As we begin a new year, no doubt each of us will stop and reflect what has been accomplished within our companies for the previous year. If your company is like mine, you have seen the first half of 2006 was outstanding from a revenue and shipment count. However, as we moved into the third and fourth quarters of 2006, the economy began to soften and seems to have remained that way. One economist recently stated that he sees the first half of 2007 staying a little soft as well, with shipments picking up around mid-year. We surely hope that he is wrong and shipment count picks up before mid- year.

Unlike the economy that has gotten a little soft, I am happy to announce that the TRMG group has continued to gain strength for all of 2006. Our meeting in San Antonio last fall proved that we can come together as a national transportation group, as was evident by those in attendance. The vision of TRMG has always been to have a unified transportation industry, which would include all modes of transportation; such as LTL, TL, Air Express and Cargo, Railroads, small packages, 3PLs, Truck & Trailer Leasing and associates which consist of companies such as collection agencies, software providers or any company that is directly involved in our industry. Over the past months since San Antonio, our host, NACM Houston, has worked diligently to review and revise by-laws for every group interested in forming a national transportation group. Their work is deeply appreciated and will enable TRMG to go to the next level at our meeting in Savannah this Spring.

Over the next few months, I will continue to work with our current TRMG leadership council to finalize the structure for our group going forward. We will be in a position for the Spring conference to clearly communicate how the new structure will look and how it will benefit everyone that is a member of TRMG. You do not want to miss this meeting!

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That’s our conference theme for the upcoming Savannah Transportation Revenue Management Conference. We’re all asked to be that everyday; when we gather for on-target education sessions and peer networking, we come back to the company and the job ready to be…better, smarter, faster.

The education line-up is as first rate as you have come to expect from TRMG Conferences and we continue to offer the experience at the most affordable prices anywhere….you don’t want to miss it!

As a special treat, our opening event will culminate in a reception at the mansion that was the basis of the book and movie "Midnight in the Garden of Good & Evil."

The compiled results will be presented in Savannah….be there!

News from the Credit World

Masson is President of The Resource Alliance, a training and consulting firm specializing in treasury management, electronic commerce, international finance, sales and sales management, retirement investments and planning and business process redesign. Over the past 20 years, he has been providing business and financial consulting and training services to a wide variety of corporations, financial institutions and not-for-profit organizations in the U.S., Canada and abroad. Masson has an extensive resume that includes teaching, speaking and writing articles and books on various financial subjects.

He mentioned that there were three types of accounting: managerial, tax and financial. In managerial accounting, the goal is to provide information to the company's executives about the financial strengths and weakness of the organization. "It's considered proprietary and internal to the company," Masson said. Tax accounting is done primarily "to minimize a company's tax liability." Financial accounting is used to produce the books that are provided to the general public, to the investors and to the SEC. "Companies use different types of accounting for different purposes," he added. He provided the example of the depreciation of assets. For tax purposes, accelerated depreciation may be used to reduce the tax liability of the company in the first few years, while for investors, straight-line depreciation may be used.

There are two types of accounting methods, which are cash and accrual accounting. Masson said that cash accounting recognized expenses and revenues when cash is actually brought in or paid out, while accrual accounting recognizes these entries when they are booked. "In accrual accounting, we have a disconnect between cash flow with the accounting of that cash flow." Under Generally Accepted Accounting Principles (GAAP), Masson noted that flexibility is allowed in accrual accounting. He pointed out that cash flow analysis is used to try to understand the true cash position or liquidity of the company. "Liquidity of any company is its life's blood."

The four types of financial statements required by GAAP are: income statements, statements of retained earnings, balance sheets and statement of cash flows. Masson said the income statement, or P&L (profit and loss), is a record of revenues and expenses showing the net change in shareholder equity from operations over a specified period. The statement of retained earnings shows how net income for the period was used. A balance sheet presents a snapshot of assets and liabilities, and the statement of cash flow reconciles all information back to what is the cash position of the business. In describing the difference between income and cash flow statements, Masson said the statement of cash flows provides an indication of cash flow and how it is being used while the income statement is an indication of performance.

There are various financial ratios and performance measures designed to reveal various aspects of the financial status of a company. The most common of these were presented and explained with accompanying examples. The most commonly used are liquidity, activity, debt, profitability and market ratios. Masson pointed out there are advantages and disadvantages offered by these ratios. Among the advantages are that they are easily computed, they are widely used, the information is easily obtained, they allow assessments of historical performance and they allow for comparisons between companies. Some of the disadvantages these financial indicators present are that they summarize accounting information and do not reflect economic value, they express static, not dynamic, relationships, they cannot reflect qualitative value such as managerial talent and other intangibles, they often miss variability of cash flows and are not necessarily indicative of future performance and their use of different accounting methods or "window dressing" can distort calculations.

2005-2007 Group Leadership

Thanks for all your work!