TFI International Announces 2020 Fourth Quarter and Full-Year Results

• Elective change of presentation currency to U.S. dollars effective on December 31, 2020
• Fourth quarter diluted EPS from continuing operations of $0.91 (CAD $1.18) up from $0.70 (CAD $0.92) in Q4 2019, while adjusted diluted EPS1 of $0.98 (CAD $1.27) increased from $0.72 (CAD $0.95)
• Fourth quarter operating income from continuing operations of $117.1 million increased from $92.8 million in Q4 2019
• Fourth quarter net cash from continuing operating activities of $164.9 million increased from $133.3 million in Q4 2019
• Annual diluted EPS from continuing operations of $3.03 (CAD $4.06) up from $2.86 (CAD $3.80) in 2019, while adjusted diluted EPS1 of $3.30 (CAD $4.39) increased from $2.97 (CAD $3.94)

MONTREAL, Feb. 08, 2021 (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, 2020.

“TFI International had a successful 2020 that began with our listing on the New York Stock exchange and culminated with our robust fourth quarter results that featured a 26% increase in operating income and a 36% increase in adjusted diluted EPS,” said Alain Bédard, Chairman, President and Chief Executive Officer. “Throughout the ongoing global pandemic, we’ve remained true to our operating philosophy including our asset-right business plan and an emphasis on free cash flow that we put toward growth objectives while returning excess capital to our shareholders. We strategically made thirteen acquisitions during 2020 including five during the fourth quarter, and in the new year have already announced two additional strategic acquisitions, including the transformational purchase of UPS Freight. I wish to thank all of our employees for their extraordinary efforts during an unprecedented year, placing TFI International in an enviable position of strength to create additional shareholder value as we move through 2021.”

SELECTED FINANCIAL DATA AND HIGHLIGHTS (UNAUDITED)

Financial highlights	Quarters endedDecember 31				Years endedDecember 31
(in millions of U.S. dollars, except per share data)	2020		2019*		2020		2019*
Total revenue	1,122.0		989.0		3,781.1		3,903.5
Revenue before fuel surcharge	1,048.1		883.7		3,484.3		3,477.6
Adjusted EBITDA1	193.5		163.4		699.6		649.0
Operating income from continuing operations	117.1		92.8		416.6		382.9
Net cash from continuing operating activities	164.9		133.3		610.9		500.5
Adjusted net income1	93.4		60.1		299.8		253.6
Adjusted EPS - diluted1 ($)	0.98		0.72		3.30		2.97
Net income from continuing operations	86.3		58.0		275.7		244.2
EPS from continuing operations - diluted ($)	0.91		0.70		3.03		2.86
Weighted average number of shares ('000s)	93,374		81,551		89,113		83,390

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar.1 This is a non-IFRS measure. For a reconciliation, please refer to the “Non-IFRS Financial Measures” section below.

FOURTH QUARTER RESULTSTotal revenue of $1.12 billion was up 13% and, net of fuel surcharge, revenue of $1.05 billion was up 19% compared to the prior year period.

Operating income from continuing operations grew 26% to $117.1 million from $92.8 million the prior year period, primarily driven by acquisitions, strong execution across the organization, increased quality of revenue, an asset-right approach, cost efficiencies, and Canadian Emergency Wage Subsidy contributions of $6.3 million.

Net income from continuing operations grew 49% to $86.3 million from $58.0 million the prior year period, and net income from continuing operations of $0.91 (CAD $1.18) per diluted share was up relative to $0.70 (CAD $0.92) the prior year period. Adjusted net income, a non-IFRS measure, was $93.4 million, or $0.98 (CAD $1.27) per diluted share, as compared to $60.1 million, or $0.72 (CAD $0.95) per diluted share, the prior year period.

Total revenue grew 16% for Package and Courier, 2% for Truckload and 59% for Logistics, and declined 10% for Less-Than-Truckload, relative to the prior year period. Operating income was higher across all segments in Q4 in comparison to the prior-year.

FULL-YEAR RESULTSTotal revenue was $3.78 billion for 2020 versus $3.90 billion in 2019. Net of fuel surcharge, revenue was $3.48 billion, flat with the prior year.

Operating income from continuing operations totalled $416.6 million, or 12.0% of revenue before fuel surcharge, an increase of 9% compared to $382.9 million and 11.0% of revenue before fuel surcharge in the prior year. The increase is mainly attributable to the Canadian Emergency Wage Subsidy of $52.3 million offset by a decrease in revenues due to the COVID-19 pandemic.

Net income from continuing operations was $275.7 million, or $3.03 (CAD $4.06) per diluted share, compared to $244.2 million, or $2.86 (CAD $3.80) per diluted share a year earlier. Adjusted net income from continuing operations, a non-IFRS measure, was $299.8 million, or $3.30 (CAD $4.39) per diluted share, compared to $253.6 million, or $2.97 (CAD $3.94) per diluted share the prior year period.

During 2020, total revenue grew 22% for Logistics, and declined 2% for Package and Courier, 19% for Less-Than-Truckload and 8% for Truckload relative to 2019. Operating income was up 7% for Less-Than-Truckload, 7% for Truckload and 48% for Logistics, and down 4% for Package and Courier.

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)	PackageandCourier		Less-Than-Truckload		Truckload		Logistics		Corporate		Eliminations		Total
Three months ended December 31, 2020
Revenue before fuel surcharge1	154,094		141,081		438,135		322,319		—		(7,482	)	1,048,147
% of total revenue2	15	%	14	%	42	%	29	%					100	%
Adjusted EBITDA	35,934		37,084		101,383		35,809		(16,672	)	—		193,538
Adjusted EBITDA margin3	23.3	%	26.3	%	23.1	%	11.1	%					18.5	%
Operating income (loss)	29,401		24,464		53,604		26,462		(16,809	)	—		117,122
Operating margin3	19.1	%	17.3	%	12.2	%	8.2	%					11.2	%
Net capital expenditures4	2,550		6,194		21,155		70		244		—		30,213
Three months ended December 31, 2019*
Revenue before fuel surcharge1	127,301		151,303		412,760		198,961		—		(6,608	)	883,717
% of total revenue2	15	%	18	%	47	%	20	%					100	%
Adjusted EBITDA	29,295		31,269		90,447		21,933		(9,547	)	—		163,397
Adjusted EBITDA margin3	23.0	%	20.7	%	21.9	%	11.0	%					18.5	%
Operating income (loss)	22,680		19,311		46,417		14,216		(9,840	)	—		92,784
Operating margin3	17.8	%	12.8	%	11.2	%	7.1	%					10.5	%
Net capital expenditures4	3,321		27,945		17,783		1,002		5,158		—		55,209
YTD December 31, 2020
Revenue before fuel surcharge1	481,490		522,851		1,584,837		923,456		—		(28,331	)	3,484,303
% of total revenue2	14	%	15	%	46	%	25	%					100	%
Adjusted EBITDA	104,019		138,361		383,155		113,885		(39,831	)	—		699,589
Adjusted EBITDA margin3	21.6	%	26.5	%	24.2	%	12.3	%					20.1	%
Operating income (loss)	78,753		87,950		206,346		84,459		(40,941	)	—		416,567
Operating margin3	16.4	%	16.8	%	13.0	%	9.1	%					12.0	%
Total assets less intangible assets	194,631		404,074		1,193,730		272,592		34,564		—		2,099,591
Net capital expenditures4	16,798		19,230		29,179		567		444		—		66,218
YTD December 31, 2019*
Revenue before fuel surcharge1	473,666		627,219		1,657,797		745,322		—		(26,428	)	3,477,576
% of total revenue2	14	%	18	%	48	%	20	%					100	%
Adjusted EBITDA	106,278		126,641		362,641		83,030		(29,569	)	—		649,021
Adjusted EBITDA margin3	22.4	%	20.2	%	21.9	%	11.1	%					18.7	%
Operating income (loss)	82,228		82,230		192,172		57,447		(31,209	)	—		382,868
Operating margin3	17.4	%	13.1	%	11.6	%	7.7	%					11.0	%
Total assets less intangible assets	180,811		407,358		1,206,568		159,152		49,771		—		2,003,660
Net capital expenditures4	10,967		27,536		108,039		1,995		4,261		—		152,798

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar and mark-to-market gain (loss) on deferred share units presentation in personnel expenses from finance (income) costs1 Includes intersegment revenue.2 Segment revenue including fuel and intersegment revenue to consolidated revenue including fuel and intersegment revenue.3 As a percentage of revenue before fuel surcharge.4 Additions to rolling stock and equipment, net of proceeds from sale of rolling stock and equipment and assets held for sale excluding property.

CASH FLOW Net cash from continuing operating activities was $610.9 million during 2020 compared to $500.5 million the prior year. The 22% increase was due to stronger operating performance, reduction of interest payments as a result of lower debt levels, and contributions from acquisitions. The Company returned $105.6 million to shareholders during the year, of which $67.6 million was through dividends and $38.0 million was through share repurchases.

On December 15, 2020, the Board of Directors of TFI International declared a quarterly dividend of $0.23 (CAD $0.29) per outstanding common share payable on January 15, 2021, representing an 14% increase over the $0.20 (CAD $0.26) quarterly dividend declared in Q4 2019.

CHANGE IN PRESENTATION CURRENCYThe Company has elected to change its presentation currency from Canadian dollars (“CAD”) to United States dollars (“U.S. Dollars” or “USD”) effective December 31st, 2020. Due to the Company’s growing market presence in the U.S. with our equity listing in the U.S., financial reporting in USD provides a more relevant presentation of the Company’s financial position in comparison to its peers. The change in presentation currency is a voluntary change which is accounted for retrospectively. For comparative purposes, the historical consolidated financial statements have been restated to U.S. dollars using the procedures outlined below:

• Consolidated Statements of Income, Comprehensive Income, and Cash Flows have been translated into U.S. dollars using average foreign currency rates prevailing for the relevant periods.
• Assets and liabilities in the Consolidated Statement of Financial Position have been translated into U.S. dollars at the closing foreign currency rates on the relevant balance sheet dates.
• Equity in the Consolidated Statement of Financial Position and Consolidated Statements of changes in Equity, including foreign currency translation reserve and net investment hedge, retained earnings, share capital, contributed surplus and other reserves, have been translated into U.S. dollars using historical rates.
• Consolidated Earnings per share and dividend disclosures have also been translated to U.S. dollars to reflect the change in presentation currency.

The Company has also presented an opening consolidated statement of financial position as at January 1, 2019 in USD, which has been derived from the consolidated financial statements as at and for the year ended December 31, 2018. The Company’s consolidated financial statements will now be presented in U.S. dollars. All information in this press release is presented in USD unless otherwise specified.

The Company’s functional currency remains Canadian dollar. Translation gains and losses from the application of the U.S. dollar as the reporting currency while the Canadian dollar is the functional currency are included as part of the cumulative foreign currency translation adjustment. All financial information presented in U.S. dollars has been rounded to the nearest thousand.

CONFERENCE CALLTFI International will host a conference call on Monday, February 8, 2021 at 5:00 p.m. Eastern Time to discuss these results.Interested parties can join the call by dialing 1-877-223-4471. A recording of the call will be available until midnight, February22, 2021, by dialing 1-800-585-8367 or 416-621-4642 and entering passcode 9095057.

ABOUT TFI INTERNATIONALTFI International Inc. is a North American leader in the transportation and logistics industry, operating across the United States, Canada and Mexico 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 STATEMENTSThe 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.

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 2020 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 MEASURESThis 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 (IFRS) 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 BédardChairman, President and CEOTFI International Inc.(647) 729-4079[email protected]

TFI International Inc.		UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITIONDECEMBER 31, 2020 AND 2019
(in thousands of U.S. dollars)		As at				As at				As at
		December 31,2020				December 31,2019*				January 1,2019*
Assets
Cash and cash equivalents			4,297				-				-
Trade and other receivables			597,873				452,241				463,075
Inventoried supplies			8,761				10,659				9,350
Current taxes recoverable			7,606				13,211				9,541
Prepaid expenses			29,904				27,777				28,256
Derivative financial instruments			-				30				3,980
Assets held for sale			4,331				3,561				5,551
Other assets			-				19,105				-
Current assets			652,772				526,584				519,753
Property and equipment			1,074,428				1,125,429				1,023,595
Right-of-use assets			337,285				334,168				-
Intangible assets			1,749,773				1,505,160				1,393,854
Other assets			23,899				8,655				24,685
Deferred tax assets			11,207				8,824				4,698
Derivative financial instruments			-				-				2,159
Non-current assets			3,196,592				2,982,236				2,448,991
Total assets			3,849,364				3,508,820				2,968,744
Liabilities
Bank indebtedness			-				2,927				9,041
Trade and other payables			468,238				341,443				348,618
Current taxes payable			33,220				4,658				13,892
Provisions			17,452				18,264				18,372
Other financial liabilities			4,031				2,043				1,446
Derivative financial instruments			-				649				-
Long-term debt			42,997				41,305				89,679
Lease liabilities			88,522				76,326				-
Current liabilities			654,460				487,615				481,048
Long-term debt			829,547				1,302,002				1,071,751
Lease liabilities			267,464				279,265				-
Employee benefits			15,502				14,310				11,824
Provisions			36,803				22,522				31,375
Other financial liabilities			22,699				2,810				4,329
Derivative financial instruments			-				684				-
Deferred tax liabilities			232,712				240,320				212,535
Non-current liabilities			1,404,727				1,861,913				1,331,814
Total liabilities			2,059,187				2,349,528				1,812,862
Equity
Share capital			1,120,049				678,915				697,232
Contributed surplus			19,783				19,549				19,082
Accumulated other comprehensive income			(154,723	)			(173,398	)			(200,029	)
Retained earnings			805,068				634,226				639,597
Equity attributable to owners of the Company			1,790,177				1,159,292				1,155,882
Contingencies, letters of credit and other commitments			-				-				-
Total liabilities and equity			3,849,364				3,508,820				2,968,744

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar 

TFI International Inc.	UNAUDITED CONSOLIDATED STATEMENTS OF INCOMEYEARS ENDED DECEMBER 31, 2020 AND 2019
(In thousands of U.S. dollars, except per share amounts)
		2020				2019*
Revenue			3,484,303				3,477,576
Fuel surcharge			296,831				425,969
Total revenue			3,781,134				3,903,545
Materials and services expenses			2,051,835				2,134,720
Personnel expenses			888,185				980,785
Other operating expenses			150,572				156,121
Depreciation of property and equipment			170,520				168,720
Depreciation of right-of-use assets			80,496				77,326
Amortization of intangible assets			48,213				49,701
Gain on sale of business			(306	)			-
Bargain purchase gain			(4,008	)			(8,014	)
Gain on sale of rolling stock and equipment			(7,888	)			(15,386	)
Gain on derecognition of right-of-use assets			(1,159	)			(1,716	)
Loss (gain) on sale of land and buildings			6				(9	)
Gain on sale of assets held for sale			(11,899	)			(21,571	)
Total operating expenses			3,364,567				3,520,677
Operating income			416,567				382,868
Finance (income) costs
Finance income			(2,776	)			(2,285	)
Finance costs			56,686				64,392
Net finance costs			53,910				62,107
Income before income tax			362,657				320,761
Income tax expense			86,982				76,536
Net income from continuing operations			275,675				244,225
Net loss from discontinued operations			-				(10,548	)
Net income for the year attributable to owners of the Company			275,675				233,677
Earnings per share attributable to owners of the Company
Basic earnings per share			3.09				2.80
Diluted earnings per share			3.03				2.74
Earnings per share from continuing operations attributable to owners of the Company
Basic earnings per share			3.09				2.93
Diluted earnings per share			3.03				2.86
* Recasted for change in presentation currency from Canadian dollar to U.S. dollar and mark-to-market gain (loss) on deferred share units presentation in personnel expenses from finance (income) costs.

TFI International Inc.	UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEYEARS ENDED DECEMBER 31, 2020 AND 2019
(In thousands of U.S. dollars)
		2020				2019*
Net income for the year attributable to owners of the Company			275,675				233,677
Other comprehensive income (loss)
Items that may be reclassified to income or loss in future years:
Foreign currency translation differences			21,182				17,476
Net investment hedge, net of tax			(2,010	)			12,158
Changes in fair value of cash flow hedge, net of tax			(487	)			(7,394	)
Employee benefits, net of tax			(10	)			32
Items that may never be reclassified to income
Defined benefit plan remeasurement			(1,623	)			(1,228	)
Items directly reclassified to retained earnings:
Unrealized gain on investment in equity securities measured at fair value
through OCI, net of tax			-				970
Other comprehensive income for the year, net of tax			17,052				22,014
Total comprehensive income for the year attributable to owners of the Company			292,727				255,691
* Recasted for change in presentation currency from Canadian dollar to U.S. dollar

TFI International Inc.			UNAUDITED CONSOLIDATED STATEMENTS OF EQUITYYEARS ENDED DECEMBER 31, 2020 AND 2019
(In thousands of U.S. dollars)																		Accumulated
									Accumulated									foreign				Accumulated
										unrealized								currency				unrealized								Total equity
										loss on				Accumulated				translation				loss on								attributable
										employee				cash flow				differences				investment in								to owners
		Share				Contributed				benefit				hedge				and net invest-				equity				Retained				of the
		capital				surplus				plans				gain (loss)				ment hedge				securities				earnings				Company
Balance as at December 31, 2019*			678,915				19,549				(369	)			487				(173,516	)			-				634,226				1,159,292
Net income for the year			-				-				-				-				-				-				275,675				275,675
Other comprehensive (loss) income for the year, net of tax			-				-				(10	)			(487	)			19,172				-				(1,623	)			17,052
Total comprehensive (loss) income for the year			-				-				(10	)			(487	)			19,172				-				274,052				292,727
Share-based payment transactions			-				7,046				-				-				-				-				-				7,046
Stock options exercised			25,915				(4,554	)			-				-				-				-				-				21,361
Issuance of shares, net of expenses			425,350				-				-				-				-				-				-				425,350
Dividends to owners of the Company			-				-				-				-				-				-				(72,735	)			(72,735	)
Repurchase of own shares			(12,025	)			-				-				-				-				-				(25,996	)			(38,021	)
Net settlement of restricted share units			1,894				(2,258	)			-				-				-				-				(4,479	)			(4,843	)
Total transactions with owners, recorded directly in equity			441,134				234				-				-				-				-				(103,210	)			338,158
Balance as at December 31, 2020			1,120,049				19,783				(379	)			-				(154,344	)			-				805,068				1,790,177
Balance as at January 1, 2019*			697,232				19,082				(401	)			7,881				(203,150	)			(4,359	)			639,597				1,155,882
Adjustment on initial application of IFRS 16			-				-				-				-				-				-				(18,880	)			(18,880	)
Net income for the year			-				-				-				-				-				-				233,677				233,677
Other comprehensive (loss) income for the year, net of tax			-				-				32				(7,394	)			29,634				970				(1,228	)			22,014
Realized loss on equity securities, net of tax			-				-				-				-				-				3,389				(3,389	)			-
Total comprehensive (loss) income for the year			-				-				32				(7,394	)			29,634				4,359				229,060				255,691
Share-based payment transactions			-				6,227				-				-				-				-				-				6,227
Stock options exercised			20,580				(4,233	)			-				-				-				-				-				16,347
Dividends to owners of the Company			-				-				-				-				-				-				(61,631	)			(61,631	)
Repurchase of own shares			(39,621	)			-				-				-				-				-				(152,835	)			(192,456	)
Net settlement of restricted share units			724				(1,527	)			-				-				-				-				(1,085	)			(1,888	)
Total transactions with owners, recorded directly in equity			(18,317	)			467				-				-				-				-				(215,551	)			(233,401	)
Balance as at December 31, 2019*			678,915				19,549				(369	)			487				(173,516	)			-				634,226				1,159,292
* Recasted for change in presentation currency from Canadian dollar to U.S. dollar

 

TFI International Inc.		UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWSYEARS ENDED DECEMBER 31, 2020 AND 2019
(In thousands of U.S. dollars)
		2020				2019*
Cash flows from operating activities
Net income for the year			275,675				233,677
Net loss from discontinued operations			-				(10,548	)
Net income from continuing operations			275,675				244,225
Adjustments for
Depreciation of property and equipment			170,520				168,720
Depreciation of right-of-use assets			80,496				77,326
Amortization of intangible assets			48,213				49,701
Share-based payment transactions			7,046				6,227
Net finance costs			53,910				62,107
Income tax expense			86,982				76,536
Gain on sale of business			(306	)			-
Bargain purchase gain			(4,008	)			(8,014	)
Gain on sale of property and equipment			(7,882	)			(15,395	)
Gain on derecognition of right-of-use assets			(1,159	)			(1,716	)
Gain on sale of assets held for sale			(11,899	)			(21,571	)
Provisions and employee benefits			6,274				(3,696	)
			703,862				634,450
Net change in non-cash operating working capital			33,661				16,337
Cash generated from operating activities			737,523				650,787
Interest paid			(50,366	)			(65,075	)
Income tax paid			(73,256	)			(85,216	)
Settlement of derivative contract			(3,039	)			-
Net cash from continuing operating activities			610,862				500,496
Net cash used in discontinued operating activities			-				(12,022	)
Net cash from operating activities			610,862				488,474
Cash flows from investing activities
Purchases of property and equipment			(142,710	)			(261,295	)
Proceeds from sale of property and equipment			52,116				71,754
Proceeds from sale of assets held for sale			24,480				39,146
Purchases of intangible assets			(1,665	)			(3,636	)
Proceeds from sale of business			2,351				-
Business combinations, net of cash acquired			(327,650	)			(150,912	)
Proceeds from sale of intangible assets			-				201
Purchases of investments			(7,446	)			(600	)
Proceeds from sale of investments			-				1,814
Proceeds from collection of promissory notes			18,892				-
Others			3,151				(329	)
Net cash used in continuing investing activities			(378,481	)			(303,857	)
Cash flows from financing activities
Decrease in bank indebtedness			(2,231	)			(6,083	)
Proceeds from long-term debt			33,175				328,045
Repayment of long-term debt			(191,221	)			(103,247	)
Net decrease in revolving facility			(326,201	)			(88,229	)
Repayment of lease liabilities			(82,587	)			(75,072	)
Increase (decrease) in other financial liabilities			4,738				(1,556	)
Dividends paid			(67,604	)			(60,478	)
Repurchase of own shares			(38,021	)			(192,455	)
Proceeds from the issuance of common shares, net of expenses			425,350				-
Proceeds from exercise of stock options			21,361				16,347
Repurchase of own shares for restricted share unit settlement			(4,843	)			(1,889	)
Net cash used in continuing financing activities			(228,084	)			(184,617	)
Net change in cash and cash equivalents			4,297				-
Cash and cash equivalents, beginning of year			-				-
Cash and cash equivalents, end of year			4,297				-
* Recasted for change in presentation currency from Canadian dollar to U.S. dollar

SEGMENT INFORMATION

Geographical information (Unaudited)

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

Total revenue		Package				Less-
		and				Than-
		Courier				Truckload				Truckload				Logistics				Eliminations				Total
2020
Canada			529,155				517,199				725,347				239,413				(26,019	)			1,985,095
United States			-				72,036				1,023,012				686,811				(4,726	)			1,777,133
Mexico			-				-				-				18,906				-				18,906
Total			529,155				589,235				1,748,359				945,130				(30,745	)			3,781,134
2019*
Canada			539,610				607,086				799,396				216,232				(28,352	)			2,133,972
United States			-				120,162				1,092,159				542,911				(1,349	)			1,753,883
Mexico			-				-				-				15,690				-				15,690
Total			539,610				727,248				1,891,555				774,833				(29,701	)			3,903,545

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar

Package and Courier

(unaudited)		Three months ended December 31																Years ended December 31
(in thousands of U.S. dollars)		2020				%				2019*				%				2020				%				2019*				%
Total revenue			167,555								145,018								529,155								539,610
Fuel surcharge			(13,461	)							(17,717	)							(47,665	)							(65,944	)
Revenue			154,094				100.0	%			127,301				100.0	%			481,490				100.0	%			473,666				100.0	%
Materials and services expenses (net of fuel surcharge)			72,115				46.8	%			55,737				43.8	%			220,741				45.8	%			203,441				43.0	%
Personnel expenses			39,821				25.8	%			35,222				27.7	%			133,552				27.7	%			138,125				29.2	%
Other operating expenses			6,234				4.0	%			7,015				5.5	%			23,145				4.8	%			25,973				5.5	%
Depreciation of property and equipment			3,168				2.1	%			2,606				2.0	%			11,539				2.4	%			10,046				2.1	%
Depreciation of right-of-use assets			3,210				2.1	%			3,713				2.9	%			12,871				2.7	%			13,956				2.9	%
Amortization of intangible assets			248				0.2	%			234				0.2	%			947				0.2	%			891				0.2	%
(Gain) loss on sale of rolling stock and equipment			(10	)			0.0	%			47				0.0	%			43				0.0	%			(135	)			-0.0	%
Gain on derecognition of right-of-use assets			-				0.0	%			(15	)			-0.0	%			(10	)			-0.0	%			(16	)			-0.0	%
(Gain) loss on sale of land and buildings and assets held for sale			(93	)			(0.1	)%			62				0.0	%			(91	)			-0.0	%			(843	)			-0.2	%
Operating income			29,401				19.1	%			22,680				17.8	%			78,753				16.4	%			82,228				17.4	%
Adjusted EBITDA			35,934				23.3	%			29,295				23.0	%			104,019				21.6	%			106,278				22.4	%

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar

Operational data		Three months ended December 31																Years ended December 31
(unaudited)		2020				2019*				Variance				%				2020				2019*				Variance				%
Revenue per pound (including fuel)		$	0.40			$	0.36			$	0.04				11.1	%		$	0.36			$	0.35			$	0.01				2.9	%
Revenue per pound (excluding fuel)		$	0.36			$	0.31			$	0.05				16.1	%		$	0.33			$	0.31			$	0.02				6.5	%
Revenue per shipment (including fuel)		$	6.40			$	6.52			$	(0.12	)			-1.8	%		$	6.24			$	6.29			$	(0.05	)			-0.8	%
Tonnage (in thousands of metric tons)			192				185				7				3.8	%			658				695				(37	)			-5.3	%
Shipments (in thousands)			26,185				22,244				3,941				17.7	%			84,854				85,743				(889	)			-1.0	%
Average weight per shipment (in lbs.)			16.16				18.33				(2.17	)			-11.8	%			17.09				17.86				(0.77	)			-4.3	%
Vehicle count, average			1,008				972				36				3.7	%			1,023				981				42				4.3	%
Weekly revenue per vehicle (incl. fuel, in thousands of dollars)		$	12.79			$	11.48			$	1.31				11.4	%		$	9.95			$	10.58			$	(0.63	)			-6.0	%

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar

Less-Than-Truckload

(unaudited)		Three months ended December 31																Years ended December 31
(in thousands of U.S. dollars)		2020				%				2019*				%				2020				%				2019*				%
Total revenue			157,628								175,319								589,235								727,249
Fuel surcharge			(16,547	)							(24,016	)							(66,384	)							(100,030	)
Revenue			141,081				100.0	%			151,303				100.0	%			522,851				100.0	%			627,219				100.0	%
Materials and services expenses (net of fuel surcharge)			67,140				47.6	%			75,026				49.6	%			252,334				48.3	%			315,648				50.3	%
Personnel expenses			33,338				23.6	%			38,202				25.2	%			116,257				22.2	%			159,820				25.5	%
Other operating expenses			3,587				2.5	%			7,788				5.1	%			16,593				3.2	%			26,720				4.3	%
Depreciation of property and equipment			4,886				3.5	%			5,148				3.4	%			19,407				3.7	%			19,736				3.1	%
Depreciation of right-of-use assets			5,546				3.9	%			6,159				4.1	%			22,555				4.3	%			24,825				4.0	%
Amortization of intangible assets			2,179				1.5	%			2,129				1.4	%			8,392				1.6	%			8,359				1.3	%
Gain on sale of rolling stock and equipment			(62	)			-0.0	%			(147	)			-0.1	%			(519	)			-0.1	%			(510	)			-0.1	%
Gain on derecognition of right-of-use assets			(6	)			-0.0	%			(835	)			-0.6	%			(175	)			-0.0	%			(1,100	)			-0.2	%
Loss (gain) on sale of land and buildings and assets held for sale			9				0.0	%			(1,478	)			-1.0	%			57				0.0	%			(8,509	)			-1.4	%
Operating income			24,464				17.3	%			19,311				12.8	%			87,950				16.8	%			82,230				13.1	%
Adjusted EBITDA			37,084				26.3	%			31,269				20.7	%			138,361				26.5	%			126,641				20.2	%

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar.

Operational data		Three months ended December 31																Years ended December 31
(unaudited)		2020				2019*				Variance				%				2020				2019*				Variance				%
Adjusted operating ratio			82.7	%			88.2	%											83.2	%			88.2	%
Revenue per hundredweight (excluding fuel)		$	10.15			$	9.99				0.16				1.6	%		$	9.77			$	10.01			$	(0.24	)			-2.4	%
Revenue per shipment (including fuel)		$	241.02			$	253.35			$	(12.33	)			-4.9	%		$	240.11			$	242.98			$	(2.87	)			-1.2	%
Tonnage (in thousands of tons)			695				757				(62	)			-8.2	%			2,675				3,132				(457	)			-14.6	%
Shipments (in thousands)			654				692				(38	)			-5.5	%			2,454				2,993				(539	)			-18.0	%
Average weight per shipment (in lbs)			2,125				2,188				(63	)			-2.9	%			2,180				2,093				87				4.2	%
Average length of haul (in miles)			811				839				(28	)			-3.3	%			818				830				(12	)			-1.4	%
Vehicle count, average			902				1,016				(114	)			-11.2	%			918				1,024				(106	)			-10.4	%

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar.

Truckload

(unaudited)		Three months ended December 31																Years ended December 31
(in thousands of U.S. dollars)		2020				%				2019*				%				2020				%				2019*				%
Total revenue			477,262								469,798								1,748,359								1,891,554
Fuel surcharge			(39,127	)							(57,038	)							(163,522	)							(233,757	)
Revenue			438,135				100.0	%			412,760				100.0	%			1,584,837				100.0	%			1,657,797				100.0	%
Materials and services expenses (net of fuel surcharge)			188,660				43.1	%			178,936				43.4	%			654,220				41.3	%			707,028				42.6	%
Personnel expenses			135,911				31.0	%			134,572				32.6	%			503,242				31.8	%			549,723				33.2	%
Other operating expenses			14,323				3.3	%			12,534				3.0	%			52,337				3.3	%			53,472				3.2	%
Depreciation of property and equipment			34,986				8.0	%			36,218				8.8	%			136,859				8.6	%			136,139				8.2	%
Depreciation of right-of-use assets			10,055				2.3	%			7,091				1.7	%			32,229				2.0	%			24,263				1.5	%
Amortization of intangible assets			5,171				1.2	%			5,678				1.4	%			19,891				1.3	%			22,415				1.4	%
Gain on sale of business			(306	)			-0.1	%			—				0.0	%			(306	)			-0.0	%			—				0.0	%
Gain on sale of rolling stock and equipment			(2,129	)			-0.5	%			(3,603	)			-0.9	%			(7,785	)			-0.5	%			(14,698	)			-0.9	%
Gain on derecognition of right-of-use assets			(13	)			-0.0	%			(126	)			-0.0	%			(332	)			-0.0	%			(369	)			-0.0	%
Gain on sale of land and buildings and assets held for sale			(2,127	)			-0.5	%			(4,957	)			-1.2	%			(11,864	)			-0.7	%			(12,348	)			-0.7	%
Operating income			53,604				12.2	%			46,417				11.2	%			206,346				13.0	%			192,172				11.6	%
Adjusted EBITDA			101,383				23.1	%			90,447				21.9	%			383,155				24.2	%			362,641				21.9	%
* Recasted for change in presentation currency from Canadian dollar to U.S. dollar.

Operational data (unaudited)		Three months ended December 31																Years ended December 31
(in thousands of U.S. dollars)		2020				2019*				Variance				%				2020				2019*				Variance				%
U.S. based Conventional TL
Revenue			161,476				156,678				4,798				3.1	%			632,590				646,782				(14,192	)			-2.2	%
Adjusted operating ratio			91.5	%			92.4	%											92.0	%			91.5	%
Total mileage (in thousands)			86,427				84,291				2,136				2.5	%			349,349				351,490				(2,141	)			-0.6	%
Tractor count, average			2,932				2,929				3				0.1	%			2,949				2,960				(11	)			-0.4	%
Trailer count, average			11,005				11,007				(2	)			-0.0	%			10,938				11,008				(70	)			-0.6	%
Tractor age			2.2				1.8				0.4				22.2	%			2.2				1.8				0.4				22.2	%
Trailer age			6.6				6.5				0.1				1.5	%			6.6				6.5				0.1				1.5	%
Number of owner operators, average			560				424				136				32.1	%			509				400				109				27.3	%
Canadian based Conventional TL
Revenue			58,497				56,668				1,829				3.2	%			206,418				226,816				(20,398	)			-9.0	%
Adjusted operating ratio			85.2	%			85.9	%											86.3	%			85.6	%
Total mileage (in thousands)			23,095				24,236				(1,141	)			-4.7	%			89,212				98,943				(9,731	)			-9.8	%
Tractor count, average			623				641				(18	)			-2.8	%			606				684				(78	)			-11.4	%
Trailer count, average			2,809				2,826				(17	)			-0.6	%			2,796				2,884				(88	)			-3.1	%
Tractor age			2.5				2.3				0.2				8.7	%			2.5				2.3				0.2				8.7	%
Trailer age			5.9				5.4				0.5				9.3	%			5.9				5.4				0.5				9.3	%
Number of owner operators, average			314				317				(3	)			-0.9	%			302				333				(31	)			-9.3	%
Specialized TL
Revenue			219,093				200,452				18,641				9.3	%			749,655				791,087				(41,432	)			-5.2	%
Adjusted operating ratio			86.8	%			89.3	%											84.6	%			88.3	%
Tractor count, average			2,314				2,189				125				5.7	%			2,096				2,099				(3	)			-0.1	%
Trailer count, average			6,619				6,142				477				7.8	%			6,251				6,121				130				2.1	%
Tractor age			4.0				4.0				0.0				0.0	%			4.0				4.0				0.0				0.0	%
Trailer age			12.9				11.7				1.2				10.3	%			12.9				11.7				1.2				10.3	%
Number of owner operators, average			1,132				1,224				(92	)			-7.5	%			1,115				1,191				(76	)			-6.4	%

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar.

Logistics

(unaudited)		Three months ended December 31																Years ended December 31
(in thousands of U.S. dollars)		2020				%				2019*				%				2020				%				2019*				%
Total revenue			327,689								206,268								945,130								774,833
Fuel surcharge			(5,370	)							(7,307	)							(21,674	)							(29,511	)
Revenue			322,319				100.0	%			198,961				100.0	%			923,456				100.0	%			745,322				100.0	%
Materials and services expenses (net of fuel surcharge)			241,798				75.0	%			140,019				70.4	%			668,225				72.4	%			524,098				70.3	%
Personnel expenses			24,381				7.6	%			25,427				12.8	%			93,579				10.1	%			96,593				13.0	%
Other operating expenses			19,983				6.2	%			11,745				5.9	%			48,012				5.2	%			41,865				5.6	%
Depreciation of property and equipment			596				0.2	%			640				0.3	%			2,336				0.3	%			2,147				0.3	%
Depreciation of right-of-use assets			3,138				1.0	%			2,520				1.3	%			13,204				1.4	%			14,148				1.9	%
Amortization of intangible assets			5,608				1.7	%			4,557				2.3	%			17,889				1.9	%			17,302				2.3	%
Bargain purchase gain			—				—				—				0.0	%			(4,008	)			-0.4	%			(8,014	)			-1.1	%
(Gain) loss on sale of rolling stock and equipment			368				0.1	%			(5	)			-0.0	%			373				0.0	%			(43	)			-0.0	%
Gain on derecognition of right-of-use assets			(20	)			-0.0	%			(158	)			-0.1	%			(618	)			-0.1	%			(221	)			-0.0	%
Loss on sale of land and buildings and assets held for sale			5				0.0	%			—				0.0	%			5				0.0	%			—				0.0	%
Operating income			26,462				8.2	%			14,216				7.1	%			84,459				9.1	%			57,447				7.7	%
Adjusted EBITDA			35,809				11.1	%			21,933				11.0	%			113,885				12.3	%			83,030				11.1	%

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar.

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 IFRS 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 IFRS and 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, assets held for sale and sale of business, and loss from discontinued operations, net of tax 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 endedDecember 31								Years endedDecember 31
		2020				2019*				2020				2019*
Net income			86,328				56,680				275,675				233,677
Amortization of intangible assets related to business acquisitions, net of tax			10,221				9,263				35,286				35,756
Net change in fair value and accretion expense of contingent considerations, net of tax			104				40				165				146
Net change in fair value of derivatives, net of tax			(373	)			—				(373	)			—
Net foreign exchange (gain) loss, net of tax			227				(328	)			(895	)			161
Gain on sale of business, net of tax			(230	)			—				(230	)			—
Bargain purchase gain			—				—				(4,008	)			(8,014	)
Gain on sale of land and buildings and assets held for sale, net of tax			(1,848	)			(6,872	)			(10,308	)			(18,691	)
Net loss from discontinued operations			—				1,302				—				10,548
U.S. Tax Reform			(1,072	)			—				4,451				—
Adjusted net income			93,357				60,085				299,763				253,583
Adjusted EPS – basic			1.00				0.74				3.36				3.04
Adjusted EPS – diluted			0.98				0.72				3.30				2.97

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar.

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 from continuing operations 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 and sale of business.

Segmented adjusted EBITDA refers to operating income (loss) from continuing operations before depreciation, amortization, impairment of intangible assets, bargain purchase gain, and gain or loss on sale of business, land and buildings, and assets held for sale. 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 endedDecember 31								Years endedDecember 31
		2020				2019*				2020				2019*
Net income from continuing operations			86,328				57,955				275,675				244,225
Net finance costs			15,382				15,552				53,910				62,107
Income tax expense			15,412				19,277				86,982				76,536
Depreciation of property and equipment			43,753				44,721				170,520				168,720
Depreciation of right-of-use assets			21,618				19,508				80,496				77,326
Amortization of intangible assets			13,557				12,757				48,213				49,701
Gain on sale of business			(306	)			—				(306	)			—
Bargain purchase gain			—				—				(4,008	)			(8,014	)
(Gain) loss on sale of land and buildings			5				(8	)			6				(9	)
Gain on sale of assets held for sale			(2,211	)			(6,365	)			(11,899	)			(21,571	)
Adjusted EBITDA			193,538				163,397				699,589				649,021

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar.

Segmented adjusted EBITDA from continuing operations reconciliation:

(unaudited)(in thousands of U.S. dollars)		Three months endedDecember 31								Years endedDecember 31
		2020				2019*				2020				2019*
Package and Courier
Operating income			29,401				22,680				78,753				82,228
Depreciation and amortization			6,626				6,553				25,357				24,893
Gain on sale of land and buildings			(1	)			—				—				—
(Gain) loss on sale of assets held for sale			(92	)			62				(91	)			(843	)
Adjusted EBITDA			35,934				29,295				104,019				106,278
Less-Than-Truckload
Operating income			24,464				19,311				87,950				82,230
Depreciation and amortization			12,611				13,436				50,354				52,920
Loss on sale of land and buildings			1				—				1				—
(Gain) loss on sale of assets held for sale			8				(1,478	)			56				(8,509	)
Adjusted EBITDA			37,084				31,269				138,361				126,641
Truckload
Operating income			53,604				46,417				206,346				192,172
Depreciation and amortization			50,212				48,987				188,979				182,817
Gain on sale of business			(306	)			—				(306	)			—
Gain on sale of land and buildings			—				(8	)			—				(9	)
Gain on sale of assets held for sale			(2,127	)			(4,949	)			(11,864	)			(12,339	)
Adjusted EBITDA			101,383				90,447				383,155				362,641
Logistics
Operating income			26,462				14,216				84,459				57,447
Depreciation and amortization			9,342				7,717				33,429				33,597
Bargain purchase gain			—				—				(4,008	)			(8,014	)
Loss on sale of land and buildings			5				—				5				—
Adjusted EBITDA			35,809				21,933				113,885				83,030
Corporate
Operating loss			(16,809	)			(9,840	)			(40,941	)			(31,209	)
Depreciation and amortization			137				293				1,110				1,520
Loss on sale of assets held for sale			—				—				—				120
Adjusted EBITDA			(16,672	)			(9,547	)			(39,831	)			(29,569	)

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar.

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

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

Adjusted operating ratio: Operating expenses from continuing operations before impairment of intangible assets, bargain purchase gain, and gain or loss on sale of land and buildings, assets held for sale and sale of business (“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 from continuing operations reconciliation:

(unaudited)(in thousands of U.S. dollars)		Three months endedDecember 31								Years endedDecember 31
		2020				2019*				2020				2019*
Operating expenses			1,004,884				896,248				3,364,567				3,520,677
Gain on sale of business			306				—				306				—
Bargain purchase gain			—				—				4,008				8,014
Gain (loss) on sale of land and building			(5	)			8				(6	)			9
Gain on sale of assets held for sale			2,211				6,365				11,899				21,571
Adjusted operating expenses			1,007,396				902,621				3,380,774				3,550,271
Fuel surcharge revenue			(73,859	)			(105,315	)			(296,831	)			(425,969	)
Adjusted operating expenses, net of fuel surcharge revenue			933,537				797,306				3,083,943				3,124,302
Revenue before fuel surcharge			1,048,147				883,717				3,484,303				3,477,576
Adjusted operating ratio			89.1	%			90.2	%			88.5	%			89.8	%
*Recasted for change in presentation currency from Canadian dollar to U.S. dollar.

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 endedDecember 31								Years endedDecember 31
		2020				2019*				2020				2019*
Less-Than-Truckload
Total revenue			157,628				175,319				589,235				727,249
Total operating expenses			133,164				156,008				501,285				645,019
Operating income			24,464				19,311				87,950				82,230
Operating expenses			133,164				156,008				501,285				645,019
Gain (loss) on sale of land and buildings and assets held for sale			(9	)			1,478				(57	)			8,509
Adjusted operating expenses			133,155				157,486				501,228				653,528
Fuel surcharge revenue			(16,547	)			(24,016	)			(66,384	)			(100,030	)
Adjusted operating expenses, net of fuel surcharge revenue			116,608				133,470				434,844				553,498
Revenue before fuel surcharge			141,081				151,303				522,851				627,219
Adjusted operating ratio			82.7	%			88.2	%			83.2	%			88.2	%
Truckload
Total revenue			477,262				469,798				1,748,359				1,891,554
Total operating expenses			423,658				423,381				1,542,013				1,699,382
Operating income			53,604				46,417				206,346				192,172
Operating expenses			423,658				423,381				1,542,013				1,699,382
Gain on sale of business			306				—				306				—
Gain on sale of land and buildings and assets held for sale			2,127				4,957				11,864				12,348
Adjusted operating expenses			426,091				428,338				1,554,183				1,711,730
Fuel surcharge revenue			(39,127	)			(57,038	)			(163,522	)			(233,757	)
Adjusted operating expenses, net of fuel surcharge revenue			386,964				371,300				1,390,661				1,477,973
Revenue before fuel surcharge			438,135				412,760				1,584,837				1,657,797
Adjusted operating ratio			88.3	%			90.0	%			87.7	%			89.2	%
Truckload - Revenue before fuel surcharge
U.S. based Conventional TL			161,476				156,678				632,590				646,782
Canadian based Conventional TL			58,497				56,668				206,418				226,816
Specialized TL			219,093				200,452				749,655				791,087
Eliminations			(931	)			(1,038	)			(3,826	)			(6,888	)
			438,135				412,760				1,584,837				1,657,797
Truckload - Fuel surcharge revenue
U.S. based Conventional TL			19,006				26,720				81,222				112,165
Canadian based Conventional TL			4,798				7,677				19,408				31,628
Specialized TL			15,244				22,686				63,018				90,650
Eliminations			79				(45	)			(126	)			(686	)
			39,127				57,038				163,522				233,757
Truckload - Operating income
U.S. based Conventional TL			13,722				11,931				51,857				55,055
Canadian based Conventional TL			8,673				8,001				28,337				32,610
Specialized TL			31,209				26,485				126,152				104,507
			53,604				46,417				206,346				192,172

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 endedDecember 31								Years endedDecember 31
		2020				2019*				2020				2019*
U.S. based Conventional TL
Operating expenses**			166,760				171,467				661,955				703,892
Gain on sale of land and buildings and assets held for sale			—				—				1,103				—
Adjusted operating expenses			166,760				171,467				663,058				703,892
Fuel surcharge revenue			(19,006	)			(26,720	)			(81,222	)			(112,165	)
Adjusted operating expenses, net of fuel surcharge revenue			147,754				144,747				581,836				591,727
Revenue before fuel surcharge			161,476				156,678				632,590				646,782
Adjusted operating ratio			91.5	%			92.4	%			92.0	%			91.5	%
Canadian based Conventional TL
Operating expenses**			54,622				56,344				197,489				225,834
Gain on sale of land and buildings and assets held for sale			—				8				—				8
Adjusted operating expenses			54,622				56,352				197,489				225,842
Fuel surcharge revenue			(4,798	)			(7,677	)			(19,408	)			(31,628	)
Adjusted operating expenses, net of fuel surcharge revenue			49,824				48,675				178,081				194,214
Revenue before fuel surcharge			58,497				56,668				206,418				226,816
Adjusted operating ratio			85.2	%			85.9	%			86.3	%			85.6	%
Specialized TL
Operating expenses**			203,128				196,653				686,521				777,230
Gain on sale of business			306				—				306				—
Gain on sale of assets held for sale			2,127				4,949				10,761				12,340
Adjusted operating expenses			205,561				201,602				697,588				789,570
Fuel surcharge revenue			(15,244	)			(22,686	)			(63,018	)			(90,650	)
Adjusted operating expenses, net of fuel surcharge revenue			190,317				178,916				634,570				698,920
Revenue before fuel surcharge			219,093				200,452				749,655				791,087
Adjusted operating ratio			86.9	%			89.3	%			84.6	%			88.3	%

*Recasted for change in presentation currency from Canadian dollar to U.S. dollar

** Operating expenses excluding intra TL eliminations

Free cash flow conversion : Adjusted EBITDA less additions and proceeds from rolling stock and equipment, divided by the adjusted EBITDA.

(unaudited)(in thousands of U.S. dollars)		Three months endedDecember 31								Years endedDecember 31
		2020				2019*				2020				2019*
Net income from continuing operations			86,328				57,955				275,675				244,225
Net finance costs			15,382				15,552				53,910				62,107
Income tax expense			15,412				19,277				86,982				76,536
Depreciation of property and equipment			43,753				44,721				170,520				168,720
Depreciation of right-of-use assets			21,618				19,508				80,496				77,326
Amortization of intangible assets			13,557				12,757				48,213				49,701
Gain on sale of business			(306	)			—				(306	)			—
Bargain purchase gain			—				—				(4,008	)			(8,014	)
(Gain) loss on sale of land and buildings			5				(8	)			6				(9	)
Gain on sale of assets held for sale			(2,211	)			(6,365	)			(11,899	)			(21,571	)
Adjusted EBITDA			193,538				163,397				699,589				649,021
Additions to rolling stock and equipment			(55,355	)			(52,623	)			(123,483	)			(223,965	)
Proceeds from sale of rolling stock and equipment			24,144				20,654				52,719				71,365
Adjusted EBITDA net of net rolling stock and equipment			162,327				131,428				628,825				496,421
Free cash flow conversion			83.9	%			80.4	%			89.9	%			76.5	%

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar

Free cash flow from continuing operations: Net cash from continuing 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 eof the Company in regard to its ability to meet capital requirements.

(unaudited)(in thousands of U.S. dollars)		Three months endedDecember 31								Years endedDecember 31
		2020				2019*				2020				2019*
Net cash from continuing operating activities			164,928				133,262				610,862				500,496
Additions to property and equipment			(60,410	)			(89,073	)			(142,814	)			(263,698	)
Proceeds from sale of property and equipment			23,949				20,785				52,116				71,754
Proceeds from sale of assets held for sale			6,248				13,079				24,480				39,146
Free cash flow from continuing operations			134,715				78,053				544,644				347,698

* Recasted for change in presentation currency from Canadian dollar to U.S. dollar

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:

Covenants		Requirements		As atDecember 31, 2020
Funded debt-to- EBITDA ratio [ratio of total debt 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]					1.33
EBITDAR-to-interest and rent 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			4.78

 

Source: TFI International Inc.