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, 2022. All amounts are shown in U.S. dollars.

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

SELECTED FINANCIAL DATA AND HIGHLIGHTS (UNAUDITED)

Financial highlights	Quarters ended December 31		Years ended December 31
(in millions of U.S. dollars, except per share data)	2022	2021*	2022	2021*
Total revenue	1,956.7	2,140.9	8,812.5	7,220.4
Revenue before fuel surcharge	1,616.5	1,888.4	7,357.1	6,468.8
Adjusted EBITDA1	305.0	318.5	1,425.0	1,076.5
Operating income	216.9	215.0	1,146.0	979.2
Net cash from operating activities	248.3	190.3	971.6	855.4
Net income	153.5	144.1	823.2	754.4
EPS - diluted ($)	1.74	1.52	9.02	7.91
Adjusted net income1	151.8	148.6	731.7	498.3
Adjusted EPS - diluted1 ($)	1.72	1.57	8.02	5.23
Weighted average number of shares ('000s)	86,670	92,669	89,360	93,054
1 This is a non-IFRS measure. For a reconciliation, please refer to the “Non-IFRS Financial Measures” section below.
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination.

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

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

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

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

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

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

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

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

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

SEGMENTED RESULTS

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

Selected segmented financial information

(unaudited) (in thousands of U.S. dollars)	Package  and  Courier		Less- Than-Truckload*		Truckload		Logistics		Corporate		Eliminations		Total
Three months ended December 31, 2022
Revenue before fuel surcharge1	129,074		720,783		403,351		375,968		—		(12,681	)	1,616,495
% of total revenue2	9	%	46	%	25	%	20	%					100	%
Adjusted EBITDA3	43,935		126,307		104,007		43,473		(12,766	)	—		304,956
Adjusted EBITDA margin3,4	34.0	%	17.5	%	25.8	%	11.6	%					18.9	%
Operating income (loss)	37,563		88,240		71,842		34,204		(14,989	)	—		216,860
Operating margin3,4	29.1	%	12.2	%	17.8	%	9.1	%					13.4	%
Total assets less intangible assets3	182,605		2,107,874		1,085,629		263,017		274,595		—		3,913,720
Net capital expenditures3	6,045		57,273		14,248		131		58		—		77,755
Three months ended December 31, 2021
Revenue before fuel surcharge1	150,074		822,911		506,432		427,561		—		(18,555	)	1,888,423
% of total revenue2	8	%	44	%	27	%	20	%					100	%
Adjusted EBITDA3	43,496		141,189		111,848		42,465		(20,532	)	—		318,466
Adjusted EBITDA margin3,4	29.0	%	17.2	%	22.1	%	9.9	%					16.9	%
Operating income (loss)	36,713		103,449		61,803		32,869		(19,855	)	—		214,979
Operating margin3,4	24.5	%	12.6	%	12.2	%	7.7	%					11.4	%
Total assets less intangible assets3	186,116		2,162,534		1,362,007		292,026		88,059				4,090,742
Net capital expenditures3	5,926		46,986		15,113		192		20		—		68,237
YTD December 31, 2022
Revenue before fuel surcharge1	498,972		3,243,557		1,986,331		1,689,122		—		(60,918	)	7,357,064
% of total revenue2	7	%	45	%	28	%	20	%					100	%
Adjusted EBITDA3	160,838		567,759		557,058		178,690		(39,321	)	—		1,425,024
Adjusted EBITDA margin3,4	32.2	%	17.5	%	28.0	%	10.6	%					19.4	%
Operating income (loss)	134,306		470,807		366,868		140,446		33,611		—		1,146,038
Operating margin3,4	26.9	%	14.5	%	18.5	%	8.3	%					15.6	%
Total assets less intangible assets3	182,605		2,107,874		1,085,629		263,017		274,595		—		3,913,720
Net capital expenditures3	10,636		132,814		31,658		676		170		—		175,954
YTD December 31, 2021
Revenue before fuel surcharge1	560,147		2,440,640		1,901,157		1,620,926		—		(54,085	)	6,468,785
% of total revenue2	9	%	39	%	30	%	23	%					100	%
Adjusted EBITDA3	134,845		415,641		431,181		169,005		(74,193	)	—		1,076,479
Adjusted EBITDA margin3,4	24.1	%	17.0	%	22.7	%	10.4	%					16.6	%
Operating income (loss)	108,440		572,798		230,189		142,794		(74,992	)	—		979,229
Operating margin3,4	19.4	%	23.5	%	12.1	%	8.8	%					15.1	%
Total assets less intangible assets3	186,116		2,162,534		1,362,007		292,026		88,059		—		4,090,742
Net capital expenditures3	14,445		52,703		69,177		316		141		—		136,782
1 Includes intersegment revenue.2 Segment revenue including fuel and intersegment revenue to consolidated revenue including fuel and intersegment revenue.3 This is a non-IFRS measure. For a reconciliation, refer to the “Non-IFRS and Other Financial Measures” section below.4 As a percentage of revenue before fuel surcharge.* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination.

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

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

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

ABOUT TFI INTERNATIONALTFI 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 2022 Q3 MD&A for additional information on risk factors and other events that are not within the Company’s control. The Company’s future financial and operating results may fluctuate as a result of these and other risk factors.

NON-IFRS FINANCIAL MEASURES

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

For further information:Alain BédardChairman, President and CEOTFI International Inc.647-729-4079abedard@tfiintl.com

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

(in thousands of U.S. dollars)	As at		As at
	December 31, 2022		December 31, 2021*
Assets
Cash and cash equivalents	147,117		19,292
Trade and other receivables	1,030,726		1,056,023
Inventoried supplies	24,181		24,402
Current taxes recoverable	12,788		6,080
Prepaid expenses	38,501		54,518
Assets held for sale	10,250		1,943
Current assets	1,263,563		1,162,258
Property and equipment	2,131,955		2,455,141
Right-of-use assets	381,640		398,533
Intangible assets	1,592,110		1,792,921
Investments1	85,964		31,391
Employee benefits	4,359		-
Other assets	19,192		13,724
Deferred tax assets	27,047		29,695
Non-current assets	4,242,267		4,721,405
Total assets	5,505,830		5,883,663
Liabilities
Trade and other payables	708,768		861,908
Current taxes payable	41,714		16,552
Provisions	43,903		39,012
Other financial liabilities	19,275		10,566
Long-term debt	37,087		363,586
Lease liabilities	115,934		115,344
Current liabilities	966,681		1,406,968
Long-term debt	1,278,670		1,244,508
Lease liabilities	297,105		313,862
Employee benefits	-		68,037
Provisions	131,736		108,145
Other financial liabilities	382		8,033
Deferred tax liabilities	368,186		423,755
Non-current liabilities	2,076,079		2,166,340
Total liabilities	3,042,760		3,573,308
Equity
Share capital	1,089,229		1,133,181
Contributed surplus	41,491		39,150
Accumulated other comprehensive income	(233,321	)	(144,665	)
Retained earnings	1,565,671		1,282,689
Total equity	2,463,070		2,310,355
Contingencies, letters of credit and other commitments
Subsequent events
Total liabilities and equity	5,505,830		5,883,663
* Recasted for adjustments to provisional amounts of UPS Freight prior year’s business combination.** The Company's financial reporting framework is IFRS as issued by the IASB. 1 The investments were previously presented as Other assets and have been recast due to the increase in value of the investments. The investments include both level 1 and level 3 investments. The level 1 investments are 1,027,696 shares of ArcBest Corporation (NYSE: ARCB).

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

(In thousands of U.S. dollars, except per share amounts)
	2022		2021*
Revenue	7,357,064		6,468,785
Fuel surcharge	1,455,427		751,644
Total revenue	8,812,491		7,220,429
Materials and services expenses	4,592,191		3,815,453
Personnel expenses	2,362,856		1,974,081
Other operating expenses	492,291		380,342
Depreciation of property and equipment	248,638		225,007
Depreciation of right-of-use assets	126,276		112,782
Amortization of intangible assets	55,679		55,243
Gain on sale of business	(73,653	)	-
Bargain purchase gain	-		(283,593	)
Gain on sale of rolling stock and equipment	(59,661	)	(24,644	)
Gain on derecognition of right-of-use assets	(210	)	(1,282	)
(Gain) loss on sale of land and buildings	(43	)	19
Gain on sale of assets held for sale	(77,911	)	(12,209	)
Loss on disposal of intangible assets	-		1
Total operating expenses	7,666,453		6,241,200
Operating income	1,146,038		979,229
Finance (income) costs
Finance income	(1,750	)	(5,127	)
Finance costs	82,147		78,145
Net finance costs	80,397		73,018
Income before income tax	1,065,641		906,211
Income tax expense	242,409		151,806
Net income	823,232		754,405
Earnings per share
Basic earnings per share	9.21		8.11
Diluted earnings per share	9.02		7.91
* Recasted for adjustments to provisional amounts of UPS Freight prior year’s business combination.

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

(In thousands of U.S. dollars)
	2022		2021*
Net income	823,232		754,405
Other comprehensive (loss) income
Items that may be reclassified to income or loss in future years:
Foreign currency translation differences	(10,148	)	12,960
Net investment hedge, net of tax	(72,046	)	(15,542	)
Employee benefits, net of tax	292		87
Items that may never be reclassified to income:
Defined benefit plan remeasurement, net of tax	63,508		(4,128	)
Items directly reclassified to retained earnings:
Unrealized (loss) gain on investments in equity securities
measured at fair value through OCI, net of tax	(5,495	)	24,147
Other comprehensive (loss) income, net of tax	(23,889	)	17,524
Total comprehensive income	799,343		771,929
* Recasted for adjustments to provisional amounts of UPS Freight prior year’s business combination.

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

(In thousands of U.S. dollars)							Accumulated
							foreign		Accumulated
					Accumulated		currency		unrealized
					unrealized		translation		gain (loss)				Total equity
					loss on		differences		on invest-				attributable
					employee		and net		ments in		Retained		to owners
	Share		Contributed		benefit		investment		equity		earnings		of the
	capital		surplus		plans		hedge		securities		(deficit)		Company
Balance as at December 31, 2021*	1,133,181		39,150		(292	)	(156,926	)	12,553		1,282,689		2,310,355
Net income	-		-		-		-		-		823,232		823,232
Other comprehensive income (loss), net of tax	-		-		292		(82,194	)	(5,495	)	63,508		(23,889	)
Realized (loss) gain on equity securities	-		-		-		-		(1,259	)	1,259		-
Total comprehensive income (loss)	-		-		292		(82,194	)	(6,754	)	887,999		799,343
Share-based payment transactions, net of tax	-		16,298		-		-		-		-		16,298
Stock options exercised, net of tax	22,800		(6,298	)	-		-		-		-		16,502
Dividends to owners of the Company	-		-		-		-		-		(102,615	)	(102,615	)
Repurchase of own shares	(68,536	)	-		-		-		-		(499,447	)	(567,983	)
Net settlement of restricted share units, net of tax	1,784		(7,659	)	-		-		-		(2,955	)	(8,830	)
Total transactions with owners, recorded directly in equity	(43,952	)	2,341		-		-		-		(605,017	)	(646,628	)
Balance as at December 31, 2022	1,089,229		41,491		-		(239,120	)	5,799		1,565,671		2,463,070
Balance as at December 31, 2020	1,120,049		19,783		(379	)	(154,344	)	-		803,503		1,788,612
Net income*	-		-		-		-		-		754,405		754,405
Other comprehensive income (loss), net of tax	-		-		87		(2,582	)	24,147		(4,128	)	17,524
Realized (loss) gain on equity securities	-		-		-		-		(11,594	)	11,594		-
Total comprehensive income (loss)	-		-		87		(2,582	)	12,553		761,871		771,929
Share-based payment transactions, net of tax	-		27,577		-		-		-		-		27,577
Stock options exercised, net of tax	26,324		(3,266	)	-		-		-		-		23,058
Issuance of shares, net of expenses	-		-		-		-		-		-		-
Dividends to owners of the Company	-		-		-		-		-		(89,121	)	(89,121	)
Repurchase of own shares	(23,449	)	-		-		-		-		(174,704	)	(198,153	)
Net settlement of restricted share units, net of tax	10,257		(4,944	)	-		-		-		(18,860	)	(13,547	)
Total transactions with owners, recorded directly in equity	13,132		19,367		-		-		-		(282,685	)	(250,186	)
Balance as at December 31, 2021*	1,133,181		39,150		(292	)	(156,926	)	12,553		1,282,689		2,310,355
* Recasted for adjustments to provisional amounts of UPS Freight prior year’s business combination.

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

(In thousands of U.S. dollars)
	2022		2021*
Cash flows from operating activities
Net income	823,232		754,405
Adjustments for:
Depreciation of property and equipment	248,638		225,007
Depreciation of right-of-use assets	126,276		112,782
Amortization of intangible assets	55,679		55,243
Share-based payment transactions	14,648		15,424
Net finance costs	80,397		73,018
Income tax expense	242,409		151,806
Gain on sale of business	(73,653	)	-
Bargain purchase gain	-		(283,593	)
Gain on sale of property and equipment	(59,704	)	(24,625	)
Gain on derecognition of right-of-use assets	(210	)	(1,282	)
Gain on sale of assets held for sale	(77,911	)	(12,209	)
Loss on disposal of intangible assets	-		1
Employee benefits	14,946		(20,193	)
Provisions, net of payments	26,044		21,890
Net change in non-cash operating working capital	(147,453	)	41,940
Interest paid	(77,512	)	(65,453	)
Income tax paid	(224,181	)	(188,810	)
Net cash from operating activities	971,645		855,351
Cash flows from (used in) investing activities
Purchases of property and equipment	(350,824	)	(268,656	)
Proceeds from sale of property and equipment	128,821		92,842
Proceeds from sale of assets held for sale	131,250		19,869
Purchases of intangible assets	(6,120	)	(7,143	)
Proceeds from sale of intangible assets	250		-
Proceeds from sale of business, net of cash disposed	546,228		-
Business combinations, net of cash acquired	(158,251	)	(1,008,131	)
Purchases of investments	(80,551	)	(35,913	)
Proceeds from sale of investments	12,930		40,686
Others	(311	)	3,789
Net cash from (used in) investing activities	223,422		(1,162,657	)
Cash flows (used in) from financing activities
Net decrease (increase) in bank indebtedness	7,490		(7,173	)
Proceeds from long-term debt	334,164		661,039
Repayment of long-term debt	(369,692	)	(43,868	)
Net (increase) decrease in revolving facilities	(236,502	)	118,859
Repayment of lease liabilities	(123,606	)	(115,336	)
Repayment of other financial liabilities	(21,108	)	(11,216	)
Dividends paid	(97,321	)	(85,386	)
Repurchase of own shares	(567,983	)	(198,153	)
Proceeds from exercise of stock options	16,502		20,114
Payment for settlement of restricted share units	(9,186	)	(16,579	)
Net cash (used in) from financing activities	(1,067,242	)	322,301
Net change in cash and cash equivalents	127,825		14,995
Cash and cash equivalents, beginning of year	19,292		4,297
Cash and cash equivalents, end of year	147,117		19,292
* Recasted for adjustments to provisional amounts of UPS Freight prior year’s business combination.

SEGMENT INFORMATION

Geographical information (Unaudited)

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

	Package	Less-
	and	Than-
	Courier	Truckload	Truckload	Logistics	Eliminations		Total
2022
Canada	650,844	667,506	1,182,198	256,714	(34,202	)	2,723,060
United States	-	3,355,657	1,268,840	1,488,941	(41,632	)	6,071,806
Mexico	-	-	-	17,625	-		17,625
Total revenue	650,844	4,023,163	2,451,038	1,763,280	(75,834	)	8,812,491
2021
Canada	641,449	576,311	912,166	269,568	(31,193	)	2,368,301
United States	-	2,239,079	1,250,586	1,370,843	(30,041	)	4,830,467
Mexico	-	-	-	21,661	-		21,661
Total revenue	641,449	2,815,390	2,162,752	1,662,072	(61,234	)	7,220,429

Package and Courier

(unaudited)	Three months ended December 31								Years ended December 31
(in thousands of U.S. dollars)	2022		%		2021		%		2022		%		2021		%
Total revenue	172,381				177,368				650,844				641,449
Fuel surcharge	(43,307	)			(27,294	)			(151,872	)			(81,302	)
Revenue	129,074		100.0	%	150,074		100.0	%	498,972		100.0	%	560,147		100.0	%
Materials and services expenses (net of fuel surcharge)	42,784		33.1	%	60,636		40.4	%	167,725		33.6	%	243,786		43.5	%
Personnel expenses	35,877		27.8	%	39,060		26.0	%	144,650		29.0	%	154,820		27.6	%
Other operating expenses	6,667		5.2	%	6,905		4.6	%	26,845		5.4	%	26,762		4.8	%
Depreciation of property and equipment	3,080		2.4	%	3,297		2.2	%	12,863		2.6	%	12,392		2.2	%
Depreciation of right-of-use assets	3,135		2.4	%	3,300		2.2	%	13,024		2.6	%	13,109		2.3	%
Amortization of intangible assets	157		0.1	%	186		0.1	%	645		0.1	%	903		0.2	%
Gain on sale of rolling stock and equipment	(189	)	-0.1	%	(23	)	-0.0	%	(1,087	)	-0.2	%	(59	)	-0.0	%
(Gain) loss on derecognition of right-of-use assets	-		-		-		-		1		0.0	%	(7	)	-0.0	%
Loss on disposal of intangible assets	-		-		-		-		-		-		1		0.0	%
Operating income	37,563		29.1	%	36,713		24.5	%	134,306		26.9	%	108,440		19.4	%
Adjusted EBITDA1	43,935		34.0	%	43,496		29.0	%	160,838		32.2	%	134,845		24.1	%
Return on invested capital1			32.5	%			25.3	%
1 This is a non-IFRS measure. For a reconciliation, please refer to the “Non-IFRS and Other Financial Measures” section below.

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

Less-Than-Truckload

(unaudited)	Three months ended December 31								Years ended December 31
(in thousands of U.S. dollars)	2022		%		2021		%		2022		%		2021*		%
Total revenue	903,713				959,546				4,023,163				2,815,390
Fuel surcharge	(182,930	)			(136,635	)			(779,606	)			(374,750	)
Revenue	720,783		100.0	%	822,911		100.0	%	3,243,557		100.0	%	2,440,640		100.0	%
Materials and services expenses (net of fuel surcharge)	226,839		31.5	%	274,166		33.3	%	1,003,662		30.9	%	848,273		34.8	%
Personnel expenses	311,248		43.2	%	348,237		42.3	%	1,432,857		44.2	%	1,022,214		41.9	%
Other operating expenses	58,050		8.1	%	60,196		7.3	%	243,347		7.5	%	155,992		6.4	%
Depreciation of property and equipment	26,374		3.7	%	25,846		3.1	%	104,850		3.2	%	73,242		3.0	%
Depreciation of right-of-use assets	9,641		1.3	%	9,398		1.1	%	38,985		1.2	%	33,050		1.4	%
Amortization of intangible assets	2,065		0.3	%	2,495		0.3	%	8,831		0.3	%	9,768		0.4	%
Bargain Purchase Gain	-		-		-		-		-		-		(271,593	)	-11.1	%
Gain on sale of rolling stock and equipment	(1,601	)	-0.2	%	(842	)	-0.1	%	(4,056	)	-0.1	%	(907	)	-0.0	%
Gain on derecognition of right-of-use assets	(60	)	-0.0	%	(35	)	-0.0	%	(12	)	-0.0	%	(573	)	-0.0	%
(Gain) loss on sale of land and buildings and assets held for sale	(13	)	-0.0	%	1		0.0	%	(55,714	)	-1.7	%	(1,624	)	-0.1	%
Operating income	88,240		12.2	%	103,449		12.6	%	470,807		14.5	%	572,798		23.5	%
Adjusted EBITDA1	126,307		17.5	%	141,189		17.2	%	567,759		17.5	%	415,641		17.0	%
1 This is a non-IFRS measure. For a reconciliation, please refer to the “Non-IFRS and Other Financial Measures” section below.* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination.

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

Truckload

(unaudited)	Three months ended December 31								Years ended December 31
(in thousands of U.S. dollars)	2022		%		2021		%		2022		%		2021		%
Total revenue	502,784				584,009				2,451,038				2,162,752
Fuel surcharge	(99,433	)			(77,577	)			(464,707	)			(261,595	)
Revenue	403,351		100.0	%	506,432		100.0	%	1,986,331		100.0	%	1,901,157		100.0	%
Materials and services expenses (net of fuel surcharge)	174,305		43.2	%	221,538		43.7	%	821,442		41.4	%	823,645		43.3	%
Personnel expenses	115,449		28.6	%	160,351		31.7	%	585,891		29.5	%	604,041		31.8	%
Other operating expenses	13,709		3.4	%	19,193		3.8	%	76,612		3.9	%	66,468		3.5	%
Depreciation of property and equipment	26,695		6.6	%	35,652		7.0	%	129,013		6.5	%	137,301		7.2	%
Depreciation of right-of-use assets	15,730		3.9	%	15,087		3.0	%	59,473		3.0	%	52,680		2.8	%
Amortization of intangible assets	5,699		1.4	%	5,960		1.2	%	23,944		1.2	%	21,580		1.1	%
Gain on sale of rolling stock and equipment	(3,981	)	-1.0	%	(6,338	)	-1.3	%	(54,481	)	-2.7	%	(23,747	)	-1.2	%
Gain on derecognition of right-of-use assets	(138	)	-0.0	%	(160	)	-0.0	%	(191	)	-0.0	%	(431	)	-0.0	%
Gain on sale of land and buildings and assets held for sale	(15,959	)	-4.0	%	(6,649	)	-1.3	%	(22,240	)	-1.1	%	(10,569	)	-0.6	%
Gain on disposal of intangible assets	-		-		(5	)	-0.0	%	-		-		-		-
Operating income	71,842		17.8	%	61,803		12.2	%	366,868		18.5	%	230,189		12.1	%
Adjusted EBITDA1	104,007		25.8	%	111,848		22.1	%	557,058		28.0	%	431,181		22.7	%
1 This is a non-IFRS measure. For a reconciliation, please refer to the “Non-IFRS and Other Financial Measures” section below.

Operational data	Three months ended December 31								Years ended December 31
(unaudited)	2022		2021		Variance		%		2022		2021		Variance		%
Specialized TL2
Revenue (in thousands of U.S. dollars)	325,493		328,648		(3,154	)	-1.0	%	1,362,390		1,233,791		128,599		10.4	%
Adjusted operating ratio1	87.4	%	89.6	%					83.1	%	88.7	%
Tractor count, average	3,839		3,845		(7	)	-0.2	%	3,641		3,722		(81	)	-2.2	%
Trailer count, average	11,004		11,302		(298	)	-2.6	%	10,833		10,912		(79	)	-0.7	%
Tractor age	3.6		3.4		0.2		5.5	%	3.6		3.4		0.2		5.5	%
Trailer age	11.5		10.5		1.0		9.8	%	11.5		10.5		1.0		9.8	%
Number of owner operators, average	1,193		1,201		(8	)	-0.7	%	1,126		1,217		(91	)	-7.5	%
Return on invested capital1	13.4	%	9.2	%
Canadian based Conventional TL
Revenue (in thousands of U.S. dollars)	79,101		73,786		5,315		7.2	%	322,553		250,177		72,376		28.9	%
Adjusted operating ratio1	81.1	%	88.4	%					78.7	%	87.9	%
Total mileage (in thousands)	24,498		26,467		(1,969	)	-7.4	%	93,923		92,236		1,687		1.8	%
Tractor count, average	858		728		130		17.9	%	741		640		102		15.9	%
Trailer count, average	3,636		3,401		235		6.9	%	3,456		2,884		572		19.8	%
Tractor age	3.5		4.1		(0.6	)	-13.7	%	3.5		4.1		(0.6	)	-13.7	%
Trailer age	7.3		7.5		(0.2	)	-2.5	%	7.3		7.5		(0.2	)	-2.5	%
Number of owner operators, average	254		324		(70	)	-21.7	%	269		306		(37	)	-12.0	%
Return on invested capital1	21.3	%	10.9	%
1 This is a non-IFRS measure. For a reconciliation, please refer to the “Non-IFRS Financial Measures” section below.
2 Recasted comparative figures for change in operating segments of the dedicated operations from US Conventional Truckload as a result of the sale of business of CFI.

Logistics

(unaudited)	Three months ended December 31								Years ended December 31
(in thousands of U.S. dollars)	2022		%		2021		%		2022		%		2021		%
Total revenue	394,071				441,086				1,763,280				1,662,072
Fuel surcharge	(18,103	)			(13,525	)			(74,158	)			(41,146	)
Revenue	375,968		100.0	%	427,561		100.0	%	1,689,122		100.0	%	1,620,926		100.0	%
Materials and services expenses (net of fuel surcharge)	269,625		71.7	%	323,164		75.6	%	1,232,049		72.9	%	1,223,846		75.5	%
Personnel expenses	35,770		9.5	%	29,419		6.9	%	143,505		8.5	%	116,523		7.2	%
Other operating expenses	27,107		7.2	%	32,443		7.6	%	134,923		8.0	%	111,742		6.9	%
Depreciation of property and equipment	333		0.1	%	375		0.1	%	1,460		0.1	%	1,581		0.1	%
Depreciation of right-of-use assets	3,644		1.0	%	3,442		0.8	%	14,794		0.9	%	13,943		0.9	%
Amortization of intangible assets	5,292		1.4	%	5,776		1.4	%	21,990		1.3	%	22,684		1.4	%
Bargain purchase gain	-		-		-		-		-		-		(12,000	)	-0.7	%
(Gain) loss on sale of rolling stock and equipment	(7	)	-0.0	%	70		0.0	%	(37	)	-0.0	%	70		0.0	%
Gain on derecognition of right-of-use assets	-		-		-		-		(8	)	-0.0	%	(260	)	-0.0	%
Loss on sale of land and building	-		-		3		0.0	%	-		-		3		0.0	%
Operating income	34,204		9.1	%	32,869		7.7	%	140,446		8.3	%	142,794		8.8	%
Adjusted EBITDA1	43,473		11.6	%	42,465		9.9	%	178,690		10.6	%	169,005		10.4	%
Return on invested capital1	21.9	%			19.9	%
1 This is a non-IFRS measure. For a reconciliation, please refer to the “Non-IFRS and Other Financial Measures” section below.

NON-IFRS AND OTHER FINANCIAL MEASURES

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

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

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

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

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

Adjusted net income reconciliation:

(unaudited) (in thousands of U.S. dollars, except per share data)	Three months ended December 31				Years ended December 31
	2022		2021*		2022		2021*
Net income	153,494		144,139		823,232		754,405
Amortization of intangible assets related to business acquisitions	13,969		13,128		52,003		50,498
Net change in fair value and accretion expense of contingent considerations	90		1,571		216		1,932
Net foreign exchange (gain) loss	(564	)	(939	)	556		(1,471	)
(Gain) loss on sale of business and direct attributable costs	2,069		—		(69,753	)	—
Bargain purchase gain	—		—		—		(283,593	)
Gain on sale of land and buildings and assets held for sale	(15,941	)	(6,638	)	(77,870	)	(11,978	)
(Gain) loss on disposal of intangible assets	—		(5	)	—		1
Tax impact of adjustments	(1,358	)	(2,636	)	3,284		(11,446	)
Adjusted net income1	151,759		148,620		731,668		498,348
Adjusted EPS – basic1	1.75		1.60		8.19		5.36
Adjusted EPS – diluted1	1.72		1.57		8.02		5.23
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination.

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

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

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

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

Consolidated adjusted EBITDA reconciliation:

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31				Years ended December 31
	2022		2021		2022		2021*
Net income	153,494		144,139		823,232		754,405
Net finance costs	16,963		21,441		80,397		73,018
Income tax expense	46,403		49,399		242,409		151,806
Depreciation of property and equipment	56,587		65,294		248,638		225,007
Depreciation of right-of-use assets	32,150		31,190		126,276		112,782
Amortization of intangible assets	13,262		13,653		55,679		55,243
(Gain) loss on sale of business	2,069		—		(73,653	)	—
Bargain purchase gain	—		—		—		(283,593	)
(Gain) loss on sale of land and buildings	—		9		(43	)	19
Gain on sale of assets held for sale	(15,972	)	(6,654	)	(77,911	)	(12,209	)
(Gain) loss on sale of intangible assets	—		(5	)	—		1
Adjusted EBITDA	304,956		318,466		1,425,024		1,076,479
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination.

Segmented adjusted EBITDA reconciliation:

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31				Years ended December 31
	2022		2021		2022		2021*
Package and Courier
Operating income	37,563		36,713		134,306		108,440
Depreciation and amortization	6,372		6,783		26,532		26,404
Loss on disposal of intangible assets	—		—		—		1
Adjusted EBITDA	43,935		43,496		160,838		134,845
Less-Than-Truckload
Operating income	88,240		103,449		470,807		572,798
Depreciation and amortization	38,080		37,739		152,666		116,060
Bargain purchase gain	—		—		—		(271,593	)
(Gain) loss on sale of land and buildings	(1	)	6		—		16
Gain on sale of assets held for sale	(12	)	(5	)	(55,714	)	(1,640	)
Adjusted EBITDA	126,307		141,189		567,759		415,641
Truckload
Operating income	71,842		61,803		366,868		230,189
Depreciation and amortization	48,124		56,699		212,430		211,561
(Gain) loss on sale of land and buildings	1		—		(43	)	—
Gain on sale of assets held for sale	(15,960	)	(6,649	)	(22,197	)	(10,569	)
Gain on disposal of intangible assets	—		(5	)	—		—
Adjusted EBITDA	104,007		111,848		557,058		431,181
Logistics
Operating income	34,204		32,869		140,446		142,794
Depreciation and amortization	9,269		9,593		38,244		38,208
Bargain purchase gain	—		—		—		(12,000	)
Loss on sale of land and buildings	—		3		—		3
Adjusted EBITDA	43,473		42,465		178,690		169,005
Corporate
Operating loss	(14,989	)	(19,855	)	33,611		(74,992	)
Depreciation and amortization	154		(677	)	721		799
(Gain) loss on sale of business	2,069		—		(73,653	)	—
Adjusted EBITDA	(12,766	)	(20,532	)	(39,321	)	(74,193	)
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination

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

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

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

Consolidated adjusted operating ratio reconciliation:

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31				Years ended December 31
	2022		2021		2022		2021*
Operating expenses	1,739,834		1,925,935		7,666,453		6,241,200
(Gain) loss on sale of business	(2,069	)	—		73,653		—
Bargain purchase gain	—		—		—		283,593
Gain (loss) on sale of land and building	—		(9	)	43		(19	)
Gain on sale of assets held for sale	15,972		6,654		77,911		12,209
Gain (loss) on disposal of intangible assets	—		5		—		(1	)
Adjusted operating expenses	1,753,737		1,932,585		7,818,060		6,536,982
Fuel surcharge revenue	(340,199	)	(252,491	)	(1,455,427	)	(751,644	)
Adjusted operating expenses, net of fuel surcharge revenue	1,413,538		1,680,094		6,362,633		5,785,338
Revenue before fuel surcharge	1,616,495		1,888,423		7,357,064		6,468,785
Adjusted operating ratio	87.4	%	89.0	%	86.5	%	89.4	%
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination.

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

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31				Years ended December 31
	2022		2021*		2022		2021*
Less-Than-Truckload
Total revenue	903,713		959,546		4,023,163		2,815,390
Total operating expenses	815,473		856,097		3,552,356		2,242,592
Operating income	88,240		103,449		470,807		572,798
Operating expenses	815,473		856,097		3,552,356		2,242,592
Bargain purchase gain	—		—		—		271,593
Gain (loss) on sale of land and buildings and assets held for sale	13		(1	)	55,714		1,624
Adjusted operating expenses	815,486		856,096		3,608,070		2,515,809
Fuel surcharge revenue	(182,930	)	(136,635	)	(779,606	)	(374,750	)
Adjusted operating expenses, net of fuel surcharge revenue	632,556		719,461		2,828,464		2,141,059
Revenue before fuel surcharge	720,783		822,911		3,243,557		2,440,640
Adjusted operating ratio	87.8	%	87.4	%	87.2	%	87.7	%
Less-Than-Truckload - Revenue before fuel surcharge
U.S. based LTL	601,436		680,212		2,709,762		1,889,611
Canadian based LTL	123,176		144,697		548,012		556,891
Eliminations	(3,829	)	(1,998	)	(14,217	)	(5,862	)
	720,783		822,911		3,243,557		2,440,640
Less-Than-Truckload - Fuel surcharge revenue
U.S. based LTL	142,180		108,275		615,840		281,110
Canadian based LTL	41,051		28,598		165,185		94,166
Eliminations	(301	)	(238	)	(1,419	)	(526	)
	182,930		136,635		779,606		374,750
Less-Than-Truckload - Operating income (loss)
U.S. based LTL	57,819		72,077		327,793		459,071
Canadian based LTL	30,421		31,372		143,014		113,727
	88,240		103,449		470,807		572,798
U.S. based LTL
Operating expenses*	685,797		716,410		2,997,809		1,711,650
Bargain purchase gain	-		-		-		271,593
Gain (loss) on sale of land and buildings and assets held for sale	-		(7	)	55,054		(17	)
Adjusted operating expenses	685,797		716,403		3,052,863		1,983,226
Fuel surcharge revenue	(142,180	)	(108,275	)	(615,840	)	(281,110	)
Adjusted operating expenses, net of fuel surcharge	543,617		608,128		2,437,023		1,702,116
Revenue before fuel surcharge	601,436		680,212		2,709,762		1,889,611
Adjusted operating ratio	90.4	%	89.4	%	89.9	%	90.1	%
Canadian based LTL
Operating expenses*	133,806		141,923		570,183		537,330
Gain on sale of land and buildings and assets held for sale	13		6		660		1,641
Adjusted operating expenses	133,819		141,929		570,843		538,971
Fuel surcharge revenue	(41,051	)	(28,598	)	(165,185	)	(94,166	)
Adjusted operating expenses, net of fuel surcharge	92,768		113,331		405,658		444,805
Revenue before fuel surcharge	123,176		144,697		548,012		556,891
Adjusted operating ratio	75.3	%	78.3	%	74.0	%	79.9	%
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination

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

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31				Years ended December 31
	2022		2021		2022		2021
Truckload
Total revenue	502,784		584,009		2,451,038		2,162,752
Total operating expenses	430,942		522,206		2,084,170		1,932,563
Operating income	71,842		61,803		366,868		230,189
Operating expenses	430,942		522,206		2,084,170		1,932,563
Gain on sale of business	—		—		—		—
Gain on sale of land and buildings and assets held for sale	15,959		6,649		22,240		10,569
Adjusted operating expenses	446,901		528,855		2,106,410		1,943,132
Fuel surcharge revenue	(99,433	)	(77,577	)	(464,707	)	(261,595	)
Adjusted operating expenses, net of fuel surcharge revenue	347,468		451,278		1,641,703		1,681,537
Revenue before fuel surcharge	403,351		506,432		1,986,331		1,901,157
Adjusted operating ratio	86.1	%	89.1	%	82.7	%	88.4	%
Truckload - Revenue before fuel surcharge
U.S. based Conventional TL1	—		106,171		310,026		424,320
Canadian based Conventional TL	79,101		73,786		322,553		250,177
Specialized TL1	325,493		328,648		1,362,390		1,233,761
Eliminations	(1,243	)	(2,173	)	(8,638	)	(7,101	)
	403,351		506,432		1,986,331		1,901,157
Truckload - Fuel surcharge revenue
U.S. based Conventional TL1	—		20,337		82,059		72,527
Canadian based Conventional TL	17,307		9,414		62,929		29,043
Specialized TL1	82,288		48,045		321,362		160,574
Eliminations	(162	)	(219	)	(1,643	)	(549	)
	99,433		77,577		464,707		261,595
Truckload - Operating income
U.S. based Conventional TL1	—		12,409		46,133		49,989
Canadian based Conventional TL	30,463		8,565		84,321		30,367
Specialized TL1	41,379		40,829		236,414		149,833
	71,842		61,803		366,868		230,189
U.S. based Conventional TL1
Operating expenses*	—		114,099		345,952		446,858
Gain on sale of land and buildings and assets held for sale	—		—		—		—
Adjusted operating expenses	—		114,099		345,952		446,858
Fuel surcharge revenue	—		(20,337	)	(82,059	)	(72,527	)
Adjusted operating expenses, net of fuel surcharge revenue	—		93,762		263,893		374,331
Revenue before fuel surcharge	—		106,171		310,026		424,320
Adjusted operating ratio	—		88.3	%	85.1	%	88.2	%
Canadian based Conventional TL
Operating expenses*	65,945		74,635		301,161		248,853
Gain on sale of land and buildings and assets held for sale	15,485		—		15,529		17
Adjusted operating expenses	81,430		74,635		316,690		248,870
Fuel surcharge revenue	(17,307	)	(9,414	)	(62,929	)	(29,043	)
Adjusted operating expenses, net of fuel surcharge revenue	64,123		65,221		253,761		219,827
Revenue before fuel surcharge	79,101		73,786		322,553		250,177
Adjusted operating ratio	81.1	%	88.4	%	78.7	%	87.9	%
Specialized TL1
Operating expenses*	366,402		335,864		1,447,338		1,244,502
Gain on sale of assets held for sale	474		6,649		6,711		10,552
Adjusted operating expenses	366,876		342,513		1,454,049		1,255,054
Fuel surcharge revenue	(82,288	)	(48,045	)	(321,362	)	(160,574	)
Adjusted operating expenses, net of fuel surcharge revenue	284,588		294,468		1,132,687		1,094,480
Revenue before fuel surcharge	325,493		328,648		1,362,390		1,233,761
Adjusted operating ratio	87.4	%	89.6	%	83.1	%	88.7	%
1 Recasted comparative figures for change in operating segments of the dedicated operations from US Conventional Truckload as a result of the sale of business of CFI.* Operating expenses excluding intra TL eliminations

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

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31				Years ended December 31
	2022		2021		2022		2021*
Net income	153,494		144,139		823,232		754,405
Net finance costs	16,963		21,441		80,397		73,018
Income tax expense	46,403		49,399		242,409		151,806
Depreciation of property and equipment	56,587		65,294		248,638		225,007
Depreciation of right-of-use assets	32,150		31,190		126,276		112,782
Amortization of intangible assets	13,262		13,653		55,679		55,243
(Gain) loss on the sale of business	2,069		—		(73,653	)	—
Bargain purchase gain	—		—		—		(283,593	)
(Gain) loss on sale of land and buildings	—		9		(43	)	19
Gain on sale of assets held for sale	(15,972	)	(6,654	)	(77,911	)	(12,209	)
(Gain) loss on sale of intangible assets	—		(5	)	—		1
Adjusted EBITDA	304,956		318,466		1,425,024		1,076,479
Net capital expenditures	(77,755	)	(68,237	)	(175,954	)	(136,782	)
Adjusted EBITDA less net capital expenditures	227,201		250,229		1,249,070		939,697
Free cash flow conversion	74.5	%	78.6	%	87.7	%	87.3	%
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination.

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

(unaudited) (in thousands of U.S. dollars)	Three months ended December 31				Years ended December 31
	2022		2021		2022		2021
Net cash from operating activities	248,348		190,333		971,645		855,351
Additions to property and equipment	(111,716	)	(102,595	)	(350,824	)	(267,173	)
Proceeds from sale of property and equipment	17,685		22,508		128,821		92,842
Proceeds from sale of assets held for sale	33,956		10,503		131,250		19,869
Free cash flow	188,273		120,749		880,892		700,889

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

(unaudited) (in thousands of U.S. dollars)	Package  and  Courier	Less- Than-Truckload	Truckload	Logistics	Corporate	Eliminations	Total
As at December 31, 2022
Total assets	362,724	2,275,672	1,861,093	731,564	274,777	-	5,505,830
Intangible assets	180,119	167,798	775,464	468,547	182	-	1,592,110
Total assets less intangible assets	182,605	2,107,874	1,085,629	263,017	274,595	-	3,913,720
As at December 31, 2021*
Total assets	379,881	2,351,138	2,317,615	746,638	88,391	-	5,883,663
Intangible assets	193,765	188,604	955,608	454,612	332	-	1,792,921
Total assets less intangible assets	186,116	2,162,534	1,362,007	292,026	88,059	-	4,090,742
* Recasted for adjustments to provisional amounts of UPS Freight prior year business combination.

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

(unaudited) (in thousands of U.S. dollars)	Package  and  Courier		Less- Than-Truckload		Truckload		Logistics		Corporate	Eliminations	Total
Three months ended December 31, 2022
Additions to rolling stock	5,786		58,353		23,167		-		-		87,306
Additions to equipment	579		5,025		2,134		437		58		8,233
Proceeds from the sale of rolling stock	(320	)	(6,399	)	(11,252	)	(115	)	-		(18,086	)
Proceeds from the sale of equipment	-		294		199		(191	)	-		302
Net capital expenditures	6,045		57,273		14,248		131		58		77,755
Three months ended December 31, 2021
Additions to rolling stock	4,794		47,680		33,394		-		-		85,868
Additions to equipment	1,112		1,620		1,801		235		20		4,788
Proceeds from the sale of rolling stock	20		(2,313	)	(20,075	)	(26	)	-		(22,394	)
Proceeds from the sale of equipment	-		(1	)	(7	)	(17	)	-		(25	)
Net capital expenditures	5,926		46,986		15,113		192		20		68,237
YTD ended December 31, 2022
Additions to rolling stock	9,991		134,898		141,388		—		-		286,277
Additions to equipment	2,227		10,888		3,747		1,032		170		18,064
Proceeds from the sale of rolling stock	(1,579	)	(13,067	)	(111,582	)	(165	)	-		(126,393	)
Proceeds from the sale of equipment	(3	)	95		(1,895	)	(191	)	-		(1,994	)
Net capital expenditures	10,636		132,814		31,658		676		170		175,954
YTD ended December 31, 2021
Additions to rolling stock	11,569		55,087		150,282		142		-		217,080
Additions to equipment	3,125		2,655		6,897		373		141		13,191
Proceeds from the sale of rolling stock	(246	)	(5,024	)	(87,995	)	(146	)	-		(93,411	)
Proceeds from the sale of equipment	(3	)	(15	)	(7	)	(53	)	-		(78	)
Net capital expenditures	14,445		52,703		69,177		316		141		136,782

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

(unaudited) 'Covenants	Requirements	As at December 31, 2022
Funded debt-to- EBITDA ratio [ratio of total debt, net of cash, plus letters of credit and some other long-term liabilities to earnings before interest, income tax, depreciation and amortization (“EBITDA”), including last twelve months adjusted EBITDA from business acquisitions]	< 3.50	0.96
EBITDAR Coverage Ratio [ratio of EBITDAR (EBITDA before rent and including last twelve months adjusted EBITDAR from business acquisitions) to interest and net rent expenses]	> 1.75	6.22

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

Return on invested capital segment reconciliation:
(unaudited) (in thousands of U.S. dollars)	As at December 31
	2022		2021
Package and Courier
Operating income	134,306		108,440
Amortization of intangible assets	645		903
Operating income, net of exclusions	134,951		109,343
Income tax	26.5	%	26.5	%
Operating income net of exclusions, after tax	99,189		80,367
Intangible assets	180,119		193,765
Total assets, excluding intangible assets	182,605		186,116
less: Trade and other payables, income taxes payable and provisions	(67,428	)	(65,438	)
Total invested capital, current year	295,296		314,443
Intangible assets, prior year	193,765		193,288
Total assets, excluding intangible assets, prior year	186,116		194,631
less: Trade and other payables, income taxes payable and provisions, prior year	(65,438	)	(66,793	)
Total invested capital, prior year	314,443		321,126
Average invested capital	304,870		317,785
Return on invested capital	32.5	%	25.3	%
Less-Than-Truckload - Canadian based LTL
Operating income	143,014		113,727
Gain on sale of assets held for sale	(660	)	(1,640	)
Amortization of intangible assets	7,713		9,004
Operating income, net of exclusions	150,067		121,091
Income tax	26.5	%	26.5	%
Operating income net of exclusions, after tax	110,299		89,002
Intangible assets	162,397		182,084
Total assets, excluding intangible assets	352,949		373,655
less: Trade and other payables, income taxes payable and provisions	(77,439	)	(74,241	)
Total invested capital, current year	437,907		481,498
Intangible assets, prior year	182,084		189,579
Total assets, excluding intangible assets, prior year	373,655		403,549
less: Trade and other payables, income taxes payable and provisions, prior year	(74,241	)	(76,608	)
Total invested capital, prior year	481,498		516,520
Average invested capital	459,703		499,009
Return on invested capital	24.0	%	17.8	%

Return on invested capital segment reconciliation (continued):
(unaudited) (in thousands of U.S. dollars)	As at December 31
	2022		2021
Truckload - Canadian based Conventional TL
Operating income	84,321		30,367
Gain on sale of land and buildings	(44	)	—
Gain on sale of assets held for sale	(15,485	)	(17	)
Amortization of intangible assets	1,958		2,124
Operating income, net of exclusions	70,750		32,474
Income tax	26.5	%	26.5	%
Operating income net of exclusions, after tax	52,001		23,868
Intangible assets	96,941		104,947
Total assets, excluding intangible assets	185,740		169,197
less: Trade and other payables, income taxes payable and provisions	(40,671	)	(28,473	)
Total invested capital, current year	242,010		245,671
Intangible assets, prior year	104,947		96,737
Total assets, excluding intangible assets, prior year	169,197		121,407
less: Trade and other payables, income taxes payable and provisions, prior year	(28,473	)	(24,839	)
Total invested capital, prior year	245,671		193,305
Average invested capital	243,841		219,488
Return on invested capital	21.3	%	10.9	%
Truckload - Specialized TL*
Operating income	236,414		149,833
Gain on sale of assets held for sale	(6,711	)	(10,553	)
Amortization of intangible assets	20,495		17,394
Operating income, net of exclusions	250,198		156,674
Income tax	26.5	%	26.5	%
Operating income net of exclusions, after tax	183,896		115,155
Intangible assets	678,522		658,692
Total assets, excluding intangible assets	906,564		791,293
less: Trade and other payables, income taxes payable and provisions	(151,097	)	(139,683	)
Total invested capital, current year	1,433,989		1,310,302
Intangible assets, prior year	658,692		615,865
Total assets, excluding intangible assets, prior year	791,293		701,987
less: Trade and other payables, income taxes payable and provisions, prior year	(139,683	)	(112,888	)
Total invested capital, prior year	1,310,302		1,204,964
Average invested capital	1,372,146		1,257,633
Return on invested capital	13.4	%	9.2	%
Logistics
Operating income	140,446		142,794
Loss on sale of land and buildings	—		3
Amortization of intangible assets	21,990		22,683
Bargain Purchase gain	—		(12,000	)
Operating income, net of exclusions	162,436		153,480
Income tax	26.5	%	26.5	%
Operating income net of exclusions, after tax	119,390		112,808
Intangible assets	468,547		454,612
Total assets, excluding intangible assets	263,550		292,026
less: Trade and other payables, income taxes payable and provisions	(186,557	)	(199,967	)
Total invested capital, current year	545,540		546,671
Intangible assets, prior year	454,612		457,098
Total assets, excluding intangible assets, prior year	292,026		272,592
less: Trade and other payables, income taxes payable and provisions, prior year	(199,967	)	(144,305	)
Total invested capital, prior year	546,671		585,385
Average invested capital	546,106		566,028
Return on invested capital	21.9	%	19.9	%
* Recasted comparative figures for change in operating segments of the dedicated operations from US Conventional Truckload as a result of the sale of business of CFI.

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

(unaudited) (in thousands of U.S. dollars)	As at December 31
	2022		2021*
Less-Than-Truckload - U.S. based LTL
Operating income	327,793		—
Loss on sale of land and buildings	8
Gain on sale of assets held for sale	(55,054	)
Amortization of intangible assets	1,118
Operating income, net of exclusions	273,865		—
Income tax	26.5	%
Operating income net of exclusions, after tax	201,291		—
Intangible assets	5,401
Total assets, excluding intangible assets	1,483,288
less: Total liabilities	(637,340	)
Total invested capital, current year	851,349		—
Total invested capital, acquisition price	838,910		—
Average invested capital	845,130		—
Return on invested capital	23.8	%
* The return on invested capital for the U.S. LTL is not disclosed as the trailing twelve-month information was not available for 2021.