07.23.13

Plan & Progress Update

  1. We instructed our entire internal field audit team, consisting of 25 plus employees, back to Knoxville to audit all of our nearly 5,000 diesel fuel customers' accounts. The team started with our manual diesel rebate customers, which were highlighted in the April 18 federal affidavit.
    • Our audit team completed their initial manual diesel rebate review on June 30. We mailed letters to all our manual diesel rebate customers explaining the results of our audit. The accounts that had a discrepancy in the customer’s favor received checks for the amounts of the discrepancies, plus interest and attorney fees. We have invited all manual diesel rebate customers to discuss or verify our findings.
    • It is important to note that there were numerous manual diesel rebate accounts that had a zero balance.
    • We have started to audit all other accounts with any type of direct bill or rebate relationship with Pilot Flying J. This audit will review accounts from January 2008 to date.
  2. We are continuing to strengthen our sales team and are very pleased to announce the following additions:
    • David Hughes has been named Vice President of Sales. David has 15 years' experience in the trucking industry. Prior to joining Pilot Flying J in 2012, he worked with Covenant Transportation Group in Chattanooga, TN.
    • Scott Nelson has been hired as a Vice President. Before joining Pilot Flying J, Scott was President and CEO of Premier Trailer Leasing Solutions and Business Development at GE Equipment Services – Trailer Fleet Services in Wayne, PA.
    • Steve Vanderink has moved from his position as a Pilot Flying J Division Director of Operations to Northeast/Midwest Director of Sales. Steve has been a valuable team member at Pilot Flying J with over 20 years' experience in the travel center business.
  3. We are putting the correct systems and controls in place. On April 22, we ordered the complete elimination of manually calculated diesel rebates by June 30. This will minimize any opportunity for human error, misuse or abuse.
    • New policies and procedures have been put in place and all manually calculated diesel rebates at Pilot Flying J have been eliminated.
  4. We asked our outside counsel to work with our internal counsel to create and staff a position for a Compliance Professional.
    • This process has taken more time than expected due to the importance of getting the right person for this job. We have visited with other companies who have best practices compliance policies and officers in place. We hope to have this position filled within the next several months.
  5. Finally, on April 22, we announced the Pilot Flying J Board made the decision to hire an Independent Special Counsel to conduct an independent, internal investigation for the Board, in addition to management’s internal investigation.
    • Reid Weingarten, of the national law firm Steptoe & Johnson, has his investigation underway, and Pilot Flying J is fully cooperating with Weingarten and his team.