UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K/A
(Amendment No. 1)
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of July, 2024
Commission File No. 001-39224
TFI INTERNATIONAL INC.
(Translation of registrant’s name into English)
8801 Trans-Canada Highway, Suite 500
Saint-Laurent, Québec
H4S 1Z6 Canada
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☐ Form 40-F ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
EXPLANATORY NOTE
On July 25, 2024, TFI International Inc. (the “registrant”) furnished to the Securities and Exchange Commission (the “SEC”) a Report of Foreign Private Issuer on Form 6-K, Commission File No. 001-39224 (the “Original Filing”). Due to an error in the submission mechanics, Exhibit 99.3 (Interim Financial Statements for the period ended June 30, 2024) to the Original Filing inadvertently omitted footnotes (a) and (b) from Note 4 (Segment reporting). The registrant is furnishing this Amendment No. 1 to the Original Filing solely for the purpose of replacing Exhibit 99.3 and resubmitting the associated CEO and CFO Certifications (Exhibits 99.4 and 99.5).
Except as set forth above, the registrant has not modified or updated disclosures presented in the Original Filing to reflect events or developments that have occurred after the date of the Original Filing. Among other things, forward-looking statements made in the Original Filing have not been revised to reflect events, results or developments that have occurred or facts that have become known to the registrant after the Original Filing (other than as discussed above), and such forward-looking statements should be read in their historical context. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing and the Registrant’s other filings made with the SEC subsequent to the filing of the Original Filing.
EXHIBIT INDEX
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EXHIBIT NUMBER |
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EXHIBIT DESCRIPTION |
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99.1* |
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News Release |
99.2* |
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Management Discussion & Analysis for period ended June 30, 2024 |
99.3** |
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Interim Financial Statements for period ended June 30, 2024 |
99.4** |
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CEO Certification |
99.5** |
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CFO Certification |
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* |
Previously furnished as exhibits to the Original Filing. |
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** |
Furnished herewith |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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TFI International Inc. |
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Date: July 26, 2024 |
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By: |
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/s/ Josiane M. Langlois |
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Name: Josiane M. Langlois |
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Title: Vice-President, Legal Affairs & Corporate Secretary |
Exhibit 99.3
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the second quarter ended
June 30, 2024
CONTENTS
│1
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TFI International Inc. |
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
(UNAUDITED)
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(in thousands of U.S. dollars) |
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As at |
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As at |
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Note |
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June 30, 2024 |
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December 31, 2023 |
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Assets |
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Cash and cash equivalents |
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26,606 |
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335,556 |
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Trade and other receivables |
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1,073,262 |
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894,771 |
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Inventoried supplies |
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25,946 |
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23,964 |
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Current taxes recoverable |
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26,988 |
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23,637 |
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Prepaid expenses |
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81,698 |
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56,269 |
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Assets held for sale |
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34,579 |
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1,802 |
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Current assets |
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1,269,079 |
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1,335,999 |
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Property and equipment |
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7 |
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2,989,719 |
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2,415,472 |
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Right-of-use assets |
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8 |
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524,853 |
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425,630 |
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Intangible assets |
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9 |
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2,611,137 |
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2,019,301 |
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Investments |
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10 |
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20,914 |
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50,209 |
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Other assets |
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18,895 |
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16,394 |
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Deferred tax assets |
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14,517 |
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20,615 |
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Non-current assets |
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6,180,035 |
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4,947,621 |
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Total assets |
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7,449,114 |
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6,283,620 |
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Liabilities |
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Trade and other payables |
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728,408 |
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671,936 |
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Current taxes payable |
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4,104 |
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2,442 |
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Provisions |
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14 |
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83,330 |
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66,565 |
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Other financial liabilities |
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25,939 |
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23,420 |
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Long-term debt |
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11 |
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351,673 |
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174,351 |
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Lease liabilities |
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12 |
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160,148 |
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127,397 |
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Current liabilities |
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1,353,602 |
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1,066,111 |
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Long-term debt |
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11 |
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2,333,561 |
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1,709,831 |
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Lease liabilities |
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12 |
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400,239 |
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332,761 |
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Employee benefits |
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13 |
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75,226 |
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53,231 |
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Provisions |
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14 |
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135,186 |
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93,335 |
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Other financial liabilities |
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2,350 |
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3,699 |
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Deferred tax liabilities |
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519,230 |
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433,242 |
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Non-current liabilities |
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3,465,792 |
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2,626,099 |
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Total liabilities |
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4,819,394 |
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3,692,210 |
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Equity |
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Share capital |
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15 |
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1,135,157 |
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1,107,290 |
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Contributed surplus |
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15, 17 |
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26,959 |
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37,684 |
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Accumulated other comprehensive loss |
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(252,538 |
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(200,539 |
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Retained earnings |
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1,720,142 |
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1,646,975 |
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Total equity |
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2,629,720 |
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2,591,410 |
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Contingencies, letters of credit and other commitments |
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21 |
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Total liabilities and equity |
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7,449,114 |
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6,283,620 |
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The notes on pages 7 to 24 are an integral part of these condensed consolidated interim financial statements.
│2
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TFI International Inc. |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(UNAUDITED)
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(In thousands of U.S. dollars, except per share amounts) |
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Three months |
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Three months |
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Six months |
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Six months |
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ended |
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ended |
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ended |
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ended |
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Note |
June 30, 2024 |
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June 30, 2023 |
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June 30, 2024 |
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June 30, 2023 |
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Revenue |
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1,961,120 |
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1,549,451 |
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3,572,621 |
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3,109,878 |
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Fuel surcharge |
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303,425 |
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241,815 |
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562,739 |
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531,565 |
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Total revenue |
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2,264,545 |
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1,791,266 |
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4,135,360 |
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3,641,443 |
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Materials and services expenses |
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18 |
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1,109,153 |
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897,705 |
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2,047,961 |
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1,837,985 |
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Personnel expenses |
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675,781 |
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492,360 |
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1,238,361 |
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1,034,632 |
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Other operating expenses |
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119,873 |
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104,752 |
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224,731 |
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217,190 |
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Depreciation of property and equipment |
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7 |
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87,482 |
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62,348 |
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151,973 |
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121,395 |
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Depreciation of right-of-use assets |
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8 |
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45,758 |
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31,954 |
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81,060 |
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63,389 |
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Amortization of intangible assets |
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9 |
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19,300 |
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13,872 |
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36,516 |
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27,445 |
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Gain on sale of rolling stock and equipment |
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(647 |
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(3,582 |
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(4,458 |
) |
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(11,794 |
) |
Loss (gain) on derecognition of right-of-use assets |
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11 |
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(260 |
) |
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41 |
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(1,067 |
) |
Loss on sale of land and buildings |
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- |
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40 |
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- |
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40 |
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Gain, net of impairment, on sale of assets |
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held for sale |
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(281 |
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(340 |
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(496 |
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(6,591 |
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Total operating expenses |
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2,056,430 |
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1,598,849 |
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3,775,689 |
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3,282,624 |
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Operating income |
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208,115 |
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192,417 |
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359,671 |
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358,819 |
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Finance (income) costs |
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Finance income |
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19 |
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(1,072 |
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(1,648 |
) |
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(6,224 |
) |
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(3,358 |
) |
Finance costs |
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19 |
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48,485 |
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20,378 |
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80,966 |
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39,217 |
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Net finance costs |
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47,413 |
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18,730 |
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74,742 |
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35,859 |
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Income before income tax |
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160,702 |
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173,687 |
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284,929 |
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322,960 |
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Income tax expense |
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20 |
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42,933 |
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45,453 |
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74,313 |
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82,808 |
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Net income |
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117,769 |
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128,234 |
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210,616 |
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240,152 |
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Earnings per share |
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Basic earnings per share |
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16 |
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1.39 |
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1.49 |
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2.49 |
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2.78 |
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Diluted earnings per share |
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16 |
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1.38 |
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1.47 |
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2.47 |
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2.74 |
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The notes on pages 7 to 24 are an integral part of these condensed consolidated interim financial statements.
│3
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TFI International Inc. |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
(UNAUDITED)
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(In thousands of U.S. dollars) |
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Three months |
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Three months |
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Six months |
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Six months |
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ended |
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ended |
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ended |
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ended |
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June 30, 2024 |
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June 30, 2023 |
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June 30, 2024 |
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June 30, 2023 |
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Net income |
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117,769 |
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128,234 |
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210,616 |
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240,152 |
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Other comprehensive (loss) income |
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Items that may be reclassified to income or loss in future periods: |
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Foreign currency translation differences |
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481 |
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7,640 |
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1,084 |
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8,106 |
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Net investment hedge, net of tax |
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(16,014 |
) |
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23,822 |
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(52,100 |
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26,866 |
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Items directly reclassified to retained earnings: |
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Unrealized (loss) gain on investments in equity securities |
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measured at fair value through OCI, net of tax |
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(1,698 |
) |
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(5,809 |
) |
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(9,214 |
) |
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13,562 |
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Other comprehensive (loss) income, net of tax |
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(17,231 |
) |
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25,653 |
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(60,230 |
) |
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48,534 |
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Total comprehensive income |
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100,538 |
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153,887 |
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150,386 |
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288,686 |
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The notes on pages 7 to 24 are an integral part of these condensed consolidated interim financial statements.
│4
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TFI International Inc. |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY |
|
PERIODS ENDED June 30, 2024 AND 2023 (UNAUDITED) |
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(In thousands of U.S. dollars) |
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Accumulated |
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Accumulated |
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foreign |
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unrealized |
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Total |
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currency |
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gain (loss) |
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equity |
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translation |
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on invest- |
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attributable |
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differences |
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ments in |
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Retained |
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to owners |
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Share |
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Contributed |
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& net invest- |
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equity |
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earnings |
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of the |
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Note |
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capital |
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surplus |
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ment hedge |
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securities |
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(deficit) |
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Company |
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Balance as at December 31, 2023 |
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1,107,290 |
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37,684 |
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(200,296 |
) |
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(243 |
) |
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1,646,975 |
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2,591,410 |
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Net income |
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- |
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- |
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- |
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- |
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210,616 |
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|
210,616 |
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Other comprehensive loss, net of tax |
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- |
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- |
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(51,016 |
) |
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(9,214 |
) |
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- |
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(60,230 |
) |
Realized gain (loss) on equity securities |
|
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- |
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- |
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- |
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8,231 |
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|
(8,231 |
) |
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|
- |
|
Total comprehensive (loss) income |
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|
|
|
- |
|
|
|
- |
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|
(51,016 |
) |
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|
(983 |
) |
|
|
202,385 |
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|
150,386 |
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Share-based payment transactions, net of tax |
|
17 |
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- |
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7,831 |
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- |
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- |
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- |
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7,831 |
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Stock options exercised, net of tax |
|
15, 17 |
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12,998 |
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|
(2,269 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
10,729 |
|
Dividends to owners of the Company |
|
15 |
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|
- |
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|
- |
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|
- |
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|
- |
|
|
|
(67,665 |
) |
|
|
(67,665 |
) |
Repurchase of own shares |
|
15 |
|
|
(2,761 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(31,418 |
) |
|
|
(34,179 |
) |
Net settlement of restricted share units |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and performance share units, net of tax |
|
15, 17 |
|
|
17,630 |
|
|
|
(16,287 |
) |
|
|
- |
|
|
|
- |
|
|
|
(30,135 |
) |
|
|
(28,792 |
) |
Total transactions with owners, recorded directly in equity |
|
|
27,867 |
|
|
|
(10,725 |
) |
|
|
- |
|
|
|
- |
|
|
|
(129,218 |
) |
|
|
(112,076 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at June 30, 2024 |
|
|
|
|
1,135,157 |
|
|
|
26,959 |
|
|
|
(251,312 |
) |
|
|
(1,226 |
) |
|
|
1,720,142 |
|
|
|
2,629,720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at December 31, 2022 |
|
|
|
|
1,089,229 |
|
|
|
41,491 |
|
|
|
(239,120 |
) |
|
|
5,799 |
|
|
|
1,565,671 |
|
|
|
2,463,070 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
240,152 |
|
|
|
240,152 |
|
Other comprehensive income, net of tax |
|
|
|
|
- |
|
|
|
- |
|
|
|
34,972 |
|
|
|
13,562 |
|
|
|
- |
|
|
|
48,534 |
|
Realized (loss) gain on equity securities |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(13,323 |
) |
|
|
13,323 |
|
|
|
- |
|
Total comprehensive income |
|
|
|
|
- |
|
|
|
- |
|
|
|
34,972 |
|
|
|
239 |
|
|
|
253,475 |
|
|
|
288,686 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based payment transactions, net of tax |
|
17 |
|
|
- |
|
|
|
11,949 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
11,949 |
|
Stock options exercised, net of tax |
|
15, 17 |
|
|
12,078 |
|
|
|
(3,231 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
8,847 |
|
Dividends to owners of the Company |
|
15 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(60,401 |
) |
|
|
(60,401 |
) |
Repurchase of own shares |
|
15 |
|
|
(12,065 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(106,770 |
) |
|
|
(118,835 |
) |
Net settlement of restricted share units, net of tax |
|
15, 17 |
|
|
29,185 |
|
|
|
(20,829 |
) |
|
|
- |
|
|
|
- |
|
|
|
(54,937 |
) |
|
|
(46,581 |
) |
Total transactions with owners, recorded directly in equity |
|
|
29,198 |
|
|
|
(12,111 |
) |
|
|
- |
|
|
|
- |
|
|
|
(222,108 |
) |
|
|
(205,021 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at June 30, 2023 |
|
|
|
|
1,118,427 |
|
|
|
29,380 |
|
|
|
(204,148 |
) |
|
|
6,038 |
|
|
|
1,597,038 |
|
|
|
2,546,735 |
|
The notes on pages 7 to 24 are an integral part of these condensed consolidated interim financial statements.
│5
|
|
TFI International Inc. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands of U.S. dollars) |
|
|
|
|
Three months |
|
|
Three months |
|
|
Six months |
|
|
Six months |
|
|
|
|
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
Note |
|
|
June 30, 2024 |
|
|
June 30, 2023* |
|
|
June 30, 2024 |
|
|
June 30, 2023* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
117,769 |
|
|
|
128,234 |
|
|
|
210,616 |
|
|
|
240,152 |
|
Adjustments for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of property and equipment |
|
|
7 |
|
|
|
87,482 |
|
|
|
62,348 |
|
|
|
151,973 |
|
|
|
121,395 |
|
Depreciation of right-of-use assets |
|
|
8 |
|
|
|
45,758 |
|
|
|
31,954 |
|
|
|
81,060 |
|
|
|
63,389 |
|
Amortization of intangible assets |
|
|
9 |
|
|
|
19,300 |
|
|
|
13,872 |
|
|
|
36,516 |
|
|
|
27,445 |
|
Share-based payment transactions |
|
|
17 |
|
|
|
3,215 |
|
|
|
3,306 |
|
|
|
6,003 |
|
|
|
6,649 |
|
Net finance costs |
|
|
19 |
|
|
|
47,413 |
|
|
|
18,730 |
|
|
|
74,742 |
|
|
|
35,859 |
|
Income tax expense |
|
|
20 |
|
|
|
42,933 |
|
|
|
45,453 |
|
|
|
74,313 |
|
|
|
82,808 |
|
Gain on sale of property and equipment |
|
|
|
|
|
(647 |
) |
|
|
(3,542 |
) |
|
|
(4,458 |
) |
|
|
(11,754 |
) |
Loss (gain) on derecognition of right-of-use assets |
|
|
|
11 |
|
|
|
(260 |
) |
|
|
41 |
|
|
|
(1,067 |
) |
Gain, net of impairment, on sale of assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
held for sale |
|
|
|
|
|
(281 |
) |
|
|
(340 |
) |
|
|
(496 |
) |
|
|
(6,591 |
) |
Employee benefits |
|
|
|
|
|
10,484 |
|
|
|
12,591 |
|
|
|
21,133 |
|
|
|
30,175 |
|
Provisions, net of payments |
|
|
|
|
|
2,048 |
|
|
|
(19,909 |
) |
|
|
5,143 |
|
|
|
(27,862 |
) |
Net change in non-cash operating working capital |
|
|
6 |
|
|
|
(25,773 |
) |
|
|
(14 |
) |
|
|
(60,767 |
) |
|
|
50,823 |
|
Interest paid |
|
|
|
|
|
(43,016 |
) |
|
|
(17,561 |
) |
|
|
(68,915 |
) |
|
|
(33,519 |
) |
Income tax paid |
|
|
|
|
|
(58,154 |
) |
|
|
(74,476 |
) |
|
|
(77,673 |
) |
|
|
(145,382 |
) |
Net cash from operating activities |
|
|
|
|
|
248,542 |
|
|
|
200,386 |
|
|
|
449,231 |
|
|
|
432,520 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used in investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
7 |
|
|
|
(118,861 |
) |
|
|
(84,152 |
) |
|
|
(196,400 |
) |
|
|
(160,400 |
) |
Proceeds from sale of property and equipment |
|
|
|
|
|
19,553 |
|
|
|
19,465 |
|
|
|
32,323 |
|
|
|
44,180 |
|
Proceeds from sale of assets held for sale |
|
|
|
|
|
2,193 |
|
|
|
2,380 |
|
|
|
3,436 |
|
|
|
17,486 |
|
Purchases of intangible assets |
|
|
9 |
|
|
|
(3,894 |
) |
|
|
(655 |
) |
|
|
(4,356 |
) |
|
|
(1,645 |
) |
Business combinations, net of cash acquired |
|
|
5 |
|
|
|
(805,260 |
) |
|
|
(30,309 |
) |
|
|
(914,221 |
) |
|
|
(115,052 |
) |
Purchases of investments |
|
|
|
|
|
- |
|
|
|
(4,352 |
) |
|
|
- |
|
|
|
(4,352 |
) |
Proceeds from sale of investments |
|
|
|
|
|
- |
|
|
|
85,728 |
|
|
|
19,068 |
|
|
|
89,212 |
|
Others |
|
|
|
|
|
(1,223 |
) |
|
|
(453 |
) |
|
|
(321 |
) |
|
|
(609 |
) |
Net cash used in investing activities |
|
|
|
|
|
(907,492 |
) |
|
|
(12,348 |
) |
|
|
(1,060,471 |
) |
|
|
(131,180 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows (used in) from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt |
|
|
11 |
|
|
|
- |
|
|
|
- |
|
|
|
500,000 |
|
|
|
- |
|
Repayment of long-term debt |
|
|
11 |
|
|
|
(29,998 |
) |
|
|
(9,002 |
) |
|
|
(38,195 |
) |
|
|
(22,497 |
) |
Net (decrease) increase in revolving facilities |
|
|
11 |
|
|
|
(83,838 |
) |
|
|
36,789 |
|
|
|
32,096 |
|
|
|
36,789 |
|
Repayment of lease liabilities |
|
|
12 |
|
|
|
(44,730 |
) |
|
|
(31,229 |
) |
|
|
(79,306 |
) |
|
|
(62,564 |
) |
(Decrease) increase of other financial liabilities |
|
|
|
|
|
(295 |
) |
|
|
653 |
|
|
|
(3,145 |
) |
|
|
(3,297 |
) |
Dividends paid |
|
|
|
|
|
(33,272 |
) |
|
|
(30,637 |
) |
|
|
(66,904 |
) |
|
|
(60,956 |
) |
Repurchase of own shares |
|
|
15 |
|
|
|
(34,179 |
) |
|
|
(112,839 |
) |
|
|
(34,179 |
) |
|
|
(118,835 |
) |
Proceeds from exercise of stock options |
|
|
15 |
|
|
|
8,028 |
|
|
|
2,146 |
|
|
|
10,729 |
|
|
|
8,847 |
|
Share repurchase for settlement of restricted share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
units and performance share units |
|
|
|
|
|
(1,070 |
) |
|
|
(1,056 |
) |
|
|
(28,792 |
) |
|
|
(46,581 |
) |
Net cash from (used in) financing activities |
|
|
|
|
|
(219,354 |
) |
|
|
(145,175 |
) |
|
|
292,304 |
|
|
|
(269,094 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
|
|
|
|
(878,304 |
) |
|
|
42,863 |
|
|
|
(318,936 |
) |
|
|
32,246 |
|
Cash and cash equivalents, beginning of period |
|
|
|
|
|
902,372 |
|
|
|
136,360 |
|
|
|
335,556 |
|
|
|
147,117 |
|
Effect of movements in exchange rates on |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
cash and cash equivalents |
|
|
|
|
|
2,538 |
|
|
|
(1,089 |
) |
|
|
9,986 |
|
|
|
(1,229 |
) |
Cash and cash equivalents, end of period |
|
|
|
|
|
26,606 |
|
|
|
178,134 |
|
|
|
26,606 |
|
|
|
178,134 |
|
* Recasted for change in presentation for consistency with the current year presentation of the effect of movements in exchange rates on cash and cash equivalents.
The notes on pages 7 to 24 are an integral part of these condensed consolidated interim financial statements.
│6
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
TFI International Inc. (the “Company”) is incorporated under the Canada Business Corporations Act, and is a company domiciled in Canada. The address of the Company’s registered office is 8801 Trans-Canada Highway, Suite 500, Montreal, Quebec, H4S 1Z6.
The condensed consolidated interim financial statements of the Company as at and for the three and six months ended June 30, 2024 and 2023 comprise the Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”).
The Group is involved in the provision of transportation and logistics services across the United States, Canada and Mexico.
a)Statement of compliance
These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting of International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These condensed consolidated interim financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with the most recent annual consolidated financial statements of the Group.
These condensed consolidated interim financial statements were authorized for issue by the Board of Directors on July 25, 2024.
These condensed consolidated interim financial statements have been prepared on the historical cost basis except for the following material items in the statements of financial position:
•investment in equity securities, derivative financial instruments and contingent considerations are measured at fair value;
•liabilities for cash-settled share-based payment arrangements are measured at fair value in accordance with IFRS 2;
•the defined benefit pension plan liability is recognized as the net total of the present value of the defined benefit obligation less the fair value of the plan assets; and
•assets and liabilities acquired in business combinations are measured at fair value at acquisition date.
These condensed consolidated interim financial statements are expressed in U.S. dollars, except where otherwise indicated.
c)Seasonality of interim operations
The activities conducted by the Group are subject to general demand for freight transportation. Historically, demand has been relatively stable with the first quarter being generally the weakest in terms of demand. Furthermore, during the harsh winter months, fuel consumption and maintenance costs tend to rise. Consequently, the results of operations for the interim period are not necessarily indicative of the results of operations for the full year.
d)Functional and presentation currency
The Company’s consolidated interim financial statements are presented in U.S. dollars (“U.S. dollars” or “USD”).
The Company’s functional currency is the Canadian dollar (“CAD” or CDN$”). Translation gains and losses from the application of the U.S. dollar as the presentation currency while the Canadian dollar is the functional currency are included as part of the cumulative foreign currency translation adjustment.
All financial information presented in U.S. dollars has been rounded to the nearest thousand.
e)Use of estimates and judgments
The preparation of the accompanying financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions about future events. These estimates and the underlying assumptions affect the reported amounts of assets and liabilities, the disclosures about contingent assets and liabilities, and the reported amounts of revenues and expenses. Such estimates include the valuation of goodwill and intangible assets, the measurement of identifiable assets and liabilities acquired in business combinations, income tax provisions, defined benefit obligation, the self-insurance and other provisions, and contingencies. These estimates and assumptions are based on management’s best estimates and judgments.
│7
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. Actual results could differ from these estimates. Changes in those estimates and assumptions resulting from changes in the economic environment will be reflected in the financial statements of future periods.
In preparing these condensed consolidated interim financial statements, the significant judgments made by management applying the Group’s accounting policies and the key sources of estimation uncertainty are the same as those applied and described in the Group’s 2023 annual consolidated financial statements.
3.Material accounting policies
The accounting policies described in the Group’s 2023 annual consolidated financial statements have been applied consistently to all periods presented in these condensed consolidated interim financial statements, unless otherwise indicated in note 3. The accounting policies have been applied consistently by Group entities.
New standards and interpretations adopted during the period
The following new standards, and amendments to standards and interpretations, are effective for the first time for interim periods beginning on or after January 1, 2024 and have been applied in preparing these condensed consolidated interim financial statements.
Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
On January 23, 2020, the IASB issued amendments to IAS 1 Presentation of Financial Statements (the 2020 amendments), to clarify the classification of liabilities as current or non-current. On October 31, 2022, the IASB issued Non-current Liabilities with Covenants (Amendments to IAS 1) (the 2022 amendments), to improve the information a company provides about long-term debt with covenants. The 2020 amendments and the 2022 amendments (collectively “the Amendments”) are effective for annual periods beginning on or after January 1, 2024.
For the purposes of non-current classification, the Amendments removed the requirement for a right to defer settlement or roll over of a liability for at least twelve months to be unconditional. Instead, such a right must exist at the end of the reporting period and have substance. The Amendments reconfirmed that only covenants with which a company must comply on or before the reporting date affect the classification of a liability as current or non-current. Covenants with which a company must comply after the reporting date do not affect a liability’s classification at that date. The Amendments also clarify how a company classifies a liability that includes a counterparty conversion option. The Amendments state that:
•the settlement of a liability includes transferring a company’s own equity instruments to the counterparty; and
•when classifying liabilities as current or non-current a company can ignore only those conversion options that are recognized as equity.
The adoption of the amendments did not have a material impact on the Group’s condensed consolidated interim financial statements.
Lease Liability in a Sale and Leaseback
On September 22, 2022, the IASB issued Lease Liability in a Sale and Leaseback (Amendments to IFRS 16). The amendments are effective for annual periods beginning on or after January 1, 2024. The amendment introduces a new accounting model which impacts how a seller-lessee accounts for variable lease payments that arise in a sale-and-leaseback transaction. The amendments clarify that on initial recognition, the seller-lessee includes variable lease payments when it measures a lease liability arising from a sale-and-leaseback transaction and after initial recognition, the seller-lessee applies the general requirements for subsequent accounting of the lease liability such that it recognizes no gain or loss relating to the right of use it retains. The amendments need to be applied retrospectively, which require seller-lessees to reassess and potentially restate sale-and-leaseback transactions entered into since implementation of IFRS 16 in 2019.
│8
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
The adoption of the amendments did not have a material impact on the Group’s condensed consolidated interim financial statements.
New standards and interpretations not yet adopted
The following new standards are not yet effective, and have not been applied in preparing these condensed consolidated interim financial statements:
Presentation and Disclosure in Financial Statements – IFRS 18
On April 9, 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements to improve reporting of financial performance. IFRS 18 replaces IAS 1 Presentation of Financial Statements. It carries forward many requirements from IAS 1 unchanged. IFRS 18 applies for annual reporting periods beginning on or after January 1, 2027. Earlier application is permitted.
The new Accounting Standard introduces significant changes to the structure of a company’s income statement, more discipline and transparency in presentation of management's own performance measures (commonly referred to as 'non-GAAP measures,') and less aggregation of items into large, single numbers. The main impacts of the new Accounting Standard include:
•introducing a newly defined ‘operating profit’ subtotal and a requirement for all income and expenses to be allocated between three new distinct categories based on a company’s main business activities (i.e. operating, investing and financing);
•requiring disclosure about management performance measures (MPMs); and
•adding new principles for aggregation and disaggregation of information
The extent of the impact of adoption of the amendments has not yet been determined.
The Group operates within the transportation and logistics industry in the United States, Canada and Mexico, in different reportable segments, as described below. The reportable segments are managed independently as they require different technology and capital resources. For each of the operating segments, the Group’s CEO reviews internal management reports.
In the second quarter of fiscal 2024, it was determined that Package and Courier operating segment should be aggregated with the Canadian Less-Than-Truckload and U.S. Less-Than-Truckload operating segments, forming the Less-Than-Truckload reportable segment. Comparative information has been recast to be consistent with current reportable segments.
The following summary describes the operations in each of the Group’s reportable segments:
|
|
|
|
Less-Than-Truckload (a): |
Pickup, consolidation, transport and delivery of smaller loads. |
Truckload (b): |
Full loads carried directly from the customer to the destination using a closed van or specialized equipment to meet customers’ specific needs. Includes expedited transportation, flatbed, tank, container and dedicated services. |
Logistics: |
Asset-light logistics services, including brokerage, freight forwarding and transportation management, as well as small package parcel delivery. |
a)The Less-Than-Truckload reporting segment represents the aggregation of the Canadian Less-Than-Truckload, U.S. Less-Than-Truckload and Package and Courier operating segments. The aggregation of the segment was analyzed using management’s judgment in accordance with IFRS 8. The operating segments were determined to be similar, amongst others, with respect to the nature of services offered and the methods used to distribute their services. Additionally, they have similar economic characteristics with respect to long-term expected gross margin, levels of capital invested and market place trends.
b)The Truckload reporting segment represents the aggregation of the Canadian Conventional Truckload and Specialized Truckload operating segments. The aggregation of the segment was analyzed using management’s judgment in accordance with IFRS 8. The operating segments were determined to be similar, amongst others, with respect to the nature of services offered and the methods used to distribute their services. Additionally, they have similar economic characteristics with respect to long-term expected gross margin, levels of capital invested and market place trends.
Information regarding the results of each reportable segment is included below. Performance is measured based on segment operating income or loss. This measure is included in the internal management reports that are reviewed by the Group’s CEO and refers to “Operating income (loss)” in the consolidated statements of income. Segment operating income or loss is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.
│9
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Than- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Truckload(2) |
|
|
Truckload |
|
|
Logistics |
|
|
Corporate |
|
|
Eliminations(2) |
|
|
Total |
|
Three months ended June 30, 2024 |
|
Revenue(1) |
|
|
794,158 |
|
|
|
737,687 |
|
|
|
442,393 |
|
|
|
- |
|
|
|
(13,118 |
) |
|
|
1,961,120 |
|
Fuel surcharge(1) |
|
|
163,955 |
|
|
|
114,227 |
|
|
|
28,228 |
|
|
|
- |
|
|
|
(2,985 |
) |
|
|
303,425 |
|
Total revenue(1) |
|
|
958,113 |
|
|
|
851,914 |
|
|
|
470,621 |
|
|
|
- |
|
|
|
(16,103 |
) |
|
|
2,264,545 |
|
Operating income (loss) |
|
|
109,918 |
|
|
|
83,329 |
|
|
|
50,590 |
|
|
|
(35,722 |
) |
|
|
- |
|
|
|
208,115 |
|
Selected items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization |
|
|
54,557 |
|
|
|
81,875 |
|
|
|
14,908 |
|
|
|
1,200 |
|
|
|
- |
|
|
|
152,540 |
|
Gain, net of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
impairment on sale of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
assets held for sale |
|
|
274 |
|
|
|
7 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
281 |
|
Intangible assets |
|
|
422,343 |
|
|
|
1,431,031 |
|
|
|
757,713 |
|
|
|
50 |
|
|
|
- |
|
|
|
2,611,137 |
|
Total assets |
|
|
2,744,072 |
|
|
|
3,449,232 |
|
|
|
1,146,768 |
|
|
|
109,042 |
|
|
|
- |
|
|
|
7,449,114 |
|
Total liabilities |
|
|
845,817 |
|
|
|
771,428 |
|
|
|
327,191 |
|
|
|
2,875,081 |
|
|
|
(123 |
) |
|
|
4,819,394 |
|
Additions to property |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and equipment |
|
|
51,676 |
|
|
|
64,925 |
|
|
|
2,060 |
|
|
|
200 |
|
|
|
- |
|
|
|
118,861 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, 2023 |
|
Revenue(1) |
|
|
787,687 |
|
|
|
410,680 |
|
|
|
361,767 |
|
|
|
- |
|
|
|
(10,683 |
) |
|
|
1,549,451 |
|
Fuel surcharge(1) |
|
|
157,163 |
|
|
|
69,099 |
|
|
|
17,705 |
|
|
|
- |
|
|
|
(2,152 |
) |
|
|
241,815 |
|
Total revenue(1) |
|
|
944,850 |
|
|
|
479,779 |
|
|
|
379,472 |
|
|
|
- |
|
|
|
(12,835 |
) |
|
|
1,791,266 |
|
Operating income (loss) |
|
|
107,776 |
|
|
|
66,183 |
|
|
|
32,893 |
|
|
|
(14,435 |
) |
|
|
- |
|
|
|
192,417 |
|
Selected items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization |
|
|
48,957 |
|
|
|
48,735 |
|
|
|
10,352 |
|
|
|
130 |
|
|
|
- |
|
|
|
108,174 |
|
Loss on sale of land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and buildings |
|
|
(36 |
) |
|
|
(4 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(40 |
) |
Gain, net of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
impairment on sale of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
assets held for sale |
|
|
308 |
|
|
|
32 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
340 |
|
Intangible assets |
|
|
357,279 |
|
|
|
788,931 |
|
|
|
529,045 |
|
|
|
137 |
|
|
|
- |
|
|
|
1,675,392 |
|
Total assets |
|
|
2,611,538 |
|
|
|
1,836,752 |
|
|
|
782,469 |
|
|
|
260,662 |
|
|
|
- |
|
|
|
5,491,421 |
|
Total liabilities |
|
|
791,898 |
|
|
|
395,693 |
|
|
|
225,209 |
|
|
|
1,532,014 |
|
|
|
(128 |
) |
|
|
2,944,686 |
|
Additions to property |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and equipment |
|
|
55,188 |
|
|
|
28,219 |
|
|
|
722 |
|
|
|
23 |
|
|
|
- |
|
|
|
84,152 |
|
(1) Includes intersegment revenue and intersegment fuel surcharge
(2) Recasted for changes in aggregation in the current year. Specifically, “Package and Courier” was presented separately in previous periods is now aggregated within “Less-Than-Truckload”. The remaining amounts remain the same, except for resultant changes to the Eliminations.
│10
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Than- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Truckload(2) |
|
|
Truckload |
|
|
Logistics |
|
|
Corporate |
|
|
Eliminations(2) |
|
|
Total |
|
Six months ended June 30, 2024 |
|
Revenue(1) |
|
|
1,577,678 |
|
|
|
1,135,418 |
|
|
|
884,298 |
|
|
|
- |
|
|
|
(24,773 |
) |
|
|
3,572,621 |
|
Fuel surcharge(1) |
|
|
327,201 |
|
|
|
186,090 |
|
|
|
54,932 |
|
|
|
- |
|
|
|
(5,484 |
) |
|
|
562,739 |
|
Total revenue(1) |
|
|
1,904,879 |
|
|
|
1,321,508 |
|
|
|
939,230 |
|
|
|
- |
|
|
|
(30,257 |
) |
|
|
4,135,360 |
|
Operating income (loss) |
|
|
194,949 |
|
|
|
124,792 |
|
|
|
90,772 |
|
|
|
(50,842 |
) |
|
|
- |
|
|
|
359,671 |
|
Selected items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization |
|
|
107,161 |
|
|
|
130,821 |
|
|
|
30,175 |
|
|
|
1,392 |
|
|
|
- |
|
|
|
269,549 |
|
Gain (loss), net of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
impairment on sale of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
assets held for sale |
|
|
487 |
|
|
|
(27 |
) |
|
|
36 |
|
|
|
- |
|
|
|
- |
|
|
|
496 |
|
Intangible assets |
|
|
422,343 |
|
|
|
1,431,031 |
|
|
|
757,713 |
|
|
|
50 |
|
|
|
- |
|
|
|
2,611,137 |
|
Total assets |
|
|
2,744,072 |
|
|
|
3,449,232 |
|
|
|
1,146,768 |
|
|
|
109,042 |
|
|
|
- |
|
|
|
7,449,114 |
|
Total liabilities |
|
|
845,817 |
|
|
|
771,428 |
|
|
|
327,191 |
|
|
|
2,875,081 |
|
|
|
(123 |
) |
|
|
4,819,394 |
|
Additions to property |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and equipment |
|
|
106,562 |
|
|
|
86,697 |
|
|
|
2,788 |
|
|
|
353 |
|
|
|
- |
|
|
|
196,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, 2023 |
|
Revenue(1) |
|
|
1,590,235 |
|
|
|
824,805 |
|
|
|
717,018 |
|
|
|
- |
|
|
|
(22,180 |
) |
|
|
3,109,878 |
|
Fuel surcharge(1) |
|
|
347,649 |
|
|
|
155,069 |
|
|
|
33,280 |
|
|
|
- |
|
|
|
(4,433 |
) |
|
|
531,565 |
|
Total revenue(1) |
|
|
1,937,884 |
|
|
|
979,874 |
|
|
|
750,298 |
|
|
|
- |
|
|
|
(26,613 |
) |
|
|
3,641,443 |
|
Operating income |
|
|
193,039 |
|
|
|
136,679 |
|
|
|
64,603 |
|
|
|
(35,502 |
) |
|
|
- |
|
|
|
358,819 |
|
Selected items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
amortization |
|
|
95,241 |
|
|
|
96,585 |
|
|
|
20,135 |
|
|
|
268 |
|
|
|
- |
|
|
|
212,229 |
|
Gain on sale of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
land and buildings |
|
|
(36 |
) |
|
|
(4 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(40 |
) |
Gain (loss), net of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
impairment on sale of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
assets held for sale |
|
|
3,182 |
|
|
|
3,409 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,591 |
|
Intangible assets |
|
|
357,279 |
|
|
|
788,931 |
|
|
|
529,045 |
|
|
|
137 |
|
|
|
- |
|
|
|
1,675,392 |
|
Total assets |
|
|
2,611,538 |
|
|
|
1,836,752 |
|
|
|
782,469 |
|
|
|
260,662 |
|
|
|
- |
|
|
|
5,491,421 |
|
Total liabilities |
|
|
791,898 |
|
|
|
395,693 |
|
|
|
225,209 |
|
|
|
1,532,014 |
|
|
|
(128 |
) |
|
|
2,944,686 |
|
Additions to property |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and equipment |
|
|
114,637 |
|
|
|
43,404 |
|
|
|
895 |
|
|
|
148 |
|
|
|
- |
|
|
|
159,084 |
|
(1) Includes intersegment revenue and intersegment fuel surcharge
(2) Recasted for changes in presentation for consistency with the current year presentation: “Package and Courier” presented separately in previous periods is now presented within “Less-Than-Truckload”.
Geographical information
Revenue is attributed to geographical locations based on the origin of service location.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Than- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Truckload(1) |
|
|
Truckload |
|
|
Logistics |
|
|
Eliminations(1) |
|
|
Total |
|
Three months ended June 30, 2024 |
|
Canada |
|
|
294,284 |
|
|
|
304,549 |
|
|
|
65,329 |
|
|
|
(9,331 |
) |
|
|
654,831 |
|
United States |
|
|
663,829 |
|
|
|
547,365 |
|
|
|
405,292 |
|
|
|
(6,772 |
) |
|
|
1,609,714 |
|
Total |
|
|
958,113 |
|
|
|
851,914 |
|
|
|
470,621 |
|
|
|
(16,103 |
) |
|
|
2,264,545 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, 2023 |
|
Canada |
|
|
287,656 |
|
|
|
278,946 |
|
|
|
66,990 |
|
|
|
(6,345 |
) |
|
|
627,247 |
|
United States |
|
|
657,194 |
|
|
|
200,833 |
|
|
|
312,482 |
|
|
|
(6,490 |
) |
|
|
1,164,019 |
|
Total |
|
|
944,850 |
|
|
|
479,779 |
|
|
|
379,472 |
|
|
|
(12,835 |
) |
|
|
1,791,266 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, 2024 |
|
Canada |
|
|
573,562 |
|
|
|
576,320 |
|
|
|
127,643 |
|
|
|
(17,507 |
) |
|
|
1,260,017 |
|
United States |
|
|
1,331,317 |
|
|
|
745,188 |
|
|
|
811,587 |
|
|
|
(12,750 |
) |
|
|
2,875,343 |
|
Total |
|
|
1,904,879 |
|
|
|
1,321,508 |
|
|
|
939,230 |
|
|
|
(30,257 |
) |
|
|
4,135,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, 2023 |
|
Canada |
|
|
581,216 |
|
|
|
571,584 |
|
|
|
131,295 |
|
|
|
(13,744 |
) |
|
|
1,270,351 |
|
United States |
|
|
1,356,668 |
|
|
|
408,290 |
|
|
|
619,003 |
|
|
|
(12,869 |
) |
|
|
2,371,092 |
|
Total |
|
|
1,937,884 |
|
|
|
979,874 |
|
|
|
750,298 |
|
|
|
(26,613 |
) |
|
|
3,641,443 |
|
(1) Recasted for changes in presentation for consistency with the current year presentation: “Package and Courier” presented separately in previous periods is now presented within “Less-Than-Truckload”.
│11
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
Segment assets are based on the geographical location of the assets.
|
|
|
|
|
|
|
|
|
|
|
As at |
|
|
As at |
|
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
Property and equipment, right-of-use assets and intangible assets |
|
|
|
|
|
|
Canada |
|
|
2,268,734 |
|
|
|
2,208,595 |
|
United States |
|
|
3,856,975 |
|
|
|
2,651,808 |
|
|
|
|
6,125,709 |
|
|
|
4,860,403 |
|
In line with the Group’s growth strategy, the Group acquired eight businesses during 2024, of which Daseke Inc. ("Daseke") was considered material. All other acquisitions were not considered to be material. These transactions were concluded in order to add density in the Group’s current network and further expand value-added services.
On April 1, 2024, the Group completed the acquisition of Daseke, Inc. The purchase price for the business acquisition totaled $817.0 million, which was funded by a $500.0 million term loan obtained and the remaining balance was drawn from cash on hand, and the Group absorbed $314.7 million of equipment financing debt in the acquisition. During the six months ended June 30, 2024, the business contributed revenue and net income of $371.0 million and $5.5 million, respectively since the acquisition.
Had the Group acquired Daseke on January 1, 2024, as per management’s best estimates, the revenue and net income for this entity would have been $727.8 million and $7.1 million, respectively. In determining these estimated amounts, management assumed that the fair value adjustments that arose on the date of acquisition would have been the same had the acquisitions occurred on January 1, 2024 and adjusted for interest, based on the purchase price and average borrowing rate of the Group, and income tax expense based on the effective tax rate of the entity.
During the six months ended June 30, 2024, the non-material businesses, in aggregate, contributed revenue and net income of $55.5 million and $1.3 million, respectively, since the acquisitions.
Had the Group acquired the non-material businesses on January 1, 2024, as per management’s best estimates, the revenue and net income for these entities would have been $86.2 million and $4.3 million, respectively. In determining these estimated amounts, management assumed that the fair value adjustments that arose on the date of acquisition would have been the same had the acquisitions occurred on January 1, 2024 and adjusted for interest, based on the purchase price and average borrowing rate of the Group, and income tax expense based on the effective tax rate of the entity.
During the six months ended June 30, 2024, $0.5 million of transaction costs (2023 – $0.2 million) have been expensed in other operating expenses in the consolidated statements of income in relation to the above-mentioned business acquisitions.
As of the reporting date, the Group had not yet completed the determination of the fair value of assets acquired and liabilities assumed of the 2024 acquisitions. Information to confirm the fair value of certain assets and liabilities still needs to be obtained for these acquisitions. As the Group obtains more information, the allocation will be completed.
│12
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
The table below presents the determination of the fair value of assets acquired and liabilities assumed based on the best information available to the Group to date:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Identifiable assets acquired and liabilities assumed |
|
Note |
|
|
Daseke |
|
|
Others |
|
|
June 30, 2024 |
|
Cash and cash equivalents |
|
|
|
|
|
46,242 |
|
|
|
31,937 |
|
|
|
78,179 |
|
Trade and other receivables |
|
|
|
|
|
173,389 |
|
|
|
22,110 |
|
|
|
195,499 |
|
Inventoried supplies and prepaid expenses |
|
|
|
|
|
32,611 |
|
|
|
3,202 |
|
|
|
35,813 |
|
Property and equipment |
|
|
7 |
|
|
|
577,825 |
|
|
|
42,266 |
|
|
|
620,091 |
|
Right-of-use assets |
|
|
8 |
|
|
|
113,385 |
|
|
|
9,161 |
|
|
|
122,546 |
|
Intangible assets |
|
|
9 |
|
|
|
60,233 |
|
|
|
44,505 |
|
|
|
104,738 |
|
Other assets |
|
|
|
|
|
3,093 |
|
|
|
(17 |
) |
|
|
3,076 |
|
Trade and other payables |
|
|
|
|
|
(100,716 |
) |
|
|
(16,909 |
) |
|
|
(117,625 |
) |
Income tax payable |
|
|
|
|
|
(58 |
) |
|
|
(242 |
) |
|
|
(300 |
) |
Employee benefits |
|
|
|
|
|
(194 |
) |
|
|
- |
|
|
|
(194 |
) |
Provisions |
|
|
|
|
|
(54,681 |
) |
|
|
- |
|
|
|
(54,681 |
) |
Other non-current liabilities |
|
|
|
|
|
(213 |
) |
|
|
- |
|
|
|
(213 |
) |
Long-term debt |
|
|
11 |
|
|
|
(314,671 |
) |
|
|
- |
|
|
|
(314,671 |
) |
Lease liabilities |
|
|
12 |
|
|
|
(113,385 |
) |
|
|
(9,161 |
) |
|
|
(122,546 |
) |
Deferred tax liabilities |
|
|
|
|
|
(96,434 |
) |
|
|
(10,783 |
) |
|
|
(107,217 |
) |
Total identifiable net assets |
|
|
|
|
|
326,426 |
|
|
|
116,069 |
|
|
|
442,495 |
|
Total consideration transferred |
|
|
|
|
|
816,958 |
|
|
|
179,892 |
|
|
|
996,850 |
|
Goodwill |
|
|
9 |
|
|
|
490,532 |
|
|
|
63,823 |
|
|
|
554,355 |
|
Cash |
|
|
|
|
|
816,958 |
|
|
|
175,442 |
|
|
|
992,400 |
|
Contingent consideration |
|
|
|
|
|
- |
|
|
|
4,450 |
|
|
|
4,450 |
|
Total consideration transferred |
|
|
|
|
|
816,958 |
|
|
|
179,892 |
|
|
|
996,850 |
|
The fair values measured on the amounts regarding Daseke are on a provisional basis, mainly regarding tangible assets, intangible assets, provisions and current and deferred tax liabilities. This is mainly due to pending completion and review of independent valuations and due to the complexity of the information for the tax provisions. The fair values will be revised as more information is obtained about the facts and circumstances that existed at the date of acquisition.
The total trade receivables comprise gross amounts due of $198.3 million, of which $2.8 million was expected to be uncollectible at the acquisition date.
The goodwill is attributable mainly to the premium of an established business operation with a good reputation in the transportation industry, and the synergies expected to be achieved from integrating the acquired entity into the Group’s existing business.
The goodwill arising in the business combinations has been allocated to operating segments as indicated in the table below, which represents the lowest level at which goodwill is monitored internally.
|
|
|
|
|
|
Operating segment |
Reportable segment |
|
June 30, 2024 |
|
U.S. Less-Than-Truckload |
Less-Than-Truckload |
|
|
29,425 |
|
Canadian Truckload |
Truckload |
|
|
477 |
|
Specialized Truckload |
Truckload |
|
|
519,585 |
|
Logistics |
Logistics |
|
|
4,868 |
|
|
|
|
|
554,355 |
|
│13
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
c)Contingent consideration
The contingent consideration for the six months ended June 30, 2024 relates to non-material business acquisitions and is recorded in the original determination of the fair value of assets acquired and liabilities assumed. The fair value was determined using expected cash flows. These considerations are contingent on achieving specified earnings levels in future periods. The maximum amount payable is $4.5 million in less than one year.
The contingent consideration balance at June 30, 2024 is $15.6 million (December 31, 2023 - $13.2 million) and is presented in other financial liabilities on the consolidated statements of financial position.
d)Adjustment to the provisional amounts of prior year’s business combinations
The 2023 annual consolidated financial statements included details of the Group’s business combinations and set out provisional fair values relating to the consideration paid and net assets acquired of various acquisitions. These acquisitions were accounted for under the provisions of IFRS 3.
As required by IFRS 3, the provisional fair values have been reassessed in light of information obtained during the measurement period following the acquisition. No material adjustments were required to the provisional fair values for these prior period business combinations during the six months ended June 30, 2024.
6.Additional cash flow information
Net change in non-cash operating working capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months |
|
|
Three months |
|
|
Six months |
|
|
Six months |
|
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
Trade and other receivables |
|
|
25,040 |
|
|
|
61,261 |
|
|
|
4,810 |
|
|
|
153,280 |
|
Inventoried supplies |
|
|
1,403 |
|
|
|
(1,764 |
) |
|
|
2,151 |
|
|
|
1,088 |
|
Prepaid expenses |
|
|
1,302 |
|
|
|
(10,117 |
) |
|
|
(3,421 |
) |
|
|
(21,490 |
) |
Trade and other payables |
|
|
(53,518 |
) |
|
|
(49,394 |
) |
|
|
(64,307 |
) |
|
|
(82,055 |
) |
|
|
|
(25,773 |
) |
|
|
(14 |
) |
|
|
(60,767 |
) |
|
|
50,823 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land and |
|
|
Rolling |
|
|
|
|
|
|
|
|
Note |
|
|
buildings |
|
|
stock |
|
|
Equipment |
|
|
Total |
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2023 |
|
|
|
|
|
1,383,977 |
|
|
|
1,758,200 |
|
|
|
192,371 |
|
|
|
3,334,548 |
|
Additions through business combinations |
|
|
5 |
|
|
|
112,029 |
|
|
|
498,187 |
|
|
|
9,875 |
|
|
|
620,091 |
|
Other additions |
|
|
|
|
|
33,379 |
|
|
|
143,981 |
|
|
|
19,040 |
|
|
|
196,400 |
|
Disposals |
|
|
|
|
|
(5,410 |
) |
|
|
(79,531 |
) |
|
|
(5,206 |
) |
|
|
(90,147 |
) |
Reclassification to assets held for sale |
|
|
|
|
|
(32,925 |
) |
|
|
(23,212 |
) |
|
|
- |
|
|
|
(56,137 |
) |
Effect of movements in exchange rates |
|
|
|
|
|
(14,267 |
) |
|
|
(23,540 |
) |
|
|
(7,363 |
) |
|
|
(45,170 |
) |
Balance at June 30, 2024 |
|
|
|
|
|
1,476,783 |
|
|
|
2,274,085 |
|
|
|
208,717 |
|
|
|
3,959,585 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated Depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2023 |
|
|
|
|
|
105,401 |
|
|
|
690,232 |
|
|
|
123,443 |
|
|
|
919,076 |
|
Depreciation |
|
|
|
|
|
12,581 |
|
|
|
128,805 |
|
|
|
10,587 |
|
|
|
151,973 |
|
Disposals |
|
|
|
|
|
(5,406 |
) |
|
|
(53,701 |
) |
|
|
(3,175 |
) |
|
|
(62,282 |
) |
Reclassification to assets held for sale |
|
|
|
|
|
(2,035 |
) |
|
|
(18,383 |
) |
|
|
- |
|
|
|
(20,418 |
) |
Effect of movements in exchange rates |
|
|
|
|
|
(2,205 |
) |
|
|
(12,682 |
) |
|
|
(3,596 |
) |
|
|
(18,483 |
) |
Balance at June 30, 2024 |
|
|
|
|
|
108,336 |
|
|
|
734,271 |
|
|
|
127,259 |
|
|
|
969,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net carrying amounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2023 |
|
|
|
|
|
1,278,576 |
|
|
|
1,067,968 |
|
|
|
68,928 |
|
|
|
2,415,472 |
|
At June 30, 2024 |
|
|
|
|
|
1,368,447 |
|
|
|
1,539,814 |
|
|
|
81,458 |
|
|
|
2,989,719 |
|
As at June 30, 2024, there are no amounts included in trade and other payables for the purchases of property and equipment (December 31, 2023 – nil).
│14
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land and |
|
|
Rolling |
|
|
|
|
|
|
|
|
Note |
|
|
buildings |
|
|
stock |
|
|
Equipment |
|
|
Total |
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2023 |
|
|
|
|
|
588,359 |
|
|
|
290,358 |
|
|
|
3,814 |
|
|
|
882,531 |
|
Other additions |
|
|
|
|
|
27,461 |
|
|
|
42,471 |
|
|
|
516 |
|
|
|
70,448 |
|
Additions through business combinations |
|
|
5 |
|
|
|
73,774 |
|
|
|
47,318 |
|
|
|
1,454 |
|
|
|
122,546 |
|
Derecognition* |
|
|
|
|
|
(4,082 |
) |
|
|
(33,802 |
) |
|
|
(246 |
) |
|
|
(38,130 |
) |
Effect of movements in exchange rates |
|
|
|
|
|
(13,589 |
) |
|
|
(8,665 |
) |
|
|
(11 |
) |
|
|
(22,265 |
) |
Balance at June 30, 2024 |
|
|
|
|
|
671,923 |
|
|
|
337,680 |
|
|
|
5,527 |
|
|
|
1,015,130 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2023 |
|
|
|
|
|
330,515 |
|
|
|
124,677 |
|
|
|
1,709 |
|
|
|
456,901 |
|
Depreciation |
|
|
|
|
|
39,092 |
|
|
|
41,270 |
|
|
|
698 |
|
|
|
81,060 |
|
Derecognition* |
|
|
|
|
|
(4,035 |
) |
|
|
(31,353 |
) |
|
|
(245 |
) |
|
|
(35,633 |
) |
Effect of movements in exchange rates |
|
|
|
|
|
(8,027 |
) |
|
|
(3,998 |
) |
|
|
(26 |
) |
|
|
(12,051 |
) |
Balance at June 30, 2024 |
|
|
|
|
|
357,545 |
|
|
|
130,596 |
|
|
|
2,136 |
|
|
|
490,277 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net carrying amounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2023 |
|
|
|
|
|
257,844 |
|
|
|
165,681 |
|
|
|
2,105 |
|
|
|
425,630 |
|
At June 30, 2024 |
|
|
|
|
|
314,378 |
|
|
|
207,084 |
|
|
|
3,391 |
|
|
|
524,853 |
|
* Derecognized right-of-use assets include negotiated asset purchases and extinguishments resulting from accidents as well as fully amortized or end of term right-of-use assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer |
|
|
Trademarks |
|
|
compete |
|
|
Information |
|
|
|
|
Note |
|
Goodwill |
|
|
relationships |
|
|
and other |
|
|
agreements |
|
|
technology |
|
|
Total |
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2023 |
|
|
|
|
1,562,129 |
|
|
|
757,195 |
|
|
|
62,672 |
|
|
|
23,319 |
|
|
|
39,305 |
|
|
|
2,444,620 |
|
Additions through business combinations |
|
|
5 |
|
|
554,355 |
|
|
|
69,043 |
|
|
|
32,726 |
|
|
|
2,676 |
|
|
|
293 |
|
|
|
659,093 |
|
Other additions |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,356 |
|
|
|
4,356 |
|
Extinguishments |
|
|
|
|
- |
|
|
|
- |
|
|
|
(4,432 |
) |
|
|
(288 |
) |
|
|
(2,149 |
) |
|
|
(6,869 |
) |
Effect of movements in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
exchange rates |
|
|
|
|
(31,045 |
) |
|
|
(9,307 |
) |
|
|
(883 |
) |
|
|
(451 |
) |
|
|
(517 |
) |
|
|
(42,203 |
) |
Balance at June 30, 2024 |
|
|
|
|
2,085,439 |
|
|
|
816,931 |
|
|
|
90,083 |
|
|
|
25,256 |
|
|
|
41,288 |
|
|
|
3,058,997 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization and impairment losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2023 |
|
|
|
|
79,052 |
|
|
|
286,828 |
|
|
|
25,119 |
|
|
|
11,873 |
|
|
|
22,447 |
|
|
|
425,319 |
|
Amortization |
|
|
|
|
- |
|
|
|
28,269 |
|
|
|
2,938 |
|
|
|
1,871 |
|
|
|
3,438 |
|
|
|
36,516 |
|
Extinguishments |
|
|
|
|
- |
|
|
|
- |
|
|
|
(4,432 |
) |
|
|
(288 |
) |
|
|
(2,149 |
) |
|
|
(6,869 |
) |
Effect of movements in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
exchange rates |
|
|
|
|
(1,630 |
) |
|
|
(4,390 |
) |
|
|
(441 |
) |
|
|
(192 |
) |
|
|
(453 |
) |
|
|
(7,106 |
) |
Balance at June 30, 2024 |
|
|
|
|
77,422 |
|
|
|
310,707 |
|
|
|
23,184 |
|
|
|
13,264 |
|
|
|
23,283 |
|
|
|
447,860 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net carrying amounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2023 |
|
|
|
|
1,483,077 |
|
|
|
470,367 |
|
|
|
37,553 |
|
|
|
11,446 |
|
|
|
16,858 |
|
|
|
2,019,301 |
|
At June 30, 2024 |
|
|
|
|
2,008,017 |
|
|
|
506,224 |
|
|
|
66,899 |
|
|
|
11,992 |
|
|
|
18,005 |
|
|
|
2,611,137 |
|
|
|
|
|
|
|
|
|
|
|
|
As at |
|
|
As at |
|
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
Level 1 investments |
|
|
2,756 |
|
|
|
31,557 |
|
Level 2 investments |
|
|
4,301 |
|
|
|
4,339 |
|
Level 3 investments |
|
|
13,857 |
|
|
|
14,313 |
|
|
|
|
20,914 |
|
|
|
50,209 |
|
The Group elected to designate all of its investments as at fair value through OCI.
During the six months ended June 30, 2024, the Group sold Level 1 investments for proceeds of $19.1 million resulting in a realized loss of 8.2M$ on equity securities transferred from OCI to retained earnings.
│15
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
As at |
|
|
As at |
|
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
Non-current liabilities |
|
|
|
|
|
|
Unsecured revolving facilities |
|
|
52,426 |
|
|
|
22,166 |
|
Unsecured term loan |
|
|
399,059 |
|
|
|
- |
|
Unsecured senior notes |
|
|
1,652,383 |
|
|
|
1,652,049 |
|
Conditional sales contracts |
|
|
225,537 |
|
|
|
31,278 |
|
Other long-term debt |
|
|
4,156 |
|
|
|
4,338 |
|
|
|
|
2,333,561 |
|
|
|
1,709,831 |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Current portion of unsecured term loan |
|
|
100,000 |
|
|
|
- |
|
Current portion of unsecured debenture |
|
|
146,210 |
|
|
|
151,023 |
|
Current portion of other long-term debt |
|
|
360 |
|
|
|
354 |
|
Current portion of conditional sales contracts |
|
|
105,103 |
|
|
|
22,974 |
|
|
|
|
351,673 |
|
|
|
174,351 |
|
The table below summarizes changes to the long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended |
|
|
Six months ended |
|
|
|
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
Balance at beginning of period |
|
|
|
|
|
1,884,182 |
|
|
|
1,315,757 |
|
Proceeds from long-term debt |
|
|
|
|
|
500,000 |
|
|
|
- |
|
Business combinations |
|
|
5 |
|
|
|
314,671 |
|
|
|
- |
|
Repayment of long-term debt |
|
|
|
|
|
(38,195 |
) |
|
|
(22,497 |
) |
Net increase in revolving facilities |
|
|
|
|
|
32,096 |
|
|
|
36,789 |
|
Amortization of deferred financing fees |
|
|
|
|
|
856 |
|
|
|
652 |
|
Effect of movements in exchange rates |
|
|
|
|
|
(60,476 |
) |
|
|
30,072 |
|
Effect of movements in exchange rates - debt |
|
|
|
|
|
|
|
|
|
designated as net investment hedge |
|
|
|
|
|
52,100 |
|
|
|
(23,971 |
) |
Balance at end of period |
|
|
|
|
|
2,685,234 |
|
|
|
1,336,802 |
|
On March 22, 2024, the Group amended its revolving credit facility, including the addition of a $500.0 million term loan and an extension. Under the new amendment, the revolving credit facility was extended to March 22, 2027. The new agreement also provides the Company with a non-revolving term loan for $500.0 million maturing in 1 to 3 years, $100.0 million each in year one and year two and $300.0 million in year three. Based on certain ratios, the interest rate on the term loan is the sum of SOFR, plus an applicable margin, which can vary between 128 basis points and 190 basis points. The applicable margin on the credit facility is currently 1.4%. Deferred financing fees of $1.3 million were recognized on the increase. The amendment also includes the adoption of the Canadian Interest Rate Benchmark Reform, resulting in the replacement of the banker’s acceptance rate in Canada with the Canadian Overnight Repo Rate Average (CORRA), a measure of the cost of overnight general collateral funding in Canadian Dollars using Government of Canada treasury bills and bonds as collateral for repurchase transactions. The change did not have a material impact on the Group’s financial statements. The debt amendment is subject to the same covenants as previously required by the Company’s syndicated revolving credit agreement as described in note 26(f) of the 2023 annual audited consolidated financial statements.
The Group’s revolving facilities have a total size of $948.0 million at June 30, 2024 (December 31, 2023 – $951.4 million) and an additional $184.1 million of credit availability (CAD $245.0 million and USD $5.0 million). The additional credit is available under certain conditions under the Group’s syndicated revolving credit agreement.
The debt issuances described above are subject to certain covenants regarding the maintenance of financial ratios. These are the same covenants as previously required by the Company’s syndicated revolving credit agreement as described in note 26(f) of the 2023 annual audited consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
As at |
|
|
As at |
|
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
Current portion of lease liabilities |
|
|
160,148 |
|
|
|
127,397 |
|
Long-term portion of lease liabilities |
|
|
400,239 |
|
|
|
332,761 |
|
|
|
|
560,387 |
|
|
|
460,158 |
|
│16
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
The table below summarizes changes to the lease liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended |
|
|
Six months ended |
|
|
|
Note |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
Balance at beginning of period |
|
|
|
|
|
460,158 |
|
|
|
413,039 |
|
Business combinations |
|
|
5 |
|
|
|
122,546 |
|
|
|
5,524 |
|
Additions |
|
|
|
|
|
70,448 |
|
|
|
48,294 |
|
Derecognition* |
|
|
|
|
|
(2,456 |
) |
|
|
(10,594 |
) |
Repayment |
|
|
|
|
|
(79,306 |
) |
|
|
(62,564 |
) |
Effect of movements in exchange rates |
|
|
|
|
|
(11,003 |
) |
|
|
6,581 |
|
Balance at end of period |
|
|
|
|
|
560,387 |
|
|
|
400,280 |
|
* Derecognized lease liabilities include negotiated asset purchases and extinguishments resulting from accidents.
Extension options
Some real estate leases contain extension options exercisable by the Group. Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The Group assesses at the lease commencement date whether it is reasonably certain to exercise the extension options. The Group reassesses whether it is reasonably certain to exercise the options if there are significant events or significant changes in circumstances within its control.
The lease liabilities include future lease payments of $23.8 million (December 31, 2023 – $7.9 million) related to extension options that the Group is reasonably certain to exercise.
The Group has estimated that the potential future lease payments, should it exercise the remaining extension options, would result in an increase in lease liabilities of $434.9 million (December 31, 2023 - $375.0 million).
The Group does not have a significant exposure to termination options and penalties.
Contractual cash flows
The total contractual cash flow maturities of the Group’s lease liabilities are as follows:
|
|
|
|
|
|
|
As at |
|
|
|
June 30, 2024 |
|
Less than 1 year |
|
|
182,880 |
|
Between 1 and 5 years |
|
|
356,463 |
|
More than 5 years |
|
|
93,972 |
|
|
|
|
633,315 |
|
│17
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
The Group has various benefit plans, mainly TForce Freight pension plans and TFI International pension plans, under which participants are entitled to benefits once participation requirements are satisfied. Additional information relating to the retirement benefit plans is provided in Note 16 - Employee benefits of the Group’s 2023 annual audited consolidated financial statements.
Net periodic benefit cost and pension contributions are as follows for the TForce Freight pension plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months |
|
|
Three months |
|
|
Six months |
|
|
Six months |
|
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
Current service cost |
|
|
15,532 |
|
|
|
12,522 |
|
|
|
31,069 |
|
|
|
29,980 |
|
Net interest cost (income) |
|
|
395 |
|
|
|
(260 |
) |
|
|
789 |
|
|
|
(516 |
) |
Net periodic benefit cost |
|
|
15,927 |
|
|
|
12,262 |
|
|
|
31,858 |
|
|
|
29,464 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension contributions |
|
|
5,000 |
|
|
|
- |
|
|
|
10,000 |
|
|
|
- |
|
The pension plan is funded in line with the statutory funding requirements of the Employee Retirement Income Security Act.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Self-insurance |
|
|
Other |
|
|
Total |
|
As at June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
Current provisions |
|
|
|
|
69,423 |
|
|
|
13,907 |
|
|
|
83,330 |
|
Non-current provisions |
|
|
|
|
116,001 |
|
|
|
19,185 |
|
|
|
135,186 |
|
|
|
|
|
|
185,424 |
|
|
|
33,092 |
|
|
|
218,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
Current provisions |
|
|
|
|
46,940 |
|
|
|
19,625 |
|
|
|
66,565 |
|
Non-current provisions |
|
|
|
|
76,705 |
|
|
|
16,630 |
|
|
|
93,335 |
|
|
|
|
|
|
123,645 |
|
|
|
36,255 |
|
|
|
159,900 |
|
Self-insurance provisions represent the uninsured portion of outstanding claims at period-end. Other provisions include mainly litigation provisions of $19.2 million (December 31, 2023 - $16.6 million) and environmental remediation liabilities of $4.5 million (December 31, 2023 - $9.7 million). Litigation provisions contain various pending claims for which management uses judgment and assumptions about future events. The outcomes will depend on future claim developments.
15.Share capital and other components of equity
The following table summarizes the number of common shares issued:
|
|
|
|
|
|
|
|
|
|
|
|
|
(in number of shares) |
|
|
|
|
Six months |
|
|
Six months |
|
|
|
|
|
|
ended |
|
|
ended |
|
|
|
Note |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
Balance, beginning of period |
|
|
|
|
|
84,441,733 |
|
|
|
86,539,559 |
|
Repurchase and cancellation of own shares |
|
|
|
|
|
(250,000 |
) |
|
|
(1,109,900 |
) |
Stock options exercised |
|
|
17 |
|
|
|
412,750 |
|
|
|
371,820 |
|
Balance, end of period |
|
|
|
|
|
84,604,483 |
|
|
|
85,801,479 |
|
The following table summarizes the share capital issued and fully paid:
|
|
|
|
|
|
|
|
|
|
|
Six months |
|
|
Six months |
|
|
|
ended |
|
|
ended |
|
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
Balance, beginning of period |
|
|
1,107,290 |
|
|
|
1,089,229 |
|
Repurchase and cancellation of own shares |
|
|
(2,761 |
) |
|
|
(12,065 |
) |
Cash consideration of stock options exercised |
|
|
10,729 |
|
|
|
8,847 |
|
Ascribed value credited to share capital on stock options exercised, net of tax |
|
|
2,269 |
|
|
|
3,231 |
|
Issuance of shares on settlement of RSUs and PSUs, net of tax |
|
|
17,630 |
|
|
|
29,185 |
|
Balance, end of period |
|
|
1,135,157 |
|
|
|
1,118,427 |
|
│18
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
Pursuant to the normal course issuer bid (“NCIB”) which began on November 2, 2023 and ending on November 1, 2024, the Company is authorized to repurchase for cancellation up to a maximum of 7,161,046 of its common shares under certain conditions. As at June 30, 2024, and since the inception of this NCIB, the Company has repurchased and cancelled 1,035,140 shares.
During the six months ended June 30, 2024, the Company repurchased 250,000 common shares at a weighted average price of $136.72 per share for a total purchase price of $34.2 million relating to the NCIB. During the six months ended June 30, 2023, the Company repurchased 1,109,900 common shares at a weighted average price of $107.07 per share for a total purchase price of $118.8 million relating to a previous NCIB. The excess of the purchase price paid over the carrying value of the shares repurchased, net of tax, in the amount of $31.4 million (2023 – $106.8 million) was charged to retained earnings as share repurchase premium.
Basic earnings per share
The basic earnings per share and the weighted average number of common shares outstanding have been calculated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of dollars and number of shares) |
|
Three months |
|
|
Three months |
|
|
Six months |
|
|
Six months |
|
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
Net income |
|
|
117,769 |
|
|
|
128,234 |
|
|
|
210,616 |
|
|
|
240,152 |
|
Issued common shares, beginning of period |
|
|
84,555,210 |
|
|
|
86,771,197 |
|
|
|
84,441,733 |
|
|
|
86,539,559 |
|
Effect of stock options exercised |
|
|
105,408 |
|
|
|
43,080 |
|
|
|
126,164 |
|
|
|
217,693 |
|
Effect of repurchase of own shares |
|
|
(161,099 |
) |
|
|
(679,238 |
) |
|
|
(80,549 |
) |
|
|
(400,102 |
) |
Weighted average number of common shares |
|
|
84,499,519 |
|
|
|
86,135,039 |
|
|
|
84,487,348 |
|
|
|
86,357,150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share – basic (in dollars) |
|
|
1.39 |
|
|
|
1.49 |
|
|
|
2.49 |
|
|
|
2.78 |
|
Diluted earnings per share
The diluted earnings per share and the weighted average number of common shares outstanding after adjustment for the effects of all dilutive common shares have been calculated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of dollars and number of shares) |
|
Three months |
|
|
Three months |
|
|
Six months |
|
|
Six months |
|
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
Net income |
|
|
117,769 |
|
|
|
128,234 |
|
|
|
210,616 |
|
|
|
240,152 |
|
Weighted average number of common shares |
|
|
84,499,519 |
|
|
|
86,135,039 |
|
|
|
84,487,348 |
|
|
|
86,357,150 |
|
Dilutive effect: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock options, restricted share units |
|
|
|
|
|
|
|
|
|
|
|
|
and performance share units |
|
|
624,922 |
|
|
|
989,778 |
|
|
|
760,045 |
|
|
|
1,179,973 |
|
Weighted average number of diluted common shares |
|
|
85,124,441 |
|
|
|
87,124,817 |
|
|
|
85,247,393 |
|
|
|
87,537,123 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - diluted (in dollars) |
|
|
1.38 |
|
|
|
1.47 |
|
|
|
2.47 |
|
|
|
2.74 |
|
As at June 30, 2024, 768 stock options were excluded from the calculation of diluted earnings per share (June 30, 2023 – nil) as these were deemed to be anti-dilutive.
The average market value of the Company’s shares for purposes of calculating the dilutive effect of stock options was based on quoted market prices for the period during which the options were outstanding.
17.Share-based payment arrangements
Stock option plan (equity-settled)
The Company offers a stock option plan for the benefit of certain of its employees. The maximum number of shares that can be issued upon the exercise of options granted under the current 2012 stock option plan is 5,979,201. Each stock option entitles its holder to receive one common share upon exercise. The exercise price payable for each option is determined by the Board of Directors at the date of grant, and may not be less than the volume weighted average trading price of the Company’s shares for the last five trading days immediately preceding the grant date. The options vest in equal installments over three years and the expense is recognized following the accelerated method as each installment is fair valued separately and recorded over the respective vesting periods.
│19
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
The table below summarizes the changes in the outstanding stock options:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of options |
|
Three months |
|
|
Three months |
|
|
Six months |
|
|
Six months |
|
and in dollars) |
|
|
|
|
ended |
|
|
|
|
|
ended |
|
|
|
|
|
ended |
|
|
|
|
|
ended |
|
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
|
|
|
|
Weighted |
|
|
|
|
|
Weighted |
|
|
|
|
|
Weighted |
|
|
|
|
|
Weighted |
|
|
|
Number |
|
|
average |
|
|
Number |
|
|
average |
|
|
Number |
|
|
average |
|
|
Number |
|
|
average |
|
|
|
of |
|
|
exercise |
|
|
of |
|
|
exercise |
|
|
of |
|
|
exercise |
|
|
of |
|
|
exercise |
|
|
|
options |
|
|
price |
|
|
options |
|
|
price |
|
|
options |
|
|
price |
|
|
options |
|
|
price |
|
Balance, beginning of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
period |
|
|
676 |
|
|
|
29.83 |
|
|
|
1,011 |
|
|
|
29.02 |
|
|
|
790 |
|
|
|
29.17 |
|
|
|
1,302 |
|
|
|
27.89 |
|
Exercised |
|
|
(299 |
) |
|
|
28.30 |
|
|
|
(81 |
) |
|
|
27.57 |
|
|
|
(413 |
) |
|
|
27.44 |
|
|
|
(372 |
) |
|
|
24.75 |
|
Balance, end of period |
|
|
377 |
|
|
|
31.05 |
|
|
|
930 |
|
|
|
29.14 |
|
|
|
377 |
|
|
|
31.05 |
|
|
|
930 |
|
|
|
29.14 |
|
Options exercisable, end of period |
|
|
|
|
|
|
377 |
|
|
|
31.05 |
|
|
|
901 |
|
|
|
28.78 |
|
The following table summarizes information about stock options outstanding and exercisable at June 30, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of options and in dollars) |
|
Options outstanding and exercisable |
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
average |
|
|
|
|
|
Number |
|
|
remaining |
|
|
|
|
|
of |
|
|
contractual life |
|
Exercise prices |
|
options |
|
|
(in years) |
|
|
23.70 |
|
|
|
|
17 |
|
|
|
0.6 |
|
|
30.71 |
|
|
|
|
334 |
|
|
|
1.7 |
|
|
40.41 |
|
|
|
|
26 |
|
|
|
3.1 |
|
|
|
|
|
|
377 |
|
|
|
1.7 |
|
Of the options outstanding at June 30, 2024, a total of 355,527 (December 31, 2023 - 726,572) are held by key management personnel.
The weighted average share price at the date of exercise for stock options exercised in the six months ended June 30, 2024 was $140.70 (June 30, 2023 – $118.63).
For the three and six months ended June 30, 2024, the Group recognized no compensation expense (June 30, 2023 - $0.1 and $0.2 million).
No stock options were granted during the three and six months ended June 30, 2024 or June 30, 2023 under the Company’s stock option plan.
Deferred share unit plan for board members (cash-settled)
In 2024, quarterly amounts are paid fully in cash to the board members on the 2nd Thursday following each quarter. Until December 31, 2023, in addition, an equity portion of compensation was awarded, comprised of restricted share units granted annually effective on the date of each Annual Meeting, with a vesting period of one year.
Until December 31, 2020, the Company offered a deferred share unit (“DSU”) plan for its board members. Under this plan, board members could elect to receive cash, DSUs or a combination of both for their compensation. The following table provides the number of DSUs related to this plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in units) |
|
Three months |
|
|
Three months |
|
|
Six months |
|
|
Six months |
|
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
Balance, beginning of period |
|
|
- |
|
|
|
259,050 |
|
|
|
- |
|
|
|
310,128 |
|
Paid |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(51,925 |
) |
Forfeited |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(170 |
) |
Dividends paid in units |
|
|
- |
|
|
|
785 |
|
|
|
- |
|
|
|
1,802 |
|
Balance, end of period |
|
|
- |
|
|
|
259,835 |
|
|
|
- |
|
|
|
259,835 |
|
│20
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
For the three and six months ended June 30, 2024, the Group recognized, as a result of the cash-settled director compensation plan, a compensation expense of $0.8 million and $1.1 million respectively (June 30, 2023 – $0.3 million and $0.6 million). In personnel expenses, the Group recognized no mark-to-market gain or loss on DSUs for the three and six months ended June 30, 2024 (June 30, 2023 – gain of $1.9 million and loss of $3.2 million). As at June 30, 2024, the total carrying amount of liabilities for cash-settled arrangements recorded in trade and other payables amounted to $2.9 million following the settlement of all outstanding DSUs in 2023 of which $2.9 million remains payable (December 31, 2023 - $2.9 million).
Performance contingent restricted share unit and performance share unit plans (equity-settled)
The Company offers an equity incentive plan for the benefit of senior employees of the Group. Each participant’s annual LTIP allocation is split in two equally weighted awards of restricted share units (‘’RSUs’’) and of performance share units (“PSUs”). The RSUs are only subject to a time cliff vesting condition on the third anniversary of the award whereas the PSUs are subject to both performance and time cliff vesting conditions on the third anniversary of the award. The performance conditions attached to the PSUs are equally weighted between absolute earnings before interest and income tax and relative total shareholder return (“TSR”). For purposes of the relative TSR portion, there are two equally weighted comparisons: the first portion is compared against the TSR of a group of transportation industry peers and the second portion is compared against the S&P/TSX60 index.
Restricted share units
On February 8, 2024, the Company granted a total of 45,850 RSUs under the Company’s equity incentive plan of which 30,842 were granted to key management personnel. The fair value of the RSUs is determined to be the share price fair value at the date of the grant and is recognized as a share-based compensation expense, through contributed surplus, over the vesting period. The fair value of the RSUs granted was $135.00 per unit.
On February 6, 2023, the Company granted a total of 55,400 RSUs under the Company’s equity incentive plan of which 38,275 were granted to key management personnel. The fair value of the RSUs is determined to be the share price fair value at the date of the grant and is recognized as a share-based compensation expense, through contributed surplus, over the vesting period. The fair value of the RSUs granted was $115.51 per unit.
On April 26, 2023, the Company granted a total of 7,632 RSUs under the Company’s equity incentive plan of which 7,632 were granted to the directors under the director compensation plan. The fair value of the RSUs is determined to be the share price fair value at the date of the grant and is recognized as a share-based compensation expense, through contributed surplus, over the vesting period. The fair value of the RSUs granted was $117.85 per unit.
The table below summarizes changes to the outstanding RSUs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of RSUs |
Three months |
|
|
Three months |
|
|
Six months |
|
|
Six months |
|
and in dollars) |
|
|
|
|
ended |
|
|
|
|
|
ended |
|
|
|
|
|
ended |
|
|
|
|
|
ended |
|
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
|
|
|
|
Weighted |
|
|
|
|
|
Weighted |
|
|
|
|
|
Weighted |
|
|
|
|
|
Weighted |
|
|
|
Number |
|
|
average |
|
|
Number |
|
|
average |
|
|
Number |
|
|
average |
|
|
Number |
|
|
average |
|
|
|
of |
|
|
grant date |
|
|
of |
|
|
grant date |
|
|
of |
|
|
grant date |
|
|
of |
|
|
grant date |
|
|
|
RSUs |
|
|
fair value |
|
|
RSUs |
|
|
fair value |
|
|
RSUs |
|
|
fair value |
|
|
RSUs |
|
|
fair value |
|
Balance, beginning of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
period |
|
|
165 |
|
|
|
114.67 |
|
|
|
193 |
|
|
|
92.11 |
|
|
|
192 |
|
|
|
93.62 |
|
|
|
272 |
|
|
|
58.33 |
|
Granted* |
|
|
5 |
|
|
|
157.51 |
|
|
|
8 |
|
|
|
117.85 |
|
|
|
51 |
|
|
|
137.21 |
|
|
|
63 |
|
|
|
115.81 |
|
Reinvested |
|
|
- |
|
|
|
- |
|
|
|
1 |
|
|
|
92.43 |
|
|
|
1 |
|
|
|
93.54 |
|
|
|
2 |
|
|
|
74.53 |
|
Settled |
|
|
(8 |
) |
|
|
117.85 |
|
|
|
(11 |
) |
|
|
84.69 |
|
|
|
(79 |
) |
|
|
75.48 |
|
|
|
(145 |
) |
|
|
36.87 |
|
Forfeited |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3 |
) |
|
|
112.69 |
|
|
|
(1 |
) |
|
|
85.37 |
|
Balance, end of period |
|
|
162 |
|
|
|
115.84 |
|
|
|
191 |
|
|
|
93.62 |
|
|
|
162 |
|
|
|
115.84 |
|
|
|
191 |
|
|
|
93.62 |
|
* Granted RSUs for the three months ended June 30, 2024 relate to the conversion of units of Daseke employees.
│21
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
The following table summarizes information about RSUs outstanding as at June 30, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of RSUs and in dollars) |
|
RSUs outstanding |
|
|
|
|
|
|
|
|
Remaining |
|
|
|
|
|
Number of |
|
|
contractual life |
|
Grant date fair value |
|
RSUs |
|
|
(in years) |
|
|
98.27 |
|
|
|
|
57 |
|
|
|
0.6 |
|
|
157.51 |
|
|
|
|
3 |
|
|
|
0.7 |
|
|
157.51 |
|
|
|
|
1 |
|
|
|
1.5 |
|
|
115.51 |
|
|
|
|
54 |
|
|
|
1.6 |
|
|
157.51 |
|
|
|
|
1 |
|
|
|
1.7 |
|
|
135.00 |
|
|
|
|
46 |
|
|
|
2.6 |
|
|
|
|
|
|
162 |
|
|
|
1.5 |
|
The weighted average share price at the date of settlement of the RSUs vested in the six months ended June 30, 2024 was $134.64 (June 30, 2023 – $115.13). The excess of the purchase price paid to repurchase shares on the market over the carrying value of awarded RSUs, in the amount of $10.3 million (June 30, 2023 – $18.1 million), was charged to retained earnings as share repurchase premium.
For the three and six months ended June 30, 2024, the Group recognized, as a result of RSUs, a compensation expense of $1.6 million and $3.2 million respectively (June 30, 2023 - $1.6 million and $3.2 million) with a corresponding increase to contributed surplus.
Of the RSUs outstanding at June 30, 2024, a total of 102,769 (December 31, 2023 – 116,368) are held by key management personnel.
Performance share units
On February 8, 2024, the Company granted a total of 45,850 PSUs under the Company’s equity incentive plan of which 30,842 were granted to key management personnel. The fair value of the PSUs is determined using a Monte Carlo simulation model for the TSR portion and using management’s estimates for the absolute earnings before interest and income tax portion. The estimates related to the absolute earnings before interest and income tax portion are revised during the vesting period and the cumulative amount recognized at each reporting date is based on the number of equity instruments for which service and non-market performance conditions are expected to be satisfied. The share-based compensation expense is recognized, through contributed surplus, over the vesting period. The fair value of the PSUs granted was $156.17 per unit as at grant date as at June 30, 2024.
On February 6, 2023, the Company granted a total of 55,400 PSUs under the Company’s equity incentive plan of which 38,275 were granted to key management personnel. The fair value of the PSUs is determined using a Monte Carlo simulation model for the TSR portion and using management’s estimates for the absolute earnings before interest and income tax portion. The estimates related to the absolute earnings before interest and income tax portion are revised during the vesting period and the cumulative amount recognized at each reporting date is based on the number of equity instruments for which service and non-market performance conditions are expected to be satisfied. The share-based compensation expense is recognized, through contributed surplus, over the vesting period. The fair value of the PSUs granted was $135.15 per unit as at grant date and $131.68 per unit as at June 30, 2024.
The table below summarizes changes to the outstanding PSUs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of PSUs |
|
Three months |
|
|
Three months |
|
|
Six months |
|
|
Six months |
|
and in dollars) |
|
|
|
|
ended |
|
|
|
|
|
ended |
|
|
|
|
|
ended |
|
|
|
|
|
ended |
|
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
|
|
|
|
Weighted |
|
|
|
|
|
Weighted |
|
|
|
|
|
Weighted |
|
|
|
|
|
Weighted |
|
|
|
Number |
|
|
average |
|
|
Number |
|
|
average |
|
|
Number |
|
|
average |
|
|
Number |
|
|
average |
|
|
|
of |
|
|
grant date |
|
|
of |
|
|
grant date |
|
|
of |
|
|
grant date |
|
|
of |
|
|
grant date |
|
|
|
PSUs |
|
|
fair value |
|
|
PSUs |
|
|
fair value |
|
|
PSUs |
|
|
fair value |
|
|
PSUs |
|
|
fair value |
|
Balance, beginning of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
period |
|
|
157 |
|
|
|
127.88 |
|
|
|
184 |
|
|
|
106.27 |
|
|
|
184 |
|
|
|
106.17 |
|
|
|
261 |
|
|
|
62.87 |
|
Granted |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
46 |
|
|
|
156.17 |
|
|
|
55 |
|
|
|
135.15 |
|
Reinvested |
|
|
- |
|
|
|
- |
|
|
|
1 |
|
|
|
106.78 |
|
|
|
1 |
|
|
|
106.72 |
|
|
|
3 |
|
|
|
77.65 |
|
Settled |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(134 |
) |
|
|
89.69 |
|
|
|
(267 |
) |
|
|
32.70 |
|
Added due to performance conditions |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
63 |
|
|
|
89.67 |
|
|
|
134 |
|
|
|
32.93 |
|
Forfeited |
|
|
- |
|
|
|
- |
|
|
|
(1 |
) |
|
|
116.95 |
|
|
|
(3 |
) |
|
|
126.44 |
|
|
|
(2 |
) |
|
|
106.46 |
|
Balance, end of period |
|
|
157 |
|
|
|
127.88 |
|
|
|
184 |
|
|
|
106.22 |
|
|
|
157 |
|
|
|
127.88 |
|
|
|
184 |
|
|
|
106.22 |
|
│22
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
The following table summarizes information about PSUs outstanding as at June 30, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands of PSUs and in dollars) |
|
PSUs outstanding |
|
|
|
|
|
|
|
|
Remaining |
|
|
|
|
|
Number of |
|
|
contractual life |
|
Grant date fair value |
|
PSUs |
|
|
(in years) |
|
|
100.43 |
|
|
|
|
57 |
|
|
|
0.6 |
|
|
135.15 |
|
|
|
|
54 |
|
|
|
1.6 |
|
|
156.17 |
|
|
|
|
46 |
|
|
|
2.6 |
|
|
|
|
|
|
157 |
|
|
|
1.5 |
|
The weighted average share price at the date of settlement of the PSUs vested in the six months ended June 30, 2024 was $133.74. The excess of the purchase price paid to repurchase shares on the market over the carrying value of awarded PSUs, in the amount of $19.8 million, was charged to retained earnings as share repurchase premium (June 30, 2023 – $36.8 million).
For the three and six months ended June 30, 2024, the Group recognized, as a result of PSUs, a compensation expense of $1.6 million and $2.8 million respectively (June 30, 2023 – $1.6 million and $3.2 million) with a corresponding increase to contributed surplus.
Of the PSUs outstanding at June 30, 2024, a total of 102,769 (December 31, 2023 - 116,368) are held by key management personnel.
18.Materials and services expenses
The Group’s materials and services expenses are primarily costs related to independent contractors and vehicle operation expenses. Vehicle operation expenses consist primarily of fuel costs, repairs and maintenance, insurance, permits and operating supplies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months |
|
|
Three months |
|
|
Six months |
|
|
Six months |
|
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
Independent contractors |
|
|
772,946 |
|
|
|
673,911 |
|
|
|
1,433,209 |
|
|
|
1,381,781 |
|
Vehicle operation expenses |
|
|
336,207 |
|
|
|
223,794 |
|
|
|
614,752 |
|
|
|
456,204 |
|
|
|
|
1,109,153 |
|
|
|
897,705 |
|
|
|
2,047,961 |
|
|
|
1,837,985 |
|
19.Finance income and finance costs
Recognized in income or loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs (income) |
|
Three months |
|
|
Three months |
|
|
Six months |
|
|
Six months |
|
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
Interest expense on long-term debt and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
of deferred financing fees |
|
|
36,508 |
|
|
|
12,511 |
|
|
|
58,959 |
|
|
|
24,415 |
|
Interest expense on lease liabilities |
|
|
6,485 |
|
|
|
3,796 |
|
|
|
11,540 |
|
|
|
7,584 |
|
Interest income |
|
|
(1,072 |
) |
|
|
(1,219 |
) |
|
|
(6,224 |
) |
|
|
(2,581 |
) |
Net change in fair value and accretion expense |
|
|
|
|
|
|
|
|
|
|
|
|
of contingent considerations |
|
|
21 |
|
|
|
384 |
|
|
|
52 |
|
|
|
434 |
|
Net foreign exchange loss (gain) |
|
|
1,506 |
|
|
|
(429 |
) |
|
|
2,774 |
|
|
|
(777 |
) |
Other financial expenses |
|
|
3,965 |
|
|
|
3,687 |
|
|
|
7,641 |
|
|
|
6,784 |
|
Net finance costs |
|
|
47,413 |
|
|
|
18,730 |
|
|
|
74,742 |
|
|
|
35,859 |
|
Presented as: |
|
|
|
|
|
|
|
|
|
|
|
|
Finance income |
|
|
(1,072 |
) |
|
|
(1,648 |
) |
|
|
(6,224 |
) |
|
|
(3,358 |
) |
Finance costs |
|
|
48,485 |
|
|
|
20,378 |
|
|
|
80,966 |
|
|
|
39,217 |
|
│23
|
|
TFI International Inc. |
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
(Tabular amounts in thousands of U.S. dollars, unless otherwise noted.) |
PERIODS ENDED JUNE 30, 2024 AND 2023 – (UNAUDITED) |
Income tax recognized in income or loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months |
|
|
Three months |
|
|
Six months |
|
|
Six months |
|
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
Current tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
Current period |
|
|
55,199 |
|
|
|
57,844 |
|
|
|
89,958 |
|
|
|
98,834 |
|
Adjustment for prior periods |
|
|
(1,069 |
) |
|
|
(2 |
) |
|
|
(1,069 |
) |
|
|
(393 |
) |
|
|
|
54,130 |
|
|
|
57,842 |
|
|
|
88,889 |
|
|
|
98,441 |
|
Deferred tax expense (recovery) |
|
|
|
|
|
|
|
|
|
|
|
|
Origination and reversal of temporary differences |
|
|
(13,301 |
) |
|
|
(12,167 |
) |
|
|
(17,392 |
) |
|
|
(16,297 |
) |
Variation in tax rate |
|
|
1,917 |
|
|
|
(139 |
) |
|
|
1,913 |
|
|
|
584 |
|
Adjustment for prior periods |
|
|
187 |
|
|
|
(83 |
) |
|
|
903 |
|
|
|
80 |
|
|
|
|
(11,197 |
) |
|
|
(12,389 |
) |
|
|
(14,576 |
) |
|
|
(15,633 |
) |
Income tax expense |
|
|
42,933 |
|
|
|
45,453 |
|
|
|
74,313 |
|
|
|
82,808 |
|
Reconciliation of effective tax rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months |
|
|
Three months |
|
|
Six months |
|
|
Six months |
|
|
|
ended |
|
|
ended |
|
|
ended |
|
|
ended |
|
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
Income before income tax |
|
|
|
|
160,702 |
|
|
|
|
|
173,687 |
|
|
|
|
|
284,929 |
|
|
|
|
|
322,960 |
|
Income tax using the Company’s |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
statutory tax rate |
|
|
26.5 |
% |
|
42,586 |
|
|
|
26.5 |
% |
|
46,027 |
|
|
|
26.5 |
% |
|
75,506 |
|
|
|
26.5 |
% |
|
85,584 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) resulting from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rate differential between |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
jurisdictions |
|
|
-0.2 |
% |
|
(336 |
) |
|
|
0.0 |
% |
|
(54 |
) |
|
|
0.0 |
% |
|
(129 |
) |
|
|
0.2 |
% |
|
535 |
|
Variation in tax rate |
|
|
1.2 |
% |
|
1,917 |
|
|
|
-0.1 |
% |
|
(139 |
) |
|
|
0.7 |
% |
|
1,913 |
|
|
|
0.2 |
% |
|
584 |
|
Non deductible expenses |
|
|
1.7 |
% |
|
2,689 |
|
|
|
0.3 |
% |
|
522 |
|
|
|
1.3 |
% |
|
3,622 |
|
|
|
0.2 |
% |
|
737 |
|
Tax deductions and tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
exempt income |
|
|
-2.2 |
% |
|
(3,522 |
) |
|
|
-2.1 |
% |
|
(3,568 |
) |
|
|
-2.5 |
% |
|
(7,139 |
) |
|
|
-2.3 |
% |
|
(7,314 |
) |
Adjustment for prior periods |
|
|
-0.5 |
% |
|
(882 |
) |
|
|
0.0 |
% |
|
(85 |
) |
|
|
-0.1 |
% |
|
(166 |
) |
|
|
-0.1 |
% |
|
(313 |
) |
Multi-jurisdiction tax |
|
|
0.3 |
% |
|
481 |
|
|
|
1.6 |
% |
|
2,750 |
|
|
|
0.2 |
% |
|
706 |
|
|
|
0.9 |
% |
|
2,995 |
|
|
|
|
26.7 |
% |
|
42,933 |
|
|
|
26.2 |
% |
|
45,453 |
|
|
|
26.1 |
% |
|
74,313 |
|
|
|
25.6 |
% |
|
82,808 |
|
21.Contingencies, letters of credit and other commitments
There are pending operational and personnel related claims against the Group. In the opinion of management, these claims are adequately provided for in long-term provisions on the consolidated statements of financial position and settlement should not have a significant impact on the Group’s financial position or results of operations.
As at June 30, 2024, the Group had $121.5 million of outstanding letters of credit (December 31, 2023 - $106.2 million).
As at June 30, 2024, the Group had $126.2 million of purchase commitments (December 31, 2023 – $62.3 million) and $55.0 million of purchase orders for leases that the Group intends to enter into (December 31, 2023 – $44.4 million).
│24
EXHIBIT 99.4
FORM 52-109F2
CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE
This certification is being furnished on the same date that TFI International Inc. resubmitted the interim financial statements for the period ended June 30, 2024.
I, Alain Bédard, Chairman of the Board, President and Chief Executive Officer of TFI International Inc., certify the following:
1.Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of TFI International Inc. (the “issuer”) for the interim period ended June 30th, 2024.
2.No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3.Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
4.Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
5.Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
a)designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
i)material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
ii)information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
b)designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the 2013 Internal Control – Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
5.2 ICFR – material weakness relating to design: N/A
.
5.3 Limitation on scope of design: The issuer has disclosed in its interim MD&A
(a)the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of:
(iii)businesses that the issuer acquired not more than 365 days before the last day of the period covered by the interim filings; and
(b)summary financial information about business that the issuer acquired that has been consolidated in the issuer’s financial statements.
6.Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1st, 2024 and ended on June 30th, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
July 26th, 2024
(signed) Alain Bédard
Alain Bédard, FCA, CMA
Chairman of the Board
President and Chief Executive Officer
EXHIBIT 99.5
FORM 52-109F2
CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE
This certification is being furnished on the same date that TFI International Inc. resubmitted the interim financial statements for the period ended June 30, 2024.
I, David Saperstein, Chief Financial Officer of TFI International Inc., certify the following:
1.Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of TFI International Inc. (the “issuer”) for the interim period ended June 30th, 2024.
2.No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3.Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
4.Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
5.Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
a)designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
i)material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
ii)information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
b)designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
5.1Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the 2013 Internal Control – Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
5.2ICFR – material weakness relating to design: N/A.
5.3Limitation on scope of design: The issuer has disclosed in its interim MD&A
(a)the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of:
(iii)businesses that the issuer acquired not more than 365 days before the last day of the period covered by the interim filings; and
(b)summary financial information about business that the issuer acquired that has been consolidated in the issuer’s financial statements.
6.Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1st, 2024 and ended on June 30th, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
July 26th, 2024
(signed) David Saperstein
David Saperstein
Chief Financial Officer
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