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TFI International Announces 2022 Fourth Quarter and Full-Year Results

  • Fourth quarter operating income of $216.9 million increased 1% over the prior year quarter
  • Fourth quarter net income of $153.5 million increased 6% compared to Q4 2021, while adjusted net income1 of $151.8 million increased 2%
  • Fourth quarter diluted earnings per share (diluted “EPS”) of $1.74 increased 14% compared to Q4 2021, while adjusted diluted EPS1 of $1.72 increased 10%
  • Fourth quarter net cash from operating activities grew to $248.3 million, up 30% over the prior year period and free cash flow1 grew to $188.3 million, up 56% over the prior year period
  • Full year diluted EPS of $9.02 increased from $7.91 in 2021, while adjusted diluted EPS1 of $8.02 increased from $5.23
  • The Board of Directors approved a $0.35 quarterly dividend, an increase of 30%

MONTREAL, Feb. 06, 2023 (GLOBE NEWSWIRE) -- TFI International Inc. (NYSE and TSX: TFII), a North American leader in the transportation and logistics industry, today announced its results for the fourth quarter and full year ended December 31, 2022. All amounts are shown in U.S. dollars.

“TFI International successfully capped 2022 with strong fourth quarter results, generating slightly higher operating income on significantly improved operating margins, a 53% increase in the full-year adjusted diluted EPS and a 26% increase in the full-year free cash flow, despite macro volatility, fuel-related working capital outlays, and the sale of CFI assets last summer that served to strengthen our overall business mix and returns,” said Alain Bédard, Chairman, President and Chief Executive Officer.  “As laid out at our recent Investor Day, our unique positioning includes business line diversity, exposure to attractive niche markets and numerous self-help initiatives that are producing remarkable success during turbulent economic times. Most importantly, our relative stability, margin expansion and free cash flow reflect the tireless efforts of our people, who are diligently adhering to our longstanding operating principles regardless of external factors. Capitalizing on this attractive competitive positioning and our sharp focus on the fundamentals, we continue to strategically allocate capital toward attractive acquisitions, with our acquisition pipeline remarkably strong and the majority of these closings expected in the first half of the year.  During the quarter, our Board of Directors approved a 30% increase to our quarterly dividend and we continued to repurchase shares, both reflecting our favorable outlook.  We enter 2023 in the best position in TFI International’s history and are eager to create additional shareholder value in the year ahead.”

SELECTED FINANCIAL DATA AND HIGHLIGHTS (UNAUDITED)

Financial highlightsQuarters ended
December 31
Years ended
December 31
(in millions of U.S. dollars, except per share data)20222021*20222021*
Total revenue1,956.72,140.98,812.57,220.4
Revenue before fuel surcharge1,616.51,888.47,357.16,468.8
Adjusted EBITDA1305.0318.51,425.01,076.5
Operating income216.9215.01,146.0979.2
Net cash from operating activities248.3190.3971.6855.4
Net income153.5144.1823.2754.4
EPS - diluted ($)1.741.529.027.91
Adjusted net income1151.8148.6731.7498.3
Adjusted EPS - diluted1 ($)1.721.578.025.23
Weighted average number of shares ('000s)86,67092,66989,36093,054
1 This is a non-IFRS measure. For a reconciliation, please refer to the “Non-IFRS Financial Measures” section below.   
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination.    
     
     

FOURTH QUARTER RESULTS
Total revenue of $1.96 billion compared to $2.14 billion in the prior year period and revenue before fuel surcharge of $1.62 billion compared to $1.89 billion in the prior year period. The decline is primarily due to the sale of CFI’s Truckload, Temp Control and Mexican non-asset logistics business ("CFI") in August 2022, which had sales of $139.2 million in Q4 2021, as well as to reduced volumes in US LTL operations driven by a combination of weaker end market demand as well as the Company's intentional elimination of unprofitable freight.

Operating income grew 1% to $216.9 million from $215.0 million the prior year period with a 200 basis point operating margin1 improvement, despite $12.4 million of operating income included in the fourth quarter of 2021 from CFI.

Net income grew 6% to $153.5 million from $144.1 million in the prior year period, and net income of $1.74 per diluted share was up relative to $1.52 in the prior year period.  Adjusted net income, a non-IFRS measure, was $151.8 million, or $1.72 per diluted share, up from $148.6 million, or $1.57 per diluted share, the prior year period.

Total revenue declined for all segments relative to the prior year period with decreases of 3% for Package and Courier, 6% for Less-Than-Truckload, 14% for Truckload and 11% for Logistics. In contrast, operating income was higher for Package and Courier by 2%, for Truckload by 16% and for Logistics by 4%, and lower for Less-Than-Truckload by 15% in the fourth quarter in comparison to the prior-year. Truckload operating income in the prior year period included a $12.4 million contribution from CFI which was partially offset by an increased contribution of $9.7 million from the sale of real estate in the quarter. Operating income in the Less-Than-Truckload segment, more specifically U.S. LTL, decreased due to the lower freight volumes as well as to non-recurring costs related to exiting the transition service agreement with UPS. On February 1, 2023, the financial system supporting the U.S. LTL operations was migrated from UPS to a standalone system managed by TFI.

FULL-YEAR RESULTS
Total revenue was $8.81 billion for 2022 versus $7.22 billion in 2021.  Revenue before fuel surcharge of $7.36 billion was up 14% compared to the prior year. 

Operating income totaled $1,146.0 million, or 16% of revenue before fuel surcharge, an increase of 17% compared to $979.2 million and 15% of revenue before fuel surcharge in the prior year. The increase is mainly attributable to the contributions from acquisitions, including a gain on sale of business of $73.7 million.

Net income was $823.2 million, or $9.02 per diluted share, compared to $754.4 million, or $7.91 per diluted share a year earlier.  Adjusted net income and Adjusted diluted EPS, non-IFRS measures, were $731.7 million, or $8.02 per diluted share, compared to $498.3 million, or $5.23 per diluted share the prior year.

During 2022, total revenue grew 1% for Package and Courier, 43% for Less-Than-Truckload, 13% for Truckload and 6% for Logistics relative to the prior year.  Operating income was up 24% for Package and Courier, 59% for Truckload, down 18% for Less-Than-Truckload, mainly due to the inclusion of the bargain purchase gain in 2021, and down 2% for Logistics.

1 This is a non-IFRS measure. For a reconciliation, refer to the "Non-IFRS and Other Financial Measures" section below.

SEGMENTED RESULTS

To facilitate the comparison of business level activity and operating costs between periods, the Company compares the revenue before fuel surcharge (“revenue”) and reallocates the fuel surcharge revenue to materials and services expenses within operating expenses. Note that “Total revenue” is not affected by this reallocation.

Selected segmented financial information

(unaudited)
(in thousands of U.S. dollars)
Package
 and
 Courier
 Less-
Than-Truckload*
 Truckload Logistics Corporate Eliminations Total 
Three months ended December 31, 2022              
Revenue before fuel surcharge1129,074 720,783 403,351 375,968  (12,681)1,616,495 
% of total revenue29%46%25%20%    100%
Adjusted EBITDA343,935 126,307 104,007 43,473 (12,766) 304,956 
Adjusted EBITDA margin3,434.0%17.5%25.8%11.6%    18.9%
Operating income (loss)37,563 88,240 71,842 34,204 (14,989) 216,860 
Operating margin3,429.1%12.2%17.8%9.1%    13.4%
Total assets less intangible assets3182,605 2,107,874 1,085,629 263,017 274,595  3,913,720 
Net capital expenditures36,045 57,273 14,248 131 58  77,755 
Three months ended December 31, 2021              
Revenue before fuel surcharge1150,074 822,911 506,432 427,561  (18,555)1,888,423 
% of total revenue28%44%27%20%    100%
Adjusted EBITDA343,496 141,189 111,848 42,465 (20,532) 318,466 
Adjusted EBITDA margin3,429.0%17.2%22.1%9.9%    16.9%
Operating income (loss)36,713 103,449 61,803 32,869 (19,855) 214,979 
Operating margin3,424.5%12.6%12.2%7.7%    11.4%
Total assets less intangible assets3186,116 2,162,534 1,362,007 292,026 88,059   4,090,742 
Net capital expenditures35,926 46,986 15,113 192 20  68,237 
YTD December 31, 2022              
Revenue before fuel surcharge1498,972 3,243,557 1,986,331 1,689,122  (60,918)7,357,064 
% of total revenue27%45%28%20%    100%
Adjusted EBITDA3160,838 567,759 557,058 178,690 (39,321) 1,425,024 
Adjusted EBITDA margin3,432.2%17.5%28.0%10.6%    19.4%
Operating income (loss)134,306 470,807 366,868 140,446 33,611  1,146,038 
Operating margin3,426.9%14.5%18.5%8.3%    15.6%
Total assets less intangible assets3182,605 2,107,874 1,085,629 263,017 274,595  3,913,720 
Net capital expenditures310,636 132,814 31,658 676 170  175,954 
YTD December 31, 2021              
Revenue before fuel surcharge1560,147 2,440,640 1,901,157 1,620,926  (54,085)6,468,785 
% of total revenue29%39%30%23%    100%
Adjusted EBITDA3134,845 415,641 431,181 169,005 (74,193) 1,076,479 
Adjusted EBITDA margin3,424.1%17.0%22.7%10.4%    16.6%
Operating income (loss)108,440 572,798 230,189 142,794 (74,992) 979,229 
Operating margin3,419.4%23.5%12.1%8.8%    15.1%
Total assets less intangible assets3186,116 2,162,534 1,362,007 292,026 88,059  4,090,742 
Net capital expenditures314,445 52,703 69,177 316 141  136,782 
1 Includes intersegment revenue.
2 Segment revenue including fuel and intersegment revenue to consolidated revenue including fuel and intersegment revenue.
3 This is a non-IFRS measure. For a reconciliation, refer to the “Non-IFRS and Other Financial Measures” section below.
4 As a percentage of revenue before fuel surcharge.
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination.
 
 

CASH FLOW
Net cash flow from operating activities was $971.6 million during 2022 compared to $855.4 million the prior year. The 14% increase was due to stronger operating performance and contributions from acquisitions. The Company returned $665.3 million to shareholders during the year, of which $97.3 million was through dividends and $568.0 million was through share repurchases.

On December 15, 2022, the Board of Directors of TFI International declared a quarterly dividend of $0.35 per outstanding common share paid on January 16, 2023, representing a 30% increase over the $0.27 quarterly dividend declared in Q4 2021.

CONFERENCE CALL
TFI International will host a conference call on Monday, February 6, 2023 at 5:00 p.m. Eastern Time to discuss these results. Interested parties can join the call by dialing 1-855-327-6837 or 1-631-891-4304. A recording of the call will be available until 11:59 p.m Eastern, Monday February 20, 2023 by dialing 1-844-512-2921 or 1-412-317-6671.

ABOUT TFI INTERNATIONAL
TFI International Inc. is a North American leader in the transportation and logistics industry, operating across the United States and Canada through its subsidiaries. TFI International creates value for shareholders by identifying strategic acquisitions and managing a growing network of wholly-owned operating subsidiaries. Under the TFI International umbrella, companies benefit from financial and operational resources to build their businesses and increase their efficiency. TFI International companies service the following segments:

  • Package and Courier;
  • Less-Than-Truckload;
  • Truckload;
  • Logistics.

TFI International Inc. is publicly traded on the New York Stock Exchange and the Toronto Stock Exchange under symbol TFII. For more information, visit www.tfiintl.com.

FORWARD-LOOKING STATEMENTS
The Company may make statements in this report that reflect its current expectations regarding future results of operations, performance and achievements. These are “forward-looking” statements and reflect management’s current beliefs. They are based on information currently available to management. Words such as “may”, “might”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”, “to its knowledge”, “could”, “design”, “forecast”, “goal”, “hope”, “intend”, “likely”, “predict”, “project”, “seek”, “should”, “target”, “will”, “would” or “continue” and words and expressions of similar import are intended to identify these forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and those presently anticipated or projected.

The Company wishes to caution readers not to place undue reliance on any forward-looking statements which reference issues only as of the date made. The following important factors could cause the Company’s actual financial performance to differ materially from that expressed in any forward-looking statement: the highly competitive market conditions, the Company’s ability to recruit, train and retain qualified drivers, fuel price variations and the Company’s ability to recover these costs from its customers, foreign currency fluctuations, the impact of environmental standards and regulations, changes in governmental regulations applicable to the Company’s operations, adverse weather conditions, accidents, the market for used equipment, changes in interest rates, cost of liability insurance coverage, downturns in general economic conditions affecting the Company and its customers, credit market liquidity, and the Company’s ability to identify, negotiate, consummate, and successfully integrate acquisitions. In addition, any material weaknesses in internal control over financial reporting that are identified, and the cost of remediation of any such material weakness and any other control deficiencies, may have adverse effects on the Company and impact future results. 

The foregoing list should not be construed as exhaustive, and the Company disclaims any subsequent obligation to revise or update any previously made forward-looking statements unless required to do so by applicable securities laws. Unanticipated events are likely to occur. Readers should also refer to the section “Risks and Uncertainties” at the end of the 2022 Q3 MD&A for additional information on risk factors and other events that are not within the Company’s control. The Company’s future financial and operating results may fluctuate as a result of these and other risk factors.

NON-IFRS FINANCIAL MEASURES

This press release includes references to certain non-IFRS financial measures as described below. These non-IFRS measures do not have any standardized meanings prescribed by International Financial Reporting Standards as issued by the international Accounting Standards Board (IASB) and are therefore unlikely to be comparable to similar measures presented by other companies. Accordingly, they should not be considered in isolation, in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with IFRS. The terms and definitions of the non-IFRS measures used in this press release and a reconciliation of each non-IFRS measure to the most directly comparable IFRS measure are provided in the exhibits.

For further information:
Alain Bédard
Chairman, President and CEO
TFI International Inc.
647-729-4079
[email protected]


TFI International Inc.UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 DECEMBER 31, 2022 AND 2021


     
(in thousands of U.S. dollars)As at As at 
 December 31,
2022
 December 31,
2021*
 
Assets    
Cash and cash equivalents147,117 19,292 
Trade and other receivables1,030,726 1,056,023 
Inventoried supplies24,181 24,402 
Current taxes recoverable12,788 6,080 
Prepaid expenses38,501 54,518 
Assets held for sale10,250 1,943 
Current assets1,263,563 1,162,258 
     
Property and equipment2,131,955 2,455,141 
Right-of-use assets381,640 398,533 
Intangible assets1,592,110 1,792,921 
Investments185,964 31,391 
Employee benefits4,359 - 
Other assets19,192 13,724 
Deferred tax assets27,047 29,695 
Non-current assets4,242,267 4,721,405 
Total assets5,505,830 5,883,663 
     
Liabilities    
Trade and other payables708,768 861,908 
Current taxes payable41,714 16,552 
Provisions43,903 39,012 
Other financial liabilities19,275 10,566 
Long-term debt37,087 363,586 
Lease liabilities115,934 115,344 
Current liabilities966,681 1,406,968 
     
Long-term debt1,278,670 1,244,508 
Lease liabilities297,105 313,862 
Employee benefits- 68,037 
Provisions131,736 108,145 
Other financial liabilities382 8,033 
Deferred tax liabilities368,186 423,755 
Non-current liabilities2,076,079 2,166,340 
Total liabilities3,042,760 3,573,308 
     
Equity    
Share capital1,089,229 1,133,181 
Contributed surplus41,491 39,150 
Accumulated other comprehensive income(233,321)(144,665)
Retained earnings1,565,671 1,282,689 
Total equity2,463,070 2,310,355 
     
Contingencies, letters of credit and other commitments    
Subsequent events    
Total liabilities and equity5,505,830 5,883,663 
* Recasted for adjustments to provisional amounts of UPS Freight prior year’s business combination.
** The Company's financial reporting framework is IFRS as issued by the IASB.
1 The investments were previously presented as Other assets and have been recast due to the increase in value of the investments. The investments include both level 1 and level 3 investments. The level 1 investments are 1,027,696 shares of ArcBest Corporation (NYSE: ARCB).
 
  


TFI International Inc.UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
 YEARS ENDED DECEMBER 31, 2022 AND 2021


     
(In thousands of U.S. dollars, except per share amounts)    
 2022 2021* 
     
Revenue7,357,064 6,468,785 
Fuel surcharge1,455,427 751,644 
Total revenue8,812,491 7,220,429 
     
Materials and services expenses4,592,191 3,815,453 
Personnel expenses2,362,856 1,974,081 
Other operating expenses492,291 380,342 
Depreciation of property and equipment248,638 225,007 
Depreciation of right-of-use assets126,276 112,782 
Amortization of intangible assets55,679 55,243 
Gain on sale of business(73,653)- 
Bargain purchase gain- (283,593)
Gain on sale of rolling stock and equipment(59,661)(24,644)
Gain on derecognition of right-of-use assets(210)(1,282)
(Gain) loss on sale of land and buildings(43)19 
Gain on sale of assets held for sale(77,911)(12,209)
Loss on disposal of intangible assets- 1 
Total operating expenses7,666,453 6,241,200 
     
Operating income1,146,038 979,229 
     
Finance (income) costs    
Finance income(1,750)(5,127)
Finance costs82,147 78,145 
Net finance costs80,397 73,018 
     
Income before income tax1,065,641 906,211 
Income tax expense242,409 151,806 
     
Net income823,232 754,405 
     
Earnings per share    
Basic earnings per share9.21 8.11 
Diluted earnings per share9.02 7.91 
* Recasted for adjustments to provisional amounts of UPS Freight prior year’s business combination. 
  
  


TFI International Inc. UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 YEARS ENDED DECEMBER 31, 2022 AND 2021


     
(In thousands of U.S. dollars)    
 2022 2021* 
     
Net income823,232 754,405 
     
Other comprehensive (loss) income    
Items that may be reclassified to income or loss in future years:    
Foreign currency translation differences(10,148)12,960 
Net investment hedge, net of tax(72,046)(15,542)
Employee benefits, net of tax292 87 
Items that may never be reclassified to income:    
Defined benefit plan remeasurement, net of tax63,508 (4,128)
Items directly reclassified to retained earnings:    
Unrealized (loss) gain on investments in equity securities    
measured at fair value through OCI, net of tax(5,495)24,147 
Other comprehensive (loss) income, net of tax(23,889)17,524 
     
Total comprehensive income799,343 771,929 
* Recasted for adjustments to provisional amounts of UPS Freight prior year’s business combination. 
  
  


TFI International Inc.UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY
 YEARS ENDED DECEMBER 31, 2022 AND 2021


               
(In thousands of U.S. dollars)      Accumulated       
       foreign Accumulated     
     Accumulated currency unrealized     
     unrealized translation gain (loss)   Total equity 
     loss on differences on invest-   attributable 
     employee and net ments in Retained to owners 
 Share Contributed benefit investment equity earnings of the 
 capital surplus plans hedge securities (deficit) Company 
               
Balance as at December 31, 2021*1,133,181 39,150 (292)(156,926)12,553 1,282,689 2,310,355 
               
Net income- - - - - 823,232 823,232 
Other comprehensive income (loss), net of tax- - 292 (82,194)(5,495)63,508 (23,889)
Realized (loss) gain on equity securities- - - - (1,259)1,259 - 
Total comprehensive income (loss)- - 292 (82,194)(6,754)887,999 799,343 
               
Share-based payment transactions, net of tax- 16,298 - - - - 16,298 
Stock options exercised, net of tax22,800 (6,298)- - - - 16,502 
Dividends to owners of the Company- - - - - (102,615)(102,615)
Repurchase of own shares(68,536)- - - - (499,447)(567,983)
Net settlement of restricted share units, net of tax1,784 (7,659)- - - (2,955)(8,830)
Total transactions with owners, recorded directly in equity(43,952)2,341 - - - (605,017)(646,628)
               
Balance as at December 31, 20221,089,229 41,491 - (239,120)5,799 1,565,671 2,463,070 
               
Balance as at December 31, 20201,120,049 19,783 (379)(154,344)- 803,503 1,788,612 
               
Net income*- - - - - 754,405 754,405 
Other comprehensive income (loss), net of tax- - 87 (2,582)24,147 (4,128)17,524 
Realized (loss) gain on equity securities- - - - (11,594)11,594 - 
Total comprehensive income (loss)- - 87 (2,582)12,553 761,871 771,929 
               
Share-based payment transactions, net of tax- 27,577 - - - - 27,577 
Stock options exercised, net of tax26,324 (3,266)- - - - 23,058 
Issuance of shares, net of expenses- - - - - - - 
Dividends to owners of the Company- - - - - (89,121)(89,121)
Repurchase of own shares(23,449)- - - - (174,704)(198,153)
Net settlement of restricted share units, net of tax10,257 (4,944)- - - (18,860)(13,547)
Total transactions with owners, recorded directly in equity13,132 19,367 - - - (282,685)(250,186)
               
Balance as at December 31, 2021*1,133,181 39,150 (292)(156,926)12,553 1,282,689 2,310,355 
* Recasted for adjustments to provisional amounts of UPS Freight prior year’s business combination. 
  
  


TFI International Inc.UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
 YEARS ENDED DECEMBER 31, 2022 AND 2021


     
(In thousands of U.S. dollars)    
 2022 2021* 
     
Cash flows from operating activities    
Net income823,232 754,405 
Adjustments for:    
Depreciation of property and equipment248,638 225,007 
Depreciation of right-of-use assets126,276 112,782 
Amortization of intangible assets55,679 55,243 
Share-based payment transactions14,648 15,424 
Net finance costs80,397 73,018 
Income tax expense242,409 151,806 
Gain on sale of business(73,653)- 
Bargain purchase gain- (283,593)
Gain on sale of property and equipment(59,704)(24,625)
Gain on derecognition of right-of-use assets(210)(1,282)
Gain on sale of assets held for sale(77,911)(12,209)
Loss on disposal of intangible assets- 1 
Employee benefits14,946 (20,193)
Provisions, net of payments26,044 21,890 
Net change in non-cash operating working capital(147,453)41,940 
Interest paid(77,512)(65,453)
Income tax paid(224,181)(188,810)
Net cash from operating activities971,645 855,351 
     
Cash flows from (used in) investing activities    
Purchases of property and equipment(350,824)(268,656)
Proceeds from sale of property and equipment128,821 92,842 
Proceeds from sale of assets held for sale131,250 19,869 
Purchases of intangible assets(6,120)(7,143)
Proceeds from sale of intangible assets250 - 
Proceeds from sale of business, net of cash disposed546,228 - 
Business combinations, net of cash acquired(158,251)(1,008,131)
Purchases of investments(80,551)(35,913)
Proceeds from sale of investments12,930 40,686 
Others(311)3,789 
Net cash from (used in) investing activities223,422 (1,162,657)
     
Cash flows (used in) from financing activities    
Net decrease (increase) in bank indebtedness7,490 (7,173)
Proceeds from long-term debt334,164 661,039 
Repayment of long-term debt(369,692)(43,868)
Net (increase) decrease in revolving facilities(236,502)118,859 
Repayment of lease liabilities(123,606)(115,336)
Repayment of other financial liabilities(21,108)(11,216)
Dividends paid(97,321)(85,386)
Repurchase of own shares(567,983)(198,153)
Proceeds from exercise of stock options16,502 20,114 
Payment for settlement of restricted share units(9,186)(16,579)
Net cash (used in) from financing activities(1,067,242)322,301 
     
Net change in cash and cash equivalents127,825 14,995 
Cash and cash equivalents, beginning of year19,292 4,297 
Cash and cash equivalents, end of year147,117 19,292 
* Recasted for adjustments to provisional amounts of UPS Freight prior year’s business combination. 
  
  

SEGMENT INFORMATION

Geographical information (Unaudited)

Total revenue is attributed to geographical locations based on the origin of service’s location.

 PackageLess-     
 andThan-     
 CourierTruckloadTruckloadLogisticsEliminations Total
2022
Canada650,844667,5061,182,198256,714(34,202)2,723,060
United States-3,355,6571,268,8401,488,941(41,632)6,071,806
Mexico---17,625- 17,625
Total revenue650,8444,023,1632,451,0381,763,280(75,834)8,812,491
        
2021
Canada641,449576,311912,166269,568(31,193)2,368,301
United States-2,239,0791,250,5861,370,843(30,041)4,830,467
Mexico---21,661- 21,661
Total revenue641,4492,815,3902,162,7521,662,072(61,234)7,220,429
        
        

Package and Courier

(unaudited)Three months ended December 31 Years ended December 31 
(in thousands of U.S. dollars)2022 % 2021 % 2022 % 2021 % 
Total revenue172,381   177,368   650,844   641,449   
Fuel surcharge(43,307)  (27,294)  (151,872)  (81,302)  
Revenue129,074 100.0%150,074 100.0%498,972 100.0%560,147 100.0%
Materials and services expenses (net of fuel surcharge)42,784 33.1%60,636 40.4%167,725 33.6%243,786 43.5%
Personnel expenses35,877 27.8%39,060 26.0%144,650 29.0%154,820 27.6%
Other operating expenses6,667 5.2%6,905 4.6%26,845 5.4%26,762 4.8%
Depreciation of property and equipment3,080 2.4%3,297 2.2%12,863 2.6%12,392 2.2%
Depreciation of right-of-use assets3,135 2.4%3,300 2.2%13,024 2.6%13,109 2.3%
Amortization of intangible assets157 0.1%186 0.1%645 0.1%903 0.2%
Gain on sale of rolling stock and equipment(189)-0.1%(23)-0.0%(1,087)-0.2%(59)-0.0%
(Gain) loss on derecognition of right-of-use assets- - - - 1 0.0%(7)-0.0%
Loss on disposal of intangible assets- - - - - - 1 0.0%
Operating income37,563 29.1%36,713 24.5%134,306 26.9%108,440 19.4%
Adjusted EBITDA143,935 34.0%43,496 29.0%160,838 32.2%134,845 24.1%
Return on invested capital1  32.5%  25.3%        
1 This is a non-IFRS measure. For a reconciliation, please refer to the “Non-IFRS and Other Financial Measures” section below.
 
 


      
Operational data     
(unaudited)Three months ended December 31  Years ended December 31 
(Revenue in U.S. dollars)2022 2021 Variance %  2022 2021 Variance % 
Revenue per pound (including fuel)$0.47 $0.43 $0.04 9.3% $0.48 $0.44 $0.04 9.1%
Revenue per pound (excluding fuel)$0.35 $0.36 $(0.01)-2.8% $0.37 $0.39 $(0.02)-5.1%
Revenue per package (excluding fuel)$5.59 $6.11 $(0.52)-8.5% $5.88 $6.21 $(0.33)-5.3%
Tonnage (in thousands of metric tons) 167  187  (20)-10.7%  614  656  (42)-6.4%
Packages (in thousands) 23,107  24,581  (1,474)-6.0%  84,915  90,257  (5,342)-5.9%
Average weight per package (in lbs.) 15.93  16.77  (0.84)-5.0%  15.94  16.03  (0.09)-0.6%
Vehicle count, average 1,028  1,139  (111)-9.7%  1,046  1,069  (23)-2.2%
Weekly revenue per vehicle (incl. fuel, in thousands of U.S. dollars)$12.90 $11.98 $0.92 7.7% $11.97 $11.54 $0.43 3.7%
                        
                        

Less-Than-Truckload

(unaudited)Three months ended December 31 Years ended December 31 
(in thousands of U.S. dollars)2022 % 2021 % 2022 % 2021* % 
Total revenue903,713   959,546   4,023,163   2,815,390   
Fuel surcharge(182,930)  (136,635)  (779,606)  (374,750)  
Revenue720,783 100.0%822,911 100.0%3,243,557 100.0%2,440,640 100.0%
Materials and services expenses (net of fuel surcharge)226,839 31.5%274,166 33.3%1,003,662 30.9%848,273 34.8%
Personnel expenses311,248 43.2%348,237 42.3%1,432,857 44.2%1,022,214 41.9%
Other operating expenses58,050 8.1%60,196 7.3%243,347 7.5%155,992 6.4%
Depreciation of property and equipment26,374 3.7%25,846 3.1%104,850 3.2%73,242 3.0%
Depreciation of right-of-use assets9,641 1.3%9,398 1.1%38,985 1.2%33,050 1.4%
Amortization of intangible assets2,065 0.3%2,495 0.3%8,831 0.3%9,768 0.4%
Bargain Purchase Gain- - - - - - (271,593)-11.1%
Gain on sale of rolling stock and equipment(1,601)-0.2%(842)-0.1%(4,056)-0.1%(907)-0.0%
Gain on derecognition of right-of-use assets(60)-0.0%(35)-0.0%(12)-0.0%(573)-0.0%
(Gain) loss on sale of land and buildings and assets held for sale(13)-0.0%1 0.0%(55,714)-1.7%(1,624)-0.1%
Operating income88,240 12.2%103,449 12.6%470,807 14.5%572,798 23.5%
Adjusted EBITDA1126,307 17.5%141,189 17.2%567,759 17.5%415,641 17.0%
1 This is a non-IFRS measure. For a reconciliation, please refer to the “Non-IFRS and Other Financial Measures” section below.
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination.
 
 


      
Operational data     
(unaudited)Three months ended December 31  Years ended December 31 
(Revenue in U.S. dollars)2022  2021  Variance %  2022  2021  Variance % 
U.S. LTL                     
Revenue (in thousands of dollars)1 475,389   568,761   (93,372)-16.4%  2,186,668   1,586,228   600,440 37.9%
Adjusted Operating Ratio2 90.4%  89.4%       89.9%  90.1%     
Revenue per hundredweight (excluding fuel)1$30.05  $29.20  $0.85 2.9% $29.67  $28.52  $1.15 4.0%
Revenue per shipment (excluding fuel)1$322.74  $310.97  $11.77 3.8% $320.20  $299.91  $20.29 6.8%
Revenue per hundredweight (including fuel)1$39.04  $34.76  $4.28 12.3% $38.03  $33.57  $4.46 13.3%
Revenue per shipment (including fuel)1$419.26  $371.17  $49.09 13.3% $410.38  $353.06  $57.32 16.2%
Tonnage (in thousands of tons)1 791   974   (183)-18.8%  3,685   2,781   904 32.5%
Shipments (in thousands)1 1,473   1,829   (356)-19.5%  6,829   5,289   1,540 29.1%
Average weight per shipment (in lbs)1 1,074   1,065   9 0.8%  1,079   1,052   27 2.6%
Average length of haul (in miles)1 1,092   1,110   (18)-1.6%  1,101   1,089   12 1.1%
Vehicle count, average4 4,410   4,583   (173)-3.8%  4,685   4,866   (181)-3.7%
Return on invested capital2,3 18.8% -                 
Canadian LTL                     
Revenue (in thousands of dollars) 123,176   144,697   (21,521)-14.9%  548,012   556,891   (8,879)-1.6%
Adjusted Operating Ratio2 75.3%  78.3%       74.0%  79.9%     
Revenue per hundredweight (excluding fuel)$10.84  $11.13  $(0.29)-2.6% $11.26  $10.80  $0.46 4.3%
Revenue per shipment (excluding fuel)$235.97  $223.30  $12.67 5.7% $241.95  $222.40  $19.55 8.8%
Revenue per hundredweight (including fuel)1$14.46  $13.33  $1.13 8.5% $14.65  $12.62  $2.03 16.1%
Revenue per shipment (including fuel)1$314.61  $267.43  $47.18 17.6% $314.88  $260.01  $54.87 21.1%
Tonnage (in thousands of tons) 568   650   (82)-12.6%  2,434   2,579   (145)-5.6%
Shipments (in thousands) 522   648   (126)-19.4%  2,265   2,504   (239)-9.5%
Average weight per shipment (in lbs) 2,176   2,006   170 8.5%  2,149   2,060   89 4.3%
Average length of haul (in miles) 734   791   (57)-7.2%  748   773   (25)-3.2%
Vehicle count, average 808   810   (2)-0.2%  800   837   (37)-4.4%
Return on invested capital2 24.0%  17.8%                
1  Operational statistics exclude figures from Ground Freight Pricing (“GFP”).
2  This is a non-IFRS measure. For a reconciliation please refer to the “Non-IFRS and Other Financial Measures” section below.
3  The Return on invested capital for the U.S. LTL is not disclosed as the trailing twelve-month information is not available for fiscal 2021, as it was acquired on April 30, 2021.
4  The vehicle count average for the year ended December 31, 2021 was adjusted to calculate the average since the acquisition of UPS Freight on April 30, 2021. As at December 31, 2022 the active vehicle count was 4,046.
  
  

Truckload

(unaudited)Three months ended December 31 Years ended December 31 
(in thousands of U.S. dollars)2022 % 2021 % 2022 % 2021 % 
Total revenue502,784   584,009   2,451,038   2,162,752   
Fuel surcharge(99,433)  (77,577)  (464,707)  (261,595)  
Revenue403,351 100.0%506,432 100.0%1,986,331 100.0%1,901,157 100.0%
Materials and services expenses (net of fuel surcharge)174,305 43.2%221,538 43.7%821,442 41.4%823,645 43.3%
Personnel expenses115,449 28.6%160,351 31.7%585,891 29.5%604,041 31.8%
Other operating expenses13,709 3.4%19,193 3.8%76,612 3.9%66,468 3.5%
Depreciation of property and equipment26,695 6.6%35,652 7.0%129,013 6.5%137,301 7.2%
Depreciation of right-of-use assets15,730 3.9%15,087 3.0%59,473 3.0%52,680 2.8%
Amortization of intangible assets5,699 1.4%5,960 1.2%23,944 1.2%21,580 1.1%
Gain on sale of rolling stock and equipment(3,981)-1.0%(6,338)-1.3%(54,481)-2.7%(23,747)-1.2%
Gain on derecognition of right-of-use assets(138)-0.0%(160)-0.0%(191)-0.0%(431)-0.0%
Gain on sale of land and buildings and assets held for sale(15,959)-4.0%(6,649)-1.3%(22,240)-1.1%(10,569)-0.6%
Gain on disposal of intangible assets- - (5)-0.0%- - - - 
Operating income71,842 17.8%61,803 12.2%366,868 18.5%230,189 12.1%
Adjusted EBITDA1104,007 25.8%111,848 22.1%557,058 28.0%431,181 22.7%
1 This is a non-IFRS measure. For a reconciliation, please refer to the “Non-IFRS and Other Financial Measures” section below.
 
 


     
Operational dataThree months ended December 31 Years ended December 31 
(unaudited)2022 2021 Variance % 2022 2021 Variance % 
Specialized TL2                
Revenue (in thousands of U.S. dollars)325,493 328,648 (3,154)-1.0%1,362,390 1,233,791 128,599 10.4%
Adjusted operating ratio187.4%89.6%    83.1%88.7%    
Tractor count, average3,839 3,845 (7)-0.2%3,641 3,722 (81)-2.2%
Trailer count, average11,004 11,302 (298)-2.6%10,833 10,912 (79)-0.7%
Tractor age3.6 3.4 0.2 5.5%3.6 3.4 0.2 5.5%
Trailer age11.5 10.5 1.0 9.8%11.5 10.5 1.0 9.8%
Number of owner operators, average1,193 1,201 (8)-0.7%1,126 1,217 (91)-7.5%
Return on invested capital113.4%9.2%            
Canadian based Conventional TL                
Revenue (in thousands of U.S. dollars)79,101 73,786 5,315 7.2%322,553 250,177 72,376 28.9%
Adjusted operating ratio181.1%88.4%    78.7%87.9%    
Total mileage (in thousands)24,498 26,467 (1,969)-7.4%93,923 92,236 1,687 1.8%
Tractor count, average858 728 130 17.9%741 640 102 15.9%
Trailer count, average3,636 3,401 235 6.9%3,456 2,884 572 19.8%
Tractor age3.5 4.1 (0.6)-13.7%3.5 4.1 (0.6)-13.7%
Trailer age7.3 7.5 (0.2)-2.5%7.3 7.5 (0.2)-2.5%
Number of owner operators, average254 324 (70)-21.7%269 306 (37)-12.0%
Return on invested capital121.3%10.9%            
1 This is a non-IFRS measure. For a reconciliation, please refer to the “Non-IFRS Financial Measures” section below. 
2 Recasted comparative figures for change in operating segments of the dedicated operations from US Conventional Truckload as a result of the sale of business of CFI. 
  
  

Logistics

(unaudited)Three months ended December 31 Years ended December 31 
(in thousands of U.S. dollars)2022 % 2021 % 2022 % 2021 % 
Total revenue394,071   441,086   1,763,280   1,662,072   
Fuel surcharge(18,103)  (13,525)  (74,158)  (41,146)  
Revenue375,968 100.0%427,561 100.0%1,689,122 100.0%1,620,926 100.0%
Materials and services expenses (net of fuel surcharge)269,625 71.7%323,164 75.6%1,232,049 72.9%1,223,846 75.5%
Personnel expenses35,770 9.5%29,419 6.9%143,505 8.5%116,523 7.2%
Other operating expenses27,107 7.2%32,443 7.6%134,923 8.0%111,742 6.9%
Depreciation of property and equipment333 0.1%375 0.1%1,460 0.1%1,581 0.1%
Depreciation of right-of-use assets3,644 1.0%3,442 0.8%14,794 0.9%13,943 0.9%
Amortization of intangible assets5,292 1.4%5,776 1.4%21,990 1.3%22,684 1.4%
Bargain purchase gain- - - - - - (12,000)-0.7%
(Gain) loss on sale of rolling stock and equipment(7)-0.0%70 0.0%(37)-0.0%70 0.0%
Gain on derecognition of right-of-use assets- - - - (8)-0.0%(260)-0.0%
Loss on sale of land and building- - 3 0.0%- - 3 0.0%
Operating income34,204 9.1%32,869 7.7%140,446 8.3%142,794 8.8%
Adjusted EBITDA143,473 11.6%42,465 9.9%178,690 10.6%169,005 10.4%
Return on invested capital121.9%  19.9%          
1 This is a non-IFRS measure. For a reconciliation, please refer to the “Non-IFRS and Other Financial Measures” section below.
 
 

NON-IFRS AND OTHER FINANCIAL MEASURES

Financial data have been prepared in conformity with IFRS, including the following measures:

Operating expenses: Operating expenses include: a) materials and services expenses, which are primarily costs related to independent contractors and vehicle operation; vehicle operation expenses, which primarily include fuel, repairs and maintenance, vehicle leasing costs, insurance, permits and operating supplies; b) personnel expenses; c) other operating expenses, which are primarily composed of costs related to offices’ and terminals’ rent, taxes, heating, telecommunications, maintenance and security and other general administrative expenses; d) depreciation of property and equipment, depreciation of right-of-use assets, amortization of intangible assets and gain or loss on the sale of rolling stock and equipment, on derecognition of right-of use assets, on sale of business and on sale of land and buildings and assets held for sale; e) bargain purchase gain; and f) impairment of intangible assets.

Operating income (loss): Net income or loss before finance income and costs and income tax expense, as stated in the consolidated financial statements.

This press release includes references to certain non-IFRS financial measures as described below. These non-IFRS financial measures are not standardized financial measures under IFRS used to prepare the financial statements of the Company to which the measures relates and might not be comparable to similar financial measures disclosed by other issuers. Accordingly, they should not be considered in isolation, in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with IFRS. The terms and definitions of non-IFRS measures used in this press release and a reconciliation of each non-IFRS measure to the most directly comparable IFRS measure are provided below.

Adjusted net income: Net income or loss excluding amortization of intangible assets related to business acquisitions, net change in the fair value and accretion expense of contingent considerations, net change in the fair value of derivatives, net foreign exchange gain or loss, impairment of intangible assets, bargain purchase gain, gain or loss on sale of land and buildings and assets held for sale of land and building, gain or loss on the sale of business and directly attributable expenses due to disposal, gain or loss on the disposal of intangible assets and U.S. Tax Reform. In presenting an adjusted net income and adjusted EPS, the Company’s intent is to help provide an understanding of what would have been the net income and earnings per share in a context of significant business combinations and excluding specific impacts and to reflect earnings from a strictly operating perspective. The amortization of intangible assets related to business acquisitions comprises amortization expense of customer relationships, trademarks and non-compete agreements accounted for in business combinations and the income tax effects related to this amortization. Management also believes, in excluding amortization of intangible assets related to business acquisitions, it provides more information on the amortization of intangible asset expense portion, net of tax, that will not have to be replaced to preserve the Company’s ability to generate similar future cash flows. The Company excludes these items because they affect the comparability of its financial results and could potentially distort the analysis of trends in its business performance. Excluding these items does not imply they are necessarily non-recurring.

Adjusted net income reconciliation:

(unaudited)
(in thousands of U.S. dollars, except per share data)
Three months ended
December 31
 Years ended
December 31
 
 2022 2021* 2022 2021* 
Net income153,494 144,139 823,232 754,405 
Amortization of intangible assets related to business acquisitions13,969 13,128 52,003 50,498 
Net change in fair value and accretion expense of contingent considerations90 1,571 216 1,932 
Net foreign exchange (gain) loss(564)(939)556 (1,471)
(Gain) loss on sale of business and direct attributable costs2,069  (69,753) 
Bargain purchase gain   (283,593)
Gain on sale of land and buildings and assets held for sale(15,941)(6,638)(77,870)(11,978)
(Gain) loss on disposal of intangible assets (5) 1 
Tax impact of adjustments(1,358)(2,636)3,284 (11,446)
Adjusted net income1151,759 148,620 731,668 498,348 
Adjusted EPS – basic11.75 1.60 8.19 5.36 
Adjusted EPS – diluted11.72 1.57 8.02 5.23 
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination.
 
 

Adjusted earnings per share (adjusted “EPS”) - basic: Adjusted net income divided by the weighted average number of common shares.

Adjusted EPS - diluted: Adjusted net income divided by the weighted average number of diluted common shares.

Adjusted EBITDA: Net income or loss before finance income and costs, income tax expense, depreciation, amortization, impairment of intangible assets, bargain purchase gain, and gain or loss on sale of land and buildings, assets held for sale, sale of business, and gain or loss on disposal of intangible assets. Management believes adjusted EBITDA to be a useful supplemental measure. Adjusted EBITDA is provided to assist in determining the ability of the Company to assess its performance.

Segmented adjusted EBITDA refers to operating income (loss) before depreciation, amortization, impairment of intangible assets, bargain purchase gain, gain or loss on sale of business, land and buildings, and assets held for sale and gain or loss on disposal of intangible assets. Management believes adjusted EBITDA to be a useful supplemental measure. Adjusted EBITDA is provided to assist in determining the ability of the Company to assess its performance.

Consolidated adjusted EBITDA reconciliation:

(unaudited)
(in thousands of U.S. dollars)
Three months ended
December 31
 Years ended
December 31
 
 2022 2021 2022 2021* 
Net income153,494 144,139 823,232 754,405 
Net finance costs16,963 21,441 80,397 73,018 
Income tax expense46,403 49,399 242,409 151,806 
Depreciation of property and equipment56,587 65,294 248,638 225,007 
Depreciation of right-of-use assets32,150 31,190 126,276 112,782 
Amortization of intangible assets13,262 13,653 55,679 55,243 
(Gain) loss on sale of business2,069  (73,653) 
Bargain purchase gain   (283,593)
(Gain) loss on sale of land and buildings 9 (43)19 
Gain on sale of assets held for sale(15,972)(6,654)(77,911)(12,209)
(Gain) loss on sale of intangible assets (5) 1 
Adjusted EBITDA304,956 318,466 1,425,024 1,076,479 
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination.
 
 

Segmented adjusted EBITDA reconciliation:

(unaudited)
(in thousands of U.S. dollars)
Three months ended
December 31
 Years ended
December 31
 
 2022 2021 2022 2021* 
Package and Courier        
Operating income37,563 36,713 134,306 108,440 
Depreciation and amortization6,372 6,783 26,532 26,404 
Loss on disposal of intangible assets   1 
Adjusted EBITDA43,935 43,496 160,838 134,845 
Less-Than-Truckload        
Operating income88,240 103,449 470,807 572,798 
Depreciation and amortization38,080 37,739 152,666 116,060 
Bargain purchase gain   (271,593)
(Gain) loss on sale of land and buildings(1)6  16 
Gain on sale of assets held for sale(12)(5)(55,714)(1,640)
Adjusted EBITDA126,307 141,189 567,759 415,641 
Truckload        
Operating income71,842 61,803 366,868 230,189 
Depreciation and amortization48,124 56,699 212,430 211,561 
(Gain) loss on sale of land and buildings1  (43) 
Gain on sale of assets held for sale(15,960)(6,649)(22,197)(10,569)
Gain on disposal of intangible assets (5)  
Adjusted EBITDA104,007 111,848 557,058 431,181 
Logistics        
Operating income34,204 32,869 140,446 142,794 
Depreciation and amortization9,269 9,593 38,244 38,208 
Bargain purchase gain   (12,000)
Loss on sale of land and buildings 3  3 
Adjusted EBITDA43,473 42,465 178,690 169,005 
Corporate        
Operating loss(14,989)(19,855)33,611 (74,992)
Depreciation and amortization154 (677)721 799 
(Gain) loss on sale of business2,069  (73,653) 
Adjusted EBITDA(12,766)(20,532)(39,321)(74,193)
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination 
  
  

Adjusted EBITDA margin is calculated as adjusted EBITDA as a percentage of revenue before fuel surcharge.

Operating margin is calculated as operating income (loss) as a percentage of revenue before fuel surcharge.

Adjusted operating ratio: Operating expenses before gain on sale of business, bargain purchase gain, and gain or loss on sale of land and buildings and assets held for sale, and gain or loss on disposal of intangible assets (“Adjusted operating expenses”), net of fuel surcharge revenue, divided by revenue before fuel surcharge. Although the adjusted operating ratio is not a recognized financial measure defined by IFRS, it is a widely recognized measure in the transportation industry, which the Company believes provides a comparable benchmark for evaluating the Company’s performance. Also, to facilitate the comparison of business level activity and operating costs between periods, the Company compares the revenue before fuel surcharge (“revenue”) and reallocates the fuel surcharge revenue to materials and services expenses within operating expenses.

Consolidated adjusted operating ratio reconciliation:

(unaudited)
(in thousands of U.S. dollars)
Three months ended
December 31
Years ended
December 31
 
 2022 2021 2022 2021* 
Operating expenses1,739,834 1,925,935 7,666,453 6,241,200 
(Gain) loss on sale of business(2,069) 73,653  
Bargain purchase gain   283,593 
Gain (loss) on sale of land and building (9)43 (19)
Gain on sale of assets held for sale15,972 6,654 77,911 12,209 
Gain (loss) on disposal of intangible assets 5  (1)
Adjusted operating expenses1,753,737 1,932,585 7,818,060 6,536,982 
Fuel surcharge revenue(340,199)(252,491)(1,455,427)(751,644)
Adjusted operating expenses, net of fuel surcharge revenue1,413,538 1,680,094 6,362,633 5,785,338 
Revenue before fuel surcharge1,616,495 1,888,423 7,357,064 6,468,785 
Adjusted operating ratio87.4%89.0%86.5%89.4%
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination.
 
 

Less-Than-Truckload and Truckload reportable segments adjusted operating ratio reconciliation and Truckload operating segments reconciliations:

(unaudited)
(in thousands of U.S. dollars)
Three months ended
December 31
 Years ended
December 31
 
 2022 2021* 2022 2021* 
Less-Than-Truckload        
Total revenue903,713 959,546 4,023,163 2,815,390 
Total operating expenses815,473 856,097 3,552,356 2,242,592 
Operating income88,240 103,449 470,807 572,798 
Operating expenses815,473 856,097 3,552,356 2,242,592 
Bargain purchase gain   271,593 
Gain (loss) on sale of land and buildings and assets held for sale13 (1)55,714 1,624 
Adjusted operating expenses815,486 856,096 3,608,070 2,515,809 
Fuel surcharge revenue(182,930)(136,635)(779,606)(374,750)
Adjusted operating expenses, net of fuel surcharge revenue632,556 719,461 2,828,464 2,141,059 
Revenue before fuel surcharge720,783 822,911 3,243,557 2,440,640 
Adjusted operating ratio87.8%87.4%87.2%87.7%
Less-Than-Truckload - Revenue before fuel surcharge        
U.S. based LTL601,436 680,212 2,709,762 1,889,611 
Canadian based LTL123,176 144,697 548,012 556,891 
Eliminations(3,829)(1,998)(14,217)(5,862)
 720,783 822,911 3,243,557 2,440,640 
Less-Than-Truckload - Fuel surcharge revenue        
U.S. based LTL142,180 108,275 615,840 281,110 
Canadian based LTL41,051 28,598 165,185 94,166 
Eliminations(301)(238)(1,419)(526)
 182,930 136,635 779,606 374,750 
Less-Than-Truckload - Operating income (loss)        
U.S. based LTL57,819 72,077 327,793 459,071 
Canadian based LTL30,421 31,372 143,014 113,727 
 88,240 103,449 470,807 572,798 
U.S. based LTL        
Operating expenses*685,797 716,410 2,997,809 1,711,650 
Bargain purchase gain- - - 271,593 
Gain (loss) on sale of land and buildings and assets held for sale- (7)55,054 (17)
Adjusted operating expenses685,797 716,403 3,052,863 1,983,226 
Fuel surcharge revenue(142,180)(108,275)(615,840)(281,110)
Adjusted operating expenses, net of fuel surcharge543,617 608,128 2,437,023 1,702,116 
Revenue before fuel surcharge601,436 680,212 2,709,762 1,889,611 
Adjusted operating ratio90.4%89.4%89.9%90.1%
Canadian based LTL        
Operating expenses*133,806 141,923 570,183 537,330 
Gain on sale of land and buildings and assets held for sale13 6 660 1,641 
Adjusted operating expenses133,819 141,929 570,843 538,971 
Fuel surcharge revenue(41,051)(28,598)(165,185)(94,166)
Adjusted operating expenses, net of fuel surcharge92,768 113,331 405,658 444,805 
Revenue before fuel surcharge123,176 144,697 548,012 556,891 
Adjusted operating ratio75.3%78.3%74.0%79.9%
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination 
  
  

Less-Than-Truckload and Truckload reportable segments adjusted operating ratio reconciliation and Truckload operating segments reconciliations (continued):

(unaudited)
(in thousands of U.S. dollars)
Three months ended
December 31
 Years ended
December 31
 
 2022 2021 2022 2021 
Truckload        
Total revenue502,784 584,009 2,451,038 2,162,752 
Total operating expenses430,942 522,206 2,084,170 1,932,563 
Operating income71,842 61,803 366,868 230,189 
Operating expenses430,942 522,206 2,084,170 1,932,563 
Gain on sale of business    
Gain on sale of land and buildings and assets held for sale15,959 6,649 22,240 10,569 
Adjusted operating expenses446,901 528,855 2,106,410 1,943,132 
Fuel surcharge revenue(99,433)(77,577)(464,707)(261,595)
Adjusted operating expenses, net of fuel surcharge revenue347,468 451,278 1,641,703 1,681,537 
Revenue before fuel surcharge403,351 506,432 1,986,331 1,901,157 
Adjusted operating ratio86.1%89.1%82.7%88.4%
Truckload - Revenue before fuel surcharge        
U.S. based Conventional TL1 106,171 310,026 424,320 
Canadian based Conventional TL79,101 73,786 322,553 250,177 
Specialized TL1325,493 328,648 1,362,390 1,233,761 
Eliminations(1,243)(2,173)(8,638)(7,101)
 403,351 506,432 1,986,331 1,901,157 
Truckload - Fuel surcharge revenue        
U.S. based Conventional TL1 20,337 82,059 72,527 
Canadian based Conventional TL17,307 9,414 62,929 29,043 
Specialized TL182,288 48,045 321,362 160,574 
Eliminations(162)(219)(1,643)(549)
 99,433 77,577 464,707 261,595 
Truckload - Operating income        
U.S. based Conventional TL1 12,409 46,133 49,989 
Canadian based Conventional TL30,463 8,565 84,321 30,367 
Specialized TL141,379 40,829 236,414 149,833 
 71,842 61,803 366,868 230,189 
U.S. based Conventional TL1        
Operating expenses* 114,099 345,952 446,858 
Gain on sale of land and buildings and assets held for sale    
Adjusted operating expenses 114,099 345,952 446,858 
Fuel surcharge revenue (20,337)(82,059)(72,527)
Adjusted operating expenses, net of fuel surcharge revenue 93,762 263,893 374,331 
Revenue before fuel surcharge 106,171 310,026 424,320 
Adjusted operating ratio 88.3%85.1%88.2%
Canadian based Conventional TL        
Operating expenses*65,945 74,635 301,161 248,853 
Gain on sale of land and buildings and assets held for sale15,485  15,529 17 
Adjusted operating expenses81,430 74,635 316,690 248,870 
Fuel surcharge revenue(17,307)(9,414)(62,929)(29,043)
Adjusted operating expenses, net of fuel surcharge revenue64,123 65,221 253,761 219,827 
Revenue before fuel surcharge79,101 73,786 322,553 250,177 
Adjusted operating ratio81.1%88.4%78.7%87.9%
Specialized TL1        
Operating expenses*366,402 335,864 1,447,338 1,244,502 
Gain on sale of assets held for sale474 6,649 6,711 10,552 
Adjusted operating expenses366,876 342,513 1,454,049 1,255,054 
Fuel surcharge revenue(82,288)(48,045)(321,362)(160,574)
Adjusted operating expenses, net of fuel surcharge revenue284,588 294,468 1,132,687 1,094,480 
Revenue before fuel surcharge325,493 328,648 1,362,390 1,233,761 
Adjusted operating ratio87.4%89.6%83.1%88.7%
1 Recasted comparative figures for change in operating segments of the dedicated operations from US Conventional Truckload as a result of the sale of business of CFI.
* Operating expenses excluding intra TL eliminations
 
  
  

Free cash flow conversion : Adjusted EBITDA less net capital expenditures, divided by the adjusted EBITDA. Management believes that this measure provides a benchmark to evaluate the performance of the Company in regard to its ability to convert its operating profit into free cash flow.

(unaudited)
(in thousands of U.S. dollars)
Three months ended
December 31
 Years ended
December 31
 
 2022 2021 2022 2021* 
Net income153,494 144,139 823,232 754,405 
Net finance costs16,963 21,441 80,397 73,018 
Income tax expense46,403 49,399 242,409 151,806 
Depreciation of property and equipment56,587 65,294 248,638 225,007 
Depreciation of right-of-use assets32,150 31,190 126,276 112,782 
Amortization of intangible assets13,262 13,653 55,679 55,243 
(Gain) loss on the sale of business2,069  (73,653) 
Bargain purchase gain   (283,593)
(Gain) loss on sale of land and buildings 9 (43)19 
Gain on sale of assets held for sale(15,972)(6,654)(77,911)(12,209)
(Gain) loss on sale of intangible assets (5) 1 
Adjusted EBITDA304,956 318,466 1,425,024 1,076,479 
Net capital expenditures(77,755)(68,237)(175,954)(136,782)
Adjusted EBITDA less net capital expenditures227,201 250,229 1,249,070 939,697 
Free cash flow conversion74.5%78.6%87.7%87.3%
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination.
 
 

Free cash flow: Net cash from operating activities less additions to property and equipment plus proceeds from sale of property and equipment and assets held for sale. Management believes that this measure provides a benchmark to evaluate the performance of the Company in regard to its ability to meet capital requirements.

(unaudited)
(in thousands of U.S. dollars)
Three months ended
December 31
 Years ended
December 31
 
 2022 2021 2022 2021 
Net cash from operating activities248,348 190,333 971,645 855,351 
Additions to property and equipment(111,716)(102,595)(350,824)(267,173)
Proceeds from sale of property and equipment17,685 22,508 128,821 92,842 
Proceeds from sale of assets held for sale33,956 10,503 131,250 19,869 
Free cash flow188,273 120,749 880,892 700,889 
         
         

Total assets less intangible assets: Management believes that this presents a more useful basis to evaluate the return on the productive assets. The excluded intangibles relate primarily to intangibles assets acquired through business acquisitions.

(unaudited)
(in thousands of U.S. dollars)
Package
 and
 Courier
Less-
Than-Truckload
TruckloadLogisticsCorporateEliminationsTotal 
As at December 31, 2022        
Total assets362,7242,275,6721,861,093731,564274,777-5,505,830 
Intangible assets180,119167,798775,464468,547182-1,592,110 
Total assets less intangible assets182,6052,107,8741,085,629263,017274,595-3,913,720 
         
As at December 31, 2021*        
Total assets379,8812,351,1382,317,615746,63888,391-5,883,663 
Intangible assets193,765188,604955,608454,612332-1,792,921 
Total assets less intangible assets186,1162,162,5341,362,007292,02688,059-4,090,742 
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination.
 
 

Net capital expenditures: Additions to rolling stock and equipment, net of proceeds from the sale of rolling stock and equipment and assets held for sale excluding property. Management believes that this measure illustrates the recurring net capital expenditures which is required for the respective period.

(unaudited)
(in thousands of U.S. dollars)
Package
 and
 Courier
 Less-
Than-Truckload
 Truckload Logistics CorporateEliminationsTotal 
Three months ended December 31, 2022            
Additions to rolling stock5,786 58,353 23,167 - - 87,306 
Additions to equipment579 5,025 2,134 437 58 8,233 
Proceeds from the sale of rolling stock(320)(6,399)(11,252)(115)- (18,086)
Proceeds from the sale of equipment- 294 199 (191)- 302 
Net capital expenditures6,045 57,273 14,248 131 58 77,755 
             
Three months ended December 31, 2021            
Additions to rolling stock4,794 47,680 33,394 - - 85,868 
Additions to equipment1,112 1,620 1,801 235 20 4,788 
Proceeds from the sale of rolling stock20 (2,313)(20,075)(26)- (22,394)
Proceeds from the sale of equipment- (1)(7)(17)- (25)
Net capital expenditures5,926 46,986 15,113 192 20 68,237 
             
YTD ended December 31, 2022            
Additions to rolling stock9,991 134,898 141,388  - 286,277 
Additions to equipment2,227 10,888 3,747 1,032 170 18,064 
Proceeds from the sale of rolling stock(1,579)(13,067)(111,582)(165)- (126,393)
Proceeds from the sale of equipment(3)95 (1,895)(191)- (1,994)
Net capital expenditures10,636 132,814 31,658 676 170 175,954 
             
YTD ended December 31, 2021            
Additions to rolling stock11,569 55,087 150,282 142 - 217,080 
Additions to equipment3,125 2,655 6,897 373 141 13,191 
Proceeds from the sale of rolling stock(246)(5,024)(87,995)(146)- (93,411)
Proceeds from the sale of equipment(3)(15)(7)(53)- (78)
Net capital expenditures14,445 52,703 69,177 316 141 136,782 
             
             

Covenants : The following table indicates the Company’s financial covenants to be maintained under its credit facility. These covenants are measured on a consolidated rolling twelve-month basis and are calculated as prescribed by the credit agreement which, among other things, requires the exclusion of the impact of the new standard IFRS 16 Leases:

(unaudited)
'Covenants
RequirementsAs at
December 31, 2022
Funded debt-to- EBITDA ratio [ratio of total debt, net of cash, plus letters of credit and some other long-term liabilities to earnings before interest, income tax, depreciation and amortization (“EBITDA”), including last twelve months adjusted EBITDA from business acquisitions]< 3.500.96
EBITDAR Coverage Ratio [ratio of EBITDAR (EBITDA before rent and including last twelve months adjusted EBITDAR from business acquisitions) to interest and net rent expenses]> 1.756.22
   
   

Return on invested capital (“ROIC”): Management believes ROIC at the segment level is a useful measure in the efficiency in the use of capital funds. The Company calculates ROIC as segment operating income net of exclusions, after tax, divided by the segment average invested capital. Operating income net of exclusions, after tax, is calculated as the trailing twelve months of operating income before bargain purchase gain, gain or loss on the sale of land and buildings and assets held for sale, and amortization of intangible assets, after tax using the statutory tax rate of the Company. Average invested capital is calculated as intangibles plus total assets excluding intangibles, net of trade and other payables, income taxes payable and provisions averaged between the beginning and ending balance over a twelve-month period.

Return on invested capital segment reconciliation: 
     
(unaudited)
(in thousands of U.S. dollars)
As at
December 31
 
 2022 2021 
Package and Courier    
Operating income134,306 108,440 
Amortization of intangible assets645 903 
Operating income, net of exclusions134,951 109,343 
Income tax26.5%26.5%
Operating income net of exclusions, after tax99,189 80,367 
Intangible assets180,119 193,765 
Total assets, excluding intangible assets182,605 186,116 
less: Trade and other payables, income taxes payable and provisions(67,428)(65,438)
Total invested capital, current year295,296 314,443 
Intangible assets, prior year193,765 193,288 
Total assets, excluding intangible assets, prior year186,116 194,631 
less: Trade and other payables, income taxes payable and provisions, prior year(65,438)(66,793)
Total invested capital, prior year314,443 321,126 
Average invested capital304,870 317,785 
Return on invested capital32.5%25.3%
Less-Than-Truckload - Canadian based LTL    
Operating income143,014 113,727 
Gain on sale of assets held for sale(660)(1,640)
Amortization of intangible assets7,713 9,004 
Operating income, net of exclusions150,067 121,091 
Income tax26.5%26.5%
Operating income net of exclusions, after tax110,299 89,002 
Intangible assets162,397 182,084 
Total assets, excluding intangible assets352,949 373,655 
less: Trade and other payables, income taxes payable and provisions(77,439)(74,241)
Total invested capital, current year437,907 481,498 
Intangible assets, prior year182,084 189,579 
Total assets, excluding intangible assets, prior year373,655 403,549 
less: Trade and other payables, income taxes payable and provisions, prior year(74,241)(76,608)
Total invested capital, prior year481,498 516,520 
Average invested capital459,703 499,009 
Return on invested capital24.0%17.8%
     
     


  
Return on invested capital segment reconciliation (continued): 
     
(unaudited)
(in thousands of U.S. dollars)
As at
December 31
 
 2022 2021 
Truckload - Canadian based Conventional TL    
Operating income84,321 30,367 
Gain on sale of land and buildings(44) 
Gain on sale of assets held for sale(15,485)(17)
Amortization of intangible assets1,958 2,124 
Operating income, net of exclusions70,750 32,474 
Income tax26.5%26.5%
Operating income net of exclusions, after tax52,001 23,868 
Intangible assets96,941 104,947 
Total assets, excluding intangible assets185,740 169,197 
less: Trade and other payables, income taxes payable and provisions(40,671)(28,473)
Total invested capital, current year242,010 245,671 
Intangible assets, prior year104,947 96,737 
Total assets, excluding intangible assets, prior year169,197 121,407 
less: Trade and other payables, income taxes payable and provisions, prior year(28,473)(24,839)
Total invested capital, prior year245,671 193,305 
Average invested capital243,841 219,488 
Return on invested capital21.3%10.9%
Truckload - Specialized TL*    
Operating income236,414 149,833 
Gain on sale of assets held for sale(6,711)(10,553)
Amortization of intangible assets20,495 17,394 
Operating income, net of exclusions250,198 156,674 
Income tax26.5%26.5%
Operating income net of exclusions, after tax183,896 115,155 
Intangible assets678,522 658,692 
Total assets, excluding intangible assets906,564 791,293 
less: Trade and other payables, income taxes payable and provisions(151,097)(139,683)
Total invested capital, current year1,433,989 1,310,302 
Intangible assets, prior year658,692 615,865 
Total assets, excluding intangible assets, prior year791,293 701,987 
less: Trade and other payables, income taxes payable and provisions, prior year(139,683)(112,888)
Total invested capital, prior year1,310,302 1,204,964 
Average invested capital1,372,146 1,257,633 
Return on invested capital13.4%9.2%
Logistics    
Operating income140,446 142,794 
Loss on sale of land and buildings 3 
Amortization of intangible assets21,990 22,683 
Bargain Purchase gain (12,000)
Operating income, net of exclusions162,436 153,480 
Income tax26.5%26.5%
Operating income net of exclusions, after tax119,390 112,808 
Intangible assets468,547 454,612 
Total assets, excluding intangible assets263,550 292,026 
less: Trade and other payables, income taxes payable and provisions(186,557)(199,967)
Total invested capital, current year545,540 546,671 
Intangible assets, prior year454,612 457,098 
Total assets, excluding intangible assets, prior year292,026 272,592 
less: Trade and other payables, income taxes payable and provisions, prior year(199,967)(144,305)
Total invested capital, prior year546,671 585,385 
Average invested capital546,106 566,028 
Return on invested capital21.9%19.9%
* Recasted comparative figures for change in operating segments of the dedicated operations from US Conventional Truckload as a result of the sale of business of CFI. 
  
  

Return on invested capital for US LTL : Management believes ROIC at the segment level is a useful measure in the efficiency in the use of capital funds and the ROIC calculation for U.S. LTL has been modified as compared to the other segment ROICs due to the impact of the bargain purchase gain to provide more consistent comparison to other segments ROIC calculation. The modification includes reducing the total assets, excluding intangible assets by the bargain purchase gain, using the acquisition price instead of the prior year invested capital, and reducing the current year total invested capital by the total liabilities of the US .

(unaudited)
(in thousands of U.S. dollars)
As at
December 31
 2022 2021*
Less-Than-Truckload - U.S. based LTL   
Operating income327,793 
Loss on sale of land and buildings8  
Gain on sale of assets held for sale(55,054) 
Amortization of intangible assets1,118  
Operating income, net of exclusions273,865 
Income tax26.5% 
Operating income net of exclusions, after tax201,291 
Intangible assets5,401  
Total assets, excluding intangible assets1,483,288  
less: Total liabilities(637,340) 
Total invested capital, current year851,349 
Total invested capital, acquisition price838,910 
Average invested capital845,130 
Return on invested capital23.8% 
* The return on invested capital for the U.S. LTL is not disclosed as the trailing twelve-month information was not available for 2021.  

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