second quarter ended june 30, 2020 · 1 package & courier: fedex and ups. 2 less -than...
TRANSCRIPT
Second Quarter Ended June 30, 2020
2
In the interest of providing shareholders and potential investors with information regarding TFI International, including management’s assessment of
future plans and operations, certain statements in this presentation are forward-looking statements subject to risks, uncertainties and other
important factors that could cause the Company’s actual performance to differ materially from those expressed in or implied by such statements.
Such factors are further discussed under Risks and Uncertainties in the Company’s Annual Information Form and MD&A, but readers are cautioned
that the list of factors that may affect future growth, results and performance is not exhaustive, and undue reliance should not be placed on forward-
looking statements.
The expectations conveyed by the forward-looking statements are based on information available to it on the date such statements were made, and
there can be no assurance that such expectations will prove to be correct. All subsequent forward-looking statements, whether written or orally
attributable to the Company or persons acting on its behalf, are expressly qualified in their entirety by these cautionary statements.
Unless otherwise required by applicable securities laws, the Company expressly disclaims any intention, and assumes no obligation, to update or
revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Forward-Looking Statements
TFI International: Who We Are
3
Diversified: Package & Courier,
Less-Than-Truckload, Truckload and
Logistics
Full service: Transport and
logistics
North American Leader:
Operations across U.S., Canada and
Mexico
Extensive Network:
365 facilities, 17,937 tractors1,
24,867 trailers
Decentralized, entrepreneurial
management approach
16,564employees, of which 8,349
are drivers
1 7,477 owned or leased; 10,460 are independent contractors
…mitigate risk for customers
Our Customer Value Proposition
4
…improve their efficiency and delivery timing
…drive satisfaction for the end consumer
We create transportation and supply chain advantages to…
…reduce their delivery costs
5
Why Invest in TFI International?
Superior record of growth and
shareholder value creation
Market leader in key transportation
and logistics segments
Diversification by industry sectors and geography
Robust Return on Equity
Track record of M&A execution
with well-defined acquisition
pipeline
Investment Highlights
6
Note: All financial results presented on this page represent continuing operations.1 TTM Q2 2020, calculated using revenue before surcharge.2 TTM Q2 2020 FCF divided by the June 30, 2020 market cap.3 Calculated as TTM Q2 2020 (Adjusted EBITDA – Net Capex ex-property) / Adjusted EBITDA.4 Before impairment.
Best-in-class operating margins, FCF yield and FCF conversion
11.4% Operating Margin1
14.8% FCF Yield2
82.8% FCF Conversion3
Avg. Adjusted ROE of 18.5% since 20164
Proven track record of growth through disciplined acquisition strategy
Completed 84 acquisitions since 2008
Industry remains fragmented
Balanced capital allocation approach to drive shareholder value
$4.0 billion 20-year total FCF
$1.0 billion returned to shareholders since 2016
Robust balance sheet position
Access to $1.2 billion revolving facilities ($1.1 billion undrawn)
Annual dividend yield of 2.2%
3.0%
9.7%
8.2% 8.1%
0.8%
TFII Truckload Peer Average Package & Courier Peer Average Less-than-Truckload Peer Average Logistics Peer Average
7
Low Capex Facilitates Asset-Light Model
Note: TFI Net Capex excludes purchases and sales of property. TFII data reflects TTM Q2-2020 while peer data is TTM Q1-2020.1 Truckload: Heartland, Knight-Swift, Werner, Schneider and U.S. Xpress. 2 Package & Courier: FedEx and UPS.3 Less-Than-Truckload: ArcBest, Old Dominion Freight Line, Saia and YRC Worldwide.4 Logistics: CH Robinson, Landstar, Echo and Forward Air.
231 4
TTM Q2-2020 Net Capex (% of Total Revenue)
91.7%
47.2%
78.0%
38.1%
Peer AveragePeer Average
Peer Average
8
Market Leadership in Key Transportation and
Logistics Segments: FCF Conversion
Package & Courier Less-Than-Truckload
Truckload Logistics
Note: FCF Conversion (%) calculated as (Adjusted EBITDA – Net Capex ex-property) / Adjusted EBITDA. TFII data reflects TTM Q2-2020 while peer data is TTM Q1-2020.1 Package & Courier: FedEx and UPS.2 Less-Than-Truckload: ArcBest, Old Dominion Freight Line, Saia and YRC Worldwide. 3 Truckload: Heartland, Knight-Swift, Werner, Schneider and U.S. Xpress. 4 Logistics: CH Robinson, Landstar, Echo and Forward Air.
2
43
1
Peer Average
99.8%
86.3%
78.9%
33.8%
9
Our Strategy of Growth Through Acquisitions
Proven track record of executing on M&A strategy across highly fragmented markets
– Completed 84 acquisitions since 2008
– Strong focus on integration, operations and realization of synergies
Our disciplined acquisition criteria:
– Immediately accretive to EPS and free cash flow
– Fit with one of our four segments (Package & Courier, LTL, TL, Logistics)
– High free cash flow generation
– U.S. or Canada footprint
– Strong management team
– Synergy and growth potential
10
Overview of the TFI International Platform
Over-the-road(10% of YTD
2020 Revenue)
Intermodal(6% of YTD
2020 Revenue)
Less-Than-Truckload(16% of YTD 2020
Revenue)
Conventional(26% of YTD
2020 Revenue)
Specialized(21% of YTD
2020 Revenue)
Truckload(47% of YTD 2020
Revenue)
Package & Courier(13% of YTD 2020
Revenue)
Logistics(24% of YTD 2020
Revenue)
11
Services by Geography
Truckload LogisticsLess-Than-Truckload
Package & Courier
✔ ✔ ✔ ✔
✔ ✔ ✔
✔ ✔ ✔
Canada
United States
Mexico1
TFI has built a robust and well-diversified revenue base
— No client accounts for > 5% of consolidated revenue
1 Truckload and LTL in Mexico provided by CFI Logistica.
By Geography (YTD Q2-2020)
By Top Customers' Industry(YTD Q2-2020)
26%
16%
8%8%7%
7%
7%
5%
5%5%
3% 2% 1%
Retail Manufactured Goods
Metals & Mining Building Materials
Services Food & Beverage
Automotive Others
Forest Products Chemicals & Explosives
Energy Waste Management
Maritime Containers
53.0%
46.6%
0.4%
Canada
United States
Mexico
12
Truckload Segment
Dry van full truckload
Flatbed, tanks, dumps, oversized and other specialized services
Modern fleet
We own the majority of our assets and have long established partner carrier relationships
47% of YTD 2020 Revenue
Truckload Operating Companies
CONVENTIONAL (26% of Total Revs.) SPECIALIZED (21% of Total Revs.)A&M Intl.
Besner
CFI
Couture
Ganeca
Grégoire
BTC East
BTC West
Charbonneau
Coastal Transport
Contrans Flatbed Group
Contrans Tank Group
Contrans Vrac
Durocher Intl.
Laidlaw Carriers Van
MCT
Papineau Intl.
TF Dedicated Logistics
Transport America
Transport J.C. Germain
E.L. Farmer
GBT
GHL Transport
Golden Intl.
Gusgo
JAF
JAG
Kingsway Bulk
Laidlaw Carriers Bulk
McArthur Express
Mirabel Logistic
Nordique
P&W Intermodal
Piston Tank
Rebel Transport
SAF
TF Truckload & Logistics
Timeline Logisitc
Trans2D Logistics
Tri-Line Carriers
TST Expedited
TTL
Westfreight Systems
Winalta
1 Truckload in Mexico provided by CFI Logistica.
Geographic Footprint1 Segment Overview
13
Logistics Segment
Same day parcel delivery nationwide in the United States and Canada
Truck brokerage and other logistics services
24% of YTD 2020 Revenue
Logistics Operating Companies
AC Logistics Canada
Cavalier Logistics
CFI Logistica
CFI Logistics
CK Logistics
Clarke North America
Cornerstone Logistics
Craler
E&L Logistics
Guardian Medical Logistics
Kobelt Transportation
Landry
Logikit
Patriot Freight Services
Quik X Logistics
Geographic Footprint Segment Overview
St-Lambert
Stream Logistics
TForce Critical
TForce Logistics
TForce Logistics Canada
TForce Premier Distribution
14
Less-Than-Truckload Segment
Over-the-road and intermodal LTL services
Solid track record for safety and on-time delivery
Focus on customer facing technology
Asset light intermodal
16% of YTD 2020 Revenue
Less-Than-Truckload Operating Companies
OVER-THE-ROAD (10% of Total Revs.) INTERMODAL (6% of Total Revs.)
Cavalier
Concord
La Crete Transport
McMurray Serv-U Expediting
Clarke Transport
National Fast Freight
Quiktrax Intermodal
Vitran
Normandin
Quik X Transportation
Tripar Transportation
TST-CF Express
1 LTL in U.S. provided by partners and in Mexico provided by CFI Logistica.
Geographic Footprint1 Segment Overview
15
Package & Courier Segment
Package & Courier Operating Companies
Next-day in Canada and globally through partnership with DHL
Cutting edge technology
Specialized supply chain services
13% of YTD 2020 Revenue
Canpar Express
ICS Courier
Loomis Express
TForce Integrated Solutions
Geographic Footprint Segment Overview
Our Decentralized Structure: Uniquely Delivering
Value for Shareholders
16
…reaping the benefits of both economies of scale and specialization
…more efficiently allocating resources
Our four segments are constituted of wholly-owned subsidiaries operating under their own brands
Our differentiated approach to operating our businesses enables us to create shareholder value by…
…capitalizing on market opportunities and exploiting market dislocations in real time
$0
$100
$200
$300
$400
$500
$600
$700
1999 2019$0
$1
$2
$3
$4
$5
1999 2019
$0
$1,000
$2,000
$3,000
$4,000
$5,000
1999 2019
Superior Track Record of Growth
17
Revenue Before Fuel Surcharge (C$ in millions)
1 These are non-IFRS measures. Please refer to the tables at the end of the presentation for a reconciliation of non-IFRS measures.2 Please refer to pages 32 and 33 for the most directly comparable measure determined under IFRS, being net income and diluted EPS.3 Tax adjusted for 2002-2008 when TFI was an income trust.4 Recast as of April 21, 2020 for changes in presentation
Adjusted EBITDA1,2,4 (C$ in millions)
Diluted Adjusted EPS from Continuing Operations1,2,3
$4,614
$3.94
Net Cash from Operating Activities (C$ in millions)
$649
$0
$200
$400
$600
$800
$1,000
1999 2019
$861
18
Total Shareholder Return Over Various Periods
Peer Average
Package & Courier1
Less-Than-Truckload2 Truckload3 Logistics4
Tota
l Sh
are
ho
lde
r R
etu
rn
15-Year 1,321% 382% 120% 970% 205% 231%
10-Year 1,030% 255% 141% 626% 135% 120%
5-Year 145% 44% 11% 90% 54% 22%
1-Year 49% 12% (1%) 21% 28% (2%)
1 Package & Courier: FedEx and UPS. 2 Less-Than-Truckload: ArcBest, Old Dominion Freight Line, Saia and YRC Worldwide. 3 Truckload: Heartland, Knight-Swift, Werner, Schneider and U.S. Xpress. 4 Logistics: CH Robinson, Echo, Landstar and Forward Air.Note: All periods above are through 6/30/20. Peers included only in rows during which their stocks were public throughout the period. Total return performance includes dividends, assuming dividends reinvested.
551%
580%
116%
25%
19
Resilience Through the Cycle
1 Total Revenue and Adjusted EBITDA have not been restated to reflect discontinued operations, including the exit from oil rig moving operations in 2015 and the sale of the Waste Management segment in 2016.2 Adjusted EBITDA is a non-IFRS measure. Please refer to page 34 for the most directly comparable measure determined under IFRS, being net income.3 Adjusted EBITDA margin is a non-IFRS measure calculated as adjusted EBITDA as a percentage of total revenue.
TFI’s Adjusted EBITDA margin1, 3 held virtually flat through the Great Recession
(C$ in Millions) 2007 2008 2009 2010 2011 2012
Total Revenue1 1,940 2,262 1,847 2,002 2,691 3,140
Annual Growth 8% 17% -18% 8% 34% 17%
Adjusted EBITDA1, 2 243 280 227 263 312 386
Annual Growth 1% 15% -19% 16% 19% 24%
Adjusted EBITDA Margin1, 3 12.5% 12.4% 12.3% 13.1% 11.6% 12.3%
$ 165
$ 422
2012 TTM Q2 2020
E-Commerce Revenue(C$ in millions)
20
E-Commerce Provides Additional Growth
74% 69% 68% 66%59% 58% 59% 61%
51%
26% 31% 32% 34%41% 42% 41% 39%
49%
12 13 14 15 16 17 18 19 TTM Q22020
B2B B2C
Evolution of B2B/B2C Split
11.6% CAGR
E-Commerce is a powerful secular force, driving new shipping demands including greater emphasis on last-mile logistics
Same-Day Services
The evolution of E-Commerce fulfillment has created numerous opportunitiesfor TFI companies – both next-day (Canada) and same-day (Canada & U.S.)
Next-Day Services
21
Shipper - Warehouse
Evolution of E-Commerce Fulfillment
Shipper - Warehouse
Sorting Facility
Sorting Facility
Pickup
Delivery
DeliveryLinehaulRegion A
Region B
Business Customer CustomerBusiness
$165.1
$86.1
$61.2
$13.1
$95.7
Logistics TL P&C LTL
United States Canada
22
TFI International Serves a Vast E-Commerce Network
TFI services E-Commerce from nearly 80 North American cities
Further opportunities for the Logistics segment, both through acquisitions and organic growth
Increasing facility utilization with addition of same-day service
Total Canadian E-Commerce revenue: $170.5 million
Total U.S. E-Commerce revenue: $251.2 million
TTM Q2 2020 E-Commerce Revenue by Segment(C$ in millions)
$0.5
23
Robust Balance Sheet With Strategic Flexibility
Note: The table above indicates the Company’s financial covenants to be maintained under its credit facility. These covenants are measured on a consolidated rolling twelve-month basis and are calculated as prescribed by the credit agreement which, among other things, requires the exclusion of the impact of the new standard IFRS 16 Leases.
Covenants RequirementsAs at June 30,
2020
Funded debt-to-EBITDA ratio [ratio of total debt plus letters of credit and some other long-term liabilities to earnings before interest, income tax, depreciation and amortization (“EBITDA”), including last twelve months adjusted EBITDA from business acquisitions]
< 3.50 1.671
EBITDAR-to-interest and rent ratio [ratio of EBITDAR (EBITDA before rent and including last twelve months adjusted EBITDAR from business acquisitions) to interest and net rent expenses]
> 1.75 4.23
1 The Funded debt-to-EBITDA ratio is based on gross debt, the cash on hand of $12.1 million is excluded from the calculation of this measure.
24
Track Record of M&A Execution and Integration
Number of Acquisitions per Year
Acquired 84 companies across our highly fragmented markets since 2008
14
5
3
6
4 4
6
4
10
7
9
8
4
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Winalta
La Crete
TForce Integrated
Solutions
Lafleche
Total Transfer
Quik X
Transportation E.L. Farmer
Contrans
Clarke
Vitran
Transport
America
AC Logistics
Canada
Cavalier
TForce Critical
TForce Premier
Distribution
GBT
Brasseur
Normandin
TForce Logistics
Loomis Express
CFI
National Fast
FreightTTL
BTC East
BeavEx
RRD Courier
Services
Gusgo
Coastal
Transport
MCT
25
Our Approach To Creating Shareholder Value
Our People
Market Leadership
Growth & ROIC
We continually solidify our position as a leader in the North American transportation and logistics industry
We deliver earnings growth and strong ROIC, both organically and through our proven acquisition strategy
We maintain a strong balance sheet andaccess to capital
We leverage our team of dedicated professionals to provide value-added services and solutions across each of our business segments
Prudent Balance Sheet
26
Appendix
27
Balance Sheet Details— As of June 30, 2020—
Debt structure
— $1.2 billion unsecured revolving facility
– Matures in June 2023 and can be extended annually
– Provides favorable terms and conditions and capital management flexibility
— US$25 million unsecured revolving facility
– Matures in November 2020
— $610 million unsecured term loan
– Two tranches, $200 million maturing in June 2021 and $410 million maturing in June 2022
– Same covenants and conditions as the banking revolving facility
— $200 million unsecured debenture
– Interest rate between 3.32% and 4.22% and matures in December 2024
– Can be repaid, without penalty, after December 20, 2022
— US$150 million unsecured senior notes
– Interest rate of 3.85% and mature in December 2026
28
Additional Operating Data (Slide 1 of 3)
Operating Data – TL 2018-Q3 2018-Q4 2019-Q1 2019-Q2 2019-Q3 2019-Q4 2020-Q1 2020-Q2
U.S. based Conventional TL
Revenue before fuel surcharge (in thousands of U.S. dollars)
171,766 168,451 163,749 164,171 162,377 155,861 157,243 147,459
Adjusted operating ratio1 92.4% 93.3% 92.4% 90.2% 90.9% 92.4% 93.4% 91.8%
Total mileage (in thousands) 94,735 90,658 88,588 89,975 88,636 84,291 87,630 83,849
Tractor count, average 3,109 3,053 3,001 2,966 2,942 2,929 2,939 2,897
Trailer count, average 11,210 11,180 11,035 10,962 11,028 11,007 10,778 10,675
Tractor age 2.1 2.0 2.1 2.0 1.8 1.8 2.0 2.1
Trailer age 6.8 6.8 6.9 7.0 6.8 6.5 6.6 6.7
Number of owner operators, average 425 408 398 376 376 424 438 462
Canadian based Conventional TL
Revenue before fuel surcharge (in thousands of dollars)
78,154 79,017 77,882 76,949 71,299 74,803 70,279 60,917
Adjusted operating ratio1 85.2% 85.9% 86.2% 87.1% 83.1% 85.9% 87.8% 86.5%
Total mileage (in thousands) 26,139 26,019 25,536 26,151 23,019 24,237 23,395 20,852
Tractor count, average 700 708 720 718 657 641 640 572
Trailer count, average 3,182 3,043 2,932 2,953 2,824 2,826 2,835 2,778
Tractor age 2.8 2.7 2.5 2.7 2.6 2.3 2.2 2.2
Trailer age 5.6 5.5 5.6 5.6 5.5 5.4 5.5 5.2
Number of owner operators, average 371 363 353 348 348 317 308 286
1 This is a non-IFRS measure. Please refer to the reconciliation on pages 35, 36, 37 and 38.
29
Additional Operating Data (Slide 2 of 3)
Operating Data – TL 2018-Q3 2018-Q4 2019-Q1 2019-Q2 2019-Q3 2019-Q4 2020-Q1 2020-Q2
Specialized TL
Revenue before fuel surcharge (in thousands of dollars)
220,333 227,438 235,964 275,963 273,029 264,591 253,211 207,225
Adjusted operating ratio1 85.6% 89.2% 90.4% 87.0% 87.1% 89.3% 88.2% 78.6%
Tractor count, average 1,439 1,546 1,771 2,116 2,194 2,189 2,065 1,786
Trailer count, average 4,541 4,693 5,519 6,095 6,341 6,142 5,986 5,779
Tractor age 3.6 3.5 3.7 4.6 4.1 4.0 3.9 3.9
Trailer age 10.2 9.7 10.0 11.1 11.4 11.7 12.0 12.3
Number of owner operators, average 1,054 1,102 1,192 1,157 1,225 1,224 1,154 1,068
1 This is a non-IFRS measure. Please refer to the reconciliation on pages 35, 36, 37 and 38.
30
Additional Operating Data (Slide 3 of 3)
Operating Data - LTL 2018-Q3 2018-Q4 2019-Q1 2019-Q2 2019-Q3 2019-Q4 2020-Q1 2020-Q2
Revenue before fuel surcharge (in thousands of dollars)
227,514 231,994 207,986 219,075 205,434 199,718 180,194 158,406
Adjusted operating ratio1 88.8% 90.0% 91.2% 86.2% 87.4% 88.2% 90.2% 78.9%
Revenue per hundredweight (excluding fuel) $13.18 $13.79 $12.82 $13.62 $13.51 $13.19 $13.27 $12.75
Revenue per shipment (including fuel) $316.68 $324.84 $319.92 $316.36 $320.28 $334.42 $332.32 $329.65
Tonnage (in thousands of tons) 863 841 811 804 760 757 679 621
Shipments (in thousands) 847 838 753 806 742 692 627 536
Average weight per shipment (in lbs) 2,038 2,007 2,154 1,995 2,049 2,188 2,166 2,317
Average length of haul (in miles) 833 831 838 820 824 839 808 830
Vehicle count, average 1,081 1,020 1,031 1,019 1,031 1,016 976 909
1 This is a non-IFRS measure. Please refer to the reconciliation on page 39.
31
Reconciliations
32
Five-Year Reconciliation of Adjusted EBITDA1
(C$ in millions)(from Continuing Operations)
TTM Q2 2020
20192 20182 20172 20162
Net Income $304.6 $324.5 $292.0 $158.0 $157.1
Net Finance Costs $81.8 $82.3 $47.4 $61.4 $51.7
Income Tax Expense (Recovery) $121.2 $101.5 $90.2 $(40.6) $46.3
Depreciation of Property and Equipment $230.8 $223.8 $198.5 $209.6 $139.4
Depreciation of Right-of-Use Assets $105.0 $102.6 – – –
Amortization of Intangible Assets $64.6 $65.9 $62.1 $61.2 $53.7
Impairment of Intangible Assets – – $12.6 $143.0 –
Bargain Purchase Gain $(5.6) $(10.8) – – –
Gain on Sale of Land and Buildings $(0.0) $(0.0) $(0.5) $(0.2) $(8.9)
Gain on Sale of Assets Held for Sale $(29.2) $(28.6) $(15.6) $(77.4) –
Gain on Sale of Intangible – – $(1.2) – –
Adjusted EBITDA $873.2 $861.2 $685.4 $514.8 $439.2
1 This is a non-IFRS measure.2 Recasted as of April 21, 2020 for changes in presentation.Note: As of 2019, results include the impacts from the adoption of the new IFRS 16 Leases as discussed in note 3 of the audited consolidated financial statements. As is permitted with this new standard, comparative information has not been restated and, therefore, may not be comparable.
33
Five-Year Reconciliation of Adjusted Net Income1
and Adjusted EPS – Diluted1
(C$ in millions, except per share data)TTM Q2
20202019 2018 2017 2016
Net Income $302.9 $310.3 $292.0 $158.0 $639.6
Amortization of Intangible Assets Related to Business Acquisitions, Net of Tax $46.0 $47.1 $44.0 $38.3 $32.7
Net Change in Fair Value and Accretion Expense of Contingent Considerations, Net of Tax $0.2 $0.2 $(8.9) $(0.4) $0.1
Net Change in Fair Value of Derivatives, Net of Tax $0.2 $(0.0) $(0.3) $(1.2) $3.5
Net Foreign Exchange (Gain) Loss, Net of Tax $(1.2) $0.2 $0.5 $1.8 $1.6
Impairment of Intangible Assets, Net of Tax – – $9.1 $138.4 –
Bargain Purchase Gain $(5.6) $(10.8) – – –
Gain on Sale of Land and Buildings and Assets Held for Sale, Net of Tax $(25.4) $(24.8) $(13.9) $(66.7) $(7.5)
Gain on Sale of Intangible Assets, Net of Tax – – $(0.9) – –
U.S. Tax Reform $10.1 – – $(76.1) –
Net (Income) Loss from Discontinued Operations $1.7 $14.2 – – $(482.5)
Adjusted Net Income from Continuing Operations $328.9 $336.4 $321.6 $192.2 $187.5
Adjusted EPS from Continuing Operations – Basic $3.54 $4.03 $3.66 $2.12 $2.00
Adjusted EPS from Continuing Operations – Diluted $3.45 $3.94 $3.54 $2.07 $1.96
EPS from Continuing Operations – Diluted $3.70 $3.80 $3.22 $1.70 $1.64
1 This is a non-IFRS measure.Note: As of 2019, results include the impacts from the adoption of the new IFRS 16 Leases as discussed in note 3 of the audited consolidated financial statements. As is permitted with this new standard, comparative information has not been restated and, therefore, may not be comparable.
34
2007-2012 Reconciliation of Adjusted EBITDA1
1 This is a non-IFRS measure.Note: Figures have not been restated to reflect discontinued operations, including the exit from oil rig moving operations in 2015 and the sale of the Waste Management segment in 2016.
(C$ in millions) 2012 2011 2010 2009 2008 2007
Net income $154.2 $102.2 $102.7 $10.9 $79.7 $44.8
Net Finance Costs $38.4 $50.3 $8.0 $29.5 $60.5 $36.2
Income Tax Expense $54.6 $33.9 $33.5 $21.4 $19.5 $3.6
Depreciation of Property and Equipment $103.4 $97.5 $98.8 $102.6 $106.3 $96.6
Amortization of Intangible Assets $44.2 $35.0 $27.6 $20.0 $16.7 $11.1
Gain on Sale of Property and Equipment $(8.8) $(6.5) $(7.9) $(2.9) $(2.7) $(5.3)
Impairment of Intangible Assets – – – $45.0 – $56.0
Adjusted EBITDA $386.0 $312.4 $262.7 $226.5 $280.0 $243.0
35
Adjusted Operating Ratio1 Reconciliation
(C$ in thousands) 2018-Q3 2018-Q4 2019-Q1 2019-Q2 2019-Q3 2019-Q4 2020-Q1 2020-Q2
Truckload
Total revenue 604,759 610,161 600,535 655,548 633,547 620,122 605,694 515,921
Total operating expenses 541,101 557,879 549,791 588,307 557,785 558,871 542,690 446,397
Operating income 63,658 52,282 50,744 67,241 75,762 61,251 63,004 69,524
Operating expenses 541,101 557,879 549,791 588,307 557,785 558,871 542,690 446,397
Gain on sale of land and buildings and assets held for sale
3,208 1,560 696 76 9,020 6,530 10,661 170
Adjusted operating expenses 544,309 559,439 550,487 588,383 566,805 565,401 553,351 446,567
Fuel surcharge revenue (84,112) (81,997) (73,388) (85,190) (76,342) (75,289) (72,206) (44,703)
Adjusted operating expenses, net of fuel surcharge revenue
460,197 477,442 477,099 503,193 490,463 490,112 481,145 401,864
Revenue before fuel surcharge 520,647 528,164 527,147 570,358 557,205 544,833 533,488 471,218
Adjusted operating ratio 88.4% 90.4% 90.5% 88.2% 88.0% 90.0% 90.2% 85.3%
1 This is a non-IFRS measure.Note: As of 2019, results include the impacts from the adoption of the new IFRS 16 Leases as discussed in note 3 of the audited consolidated financial statements. As is permitted with this new standard, comparative information has not been restated and, therefore, may not be comparable.
36
Adjusted Operating Ratio1 Reconciliation
(C$ in thousands) 2018-Q3 2018-Q4 2019-Q1 2019-Q2 2019-Q3 2019-Q4 2020-Q1 2020-Q2
Truckload - Revenue before fuel surcharge
U.S. based Conventional TL 224,115 223,128 217,606 219,480 214,318 206,810 211,251 204,187
Canadian based Conventional TL 78,153 79,017 77,882 76,949 71,299 74,803 70,279 60,917
Specialized TL 220,333 227,438 235,964 275,963 273,029 264,591 253,211 207,225
Eliminations (1,954) (1,419) (4,305) (2,034) (1,441) (1,371) (1,253) (1,111)
520,647 528,164 527,147 570,358 557,205 544,833 533,488 471,218
Truckload - Fuel surcharge revenue
U.S. based Conventional TL 43,980 43,034 37,318 39,867 36,404 35,270 34,581 23,507
Canadian based Conventional TL 12,756 12,257 10,567 11,478 9,795 10,133 8,782 5,034
Specialized TL 27,496 26,815 26,224 33,923 30,195 29,945 28,895 16,218
Eliminations (120) (109) (721) (78) (52) (59) (52) (56)
84,112 81,997 73,388 85,190 76,342 75,289 72,206 44,703
Truckload - Operating income (loss)
U.S. based Conventional TL 17,091 15,012 16,507 21,435 19,429 15,751 13,997 16,683
Canadian based Conventional TL 11,553 11,172 10,777 9,901 12,024 10,562 8,539 8,244
Specialized TL 35,013 26,098 23,460 35,905 44,308 34,938 40,468 44,597
63,657 52,282 50,744 67,241 75,761 61,251 63,004 69,5241 This is a non-IFRS measure.Note: As of 2019, results include the impacts from the adoption of the new IFRS 16 Leases as discussed in note 3 of the audited consolidated financial statements. As is permitted with this new standard, comparative information has not been restated and, therefore, may not be comparable.
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Adjusted Operating Ratio1 Reconciliation
(C$ in thousands) 2018-Q3 2018-Q4 2019-Q1 2019-Q2 2019-Q3 2019-Q4 2020-Q1 2020-Q2
U.S. based Conventional TL
Operating expenses** 251,004 251,150 238,417 237,912 231,294 226,329 231,835 211,011
Fuel surcharge revenue (43,980) (43,034) (37,318) (39,867) (36,404) (35,270) (34,581) (23,507)
Adjusted operating expenses, net of fuel surcharge
207,024 208,116 201,099 198,045 194,890 191,059 197,254 187,504
Revenue before fuel surcharge 224,115 223,128 217,606 219,480 214,318 206,810 211,251 204,187
Adjusted operating ratio 92.4% 93.3% 92.4% 90.2% 90.9% 92.4% 93.4% 91.8%
Canadian based Conventional TL
Operating expenses** 79,357 80,102 77,672 78,526 69,070 74,374 70,522 57,707
Gain on sale of land and buildings and assets held for sale
- - - - - 11 - -
Adjusted operating expenses 79,357 80,102 77,672 78,526 69,070 74,385 70,522 57,707
Fuel surcharge revenue (12,756) (12,257) (10,567) (11,478) (9,795) (10,133) (8,782) (5,034)
Adjusted operating expenses, net of fuel surcharge revenue
66,601 67,845 67,105 67,048 59,275 64,252 61,740 52,673
Revenue before fuel surcharge 78,153 79,017 77,882 76,949 71,299 74,803 70,279 60,917
Adjusted operating ratio 85.2% 85.9% 86.2% 87.1% 83.1% 85.9% 87.8% 86.5%
** Operating expenses excluding intra TL eliminations
1 This is a non-IFRS measure.Note: As of 2019, results include the impacts from the adoption of the new IFRS 16 Leases as discussed in note 3 of the audited consolidated financial statements. As is permitted with this new standard, comparative information has not been restated and, therefore, may not be comparable.
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Adjusted Operating Ratio1 Reconciliation
(C$ in thousands) 2018-Q3 2018-Q4 2019-Q1 2019-Q2 2019-Q3 2019-Q4 2020-Q1 2020-Q2
Specialized TL
Operating expenses** 212,817 228,155 238,728 273,981 258,916 259,598 241,638 178,846
Gain on sale of land and buildings and assets held for sale
3,208 1,560 696 76 9,020 6,519 10,661 170
Adjusted operating expenses 216,025 229,715 239,424 274,057 267,936 266,117 252,299 179,016
Fuel surcharge revenue (27,496) (26,815) (26,224) (33,923) (30,195) (29,945) (28,895) (16,218)
Adjusted operating expenses, net of fuel surcharge revenue
188,529 202,900 213,200 240,134 237,741 236,172 223,404 162,798
Revenue before fuel surcharge 220,333 227,438 235,964 275,963 273,029 264,591 253,211 207,225
Adjusted operating ratio 85.6% 89.2% 90.4% 87.0% 87.1% 89.3% 88.2% 78.6%
** Operating expenses excluding intra TL eliminations
1 This is a non-IFRS measure.Note: As of 2019, results include the impacts from the adoption of the new IFRS 16 Leases as discussed in note 3 of the audited consolidated financial statements. As is permitted with this new standard, comparative information has not been restated and, therefore, may not be comparable.
39
Adjusted Operating Ratio1 Reconciliation
(C$ in thousands) 2018-Q3 2018-Q4 2019-Q1 2019-Q2 2019-Q3 2019-Q4 2020-Q1 2020-Q2
Less-Than-Truckload
Total revenue 268,231 272,212 240,897 254,989 237,644 231,421 208,363 176,692
Total operating expenses 242,822 248,751 213,255 224,721 211,853 205,923 190,682 143,273
Operating income 25,409 23,461 27,642 30,268 25,791 25,498 17,681 33,419
Operating expenses 242,822 248,751 213,255 224,721 211,853 205,923 190,682 143,273
Gain (loss) on sale of land and buildings and assets held for sale
(61) 254 9,401 (2) (0) 1,947 (0) (45)
Adjusted operating expenses 242,761 249,005 222,656 224,719 211,853 207,870 190,682 143,228
Fuel surcharge revenue (40,717) (40,218) (32,911) (35,914) (32,210) (31,703) (28,169) (18,286)
Adjusted operating expenses, net of fuel surcharge revenue
202,044 208,787 189,745 188,805 179,643 176,167 162,513 124,942
Revenue before fuel surcharge 227,514 231,994 207,986 219,075 205,434 199,718 180,194 158,406
Adjusted operating ratio 88.8% 90.0% 91.2% 86.2% 87.4% 88.2% 90.2% 78.9%
1 This is a non-IFRS measure.Note: As of 2019, results include the impacts from the adoption of the new IFRS 16 Leases as discussed in note 3 of the audited consolidated financial statements. As is permitted with this new standard, comparative information has not been restated and, therefore, may not be comparable.