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TFI International Announces 2022 Fourth Quarter and Full-Year Results
Press Releases

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 highlights Quarters ended
December 31
Years ended
December 31
(in millions of U.S. dollars, except per share data) 2022 2021* 2022 2021*
Total revenue 1,956.7 2,140.9 8,812.5 7,220.4
Revenue before fuel surcharge 1,616.5 1,888.4 7,357.1 6,468.8
Adjusted EBITDA1 305.0 318.5 1,425.0 1,076.5
Operating income 216.9 215.0 1,146.0 979.2
Net cash from operating activities 248.3 190.3 971.6 855.4
Net income 153.5 144.1 823.2 754.4
EPS – diluted ($) 1.74 1.52 9.02 7.91
Adjusted net income1 151.8 148.6 731.7 498.3
Adjusted EPS – diluted1 ($) 1.72 1.57 8.02 5.23
Weighted average number of shares (‘000s) 86,670 92,669 89,360 93,054
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 surcharge1 129,074   720,783   403,351   375,968     (12,681 ) 1,616,495  
% of total revenue2 9 % 46 % 25 % 20 %         100 %
Adjusted EBITDA3 43,935   126,307   104,007   43,473   (12,766 )   304,956  
Adjusted EBITDA margin3,4 34.0 % 17.5 % 25.8 % 11.6 %         18.9 %
Operating income (loss) 37,563   88,240   71,842   34,204   (14,989 )   216,860  
Operating margin3,4 29.1 % 12.2 % 17.8 % 9.1 %         13.4 %
Total assets less intangible assets3 182,605   2,107,874   1,085,629   263,017   274,595     3,913,720  
Net capital expenditures3 6,045   57,273   14,248   131   58     77,755  
Three months ended December 31, 2021                            
Revenue before fuel surcharge1 150,074   822,911   506,432   427,561     (18,555 ) 1,888,423  
% of total revenue2 8 % 44 % 27 % 20 %         100 %
Adjusted EBITDA3 43,496   141,189   111,848   42,465   (20,532 )   318,466  
Adjusted EBITDA margin3,4 29.0 % 17.2 % 22.1 % 9.9 %         16.9 %
Operating income (loss) 36,713   103,449   61,803   32,869   (19,855 )   214,979  
Operating margin3,4 24.5 % 12.6 % 12.2 % 7.7 %         11.4 %
Total assets less intangible assets3 186,116   2,162,534   1,362,007   292,026   88,059       4,090,742  
Net capital expenditures3 5,926   46,986   15,113   192   20     68,237  
YTD December 31, 2022                            
Revenue before fuel surcharge1 498,972   3,243,557   1,986,331   1,689,122     (60,918 ) 7,357,064  
% of total revenue2 7 % 45 % 28 % 20 %         100 %
Adjusted EBITDA3 160,838   567,759   557,058   178,690   (39,321 )   1,425,024  
Adjusted EBITDA margin3,4 32.2 % 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 margin3,4 26.9 % 14.5 % 18.5 % 8.3 %         15.6 %
Total assets less intangible assets3 182,605   2,107,874   1,085,629   263,017   274,595     3,913,720  
Net capital expenditures3 10,636   132,814   31,658   676   170     175,954  
YTD December 31, 2021                            
Revenue before fuel surcharge1 560,147   2,440,640   1,901,157   1,620,926     (54,085 ) 6,468,785  
% of total revenue2 9 % 39 % 30 % 23 %         100 %
Adjusted EBITDA3 134,845   415,641   431,181   169,005   (74,193 )   1,076,479  
Adjusted EBITDA margin3,4 24.1 % 17.0 % 22.7 % 10.4 %         16.6 %
Operating income (loss) 108,440   572,798   230,189   142,794   (74,992 )   979,229  
Operating margin3,4 19.4 % 23.5 % 12.1 % 8.8 %         15.1 %
Total assets less intangible assets3 186,116   2,162,534   1,362,007   292,026   88,059     4,090,742  
Net capital expenditures3 14,445   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
abedard@tfiintl.com

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 equivalents 147,117   19,292  
Trade and other receivables 1,030,726   1,056,023  
Inventoried supplies 24,181   24,402  
Current taxes recoverable 12,788   6,080  
Prepaid expenses 38,501   54,518  
Assets held for sale 10,250   1,943  
Current assets 1,263,563   1,162,258  
         
Property and equipment 2,131,955   2,455,141  
Right-of-use assets 381,640   398,533  
Intangible assets 1,592,110   1,792,921  
Investments1 85,964   31,391  
Employee benefits 4,359    
Other assets 19,192   13,724  
Deferred tax assets 27,047   29,695  
Non-current assets 4,242,267   4,721,405  
Total assets 5,505,830   5,883,663  
         
Liabilities        
Trade and other payables 708,768   861,908  
Current taxes payable 41,714   16,552  
Provisions 43,903   39,012  
Other financial liabilities 19,275   10,566  
Long-term debt 37,087   363,586  
Lease liabilities 115,934   115,344  
Current liabilities 966,681   1,406,968  
         
Long-term debt 1,278,670   1,244,508  
Lease liabilities 297,105   313,862  
Employee benefits   68,037  
Provisions 131,736   108,145  
Other financial liabilities 382   8,033  
Deferred tax liabilities 368,186   423,755  
Non-current liabilities 2,076,079   2,166,340  
Total liabilities 3,042,760   3,573,308  
         
Equity        
Share capital 1,089,229   1,133,181  
Contributed surplus 41,491   39,150  
Accumulated other comprehensive income (233,321 ) (144,665 )
Retained earnings 1,565,671   1,282,689  
Total equity 2,463,070   2,310,355  
         
Contingencies, letters of credit and other commitments        
Subsequent events        
Total liabilities and equity 5,505,830   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*  
         
Revenue 7,357,064   6,468,785  
Fuel surcharge 1,455,427   751,644  
Total revenue 8,812,491   7,220,429  
         
Materials and services expenses 4,592,191   3,815,453  
Personnel expenses 2,362,856   1,974,081  
Other operating expenses 492,291   380,342  
Depreciation of property and equipment 248,638   225,007  
Depreciation of right-of-use assets 126,276   112,782  
Amortization of intangible assets 55,679   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 expenses 7,666,453   6,241,200  
         
Operating income 1,146,038   979,229  
         
Finance (income) costs        
Finance income (1,750 ) (5,127 )
Finance costs 82,147   78,145  
Net finance costs 80,397   73,018  
         
Income before income tax 1,065,641   906,211  
Income tax expense 242,409   151,806  
         
Net income 823,232   754,405  
         
Earnings per share        
Basic earnings per share 9.21   8.11  
Diluted earnings per share 9.02   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 income 823,232   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 tax 292   87  
Items that may never be reclassified to income:        
Defined benefit plan remeasurement, net of tax 63,508   (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 income 799,343   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 tax 22,800   (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 tax 1,784   (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, 2022 1,089,229   41,491     (239,120 ) 5,799   1,565,671   2,463,070  
                             
Balance as at December 31, 2020 1,120,049   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 tax 26,324   (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 tax 10,257   (4,944 )       (18,860 ) (13,547 )
Total transactions with owners, recorded directly in equity 13,132   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 income 823,232   754,405  
Adjustments for:        
Depreciation of property and equipment 248,638   225,007  
Depreciation of right-of-use assets 126,276   112,782  
Amortization of intangible assets 55,679   55,243  
Share-based payment transactions 14,648   15,424  
Net finance costs 80,397   73,018  
Income tax expense 242,409   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 benefits 14,946   (20,193 )
Provisions, net of payments 26,044   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 activities 971,645   855,351  
         
Cash flows from (used in) investing activities        
Purchases of property and equipment (350,824 ) (268,656 )
Proceeds from sale of property and equipment 128,821   92,842  
Proceeds from sale of assets held for sale 131,250   19,869  
Purchases of intangible assets (6,120 ) (7,143 )
Proceeds from sale of intangible assets 250    
Proceeds from sale of business, net of cash disposed 546,228    
Business combinations, net of cash acquired (158,251 ) (1,008,131 )
Purchases of investments (80,551 ) (35,913 )
Proceeds from sale of investments 12,930   40,686  
Others (311 ) 3,789  
Net cash from (used in) investing activities 223,422   (1,162,657 )
         
Cash flows (used in) from financing activities        
Net decrease (increase) in bank indebtedness 7,490   (7,173 )
Proceeds from long-term debt 334,164   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 options 16,502   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 equivalents 127,825   14,995  
Cash and cash equivalents, beginning of year 19,292   4,297  
Cash and cash equivalents, end of year 147,117   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.

  Package Less-          
  and Than-          
  Courier Truckload Truckload Logistics Eliminations   Total
2022
Canada 650,844 667,506 1,182,198 256,714 (34,202 ) 2,723,060
United States 3,355,657 1,268,840 1,488,941 (41,632 ) 6,071,806
Mexico 17,625   17,625
Total revenue 650,844 4,023,163 2,451,038 1,763,280 (75,834 ) 8,812,491
               
2021
Canada 641,449 576,311 912,166 269,568 (31,193 ) 2,368,301
United States 2,239,079 1,250,586 1,370,843 (30,041 ) 4,830,467
Mexico 21,661   21,661
Total revenue 641,449 2,815,390 2,162,752 1,662,072 (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 revenue 172,381       177,368       650,844       641,449      
Fuel surcharge (43,307 )     (27,294 )     (151,872 )     (81,302 )    
Revenue 129,074   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 expenses 35,877   27.8 % 39,060   26.0 % 144,650   29.0 % 154,820   27.6 %
Other operating expenses 6,667   5.2 % 6,905   4.6 % 26,845   5.4 % 26,762   4.8 %
Depreciation of property and equipment 3,080   2.4 % 3,297   2.2 % 12,863   2.6 % 12,392   2.2 %
Depreciation of right-of-use assets 3,135   2.4 % 3,300   2.2 % 13,024   2.6 % 13,109   2.3 %
Amortization of intangible assets 157   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 income 37,563   29.1 % 36,713   24.5 % 134,306   26.9 % 108,440   19.4 %
Adjusted EBITDA1 43,935   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 revenue 903,713       959,546       4,023,163       2,815,390      
Fuel surcharge (182,930 )     (136,635 )     (779,606 )     (374,750 )    
Revenue 720,783   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 expenses 311,248   43.2 % 348,237   42.3 % 1,432,857   44.2 % 1,022,214   41.9 %
Other operating expenses 58,050   8.1 % 60,196   7.3 % 243,347   7.5 % 155,992   6.4 %
Depreciation of property and equipment 26,374   3.7 % 25,846   3.1 % 104,850   3.2 % 73,242   3.0 %
Depreciation of right-of-use assets 9,641   1.3 % 9,398   1.1 % 38,985   1.2 % 33,050   1.4 %
Amortization of intangible assets 2,065   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 income 88,240   12.2 % 103,449   12.6 % 470,807   14.5 % 572,798   23.5 %
Adjusted EBITDA1 126,307   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 revenue 502,784       584,009       2,451,038       2,162,752      
Fuel surcharge (99,433 )     (77,577 )     (464,707 )     (261,595 )    
Revenue 403,351   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 expenses 115,449   28.6 % 160,351   31.7 % 585,891   29.5 % 604,041   31.8 %
Other operating expenses 13,709   3.4 % 19,193   3.8 % 76,612   3.9 % 66,468   3.5 %
Depreciation of property and equipment 26,695   6.6 % 35,652   7.0 % 129,013   6.5 % 137,301   7.2 %
Depreciation of right-of-use assets 15,730   3.9 % 15,087   3.0 % 59,473   3.0 % 52,680   2.8 %
Amortization of intangible assets 5,699   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 income 71,842   17.8 % 61,803   12.2 % 366,868   18.5 % 230,189   12.1 %
Adjusted EBITDA1 104,007   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 data Three 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 ratio1 87.4 % 89.6 %         83.1 % 88.7 %        
Tractor count, average 3,839   3,845   (7 ) -0.2 % 3,641   3,722   (81 ) -2.2 %
Trailer count, average 11,004   11,302   (298 ) -2.6 % 10,833   10,912   (79 ) -0.7 %
Tractor age 3.6   3.4   0.2   5.5 % 3.6   3.4   0.2   5.5 %
Trailer age 11.5   10.5   1.0   9.8 % 11.5   10.5   1.0   9.8 %
Number of owner operators, average 1,193   1,201   (8 ) -0.7 % 1,126   1,217   (91 ) -7.5 %
Return on invested capital1 13.4 % 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 ratio1 81.1 % 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, average 858   728   130   17.9 % 741   640   102   15.9 %
Trailer count, average 3,636   3,401   235   6.9 % 3,456   2,884   572   19.8 %
Tractor age 3.5   4.1   (0.6 ) -13.7 % 3.5   4.1   (0.6 ) -13.7 %
Trailer age 7.3   7.5   (0.2 ) -2.5 % 7.3   7.5   (0.2 ) -2.5 %
Number of owner operators, average 254   324   (70 ) -21.7 % 269   306   (37 ) -12.0 %
Return on invested capital1 21.3 % 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 revenue 394,071       441,086       1,763,280       1,662,072      
Fuel surcharge (18,103 )     (13,525 )     (74,158 )     (41,146 )    
Revenue 375,968   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 expenses 35,770   9.5 % 29,419   6.9 % 143,505   8.5 % 116,523   7.2 %
Other operating expenses 27,107   7.2 % 32,443   7.6 % 134,923   8.0 % 111,742   6.9 %
Depreciation of property and equipment 333   0.1 % 375   0.1 % 1,460   0.1 % 1,581   0.1 %
Depreciation of right-of-use assets 3,644   1.0 % 3,442   0.8 % 14,794   0.9 % 13,943   0.9 %
Amortization of intangible assets 5,292   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 income 34,204   9.1 % 32,869   7.7 % 140,446   8.3 % 142,794   8.8 %
Adjusted EBITDA1 43,473   11.6 % 42,465   9.9 % 178,690   10.6 % 169,005   10.4 %
Return on invested capital1 21.9 %     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 income 153,494   144,139   823,232   754,405  
Amortization of intangible assets related to business acquisitions 13,969   13,128   52,003   50,498  
Net change in fair value and accretion expense of contingent considerations 90   1,571   216   1,932  
Net foreign exchange (gain) loss (564 ) (939 ) 556   (1,471 )
(Gain) loss on sale of business and direct attributable costs 2,069     (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 income1 151,759   148,620   731,668   498,348  
Adjusted EPS – basic1 1.75   1.60   8.19   5.36  
Adjusted EPS – diluted1 1.72   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 income 153,494   144,139   823,232   754,405  
Net finance costs 16,963   21,441   80,397   73,018  
Income tax expense 46,403   49,399   242,409   151,806  
Depreciation of property and equipment 56,587   65,294   248,638   225,007  
Depreciation of right-of-use assets 32,150   31,190   126,276   112,782  
Amortization of intangible assets 13,262   13,653   55,679   55,243  
(Gain) loss on sale of business 2,069     (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 EBITDA 304,956   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 income 37,563   36,713   134,306   108,440  
Depreciation and amortization 6,372   6,783   26,532   26,404  
Loss on disposal of intangible assets       1  
Adjusted EBITDA 43,935   43,496   160,838   134,845  
Less-Than-Truckload                
Operating income 88,240   103,449   470,807   572,798  
Depreciation and amortization 38,080   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 EBITDA 126,307   141,189   567,759   415,641  
Truckload                
Operating income 71,842   61,803   366,868   230,189  
Depreciation and amortization 48,124   56,699   212,430   211,561  
(Gain) loss on sale of land and buildings 1     (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 EBITDA 104,007   111,848   557,058   431,181  
Logistics                
Operating income 34,204   32,869   140,446   142,794  
Depreciation and amortization 9,269   9,593   38,244   38,208  
Bargain purchase gain       (12,000 )
Loss on sale of land and buildings   3     3  
Adjusted EBITDA 43,473   42,465   178,690   169,005  
Corporate                
Operating loss (14,989 ) (19,855 ) 33,611   (74,992 )
Depreciation and amortization 154   (677 ) 721   799  
(Gain) loss on sale of business 2,069     (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 expenses 1,739,834   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 sale 15,972   6,654   77,911   12,209  
Gain (loss) on disposal of intangible assets   5     (1 )
Adjusted operating expenses 1,753,737   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 revenue 1,413,538   1,680,094   6,362,633   5,785,338  
Revenue before fuel surcharge 1,616,495   1,888,423   7,357,064   6,468,785  
Adjusted operating ratio 87.4 % 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 revenue 903,713   959,546   4,023,163   2,815,390  
Total operating expenses 815,473   856,097   3,552,356   2,242,592  
Operating income 88,240   103,449   470,807   572,798  
Operating expenses 815,473   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 sale 13   (1 ) 55,714   1,624  
Adjusted operating expenses 815,486   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 revenue 632,556   719,461   2,828,464   2,141,059  
Revenue before fuel surcharge 720,783   822,911   3,243,557   2,440,640  
Adjusted operating ratio 87.8 % 87.4 % 87.2 % 87.7 %
Less-Than-Truckload – Revenue before fuel surcharge                
U.S. based LTL 601,436   680,212   2,709,762   1,889,611  
Canadian based LTL 123,176   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 LTL 142,180   108,275   615,840   281,110  
Canadian based LTL 41,051   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 LTL 57,819   72,077   327,793   459,071  
Canadian based LTL 30,421   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 expenses 685,797   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 surcharge 543,617   608,128   2,437,023   1,702,116  
Revenue before fuel surcharge 601,436   680,212   2,709,762   1,889,611  
Adjusted operating ratio 90.4 % 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 sale 13   6   660   1,641  
Adjusted operating expenses 133,819   141,929   570,843   538,971  
Fuel surcharge revenue (41,051 ) (28,598 ) (165,185 ) (94,166 )
Adjusted operating expenses, net of fuel surcharge 92,768   113,331   405,658   444,805  
Revenue before fuel surcharge 123,176   144,697   548,012   556,891  
Adjusted operating ratio 75.3 % 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 revenue 502,784   584,009   2,451,038   2,162,752  
Total operating expenses 430,942   522,206   2,084,170   1,932,563  
Operating income 71,842   61,803   366,868   230,189  
Operating expenses 430,942   522,206   2,084,170   1,932,563  
Gain on sale of business        
Gain on sale of land and buildings and assets held for sale 15,959   6,649   22,240   10,569  
Adjusted operating expenses 446,901   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 revenue 347,468   451,278   1,641,703   1,681,537  
Revenue before fuel surcharge 403,351   506,432   1,986,331   1,901,157  
Adjusted operating ratio 86.1 % 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 TL 79,101   73,786   322,553   250,177  
Specialized TL1 325,493   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 TL 17,307   9,414   62,929   29,043  
Specialized TL1 82,288   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 TL 30,463   8,565   84,321   30,367  
Specialized TL1 41,379   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 sale 15,485     15,529   17  
Adjusted operating expenses 81,430   74,635   316,690   248,870  
Fuel surcharge revenue (17,307 ) (9,414 ) (62,929 ) (29,043 )
Adjusted operating expenses, net of fuel surcharge revenue 64,123   65,221   253,761   219,827  
Revenue before fuel surcharge 79,101   73,786   322,553   250,177  
Adjusted operating ratio 81.1 % 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 sale 474   6,649   6,711   10,552  
Adjusted operating expenses 366,876   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 revenue 284,588   294,468   1,132,687   1,094,480  
Revenue before fuel surcharge 325,493   328,648   1,362,390   1,233,761  
Adjusted operating ratio 87.4 % 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 income 153,494   144,139   823,232   754,405  
Net finance costs 16,963   21,441   80,397   73,018  
Income tax expense 46,403   49,399   242,409   151,806  
Depreciation of property and equipment 56,587   65,294   248,638   225,007  
Depreciation of right-of-use assets 32,150   31,190   126,276   112,782  
Amortization of intangible assets 13,262   13,653   55,679   55,243  
(Gain) loss on the sale of business 2,069     (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 EBITDA 304,956   318,466   1,425,024   1,076,479  
Net capital expenditures (77,755 ) (68,237 ) (175,954 ) (136,782 )
Adjusted EBITDA less net capital expenditures 227,201   250,229   1,249,070   939,697  
Free cash flow conversion 74.5 % 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 activities 248,348   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 equipment 17,685   22,508   128,821   92,842  
Proceeds from sale of assets held for sale 33,956   10,503   131,250   19,869  
Free cash flow 188,273   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
Truckload Logistics Corporate Eliminations Total  
As at December 31, 2022                
Total assets 362,724 2,275,672 1,861,093 731,564 274,777 5,505,830  
Intangible assets 180,119 167,798 775,464 468,547 182 1,592,110  
Total assets less intangible assets 182,605 2,107,874 1,085,629 263,017 274,595 3,913,720  
                 
As at December 31, 2021*                
Total assets 379,881 2,351,138 2,317,615 746,638 88,391 5,883,663  
Intangible assets 193,765 188,604 955,608 454,612 332 1,792,921  
Total assets less intangible assets 186,116 2,162,534 1,362,007 292,026 88,059 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   Corporate Eliminations Total  
Three months ended December 31, 2022                        
Additions to rolling stock 5,786   58,353   23,167       87,306  
Additions to equipment 579   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 expenditures 6,045   57,273   14,248   131   58   77,755  
                         
Three months ended December 31, 2021                        
Additions to rolling stock 4,794   47,680   33,394       85,868  
Additions to equipment 1,112   1,620   1,801   235   20   4,788  
Proceeds from the sale of rolling stock 20   (2,313 ) (20,075 ) (26 )   (22,394 )
Proceeds from the sale of equipment   (1 ) (7 ) (17 )   (25 )
Net capital expenditures 5,926   46,986   15,113   192   20   68,237  
                         
YTD ended December 31, 2022                        
Additions to rolling stock 9,991   134,898   141,388       286,277  
Additions to equipment 2,227   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 expenditures 10,636   132,814   31,658   676   170   175,954  
                         
YTD ended December 31, 2021                        
Additions to rolling stock 11,569   55,087   150,282   142     217,080  
Additions to equipment 3,125   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 expenditures 14,445   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
Requirements As 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] < 3.50 0.96
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] > 1.75 6.22
     
     

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 income 134,306   108,440  
Amortization of intangible assets 645   903  
Operating income, net of exclusions 134,951   109,343  
Income tax 26.5 % 26.5 %
Operating income net of exclusions, after tax 99,189   80,367  
Intangible assets 180,119   193,765  
Total assets, excluding intangible assets 182,605   186,116  
less: Trade and other payables, income taxes payable and provisions (67,428 ) (65,438 )
Total invested capital, current year 295,296   314,443  
Intangible assets, prior year 193,765   193,288  
Total assets, excluding intangible assets, prior year 186,116   194,631  
less: Trade and other payables, income taxes payable and provisions, prior year (65,438 ) (66,793 )
Total invested capital, prior year 314,443   321,126  
Average invested capital 304,870   317,785  
Return on invested capital 32.5 % 25.3 %
Less-Than-Truckload – Canadian based LTL        
Operating income 143,014   113,727  
Gain on sale of assets held for sale (660 ) (1,640 )
Amortization of intangible assets 7,713   9,004  
Operating income, net of exclusions 150,067   121,091  
Income tax 26.5 % 26.5 %
Operating income net of exclusions, after tax 110,299   89,002  
Intangible assets 162,397   182,084  
Total assets, excluding intangible assets 352,949   373,655  
less: Trade and other payables, income taxes payable and provisions (77,439 ) (74,241 )
Total invested capital, current year 437,907   481,498  
Intangible assets, prior year 182,084   189,579  
Total assets, excluding intangible assets, prior year 373,655   403,549  
less: Trade and other payables, income taxes payable and provisions, prior year (74,241 ) (76,608 )
Total invested capital, prior year 481,498   516,520  
Average invested capital 459,703   499,009  
Return on invested capital 24.0 % 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 income 84,321   30,367  
Gain on sale of land and buildings (44 )  
Gain on sale of assets held for sale (15,485 ) (17 )
Amortization of intangible assets 1,958   2,124  
Operating income, net of exclusions 70,750   32,474  
Income tax 26.5 % 26.5 %
Operating income net of exclusions, after tax 52,001   23,868  
Intangible assets 96,941   104,947  
Total assets, excluding intangible assets 185,740   169,197  
less: Trade and other payables, income taxes payable and provisions (40,671 ) (28,473 )
Total invested capital, current year 242,010   245,671  
Intangible assets, prior year 104,947   96,737  
Total assets, excluding intangible assets, prior year 169,197   121,407  
less: Trade and other payables, income taxes payable and provisions, prior year (28,473 ) (24,839 )
Total invested capital, prior year 245,671   193,305  
Average invested capital 243,841   219,488  
Return on invested capital 21.3 % 10.9 %
Truckload – Specialized TL*        
Operating income 236,414   149,833  
Gain on sale of assets held for sale (6,711 ) (10,553 )
Amortization of intangible assets 20,495   17,394  
Operating income, net of exclusions 250,198   156,674  
Income tax 26.5 % 26.5 %
Operating income net of exclusions, after tax 183,896   115,155  
Intangible assets 678,522   658,692  
Total assets, excluding intangible assets 906,564   791,293  
less: Trade and other payables, income taxes payable and provisions (151,097 ) (139,683 )
Total invested capital, current year 1,433,989   1,310,302  
Intangible assets, prior year 658,692   615,865  
Total assets, excluding intangible assets, prior year 791,293   701,987  
less: Trade and other payables, income taxes payable and provisions, prior year (139,683 ) (112,888 )
Total invested capital, prior year 1,310,302   1,204,964  
Average invested capital 1,372,146   1,257,633  
Return on invested capital 13.4 % 9.2 %
Logistics        
Operating income 140,446   142,794  
Loss on sale of land and buildings   3  
Amortization of intangible assets 21,990   22,683  
Bargain Purchase gain   (12,000 )
Operating income, net of exclusions 162,436   153,480  
Income tax 26.5 % 26.5 %
Operating income net of exclusions, after tax 119,390   112,808  
Intangible assets 468,547   454,612  
Total assets, excluding intangible assets 263,550   292,026  
less: Trade and other payables, income taxes payable and provisions (186,557 ) (199,967 )
Total invested capital, current year 545,540   546,671  
Intangible assets, prior year 454,612   457,098  
Total assets, excluding intangible assets, prior year 292,026   272,592  
less: Trade and other payables, income taxes payable and provisions, prior year (199,967 ) (144,305 )
Total invested capital, prior year 546,671   585,385  
Average invested capital 546,106   566,028  
Return on invested capital 21.9 % 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 income 327,793  
Loss on sale of land and buildings 8    
Gain on sale of assets held for sale (55,054 )  
Amortization of intangible assets 1,118    
Operating income, net of exclusions 273,865  
Income tax 26.5 %  
Operating income net of exclusions, after tax 201,291  
Intangible assets 5,401    
Total assets, excluding intangible assets 1,483,288    
less: Total liabilities (637,340 )  
Total invested capital, current year 851,349  
Total invested capital, acquisition price 838,910  
Average invested capital 845,130  
Return on invested capital 23.8 %  
* 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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