess risk and to calibrate discussions with business units in future reporting periods.


•	On a quarterly basis, executive management in conjunction with corporate and operations teams formally reviews Risk Factors that are included in SEC Form 10-Q filings. The objective of this review is to identify any new and relevant financial reporting risk factors that are applicable to the organization.


•	Our Chief Information Officer continues to assess our information technology control environment and adequacy of personnel, including responding to information technology risks appropriately.

Control Activities

We continue to redesign and implement ~~common~~ internal control activities. In ~~2018,~~We we established policies and procedures and conducted process and control walkthrough meetings and workshops, sharing best practices over process-level controls and structures and providing guidance to ensure that there is appropriate assignment of authority, responsibility, and accountability to enable remediating our material weaknesses. This will continue in ~~2019~~2020 and subsequent years as necessary. and includes:


•	Monthly and quarterly trial balance reviews with business unit and finance leaders which includes review of the financial statement fluctuation analysis requiring all reporting units to explain material fluctuations in their financial statement line items.


•	We have implemented specific control activities including a monthly data validation performed by each business unit to ensure financial data recorded at the business unit level is complete and accurate and reconciles to our consolidated financial statements. Additionally, the Corporate Controller reviews all adjustments made between the initial and final submissions of financial statements.

Information and Communication

We continue to take steps to enhance our practices related to information and communication. Our senior finance and information technology executives have communicated objectives and developed formal job responsibilities for key roles. The information technology department is organized and centralized to support our business structure. We are evaluating and developing controls to address cyber risk. As previously disclosed in September 2019, we suffered a server and applications quarantine caused by a malware attack which for a period of time resulted in our inability to provide timely and accurate information to manage our business. We have invested and continue to invest in technology security initiatives, we hired an Information Technology Security Manager, implemented relevant employee training, enhanced information technology risk management, and are in various stages of implementing disaster recovery plans. Business unit restructuring occurred allowing information to be consolidated and communicated more efficiently and effectively. We implemented a new software solution used to support the consolidation of financial statements.

technology department was reorganized and centralized to better support our business structure. We are evaluating and developing controls to address cyber risk. Operating company restructuring occurred allowing information to be consolidated and communicated more efficiently and effectively. We piloted a new consolidation software solution in 2018, scheduled to be put into service and used to support the consolidation of financial statements for the first quarter of 2019.

Monitoring Activities

In addition to the items noted above, as we continue to evaluate, remediate, and improve our internal control over financial reporting, executive management ~~may~~will ~~elect~~continue to implement additional measures to address control deficiencies or ~~may~~further ~~determine~~refine ~~that~~and improve the remediation efforts described above ~~require modification~~. Executive management, in consultation with and at the direction of our Audit ~~Committee, will continue to assess the control environment and the above-mentioned efforts to remediate the underlying causes of the identified material weaknesses, including through the following:~~

• We have increased and will continue to evaluate accounting, finance, information technology and internal audit staffing levels to sufficiently address the size, scope, and complexity of our organization.62

•Committee, Wewill ~~have~~continue ~~developed~~to ~~and~~assess ~~continue~~the tocontrol ~~implement~~environment ~~effective~~and ~~communication~~the ~~plans~~above-mentioned ~~relating~~efforts to, ~~among~~remediate ~~other~~the ~~things,~~underlying ~~identification~~causes of ~~deficiencies~~the ~~and~~identified ~~recommendations~~material ~~for~~weaknesses, ~~corrective~~including ~~actions.~~through ~~These~~the ~~plans will apply to all parties responsible for remediation.~~following:


•	We continue to evaluate accounting, finance, information technology and internal audit staffing levels to sufficiently address the size, scope, and complexity of our organization.


•	We have developed and continue to implement effective communication plans relating to, among other things, identification of deficiencies and recommendations for corrective actions. Our Audit Committee receives quarterly remediation reports and periodic updates, as needed. These communication plans apply to all parties responsible for remediation.

We have implemented processes to communicate relevant information within the organization to the Board of Directors, Audit Committee and independent auditors.

Inherent Limitations on Effectiveness of Controls

Management, including our CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, misstatements, errors, and instances of fraud, if any, within our organization have been or will be prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls also can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, internal controls may become inadequate as a result of changes in conditions, or through the deterioration of the degree of compliance with policies or procedures.

5963

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Roadrunner Transportation Systems, Inc. and subsidiaries

Downers Grove, Illinois

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Roadrunner Transportation Systems, Inc. and subsidiaries (the “Company”) as of December 31, ~~2018~~2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, because of the effect of the material weaknesses identified below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, ~~2018~~2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, ~~2018~~2019, of the Company and our report dated March 1130, ~~2019~~2020, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Material Weaknesses

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management's assessment:

Control Environment - control deficiencies ~~constituting~~constitute material weaknesses, either individually or in the aggregate, relating to: (i) commitment to integrity and ethical values, (ii) the ability of the board of directors to effectively exercise oversight of the development and performance of internal control, as a result of failure to communicate relevant information within the organization and, in some

6064

cases, withholding information, (iii) appropriate organizational structure, reporting lines, and authority and responsibilities in pursuit of objectives, (iv) commitment to attract, develop, and retain competent individuals, and (v) holding individuals accountable for their internal control related responsibilities.

Risk Assessment - control deficiencies ~~constituting~~constitute material weaknesses, either individually or in the aggregate, relating to: (i) identifying, assessing, and communicating appropriate objectives, (ii) identifying and analyzing risks to achieve these objectives, (iii) contemplating fraud risks, and (iv) identifying and assessing changes in the business that could impact the system of internal controls.

Control Activities - control deficiencies ~~constituting~~constitute material weaknesses, either individually or in the aggregate, relating to: (i) selecting and developing control activities and information technology that contribute to the mitigation of risks and support achievement of objectives and (ii) deploying control activities through policies that establish what is expected and procedures that put policies into action.

Information and Communication - control deficiencies ~~constituting~~constitute material weaknesses, either individually or in the aggregate, relating to: (i) obtaining, generating, and using relevant quality information to support the function of internal control, and (ii) communicating accurate information internally and externally, including providing information pursuant to objectives, responsibilities, and functions of internal control.

Monitoring - control deficiencies ~~constituting~~constitute material weaknesses, either individually or in the aggregate, relating to: (i) selecting, developing, and performing ongoing evaluation to ascertain whether the components of internal controls are present and functioning, and (ii) evaluating and communicating internal control deficiencies in a timely manner to those parties responsible for taking corrective action.

These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements as of and for the year ended December 31, ~~2018~~2019, of the Company, and this report does not affect our report on such financial statements.

/s/ DELOITTE & TOUCHE LLP

Chicago, Illinois

March 1130, ~~2019~~ 2020

6165



ITEM 9B.	OTHER INFORMATION

Not applicable.

PART III



ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our 2019 Annual Meeting of Stockholders. Directors

The following table sets forth the names, ages and positions held as of the date of this Annual Report on Form 10-K for each member of our board of directors. There are no family relationships among any of our directors or executive officers.



Name	Age	Position(s) Held
James D. Staley⁽¹⁾⁽³⁾	70	Chairman of the Board
Curtis W. Stoelting	60	Chief Executive Officer and Director
Scott L. Dobak⁽²⁾⁽³⁾	57	Director
Christopher L. Doerr⁽²⁾⁽³⁾	70	Director
Ralph (“Cody”) W. Kittle III	30	Director
Donald C. Brown⁽¹⁾	64	Director
Christopher W. Jamroz⁽¹⁾⁽²⁾	45	Director

(1) Member of the audit committee.

(2) Member of the compensation committee.

(3) Member of the nominating/corporate governance committee.

Each of our directors stands for election at each annual meeting of stockholders and, if elected, will serve from the time of election and qualification until the next annual meeting. Each director’s term continues until the election and qualification of his or her successor, or his or her earlier death, resignation or removal.

The following is a biographical summary of the experience of our directors:

James D. Staley has served as the chairman of our board of directors since November 2017 and has been a director of our company since October 2010. Mr. Staley previously served as the lead independent director of our board of directors from December 2016 to November 2017. Mr. Staley is presently retired. From 2004 through December 2007, Mr. Staley served in various capacities for YRC Worldwide, Inc. (NASDAQ: YRCW) and its subsidiaries, one of the world’s largest transportation services providers, including as President and Chief Executive Officer of Roadway Group and YRC Regional Transportation. Prior to that, Mr. Staley served for over 30 years in various capacities for Roadway Express, including President and Chief Operating Officer. Mr. Staley currently serves as the Lead Director and on the audit, compensation, and nominating and corporate governance committees of Douglas Dynamics, Inc. (NYSE: PLOW), a designer, manufacturer, and seller of snow and ice control equipment for light trucks. Our board of directors concluded that Mr. Staley should serve as a member of our board of directors because of his executive and operational experience with a public company in the transportation industry, and his experience on other public company boards of directors.

Curtis W. Stoelting has served as our Chief Executive Officer since April 2017 and has been a director of our company since January 2016. Mr. Stoelting previously served as our principal financial officer and principal accounting officer from April 2017 until March 2018 and our President and Chief Operating Officer from January 2016 until April 2017. Prior to joining our company, Mr. Stoelting served as the Chief Executive Officer and a director of TOMY International (formerly RC2 Corporation) from January 2003 to March 2013. RC2 Corporation (NASDAQ: RCRC) was acquired by TOMY Company, Ltd. in April 2011. Mr. Stoelting previously served as RC2’s Chief Operating Officer from 2000 to 2003, Executive Vice President from 1998 to 2000 and Chief Financial Officer from 1994 to 1998. Prior to that, Mr. Stoelting was with Arthur Andersen for 12 years. Mr. Stoelting currently serves on the Board of Directors and Compensation Committee of Regal-Beloit Corporation (NYSE: RBC), a publicly traded manufacturer of commercial, industrial, and HVAC electric motors, electric generators and controls, and mechanical motion control products. Our board of directors concluded that Mr. Stoelting should serve as a member of our board of directors because of his role as our chief executive officer, which enables him to provide the board with insight based on his day-to-day interactions with our company, and because of his operational expertise. As a management representative on our board of directors, Mr. Stoelting provides an insider’s perspective in board discussions about the business and strategic direction of our company.

Scott L. Dobak has served as a director of our company since June 2017. Mr. Dobak currently serves as President and Chief Executive Officer of Hufcor, Inc. where he has served since September 2019. Prior to this, Mr. Dobak was the Chairman of AT Group, US, from September 2018 to August 2019. Previously, Mr. Dobak served as the Chief Executive Officer of Dicom Transportation Group from January 2014 to September 2018. Additionally, Mr. Dobak served in various leadership roles with our company from January 2007 to December 2013, most recently serving as our President-Less-than-Truckload and Transportation Management Solutions. Our board of directors concluded that Mr. Dobak should serve as a member of our board of directors because of his proven business acumen, his executive and operational experience in the transportation industry, and his familiarity with our business.

Christopher L. Doerr has served as a director of our company since October 2010. Mr. Doerr is currently the sole member of Passage Partners, LLC, a private investment company. Mr. Doerr served as Co-Chief Executive Officer of Sterling Aviation Holdings, Inc., an aircraft management and charter company, from 2004 to 2014. From 2009 to 2011, Mr. Doerr served as Executive Chairman and Chief Executive Officer of Karl’s Rental, Inc., a global manufacturer and supplier of portable event structures and related equipment. Prior to that, Mr. Doerr served as President and Co-Chief Executive Officer of Leeson Electric Corporation from 1986 to 2001. Mr. Doerr currently serves on the board of directors and compensation committee of Regal Beloit Corporation (NYSE: RBC), a publicly traded manufacturer of commercial, industrial, and HVAC electric motors, electric generators and controls, and mechanical motion control products. Our board of directors concluded that Mr. Doerr should serve as a member of our board of directors because of his proven business acumen and executive and operational experience, having served as the chief executive officer of several companies, and because of his experience on other public company boards of directors.

Ralph (“Cody”) W. Kittle III has served as a director of our company since June 2017. Mr. Kittle currently serves as an investment professional with Elliott Management Corporation (“Elliott”), where he has been employed since August 2014. Prior to that, Mr. Kittle served as an associate at Wind Point Partners, a private equity firm based in Chicago, and in Investment Banking at J.P. Morgan, where he focused on mergers and acquisitions in the industrial and consumer industries. Our board of directors concluded that Mr. Kittle should serve as a member of our board of directors because of his significant business and investment experience across a wide range of industries, including in the transportation and logistics sectors, as well as experience with financial and operational matters for businesses.

Donald C. Brown has served as a director of our company since April 2019. Mr. Brown retired in 2017 as Executive Vice President of FedEx Freight Corporation, a North American freight shipping company, having served as Executive Vice President, Finance and Administration, and Chief Financial Officer from 2008 to November 2016. Prior to joining FedEx Freight Corporation as Senior Vice President and Chief Financial Officer in 2001, he held financial management positions at FedEx Corporation, FedEx Corporate Services and FedEx Logistics. His prior affiliations include Caliber System, Inc., Roadway Services, Inc. and Ernst & Young. Mr. Brown is a member of the Board of Directors of The Davey Tree Expert Company and the Board of Advisors for Miller Transfer & Rigging. Our board of directors concluded that Mr. Brown should serve as a member of our board of directors because of his executive experience with transportation companies involved in freight and parcel delivery services, extensive experience with internal and external financial reporting, including filings with the SEC, interactions with audit committees, including as a member of the audit committee of The Davey Tree Expert Company, as well as executive level responsibility for risk management and human resources.

Christopher W. Jamroz has served as a director of our company since April 2019. Mr. Jamroz currently serves as the Executive Chairman of STG Holdings, LLC, a specialty 3PL and transportation services provider, and Chairman of the Board of CMS Info Systems, Ltd., a secure logistics company. Mr. Jamroz previously served as the President and Chief Operating Officer of GardaWorld Cash Services, the #1 currency supply chain, secure logistics and outsourced business services provider in North America, from 2010 to 2016. Prior to that time, Mr. Jamroz was at J.P. Morgan Chase in Canada from 2003 to 2010, ultimately serving as the Head of the Corporate Finance practice. Our board of directors concluded that Mr. Jamroz should serve as a member of our board of directors because of his executive and operational experience in the transportation industry and his knowledge of corporate finance.

Executive Officers

The following table sets forth the names, ages and positions held as of the date of this Annual Report on Form 10-K for each of our executive officers.



Name	Age	Position(s) Held
Curtis W. Stoelting	60	Chief Executive Officer and Director
Patrick J. Unzicker	49	Executive Vice President and Chief Financial Officer
Michael K. Rapken	59	Chief Information Officer
Robert M. Milane	66	General Counsel
Douglas J. Smith	50	Senior Vice President of Human Resources and Chief Compliance Officer
Frank L. Hurst	46	President-Roadrunner Freight
William R. Goodgion	56	President-Ascent International
Patrick K. McKay	52	Senior Vice President-Enterprise Fleet Services
Thomas D. Stenglein	55	President-Ascent On-Demand
Christopher M. Cook	45	President - Ascent Domestic
Micah L. Holst	43	Chief Commercial Officer - Ascent Global Logistics

Curtis W. Stoelting’s biography is set forth under the heading “Directors” above.

Each of our executive officers was appointed to serve until such officer’s resignation or removal.

Patrick J. Unzicker has served as our Executive Vice President and Chief Financial Officer since September 9, 2019. Prior to joining the company, Mr. Unzicker served Adtalem Global Education (NYSE: ATGE, formerly DeVry Education Group) from 2006 to 2019. He was Senior Vice President, Chief Financial Officer and Treasurer of Adtalem Global Education from 2016 to 2019, Vice President, Chief Accounting Officer and Treasurer from 2015 to 2016, Vice President, Finance and Chief Accounting Officer from 2012 to 2015, and Vice President and Controller from 2006 to 2012. Mr. Unzicker previously served as Vice President-Controller for Whitehall Jewelers, Inc. from 2003 to 2006, was Vice President, Finance of Galileo International from 2001 to 2002 and Senior Manager, Finance from 2000 to 2001, and held several accounting positions with Ryerson, Inc. from 1997 to 2000. He began his career at Price Waterhouse LLP in 1993.

Michael K. Rapken has served as our Chief Information Officer since December 2018. Prior to joining our company, Mr. Rapken served as Chief Technology Officer at Press Ganey Associates, a leading integrated solutions provider to the health care industry, from June 2014 to May 2018. Prior to his time at Press Ganey Associates, Mr. Rapken held leadership positions at Genesis10, a privately held national technology consulting firm, from January 2010 to June 2014, and as Chief Information Officer at YRC Worldwide (NASDAQ: YRCW), one of the largest transportation providers in North America, from October 2005 to June 2009. Prior to YRC Worldwide, Mr. Rapken had various positions in application development at Sprint from June 1988 to September 2005.

Robert M. Milane has served as our Chief Compliance Officer since April 2017 and as our General Counsel since November 2015. Mr. Milane has also served as our Executive Vice President of Risk Management since November 2015. Mr. Milane served as our Vice President of Risk Management from June 2014 to October 2015. Prior to joining our company, Mr. Milane served as Managing Director for Risk Management at FedEx Ground from 1999 to 2010 and as Assistant Vice President of Risk Management for Canal Insurance from 2011 to 2013.

Douglas J. Smith has served as our Senior Vice President of Human Resources since April 2019. Prior to joining our company, Mr. Smith served as Vice President of Human Resources at Allegheny Technologies, Inc. at the business unit, group and corporate levels from November 2012 to April 2019. Prior to that, Mr. Smith held human resources leadership roles at Sara Lee North American Fresh Bakery (now part of Bimbo Bakeries USA) from 2007 to 2012.

Frank L. Hurst has served as our President-Roadrunner Freight since June 2017. Mr. Hurst previously served as our Senior Vice President of Sales and Marketing of Roadrunner Freight from January 2017 to June 2017. Prior to joining our company, Mr. Hurst served as VP/GM for North American Corporation, a distributor of packaging products, equipment, and service based in Glenview, Illinois, from January 2014 to December 2016. From August 2012 to December 2013, Mr. Hurst served as Executive Vice President for Vitran Express, where he was responsible for the turnaround, sale, and transition of the US LTL operation. Prior to joining Vitran Express, Mr. Hurst spent 16 years at FedEx Freight, where he was most recently served as VP-Divisional Operations from July 2007 to August 2012.

William R. Goodgion has served as our President-Ascent Global Logistics since April 2015. Prior to joining our company,

Mr. Goodgion served as Managing Director-Operations (Central Region) for FedEx Trade Networks Transport & Brokerage, Inc., a subsidiary of FedEx Corporation, from December 2014 through April 2015, and as Managing Director-Global Distribution & Surface Transportation for FedEx Trade Networks Transport & Brokerage, Inc. from March 2000 through April 2015.

Patrick K. McKay has served as our Senior Vice President-Enterprise Fleet Services since February 2017 and was previously our President-Truckload Logistics from July 2014 until February 2017 and our President-Truckload Services from March 2012 to July 2014. Prior to joining our company, Mr. McKay served as a General Manager-Operations for the van truckload division of Schneider National, Inc. from 2008 to 2012. Prior to that, Mr. McKay held various leadership positions with FedEx Ground, Inc. from 1992 to 2008, most recently serving as a Division Managing Director.

Thomas D. Stenglein has served as our President, Ascent On-Demand since November 2016. Prior to his current position, Mr. Stenglein was the Chief Operating Officer and Chief Financial Officer for Active On-Demand from March 2013 to November 2016. Prior to that, Mr. Stenglein had leadership roles in Finance and Operations at Truesense Imaging and Eastman Kodak from 1989 to 2013.

Chris M. Cook has served as President, Ascent Domestic since March 2020. Prior to his current position, Mr. Cook served as President of Roadrunner Truckload Plus, joining in January of 2013. Prior to joining our company, Mr. Cook spent four years at R.R. Donnelley managing the independent agent model of the business. He also spent eight years prior to that with ABF Freight, fulfilling various sales and operations management roles.

Micah L. Holst has served as Chief Commercial Officer of Ascent Global Logistics since February 1, 2020. Prior to that, Mr. Holst was President of Ascent International from July 2013 to January 2020. Mr. Holst joined Ascent International (formerly Marisol International) in 2004 and served in operations and sales capacities from 2004 to 2013, prior to becoming President. Before joining Marisol International, Mr. Holst played four seasons of professional baseball in the San Francisco Giants organization.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our directors, executive officers, and persons who own more than 10% of a registered class of our securities to file with the SEC initial reports of ownership and reports of changes in ownership. Directors, executive officers, and greater than 10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.

Based solely upon our review of the copies of such forms that we received during the year ended December 31, 2019, and written representations that no other reports were required, we believe that each person who at any time during such year was a director, executive officer, or beneficial owner of more than 10% of our common stock complied with all Section 16(a) filing requirements during the year ended December 31, 2019, except that (i) the Form 4 filed by Christopher L. Doerr on April 18, 2019 was late; (ii) the Form 4s filed by Michael L. Gettle on February 15, 2019, May 29, 2019 and May 30, 2019 were late; (iii) the Form 4s filed by William Goodgion on May 29, 2019 and May 30, 2019 were late; (iv) the Form 4s filed by Frank Hurst on May 29, 2019 and May 30, 2019 were late; (v) the Form 3 filed by Dennis Matthews on September 9, 2019 was late; (vi) the Form 4s filed by Patrick McKay on May 29, 2019 and May 30, 2019 were late; (vii) the Form 4s filed by Robert Milane on May 29, 2019 and May 30, 2019 were late; (viii) the Form 3 and Form 4 filed by Peter Nicholson on September 9, 2019 were late; (ix) the Form 4 filed by Michael Rapken on September 9, 2019 was late; (x) the Form 4s filed by Terence R. Rogers on May 29, 2019 and May 30, 2019 were late; (xi) the Form 4s filed by Paul Schwind on May 29, 2019 and May 30, 2019 were late; (xii) the Form 4 filed by James D. Staley on February 20, 2019 was late; (xiii) the Form 3 filed by Tom Stenglein on October 16, 2019 was late; and (xiv) the Form 4s filed by Curtis W. Stoelting on May 29, 2019 and May 30, 2019 were late.

Code of Conduct - Availability of Corporate Governance Information

Our board of directors has adopted charters for our audit, compensation, and nominating/corporate governance committees describing the authority and responsibilities delegated to these committees by our board of directors. Our board of directors has also adopted corporate governance guidelines, a whistle blower policy, a code of business conduct and ethics, and a code of ethics for our chief executive officer and senior financial officers. We post on our website, at www.rrts.com, the charters of our audit, compensation, and nominating/corporate governance committees; our corporate governance guidelines; our whistle blower policy; our code of business conduct and ethics; our code of ethics for our chief executive officer and senior financial officers, and any amendments or waivers thereto. These documents are also available in print to any stockholder requesting a copy in writing from our secretary at Roadrunner Transportation Systems, Inc., 1431 Opus Place, Suite 530, Downers Grove, Illinois 60515.

Audit Committee and Audit Committee Financial Expert

We have a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The current members of our audit committee are Messrs. Brown (chairman), Jamroz, and Staley, each of whom satisfies the independence requirements under the NYSE listing standards and Rule 10A-3(b)(1) of the Exchange Act. Messrs. Brown and

Jamroz were appointed to the audit committee on May 22, 2019. Our board of directors has determined that Mr. Brown is an “audit committee financial expert” within the meaning of SEC regulations. Each member or contemplated member of our audit committee can read and understand fundamental financial statements in accordance with audit committee requirements. In arriving at this determination, our board of directors has examined each audit committee member’s or contemplated member’s professional experience and the nature of their employment in the corporate finance sector.



ITEM 11.	EXECUTIVE COMPENSATION

~~The~~As ~~information~~a ~~required~~company bywith ~~this~~a ~~Item~~public isfloat ~~included~~less than $250 million as of June 30, 2019, we qualified as a “smaller reporting company” as defined in Rule 405 under the Securities Exchange Act of 1934, as amended. A smaller reporting company may take advantage of certain reduced reporting requirements that are otherwise applicable generally to public companies. These reduced reporting requirements include reduced disclosure about our ~~definitive~~executive ~~Proxy~~compensation ~~Statement~~arrangements. ~~(see~~We ~~Item~~currently 10intend ~~above)~~to take advantage of some of these reduced reporting requirements available to a smaller reporting company. Accordingly, ~~and~~the isexecutive ~~incorporated~~compensation ~~herein~~information bycontained ~~reference~~below may be different than the information we have disclosed in prior years or that you receive from other public companies in which you invest.

Fiscal Year 2019 Summary Compensation Table

The following table sets forth compensation information for our named executive officers.



Name and Principal Position	Year	Salary		Bonus (2)		Stock Awards (3)(4)		Option Awards (5)		Non-Equity Incentive Plan Compensation (6)		All Other Compensation (7)		Total
Curtis W. Stoelting (1)	2019	$	571,000	$	—	$	14,695,795	$	946,275	$	—	$	3,859	$	16,216,929
Chief Executive Officer (8)	2018	$	571,000	$	265,515	$	560,700	$	—	$	—	$	3,409	$	1,400,624

Patrick J. Unzicker	2019	$	138,461	$	—	$	1,453,800	$	168,980	$	—	$	152	$	1,761,393
Executive Vice President and Chief Financial Officer (9)

Frank L Hurst	2019	$	335,000	$	—	$	2,673,997	$	113,821	$	—	$	9,070	$	3,131,888
President - Roadrunner Freight

Michael L. Gettle	2019	$	592,962	$	—	$	4,725,743	$	—	$	—	$	9,892	$	5,328,597
Former President, Chief Operating Officer and Secretary (10)	2018	$	571,000	$	265,515	$	560,700	—		$	—	$	9,024	$	1,406,239

Terence R. Rogers	2019	$	405,770	$	—	$	41,996	$	—	$	—	$	822	$	448,588
Former Executive Vice President and Chief Financial Officer (11)	2018	$	400,000	$	156,000	$	200,250	$	—	$	—	$	774	$	757,024


(1)	As set forth in more detail below, Mr. Stoelting’s 2019 total compensation included the following:

a. The “Stock Awards” column represents the awards of restricted stock units (“RSUs”) and performance-based restricted stock units (“PRSUs”) as follows:

(i) RSUs valued at $5.0 million (weighted average of $11.50 per share); and

(ii) PRSUs valued at $9.7 million (weighted average of $18.48/share).

b. The “Options Awards” column represents options to purchase common stock at an exercise price of $12.50 per share.

The PRSUs and options will not result in monetary value to Mr. Stoelting unless the price of our common stock is above $12.50 per share, which is substantially above the closing price on March 27, 2020 of $4.55 per share.


(2)	Amounts shown for 2018 reflect discretionary bonuses awarded for fiscal 2018, but not paid until 2019.

(3)

Amounts reflect the grant date fair value of stock awards. The grant date fair value is calculated in accordance with ASC Topic 718, “Compensation-Stock Compensation.” The fair value of RSUs is based on the closing market price of our common stock on the date of grant. The fair value of PRSUs is calculated using the Monte Carlo method. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. For a discussion of valuation assumptions, see Note 10, “Share-based Compensation” to our 2019 consolidated financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2019. These amounts reflect our accounting expense for these awards over the vesting period and do not correspond to the actual value that will be recognized by the named executive officers with respect to these awards.


(4)	Includes RSU awards totaling $5.0 million, $1.0 million, and $5.0 million to Messrs. Stoelting, Hurst, and Gettle, respectively. These grants vest over four years and were contemplated by the Compensation Committee to be the only RSU grants to those executive officers over that four year period.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Filing Compare · Roadrunner Transportation Systems, Inc.