TFII TFI International Inc

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, 2023. All amounts are shown in U.S. dollars.

“We generated robust free cash flow during the quarter, bringing our full-year total to more than $9 per share1 and wrapping up 2023 on a favorable note as our team continues to strive for day-to-day efficiencies while delivering superior service. Despite market conditions, during the fourth quarter we were able to grow revenue over the prior year period and deliver adjusted diluted EPS of $1.71. Strategically, we capitalized on our cash flow and strong balance sheet by significantly investing during periods of weaker freight demand, committing   $2 billion of capital during 2023 into announced acquisitions and share buybacks,” said Alain Bédard, Chairman, President and Chief Executive Officer. “We’re entering 2024 in an attractive position across all four business segments, with Logistics outperforming the market boosted by our recent successful acquisition of JHT, with Truckload standing to significantly benefit from our Daseke acquisition expected to close in the second quarter, and with the ongoing turnaround at LTL a top priority.  This involves a renewed focus on LTL growth and quality of revenue through improved service, as evidenced by our latest cargo claims ratio of only 0.5% for US LTL, down from 1.5% a year earlier, and our second-to-none Canadian LTL cargo claims ratio of 0.1%. Looking ahead, while continuing our sharp focus on day-to-day operations, we can also seek highly strategic investment opportunities while returning excess cash to shareholders, consistent with our Board’s recently approved 14% increase to our quarterly dividend.”

SELECTED FINANCIAL DATA AND HIGHLIGHTS (UNAUDITED)

Financial highlights	Three-months ended December 31		Years ended December 31
(in millions of U.S. dollars, except per share data)	2023	2022	2023	2022
Total revenue	1,968.7	1,956.7	7,521.2	8,812.5
Revenue before fuel surcharge	1,674.1	1,616.5	6,416.9	7,357.1
Adjusted EBITDA1	320.9	305.0	1,187.9	1,425.0
Operating income	198.3	216.9	757.6	1,146.0
Net cash from operating activities	302.6	248.3	1,013.8	971.6
Net income	131.4	153.5	504.9	823.2
EPS - diluted ($)	1.53	1.74	5.80	9.02
Adjusted net income1	147.0	151.8	538.3	731.7
Adjusted EPS - diluted1 ($)	1.71	1.72	6.18	8.02
Weighted average number of shares ('000s)	85,082	86,670	85,908	89,360

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

FOURTH QUARTER RESULTSTotal revenue of $1.97 billion compared to $1.96 billion in the prior year period and revenue before fuel surcharge of $1.67 billion compared to $1.62 billion in the prior year period. The increase is primarily due to contributions from business acquisitions offset by reduced volumes driven by weaker end market demand.

Operating income of $198.3 million compared to $216.9 million the prior year period. The decrease is primarily attributable to the decline in revenues as a result of weaker market demand in the quarter and the impact of a decrease in gains from assets held for sale of $23.0 million, partially offset by contributions from business acquisitions of $24.1 million.

Net income of $131.4 million compares to $153.5 million in the prior year period, and net income of $1.53 per diluted share compared to $1.74 in the prior year period.  Adjusted net income, a non-IFRS measure, was $147.0 million, or $1.71 per diluted share, compared to $151.8 million, or $1.72 per diluted share, the prior year period.

Total revenue declined for three segments relative to the prior year period with decreases of 9% for Package and Courier, 6% for Less-Than-Truckload, and 5% for Truckload, while total revenue for Logistics increased 28%. Operating income declined for Package and Courier by 8%, for Less-Than-Truckload by 19%, and for Truckload by 29% and increased for Logistics by 60% in the fourth quarter in comparison to the prior-year. Operating income in the Truckload segment decreased due to a $16.0 million gain on the sale of assets held for sale being recognized in the same prior year period, while operating income in the logistics segment increased primarily through business acquisitions.

FULL-YEAR RESULTSTotal revenue was $7.52 billion for 2023 versus $8.81 billion in 2022.  Revenue before fuel surcharge of $6.42 billion compared to $7.36 billion the prior year.  The decrease is primarily due to weaker market demand and the sale of CFI in 2022 resulting in a decrease of $333.3 million.

Operating income totaled $757.6 million compared to $1,146.0 million. The decrease is mainly attributable to the weaker market demand referenced above, a gain on sale of business of $73.7 million in 2022, as well as $107.3 million less gains from the sale of rolling stock, equipment, and assets held for sale and the 2022 sale of CFI which contributed $46.1 million in 2022.

Net income was $504.9 million, or $5.80 per diluted share, compared to $823.2 million, or $9.02 per diluted share a year earlier.  Adjusted net income and adjusted diluted EPS, non-IFRS measures, were $538.3 million, or $6.18 per diluted share, compared to $731.7 million, or $8.02 per diluted share the prior year.

During 2023, total revenue declined 10% for Package and Courier, 16% for Less-Than-Truckload, 21% for Truckload and 4% for Logistics relative to the prior year.  Operating income was down 15% for Package and Courier, 34% for Less-Than-Truckload, 35% for Truckload, and up 14% 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, 2023
Revenue before fuel surcharge1	122,033			695,930			399,277			471,638			—			(14,764	)		1,674,114
% of total revenue2	8	%		43	%		24	%		25	%								100	%
Adjusted EBITDA3	40,939			125,064			98,770			69,230			(13,065	)		—			320,938
Adjusted EBITDA margin3,4	33.5	%		18.0	%		24.7	%		14.7	%								19.2	%
Operating income (loss)	34,711			71,447			50,657			54,654			(13,212	)		—			198,257
Operating margin3,4	28.4	%		10.3	%		12.7	%		11.6	%								11.8	%
Total assets less intangible assets3	175,336			2,134,895			1,146,497			357,251			450,340			—			4,264,319
Net capital expenditures3	9,572			37,380			4,725			1,792			129			—			53,598
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
Year ended December 31, 2023
Revenue before fuel surcharge1	461,930			2,777,309			1,625,592			1,604,878			—			(52,823	)		6,416,886
% of total revenue2	8	%		44	%		26	%		22	%								100	%
Adjusted EBITDA3	139,437			473,602			428,203			207,800			(61,102	)		—			1,187,940
Adjusted EBITDA margin3,4	30.2	%		17.1	%		26.3	%		12.9	%								18.5	%
Operating income (loss)	114,360			310,429			237,393			160,112			(64,659	)		—			757,635
Operating margin3,4	24.8	%		11.2	%		14.6	%		10.0	%								11.8	%
Total assets less intangible assets3	175,336			2,134,895			1,146,497			357,251			450,340			—			4,264,319
Net capital expenditures3	19,935			154,832			29,098			3,725			238			—			207,828
Year ended 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	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

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.

CASH FLOW AND CAPITAL DEPLOYMENT

Net cash flow from operating activities was $1,013.8 million during 2023 compared to $971.6 million the prior year. The 4% increase was due to stronger working capital conversion. The Company returned $409.1 million to shareholders during the year, of which $121.1 million was through dividends and $288.0 million was through share repurchases. In addition, the Company deployed $628.7 million for business combinations and announced another $1.1 billion expected to be closed in the second quarter of 2024.

On December 15, 2023, the Board of Directors of TFI International declared a quarterly dividend of $0.40 per outstanding common share paid on January 15, 2024, representing a 14% increase over the $0.35 quarterly dividend declared in Q4 2022.

CONFERENCE CALL

TFI International will host a conference call on Friday, February 9, 2024 at 8:30 a.m. Eastern Time to discuss these results. Interested parties can join the call by dialing 1-877-704-4453 or 1-201-389-0920. A recording of the call will be available until 11:59 p.m Eastern, Friday, February 23, 2024 by dialing 1-844-512-2921 or 1-412-317-6671 by entering passcode 13743370.

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 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. 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 2023 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 BédardChairman, President and CEOTFI International Inc.647-729-4079abedard@tfiintl.com

TFI International Inc.
UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
	DECEMBER 31, 2023 AND 2022
(in thousands of U.S. dollars)	As at			As at
	December 31, 2023			December 31, 2022
Assets
Cash and cash equivalents	335,556			147,117
Trade and other receivables	894,771			1,030,726
Inventoried supplies	23,964			24,181
Current taxes recoverable	23,637			12,788
Prepaid expenses	56,269			38,501
Assets held for sale	1,802			10,250
Current assets	1,335,999			1,263,563
Property and equipment	2,415,472			2,131,955
Right-of-use assets	425,630			381,640
Intangible assets	2,019,301			1,592,110
Investments	50,209			85,964
Employee benefits	-			4,359
Other assets	16,394			19,192
Deferred tax assets	20,615			27,047
Non-current assets	4,947,621			4,242,267
Total assets	6,283,620			5,505,830
Liabilities
Trade and other payables	671,936			708,768
Current taxes payable	2,442			41,714
Provisions	66,565			43,903
Other financial liabilities	23,420			19,275
Long-term debt	174,351			37,087
Lease liabilities	127,397			115,934
Current liabilities	1,066,111			966,681
Long-term debt	1,709,831			1,278,670
Lease liabilities	332,761			297,105
Employee benefits	53,231			-
Provisions	93,335			131,736
Other financial liabilities	3,699			382
Deferred tax liabilities	433,242			368,186
Non-current liabilities	2,626,099			2,076,079
Total liabilities	3,692,210			3,042,760
Equity
Share capital	1,107,290			1,089,229
Contributed surplus	37,684			41,491
Accumulated other comprehensive loss	(200,539	)		(233,321	)
Retained earnings	1,646,975			1,565,671
Total equity	2,591,410			2,463,070
Contingencies, letters of credit and other commitments
Subsequent events
Total liabilities and equity	6,283,620			5,505,830

** The Company's financial reporting framework is IFRS as issued by the IASB.

TFI International Inc.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2023 AND 2022
(In thousands of U.S. dollars, except per share amounts)	2023		2022
Revenue	6,416,886		7,357,064
Fuel surcharge	1,104,281		1,455,427
Total revenue	7,521,167		8,812,491
Materials and services expenses	3,805,846		4,592,191
Personnel expenses	2,109,622		2,362,856
Other operating expenses	434,751		492,291
Depreciation of property and equipment	249,835		248,638
Depreciation of right-of-use assets	132,112		126,276
Amortization of intangible assets	60,028		55,679
Loss (gain) on sale of business	3,011		(73,653	)
Gain on sale of rolling stock and equipment	(15,510	)	(59,661	)
Gain on derecognition of right-of-use assets	(1,482	)	(210	)
Loss (gain) on sale of land and buildings	40		(43	)
Gain, net of impairment, on sale of assets held for sale	(14,721	)	(77,911	)
Total operating expenses	6,763,532		7,666,453
Operating income	757,635		1,146,038
Finance (income) costs
Finance income	(8,612	)	(1,750	)
Finance costs	89,483		82,147
Net finance costs	80,871		80,397
Income before income tax	676,764		1,065,641
Income tax expense	171,887		242,409
Net income	504,877		823,232
Earnings per share
Basic earnings per share	5.88		9.21
Diluted earnings per share	5.80		9.02

TFI International Inc.
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 2023 AND 2022
(In thousands of U.S. dollars)	2023			2022
Net income	504,877			823,232
Other comprehensive income (loss)
Items that may be reclassified to income or loss in future years:
Foreign currency translation differences	(881	)		(10,148	)
Net investment hedge, net of tax	39,705			(72,046	)
Employee benefits, net of tax	-			292
Items that may never be reclassified to income:
Defined benefit plan remeasurement, net of tax	2,016			63,508
Items directly reclassified to retained earnings:
Unrealized gain (loss) on investments in equity securities
measured at fair value through OCI, net of tax	7,281			(5,495	)
Other comprehensive income (loss), net of tax	48,121			(23,889	)
Total comprehensive income	552,998			799,343

TFI International Inc.
UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY
YEARS ENDED DECEMBER 31, 2023 AND 2022
(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, 2022	1,089,229			41,491			-			(239,120	)		5,799			1,565,671			2,463,070
Net income	-			-			-			-			-			504,877			504,877
Other comprehensive income, net of tax	-			-			-			38,824			7,281			2,016			48,121
Realized (loss) gain on equity securities	-			-			-			-			(13,323	)		13,323			-
Total comprehensive (loss) income	-			-			-			38,824			(6,042	)		520,216			552,998
Share-based payment transactions, net of tax	-			21,424			-			-			-			-			21,424
Stock options exercised, net of tax	17,179			(4,402	)		-			-			-			-			12,777
Dividends to owners of the Company	-			-			-			-			-			(124,254	)		(124,254	)
Repurchase of own shares	(28,303	)		-			-			-			-			(259,721	)		(288,024	)
Net settlement of restricted share units
and performance share units, net of tax	29,185			(20,829	)		-			-			-			(54,937	)		(46,581	)
Total transactions with owners, recorded directly in equity	18,061			(3,807	)		-			-			-			(438,912	)		(424,658	)
Balance as at December 31, 2023	1,107,290			37,684			-			(200,296	)		(243	)		1,646,975			2,591,410
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
Issuance of shares, net of expenses	-			-			-			-			-			-			-
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

TFI International Inc.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2023 AND 2022
(In thousands of U.S. dollars)	2023			2022
Cash flows from operating activities
Net income	504,877			823,232
Adjustments for:
Depreciation of property and equipment	249,835			248,638
Depreciation of right-of-use assets	132,112			126,276
Amortization of intangible assets	60,028			55,679
Share-based payment transactions	13,451			14,648
Net finance costs	80,871			80,397
Income tax expense	171,887			242,409
Loss (gain) on sale of business	3,011			(73,653	)
Gain on sale of property and equipment	(15,470	)		(59,704	)
Gain on derecognition of right-of-use assets	(1,482	)		(210	)
Gain, net of impairment, on sale of assets held for sale	(14,721	)		(77,911	)
Employee benefits	60,212			14,946
Provisions, net of payments	(33,696	)		26,044
Net change in non-cash operating working capital	106,631			(147,453	)
Interest paid	(70,354	)		(77,512	)
Income tax paid	(233,353	)		(224,181	)
Net cash from operating activities	1,013,839			971,645
Cash flows (used in) from investing activities
Purchases of property and equipment	(361,563	)		(350,824	)
Proceeds from sale of property and equipment	73,339			128,821
Proceeds from sale of assets held for sale	50,280			131,250
Purchases of intangible assets	(2,758	)		(6,120	)
Proceeds from sale of intangible assets	-			250
Proceeds from sale of business, net of cash disposed	-			546,228
Business combinations, net of cash acquired	(628,701	)		(158,251	)
Purchases of investments	(41,719	)		(80,551	)
Proceeds from sale of investments	89,225			12,930
Others	24,565			(311	)
Net cash (used in) from investing activities	(797,332	)		223,422
Cash flows used in financing activities
Net (decrease) increase in bank indebtedness	(6,337	)		7,490
Proceeds from long-term debt	575,000			334,164
Repayment of long-term debt	(41,371	)		(369,692	)
Net increase (decrease) in revolving facilities	25,242			(236,502	)
Repayment of lease liabilities	(128,107	)		(123,606	)
Decrease of other financial liabilities	(9,572	)		(21,108	)
Dividends paid	(121,095	)		(97,321	)
Repurchase of own shares	(288,024	)		(567,983	)
Proceeds from exercise of stock options	12,777			16,502
Share repurchase for settlement of restricted share
units and performance share units	(46,581	)		(9,186	)
Net cash used in financing activities	(28,068	)		(1,067,242	)
Net change in cash and cash equivalents	188,439			127,825
Cash and cash equivalents, beginning of year	147,117			19,292
Cash and cash equivalents, end of year	335,556			147,117

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
2023
Canada	583,198	608,545	1,139,272	271,136	(34,915	)	2,567,236
United States	-	2,760,022	796,766	1,425,880	(28,737	)	4,953,931
Total	583,198	3,368,567	1,936,038	1,697,016	(63,652	)	7,521,167
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	650,844	4,023,163	2,451,038	1,763,280	(75,834	)	8,812,491

 

Package and Courier

(unaudited)	Three months ended December 31								Years ended December 31
(in thousands of U.S. dollars)	2023		%		2022		%		2023		%		2022		%
Total revenue	156,198				172,381				583,198				650,844
Fuel surcharge	(34,165	)			(43,307	)			(121,268	)			(151,872	)
Revenue	122,033		100.0	%	129,074		100.0	%	461,930		100.0	%	498,972		100.0	%
Materials and services expenses (net of fuel    surcharge)	41,104		33.7	%	42,784		33.1	%	163,960		35.5	%	167,725		33.6	%
Personnel expenses	33,695		27.6	%	35,877		27.8	%	133,504		28.9	%	144,650		29.0	%
Other operating expenses	6,403		5.2	%	6,667		5.2	%	26,374		5.7	%	26,845		5.4	%
Depreciation of property and equipment	2,969		2.4	%	3,080		2.4	%	11,789		2.6	%	12,863		2.6	%
Depreciation of right-of-use assets	3,103		2.5	%	3,135		2.4	%	12,654		2.7	%	13,024		2.6	%
Amortization of intangible assets	156		0.1	%	157		0.1	%	627		0.1	%	645		0.1	%
Gain on sale of rolling stock and equipment	(106	)	-0.1	%	(189	)	-0.1	%	(510	)	-0.1	%	(1,087	)	-0.2	%
(Gain) loss on derecognition of right-of-use assets	(2	)	-0.0	%	-		-		(835	)	-0.2	%	1		0.0	%
Loss on sale of land and buildings and assets    held for sale	-		-		-		-		7		0.0	%	—		0.0	%
Operating income	34,711		28.4	%	37,563		29.1	%	114,360		24.8	%	134,306		26.9	%
Adjusted EBITDA1	40,939		33.5	%	43,935		34.0	%	139,437		30.2	%	160,838		32.2	%
Return on invested capital1			28.1	%			32.5	%

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)	2023			2022			Variance			%			2023			2022			Variance			%
Revenue per pound (including fuel)	$	0.48		$	0.47		$	0.01		-2.1	%		$	0.47		$	0.48		$	(0.01	)	-2.1	%
Revenue per pound (excluding fuel)	$	0.37		$	0.35		$	0.02		5.7	%		$	0.37		$	0.37		$	—		—
Revenue per package (including fuel)	$	7.03		$	7.46		$	(0.43	)	-5.8	%		$	7.27		$	7.66		$	(0.39	)	-5.1	%
Revenue per package (excluding fuel)	$	5.49		$	5.59		$	(0.10	)	-1.8	%		$	5.76		$	5.88		$	(0.12	)	-2.0	%
Tonnage (in thousands of metric tons)		148			167			(19	)	-11.4	%			563			614			(51	)	-8.3	%
Packages (in thousands)		22,230			23,107			(877	)	-3.8	%			80,245			84,915			(4,670	)	-5.5	%
Average weight per package (in lbs.)		14.67			15.93			(1.26	)	-7.9	%			15.46			15.94			(0.48	)	-3.0	%
Vehicle count, average		995			1,028			(33	)	-3.2	%			990			1,046			(56	)	-5.3	%
Weekly revenue per vehicle (incl. fuel, in thousands of U.S. dollars)	$	12.08		$	12.90		$	(0.82	)	-6.4	%		$	11.33		$	11.97		$	(0.64	)	-5.4	%

Less-Than-Truckload

(unaudited)	Three months ended December 31								Years ended December 31
(in thousands of U.S. dollars)	2023		%		2022		%		2023		%		2022		%
Total revenue	846,410				903,713				3,368,567				4,023,163
Fuel surcharge	(150,480	)			(182,930	)			(591,258	)			(779,606	)
Revenue	695,930		100.0	%	720,783		100.0	%	2,777,309		100.0	%	3,243,557		100.0	%
Materials and services expenses (net of fuel    surcharge)	213,583		30.7	%	226,839		31.5	%	827,533		29.8	%	1,003,662		30.9	%
Personnel expenses	299,793		43.1	%	311,248		43.2	%	1,244,092		44.8	%	1,432,857		44.2	%
Other operating expenses	58,177		8.4	%	58,050		8.1	%	233,229		8.4	%	243,347		7.5	%
Depreciation of property and equipment	35,212		5.1	%	26,374		3.7	%	132,027		4.8	%	104,850		3.2	%
Depreciation of right-of-use assets	8,728		1.3	%	9,641		1.3	%	32,774		1.2	%	38,985		1.2	%
Amortization of intangible assets	2,432		0.3	%	2,065		0.3	%	8,883		0.3	%	8,831		0.3	%
Gain on sale of rolling stock and equipment	(687	)	-0.1	%	(1,601	)	-0.2	%	(1,038	)	-0.0	%	(4,056	)	-0.1	%
Gain on derecognition of right-of-use assets	—		0.0	%	(60	)	-0.0	%	(109	)	-0.0	%	(12	)	-0.0	%
(Gain) loss, net of impairment, on sale of land and
buildings and assets held for sale	7,245		1.0	%	(13	)	-0.0	%	(10,511	)	-0.4	%	(55,714	)	-1.7	%
Operating income	71,447		10.3	%	88,240		12.2	%	310,429		11.2	%	470,807		14.5	%
Adjusted EBITDA1	125,064		18.0	%	126,307		17.5	%	473,602		17.1	%	567,759		17.5	%

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)	2023				2022				Variance			%			2023				2022				Variance			%
U.S. LTL
Revenue (in thousands of dollars)1		481,102				475,389				5,713		1.2	%			1,912,623				2,186,668				(274,045	)	-12.5	%
Adjusted Operating Ratio2		91.0	%			90.4	%									92.2	%			89.9	%
Revenue per hundredweight (excluding fuel)1	$	28.81			$	30.05			$	(1.24	)	-4.1	%		$	28.61			$	29.67			$	(1.06	)	-3.6	%
Revenue per shipment (excluding fuel)1	$	342.18			$	322.74			$	19.44		6.0	%		$	322.26			$	320.20			$	2.06		0.6	%
Revenue per hundredweight (including fuel)1	$	35.52			$	39.04			$	(3.52	)	-9.0	%		$	35.31			$	38.03			$	(2.72	)	-7.2	%
Revenue per shipment (including fuel)1	$	421.89			$	419.26			$	2.63		0.6	%		$	397.72			$	410.38			$	(12.66	)	-3.1	%
Tonnage (in thousands of tons)1		835				791				44		5.6	%			3,342				3,685				(343	)	-9.3	%
Shipments (in thousands)1		1,406				1,473				(67	)	-4.5	%			5,935				6,829				(894	)	-13.1	%
Average weight per shipment (in lbs)1		1,188				1,074				114		10.6	%			1,126				1,079				47		4.4	%
Average length of haul (in miles)1		1,132				1,092				40		3.7	%			1,111				1,101				10		0.9	%
Cargo claims (% revenue)		0.5	%			1.5	%									0.5	%			0.7	%
Vehicle count, average3		3,974				4,410				(436	)	-9.9	%			4,097				4,685				(588	)	-12.6	%
Truck age4		4.7				6.6				(1.9	)	-28.8	%			4.8				7.4				(2.6	)	-35.1	%
Business days		62				62				—		0.0	%			254				253				1.0		0.4	%
Return on invested capital2		15.1	%			23.8	%
Canadian LTL
Revenue (in thousands of dollars)		138,241				123,176				15,065		12.2	%			531,784				548,012				(16,228	)	-3.0	%
Adjusted Operating Ratio2		79.9	%			75.3	%									76.6	%			74.0	%
Revenue per hundredweight (excluding fuel)	$	10.82			$	10.84			$	(0.02	)	-0.2	%		$	10.83			$	11.26			$	(0.43	)	-3.8	%
Revenue per shipment (excluding fuel)	$	237.12			$	235.97			$	1.15		0.5	%		$	235.20			$	241.95			$	(6.75	)	-2.8	%
Revenue per hundredweight (including fuel)1	$	13.90			$	14.46			$	(0.56	)	-3.9	%		$	13.82			$	14.65			$	(0.83	)	-5.7	%
Revenue per shipment (including fuel)1	$	304.68			$	314.61			$	(9.93	)	-3.2	%		$	300.32			$	314.88			$	(14.56	)	-4.6	%
Tonnage (in thousands of tons)		639				568				71		12.5	%			2,456				2,434				22		0.9	%
Shipments (in thousands)		583				522				61		11.7	%			2,261				2,265				(4	)	-0.2	%
Average weight per shipment (in lbs)		2,192				2,176				16		0.7	%			2,172				2,149				23		1.1	%
Average length of haul (in miles)		856				734				122		16.6	%			852				748				104		13.9	%
Cargo claims (% revenue)		0.1	%			0.1	%									0.2	%			0.2	%
Vehicle count, average		777				808				(31	)	-3.8	%			788				800				(12	)	-1.5	%
Truck age		4.8				5.1				(0.3	)	-5.9	%			4.8				4.8				—		0.0	%
Business days		62				62				—		0.0	%			250				250				—		0.0	%
Return on invested capital2		20.1	%			24.0	%
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  As at December 31, 2023 the active vehicle count was 3,364 (December 31, 2022 - 4,046)
4 The truck age for U.S. LTL operations has been presented for active trucks.

 

Truckload

(unaudited)	Three months ended December 31									Years ended December 31
(in thousands of U.S. dollars)	2023		%		2022		%			2023		%		2022		%
Total revenue	479,596				502,784					1,936,038				2,451,038
Fuel surcharge	(80,319	)			(99,433	)				(310,446	)			(464,707	)
Revenue	399,277		100.0	%	403,351		100.0	%		1,625,592		100.0	%	1,986,331		100.0	%
Materials and services expenses (net of fuel    surcharge)	166,850		41.8	%	174,305		43.2	%		682,342		42.0	%	821,442		41.4	%
Personnel expenses	121,120		30.3	%	115,449		28.6	%		473,948		29.2	%	585,891		29.5	%
Other operating expenses	14,540		3.6	%	13,709		3.4	%		55,420		3.4	%	76,612		3.9	%
Depreciation of property and equipment	23,863		6.0	%	26,695		6.6	%		101,508		6.2	%	129,013		6.5	%
Depreciation of right-of-use assets	18,341		4.6	%	15,730		3.9	%		70,084		4.3	%	59,473		3.0	%
Amortization of intangible assets	5,902		1.5	%	5,699		1.4	%		23,169		1.4	%	23,944		1.2	%
Gain on sale of rolling stock and equipment	(1,768	)	-0.4	%	(3,981	)	-1.0	%		(13,828	)	-0.9	%	(54,481	)	-2.7	%
Gain on derecognition of right-of-use assets	(235	)	-0.1	%	(138	)	-0.0	%		(493	)	-0.0	%	(191	)	-0.0	%
(Gain) loss on sale of land and buildings and assets
held for sale	7		0.0	%	(15,959	)	-4.0	%		(3,951	)	-0.2	%	(22,240	)	-1.1	%
Operating income	50,657		12.7	%	71,842		17.8	%		237,393		14.6	%	366,868		18.5	%
Adjusted EBITDA1	98,770		24.7	%	104,007		25.8	%		428,203		26.3	%	557,058		28.0	%

Operational data	Three months ended December 31														Years ended December 31
(unaudited)	2023				2022				Variance			%			2023				2022				Variance			%
Specialized TL
Revenue (in thousands of U.S. dollars)		323,952				325,493				(1,541	)	-0.5	%			1,323,083				1,362,390				(39,307	)	-2.9	%
Adjusted operating ratio1		87.0	%			87.4	%									85.8	%			83.1	%
Revenue per truck per week (excluding fuel)	$	4,133			$	4,197			$	(64	)	-1.5	%		$	4,232			$	4,582			$	(350	)	-7.6	%
Revenue per truck per week (including fuel)	$	5,086			$	5,455			$	(369	)	-6.8	%		$	5,174			$	5,879			$	(705	)	-12.0	%
Truck count, average		4,051				3,839				212		5.5	%			3,977				3,641				336		9.2	%
Trailer count, average		10,402				11,004				(602	)	-5.5	%			10,460				10,833				(373	)	-3.4	%
Truck age		3.4				3.6				(0.2	)	-5.6	%			3.4				3.6				(0.2	)	-5.6	%
Trailer age		12.7				11.5				1.2		10.4	%			12.7				11.5				1.2		10.4	%
Number of owner operators, average		1,223				1,193				30		2.5	%			1,208				1,126				82		7.3	%
Return on invested capital1		10.3	%			13.4	%
Canadian based Conventional TL
Revenue (in thousands of U.S. dollars)		77,815				79,101				(1,286	)	-1.6	%			311,838				322,553				(10,715	)	-3.3	%
Adjusted operating ratio1		89.0	%			81.1	%									85.6	%			78.7	%
Total mileage (in thousands)		25,917				24,498				1,419		5.8	%			102,559				93,923				8,636		9.2	%
Revenue per mile (excluding fuel)2	$	2.08			$	2.24			$	(0.16	)	-7.2	%		$	2.11			$	2.30			$	(0.19	)	-8.0	%
Revenue per mile (including fuel)2	$	2.67			$	2.94			$	(0.27	)	-9.4	%		$	2.67			$	2.97			$	(0.30	)	-9.9	%
Revenue per truck per week (excluding fuel)	$	3,094			$	3,792			$	(698	)	-18.4	%		$	3,266			$	4,102			$	(836	)	-20.4	%
Revenue per truck per week (including fuel)	$	3,973			$	4,989			$	(1,016	)	-20.4	%		$	4,133			$	5,299			$	(1,166	)	-22.0	%
Truck count, average		1,072				858				214		24.9	%			1,024				741				283		38.2	%
Trailer count, average		3,861				3,636				225		6.2	%			3,923				3,456				467		13.5	%
Truck age		3.3				3.5				(0.2	)	-5.7	%			3.3				3.5				(0.2	)	-5.7	%
Trailer age		7.9				7.3				0.6		8.2	%			7.9				7.3				0.6		8.2	%
Number of owner operators, average		267				254				13		5.0	%			250				269				(19	)	-7.1	%
Return on invested capital1		12.6	%			21.3	%
1 This is a non-IFRS measure. For a reconciliation, please refer to the “Non-IFRS Financial Measures” section below.
2 The revenue per mile calculation excludes brokerage revenues

 

Logistics

(unaudited)	Three months ended December 31												Years ended December 31
(in thousands of U.S. dollars)	2023			%			2022			%			2023			%			2022			%
Total revenue	504,493						394,071						1,697,016						1,763,280
Fuel surcharge	(32,855	)					(18,103	)					(92,138	)					(74,158	)
Revenue	471,638			100.0	%		375,968			100.0	%		1,604,878			100.0	%		1,689,122			100.0	%
Materials and services expenses (net of fuel    surcharge)	309,079			65.5	%		269,625			71.7	%		1,102,396			68.7	%		1,232,049			72.9	%
Personnel expenses	67,034			14.2	%		35,770			9.5	%		191,146			11.9	%		143,505			8.5	%
Other operating expenses	26,323			5.6	%		27,107			7.2	%		103,715			6.5	%		134,923			8.0	%
Depreciation of property and equipment	1,905			0.4	%		333			0.1	%		4,094			0.3	%		1,460			0.1	%
Depreciation of right-of-use assets	4,712			1.0	%		3,644			1.0	%		16,583			1.0	%		14,794			0.9	%
Amortization of intangible assets	8,185			1.7	%		5,292			1.4	%		27,237			1.7	%		21,990			1.3	%
Gain on sale of rolling stock and equipment	(24	)		-0.0	%		(7	)		-0.0	%		(134	)		-0.0	%		(37	)		-0.0	%
Gain on derecognition of right-of-use assets	(4	)		-0.0	%		—			—			(45	)		-0.0	%		(8	)		-0.0	%
Gain on sale of land and building	(226	)		-0.0	%		—			—			(226	)		-0.0	%		—			—
Operating income	54,654			11.6	%		34,204			9.1	%		160,112			10.0	%		140,446			8.3	%
Adjusted EBITDA1	69,230			14.7	%		43,473			11.6	%		207,800			12.9	%		178,690			10.6	%
Return on invested capital1				18.8	%					21.9	%

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, impairment of fixed assets classified as held for sale, gain or loss on the sale of business and direct attributable costs, 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
	2023			2022			2021			2023			2022			2021
Net income	131,386			153,494			144,139			504,877			823,232			754,405
Amortization of intangible assets related to business acquisitions	15,598			13,969			13,128			56,160			52,003			50,498
Net change in fair value and accretion expense of contingent    considerations	31			90			1,571			165			216			1,932
Net foreign exchange (gain) loss	(1,620	)		(564	)		(939	)		(491	)		556			(1,471	)
(Gain) loss on sale of business and direct attributable costs	—			2,069			—			3,011			(69,753	)		—
Bargain purchase gain	—			—			—			—			—			(283,593	)
(Gain) loss, net of impairment, on sale of land and buildings and assets held for sale	7,026			(15,941	)		(6,638	)		(14,721	)		(77,870	)		(11,978	)
(Gain) loss on disposal of intangible assets	—			—			(5	)		—			—			1
Tax impact of adjustments	(5,401	)		(1,358	)		(2,636	)		(10,668	)		3,284			(11,446	)
Adjusted net income1	147,020			151,759			148,620			538,333			731,668			498,348
Adjusted EPS – basic1	1.73			1.75			1.60			6.27			8.19			5.36
Adjusted EPS – diluted1	1.71			1.72			1.57			6.18			8.02			5.23

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 improve the comparability of the Company's 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.  Segmented adjusted EBITDA is provided to improve the comparability of the Company's segment performance.

Consolidated adjusted EBITDA reconciliation:

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31								Years ended December 31
	2023		2022			2021			2023			2022			2021
Net income	131,386		153,494			144,139			504,877			823,232			754,405
Net finance costs	23,263		16,963			21,441			80,871			80,397			73,018
Income tax expense	43,608		46,403			49,399			171,887			242,409			151,806
Depreciation of property and equipment	64,053		56,587			65,294			249,835			248,638			225,007
Depreciation of right-of-use assets	34,901		32,150			31,190			132,112			126,276			112,782
Amortization of intangible assets	16,701		13,262			13,653			60,028			55,679			55,243
(Gain) loss on sale of business	—		2,069			—			3,011			(73,653	)		—
Bargain purchase gain	—		—			—			—			—			(283,593	)
(Gain) loss on sale of land and buildings	—		—			9			40			(43	)		19
(Gain) loss, net of impairment, on sale of assets held for sale	7,026		(15,972	)		(6,654	)		(14,721	)		(77,911	)		(12,209	)
(Gain) loss on sale of intangible assets	—		—			(5	)		—			—			1
Adjusted EBITDA	320,938		304,956			318,466			1,187,940			1,425,024			1,076,479

Segmented adjusted EBITDA reconciliation:

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31						Years ended December 31
	2023			2022			2023			2022
Package and Courier
Operating income	34,711			37,563			114,360			134,306
Depreciation and amortization	6,228			6,372			25,070			26,532
Loss on sale of assets held for sale	—			—			7			—
Adjusted EBITDA	40,939			43,935			139,437			160,838
Less-Than-Truckload
Operating income	71,447			88,240			310,429			470,807
Depreciation and amortization	46,372			38,080			173,684			152,666
(Gain) loss on sale of land and buildings	(1	)		(1	)		35			—
(Gain) loss, net of impairment, on sale of assets held for sale	7,246			(12	)		(10,546	)		(55,714	)
Adjusted EBITDA	125,064			126,307			473,602			567,759
Truckload
Operating income	50,657			71,842			237,393			366,868
Depreciation and amortization	48,106			48,124			194,761			212,430
(Gain) loss on sale of land and buildings	1			1			5			(43	)
(Gain) loss on sale of assets held for sale	6			(15,960	)		(3,956	)		(22,197	)
Adjusted EBITDA	98,770			104,007			428,203			557,058
Logistics
Operating income	54,654			34,204			160,112			140,446
Depreciation and amortization	14,802			9,269			47,914			38,244
Gain on sale of assets held for sale	(226	)		—			(226	)		—
Adjusted EBITDA	69,230			43,473			207,800			178,690
Corporate
Operating loss	(13,212	)		(14,989	)		(64,659	)		33,611
Depreciation and amortization	147			154			546			721
(Gain) loss on sale of business	—			2,069			3,011			(73,653	)
Adjusted EBITDA	(13,065	)		(12,766	)		(61,102	)		(39,321	)

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
	2023			2022			2021			2023			2022			2021
Operating expenses	1,770,421			1,739,834			1,925,935			6,763,532			7,666,453			6,241,200
Gain (loss) on sale of business	—			(2,069	)		—			(3,011	)		73,653			—
Bargain purchase gain	—			—			—			—			—			283,593
Gain (loss) on sale of land and building	—			—			(9	)		(40	)		43			(19	)
Gain (loss), net of impairment, on sale of assets held for sale	(7,026	)		15,972			6,654			14,721			77,911			12,209
Gain (loss) on disposal of intangible assets	—			—			5			—			—			(1	)
Adjusted operating expenses	1,763,395			1,753,737			1,932,585			6,775,202			7,818,060			6,536,982
Fuel surcharge revenue	(294,564	)		(340,199	)		(252,491	)		(1,104,281	)		(1,455,427	)		(751,644	)
Adjusted operating expenses, net of fuel surcharge revenue	1,468,831			1,413,538			1,680,094			5,670,921			6,362,633			5,785,338
Revenue before fuel surcharge	1,674,114			1,616,495			1,888,423			6,416,886			7,357,064			6,468,785
Adjusted operating ratio	87.7	%		87.4	%		89.0	%		88.4	%		86.5	%		89.4	%

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
	2023			2022			2023			2022
Less-Than-Truckload
Total revenue	846,410			903,713			3,368,567			4,023,163
Total operating expenses	774,963			815,473			3,058,138			3,552,356
Operating income	71,447			88,240			310,429			470,807
Operating expenses	774,963			815,473			3,058,138			3,552,356
Gain (loss) on sale of land and buildings	1			1			(35	)		—
Gain (loss), net of impairment, on sale of assets held for sale	(7,246	)		12			10,546			55,714
Adjusted operating expenses	767,718			815,486			3,068,649			3,608,070
Fuel surcharge revenue	(150,480	)		(182,930	)		(591,258	)		(779,606	)
Adjusted operating expenses, net of fuel surcharge revenue	617,238			632,556			2,477,391			2,828,464
Revenue before fuel surcharge	695,930			720,783			2,777,309			3,243,557
Adjusted operating ratio	88.7	%		87.8	%		89.2	%		87.2	%
Less-Than-Truckload - Revenue before fuel surcharge
U.S. based LTL	562,666			601,436			2,262,987			2,709,762
Canadian based LTL	138,241			123,176			531,784			548,012
Eliminations	(4,977	)		(3,829	)		(17,462	)		(14,217	)
	695,930			720,783			2,777,309			3,243,557
Less-Than-Truckload - Fuel surcharge revenue
U.S. based LTL	112,079			142,180			447,820			615,840
Canadian based LTL	39,388			41,051			147,247			165,185
Eliminations	(987	)		(301	)		(3,809	)		(1,419	)
	150,480			182,930			591,258			779,606
Less-Than-Truckload - Operating income (loss)
U.S. based LTL	43,627			57,819			186,231			327,793
Canadian based LTL	27,820			30,421			124,198			143,014
	71,447			88,240			310,429			470,807
U.S. based LTL
Operating expenses*	631,118			685,797			2,524,576			2,997,809
Gain (loss) on sale of land and buildings	1			-			(35	)		-
Gain (loss), net of impairment, on sale of assets held for sale	(7,247	)		-			10,549			55,054
Adjusted operating expenses	623,872			685,797			2,535,090			3,052,863
Fuel surcharge revenue	(112,079	)		(142,180	)		(447,820	)		(615,840	)
Adjusted operating expenses, net of fuel surcharge	511,793			543,617			2,087,270			2,437,023
Revenue before fuel surcharge	562,666			601,436			2,262,987			2,709,762
Adjusted operating ratio	91.0	%		90.4	%		92.2	%		89.9	%
Canadian based LTL
Operating expenses*	149,809			133,806			554,833			570,183
Gain on sale of land and buildings	-			1			-			-
Gain (loss), net of impairment, on sale of assets held for sale	1			12			(3	)		660
Adjusted operating expenses	149,810			133,819			554,830			570,843
Fuel surcharge revenue	(39,388	)		(41,051	)		(147,247	)		(165,185	)
Adjusted operating expenses, net of fuel surcharge	110,422			92,768			407,583			405,658
Revenue before fuel surcharge	138,241			123,176			531,784			548,012
Adjusted operating ratio	79.9	%		75.3	%		76.6	%		74.0	%

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
	2023			2022			2023			2022
Truckload
Total revenue	479,596			502,784			1,936,038			2,451,038
Total operating expenses	428,939			430,942			1,698,645			2,084,170
Operating income	50,657			71,842			237,393			366,868
Operating expenses	428,939			430,942			1,698,645			2,084,170
Gain (loss) on sale of land and buildings	(1	)		(1	)		(5	)		43
Gain (loss) on sale of assets held for sale	(6	)		15,960			3,956			22,197
Adjusted operating expenses	428,932			446,901			1,702,596			2,106,410
Fuel surcharge revenue	(80,319	)		(99,433	)		(310,446	)		(464,707	)
Adjusted operating expenses, net of fuel surcharge revenue	348,613			347,468			1,392,150			1,641,703
Revenue before fuel surcharge	399,277			403,351			1,625,592			1,986,331
Adjusted operating ratio	87.3	%		86.1	%		85.6	%		82.7	%
Truckload - Revenue before fuel surcharge
U.S. based Conventional TL	—			—			—			310,026
Canadian based Conventional TL	77,815			79,101			311,838			322,553
Specialized TL	323,952			325,493			1,323,083			1,362,390
Eliminations	(2,490	)		(1,243	)		(9,329	)		(8,638	)
	399,277			403,351			1,625,592			1,986,331
Truckload - Fuel surcharge revenue
U.S. based Conventional TL	—			—			—			82,059
Canadian based Conventional TL	15,287			17,307			57,447			62,929
Specialized TL	65,366			82,288			254,161			321,362
Eliminations	(334	)		(162	)		(1,162	)		(1,643	)
	80,319			99,433			310,446			464,707
Truckload - Operating income
U.S. based Conventional TL	—			—			—			46,133
Canadian based Conventional TL	8,584			30,463			45,004			84,321
Specialized TL	42,073			41,379			192,389			236,414
	50,657			71,842			237,393			366,868
U.S. based Conventional TL
Operating expenses*	—			—			—			345,952
Fuel surcharge revenue	—			—			—			(82,059	)
Adjusted operating expenses, net of fuel surcharge revenue	—			—			—			263,893
Revenue before fuel surcharge	—			—			—			310,026
Adjusted operating ratio	—			—			—			85.1	%
Canadian based Conventional TL
Operating expenses*	84,518			65,945			324,281			301,161
Gain on sale of land and buildings	—			—			—			43
Gain on sale of assets held for sale	—			15,485			—			15,486
Adjusted operating expenses	84,518			81,430			324,281			316,690
Fuel surcharge revenue	(15,287	)		(17,307	)		(57,447	)		(62,929	)
Adjusted operating expenses, net of fuel surcharge revenue	69,231			64,123			266,834			253,761
Revenue before fuel surcharge	77,815			79,101			311,838			322,553
Adjusted operating ratio	89.0	%		81.1	%		85.6	%		78.7	%
Specialized TL
Operating expenses*	347,245			366,402			1,384,855			1,447,338
Loss on sale of land and buildings	(1	)		(1	)		(5	)		—
Gain (loss) on sale of assets held for sale	(6	)		475			3,956			6,711
Adjusted operating expenses	347,238			366,876			1,388,806			1,454,049
Fuel surcharge revenue	(65,366	)		(82,288	)		(254,161	)		(321,362	)
Adjusted operating expenses, net of fuel surcharge revenue	281,872			284,588			1,134,645			1,132,687
Revenue before fuel surcharge	323,952			325,493			1,323,083			1,362,390
Adjusted operating ratio	87.0	%		87.4	%		85.8	%		83.1	%
* 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
	2023			2022			2023			2022
Net income	131,386			153,494			504,877			823,232
Net finance costs	23,263			16,963			80,871			80,397
Income tax expense	43,608			46,403			171,887			242,409
Depreciation of property and equipment	64,053			56,587			249,835			248,638
Depreciation of right-of-use assets	34,901			32,150			132,112			126,276
Amortization of intangible assets	16,701			13,262			60,028			55,679
(Gain) loss on the sale of business	—			2,069			3,011			(73,653	)
(Gain) loss on sale of land and buildings	—			—			40			(43	)
(Gain) loss, net of impairment, on sale assets held for sale	7,026			(15,972	)		(14,721	)		(77,911	)
Adjusted EBITDA	320,938			304,956			1,187,940			1,425,024
Net capital expenditures	(53,598	)		(77,755	)		(207,828	)		(175,954	)
Adjusted EBITDA less net capital expenditures	267,340			227,201			980,112			1,249,070
Free cash flow conversion	83.3	%		74.5	%		82.5	%		87.7	%

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
	2023			2022			2021			2023			2022			2021
Net cash from operating activities	302,580			248,348			190,333			1,013,839			971,645			855,351
Additions to property and equipment	(80,643	)		(111,716	)		(102,595	)		(361,563	)		(350,824	)		(267,173	)
Proceeds from sale of property and equipment	11,708			17,685			22,508			73,339			128,821			92,842
Proceeds from sale of assets held for sale	10,143			33,956			10,503			50,280			131,250			19,869
Free cash flow	243,788			188,273			120,749			775,895			880,892			700,889

Free cash flow per share: Free cash flow divided by the average shares outstanding for the period. The free cash flow per share was $9.03 for 2023 ($9.86 for 2022). Management believes that this measure provides a benchmark to evaluate the performance of the Company in regard to its ability to meet capital requirements on a per share basis.

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, 2023
Total assets	359,177	2,329,677	2,004,163	1,140,174	450,429	-	6,283,620
Intangible assets	183,841	194,782	857,666	782,923	89	-	2,019,301
Total assets less intangible assets	175,336	2,134,895	1,146,497	357,251	450,340	-	4,264,319
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

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, 2023
Additions to rolling stock	5,940			40,970			11,821			1,624			-				60,355
Additions to equipment	4,059			310			1,887			281			129				6,666
Proceeds from the sale of rolling stock	(427	)		(3,900	)		(8,983	)		(113	)		-				(13,423	)
Proceeds from the sale of equipment	-			-			-			-			-				-
Net capital expenditures	9,572			37,380			4,725			1,792			129				53,598
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
Year ended December 31, 2023
Additions to rolling stock	15,318			175,640			72,000			2,729			-				265,687
Additions to equipment	6,212			3,174			6,078			1,342			238				17,044
Proceeds from the sale of rolling stock	(1,595	)		(23,871	)		(48,962	)		(334	)		-				(74,762	)
Proceeds from the sale of equipment	-			(111	)		(18	)		(12	)		-				(141	)
Net capital expenditures	19,935			154,832			29,098			3,725			238				207,828
Year 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

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, 2023
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		1.49
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		5.65

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
	2023			2022
Package and Courier
Operating income	114,360			134,306
Loss on sale of assets held for sale	7			—
Amortization of intangible assets	627			645
Operating income, net of exclusions	114,994			134,951
Income tax	26.5	%		26.5	%
Operating income net of exclusions, after tax	84,521			99,189
Intangible assets	183,841			180,119
Total assets, excluding intangible assets	175,336			182,605
less: Trade and other payables, income taxes payable and provisions	(53,870	)		(67,428	)
Total invested capital, current year	305,307			295,296
Intangible assets, prior year	180,119			193,765
Total assets, excluding intangible assets, prior year	182,605			186,116
less: Trade and other payables, income taxes payable and provisions, prior year	(67,428	)		(65,438	)
Total invested capital, prior year	295,296			314,443
Average invested capital	300,302			304,870
Return on invested capital	28.1	%		32.5	%
Less-Than-Truckload - Canadian based LTL
Operating income	124,198			143,014
(Gain) loss on sale of assets held for sale	3			(660	)
Amortization of intangible assets	7,531			7,713
Operating income, net of exclusions	131,732			150,067
Income tax	26.5	%		26.5	%
Operating income net of exclusions, after tax	96,823			110,299
Intangible assets	184,025			162,397
Total assets, excluding intangible assets	418,217			352,949
less: Trade and other payables, income taxes payable and provisions	(78,384	)		(77,439	)
Total invested capital, current year	523,858			437,907
Intangible assets, prior year	162,397			182,084
Total assets, excluding intangible assets, prior year	352,949			373,655
less: Trade and other payables, income taxes payable and provisions, prior year	(77,439	)		(74,241	)
Total invested capital, prior year	437,907			481,498
Average invested capital	480,883			459,703
Return on invested capital	20.1	%		24.0	%

Return on invested capital segment reconciliation (continued):
(unaudited) (in thousands of U.S. dollars)	As at December 31
	2023			2022
Truckload - Canadian based Conventional TL
Operating income	45,004			84,321
Gain on sale of land and buildings	—			(43	)
Gain on sale of assets held for sale	—			(15,486	)
Amortization of intangible assets	2,133			1,958
Operating income, net of exclusions	47,137			70,750
Income tax	26.5	%		26.5	%
Operating income net of exclusions, after tax	34,646			52,001
Intangible assets	121,871			96,941
Total assets, excluding intangible assets	210,872			185,740
less: Trade and other payables, income taxes payable and provisions	(26,866	)		(40,671	)
Total invested capital, current year	305,877			242,010
Intangible assets, prior year	96,941			104,947
Total assets, excluding intangible assets, prior year	185,740			169,197
less: Trade and other payables, income taxes payable and provisions, prior year	(40,671	)		(28,473	)
Total invested capital, prior year	242,010			245,671
Average invested capital	273,944			243,841
Return on invested capital	12.6	%		21.3	%
Truckload - Specialized TL
Operating income	192,389			236,414
Loss on sale of land and buildings	5			—
Gain on sale of assets held for sale	(3,956	)		(6,711	)
Amortization of intangible assets	21,036			20,495
Operating income, net of exclusions	209,474			250,198
Income tax	26.5	%		26.5	%
Operating income net of exclusions, after tax	153,963			183,896
Intangible assets	735,795			678,522
Total assets, excluding intangible assets	935,625			906,564
less: Trade and other payables, income taxes payable and provisions	(124,538	)		(151,097	)
Total invested capital, current year	1,546,882			1,433,989
Intangible assets, prior year	678,522			658,692
Total assets, excluding intangible assets, prior year	906,564			791,293
less: Trade and other payables, income taxes payable and provisions, prior year	(151,097	)		(139,683	)
Total invested capital, prior year	1,433,989			1,310,302
Average invested capital	1,490,436			1,372,146
Return on invested capital	10.3	%		13.4	%
Logistics
Operating income	160,112			140,446
Gain on sale of assets held for sale	(226	)		—
Amortization of intangible assets	27,237			21,990
Operating income, net of exclusions	187,123			162,436
Income tax	26.5	%		26.5	%
Operating income net of exclusions, after tax	137,535			119,390
Intangible assets	782,923			468,547
Total assets, excluding intangible assets	357,251			263,550
less: Trade and other payables, income taxes payable and provisions	(220,328	)		(186,557	)
Total invested capital, current year	919,846			545,540
Intangible assets, prior year	468,547			454,612
Total assets, excluding intangible assets, prior year	263,550			292,026
less: Trade and other payables, income taxes payable and provisions, prior year	(186,557	)		(199,967	)
Total invested capital, prior year	545,540			546,671
Average invested capital	732,693			546,106
Return on invested capital	18.8	%		21.9	%

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
	2023			2022
Less-Than-Truckload - U.S. based LTL
Operating income	186,231			327,793
Loss on sale of land and buildings	35			8
Gain on sale of assets held for sale	(10,549	)		(55,054	)
Amortization of intangible assets	1,353			1,118
Operating income, net of exclusions	177,070			273,865
Income tax	26.5	%		26.5	%
Operating income net of exclusions, after tax	130,146			201,291
Intangible assets	10,757			5,401
Total assets, excluding intangible assets	1,445,085			1,483,288
less: Total liabilities	(571,468	)		(637,340	)
Total invested capital, current year	884,374			851,349
Total invested capital, acquisition price	838,910			838,910
Average invested capital	861,642			845,130
Return on invested capital	15.1	%		23.8	%