##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, 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, 2010
  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.)4900 S. Pennsylvania Ave.Cudahy,
    Wisconsin

53110(Zip Code)(Address of Principal Executive
    Offices)   (414)
    615-1500
 (Registrants telephone number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, par value $.01 per share

The New York Stock Exchange   o þ
  o þ
  þ o
  Regulation S-T þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer o

Non-accelerated
    filer þ

Smaller reporting
    company o(Do not check if a smaller reporting company)   Rule 12b-2 o þ
      Documents
    Incorporated by Reference
  Form 10-K.




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##### 





ROADRUNNER
    TRANSPORTATION SYSTEMS, INC.
  ANNUAL
    REPORT ON
    FORM 10-K
  TABLE OF
    CONTENTS
   
 PART IITEM 1.

BUSINESS


1ITEM 1A.

RISK FACTORS


14ITEM 1B.

UNRESOLVED STAFF COMMENTS


19ITEM 2.

PROPERTIES


19ITEM 3.

LEGAL PROCEEDINGS


19ITEM 4.

RESERVED


20PART IIITEM 5.

MARKET FOR THE REGISTRANTS COMMON EQUITY,
    RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY
    SECURITIES


20ITEM 6.

SELECTED FINANCIAL DATA


22ITEM 7.

MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


24ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISK


35ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


35ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE


35ITEM 9A.

CONTROLS AND PROCEDURES


36ITEM 9B.

OTHER INFORMATION


36PART IIIITEM 10.

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE
    GOVERNANCE


36ITEM 11.

EXECUTIVE COMPENSATION


37ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


37ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
    AND DIRECTOR INDEPENDENCE


37ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES


37PART IVITEM 15.

EXHIBITS AND FINANCIAL STATEMENT
    SCHEDULES


37EX-21EX-23EX-31.1EX-31.2EX-32.1EX-32.2    Statement
    Regarding Forward-Looking Statements
  This report on
    Form 10-K
    contains forward-looking statements regarding future events or
    our future financial and operational performance.
    Forward-looking statements include statements regarding markets
    for our services; trends in revenues, margins, and estimated
    expenses; liquidity and anticipated cash needs and availability;
    and any statement that contains the words
    anticipate, believe, plan,
    forecast, foresee, estimate,
    project, expect, seek,
    target, intend, goal and
    other similar expressions. The forward-looking statements
    included in this report reflect our current expectations and
    beliefs, and 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 annual report
    or future quarterly reports, press releases or company
    statements will not be realized. In addition, the inclusion of
    any statement in this report does not constitute an admission by
    us that the events or circumstances described in such statement
    are material. Furthermore, we wish to caution and advise readers
    that these statements are based on assumptions that may not
    materialize and may involve risks and uncertainties, many of
    which are beyond our control, that could cause actual events or
    performance to differ materially from those contained or implied
    in these forward-looking statements. These risks and
    uncertainties include the business and economic risks described
    in Item 1A, Risk Factors.
  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 its subsidiaries.




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##### Table of Contents



PART I  ITEM 1.
    BUSINESS  Overview
  less-than-truckload, over-the-road over-the-road
    Less-than-Truckload. less-than-truckload point-to-point
  Truckload Brokerage. year-over-year.
  Transportation Management Solutions. time-sensitive
  Our
    Industry
  Over-the-Road
    Freight
  over-the-road U.S. over-the-road U.S. over-the-road
 1




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two-day
    Third-Party
    Logistics
  Logistics
    Quarterly
  Factors
    Important to Our Business
  over-the-road
  Agent Network and Sales Personnel. and/or
  Tonnage Levels and Capacity. over-the-road
  Purchased Transportation Costs. agreed-upon
 2




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agreed-upon
  Fuel.
  Pricing. over-the-road
  Our
    Strategy
    Gain New Customers.
  Increase Penetration with Existing
    Customers.
  Pursue Selective Acquisitions.
 3




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##### Table of Contents



Expand Truckload Capacity. over-the-road
  Continue Generating Free Cash Flows.
  Our
    Services
  shipment-by-shipment e-mail,
  Less-than-Truckload
    point-to-point
 4




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##### Table of Contents



Representative Asset-Based
 National Hub and Spoke LTL Model versus
 Non-Asset Based National
    Point-to-Point
    LTL Model
  Asset-Based

Non-Asset-BasedNational Hub and Spoke LTL Model

National
    Point-to-Point
    LTL ModelShipper to End User

Shipper to End User 5 different trucks

 2 to 3 different trucks 5 different drivers

 2 to 3 different drivers 4 service centers

 1 to 2 service centers 10 handlings (loading/unloading)

 4 to 6 handlings (loading/unloading) Standard 5 days

 3 to 5 days   
    
    Pickup.  In order to stay as close as possible
    to our customers, we prefer to handle customer pickups whenever
    cost-effective. We generally pick up freight within
    150 miles of one of our service centers, utilizing
    primarily city 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 (not for linehaul or
    our other LTL operations). In 2010, we picked up approximately
    82% 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 is a network of 17 service centers, as illustrated by the
    map below, 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 continually 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 at one of our service centers uses our technology
    system to optimize cost-efficiency and service by assigning the
    load to the appropriate third-party transportation provider,
    either an IC or purchased power provider. In 2010, ICs handled
    approximately 42% of our linehaul shipments. As industry-wide
    freight 5




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capacity tightens with an anticipated market rebound, we believe
    our recruitment and retention efforts will allow us to increase
    IC utilization in order to maintain service and cost stability.  
    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, and reduces
    delivery times by one to three days on average. In 2010, we
    delivered approximately 22% of LTL shipments through our service
    centers, 77% through our delivery agents, and 1% direct to end
    users.  
    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.    over-the-road point-to-point
  LTL
    Service Center and Delivery Agent Network
  
  Truckload
    Brokerage
  and/or
 6




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TL
    Dispatcher and Agent Network
  
  Company Dispatchers.
  Dispatch Office Expansion.
  Independent Brokerage Agents. and/or
 7




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40-70%
  Brokerage Agent Expansion.
  Transportation
    Management Solutions
    
    Procurement.  After an in-depth consultation
    and analysis with our customer to identify cost savings
    opportunities, we develop an estimate of our customers
    potential savings and cultivate a plan for implementation. If
    necessary, we manage a targeted bid process based on a
    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 call center, 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.
    Shipment Execution.  Our transportation
    specialists are adept at managing time-critical shipments. Our
    technology system prompts a specialist to hold less
    time-sensitive shipments until other complementary freight can
    be found to complete the shipping process in the most
    cost-effective manner. We maintain constant communication with
    third-party transportation providers from dispatch through final
    delivery. As a result, our expedited services are capable of
    meeting virtually any customer transit or delivery requirement.
    Finally, we 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 query 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,
    continually using our technology to identify incremental savings
    opportunities and efficiencies for our customers.   8




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Capacity
    agreed-upon
    Independent Contractors. over-the-road
    Purchased Power.
  Delivery Agents.
  Intermodal Capabilities.
  Domestic/International Air Carriers.
 9




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Customers
  year-over-year
  Sales and
    Marketing
      
    Less-than-Truckload.  Our
    LTL sales force of over 100 people consists of account
    executives, sales managers, inside sales representatives, and
    commission sales agents.
    Truckload Brokerage.  We have 44 dispatchers
    and 71 independent brokerage agents located primarily in the
    Eastern United States and Canada. We believe that this
    decentralized structure enables our salespeople to better serve
    our customers by developing an understanding of local and
    regional market conditions, as well as the specific
    transportation and logistics issues facing individual customers.
    Our dispatchers and brokerage agents seek additional business
    from existing customers and pursue new customers based on this
    knowledge and an understanding of the value proposition we can
    provide.
    Transportation Management Solutions.  We have
    50 TMS salespeople and agents. We will also utilize our LTL
    sales force to enhance the market reach and penetration of our
    TMS offering and to capitalize on the opportunity to cross-sell
    a broader menu of services to new and existing customers.  Competition
     10




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
    our comprehensive suite of transportation and logistics
    services, which allow us to offer à la carte or a
    one-stop value proposition to shippers of varying
    sizes and accommodate their diverse needs and preferred means of
    processing and communication;
    our non-asset based, variable cost business model, which allows
    us to generate strong free cash flows and focus greater
    attention on providing optimal customer service than on
    maintaining high levels of asset utilization;
    our focus on an expansive market of small to mid-size shippers
    who often lack the internal resources necessary to manage
    complex transportation and logistics requirements and whose
    freight volumes may not garner the same level of attention and
    customer service from many of our larger competitors;
    our technology systems, which allow us to provide scalable
    capacity and high levels 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
  over-the-road
  Technology
         11




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Employees
    Regulation
      24-month (hours-of-service
      Insurance
   12




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Executive
    Officers
    Name

Age

PositionMark A. DiBlasi


55


President, Chief Executive Officer, and DirectorPeter R. Armbruster


52


Vice President  Finance, Chief Financial Officer,
    Treasurer, and SecretaryBrian J. van Helden


42


Vice President  OperationsScott L. Dobak


48


Vice President  Sales and Marketing   Mark A. DiBlasi
  Peter R. Armbruster
  Brian J. van Helden
  Scott L. Dobak
  Available
    Information
  www.rrts.com Form 10-K, Form 10-Q, Form 8-K
 13




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ITEM 1A.
    RISK
    FACTORS    Fluctuations
    in the price or availability of fuel, a prolonged continuation
    in the upward trend of fuel prices, and limitations on our
    ability to collect LTL fuel surcharges may adversely affect our
    results of operations.
    A
    decrease in levels of capacity in the
    over-the-road
    freight sector could have an adverse impact on our
    business.
  over-the-road over-the-road hours-of-service
  A
    significant or prolonged economic downturn, particularly the
    recent downturn in the
    over-the-road
    freight sector, or a substantial downturn in our customers
    business, could adversely affect our revenue and results of
    operations.
  over-the-road over-the-road
 14




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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 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.  If we
    are unable to expand the number of our sales representatives and
    brokerage agents, or if a significant number of our existing
    sales representatives and brokerage agents leave us, our ability
    to increase our revenue could be negatively
    impacted.
      We may
    not be able to successfully execute our acquisition strategy,
    and any acquisitions that we undertake could be difficult to
    integrate, disrupt our business, dilute stockholder value, and
    adversely affect our results of operations.
      
    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; 15




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
    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.  Our
    reliance on ICs to provide transportation services to our
    customers could limit our expansion.
  hours-of-service over-the-road
  Our
    executive officers and key personnel are important to our
    business, and these officers and personnel may not remain with
    us in the future.
    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.
  less-than-truckload,
  One or
    more significant claims, our failure to adequately reserve for
    such claims, or the cost of maintaining our insurance for such
    claims, could have an adverse effect on our results of
    operations.
   16




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The
    cost of compliance with, liability for violations of, or
    modifications to existing or future governmental regulations
    could adversely affect our business and results of
    operations.
  hours-of-service
  Our
    operations are subject to various environmental laws and
    regulations, the violation of which could result in substantial
    fines or penalties.
    If our
    ICs are deemed by regulators to be employees, our business and
    results of operations could be adversely affected.
   17




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Our
    financial results may be adversely impacted by potential future
    changes in accounting practices.
  and/or and/or
  If we
    are unable to maintain and enhance our technology systems,
    demand for our services and our revenue could
    decrease.
    Seasonal
    sales fluctuations and weather conditions could have an adverse
    impact on our results of operations.
  lower-than-expected
  Terrorist
    attacks, anti-terrorism measures, and war could have broad
    detrimental effects on our business operations.
    If we
    fail to maintain adequate internal control over financial
    reporting in accordance with Section 404 of Sarbanes-Oxley,
    it could result in inaccurate financial reporting, sanctions, or
    securities litigation, or could otherwise harm our
    business.
   18




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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.
    Our
    growth and profitability may not continue, which may result in a
    decrease in our stock price.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES        ITEM 3.
    LEGAL
    PROCEEDINGS   19




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ITEM 4.
    RESERVED PART II  ITEM 5.
    MARKET
    FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
    MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES  Market
    Information on Common Stock
    High

LowFiscal 2010:First quarter


N/A



N/ASecond quarter (May 13  June 30, 2010)

$
14.47


$
13.25Third quarter

$
15.05


$
10.67Fourth quarter

$
14.89


$
10.34   Stockholders
    Dividends
   20




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Performance
    Graph
      COMPARISON
    OF 8 MONTH CUMULATIVE TOTAL RETURN* Among
    Roadrunner Transportation Systems Inc., the NASDAQ Composite
    Index
    and the NASDAQ Transportation Index
  
    *
    
    $100 invested on 5/13/10 in stock or 4/30/10 in index, including
    reinvestment of dividends.
    Fiscal year ending December 31. 21




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ITEM 6.
    SELECTED
    FINANCIAL DATA    Year Ended December 31,2010


2009


2008(1)


2007


2006(2)(In thousands, except per share amounts)Consolidated Statement of Operations Data:Revenues

$
632,018


$
483,322


$
565,907


$
538,007


$
399,441Purchased transportation costs


494,045



378,858



453,953



425,568



302,296Personnel and related benefits


61,853



52,621



58,282



55,354



49,716Other operating expenses


41,168



33,988



39,099



37,311



33,033Depreciation and amortization


3,114



2,967



2,465



1,840



1,072Acquisition transaction expenses


569



1,148











Restructuring and IPO related expenses


1,500







3,416







Operating income


29,769



13,740



8,692



17,934



13,324Interest on long-term debt


7,954



13,226



12,969



13,937



11,457Dividends on preferred stock subject to mandatory redemption


200



200



200



160



Loss on early extinguishment of debt


15,916











1,608



Income (loss) before provision (benefit) for income taxes


5,699



314



(4,477
)


2,229



1,867Provision (benefit) for income taxes


2,108



337



(1,139
)


1,294



1,184Net income (loss)


3,591



(23
)


(3,338
)


935



683Accretion of Series B preferred stock


765



1,950











Net income (loss) available to common stockholders

$
2,826


$
(1,973
)

$
(3,338
)

$
935


$
683Earnings (loss) per share available to common stockholders:Basic

$
0.11


$
(0.11
)

$
(0.20
)

$
0.06


$
0.05Diluted


0.11



(0.11
)


(0.20
)


0.06



0.05Pro Forma diluted earnings per share(3)


0.59















Weighted average common stock outstanding:Basic


25,779



17,656



17,061



15,114



13,205Diluted


26,777



17,656



17,061



15,134



13,205Consolidated Balance Sheet Data (at end of period):Total assets

$
348,297


$
333,281


$
285,883


$
255,880


$
259,711Total debt (including current maturities)


20,500



138,935



106,254



102,420



116,306Series A preferred stock subject to mandatory redemption


5,000



5,000



5,000



5,000



Redeemable common stock






1,740



1,740



1,765



1,865Total stockholders investment


348,297



333,281



129,987



103,870



102,317Other Data:EBITDA(4)

$
16,967


$
16,707


$
11,157


$
18,166


$
14,396Capital expenditures


2,500



2,292



1,168



1,867



1,052Working capital  current assets less current
    liabilities (end of period)


42,383



18,038



12,537



15,539



19,946Net cash provided by operating activities


2,110



778



802



12,470



9,516Net cash used in investing activities


(1,080
)


(34,216
)


(27,208
)


(3,187
)


(41,857
)Net cash (used in) provided by financing activities


(2,210
)


34,214



27,006



(11,535
)


34,285  22




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(1)
    
    On February 29, 2008, our controlling stockholder acquired
    all the outstanding capital stock of a group of TMS companies
    collectively referred to as GTS. On May 18, 2010, we
    acquired GTS by way of merger simultaneous with the consummation
    of our IPO. As such, because we were under common control with
    GTS as of February 29, 2008, the consolidated statements of
    operations, consolidated balance sheet, and other data for the
    periods presented include the results of GTS from
    February 29, 2008.(2)
    
    On October 4, 2006, our controlling stockholder acquired
    all the outstanding capital stock of a group of TL brokerage
    companies collectively referred to as Sargent. On March 14,
    2007, we acquired Sargent by way of merger. As such, because we
    were under common control with Sargent as of October 4,
    2006, the consolidated statements of operations, consolidated
    balance sheet, and other data for the periods presented include
    the results of Sargent from October 4, 2006.(3)
    
    Pro forma diluted earning per share is computed by dividing
    adjusted net income of $18,363, assuming the IPO and the sale of
    additional shares upon exercise of the underwriters
    overallotment option occurred at the beginning of 2010, and
    assuming an effective tax rate of 38%, by the diluted shares
    outstanding.(4)
    
    EBITDA represents earning before interest, taxes, depreciation,
    and amortization. Our Management uses EBITDA as a supplement
    measure in evaluating our operating performance and when
    determining executive incentive compensation. Our management
    believes 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 business. The calculation of EBITDA eliminates the
    effects of financing, income taxes, and the accounting effects
    of capital spending. These items may vary for different
    companies for reason unrelated to the overall operating
    performance of a companys business. EBITDA is not a
    financial measure presented in accordance with U.S. generally
    accepted accounting principles, or GAAP. Although our management
    uses EBITDA as a financial measure to assess the performance of
    our business compared to that of others in our industry, EBITDA
    has limitations as an analytical tool, and you should not
    consider it in isolation, or a substitute for analysis of our
    results as reported under GAAP.    Year Ended December 31,2010


2009


2008


2007


2006(In thousands)Net income (loss)

$
3,591


$
(23
)

$
(3,338
)

$
935


$
683Plus: Provision (benefit) for income taxes


2,108



337



(1,139
)


1,294



1,184Plus: Total interest expense


8,154



13,426



13,169



14,097



11,457Plus: Depreciation and amortization


3,114



2,967



2,465



1,840



1,072EBITDA

$
16,967


$
16,707


$
11,157


$
18,166


$
14,396
     Year Ended December 31,2010

2009

2008

2007

2006(In thousands)Loss on early extinguishment of debt

$
15,916


$



$



$
1,608


$
Restructuring and IPO related expenses


1,500







3,416







Acquisition transaction expenses


569



1,148












  23




---



##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS    Overview
      Less-than-Truckload. point-to-point
  Truckload Brokerage. year-over-year.
  Transportation Management Solutions.
  Recent
    Acquisitions
     24




---



##### Table of Contents



less-than-truckload
            Critical
    Accounting Policies and Estimates
    Goodwill
    and Other Intangibles
     25




---



##### Table of Contents



Income
    Taxes
      Revenue
    Recognition
         26




---



##### Table of Contents



Results
    of Operations
    Year Ended December 31,2010


2009


2008(In thousands, except for %)Revenues:LTL

$
409,914



64.9
%

$
316,119



65.4
%

$
366,527



64.8
%TL


158,724



25.1
%


134,815



27.9
%


171,419



30.3
%TMS


65,902



10.4
%


34,472



7.1
%


29,848



5.3
%Eliminations


(2,522
)


(0.4
)%


(2,084
)


(0.4
)%


(1,887
)


(0.3
)%Total


632,018



100.0
%


483,322



100.0
%


565,907



100.0
%Purchased transportation costs:LTL


307,721



75.1
%


235,602



74.5
%


279,289



76.2
%TL


140,380



88.4
%


119,050



88.3
%


153,419



89.5
%TMS


48,466



73.5
%


26,290



76.3
%


23,132



77.5
%Eliminations


(2,522
)


(0.4
)%


(2,084
)


(0.4
)%


(1,887
)


(0.3
)%Total


494,045



78.2
%


378,858



78.4
%


453,953



80.2
%Net revenues:(1)LTL


102,193



24.9
%


80,517



25.5
%


87,238



23.8
%TL


18,344



11.6
%


15,765



11.7
%


18,000



10.5
%TMS


17,436



26.5
%


8,182



23.7
%


6,716



22.5
%Total


137,973



21.8
%


104,464



21.6
%


111,954



19.8
%Other operating expenses:(2)LTL


78,856



19.2
%


69,047



21.8
%


80,060



21.8
%TL


11,141



7.0
%


10,771



8.0
%


11,781



6.9
%TMS


11,458



17.4
%


5,829



16.9
%


4,479



15.0
%Corporate


3,635



0.6
%


2,110



0.4
%


4,477



0.8
%Total


105,090



16.6
%


87,757



18.2
%


100,797



17.8
%Depreciation and amortization:LTL


1,676



0.4
%


1,716



0.5
%


1,410



0.4
%TL


744



0.5
%


656



0.5
%


593



0.3
%TMS


694



1.1
%


595



1.7
%


462



1.5
%Total


3,114



0.5
%


2,967



0.6
%


2,465



0.4
%Operating income:LTL


21,661



5.3
%


9,754



3.1
%


5,768



1.6
%TL


6,459



4.1
%


4,338



3.2
%


5,626



3.3
%TMS


5,284



8.0
%


1,758



5.1
%


1,775



5.9
%Corporate


(3,635
)


(0.6
)%


(2,110
)


(0.4
)%


(4,477
)


(0.8
)%Total


29,769



4.7
%


13,740



2.8
%


8,692



1.5
%Interest expense


8,154



1.3
%


13,426



2.8
%


13,169



2.3
%Loss on early extinguishment of debt


15,916



2.5
%






0.0
%






0.0
%Income (loss) before provision (benefit) for income taxes


5,699



0.9
%


314



0.1
%


(4,477
)


(0.8
)%Provision (benefit) for income taxes


2,108



0.3
%


337



0.1
%


(1,139
)


(0.2
)%Net income (loss)


3,591



0.6
%


(23
)


(0.0
)%


(3,338
)


(0.6
)%Accretion of Series B preferred stock


765



0.1
%


1,950



0.4
%






0.0
%Net income (loss) available to common stockholders

$
2,826



0.4
%

$
(1,973
)


(0.4
)%

$
(3,338
)


(0.6
)%     (1)
    
    Reflects revenues less purchased transportation costs.(2)
    
    Reflects the sum of personnel and related benefits, other
    operating expenses, acquisition transaction expenses, and
    restructuring and IPO related expenses. 27




---



##### Table of Contents



Year
    Ended December 31, 2010 Compared to Year Ended
    December 31, 2009
  Revenues
    year-over-year year-over-year
  year-over-year
    Purchased
    Transportation Costs
          Other
    Operating Expenses
     28




---



##### Table of Contents



Depreciation
    and Amortization
    Operating
    Income
          Interest
    Expense
    Loss on
    Early Extinguishment of Debt
   29




---



##### Table of Contents



Income
    Tax
    Net
    Income (Loss) Available to Common Stockholders
    Year
    Ended December 31, 2009 Compared to Year Ended
    December 31, 2008
  Revenues
    over-the-road year-over-year.
      Purchased
    Transportation Costs
         30




---



##### Table of Contents



Other
    Operating Expenses
            Depreciation
    and Amortization
    Operating
    Income
          Interest
    Expense
    Income
    Tax
   31




---



##### Table of Contents



Net Loss
    Available to Common Stockholders
    Liquidity
    and Capital Resources
                   32




---



##### Table of Contents



Cash
    Flows
    Year Ended December 31,2010


2009


2008Net cash provided by (used in):Operating activities

$
2,110


$
778


$
802Investing activities


(1,080
)


(34,216
)


(27,208
)Financing activities


(2,210
)


34,214



27,006Net change in cash and cash equivalents

$
(1,180
)

$
776


$
600
   Cash
    Flows from Operating Activities
      Cash
    Flows from Investing Activities
    Cash
    Flows from Financing Activities
   33




---



##### Table of Contents



Quarterly
    Results of Operations
    First

Second

Third

FourthQuarter(1)

Quarter

Quarter

Quarter(In thousands, except per share data)Year Ended December 31, 2010:Total revenues

$
142,762


$
159,770


$
163,690


$
165,796Net revenues (total revenues less purchased transportation costs)


32,095



35,334



35,061



35,483Income (loss) before income taxes


2,488



(10,581
)


7,375



6,417Net income (loss) available to common stockholders


942



(6,377
)


4,384



3,877Earnings (loss) per share:Basic

$
0.05


$
(0.25
)

$
0.15


$
0.13Diluted


0.05



(0.25
)


0.14



0.12Year ended December 31, 2009:Total revenues

$
110,524


$
120,196


$
124,670


$
127,932Net revenues (total revenues less purchased transportation costs)


23,833



26,569



26,520



27,542(Loss) income before income taxes


(997
)


1,561



987



(1,237
)Net (loss) income available to common stockholders


(1,210
)


381



126



(1,270
)(Loss) earnings per share:Basic

$
(0.07
)

$
(0.02
)

$
0.01


$
0.07Diluted


(0.07
)


(0.02
)


0.01



0.07     (1)
    
    On February 29, 2008, our controlling stockholder acquired
    all the outstanding capital stock of GTS. On May 18, 2010,
    we acquired GTS by way of merger simultaneous with the
    consummation of our IPO. As such, because we were under common
    control with GTS as of February 29, 2008, the consolidated
    statements of operations, consolidated balance sheet, and other
    data for the periods presented include the results of GTS from
    February 29, 2008.  Contractual
    Obligations and Commercial Commitments
    Payments Due by PeriodLess Than








More ThanTotal


1 Year


1-3 Years


3-5 Years


5 YearsLong-term debt

$
20,500


$



$



$
20,500


$
Capital leases


3,270



688



635



561



1,389Operating leases


30,734



6,120



10,397



8,443



5,774Preferred stock subject to mandatory redemption


5,142



200



4,942







Total

$
59,646


$
7,006


$
15,974


$
29,504


$
7,163  34




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
    Seasonality
  over-the-road
  Effects
    of Inflation
    ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Commodity
    Risk
    Interest
    Rate Risk
    ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  page F-1
  ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE   35




---



##### Table of Contents



ITEM 9A.
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e) Rules 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
    Changes
    in Internal Control Over Financial Reporting
    Inherent
    Limitations on Effectiveness of Controls
    ITEM 9B.
    OTHER
    INFORMATION  Form 8-K Form 8-K Form 10-K.
 PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE   36




---



##### Table of Contents



ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  (a)
    Financial
    Statements and Financial Statement Schedules  page F-1
    (b)
    Exhibits  ExhibitNumber

Exhibit3
.1

Amended and Restated Certificate of Incorporation(1)3
.2

Second Amended and Restated Bylaws(1)4


Second Amended and Restated Stockholders Agreement, dated
    as of March 14, 2007, by and among the Registrant and the
    stockholders named therein(2)10
.1

Employment Letter Agreement, by and between the Registrant and
    Mark A. DiBlasi(3)10
.2

Employment Letter Agreement, by and between the Registrant and
    Peter R. Armbruster(3)10
.3

Employment Letter Agreement, by and between the Registrant and
    Brian J. van Helden(4)10
.4

Employment Letter Agreement, by and between the Registrant and
    Scott L. Dobak(4)10
.5

2010 Incentive Compensation Plan(1)10
.6

Form of Indemnification Agreement(1)10
.7

Agreement and Plan of Merger, dated as of May 7, 2010, by
    and among the Registrant; GTS Transportation Logistics, Inc.;
    and Group Transportation Services Holdings, Inc.(1)10
.8

Advisory Agreement, by and between the Registrant and Thayer
    | Hidden Creek Management, L.P.(1)10
.9

Commitment letter, dated April 19, 2010, from U.S. Bank
    National Association to the Registrant(5)10
.10

Credit Agreement, dated May 18, 2010, among the Registrant,
    the Lenders (as defined therein), and U.S. Bank National
    Association, a national banking association, as LC Issuer, Swing
    Line Lender, and Administrative Agent(6) 37




---



##### Table of Contents



ExhibitNumber

Exhibit21


List of Subsidiaries23


Consent of Independent Registered Public Accounting Firm31
.1

Certification of Chief Executive Officer pursuant to Exchange
    Act
    Rules 13a-14(a)
    and 15d-14(a)31
.2

Certification of Chief Financial Officer pursuant to Exchange
    Act
    Rules 13a-14(a)
    and 15d-14(a)32
.1

Section 1350 Certification of Chief Executive Officer32
.2

Section 1350 Certification of Chief Financial Officer     (1)
    
    Incorporated by reference to the registrants registration
    statement on
    Form S-1
    (Registration
    No. 333-152504)
    as filed with the SEC on May 7, 2010.(2)
    
    Incorporated by reference to the registrants registration
    statement on
    Form S-1
    (Registration
    No. 333-152504)
    as filed with the SEC on September 11, 2008.(3)
    
    Incorporated by reference to the registrants registration
    statement on
    Form S-1
    (Registration
    No. 333-152504)
    as filed with the SEC on March 4, 2010.(4)
    
    Incorporated by reference to the registrants registration
    statement on
    Form S-1
    (Registration
    No. 333-152504)
    as filed with the SEC on April 5, 2010.(5)
    
    Incorporated by reference to the registrants registration
    statement on
    Form S-1
    (Registration
    No. 333-152504)
    as filed with the SEC on April 30, 2010.(6)
    
    Incorporated by reference to the registrants Current
    Report on
    Form 8-K
    as filed with the SEC on May 20, 2010. 38




---



##### Table of Contents



SIGNATURES
      By:
    /s/  Mark
    A. DiBlasi         Signature

Title

Date/s/  Mark
    A. DiBlasiMark
    A. DiBlasi

President, Chief Executive Officer, and Director

March 30, 2011/s/  Peter
    R. ArmbrusterPeter
    R. Armbruster

Vice President  Finance, Chief Financial Officer,
    Treasurer, and Secretary (Principal Financial and Accounting
    Officer)

March 30, 2011/s/  Scott
    D. RuedScott
    D. Rued

Chairman of the Board

March 30, 2011/s/  Christopher
    L. DoerrChristopher
    L. Doerr

Director

March 30, 2011/s/  Ivor
    J. EvansIvor
    J. Evans

Director

March 30, 2011/s/  James
    D. StaleyJames
    D. Staley

Director

March 30, 2011/s/  William
    S. UrkielWilliam
    S. Urkiel

Director

March 30, 2011/s/  Chad
    M. UtrupChad
    M. Utrup

Director

March 30, 2011/s/  Judith
    A. VijumsJudith
    A. Vijums

Director

March 30, 2011/s/  James
    L. WelchJames
    L. Welch

Director

March 30, 2011  39




---



##### Table of Contents



INDEX TO
    FINANCIAL STATEMENTS
  ROADRUNNER
    TRANSPORTATION SYSTEMS, INC.
 AND
    SUBSIDIARIES
  Reports of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets


F-3Consolidated Statements of Operations


F-4Consolidated Statements of Stockholders
    Investment


F-5Consolidated Statements of Cash Flows


F-6Notes to Consolidated Financial Statements


F-7  F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM            
    F-2




---



##### Table of Contents



ROADRUNNER
    TRANSPORTATION SYSTEMS, INC.CONSOLIDATED BALANCE SHEETS
  December 31,2010


2009(In thousands)ASSETSCURRENT ASSETS:Cash and cash equivalents

$
996


$
2,176Accounts receivable, net


73,222



57,887Deferred income taxes


6,367



1,578Prepaid expenses and other current assets


10,414



8,501Total current assets


90,999



70,142PROPERTY AND EQUIPMENT, NET


6,894



7,518OTHER ASSETS:Goodwill


246,888



244,671Other noncurrent assets


3,516



10,950Total other assets


250,404



255,621TOTAL ASSETS

$
348,297


$
333,281LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS
    INVESTMENTCURRENT LIABILITIES:Current maturities of long-term debt

$



$
8,768Accounts payable


37,241



31,184Accrued expenses and other liabilities


11,375



12,152Total current liabilities


48,616



52,104LONG-TERM DEBT,net of current maturities


20,500



130,167OTHER LONG-TERM LIABILITIES


8,492



4,627PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION


5,000



5,000Total liabilities


82,608



191,898COMMITMENTS AND CONTINGENCIES (NOTE 9)
    REDEEMABLE COMMON STOCKRedeemable common stock $.01 par value; 260 shares
    issued and outstanding






1,740STOCKHOLDERS INVESTMENT:Series B convertible preferred stock; 1,792 shares
    issued and outstanding






13,950Class A common stock $.01 par value;
    14,567 shares issued and outstanding






147Class B common stock $.01 par value; 299 shares
    authorized; 283 shares issued and outstanding






3Common stock $.01 par value; 100,000 shares
    authorized; 30,147 and 3,092 shares issued and outstanding


301



31Additional paid-in capital


262,088



125,803Retained earnings (deficit)


3,300



(291
)Total stockholders investment


265,689



139,643TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS
    INVESTMENT

$
348,297


$
333,281    F-3




---



##### Table of Contents



ROADRUNNER
    TRANSPORTATION SYSTEMS, INC.CONSOLIDATED STATEMENTS OF OPERATIONS
  Year Ended December 31,2010


2009


2008(In thousands, except per share amounts)Revenues

$
632,018


$
483,322


$
565,907Operating expenses:Purchased transportation costs


494,045



378,858



453,953Personnel and related benefits


61,853



52,621



58,282Other operating expenses


41,168



33,988



39,099Depreciation and amortization


3,114



2,967



2,465Acquisition transaction expenses


569



1,148



Restructuring and IPO related expenses


1,500







3,416Total operating expenses


602,249



469,582



557,215Operating income


29,769



13,740



8,692Interest expense:Interest on long-term debt


7,954



13,226



12,969Dividends on preferred stock subject to mandatory redemption


200



200



200Total interest expense


8,154



13,426



13,169Loss on early extinguishment of debt


15,916







Income (loss) before provision (benefit) for income taxes


5,699



314



(4,477
)Provision (benefit) for income taxes


2,108



337



(1,139
)Net income (loss)


3,591



(23
)


(3,338
)Accretion of Series B preferred stock


765



1,950



Net income (loss) available to common stockholders

$
2,826


$
(1,973
)

$
(3,338
)Earnings (loss) per share available to common
    stockholders:Basic

$
0.11


$
(0.11
)

$
(0.20
)Diluted

$
0.11


$
(0.11
)

$
(0.20
)Weighted average common stock outstanding:Basic


25,779



17,656



17,061Diluted


26,777



17,656



17,061    F-4




---



##### Table of Contents






ROADRUNNER
    TRANSPORTATION SYSTEMS, INC.CONSOLIDATED STATEMENTS OF STOCKHOLDERS
    INVESTMENT
  AccumulatedSeries B Convertible




















Additional


Retained


Other


TotalPreferred Stock


Common Stock


Class A Common Stock


Class B Common Stock


Paid-In


Earnings


Comprehensive


StockholdersShares


Amount


Shares


Amount


Shares


Amount


Shares


Amount


Capital


(Deficit)


Income


Investment(In thousands, except per share amounts)BALANCE, December 31, 2007





$







$




14,567,522


$
147



282,502


$
3


$
100,649


$
3,070


$
1


$
103,870Issuance of Series B preferred stock


1,791,768



12,000







































12,000Issuance of Common Stock










2,358,932



24



















16,606











16,630Share-based compensation


































835











835Purchase and cancellation of common stock


































(9
)










(9
)Comprehensive loss:Net change in unrealized gains and losses










































(1
)


(1
)Net loss






































(3,338
)






(3,338
)Total comprehensive loss














































(3,339
)BALANCE, December 31, 2008


1,791,768


$
12,000



2,358,932


$
24



14,567,522


$
147



282,502


$
3


$
118,081


$
(268
)

$



$
129,987Accretion of Series B preferred stock (15% per annum)






1,950



























(1,950
)










Issuance of Common Stock










732,645



7



















5,158











5,165Issuance of warrants


































3,000











3,000Share-based compensation


































714











714Forgiveness of payable to affiliates


































800











800Net loss






































(23
)






(23
)BALANCE, December 31, 2009


1,791,768


$
13,950



3,091,577


$
31



14,567,522


$
147



282,502


$
3


$
125,803


$
(291
)

$



$
139,643Accretion of Series B preferred stock (15% per annum)






765



























(765
)










Issuance of Common Stock










10,002,707



98



















121,875











121,973Conversion of Series B Convertible Preferred Stock to
    Common Stock


(1,791,768
)


(14,715
)


2,202,497



22



















14,693











Conversion of Class A Common Stock to Common Stock










14,567,522



147



(14,567,522
)


(147
)






















Conversion of Class B Common Stock to Common Stock










282,502



3











(282,502
)


(3
)














Share-based compensation


































482











482Net income






































3,591







3,591BALANCE, December 31, 2010





$




30,146,805


$
301






$







$



$
262,088


$
3,300


$



$
265,689     F-5




---



##### Table of Contents



ROADRUNNER
    TRANSPORTATION SYSTEMS, INC.
  CONSOLIDATED STATEMENTS OF CASH
    FLOWS
  Year Ended December 31,2010


2009


2008(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)

$
3,591


$
(23
)

$
(3,338
)Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation and amortization


3,817



3,681



2,901Gain on disposal of buildings and equipment


(207
)


(35
)


Loss on early extinguishment of debt


2,224







Deferred interest


2,728



2,771



1,163Share-based compensation


482



714



835Provision for bad debts and freight bill adjustments


938



1,186



737Deferred tax benefit


(1,777
)


(80
)


(1,422
)Changes in:Accounts receivable


(15,967
)


(3,998
)


5,431Prepaid expenses and other assets


(1,166
)


(1,305
)


(847
)Accounts payable


5,659



(669
)


(5,168
)Accrued expenses and other liabilities


1,788



(1,464
)


510Net cash provided by operating activities


2,110



778



802CASH FLOWS FROM INVESTING ACTIVITIES:Restricted cash


4,066



934



(5,000
)Additional payments for acquisition earnouts










499Acquisition of business, net of cash acquired


(2,910
)


(32,957
)


(20,604
)Capital expenditures


(2,500
)


(2,292
)


(1,168
)Proceeds from sale of buildings and equipment


264



99



63Net cash used in investing activities


(1,080
)


(34,216
)


(27,208
)CASH FLOWS FROM FINANCING ACTIVITIES:Borrowings under old revolving credit facilities


28,810



73,400



136,155Payments under old revolving credit facilities


(64,470
)


(66,865
)


(136,775
)Borrowings under new revolving credit facilities (net of
    issuance costs)


58,989







Payments under new revolving credit facilities


(39,369
)






Long-term debt borrowings


1,184



29,000



7,827Long-term debt payments


(107,213
)


(6,475
)


(5,600
)Proceeds from issuance of common stock (net of issuance costs)


120,232



5,165



13,430Proceeds from issuance of preferred stock










12,000Repurchase and retirement of stock










(34
)Reduction of capital lease obligation


(373
)


(11
)


3Net cash (used in) provided by financing activities


(2,210
)


34,214



27,006NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS


(1,180
)


776



600CASH AND CASH EQUIVALENTS:Beginning of period


2,176



1,400



800End of period

$
996


$
2,176


$
1,400SUPPLEMENTAL CASH FLOWS INFORMATION:Cash paid for interest

$
9,153


$
10,972


$
11,221Cash paid for income taxes (net of refunds)

$
321


$
470


$
(71
)Noncash issuance of common stock for acquisition

$



$



$
3,200Noncash Series B convertible preferred stock dividend

$
765


$
1,950


$
Noncash forgiveness of payable to affiliates

$



$
800


$
Noncash notes and warrants issued for acquisition of business
    (face amount)

$



$
3,000


$
    F-6




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes
    to Consolidated Financial Statements
  1.
    Organization,
    Nature of Business and Significant Accounting Policies  Nature of
    Business
  less-than-truckload
    Principles
    of Consolidation
    Use of
    Estimates
    Segment
    Reporting
    Cash and
    Cash Equivalents
   F-7




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
    Restricted
    Cash
    Accounts
    Receivable
    Valuation
    and Qualifying Accounts
    Year Ended December 31,2010


2009


2008Beginning balance

$
1,200


$
899


$
1,447Acquisitions


14



79



Provision, charged to expense


938



1,186



737Write-offs, less recoveries


(628
)


(964
)


(1,285
)Ending balance

$
1,524


$
1,200


$
899   Property
    and Equipment
    Buildings and leasehold improvements


5-15 yearsFurniture and fixtures


5 yearsEquipment


5 years      F-8




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
  Goodwill
    and Other Intangibles
        Debt
    Issue Costs
    Stock-Based
    Compensation
    Income
    Taxes
    Fair
    Value of Financial Instruments
   F-9




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
    Revenue
    Recognition
          Insurance
      Derivative
    Financial Instruments
   F-10




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
    2.
    Acquisitions          less-than-truckload
   F-11




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
    Mesca


GNTS


Bullet


AlphaAccounts receivable

$
1,895


$
706


$
3,940


$
519Other current assets


69











8Property and equipment


170







170



25Goodwill


8,986



1,643



26,068



1,869Customer relationship intangible assets


246







800



Other noncurrent assets


1



1



46



Accounts payable and other liabilities


(4,010
)


(819
)


(3,819
)


(511
)Total

$
7,357


$
1,531


$
27,205


$
1,910       3.
    Property
    and Equipment    2010


2009Land and improvements

$
47


$
47Building and leasehold improvements


2,439



2,172Furniture and fixtures


5,742



5,248Equipment


8,031



7,282Gross property and equipment


16,259



14,749Less: Accumulated depreciation


(9,365
)


(7,231
)Property and equipment, net

$
6,894


$
7,518     Capital
    Lease
    2010


2009Building and equipment

$
2,099


$
2,074Less: Accumulated amortization


(620
)


(320
)Total

$
1,479


$
1,754  F-12




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
    AmountYear Ending:2011

$
6862012


3672013


2682014


2762015


285Thereafter


1,389Total minimum lease payments


3,270Less: amount representing interest


(1,610
)Present value of net minimum lease payments(1)

$
1,660     (1)
    
    Reflected in the consolidated balance sheets as current other
    liabilities and other long-term liabilities of $0.4 million
    and $1.3 million, respectively.  4.
    Goodwill
    and Intangible Assets      LTL


TL


TMS


TotalGoodwill balance as of December 31, 2008

$
159,339


$
25,776


$
23,208


$
208,323Acquisition of Bullet


25,719











25,719Acquisition of Mesca










8,986



8,986Acquisition of GNTS










1,643



1,643Goodwill balance as of December 31, 2009


185,058



25,776



33,837



244,671Acquisition of Alpha










1,869



1,869Adjustment to the Bullet acquisition


348











348Goodwill balance as of December 31, 2010

$
185,406


$
25,776


$
35,706


$
246,888  F-13




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
    December 31,2010


2009Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingAmount


Amortization


Value


Amount


Amortization


ValueTL

$
1,800


$
1,530


$
270


$
1,800


$
1,170


$
630LTL


800



160



640



800







800TMS


546



232



314



546



122



424Total customer relationships

$
3,146


$
1,922


$
1,224


$
3,146


$
1,292


$
1,854     Amount2011

$
5402012


2702013


2192014


195Total

$
1,224   5.
    Restructuring
    and IPO Related Expenses    2010


2009


2008Severance and related costs

$



$



$
220Other restructuring costs










589IPO related expenses


1,500







2,607Total restructuring and IPO expenses

$
1,500


$



$
3,416  F-14




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
    Year Ended December 31,2010


2009


2008Beginning accrual balance

$
66


$
467


$
LTL segment costs incurred










809LTL segment severance and related cost payments










(220
)LTL segment other restructuring cost payments


(66
)


(401
)


(122
)Ending accrual balance

$



$
66


$
467   6.
    Fair
    Value Measurement    Level 1
  Level 2
  Level 3
      December 31, 2009Level 1


Level 2


Level 3Contingent purchase price related to acquisitions

$



$



$
2,705Total liabilities at fair value

$



$



$
2,705   December 31, 2010Level 1


Level 2


Level 3Contingent purchase price related to acquisitions

$



$



$
2,977Total liabilities at fair value

$



$



$
2,977       Balance as of December 31, 2009

$
2,705Adjustment to contingent purchase obligation


272Balance as of December 31, 2010

$
2,977  F-15




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
   7.
    Long-Term
    Debt and Interest Rate Caps  Long-Term
    Debt
    2010


2009Senior debt:Revolving credit facility

$
20,500


$
Revolving credit facility  RRTS






35,660Revolving credit facility  GTS






950Term Loans  RRTS






34,500Term loans  GTS






9,925Total senior debt


20,500



81,035Subordinated notes






41,134Junior subordinated notes, net of unaccreted discount of
    $3.0 million






16,766Total debt


20,500



138,935Less: Current maturities






(8,768
)Total long-term debt, net of current maturities

$
20,500


$
130,167   2010
      2009
   F-16




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
            8.
    Stockholders
    Investment  Common
    Stock
       F-17




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
    Form S-3 Form S-3
    Warrants
    to Acquire Common Stock
      9.
    Redeemable
    Common Stock    10.
    Preferred
    Stock  Series A
    Redeemable Preferred Stock
   F-18




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
    Series B
    Convertible Preferred Stock
    11.
    Stock-Based
    Compensation           F-19




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
    Year Ended December 31,2010


2009

2008Risk free interest rate





2.6% - 3.1%

2.7% - 3.2%Dividend yield







Expected volatility





36.5% - 42.2%

33.7% - 33.8%Expected life (years)





6

6Weighted average fair value of stock options granted





$1.64

$2.26     WeightedAverageWeighted


RemainingAverage


Contractual


AggregateExercise


Term


IntrinsicShares


Price


(Years)


Value(In thousands)Outstanding at December 31, 2007


1,613,244


$
11.17



8.1


$
Granted


360,464



8.61Exercised






Forfeited


(67,190
)


6.70Outstanding at December 31, 2008


1,906,518


$
10.84



7.6


$
Granted


159,767



12.36Exercised






Forfeited


(7,466
)


6.70Outstanding at December 31, 2009


2,058,819


$
10.98



6.8


$
Granted






Exercised


(90,834
)


7.08Forfeited


(24,500
)


10.57Outstanding at December 31, 2010


1,943,485


$
11.16



5.8


$
6,414      F-20




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
   12.
    Earnings
    (Loss) Per Share      Year Ended December 31,2010


2009


2008Basic weighted average stock outstanding


25,779



17,656



17,061Effect of dilutive securities:Employee stock options


453







Warrants


545







Dilutive weighted average stock outstanding


26,777



17,656



17,061     13.
    Income
    Taxes    Year Ended December 31,2010


2009


2008Current:Federal

$



$
(61
)

$
(23
)Foreign, state and local


331



478



306Deferred:Federal


1,859



32



(1,376
)Foreign, state and local


(82
)


(112
)


(46
)Provision (benefit) for income taxes

$
2,108


$
337


$
(1,139
)  F-21




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
    Year Ended December 31,2010


2009


2008Statutory federal rate

$
1,938


$
108


$
(1,523
)Meals and entertainment


114



78



142State income taxes  net of federal benefit


195



185



(126
)Tax credit


(85
)


(195
)


Canadian income taxes


50



2



5Preferred dividend


68



68



68Other


(172
)


91



295Total

$
2,108


$
337


$
(1,139
)     2010


2009Current deferred income tax assets:Net operating losses

$
5,100


$
Accounts receivable


605



426Accounts payable and accrued expenses


662



1,152Total

$
6,367


$
1,578Noncurrent deferred income tax assets (liabilities):Net operating losses

$
10,513


$
14,099Goodwill


(15,758
)


(12,421
)Other, net


551



194Total

$
(4,694
)

$
1,872        F-22




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
   14.
    Commitments
    and Contingencies  Employee
    Benefit Plans
          Operating
    Leases
      Year Ending

Amount2011

$
6,1202012


5,7482013


4,6492014


4,3362015


4,107Thereafter


5,774   Contingencies
   F-23




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
    15.
    Related
    Party Transactions            16.
    Segment
    Reporting     F-24




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
    Year Ended December 31,2010


2009


2008Revenues:LTL

$
409,914


$
316,119


$
366,527TL


158,724



134,815



171,419TMS


65,902



34,472



29,848Eliminations


(2,522
)


(2,084
)


(1,887
)Total

$
632,018


$
483,322


$
565,907Operating Income:LTL

$
21,661


$
9,754


$
5,768TL


6,459



4,338



5,626TMS


5,284



1,758



1,775Corporate


(3,635
)


(2,110
)


(4,477
)Total operating income

$
29,769


$
13,740


$
8,692Interest expense


8,154



13,426



13,169Loss on early extinguishment of debt


15,916







Income (loss) before provision (benefit) for income taxes

$
5,699


$
314


$
(4,477
)Depreciation and Amortization:LTL

$
1,676


$
1,716



1,410TL


744



656



593TMS


694



595



462Total

$
3,114


$
2,967


$
2,465Capital Expenditures:LTL

$
1,323


$
1,840


$
812TL


987



406



286TMS


90



46



70Total

$
2,500


$
2,292


$
1,168   December 31,2010


2009Total Assets:LTL

$
259,706


$
245,508TL


49,533



45,967TMS


44,905



42,520Corp.






Eliminations


(5,847
)


(714
)Total

$
348,297


$
333,281  F-25




---



##### Table of Contents



Roadrunner
    Transportation Systems, Inc. and Subsidiaries
  Notes to
    Consolidated Financial Statements  (Continued)
   17.
    Subsequent
    Event   F-26