EX-4.2





 Exhibit 4.2 
  





 
 CONSOLIDATED FINANCIAL STATEMENTS 

For the years ended 

December 31, 2019 and 2018 













							
	



	 		 		 	
		 	KPMG LLP	 	Telephone	 	(514) 840-2100
		 	600 de Maisonneuve Blvd. West	 	Fax	 	(514) 840-2187
		 	Suite 1500, Tour KPMG	 	Internet	 	www.kpmg.ca
		 	Montréal (Québec) H3A 0A3	 		 	
		 	Canada	 		 	

 INDEPENDENT AUDITORS’ REPORT 

To the Shareholders of TFI International Inc. 
 Opinion 

We have audited the consolidated financial statements of TFI International Inc. (the “Entity”), which comprise: 

 

	•	 	 the consolidated statements of financial position as at December 31, 2019 and 2018 



 

	•	 	 the consolidated statements of income for the years then ended 



 

	•	 	 the consolidated statements of comprehensive income for the years then ended 



 

	•	 	 the consolidated statements of changes in equity for the years then ended 



 

	•	 	 the consolidated statements of cash flows for the years then ended 



 

	•	 	 and notes to the consolidated financial statements, including a summary of significant accounting policies



 (Hereinafter referred to as the “financial statements”) 

In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated financial position of the Entity as at
December 31, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board (IASB). 
 Basis for Opinion 
 We
conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the “Auditors’ Responsibilities for the Audit of the Financial
Statements” section of our auditors’ report. 
 We are independent of the Entity in accordance with the ethical requirements that are
relevant to our audit of the financial statements in Canada and we have fulfilled our other ethical responsibilities in accordance with these requirements. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 

Emphasis of Matter - Change in Accounting Policy 
 We
draw attention to Note 1(s) to the financial statements which indicates that the Entity has changed its accounting policy for leases as of January 1, 2019, due to the adoption of IFRS 16, Leases, and has applied that change using a modified
retrospective transition approach. 
 Our opinion is not modified in respect of this matter. 

KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG 

network of independent member firms affiliated with KPMG International Cooperative 

(“KPMG International”), a Swiss entity. 

KPMG Canada provides services to KPMG LLP. 












 



 
 Page 2 
 Other Information 

Management is responsible for the other information. Other information comprises: 

 

	•	 	 the information included in 2019 Management’s Discussion and Analysis filed with the relevant Canadian Securities
Commissions; 


  

	•	 	 the information, other than the financial statements and the auditors’ report thereon, included in a document
likely to be entitled “2019 Annual Report”. 


 Our opinion on the financial statements does not cover the other information
and we do not and will not express any form of assurance conclusion thereon. 
 In connection with our audit of the financial statements, our
responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit and remain alert for
indications that the other information appears to be materially misstated. 
 We obtained the information included in 2019 Management’s Discussion
and Analysis filed with the relevant Canadian Securities Commissions as at the date of this auditors’ report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other
information, we are required to report that fact in the auditors’ report. 
 We have nothing to report in this regard. 

The information, other than the financial statements and the auditors’ report thereon, included in a document likely to be entitled “2019
Annual Report” is expected to be made available to us after the date of this auditors’ report. If, based on the work we will perform on this other information, we conclude that there is a material misstatement of this other information, we
are required to report that fact to those charged with governance. 
 Responsibilities of Management and Those Charged with Governance for the Financial
Statements 
 Management is responsible for the preparation and fair presentation of the financial statements in accordance with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error. 
 In preparing the financial statements, management is responsible for assessing the Entity’s
ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Entity or to cease operations, or has no realistic
alternative but to do so. 
 Those charged with governance are responsible for overseeing the Entity’s financial reporting process. 












 



 
 Page 3 
 Auditors’ Responsibilities
for the Audit of the Financial Statements 
 Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. 

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing
standards will always detect a material misstatement when it exists. 
 Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. 

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional
skepticism throughout the audit. 
 We also: 
  

	•	 	 Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. 



The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 
  

	•	 	 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity’s internal control. 


  

	•	 	 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management. 


  

	•	 	 Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditors’ report. However, future events or conditions may cause the Entity to cease to continue as a going concern. 


  

	•	 	 Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 


  

	•	 	 Communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 














 



 
 Page 4 
  

	•	 	 Provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. 



 

	•	 	 Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the group Entity to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. 



 
 



 
 The engagement partner on the audit resulting in this auditors’ report is Girolamo Cordi. 

Montréal, Canada 
 February 10, 2020 

 
  
 *CPA auditor, CA, public
accountancy permit No. A109612 












 TFI International Inc. 

Consolidated Financial Statements 
 Years ended December 31, 2019 and 2018 

CONTENTS 
  

					
	 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
	  	 	1	 
		
	 CONSOLIDATED STATEMENTS OF INCOME
	  	 	2	 
		
	 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
	  	 	3	 
		
	 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
	  	 	4	 
		
	 CONSOLIDATED STATEMENTS OF CASH FLOWS
	  	 	5	 
		
	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	  	 	6	 














			
	TFI International Inc.	  	CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
		  	 DECEMBER 31, 2019 AND 2018


  

													
	 (in thousands of Canadian dollars)
	  				  	 	As at	 	  	 	As at	
		  				  	 	December 31,	 	  	 	December 31,	 
	 	  	 	Note	 	  	 	2019	 	  	 	2018	 
	 Assets
	  				  				  			
	 Trade and other receivables
	  	 	7	 	  	 	587,370	 	  	 	631,727	 
	 Inventoried supplies
	  				  	 	13,844	 	  	 	12,755	 
	 Current taxes recoverable
	  				  	 	17,158	 	  	 	13,015	 
	 Prepaid expenses
	  				  	 	36,077	 	  	 	38,546	 
	 Derivative financial instruments
	  	 	26	 	  	 	39	 	  	 	5,430	 
	 Assets held for sale
	  				  	 	4,625	 	  	 	7,572	 
	 Other assets
	  	 	12	 	  	 	24,814	 	  	 	-	 
	 Current assets
	  	 	 	 	  	 	683,927	 	  	 	709,045	 
				
	 Property and equipment
	  	 	9	 	  	 	1,461,707	 	  	 	1,396,389	 
	 Right-of-use assets
	  	 	3, 10	 	  	 	434,017	 	  	 	-	 
	 Intangible assets
	  	 	11	 	  	 	1,954,902	 	  	 	1,901,495	 
	 Other assets
	  	 	12	 	  	 	11,241	 	  	 	33,676	 
	 Deferred tax assets
	  	 	18	 	  	 	11,461	 	  	 	6,409	 
	 Derivative financial instruments
	  	 	26	 	  	 	-	 	  	 	2,946	 
	 Non-current
assets
	  	 	 	 	  	 	3,873,328	 	  	 	3,340,915	 
	 Total assets
	  	 	 	 	  	 	4,557,255	 	  	 	4,049,960	 
				
	 Liabilities
	  				  				  			
	 Bank indebtedness
	  				  	 	3,801	 	  	 	12,334	 
	 Trade and other payables
	  	 	13	 	  	 	443,468	 	  	 	475,585	 
	 Current taxes payable
	  				  	 	6,050	 	  	 	18,951	 
	 Provisions
	  	 	17	 	  	 	23,721	 	  	 	25,063	 
	 Other financial liabilities
	  				  	 	2,654	 	  	 	1,972	 
	 Derivative financial instruments
	  	 	26	 	  	 	843	 	  	 	-	 
	 Long-term debt
	  	 	14	 	  	 	53,647	 	  	 	122,340	 
	 Lease liabilities
	  	 	3, 15	 	  	 	99,133	 	  	 	-	 
	 Current liabilities
	  	 	 	 	  	 	633,317	 	  	 	656,245	 
				
	 Long-term debt
	  	 	14	 	  	 	1,691,040	 	  	 	1,462,083	 
	 Lease liabilities
	  	 	3, 15	 	  	 	362,709	 	  	 	-	 
	 Employee benefits
	  	 	16	 	  	 	18,585	 	  	 	16,130	 
	 Provisions
	  	 	17	 	  	 	29,251	 	  	 	42,801	 
	 Other financial liabilities
	  				  	 	3,649	 	  	 	5,907	 
	 Derivative financial instruments
	  	 	26	 	  	 	888	 	  	 	-	 
	 Deferred tax liabilities
	  	 	18	 	  	 	312,127	 	  	 	289,940	 
	 Non-current
liabilities
	  	 	 	 	  	 	2,418,249	 	  	 	1,816,861	 
	 Total liabilities
	  	 	 	 	  	 	3,051,566	 	  	 	2,473,106	 
				
	 Equity
	  				  				  			
	 Share capital
	  	 	19	 	  	 	680,233	 	  	 	704,510	 
	 Contributed surplus
	  	 	19, 21	 	  	 	21,063	 	  	 	20,448	 
	 Accumulated other comprehensive income
	  				  	 	24,473	 	  	 	64,790	 
	 Retained earnings
	  	 	 	 	  	 	779,920	 	  	 	787,106	 
	 Equity attributable to owners of the Company
	  	 	 	 	  	 	1,505,689	 	  	 	1,576,854	 
				
	 Contingencies, letters of credit and other commitments
	  	 	27	 	  	 	 	 	  	 	 	 
	 Total liabilities and equity
	  	 	 	 	  	 	4,557,255	 	  	 	4,049,960	 

 The notes on pages 6 to 52 are an integral part of these consolidated financial statements. 

On behalf of the Board: 
  

											
	/s/ Alain Bédard  Director	 	/s/ André Bérard  Director	 	                	 
	        Alain Bédard	 	    André Bérard                 	 			


  

			
	



 	 	1















			
	TFI International Inc.	  	CONSOLIDATED STATEMENTS OF INCOME
		  	YEARS ENDED DECEMBER 31, 2019 AND 2018

  
 (In thousands of Canadian
dollars, except per share amounts)     
  

													
	  	  	Note	 	  	2019	 	 	2018	 
	 Revenue
	  				  	 	4,613,629	 	 	 	4,508,197	 
	 Fuel surcharge
	  	 	 	 	  	 	565,235	 	 	 	615,011	 
	 Total revenue
	  	 	 	 	  	 	5,178,864	 	 	 	5,123,208	 
				
	 Materials and services expenses
	  	 	22	 	  	 	2,832,070	 	 	 	2,913,996	 
	 Personnel expenses
	  	 	23	 	  	 	1,297,929	 	 	 	1,253,975	 
	 Other operating expenses
	  				  	 	207,057	 	 	 	279,857	 
	 Depreciation of property and equipment
	  	 	9	 	  	 	223,794	 	 	 	198,492	 
	 Depreciation of right-of-use
assets
	  	 	10	 	  	 	102,573	 	 	 	-	 
	 Amortization of intangible assets
	  	 	11	 	  	 	65,925	 	 	 	62,101	 
	 Impairment of intangible assets
	  	 	11	 	  	 	-	 	 	 	12,559	 
	 Bargain purchase gain
	  	 	5	 	  	 	(10,787	) 	 	 	-	 
	 Gain on sale of rolling stock and equipment
	  				  	 	(20,416	) 	 	 	(10,903	) 
	 Gain on derecognition of
right-of-use assets
	  				  	 	(2,276	) 	 	 	-	 
	 Gain on sale of land and buildings
	  				  	 	(12	) 	 	 	(524	) 
	 Gain on sale of assets held for sale
	  				  	 	(28,613	) 	 	 	(15,620	) 
	 Gain on sale of intangible assets
	  	 	 	 	  	 	-	 	 	 	(1,249	) 
	 Total operating expenses
	  	 	 	 	  	 	4,667,244	 	 	 	4,692,684	 
				
	 Operating income
	  	 	 	 	  	 	511,620	 	 	 	430,524	 
				
	 Finance (income) costs
	  				  				 			
	 Finance income
	  	 	24	 	  	 	(3,001	) 	 	 	(15,353	) 
	 Finance costs
	  	 	24	 	  	 	88,642	 	 	 	63,659	 
	 Net finance costs
	  	 	 	 	  	 	85,641	 	 	 	48,306	 
				
	 Income before income tax
	  				  	 	425,979	 	 	 	382,218	 
	 Income tax expense
	  	 	25	 	  	 	101,503	 	 	 	90,224	 
	 Net income from continuing operations
	  				  	 	324,476	 	 	 	291,994	 
	 Net loss from discontinued operations
	  	 	6	 	  	 	(14,193	) 	 	 	-	 
			
	 Net income for the year attributable to owners of
the Company
	  
	  	 	310,283	 	 	 	291,994	 
				
	 Earnings per share attributable to owners of the Company
	  				  				 			
	 Basic earnings per share
	  	 	20	 	  	 	3.72	 	 	 	3.32	 
	 Diluted earnings per share
	  	 	20	 	  	 	3.63	 	 	 	3.22	 
				
	 Earnings per share from continuing operations attributable to owners of the Company
	  				  				 			
	 Basic earnings per share
	  	 	20	 	  	 	3.89	 	 	 	3.32	 
	 Diluted earnings per share
	  	 	20	 	  	 	3.80	 	 	 	3.22	 
	 	  	 	 	 	  	 	 	 	 	 	 	 

 The notes on pages 6 to 52 are an integral part of these consolidated financial statements. 

  

			
	



 	 	2















			
	TFI International Inc.	  	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
		  	YEARS ENDED DECEMBER 31, 2019 AND 2018

  

									
	(In thousands of Canadian dollars)	  	 	 	 	 	 
	  	  	2019	 	 	2018	 
			
	 Net income for the year attributable to owners of the
Company
	  	 	310,283	 	 	 	291,994	 
			
	 Other comprehensive (loss) income
	  				 			
	 Items that may be reclassified to income or loss in future years:
	  				 			
	 Foreign currency translation differences
	  	 	(52,502	) 	 	 	101,972	 
	 Net investment hedge, net of tax
	  	 	16,115	 	 	 	(26,677	) 
	 Changes in fair value of cash flow hedge, net of tax
	  	 	(9,835	) 	 	 	(2,842	) 
	 Employee benefits, net of tax
	  	 	42	 	 	 	(159	) 
	 Items that may never be reclassified to income or loss in future years:
	  				 			
	 Defined benefit plan remeasurement (losses) gains, net of tax
	  	 	(1,619	) 	 	 	1,181	 
	 Items directly reclassified to retained earnings:
	  				 			
	 Unrealized gain (loss) on investment in equity securities measured at
fair value through OCI, net of tax
	  	 	1,326	 	 	 	(4,693	) 
	 Other comprehensive (loss) income for the year, net of
tax
	  	 	(46,473	) 	 	 	68,782	 
			
	 Total comprehensive income for the year attributable to owners
of the Company
	  	 	263,810	 	 	 	360,776	 

 The notes on pages 6 to 52 are an integral part of these consolidated financial statements. 

  

			
	



 	 	3















			
	TFI International Inc.	  	CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
		  	YEARS ENDED DECEMBER 31, 2019 AND 2018

  

																																					
	
(In thousands of Canadian dollars)
	  	 	Note	 	  	 
	Share
capital	 
 	 	 
	Contributed
surplus	 
 	 	 




 
	Accumulated
unrealized
loss on
employee
benefit
 plans
	 
 
 
 
 
  
	 	 


 
	Accumulated
cash flow
hedge
 gain
	 
 
 
  
	 	 





 
	Accumulated
foreign
currency
translation
differences
and net invest-

ment hedge
	 
 
 
 
 
 
  
	 	 




	Accumulated
unrealized
loss on
investment in
equity
securities	 
 
 
 
 
 	 	 
	Retained
earnings	 
 	 	 



	Total equity
attributable
to owners
of the
Company	 
 
 
 
 
										
	 Balance as at December 31, 2018
	  	 	 	 	  	 	704,510	 	 	 	20,448	 	 	 	(528	) 	 	 	10,210	 	 	 	60,971	 	 	 	(5,863	) 	 	 	787,106	 	 	 	1,576,854	 
										
	 Adjustment on initial application of IFRS 16 (see note 3)
	  				  	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(25,678	) 	 	 	(25,678	) 
										
	 Net income for the year
	  				  	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	310,283	 	 	 	310,283	 
	 Other comprehensive (loss) income for the year, net of tax
	  
	  	 	-	 	 	 	-	 	 	 	42	 	 	 	(9,835	) 	 	 	(36,387	) 	 	 	1,326	 	 	 	(1,619	) 	 	 	(46,473	) 
	 Realized loss on equity securities, net of tax
	  	 	 	 	  	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	4,537	 	 	 	(4,537	) 	 	 	-	 
	 Total comprehensive (loss) income for the year
	  	 	 	 	  	 	-	 	 	 	-	 	 	 	42	 	 	 	(9,835	) 	 	 	(36,387	) 	 	 	5,863	 	 	 	304,127	 	 	 	263,810	 
										
	 Share-based payment transactions
	  	 	21	 	  	 	-	 	 	 	8,269	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	8,269	 
	 Stock options exercised
	  	 	19, 21	 	  	 	27,402	 	 	 	(5,641	) 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	21,761	 
	 Dividends to owners of the Company
	  	 	19	 	  	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(81,145	) 	 	 	(81,145	) 
	 Repurchase of own shares
	  	 	19	 	  	 	(52,633	) 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(203,059	) 	 	 	(255,692	) 
	 Net settlement of restricted share units
	  	 	19, 21	 	  	 	954	 	 	 	(2,013	) 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(1,431	) 	 	 	(2,490	) 
	 Total transactions with owners, recorded directly in equity
	  	 	 	 	  	 	(24,277	) 	 	 	615	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(285,635	) 	 	 	(309,297	) 
										
	 Balance as at December 31, 2019
	  	 	 	 	  	 	680,233	 	 	 	21,063	 	 	 	(486	) 	 	 	375	 	 	 	24,584	 	 	 	-	 	 	 	779,920	 	 	 	1,505,689	 
										
	 Balance as at December 31, 2017
	  	 	 	 	  	 	711,036	 	 	 	21,995	 	 	 	(369	) 	 	 	13,052	 	 	 	(14,324	) 	 	 	(1,170	) 	 	 	684,904	 	 	 	1,415,124	 
										
	 Net income for the year
	  				  	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	291,994	 	 	 	291,994	 
	 Other comprehensive income (loss) for the year, net of
tax
	  
	  	 	-	 	 	 	-	 	 	 	(159	) 	 	 	(2,842	) 	 	 	75,295	 	 	 	(4,693	) 	 	 	1,181	 	 	 	68,782	 
	 Total comprehensive income (loss) for the year
	  	 	 	 	  	 	-	 	 	 	-	 	 	 	(159	) 	 	 	(2,842	) 	 	 	75,295	 	 	 	(4,693	) 	 	 	293,175	 	 	 	360,776	 
										
	 Share-based payment transactions
	  	 	21	 	  	 	-	 	 	 	5,926	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	5,926	 
	 Stock options exercised
	  	 	19, 21	 	  	 	20,840	 	 	 	(4,009	) 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	16,831	 
	 Dividends to owners of the Company
	  	 	19	 	  	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(76,114	) 	 	 	(76,114	) 
	 Repurchase of own shares
	  	 	19	 	  	 	(30,122	) 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(109,500	) 	 	 	(139,622	) 
	 Net settlement of restricted share units
	  	 	19, 21	 	  	 	2,756	 	 	 	(3,464	) 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(5,359	) 	 	 	(6,067	) 
	 Total transactions with owners, recorded directly in equity
	  	 	 	 	  	 	(6,526	) 	 	 	(1,547	) 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(190,973	) 	 	 	(199,046	) 
										
	 Balance as at December 31, 2018
	  	 	 	 	  	 	704,510	 	 	 	20,448	 	 	 	(528	) 	 	 	10,210	 	 	 	60,971	 	 	 	(5,863	) 	 	 	787,106	 	 	 	1,576,854	 

 The notes on pages 6 to 52 are an integral part of these consolidated financial statements. 

  

			
	



 	 	4















			
	 TFI International Inc.
	  	 CONSOLIDATED STATEMENTS OF CASH FLOWS 

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

																	
	 	 	 	 	 	  	 	 	 	    	 	 	 	    	 	 	 
	(In thousands of Canadian dollars)	  	 	 	    	 	 	    	 	 
	 	 	 	 	 	  	Note	 	    	2019	 	    	2018	 
	  
	 
				
	Cash flows from operating activities	  				    				    			
		 	Net income for the year	  				    	 	310,283	 	    	 	291,994 	 
		 	Net loss from discontinued operations	  				    	 	(14,193	) 	    	 	- 	 
		 	  
	 
		 	Net income from continuing operations	  				    	 	324,476	 	    	 	291,994 	 
		 	Adjustments for	  				    				    			
		 		 	Depreciation of property and equipment	  	 	9	 	    	 	223,794	 	    	 	198,492 	 
		 		 	Depreciation of right-of-use assets	  	 	10	 	    	 	102,573	 	    	 	- 	 
	    	 		 	Amortization of intangible assets	  	 	11	 	    	 	65,925	 	    	 	62,101 	 
		 		 	Impairment of intangible assets	  	 	11	 	    	 	-	 	    	 	12,559 	 
		 		 	Share-based payment transactions	  	 	21	 	    	 	8,269	 	    	 	5,926 	 
		 		 	Net finance costs	  	 	24	 	    	 	85,641	 	    	 	48,306 	 
		 		 	Income tax expense	  	 	25	 	    	 	101,503	 	    	 	90,224 	 
		 	    	 	Bargain purchase gain	  	 	5	 	    	 	(10,787	) 	    	 	- 	 
		 		 	Gain on sale of property and equipment	  				    	 	(20,428	) 	    	 	(11,427)	 
		 		 	Gain on derecognition of right-of-use assets	  				    	 	(2,276	) 	    	 	- 	 
		 		 	Gain on sale of assets held for sale	  				    	 	(28,613	) 	    	 	(15,620)	 
		 		 	Gain on sale of intangible assets	  				    	 	-	 	    	 	(1,249)	 
		 		 	Provisions and employee benefits	  				    	 	(4,919	) 	    	 	(8,289)	 
		 		 	  
	 
		 		 		  				    	 	845,158	 	    	 	673,017 	 
		 	Net change in non-cash operating working capital	  	 	8	 	    	 	19,600	 	    	 	12,647 	 
		 	  
	 
		 	Cash generated from operating activities	  
	    	 	864,758	 	    	 	685,664 	 
		 	Interest paid	  				    	 	(86,285	) 	    	 	(62,629)	 
		 	Income tax paid	  				    	 	(113,181	) 	    	 	(79,532)	 
	  
	 
	Net cash from continuing operating activities	  				    	 	665,292	 	    	 	543,503 	 
	  
	 
	Net cash used in discontinued operating activities	  				    	 	(16,176	) 	    	 	- 	 
	  
	 
	Net cash from operating activities	  				    	 	649,116	 	    	 	543,503 	 
	  
	 
				
	Cash flows from investing activities	  				    				    			
		 	Purchases of property and equipment	  	 	9	 	    	 	(346,313	) 	    	 	(314,300)	 
		 	Proceeds from sale of property and equipment	  				    	 	95,180	 	    	 	81,051 	 
		 	Proceeds from sale of assets held for sale	  				    	 	51,918	 	    	 	29,226 	 
		 	Purchases of intangible assets	  	 	11	 	    	 	(4,826	) 	    	 	(4,421)	 
		 	Proceeds from sale of intangible assets	  				    	 	269	 	    	 	2,975 	 
		 	Business combinations, net of cash acquired	  	 	5	 	    	 	(200,401	) 	    	 	(156,487)	 
		 	Purchases of investments	  				    	 	(787	) 	    	 	(604)	 
		 	Proceeds from sale of investments	  				    	 	2,426	 	    	 	- 	 
		 	Others	  				    	 	(440	) 	    	 	68 	 
	  
	 
	Net cash used in continuing investing activities	  				    	 	(402,974	) 	    	 	(362,492)	 
	  
	 
				
	Cash flows from financing activities	  				    				    			
		 	(Decrease) increase in bank indebtedness	  				    	 	(8,494	) 	    	 	3,237 	 
		 	Proceeds from long-term debt	  	 	14	 	    	 	433,600	 	    	 	88,907 	 
		 	Repayment of long-term debt	  	 	14	 	    	 	(252,483	) 	    	 	(67,180)	 
		 	Repayment of lease liabilities	  	 	15	 	    	 	(99,573	) 	    	 	- 	 
		 	Decrease in other financial liabilities	  				    	 	(2,068	) 	    	 	(3,021)	 
		 	Dividends paid	  				    	 	(80,703	) 	    	 	(74,096)	 
		 	Repurchase of own shares	  				    	 	(255,692	) 	    	 	(139,622)	 
		 	Proceeds from exercise of stock options	  	 	19	 	    	 	21,761	 	    	 	16,831 	 
		 	Repurchase of own shares for restricted share unit settlement	  	 	19	 	    	 	(2,490	) 	    	 	(6,067)	 
	  
	 
	Net cash used in continuing financing activities	  				    	 	(246,142	) 	    	 	(181,011)	 
	  
	 
				
	Net change in cash and cash equivalents	  				    	 	-	 	    	 	- 	 
	Cash and cash equivalents, beginning of year	  				    	 	-	 	    	 	- 	 
	  
	 
	Cash and cash equivalents, end of year	  				    	 	-	 	    	 	- 	 
	  
	 

 The notes on pages 6 to 52 are an integral part of these consolidated financial statements. 

  

			
	



 	 	5
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 1.     Reporting entity 

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 consolidated financial statements of the Company as at and for the years ended December 31, 2019 and 2018 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. 

2.     Basis of preparation 

a)     Statement of compliance 

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
(“IFRS”) as issued by the International Accounting Standards Board (“IASB”). 
 These consolidated financial
statements were authorized for issue by the Board of Directors on February 10, 2020. 
 b)     Basis of
measurement 
 These consolidated 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.



 c)     Functional and presentation currency 

These consolidated financial statements are presented in Canadian dollars (“C$” or “CDN$”), which are the
Company’s functional currency. All financial information presented in Canadian dollars has been rounded to the nearest thousand. 

d)     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 identified assets and liabilities acquired in business combinations, income tax provisions and the self-insurance and other provisions and contingencies. These
estimates and assumptions are based on management’s best estimates and judgments. 
 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. 

Information about critical judgments, assumptions and estimation uncertainties that have a significant risk of resulting in a material
adjustment within the next financial year is included in the following notes: 
 Note 5 – Establishing the fair value of assets and
liabilities, intangible assets and goodwill related to business combinations; 
 Note 11 – Determining estimates and assumptions
related to impairment tests for long-lived assets and goodwill; and 
 Note 17 – Determining estimates and assumptions related to
the evaluation of provisions for claims and litigations. 

  

			
	



 	 	6
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 3.     Significant accounting policies 

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements,
unless otherwise indicated. The accounting policies have been applied consistently by Group entities. 
 a)     Basis of
consolidation 
 i)     Business combinations 

The Group measures goodwill as the fair value of the consideration transferred including the fair value of liabilities resulting from
contingent consideration arrangements, less the net recognized amount of the identifiable assets acquired and liabilities assumed, all measured at fair value as of the acquisition date. When the excess is negative, a bargain purchase gain is
recognized immediately in income or loss. 
 Transaction costs, other than those associated with the issue of debt or equity securities,
that the Group incurs in connection with a business combination, are expensed as incurred. 
 ii)    Subsidiaries 

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has the right to, variable
returns from its involvement with the entity and has the ability to affect those through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences
until the date that control ceases. 
 iii)    Transactions eliminated on consolidation 

Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in
preparing the consolidated financial statements. 
 b)     Foreign currency translation 

i)      Foreign currency transactions 

Transactions in foreign currencies are translated to the respective functional currencies of the Group’s entities at exchange rates
at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the exchange rate in effect at the reporting date. The foreign currency gain or loss on monetary items
is the difference between amortized cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortized cost in foreign currency translated at the exchange rate at the end
of the reporting period. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated at the rate in effect on the transaction date. Income and expense
items denominated in foreign currency are translated at the date of the transactions. Gains and losses are included in income or loss. 

ii)     Foreign operations 

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on business combinations, are
translated to Canadian dollars at exchange rates in effect at the reporting date. The income and expenses of foreign operations are translated to Canadian dollars at the average exchange rate in effect during the reporting period. 

Foreign currency differences are recognized in other comprehensive income (“OCI”) in the accumulated foreign currency
translation differences account. 
 When a foreign operation is disposed of, the relevant amount in the cumulative amount of foreign
currency translation differences is transferred to income or loss as part of the income or loss on disposal. On the partial disposal of a subsidiary while retaining control, the relevant proportion of such cumulative amount is reattributed to non-controlling interest. In any other partial disposal of a foreign operation, the relevant proportion is reclassified to income or loss. 

  

			
	



 	 	7
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 Foreign exchange gains or losses arising from a monetary item receivable from or
payable to a foreign operation, the settlement of which is neither planned nor likely to occur in the foreseeable future and which in substance is considered to form part of the net investment in the foreign operation, are recognized in other
comprehensive income in the accumulated foreign currency translation differences account. 
 c)     Financial instruments

 i)      Non-derivative financial assets 

The Group initially recognizes financial assets on the trade date at which the Group becomes a party to the contractual provisions of the
instrument. Financial assets are initially measured at fair value, except for trade receivables which are initially measured at their transaction price when the trade receivables do not contain a significant financing component. If the financial
asset is not subsequently accounted for at fair value through profit or loss, then the initial measurement includes transaction costs that are directly attributable to the asset’s acquisition or origination. On initial recognition, the Group
classifies its financial assets as subsequently measured at either amortized cost or fair value, depending on its business model for managing the financial assets and the contractual cash flow characteristics of the financial assets and depending on
the purpose for which the financial assets were acquired. 
 The Group derecognizes a financial asset when the contractual rights to
the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any
interest in transferred financial assets that is created or retained by the Group is recognized as a separate asset or liability. 

Financial assets and liabilities are offset and the net amount is presented in the statement of financial position when, and only when,
the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. 

Financial assets measured at amortized cost 

A financial asset is subsequently measured at amortized cost, using the effective interest method and net of any impairment loss, if:

  

	 	•	 	 The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows;
and 



	 	•	 	 The contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of
principal and/or interest. 


 The Group currently classifies its cash equivalents, trade and other receivables and
long-term non-trade receivables included in other non-current assets as financial assets measured at amortized cost. 

The Group recognizes loss allowances for expected credit losses on financial assets measured at amortized cost. The Group has a portfolio
of trade receivables at the reporting date. The Group uses a provision matrix to determine the lifetime expected credit losses for the portfolio. 

The Group uses historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for
management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends. 

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount
and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognized in income or loss and reflected in an allowance account against trade and other receivables. 

  

			
	



 	 	8
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 Financial assets measured at fair value 

These assets are measured at fair value and changes therein, including any interest or dividend income, are recognized in income or loss.
However, for investments in equity instruments that are not held for trading, the Group may elect at initial recognition to present gains and losses in other comprehensive income. For such investments measured at fair value through other
comprehensive income, gains and losses are never reclassified to profit or loss, and no impairment is recognized in profit or loss. Dividends earned from such investments are recognized in profit or loss, unless the dividend clearly represents a
repayment of part of the cost of the investment. 
 Financial assets measured at fair value through other comprehensive income

 On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present
subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis. 

ii)    Non-derivative financial liabilities 

The Group initially recognizes debt issued and subordinated liabilities on the date that they are originated. All other financial
liabilities are recognized initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument. 

A financial liability is derecognized when its contractual obligations are discharged or cancelled or expire. 

Financial liabilities are classified into financial liabilities measured at amortized cost and financial liabilities measured at fair
value. 
 Financial liabilities measured at amortized cost 

A financial liability is subsequently measured at amortized cost, using the effective interest method. The Group currently classifies
bank indebtedness, trade and other payables and long-term debt as financial liabilities measured at amortized cost. 
 Financial liabilities
measured at fair value 
 Financial liabilities at fair value are initially recognized at fair value and are re-measured at each reporting date with any changes therein recognized in net earnings. The Group currently classifies its contingent consideration liability in connection with a business acquisition as a financial
liability measured at fair value. 
 iii)    Share capital 

Common shares 

Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares and stock options are
recognized as a deduction from equity, net of any tax effects. 
 When share capital recognized as equity is repurchased, share capital
is reduced by the amount equal to weighted average historical cost of repurchased equity. The excess amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognized as a deduction from equity. 


  

			
	



 	 	9
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 iv)    Derivative financial instruments 

The Group uses derivative financial instruments to manage its foreign currency and interest rate risk exposures. Embedded derivatives are
separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative
would meet the definition of a derivative, and the combined instrument is not measured at fair value through income or loss. 

Derivatives and embedded derivatives are recognized initially at fair value; related transaction costs are recognized in income or loss
as incurred. Subsequent to initial recognition, derivatives and embedded derivatives are measured at fair value, and changes therein are recognized in net change in fair value of foreign exchange derivatives in income or loss with the exception of
net change in fair value of cross currency interest rate swap contracts recognized in net foreign exchange gain or loss in income or loss. 

d)    Hedge accounting 

Management’s risk strategy is focused on reducing the variability in profit or losses and cash flows associated with exposure to
market risks. Hedge accounting is used to reduce this variability to an acceptable level. The hedges employed by the Group reduce the currency and interest rate fluctuation exposures. 

On the initial designation of a hedging relationship, the Group formally documents the relationship between the hedging instrument and the
hedged items, including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship. The Group makes an assessment, both at the
inception of the hedge relationship as well as on an ongoing basis, whether the hedging instruments are expected to be effective in offsetting the changes in the fair value or cash flows of the respective hedged items throughout the period for which
the hedge is designated. 
 Net investment hedge 

The Group designates a portion of its U.S. dollar (“US$”) denominated debt as a hedging item in a net investment hedge. The
Group applies hedge accounting to foreign currency differences arising between the functional currency of the foreign operation and the Company’s functional currency (CDN$), regardless of whether the net investment is held directly or through
an intermediate parent. 
 Foreign currency differences arising on the translation of a financial liability designated as a hedge of a
net investment in foreign operations are recognized in other comprehensive income to the extent that the hedge is effective, and are presented in the currency translation differences account within equity. To the extent that the hedge is
ineffective, such differences are recognized in income or loss. When the hedged net investment is disposed of, the relevant amount in the translation reserve is transferred to income or loss as part of the gain or loss on disposal. 

Cash flow hedges 

When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a particular risk
associated with a recognized asset or liability or a highly probable forecasted transaction that could affect income or loss, the effective portion of changes in the fair value of the derivatives is recognized in other comprehensive income and
presented in accumulated other comprehensive income as part of equity. The amount recognized in other comprehensive income is removed and included in net earnings under the same line item in the consolidated statement of earnings and comprehensive
income as the hedged item, in the same period that the hedged cash flows affect income or loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated, exercised, or the designation is revoked,
then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognized in other comprehensive income remains in accumulated other comprehensive income until the forecasted transaction affects income or loss. If the
forecasted transaction is no longer expected to occur, then the balance in accumulated other comprehensive income is recognized immediately in income or loss. 

  

			
	



 	 	10
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 e)     Property and equipment 

Property and equipment are accounted for at cost less accumulated depreciation and accumulated impairment losses. 

Cost includes expenditures that are directly attributable to the acquisition of the asset, the costs of dismantling and removing the
assets and restoring the site on which they are located, and borrowing costs on qualifying assets. 
 When parts of an item of property
and equipment have different useful lives, they are accounted for as separate items (major components) of property and equipment. 

Gains and losses on disposal of an item of property and equipment are determined by comparing the proceeds from disposal with the carrying
amount of property and equipment, and are recognized in net income or loss. 
 Depreciation is based on the cost of an asset less its
residual value and is recognized in income or loss over the estimated useful life of each component of an item of property and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably
certain that the Group will obtain ownership by the end of the lease term. 
  

					
	The depreciation method and useful lives are as follows:	  		    	
	Categories	  	Basis	    	Useful lives
	Buildings	  	Straight-line	    	15 – 40 years
	Rolling stock	  	Primarily straight-line	    	3 – 20 years
	Equipment	  	Primarily straight-line	    	5 – 12 years


 Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted prospectively, if appropriate. 
 Property and equipment are reviewed for
impairment in accordance with IAS 36 Impairment of Assets when there are indicators that the carrying value may not be recoverable. 

f)     Intangible assets 

i)     Goodwill 

Goodwill that arises upon business combinations is included in intangible assets. 

Goodwill is not amortized and is measured at cost less accumulated impairment losses. 

ii)     Other intangible assets 

Intangible assets consist of customer relationships, trademarks, non-compete agreements and
information technology. 
 Other intangible assets that are acquired by the Group and have finite lives are measured at
cost less accumulated amortization and accumulated impairment losses. 
  

			
	Intangible assets with finite lives are amortized on a straight-line basis over the following estimated useful lives:
	Categories	  	Useful lives
	Customer relationships	  	5 – 20 years
	Trademarks*	  	5 – 20 years
	Non-compete agreements	  	3 – 10 years
	Information technology	  	5 – 7 years
	(*) Includes indefinite useful life assets. They are reviewed at least annually for impairment (see note 11).


 Useful lives are reviewed at each financial year-end and
adjusted prospectively, if appropriate. 
 g)     Leases 

The Group has implemented IFRS 16 using the modified retrospective approach and therefore the comparative information has not been
restated and continues to be reported under IAS 17 and IFRIC 4. The impacts of changes are disclosed in note 3s). 

  

			
	



 	 	11
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 As of January 1, 2019, at inception of a contract, the Group assesses whether a
contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Group assesses whether: 
  

	 	•	 	 the contract involves the use of an identified asset – this may be specific explicitly or implicitly, and should be
physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, the asset is not identified; 



	 	•	 	 the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period
of use; and 



	 	•	 	 the Group has the right to direct the use of the asset. The Group has this right when it has the decision-making rights
that are most relevant to changing how and for what purpose the asset is used. 


 The policy is applied to contracts
entered into, or modified on or after January 1, 2019. 
 At inception or on reassessment of a contract that contains a lease
component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. 

The Group recognizes a right-of-use asset and a lease
liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for
any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset of the site on which it is located, less any
lease incentives received. 
 The assets are depreciated to the earlier of the end of the useful life of the right-of-use asset or the lease term using the straight-line method as this most closely reflects the expected pattern consumption of the future economic benefits. The lease
term includes periods covered by an option to extend if the Group is reasonably certain to exercise that option. In addition, the right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.      
 The
lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that cannot be readily determined, the Group’s
incremental borrowing rate. The incremental borrowing rate is a function of the Group’s incremental borrowing rate, the nature of the underlying asset, the location of the asset and the length of the lease. Generally, the Group uses its
incremental borrowing rate as the discount rate. 
 The lease liability is measured at amortized cost using the effective interest
method. It is remeasured when there is a change in the future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, or if
the Group changes its assessment of whether it will exercise a purchase, extension or termination option. 
 When the lease liability is
remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of
the right-of-use asset has been reduced to zero. 
 The
Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or leases and leases of low-value assets. The Group recognises these lease payments as an expense on a straight-line basis over the lease term. 

Prior to adoption of IFRS 16, the Company applied IAS 17 and IFRIC 4 and leases with terms which indicated that the Group assumed
substantially all the risks and rewards of ownership were classified as finance leases. Upon initial recognition the leased asset were measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments.
Subsequent to initial recognition, the asset was accounted for in accordance with the accounting policy applicable to that asset. 

Other leases were operating leases and the leased assets were not recognized in the Group’s statements of financial position. 

h)     Inventoried supplies 

Inventoried supplies consist primarily of repair parts and fuel and are measured at the lower of cost and net realizable value. 

  

			
	



 	 	12
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 i)     Impairment 

Non-financial assets 

The carrying amounts of the Group’s non-financial assets other than inventoried supplies and
deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill, the recoverable amount is
estimated on December 31 of each year. 
 For the purpose of impairment testing, assets that cannot be tested individually are
grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”, or “CGU”). For
the purposes of goodwill impairment testing, goodwill acquired in a business combination is allocated to the group of CGUs (usually a Group’s operating segment), that is expected to benefit from the synergies of the combination. This allocation
is subject to an operating segment ceiling test and reflects the lowest level at which that goodwill is monitored for internal reporting purposes. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less
costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset or group of assets. 
 The Group’s corporate assets do not generate separate cash inflows. If
there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs. 

An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses
recognized in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units, if any, and then to reduce the carrying amounts of the other assets in the unit (group of units) on a prorata basis. 

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior periods are
assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed
only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Impairment losses and impairment reversals
are recognized in income or loss. 
 j)     Assets held for sale 

Non-current assets are classified as held-for-sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use. 

Such assets are generally measured at the lower of their carrying amount and fair value less costs to sell. Impairment losses on initial
classification as held-for-sale or held-for-distribution and subsequent gains and losses
on remeasurement are recognized in income or loss. 
 Once classified as
held-for-sale, intangible assets and property and equipment are no longer amortized or depreciated. 

k)     Employee benefits 

i)     Defined contribution plans 

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a
separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in income or loss in the periods during which
services are rendered by employees. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available. 

  

			
	



 	 	13
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 ii)     Defined benefit plans 

The Group’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by
estimating the amount of future benefit that employees have earned in return for their services in the current and prior periods discounting that amount and deducting the fair value of any plan assets. The discount rate is the yield at the reporting
date on AA credit-rated bonds that have maturity dates approximating the terms of the Group’s obligations and that are denominated in the same currency in which the benefits are expected to be paid. The calculation is performed annually by a
qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or
reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Group. 

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets
(excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for
the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes
in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss. 

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past
service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs. 

iii) Short-term employee benefits 

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is
provided. A liability is recognized for the amount expected to be paid under short-term cash bonus or income-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the
employee, and the obligation can be estimated reliably. 
 iv) Share-based payment transactions 

The grant date fair value of equity share-based payment awards granted to employees is recognized as a personnel expense,
with a corresponding increase in contributed surplus, over the period that the employees unconditionally become entitled to the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service
conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that do meet the related service condition at the vesting date. 

The fair value of the amount payable to board members in respect of deferred share unit (“DSU”), which are to be
settled in cash, is recognized as an expense with a corresponding increase in liabilities. The liability is remeasured at each reporting date until settlement. Any changes in the fair value of the liability are recognized as finance income or costs
in income or loss. 
 v)    Termination benefits 

Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and
when the Group recognises costs for a restructuring. If benefits are not expected to be fully settled within 12 months of the end of the reporting period, then they are discounted. 

l)     Provisions 

A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the unwinding of the discount is recognized as finance cost. 

  

			
	



 	 	14
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 Self-Insurance 

The self-insurance provision represents an accrual for estimated future disbursements associated with the self-insured portion for claims
filed at year-end and incurred but not reported, related to cargo loss, bodily injury, worker’s compensation and property damages. The estimates are based on the Group’s historical experience
including settlement patterns and payment trends. The most significant assumptions in the estimation process include determining the trend in costs, the expected cost of claims incurred but not reported and the expected cost to settle or pay the
outstanding claims. Changes in assumptions and experience could cause these estimates to change significantly in the near term. 

m)    Revenue recognition 

The Group’s normal business operations consist of the provision of transportation and logistics services. All revenue relating to
normal business operations is recognized over time in the statement of income. The stage of completion of the service is determined using the proportion of days completed to date compared to the estimated total days of the service. Revenue is
presented net of trade discounts and volume rebates. Revenue is recognized as services are rendered, when the control of promised services is transferred to customers in an amount that reflects the consideration the Group expects to be entitled to
receive in exchange for those services measured based on the consideration specified in a contract with the customers. The Group considers the contract with customers to include the general transportation service agreement and the individual bill of
ladings with customers. 
 Based on the evaluation of the control model, certain businesses, mainly in the Less-Than-Truckload segment,
act as the principal within their revenue arrangements. The affected businesses report transportation revenue gross of associated purchase transportation costs rather than net of such amounts within the consolidated statements of income. 

n)    Lease payments 

Prior to adoption of IFRS 16, see note 3 g) and s), payments made under operating leases were recognized in income or loss on a
straight-line basis over the term of the lease. Lease incentives received were recognized as an integral part of the total lease expense, over the term of the lease. 

Minimum lease payments made under finance leases were apportioned between the finance costs and the reduction of the outstanding
liability. The finance cost was allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. 

o)    Finance income and finance costs 

Finance income comprises interest income on funds invested, dividend income and interest and accretion on promissory note. Interest income
is recognized as it accrues in income or loss, using the effective interest method. 
 Finance costs comprise interest expense on bank
indebtedness and long-term debt, unwinding of the discount on provisions and impairment losses recognized on financial assets (other than trade receivables). 

Fair value gains or losses on derivative financial instruments and on contingent considerations, and foreign currency gains and losses are
reported on a net basis as either finance income or cost. 
  

	 	p)	 Income taxes 



Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in income or loss except to the extent
that it relates to a business combination, or items recognized directly in equity or in other comprehensive income. 
 Current tax is
the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. 

  

			
	



 	 	15
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 Deferred tax is recognized in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction
that is not a business combination and that affects neither accounting nor taxable income or loss, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse
in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will
be realized simultaneously. 
 A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary
differences, to the extent that it is probable that future taxable income will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that
the related tax benefit will be realized. 
  

	 	q)	 Earnings per share 



The Group presents basic and diluted earnings per share (“EPS”) data for its common shares. Basic EPS is calculated by dividing
the income or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period, adjusted for own shares held, if any. Diluted EPS is determined by adjusting the income or loss
attributable to common shareholders and the weighted average number of common shares outstanding, adjusted for own shares held, for the effects of all dilutive potential common shares, which comprise convertible debentures, warrants, and restricted
share units and stock options granted to employees. 
  

	 	r)	 Segment reporting 



An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses,
including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by the Group’s chief executive officer (“CEO”) to make
decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. 

Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a
reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Group’s headquarters), head office expenses, income tax assets, liabilities and expenses, as well as long-term debt and interest expense thereon. 

Sales between the Group’s segments are measured at the exchange amount. Transactions, other than sales, are measured at carrying
value. Segment capital expenditure is the total cost incurred during the period to acquire property and equipment, and intangible assets other than goodwill. 
  

	 	s)	 New standards and interpretations adopted during the year 



The Group has adopted the following new standards and amendments to standards and interpretations, with a date of initial application of
January 1, 2019. These have been applied in preparing these consolidated financial statements: 
 IFRS 16, Leases: On
January 13, 2016, the IASB issued IFRS 16 Leases. IFRS 16 replaces IAS 17 Leases and the related interpretations. This standard introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities
for all leases but can elect to exclude those with a term of less than 12 months, or those where the underlying asset is of low value. A lessee is required to recognize a
right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. This standard
substantially carries forward the lessor accounting requirements of IAS 17, while requiring enhanced disclosures to be provided by lessors. Other areas of the lease accounting model have also been impacted, including the definition of a lease.
Transitional provisions have been provided. See note 3 g) for the Group accounting policy under IFRS 16. 
 Effective January 1,
2019, the Group adopted IFRS 16 using the modified retrospective approach and accordingly the information presented for 2018 has not been restated. It remains as previously reported under IAS 17 and related interpretations. 

  

			
	



 	 	16
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 On the initial application, the Group has elected to apply a mixture of the two
available transition options; option 1 calculates the right-of-use asset as if the standard was applied at the initial date of the lease discounted at the transition
rate or option 2 where the right-of-use asset is equal to the lease liability on the date of transition; on a lease-by-lease basis. A right-of-use asset and a lease liability were recorded as of January 1, 2019, for all outstanding
lease contracts that met the definition of a lease, with any difference recorded in retained earnings, being recognized. An additional impact of $8.3 million on provisions and retained earnings was recognized for previously recorded
straight-line rental costs under IAS 17. The Group also recognized a deferred tax liability which was recorded directly to retained earnings, and reclassed any assets recorded as finance lease from property and equipment to right-of-use assets, and the corresponding finance lease liability from long-term debt to the new lease liability presentation. 

 

													
	  	  	As reported as at
December 31, 2018	 	 	Adjustments	 	 	  

Restated balance
as at January 1,
2019
	 
	Property and equipment	  	 	1,396,389	 	 	 	(25,687	) 	 	 	1,370,702	 
	Right-of-use assets	  	 	-	 	 	 	465,095	 	 	 	465,095	 
	Provisions (including current portion)	  	 	(67,864	) 	 	 	8,310	 	 	 	(59,554	) 
	Long-term debt (including current portion)	  	 	(1,584,423	) 	 	 	9,164	 	 	 	(1,575,259	) 
	Lease liabilities (including current portion)	  	 	-	 	 	 	(492,622	) 	 	 	(492,622	) 
	Deferred tax liabilities	  	 	(289,940	) 	 	 	10,062	 	 	 	(279,878	) 
	Retained earnings	  	 	(787,106	) 	 	 	25,678	 	 	 	(761,428	) 


 When measuring lease liabilities, the Group discounted lease payments using its incremental
borrowing rate at January 1, 2019. This incremental borrowing rate was adjusted for the type of the underlying asset, the location of the underlying asset, and the length of the lease contract. At January 1, 2019, the weighted average rate
used was 3.92% and the weighted average lease contract length was 7.42 years. 
 The Group has elected to apply the following practical
expedients: 
  

	 	•	 	 The Group has elected to account for leases which lease term ends within 12 months of the date of initial application as
short-term leases. 



	 	•	 	 The Group elected to grandfather the assessment of which transactions are leases. It applied transitional provisions of
IFRS 16 only to contracts which were previously identified as leases. New definition of a lease will be applied for leases entered into after January 1, 2019. 



	 	•	 	 The Group will apply the exemption for low value items. These low value items continue to be classified as a rent expense
and included as material and service expenses. 


 The following table reconciles the Group’s operating lease
obligations at December 31, 2018, as previously disclosed in the Group’s audited annual consolidated financial statements, to the lease obligation recognized on initial application of IFRS 16 at January 1, 2019: 

 

					
	Operating lease commitment as at December 31, 2018	  	 	506,111	 
	Finance lease liability as at December 31, 2018	  	 	9,164	 
	Discounted using the incremental borrowing rate at January 1, 2019	  	 	(72,642	) 
	Recognition exemption for short-term leases	  	 	(15,646	) 
	Extension options reasonably certain to be exercised	  	 	65,635	 
	Lease obligations recognized at January 1, 2019	  	 	492,622	 


 IFRIC 23 Uncertainty over Income Tax Treatments: On June 7, 2017, the IASB issued IFRIC
Interpretation 23 Uncertainty over Income Tax Treatments. The Interpretation provides guidance on the accounting for current and deferred tax liabilities and assets in circumstances in which there is uncertainty over income tax treatments.
The Interpretation is applicable for annual periods beginning on or after January 1, 2019. The Interpretation requires: 
  

	 	•	 	 an entity to contemplate whether uncertain tax treatments should be considered separately, or together as a group, based
on which approach provides better predictions of the resolution; 



  

			
	



 	 	17
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  


	 	●	 	 an entity to determine if it is probable that the tax authorities will accept the uncertain tax treatment; and



  

	 	●	 	 if it is not probable that the uncertain tax treatment will be accepted, measure the tax uncertainty based on the most
likely amount or expected value, depending on whichever method better predicts the resolution of the uncertainty. 



The adoption of the amendments to IFRIC 23 did not have a material impact on the Group’s consolidated financial statements. 

Plan Amendment, Curtailment or Settlement (Amendments to IAS 19): On February 7, 2018, the IASB issued Plan Amendment,
Curtailment or Settlement (Amendments to IAS 19). The amendments apply for plan amendments, curtailments or settlements that occur on or after January 1, 2019, or the date on which they are first applied. The amendments to IAS 19 clarify
that: 
  

	 	●	 	 on amendment, curtailment or settlement of a defined benefit plan, an entity now uses updated actuarial assumptions to
determine its current service cost and net interest for the period; and 


  

	 	●	 	 the effect of the asset ceiling is disregarded when calculating the gain or loss on any settlement of the plan.



 The adoption of the amendments to IAS 19 did not have a material impact on the Group’s consolidated financial
statements. 
 Annual Improvements to IFRS Standards (2015-2017 cycle): On December 12, 2017, the IASB issued narrow-scope
amendments to three standards as part of its annual improvement process. The amendments are effective on or after January 1, 2019. Each of the amendments has its own specific transition requirements. Amendments were made to the following
standards: 
  

	 	●	 	 IFRS 3 Business Combinations and IFRS 11 Joint Arrangements - to clarify how a company accounts for
increasing its interest in a joint operation that meets the definition of a business; 


  

	 	●	 	 IAS 12 Income Taxes – to clarify that all income tax consequences of dividends are recognized consistently
with the transactions that generated the distributable profits – i.e. in profit or loss, OCI, or equity; and 


  

	 	●	 	 IAS 23 Borrowing Costs – to clarify that specific borrowings – i.e. funds borrowed specifically to
finance the construction of a qualifying asset – should be transferred to the general borrowings pool once the construction of the qualifying asset has been completed. They also clarify that an entity includes funds borrowed specifically to
obtain an asset other than a qualifying asset as part of general borrowings. 


 The adoption of Annual Improvements
to IFRS Standards (2015-2017 cycle) did not have a material impact on the Group’s consolidated financial statements. 

Prepayment Features with Negative Compensation (Amendments to IFRS 9): In October 2017, the IASB issued Prepayment Features with
Negative Compensation (Amendments to IFRS 9). The amendments are to be applied retrospectively for annual periods beginning on or after January 1, 2019. The amendments to IFRS 9 clarify that negative compensation may be regarded as
reasonable compensation irrespective of the cause of early termination. Financial assets with these prepayment features are eligible to be measured at amortized cost or at fair value through other comprehensive income if they meet the other relevant
requirements of IFRS 9. The adoption of the amendments did not have a material impact on the Group’s consolidated financial statements. 

New standards and interpretations not yet adopted 

The following new standards are not yet effective for the year ended December 31, 2019, and have not been applied in preparing these
consolidated financial statements: 
 Definition of a business (Amendments to IFRS 3): On October 22, 2018, the IASB issued
amendments to IFRS 3 Business Combinations, that seek to clarify whether a transaction results in an asset or a business acquisition. The amendments apply to businesses acquired in annual reporting periods beginning on or after
January 1, 2020. Earlier application is permitted. The amendments include an election to use a concentration test. This is a simplified assessment that results in an asset acquisition if substantially all of the fair value of the gross assets
is concentrated in a single identifiable asset or a group of similar identifiable assets. If a preparer chooses not to apply the concentration test, or the test is failed, then the assessment focuses on the existence of a substantive process. The
Group intends to adopt these amendments in its financial statements for the annual period beginning on January 1, 2020. The extent of the impact of adoption of the amendments has not yet been determined and would be dependent on future
transactions. 

  

			
	



 	 	18
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 Amendments to Hedge Accounting Requirements - IBOR Reform and its Effects on
Financial Reporting (Phase 1): On September 26, 2019, the IASB issued amendments for some of its requirements for hedge accounting in IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement, as well as the
related Standard on disclosures, IFRS 7 Financial Instruments: Disclosures in relation to Phase 1 of IBOR Reform and its Effects on Financial Reporting project. The amendments are effective from January 1, 2020. Earlier application is
permitted. The amendments address issues affecting financial reporting in the period leading up to IBOR reform, are mandatory and apply to all hedging relationships directly affected by uncertainties related to IBOR reform. The amendments modify
some specific hedge accounting requirements to provide relief from potential effects of the uncertainty caused by the IBOR reform in the following areas: 
  

	 	•	 	 the ‘highly probable’ requirement, 



 

	 	•	 	 prospective assessments, 


  

	 	•	 	 retrospective assessments (for IAS 39), and 



 

	 	•	 	 eligibility of risk components. 



The extent of the impact of adoption of the amendments has not yet been determined. 

4.    Segment reporting 

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. The following
summary describes the operations in each of the Group’s reportable segments: 
  

			
	 Package and Courier:
	  	
Pickup, transport and delivery of items across North America.

		
	 Less-Than-Truckload:
	  	 Pickup, consolidation, transport and delivery of smaller loads.

		
	 Truckload (a):
	  	 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
(b):
	  	 Asset-light logistics services, including brokerage, freight forwarding and transportation
management, as well as small package parcel delivery.



 (a)    The Truckload reporting segment represents the aggregation of the
Canadian Conventional Truckload, U.S. 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 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)    Effective in the fourth quarter of fiscal 2019, the Group has renamed
the segment to Logistics from the previous reporting as Logistics and Last Mile. The composition of the segment remains unchanged. 

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’s 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. 

  

			
	



 	 	19
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 
																													
	 	  	 	Package	 	  	 	Less-		  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
		  	 	and	 	  	 	Than-	 	  				  				 				 				 			
	 	  	 	Courier	 	  	 	Truckload	 	  	 	Truckload	 	  	 	Logistics	 	 	 	Corporate	 	 	 	Eliminations	 	 	 	Total	 
	2019	  
	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	External revenue	  	 	623,734	 	  	 	822,568	 	  	 	2,182,592	 	  	 	984,735	 	 	 	-	 	 	 	-	 	 	 	4,613,629	 
	External fuel surcharge	  	 	86,910	 	  	 	132,086	 	  	 	307,171	 	  	 	39,068	 	 	 	-	 	 	 	-	 	 	 	565,235	 
	Inter-segment revenue and fuel surcharge	  	 	5,177	 	  	 	10,297	 	  	 	19,989	 	  	 	3,949	 	 	 	-	 	 	 	(39,412	) 	 	 	-	 
	Total revenue	  	 	715,821	 	  	 	964,951	 	  	 	2,509,752	 	  	 	1,027,752	 	 	 	-	 	 	 	(39,412	) 	 	 	5,178,864	 
	Operating income (loss)	  	 	109,106	 	  	 	109,199	 	  	 	254,998	 	  	 	76,370	 	 	 	(38,053	) 	 	 	-	 	 	 	511,620	 
	Selected items:	  				  				  				  				 				 				 			
	 Depreciation and amortization
	  	 	33,012	 	  	 	70,193	 	  	 	242,444	 	  	 	44,571	 	 	 	2,072	 	 	 	-	 	 	 	392,292	 
	 Gain on sale of land and buildings
	  	 	-	 	  	 	-	 	  	 	12	 	  	 	-	 	 	 	-	 	 	 	-	 	 	 	12	 
	 Gain (loss) on sale of assets held for sale
	  	 	1,117	 	  	 	11,346	 	  	 	16,310	 	  	 	-	 	 	 	(160	) 	 	 	-	 	 	 	28,613	 
	 Bargain purchase gain
	  	 	-	 	  	 	-	 	  	 	-	 	  	 	10,787	 	 	 	-	 	 	 	-	 	 	 	10,787	 
	 Intangible assets
	  	 	246,948	 	  	 	244,756	 	  	 	1,117,840	 	  	 	341,183	 	 	 	4,175	 	 	 	-	 	 	 	1,954,902	 
	 Total assets
	  	 	481,903	 	  	 	773,833	 	  	 	2,684,867	 	  	 	547,890	 	 	 	68,762	 	 	 	-	 	 	 	4,557,255	 
	 Total liabilities
	  	 	155,391	 	  	 	299,090	 	  	 	542,307	 	  	 	166,263	 	 	 	1,888,515	 	 	 	-	 	 	 	3,051,566	 
	 Additions to property and equipment
	  	 	17,741	 	  	 	65,651	 	  	 	255,550	 	  	 	2,942	 	 	 	7,523	 	 	 	-	 	 	 	349,407	 
								
	2018	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	External revenue	  	 	627,819	 	  	 	889,283	 	  	 	2,044,831	 	  	 	946,264	 	 	 	-	 	 	 	-	 	 	 	4,508,197	 
	External fuel surcharge	  	 	94,798	 	  	 	154,169	 	  	 	320,064	 	  	 	45,980	 	 	 	-	 	 	 	-	 	 	 	615,011	 
	Inter-segment revenue and fuel surcharge	  	 	5,939	 	  	 	13,944	 	  	 	23,970	 	  	 	7,942	 	 	 	-	 	 	 	(51,795	) 	 	 	-	 
	Total revenue	  	 	728,556	 	  	 	1,057,396	 	  	 	2,388,865	 	  	 	1,000,186	 	 	 	-	 	 	 	(51,795	) 	 	 	5,123,208	 
	Operating income (loss)	  	 	113,214	 	  	 	85,132	 	  	 	207,723	 	  	 	54,492	 	 	 	(30,037	) 	 	 	-	 	 	 	430,524	 
	Selected items:	  				  				  				  				 				 				 			
	 Depreciation and amortization
	  	 	13,232	 	  	 	34,448	 	  	 	186,172	 	  	 	24,267	 	 	 	2,474	 	 	 	-	 	 	 	260,593	 
	 Impairment of intangible assets
	  	 	-	 	  	 	-	 	  	 	-	 	  	 	12,559	 	 	 	-	 	 	 	-	 	 	 	12,559	 
	 Gain (loss) on sale of land and buildings
	  	 	-	 	  	 	275	 	  	 	279	 	  	 	(30	) 	 	 	-	 	 	 	-	 	 	 	524	 
	 Gain on sale of assets held for sale
	  	 	-	 	  	 	2,299	 	  	 	12,909	 	  	 	-	 	 	 	412	 	 	 	-	 	 	 	15,620	 
	 Gain on sale of intangible assets
	  	 	1,249	 	  	 	-	 	  	 	-	 	  	 	-	 	 	 	-	 	 	 	-	 	 	 	1,249	 
	 Intangible assets
	  	 	247,280	 	  	 	256,009	 	  	 	1,065,624	 	  	 	329,460	 	 	 	3,122	 	 	 	-	 	 	 	1,901,495	 
	 Total assets
	  	 	398,859	 	  	 	636,724	 	  	 	2,484,367	 	  	 	464,834	 	 	 	65,176	 	 	 	-	 	 	 	4,049,960	 
	 Total liabilities
	  	 	66,057	 	  	 	146,852	 	  	 	432,010	 	  	 	111,097	 	 	 	1,717,090	 	 	 	-	 	 	 	2,473,106	 
	 Additions to property and equipment
	  	 	18,268	 	  	 	29,345	 	  	 	262,719	 	  	 	2,675	 	 	 	1,066	 	 	 	-	 	 	 	314,073	 


 Geographical information 

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

 
  

																									
	Total revenue	  	Package	 	  	Less-	 	  	  	 	  	  	 	  	  	 	 	  	 
	 	  	and	 	  	Than-	 	  	 	 	  	 	 	  	 	 	 	 	 
	  	  	Courier	 	  	Truckload	 	  	Truckload	 	  	Logistics	 	  	Eliminations	 	 	Total	 
	2019	 	  	  	 	  	  	 	  	  	 	  	  	 	 	  	 
	Canada	  	 	715,821	 	  	 	805,514	 	  	 	1,060,654	 	  	 	286,814	 	  	 	(37,622	) 	 	 	2,831,181	 
	United States	  	 	-	 	  	 	159,437	 	  	 	1,449,098	 	  	 	720,126	 	  	 	(1,790	) 	 	 	2,326,871	 
	Mexico	  	 	-	 	  	 	-	 	  	 	-	 	  	 	20,812	 	  	 	-	 	 	 	20,812	 
	Total	  	 	715,821	 	  	 	964,951	 	  	 	2,509,752	 	  	 	1,027,752	 	  	 	(39,412	) 	 	 	5,178,864	 
							
	2018	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 
	Canada	  	 	728,556	 	  	 	882,495	 	  	 	1,006,340	 	  	 	317,561	 	  	 	(50,699	) 	 	 	2,884,253	 
	United States	  	 	-	 	  	 	174,901	 	  	 	1,382,525	 	  	 	659,975	 	  	 	(1,096	) 	 	 	2,216,305	 
	Mexico	  	 	-	 	  	 	-	 	  	 	-	 	  	 	22,650	 	  	 	-	 	 	 	22,650	 
	Total	  	 	728,556	 	  	 	1,057,396	 	  	 	2,388,865	 	  	 	1,000,186	 	  	 	(51,795	) 	 	 	5,123,208	 



  

			
	



 	 	20
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  


									
	 Segment assets are based on the geographical location of the assets. 
	 
	  	  	  

2019
	 	  	  

2018
	 
	Property and equipment, right-of-use assets and intangible assets	  				  			
	 Canada
	  	 	2,308,400	 	  	 	1,927,241	 
	 United States
	  	 	1,518,877	 	  	 	1,347,574	 
	 Mexico
	  	 	23,349	 	  	 	23,069	 
	 	  	 	3,850,626	 	  	 	3,297,884	 


 5.    Business combinations 

a)    Business combinations 

In line with the Group’s growth strategy, the Group acquired eight businesses during 2019, of which Schilli Corporation
(“Schilli”), which was renamed BTC East in September 2019, was considered material. These transactions were concluded in order to add density in the Group’s current network and further expand value-added services. 

On February 22, 2019, the Group completed the acquisition of Schilli. Based in St. Louis, Schilli specializes in the transportation
of dry and liquid bulk and offers dedicated fleet solutions and other value-add services throughout the Midwest, Southeast and Gulf Coast regions of the United States. The purchase price for this business
acquisition totalled $76.6 million, which has been paid in cash. During the year ended December 31, 2019, Schilli contributed revenue and net income of $70.6 million and $3.0 million, respectively since the acquisition. 

On April 29, 2019, the Group completed the acquisition of certain assets of BeavEx Incorporated Inc. and its affiliates Guardian
Medical Logistics, JNJW Enterprises Inc. and USXP LLC (collectively “BeavEx”). The purchase price for this business acquisition totalled $9.7 million, which has been paid in cash. The fair value of the identifiable net assets
acquired, including the fair value of the customer relationships acquired, exceeded the purchase price, resulting in a bargain purchase gain of $10.8 million in the logistics segment. 

If the Group acquired the eight businesses on January 1, 2019, as per management’s best estimates, the revenue and net income
for these entities would have been $396.7 million and $22.7 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, 2019. 
 During 2019, transaction costs of $0.2 million have been expensed in
other operating expenses in the consolidated statements of income in relation to the above-mentioned business acquisitions. 

  

			
	



 	 	21
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 As of the reporting date, the Group had not completed the purchase price allocation over
the identifiable net assets and goodwill of the 2019 acquisitions. Information to confirm fair value of certain assets and liabilities is still to be obtained for these acquisitions. As the Group obtains more information, the allocations will be
completed. The table below presents the purchase price allocation based on the best information available to the Group to date. 
  

																					
	
Identifiable assets acquired and liabilities assumed
	  	 	Note	 	  	 	Schilli	 	  	 	Others	* 	  	 	2019	 	  	 	2018	 
	 Cash and cash equivalents
	  				  	 	11,622	 	  	 	8,716	 	  	 	20,338	 	  	 	2,560	 
	 Trade and other receivables
	  				  	 	7,365	 	  	 	38,301	 	  	 	45,666	 	  	 	41,771	 
	 Inventoried supplies and prepaid expenses
	  				  	 	2,426	 	  	 	5,242	 	  	 	7,668	 	  	 	6,408	 
	 Property and equipment
	  	 	9	 	  	 	28,484	 	  	 	60,050	 	  	 	88,534	 	  	 	100,058	 
	 Right-of-use assets
	  	 	10	 	  	 	3,189	 	  	 	11,451	 	  	 	14,640	 	  	 	-	 
	 Intangible assets
	  	 	11	 	  	 	12,910	 	  	 	49,912	 	  	 	62,822	 	  	 	37,611	 
	 Other assets
	  				  	 	284	 	  	 	(184	) 	  	 	100	 	  	 	428	 
	 Trade and other payables
	  				  	 	(3,617	) 	  	 	(29,415	) 	  	 	(33,032	) 	  	 	(23,576	) 
	 Income tax payable
	  				  	 	(4,205	) 	  	 	(1,913	) 	  	 	(6,118	) 	  	 	63	 
	 Provisions
	  	 	17	 	  	 	(1,921	) 	  	 	34	 	  	 	(1,887	) 	  	 	-	 
	 Other non-current liabilities
	  				  	 	-	 	  	 	(481	) 	  	 	(481	) 	  	 	-	 
	 Long-term debt
	  				  	 	-	 	  	 	(11,505	) 	  	 	(11,505	) 	  	 	(23,395	) 
	 Lease liabilities
	  	 	15	 	  	 	(3,189	) 	  	 	(11,451	) 	  	 	(14,640	) 	  	 	-	 
	 Deferred tax liabilities
	  	 	 	 	  	 	(9,606	) 	  	 	(12,353	) 	  	 	(21,959	) 	  	 	(20,740	) 
	 Total identifiable net assets
	  				  	 	43,742	 	  	 	106,403	 	  	 	150,145	 	  	 	121,188	 
	 Total consideration transferred
	  	 	 	 	  	 	76,613	 	  	 	145,043	 	  	 	221,656	 	  	 	164,393	 
	 Goodwill
	  	 	11	 	  	 	32,871	 	  	 	49,427	 	  	 	82,298	 	  	 	43,205	 
	 Bargain purchase gain
	  	 	 	 	  	 	-	 	  	 	(10,787	) 	  	 	(10,787	) 	  	 	-	 
	 Cash
	  				  	 	76,613	 	  	 	144,126	 	  	 	220,739	 	  	 	159,047	 
	 Contingent consideration
	  	 	 	 	  	 	-	 	  	 	917	 	  	 	917	 	  	 	5,346	 
	 Total consideration transferred
	  	 	 	 	  	 	76,613	 	  	 	145,043	 	  	 	221,656	 	  	 	164,393	 
	 (*) Includes non-material adjustments to prior year’s
acquisitions
	  
	  				  				  				  			


 The trade receivables comprise gross amounts due of $40.3 million, of which $1.1 million
was expected to be uncollectible at the acquisition date. 
 Of the goodwill and intangible assets acquired through business
combinations in 2019, $25.0 million is deductible for tax purposes (2018 - $7.2 million). 
 During 2018, the Group acquired nine
businesses, notably Normandin Transit Inc. (“Normandin”). 
 On April 3, 2018, the Group completed the acquisition of
Normandin. Based in Quebec, Normandin focuses on the transportation of less-than-truckload and full truckload freight shipments to and from the United States and Canada. 

During 2018, transaction costs of $0.2 million have been expensed in other operating expenses in the consolidated statements of
income in relation to the above-mentioned business acquisitions. 
 b)    Goodwill 

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. 

  

			
	



 	 	22
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 The goodwill arising in the above 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	  	2019*	 
	Specialized Truckload	  	Truckload	  	 	67,108	 
	Logistics	  	Logistics	  	 	15,190	 
	 	  	 	  	 	82,298	 
	(*) Includes non-material adjustments to prior year’s acquisitions	  



  

	 	c)	 Contingent consideration 



The contingent consideration relates to a non-material business acquisition and is recorded in the
original purchase price allocation. The fair value was determined using expected cash flows based on probability weighted scenario discounted at a rate of 6%. This consideration is contingent on achieving specified earning levels in the future
periods. The maximum yearly amount payable for the next two years is $0.5 million for a total consideration of $1.0 million. At December 31, 2019, the fair value of the contingent arrangement was estimated at $0.9 million and is
currently presented in other financial liabilities on the consolidated statements of financial position. 
 Contingent consideration
related to prior year business combination was revalued with fair value adjustment recorded in finance income of the consolidated statements of income. 
  

	 	d)	 Adjustment to the provisional amounts of prior year’s business combinations 



The 2018 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 Normandin and various non-material 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. Consequently, the fair value of certain assets acquired and liabilities assumed of Normandin and the non-material acquisitions have been adjusted in 2019. No material adjustments
were required to the provisional fair values for these prior period’s business combinations, and have been included with other acquisitions of 2019. 

6.    Discontinued operations 

In Q2 2019, the Group received an unfavorable ruling on an accident claim, resulting in a loss of $12.5 million ($16.6 million,
net of tax of $4.1 million). The incident occurred in an operating division which was part of the discontinued rig moving segment. The rig moving segment was classified as discontinued on September 30, 2015.

In Q4 2019, the tax implications were re-evaluated, resulting in a decrease of recoverable tax of
$1.7 million. The total net loss for 2019 amounted to $14.2 million ($16.6 million, net of tax of $2.4 million). 

The net cash outflows from discontinued operations amounted to $16.2 million ($18.6 million, net of tax of $2.4 million). 

The basic and diluted loss per share for the year ended December 31, 2019 from discontinued operations is $0.17 and $0.17,
respectively. 
 7.    Trade and other receivables 

 

									
	  	  	2019	 	  	2018	 
	Trade receivables	  	 	574,261	 	  	 	605,320	 
	Other receivables	  	 	13,109	 	  	 	26,407	 
	 	  	 	587,370	 	  	 	631,727	 


 The Group’s exposure to credit and currency risks related to trade and other receivables is
disclosed in note 26 a) and d). 

  

			
	



 	 	23
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 Trade receivables at December 31, 2019 include $9.9 million of in-transit revenue balances (2018 – $10.8 million). Due to the short-term nature of the transportation and logistics services provided by the Group, these services are expected to be completed within the week
following the year-end. 
 8.    Additional cash flow information 

 

									
	 Net change in non-cash operating working capital

 
	  	 	 	  	 	 
	  	  	2019	 	  	2018	 
	Trade and other receivables	  	 	77,374	 	  	 	(2,624	) 
	Inventoried supplies	  	 	3,032	 	  	 	434	 
	Prepaid expenses	  	 	5,018	 	  	 	(980	) 
	Trade and other payables	  	 	(65,824	) 	  	 	15,817	 
	 	  	 	19,600	 	  	 	12,647	 



  

			
	



 	 	24
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 9.        Property and equipment 

 

																	
	  	  	Land and	 	  	Rolling	 	  	  	 	 	  	 
	  	  	buildings	 	  	stock	 	  	Equipment	 	 	Total	 
	Cost	  				  				  				 			
	Balance at December 31, 2017	  	 	333,465	 	  	 	1,294,403	 	  	 	152,470	 	 	 	1,780,338	 
	Additions through business combinations	  	 	25,415	 	  	 	72,427	 	  	 	2,216	 	 	 	100,058	 
	Other additions	  	 	15,412	 	  	 	284,459	 	  	 	14,202	 	 	 	314,073	 
	Disposals	  	 	(3,235	) 	  	 	(172,941	) 	  	 	(12,501	) 	 	 	(188,677	) 
	Reclassification to assets held for sale	  	 	(24,330	) 	  	 	(3,420	) 	  	 	-	 	 	 	(27,750	) 
	Reclassification from assets held for sale	  	 	23,834	 	  	 	-	 	  	 	-	 	 	 	23,834	 
	Effect of movements in exchange rates	  	 	6,154	 	  	 	52,321	 	  	 	459	 	 	 	58,934	 
	Balance at December 31, 2018	  	 	376,715	 	  	 	1,527,249	 	  	 	156,846	 	 	 	2,060,810	 
	Additions through business combinations	  	 	6,378	 	  	 	79,232	 	  	 	2,924	 	 	 	88,534	 
	Other additions	  	 	52,566	 	  	 	280,704	 	  	 	16,137	 	 	 	349,407	 
	Disposals	  	 	(3,483	) 	  	 	(167,640	) 	  	 	(12,984	) 	 	 	(184,107	) 
	Reclassification to assets held for sale	  	 	(28,226	) 	  	 	(3,535	) 	  	 	-	 	 	 	(31,761	) 
	Transfer to right-of-use assets	  	 	-	 	  	 	(38,920	) 	  	 	-	 	 	 	(38,920	) 
	Effect of movements in exchange rates	  	 	(3,041	) 	  	 	(31,104	) 	  	 	(188	) 	 	 	(34,333	) 
	Balance at December 31, 2019	  	 	400,909	 	  	 	1,645,986	 	  	 	162,735	 	 	 	2,209,630	 
					
	Depreciation	  				  				  				 			
	Balance at December 31, 2017	  	 	69,676	 	  	 	411,785	 	  	 	101,264	 	 	 	582,725	 
	Depreciation for the year	  	 	10,928	 	  	 	174,407	 	  	 	13,157	 	 	 	198,492	 
	Disposals	  	 	(1,858	) 	  	 	(104,867	) 	  	 	(12,328	) 	 	 	(119,053	) 
	Reclassification to assets held for sale	  	 	(5,157	) 	  	 	(2,964	) 	  	 	-	 	 	 	(8,121	) 
	Reclassification from assets held for sale	  	 	1,974	 	  	 	-	 	  	 	-	 	 	 	1,974	 
	Effect of movements in exchange rates	  	 	958	 	  	 	7,811	 	  	 	(365	) 	 	 	8,404	 
	Balance at December 31, 2018	  	 	76,521	 	  	 	486,172	 	  	 	101,728	 	 	 	664,421	 
	Depreciation for the year	  	 	11,784	 	  	 	198,469	 	  	 	13,541	 	 	 	223,794	 
	Disposals	  	 	(3,216	) 	  	 	(94,630	) 	  	 	(11,509	) 	 	 	(109,355	) 
	Reclassification to assets held for sale	  	 	(8,447	) 	  	 	(2,956	) 	  	 	-	 	 	 	(11,403	) 
	Transfer to right-of-use assets	  	 	-	 	  	 	(13,235	) 	  	 	-	 	 	 	(13,235	) 
	Effect of movements in exchange rates	  	 	(521	) 	  	 	(6,033	) 	  	 	255	 	 	 	(6,299	) 
	Balance at December 31, 2019	  	 	76,121	 	  	 	567,787	 	  	 	104,015	 	 	 	747,923	 
					
	Net carrying amounts	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 
	At December 31, 2018	  	 	300,194	 	  	 	1,041,077	 	  	 	55,118	 	 	 	1,396,389	 
	At December 31, 2019	  	 	324,788	 	  	 	1,078,199	 	  	 	58,720	 	 	 	1,461,707	 


 As at December 31, 2019, $3.1 million is included in trade and other payables for the
purchases of property and equipment (2018 – nil). 
 Security 

At December 31 2019, certain rolling stock are pledged as security for conditional sales contracts, with a carrying amount of
$180 million (2018 - $179 million) (see note 14). 

  

			
	



 	 	25
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  


10.      Right-of-use assets 

 

																	
	  	  	Land and	 	  	Rolling	 	  	  	 	 	  	 
	  	  	buildings	 	  	stock	 	  	Equipment	 	 	Total	 
	Cost	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 
	Initial recognition of IFRS 16	  	 	565,960	 	  	 	130,805	 	  	 	1,940	 	 	 	698,705	 
	Transfer from property and equipment	  	 	-	 	  	 	38,920	 	  	 	-	 	 	 	38,920	 
	Other additions	  	 	29,547	 	  	 	54,337	 	  	 	466	 	 	 	84,350	 
	Additions through business combinations	  	 	11,754	 	  	 	2,886	 	  	 	-	 	 	 	14,640	 
	Derecognition	  	 	(46,737	) 	  	 	(13,844	) 	  	 	(14	) 	 	 	(60,595	) 
	Effect of movements in exchange rates	  	 	(1,897	) 	  	 	16	 	  	 	(3	) 	 	 	(1,884	) 
	Balance at December 31, 2019	  	 	558,627	 	  	 	213,120	 	  	 	2,389	 	 	 	774,136	 
					
	Depreciation	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 
	Initial recognition of IFRS 16	  	 	207,429	 	  	 	51,148	 	  	 	720	 	 	 	259,297	 
	Transfer from property and equipment	  	 	2	 	  	 	13,233	 	  	 	-	 	 	 	13,235	 
	Depreciation	  	 	67,256	 	  	 	34,653	 	  	 	664	 	 	 	102,573	 
	Derecognition	  	 	(22,425	) 	  	 	(11,736	) 	  	 	(2	) 	 	 	(34,163	) 
	Effect of movements in exchange rates	  	 	(704	) 	  	 	(124	) 	  	 	5	 	 	 	(823	) 
	Balance at December 31, 2019	  	 	251,558	 	  	 	87,174	 	  	 	1,387	 	 	 	340,119	 
					
	Net carrying amounts	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 
	At December 31, 2019	  	 	307,069	 	  	 	125,946	 	  	 	1,002	 	 	 	434,017	 



  

			
	



 	 	26
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 11.      Intangible assets 

 

																									
	  	  	  	 	  	Other intangible assets	 	 	  	 
	 	  	 	 	  	 	 	  	 	 	 	Non-	 	 	 	 	 	 	 
	 	  	 	 	  	Customer	 	  	 	 	 	compete	 	 	Information	 	 	 	 
	  	  	Goodwill	 	  	relationships	 	  	Trademarks	 	 	agreements	 	 	technology	 	 	Total	 
	Cost	  				  				  				 				 				 			
	Balance at December 31, 2017	  	 	1,576,661	 	  	 	538,139	 	  	 	102,626	 	 	 	8,964	 	 	 	23,961	 	 	 	2,250,351	 
	Additions through business combinations	  	 	43,205	 	  	 	31,982	 	  	 	2,640	 	 	 	2,250	 	 	 	739	 	 	 	80,816	 
	Other additions	  	 	-	 	  	 	1,863	 	  	 	-	 	 	 	-	 	 	 	2,558	 	 	 	4,421	 
	Disposals	  	 	-	 	  	 	(2,137	) 	  	 	-	 	 	 	-	 	 	 	-	 	 	 	(2,137	) 
	Extinguishments	  	 	-	 	  	 	(7,612	) 	  	 	-	 	 	 	(28	) 	 	 	(2,796	) 	 	 	(10,436	) 
	Effect of movements in exchange rates	  	 	54,923	 	  	 	20,697	 	  	 	5,647	 	 	 	439	 	 	 	263	 	 	 	81,969	 
	Balance at December 31, 2018	  	 	1,674,789	 	  	 	582,932	 	  	 	110,913	 	 	 	11,625	 	 	 	24,725	 	 	 	2,404,984	 
	Additions through business combinations	  	 	82,298	 	  	 	55,064	 	  	 	3,369	 	 	 	4,339	 	 	 	50	 	 	 	145,120	 
	Other additions	  	 	-	 	  	 	-	 	  	 	-	 	 	 	-	 	 	 	4,826	 	 	 	4,826	 
	Disposals	  	 	-	 	  	 	(274	) 	  	 	-	 	 	 	-	 	 	 	-	 	 	 	(274	) 
	Extinguishments	  	 	-	 	  	 	(1,469	) 	  	 	-	 	 	 	(220	) 	 	 	(2,379	) 	 	 	(4,068	) 
	Effect of movements in exchange rates	  	 	(28,216	) 	  	 	(10,974	) 	  	 	(2,903	) 	 	 	(246	) 	 	 	(150	) 	 	 	(42,489	) 
	Balance at December 31, 2019	  	 	1,728,871	 	  	 	625,279	 	  	 	111,379	 	 	 	15,498	 	 	 	27,072	 	 	 	2,508,099	 
							
	Amortization and impairment losses	  				  				  				 				 				 			
	Balance at December 31, 2017	  	 	185,450	 	  	 	174,218	 	  	 	37,578	 	 	 	1,714	 	 	 	19,117	 	 	 	418,077	 
	Amortization for the year	  	 	-	 	  	 	50,542	 	  	 	7,100	 	 	 	1,826	 	 	 	2,633	 	 	 	62,101	 
	Impairment loss	  	 	-	 	  	 	12,559	 	  	 	-	 	 	 	-	 	 	 	-	 	 	 	12,559	 
	Disposals	  	 	-	 	  	 	(411	) 	  	 	-	 	 	 	-	 	 	 	-	 	 	 	(411	) 
	Extinguishments	  	 	-	 	  	 	(7,612	) 	  	 	-	 	 	 	(28	) 	 	 	(2,796	) 	 	 	(10,436	) 
	Effect of movements in exchange rates	  	 	10,970	 	  	 	8,386	 	  	 	1,924	 	 	 	102	 	 	 	217	 	 	 	21,599	 
	Balance at December 31, 2018	  	 	196,420	 	  	 	237,682	 	  	 	46,602	 	 	 	3,614	 	 	 	19,171	 	 	 	503,489	 
	Amortization for the year	  	 	-	 	  	 	54,468	 	  	 	6,659	 	 	 	2,484	 	 	 	2,314	 	 	 	65,925	 
	Disposals	  	 	-	 	  	 	(5	) 	  	 	-	 	 	 	-	 	 	 	-	 	 	 	(5	) 
	Extinguishments	  	 	-	 	  	 	(1,469	) 	  	 	-	 	 	 	(220	) 	 	 	(2,379	) 	 	 	(4,068	) 
	Effect of movements in exchange rates	  	 	(5,640	) 	  	 	(5,246	) 	  	 	(1,075	) 	 	 	(72	) 	 	 	(111	) 	 	 	(12,144	) 
	Balance at December 31, 2019	  	 	190,780	 	  	 	285,430	 	  	 	52,186	 	 	 	5,806	 	 	 	18,995	 	 	 	553,197	 
							
	Net carrying amounts	  	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	At December 31, 2018	  	 	1,478,369	 	  	 	345,250	 	  	 	64,311	 	 	 	8,011	 	 	 	5,554	 	 	 	1,901,495	 
	At December 31, 2019	  	 	1,538,091	 	  	 	339,849	 	  	 	59,193	 	 	 	9,692	 	 	 	8,077	 	 	 	1,954,902	 


 At December 31, 2019, the Group performed its annual impairment testing for indefinite life
trade names. The Group estimated the value in use to be $34.7 million compared to its carrying value of $32.8 million, resulting in no impairment charge. Management used the relief-from-royalty method and discount rates between 8.5% and
9.7% in its analysis. 
 In Q2 2018, the Group reassessed the useful lives of some operational trade names from finite to indefinite.
Brand recognition, dominance in geographical area, resilience to economic and social changes as well as management intent to keep the brands indefinitely were decisive factors leading to this conclusion. At the time of change in estimate, which was
applied prospectively, the Group tested these trade names for impairment. The Group estimated the value in use to be $38.6 million compared to its carrying value of $32.7 million, resulting in no impairment charge. Management used the
relief-from-royalty method and discount rates between 9.5% and 10.5% in its analysis. 
 At December 31, 2018, the Group performed
its annual impairment testing for indefinite life trade names. The Group estimated the value in use to be $38.9 million compared to its carrying value of $34.4 million, resulting in no impairment charge. Management used the
relief-from-royalty method and discount rates between 9.7% and 10.7% in its analysis. 

  

			
	



 	 	27
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 In 2018, difficulties in retaining and recruiting qualified subcontractors and the
inability to successfully increase revenue impacted the current and expected future cash flows of one of the 2017 business acquisitions. This was identified as an indicator of impairment for its customer relationships. The Group estimated the value
in use of the customer relationships to be $15.0 million using the discounted cash flow approach, adopting the excess cash flow methodology compared to its carrying value of $27.6 million, resulting in an impairment charge of
$12.6 million. Management assumed that the customer relationships have a value for 10 years and used a discount rate of 12.9% in its analysis. The Group also revalued the contingent consideration related to the above-mentioned business
combination. This consideration was contingent on achieving specified earning levels in future periods. The fair value was determined using expected cash flows based on probability weighted scenario. A reversal of $13.2 million was recorded in
finance income of the consolidated statements of income. 
 At December 31, 2019, the Group performed its annual goodwill
impairment tests for operating segments which represent the lowest level within the Group at which the goodwill is monitored for internal management purposes. The aggregate carrying amounts of goodwill allocated to each unit are as follows: 

 

									
	Reportable segment / operating segment	  	2019	 	  	2018	 
	Package and Courier	  	 	241,181	 	  	 	241,181	 
	Less-Than-Truckload	  	 	169,349	 	  	 	169,349	 
	Truckload	  				  			
	 Canadian Truckload
	  	 	109,964	 	  	 	109,964	 
	 U.S. Truckload
	  	 	316,796	 	  	 	330,458	 
	 Specialized Truckload
	  	 	459,147	 	  	 	394,122	 
	Logistics	  	 	241,654	 	  	 	233,295	 
	 	  	 	1,538,091	 	  	 	1,478,369	 


 The results as at December 31, 2019 determined that the recoverable amounts of the Group’s
operating segments exceeded their respective carrying amounts. 
 The recoverable amounts of the Group’s operating segments were
determined using the value in use approach. The value in use methodology is based on discounted future cash flows. Management believes that the discounted future cash flows method is appropriate as it allows more precise valuation of specific future
cash flows. 
 In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rates as follows: 
  

									
	Reportable segment / operating segment	  	2019	 	  	2018	 
	Package and Courier	  	 	9.7%	 	  	 	10.0%	 
	Less-Than-Truckload	  	 	9.2%	 	  	 	9.5%	 
	Truckload	  				  			
	 Canadian Truckload
	  	 	11.7%	 	  	 	12.0%	 
	 U.S. Truckload
	  	 	10.7%	 	  	 	11.0%	 
	 Specialized Truckload
	  	 	11.2%	 	  	 	11.5%	 
	Logistics	  	 	9.7%	 	  	 	10.0%	 


 The discount rates were estimated based on past experience, and industry average weighted average
cost of capital, which were based on a possible range of debt leveraging of 50.0% (2018 – 50.0%) at a market interest rate of 7.7% (2018 – 7.8%). 

First year cash flows were projected based on previous operating results and reflect current economic conditions. For a further 4-year period, cash flows were extrapolated using an average growth rate of 2.0% (2018 – 2.0%) in revenues and margins were adjusted where deemed appropriate. The terminal value growth rate was 2.0% (2018
– 2.0%). The values assigned to the key assumptions represent management’s assessment of future trends in the transportation industry and were based on both external and internal sources (historical data). 

  

			
	



 	 	28
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 12.      Other assets 

 

									
	  	  	2019	 	  	2018	 
	Promissory note	  	 	24,814	 	  	 	22,686	 
	Restricted cash	  	 	4,298	 	  	 	4,267	 
	Security deposits	  	 	4,109	 	  	 	3,445	 
	Investments in equity securities	  	 	1,391	 	  	 	1,498	 
	Other	  	 	1,443	 	  	 	1,780	 
	 	  	 	36,055	 	  	 	33,676	 
	Presented as :	  				  			
	 Current other assets
	  	 	24,814	 	  	 	-	 
	 Non-current other
assets
	  	 	11,241	 	  	 	33,676	 


 Restricted cash consists of cash held as potential claims collateral pursuant to re-insurance agreements under the Group’s insurance program. 
 On February 1, 2016, the
Company sold the Waste Management segment (“Waste”) to GFL Environmental Inc. (“GFL”) for a total consideration of $800 million, which included an unsecured promissory note of $25 million yielding 3% interest with a
term of 4 years. On February 1, 2020, the promissory note was collected in full by the Company. 
 13.      Trade and other
payables 
  

									
	  	  	2019	 	  	2018	 
	Trade payables and accrued expenses	  	 	309,641	 	  	 	337,470	 
	Personnel accrued expenses	  	 	112,650	 	  	 	117,380	 
	Dividend payable	  	 	21,177	 	  	 	20,735	 
	 	  	 	443,468	 	  	 	475,585	 


 The Group’s exposure to currency and liquidity risk related to trade and other payables is
disclosed in note 26. 

  

			
	



 	 	29
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 14.      Long-term debt 

This note provides information about the contractual terms of the Group’s interest-bearing long-term debt, which are measured at
amortized cost. For more information about the Group’s exposure to interest rate, foreign exchange currency and liquidity, see note 26. 
  

									
	  	  	2019	 	  	2018	 
	Non-current liabilities	  				  			
	 Unsecured revolving facilities
	  	 	590,259	 	  	 	740,556	 
	 Unsecured term loans
	  	 	609,147	 	  	 	498,805	 
	 Unsecured debenture
	  	 	198,900	 	  	 	124,825	 
	 Unsecured senior notes
	  	 	194,820	 	  	 	-	 
	 Conditional sales contracts
	  	 	97,914	 	  	 	94,222	 
	 Finance lease liabilities
	  	 	-	 	  	 	3,675	 
	 	  	 	1,691,040	 	  	 	1,462,083	 
			
	Current liabilities	  				  			
	 Current portion of unsecured revolving facilities
	  	 	11,970	 	  	 	-	 
	 Current portion of conditional sales contracts
	  	 	41,677	 	  	 	41,919	 
	 Current portion of finance lease liabilities
	  	 	-	 	  	 	5,489	 
	 Current portion of unsecured term loans
	  	 	-	 	  	 	74,932	 
	 	  	 	53,647	 	  	 	122,340	 


  

																																	
	 Terms and conditions of outstanding long-term debt are as follows:

 
	  
 

	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	2019	 	  	 	2018	 
		  				  				  	 	Nominal	 	  	 	Year of	 	  	 	Face	 	  	 	Carrying	 	  	 	Face	 	  	 	Carrying	 
	 	  	 	 	 	  	 	Currency	 	  	 	interest rate	 	  	 	maturity	 	  	 	value	 	  	 	amount	 	  	 	value	 	  	 	amount	 
									
	Unsecured revolving facility	  	 	a	 	  	 	C$	 	  	 	BA + 1.70%	 	  	 	2023	 	  	 	140,600	 	  	 	137,821	 	  	 	274,832	 	  	 	273,208	 
	Unsecured revolving facility	  	 	a	 	  	 	US$	 	  	 	Libor + 1.70%	 	  	 	2023	 	  	 	349,906	 	  	 	452,438	 	  	 	344,617	 	  	 	467,348	 
	Unsecured revolving facility	  	 	b	 	  	 	US$	 	  	 	Libor + 1.70%	 	  	 	2020	 	  	 	9,216	 	  	 	11,970	 	  	 	-	 	  	 	-	 
	Unsecured term loan	  	 	a	 	  	 	C$	 	  	 	BA + 1.20% - 1.45%	 	  	 	2021-2022	 	  	 	610,000	 	  	 	609,147	 	  	 	500,000	 	  	 	498,805	 
	Unsecured debenture	  	 	c	 	  	 	C$	 	  	 	3.32% - 4.22%	 	  	 	2024	 	  	 	200,000	 	  	 	198,900	 	  	 	125,000	 	  	 	124,825	 
	Unsecured senior notes	  	 	d	 	  	 	US$	 	  	 	3.85%	 	  	 	2026	 	  	 	150,000	 	  	 	194,820	 	  	 	-	 	  	 	-	 
	Unsecured term loan	  	 	a	 	  	 	-	 	  	 	-	 	  	 	-	 	  	 	-	 	  	 	-	 	  	 	75,000	 	  	 	74,932	 
	Conditional sales contracts	  	 	e	 	  	 	Mainly C$	 	  	 	2.00% - 4.99%	 	  	 	2020-2025	 	  	 	139,591	 	  	 	139,591	 	  	 	136,141	 	  	 	136,141	 
	Finance lease liabilities	  	 	 	 	  	 	-	 	  	 	-	 	  	 	-	 	  	 	-	 	  	 	-	 	  	 	9,164	 	  	 	9,164	 
	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	1,744,687	 	  	 	 	 	  	 	1,584,423	 


  

													
	 The table below summarizes changes to the long-term debt:

 
	  
 

	 	  	 	Note	 	  	 	2019	 	  	 	2018	 
	Balance at December 31, 2018	  				  	 	1,584,423	 	  	 	1,498,396	 
	Transfer to lease liabilities	  				  	 	(9,164	) 	  	 	-	 
	Proceeds	  				  	 	433,600	 	  	 	88,907	 
	Business combinations	  	 	5	 	  	 	11,505	 	  	 	23,395	 
	Repayment including deferred financing fees	  				  	 	(252,483	) 	  	 	(67,180	) 
	Accretion of deferred financing fees	  				  	 	2,261	 	  	 	2,335	 
	Effect of movements in exchange rates	  				  	 	(6,857	) 	  	 	7,489	 
	Effect of movements in exchange rates - OCI	  				  	 	(18,598	) 	  	 	30,796	 
	Other	  	 	 	 	  	 	-	 	  	 	285	 
	Balance at December 31, 2019	  	 	 	 	  	 	1,744,687	 	  	 	1,584,423	 



  

			
	



 	 	30
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 a)    Unsecured revolving credit facility and term loans 

On February 1, 2019, the $500 million unsecured term loan was amended to increase the indebtedness to $575 million. On
February 11, 2019, the related incremental funds were used to reimburse a separate $75 million unsecured term loan that was due to mature in August 2019. Deferred financing fees of $0.1 million were recognized on the increase.

 On February 1, 2019, the Group renegotiated the pricing grid of both its revolving credit facility and $575 million term
loan. The $575 million term loan remains within the confines of the credit facility, but now has a pricing grid different than the revolving credit facility and each of the two tranches have now their own pricing grid. Deferred financing fees
of $0.3 million were recognized on the pricing grid revision. 
 On June 27, 2019, the Group extended its existing revolving
credit facility by one year, to June 2023. Deferred financing fees of $0.9 million were recognized on the extension. 
 On
June 27, 2019, the Group extended the maturity of the $575 million unsecured term loan by one year for each tranche, $200 million now due in June 2021 and $375 million now due in June 2022. Deferred financing fees of
$0.4 million were recognized on the extension. 
 On December 27, 2019, the $575 million unsecured term loan was amended
to increase the indebtedness to $610 million. Deferred financing fees of $0.1 million were recognized on the increase. 
 The
revolving credit facility is unsecured and can be extended annually. The total available amount under this revolving facility is $1,200 million. The agreement still provides, under certain conditions, an additional $250 million of credit
availability (C$245 million and US$5 million). Based on certain ratios, the interest rate will vary between banker’s acceptance rate (or Libor rate on US$ denominated debt) plus applicable margin, which can vary between 120 basis points
and 200 basis points. As of December 31, 2019, the credit facility’s interest rate on CAD denominated debt was 3.8% (2018 – 4.0%) and on US$ denominated debt was 3.4% (2018 – 4.2%). The Group is subject to certain covenants
regarding the maintenance of financial ratios and was in compliance with these covenants at year-end (see note 26 (f)). 

The term loan is unsecured and is divided into two tranches, the first tranche of $200 million is now due in June 2021 and the second
tranche of $410 million is now due in June 2022. Early repayment, in part or whole, is permitted, without penalty, and will permanently reduce the amount borrowed. The terms and conditions of this unsecured term loan are the same as the
unsecured revolving credit facility and are subject to the same covenants. As of December 31, 2019, the term loan’s interest rate was 3.3% on first tranche and 3.5% on second tranche (2018 – 4.0%). 

b)        Unsecured revolving facility 

On November 22, 2019, the Group entered into a new revolving credit facility agreement. The credit facility is unsecured and provides
an availability of US$25 million maturing in November 2020. Interest rate is following the same pricing grid applicable for the US$ denominated debt in the $1,200 million revolving credit facility. As of December 31, 2019, the credit
facility’s interest rate was 3.4%. The Group is subject to certain covenants regarding the maintenance of financial ratios and was in compliance with these covenants at year-end (see note 26 (f)). 

c)        Unsecured debenture 

On December 20, 2019, the unsecured debenture was amended to increase the indebtedness by $75 million, to $200 million, and
to extend maturity date by four years, to December 2024. Following this amendment, debenture is now carrying an interest rate between 3.32% and 4.22% (2018 – 3.00% to 3.45%) depending on certain ratios. As of December 31, 2019, the
debenture’s effective rate was 3.77% (2018 – 3.00%). The debenture may be repaid, without penalty, after December 20, 2022, subject to the approval of the Group’s syndicate of bank lenders. Deferred financing fees of
$1.1 million were recognized on the increase and extension. 
 d)        Unsecured senior notes 

On December 20, 2019, the Group entered into a new unsecured senior note agreement. This loan takes the form of senior notes each
carrying an interest rate of 3.85% and with a December 2026 maturity date. These notes may be prepaid at any time prior to maturity date, in part or in total, at 100% of the principal amount and the make-whole amount determined at the
prepayment date with respect to such principal amount. 
 e)        Conditional sales contracts 

Conditional sales contracts are secured by rolling stock having a carrying value of $180 million (2018 - $179 million) (see note 8). 

  

			
	



 	 	31
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 f)    Principal installments of other long-term debt payable
during the subsequent years are as follows: 
  

																	
	  	  	 Less than

1 year
	  	1 to 5
years	  	 More than

5 years
	  	Total	 
	Unsecured revolving facilities	  	 	11,970	 	  	 	593,495	 	  	 	-	 	  	 	605,465	 
	Unsecured term loan	  	 	-	 	  	 	610,000	 	  	 	-	 	  	 	610,000	 
	Unsecured debenture	  	 	-	 	  	 	200,000	 	  	 	-	 	  	 	200,000	 
	Unsecured senior notes	  	 	-	 	  	 	-	 	  	 	194,820	 	  	 	194,820	 
	Conditional sales contracts	  	 	41,677	 	  	 	97,691	 	  	 	223	 	  	 	139,591	 
	 	  	 	53,647	 	  	 	1,501,186	 	  	 	195,043	 	  	 	1,749,876	 


 15.    Lease liabilities 

 

					
	 	  	 	2019	 
	Current portion of lease liabilities	  	 	99,133 	 
	Long-term portion of lease liabilities	  	 	362,709 	 
	 	  	 	461,842 	 



The table below summarizes changes to the lease liabilities: 

 

									
	 	 	 
	 	  	 	                             
               Note	 	  	 	                            
                            2019	 
	Initial recognition on transition to IFRS 16 on January 1, 2019	  				  	 	483,458	 
	Transfer of finance leases from long-term debt	  				  	 	9,164	 
	Business combinations	  	 	5	 	  	 	14,640	 
	Additions	  				  	 	84,350	 
	Disposals	  				  	 	(28,708	) 
	Repayment	  				  	 	(99,573	) 
	Effect of movements in exchange rates	  	 	 	 	  	 	(1,489	) 
	Balance at December 31, 2019	  	 	 	 	  	 	461,842	 


 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 is a significant event or significant changes in circumstances within its control. 
 The lease liabilities include
future lease payments of $50.4 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 $464.6 million. 

The Group does not have a significant exposure to termination options and penalties. 

Variable lease payments 

Some leases contain variable lease payments which are not included in the measurement of the lease liability. These payments include,
amongst others, common area maintenance fees, municipal taxes and vehicle maintenance fees. The expense related to variable lease payments for the year ended December 31, 2019 was $24.0 million. 

Sub-leases 

The Group sub-leases some of its properties. Income from
sub-leasing right-of-use assets for the year ended December 31, 2019 was $16.3 million, presented in “Other
operating expenses”. 

  

			
	



 	 	32
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 Contractual cash flows 

The total contractual cash flow maturities of the Group’s lease liabilities are as follows: 

 

			
	  	  	2019
	Less than 1 year	  	114,953 
	Between 1 and 5 years	  	285,356 
	More than 5 years	  	126,467 
	 	  	526,776 


 For the year ended December 31, 2019, operating lease expenses of $44.2 million (2018
– $152.0 million) were recognized in the consolidated statement of income for leases that either did not meet the definition of a lease under IFRS 16, which was adopted on January 1, 2019, or were excluded based on practical expedients
applied at transition. 
 16.    Employee benefits 

The Group sponsors defined benefit pension plans for 165 of its employees (2018 – 193). 

These plans are all within Canada and include one unregistered plan. All the defined benefit plans are no longer offered to employees and
two defined benefits plan in the past have been converted prospectively to defined contribution plans. Therefore, the future obligation will only vary by actuarial re-measurements. 

With the exception of one plan, all other plans do not have recurring contributions for employees. These plans are still required to fund
past service costs. The remaining plan is fully funded by the Group. 
 The Group measures its accrued benefit obligations and the fair
value of plan assets for accounting purposes as at December 31 of each year. The most recent actuarial valuation of the pension plans for funding purposes was as of December 31, 2018 and the next required valuation will be as of
December 31, 2019. 
 In addition to the above-mentioned defined benefit plans, the Group sponsors an employee severance plan in
Mexico. At December 31, 2019, total obligation under this arrangement amounted to $1.3 million ($1.1 million in 2018). 

Information about the Group’s defined benefit pension plans is as follows: 

 

									
	  	  	2019	 	  	2018	 
	Accrued benefit obligation	  	 	40,846	 	  	 	37,623	 
	Fair value of plan assets	  	 	(23,519	) 	  	 	(22,620	) 
	Plan deficit - employee benefit liability	  	 	17,327	 	  	 	15,003	 


 Plan assets comprise: 

 

									
	  	  	2019	 	    	2018	 
	Equity securities	  	 	16%	 	    	 	31%	 
	Debt securities	  	 	81%	 	    	 	57%	 
	Other	  	 	3%	 	    	 	12%	 


 All equity and debt securities have quoted prices in active markets. Debt securities are held
through mutual funds and primarily hold investments with ratings of AAA or AA, based on Moody’s ratings. 
 The other asset
categories are real estate investment trusts. 

  

			
	



 	 	33
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  


									
	
Movement in the present value of the accrued benefit obligation for defined benefit plans: 
	 
	  	  	2019	 	 	2018	 
	Accrued benefit obligation, beginning of year	  	 	37,623	 	 	 	48,689	 
	Current service cost	  	 	658	 	 	 	695	 
	Interest cost	  	 	1,466	 	 	 	1,526	 
	Benefits paid	  	 	(1,695	) 	 	 	(10,860	) 
	Remeasurement (gain) loss arising from:	  				 			
	- Demographic assumptions	  	 	-	 	 	 	234	 
	- Financial assumptions	  	 	2,994	 	 	 	(2,129	) 
	- Experience	  	 	(200	) 	 	 	(532	) 
	
Accrued benefit obligation, end of year
	  	 	40,846	 	 	 	37,623	 
	
	 Movement in the fair value of plan assets for defined benefit plans: 
	 
	  	  	2019	 	 	2018	 
	Fair value of plan assets, beginning of year	  	 	22,620	 	 	 	31,822	 
	Interest income	  	 	882	 	 	 	950	 
	Employer contributions	  	 	1,287	 	 	 	1,685	 
	Benefits paid	  	 	(1,695	) 	 	 	(10,860	) 
	Remeasurement gain (loss) arising from financial assumptions	  	 	617	 	 	 	(815	) 
	Plan administration expenses	  	 	(192	) 	 	 	(162	) 
	
Fair value of plan assets, end of year
	  	 	23,519	 	 	 	22,620	 
			
	Expense recognized in income or loss:  
	  	 	 	 	 	 
	  	  	2019	 	 	2018	 
	Current service cost	  	 	658	 	 	 	695	 
	Net interest cost	  	 	584	 	 	 	576	 
	Plan administration expenses	  	 	192	 	 	 	162	 
	 Pension expense
	  	 	1,434	 	 	 	1,433	 
	 Actual return on plan assets
	  	 	1,499	 	 	 	135	 
			
	 Actuarial losses recognized in other comprehensive income: 
	  	 	 	 	 	 
	  	  	2019	 	 	2018	 
	Amount accumulated in retained earnings, beginning of year	  	 	11,712	 	 	 	13,324	 
	Recognized during the year	  	 	2,177	 	 	 	(1,612	) 
	Amount accumulated in retained earnings, end of year	  	 	13,889	 	 	 	11,712	 
	Recognized during the year, net of tax	  	 	1,619	 	 	 	(1,181	) 


  

			
	



 	 	34
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  


									
	 The significant actuarial assumptions used (expressed as weighted average): 
	 
	  	  	2019	 	  	2018	 
	 Accrued benefit obligation:
	  				  			
	 Discount rate at December 31
	  	 	3.3%	 	  	 	4.0	% 
	 Future salary increases
	  	 	1.5%	 	  	 	1.5	% 
	 Employee benefit expense:
	  				  			
	 Discount rate at January 1
	  	 	4.0%	 	  	 	3.5	% 
	 Rate of return on plan assets at January 1
	  	 	4.0%	 	  	 	3.5	% 
	 Future salary increases
	  	 	1.5%	 	  	 	1.2	% 
	
	 Assumptions regarding future mortality are based on published statistics and mortality tables. The current longevities
underlying the value of the liabilities in the defined benefit plans are as follows:
  
	  
 

	  	  	2019	 	  	2018	 
	 Longevity at age 65 for current pensioners
	  				  			
	 Males
	  	 	22.0	 	  	 	21.9	 
	 Females
	  	 	24.7	 	  	 	24.6	 
	 Longevity at age 65 for current members aged 45
	  				  			
	 Males
	  	 	23.5	 	  	 	23.4	 
	 Females
	  	 	26.0	 	  	 	26.0	 


 At December 31, 2019 the weighted-average duration of the defined benefit obligation was 12.1 years. 

The following table presents the impact of changes of major assumptions on the defined benefit obligation for the years ended: 

 

																	
	  	  	2019	 	 	2018	 
	  	  	Increase	 	 	        Decrease	 	 	        Increase	 	 	        Decrease	 
	 Discount rate (1% movement)
	  	 	(4,137	) 	 	 	5,044	 	 	 	(5,112	) 	 	 	6,244	 
	
Life expectancy (1-year movement)
	  	 	980	 	 	 	(1,097	) 	 	 	1,130	 	 	 	(1,088	) 


  

																					
	 Historical information:

 
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	  	 	2019	 	 	 	        2018	 	 	 	        2017	 	 	 	        2016	 	 	 	        2015	 
	 Present value of the accrued benefit obligation
	  	 	40,846	 	 	 	37,623	 	 	 	48,689	 	 	 	45,942	 	 	 	46,908	 
	 Fair value of plan assets
	  	 	(23,519	) 	 	 	(22,620	) 	 	 	(31,822	) 	 	 	(31,660	) 	 	 	(33,147	) 
	 Deficit in the plan
	  	 	17,327	 	 	 	15,003	 	 	 	16,867	 	 	 	14,282	 	 	 	13,761	 
						
	 Experience adjustments arising on plan obligations
	  	 	2,794	 	 	 	(2,427	) 	 	 	3,088	 	 	 	521	 	 	 	738	 
	 Experience adjustments arising on plan assets
	  	 	617	 	 	 	(815	) 	 	 	456	 	 	 	1,077	 	 	 	278	 


 The Group expects approximately $3.1 million in contributions to be paid to its defined benefit
plans in 2020. 

  

			
	



 	 	35
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 17.    Provisions 

 

															
	  	    	  	  	Self insurance	 	    	Other	 	    	Total	 
	Balance at January 1, 2018	    		  	 	55,215	 	    	 	16,509	 	    	 	71,724	 
	Provisions made during the year	    		  	 	66,441	 	    	 	10,058	 	    	 	76,499	 
	Provisions used during the year	    		  	 	(64,198	) 	    	 	(9,524	) 	    	 	(73,722	) 
	Provisions reversed during the year	    		  	 	(7,721	) 	    	 	678	 	    	 	(7,043	) 
	Unwind of discount on long-term provisions	    	 	  	 	406	 	    	 	-	 	    	 	406	 
	Balance at January 1, 2019	    		  	 	50,143	 	    	 	17,721	 	    	 	67,864	 
	Additions through business combinations	    	5	  	 	671	 	    	 	1,216	 	    	 	1,887	 
	Provisions made during the year	    		  	 	76,632	 	    	 	6,767	 	    	 	83,399	 
	Provisions used during the year	    		  	 	(64,964	) 	    	 	(23,050	) 	    	 	(88,014	) 
	Provisions reversed during the year	    		  	 	(12,018	) 	    	 	(579	) 	    	 	(12,597	) 
	Unwind of discount on long-term provisions	    		  	 	433	 	    	 	-	 	    	 	433	 
	Balance at December 31, 2019	    	 	  	 	50,897	 	    	 	2,075	 	    	 	52,972	 
					
	2019	    		  				    				    			
	Current provisions	    		  	 	21,961	 	    	 	1,760	 	    	 	23,721	 
	Non-current provisions	    	 	  	 	28,936	 	    	 	315	 	    	 	29,251	 
					
	2018	    		  				    				    			
	Current provisions	    		  	 	21,761	 	    	 	3,302	 	    	 	25,063	 
	Non-current provisions	    	 	  	 	28,382	 	    	 	14,419	 	    	 	42,801	 


 Self-insurance provisions represent the uninsured portion of outstanding claims at year-end. The current portion reflects the amount expected to be paid in the following year. Due to the long-term nature of the liability, the provision has been calculated using a discount rate of 2.2% (2018 -
2.6%). 
 18.    Deferred tax assets and liabilities 

 

									
	  	  	2019	 	    	2018	 
	Property and equipment	  	 	(244,959	) 	    	 	(213,238	) 
	Intangible assets	  	 	(103,055	) 	    	 	(104,610	) 
	Derivative financial instruments and investment in equity securities	  	 	575	 	    	 	(1,259	) 
	Long-term debt	  	 	7,645	 	    	 	2,297	 
	Employee benefits	  	 	9,675	 	    	 	7,449	 
	Provisions	  	 	12,824	 	    	 	17,162	 
	Tax losses	  	 	18,967	 	    	 	9,950	 
	Other	  	 	(2,338	) 	    	 	(1,282	) 
	Net deferred tax liabilities	  	 	(300,666	) 	    	 	(283,531	) 
	Presented as:	  				    			
	 Deferred tax assets
	  	 	11,461	 	    	 	6,409	 
	 Deferred tax liabilities
	  	 	(312,127	) 	    	 	(289,940	) 



  

			
	



 	 	36
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  


																					
	 Movement in temporary differences during the year: 
	 
	  	  	Balance
December 31,
2017	 	 	Recognized in
income or loss	 	 	Recognized
directly in equity	 	 	 Acquired

in business
combinations
	 	 	Balance
December 31,
2018	 
	Property and equipment	  	 	(181,628	) 	 	 	(7,475	) 	 	 	(10,599	) 	 	 	(13,536	) 	 	 	(213,238	) 
	Intangible assets	  	 	(103,987	) 	 	 	11,977	 	 	 	(3,357	) 	 	 	(9,243	) 	 	 	(104,610	) 
	Long-term debt	  	 	3,877	 	 	 	(2,803	) 	 	 	7	 	 	 	1,216	 	 	 	2,297	 
	Employee benefits	  	 	9,730	 	 	 	(1,918	) 	 	 	(363	) 	 	 	-	 	 	 	7,449	 
	Provisions	  	 	13,025	 	 	 	2,303	 	 	 	1,011	 	 	 	823	 	 	 	17,162	 
	Tax losses	  	 	6,583	 	 	 	2,548	 	 	 	819	 	 	 	-	 	 	 	9,950	 
	Other	  	 	(2,654	) 	 	 	(1,644	) 	 	 	1,757	 	 	 	-	 	 	 	(2,541	) 
	Net deferred tax liabilities	  	 	(255,054	) 	 	 	2,988	 	 	 	(10,725	) 	 	 	(20,740	) 	 	 	(283,531	) 
	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	  	  	Balance
December 31,
2018	 	 	Recognized in
income or loss	 	 	Recognized
directly in equity	 	 	 Acquired

in business
combinations
	 	 	Balance
December 31,
2019	 
	Property and equipment	  	 	(213,238	) 	 	 	(27,293	) 	 	 	6,088	 	 	 	(10,516	) 	 	 	(244,959	) 
	Intangible assets	  	 	(104,610	) 	 	 	11,319	 	 	 	1,678	 	 	 	(11,442	) 	 	 	(103,055	) 
	Long-term debt	  	 	2,297	 	 	 	(4,543	) 	 	 	9,892	 	 	 	(1	) 	 	 	7,645	 
	Employee benefits	  	 	7,449	 	 	 	1,687	 	 	 	539	 	 	 	-	 	 	 	9,675	 
	Provisions	  	 	17,162	 	 	 	(3,839	) 	 	 	(499	) 	 	 	-	 	 	 	12,824	 
	Tax losses	  	 	9,950	 	 	 	9,736	 	 	 	(719	) 	 	 	-	 	 	 	18,967	 
	Other	  	 	(2,541	) 	 	 	(1,797	) 	 	 	2,575	 	 	 	-	 	 	 	(1,763	) 
	Net deferred tax liabilities	  	 	(283,531	) 	 	 	(14,730	) 	 	 	19,554	 	 	 	(21,959	) 	 	 	(300,666	) 


 A tax loss of US$15.7M expires in 2037 (CA$5.2M tax effected) with the remainder of tax losses of
US$41.7M (CA$13.7M tax effected) not expiring. The related deferred tax assets have been recognized because it is probable that future taxable income will be available to benefit from these losses. 

19.   Share capital and other components of equity 

The Company is authorized to issue an unlimited number of common shares and preferred shares, issuable in series. Both common and
preferred shares are without par value. All issued shares are fully paid. 
 The common shares entitle the holders thereof to one vote
per share. The holders of the common shares are entitled to receive dividends as declared from time to time. Subject to the rights, privileges, restrictions and conditions attached to any other class of shares of the Company, the holders of the
common shares are entitled to receive the remaining property of the Company upon its dissolution, liquidation or winding-up. 

The preferred shares may be issued in one or more series, with such rights and conditions as may be determined by resolution of the
Directors who shall determine the designation, rights, privileges, conditions and restrictions to be attached to the preferred shares of such series. There are no voting rights attached to the preferred shares except as prescribed by law. In the
event of the liquidation, dissolution or winding-up of the Company, or any other distribution of assets of the Company among its shareholders, the holders of the preferred shares of each series are entitled to
receive, with priority over the common shares and any other shares ranking junior to the preferred shares of the Company, an amount equal to the redemption price for such shares, plus an amount equal to any dividends declared thereon but unpaid and
not more. The preferred shares for each series are also entitled to such other preferences over the common shares and any other shares ranking junior to the preferred shares as may be determined as to their respective series authorized to be issued.
The preferred shares of each series shall be on a parity basis with the preferred shares of every other series with respect to payment of dividends and return of capital. There are no preferred shares currently issued and outstanding. 

  

			
	



 	 	37
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  


													
	  
 The following table summarizes the number of common shares issued:

 
	  	 	 	  	 	 	 	 	 
	(in number of shares)	  	Note	 	  	2019	 	 	2018	 
	Balance, beginning of year	  				  	 	86,397,588 	 	 	 	89,123,588	 
	Repurchase and cancellation of own shares	  				  	 	(6,409,446	) 	 	 	(3,755,002	) 
	Stock options exercised	  	 	21	 	  	 	1,462,184	 	 	 	1,029,002	 
	Balance, end of year	  	 	 	 	  	 	81,450,326	 	 	 	86,397,588	 
	  
 The following table summarizes the share capital issued and fully paid:

 
	  	 	 	  	 	 	 	 	 
	  	  	  	 	  	2019	 	 	2018	 
	Balance, beginning of year	  				  	 	704,510	 	 	 	711,036	 
	Repurchase and cancellation of own shares	  				  	 	(52,633	) 	 	 	(30,122	) 
	Cash consideration of stock options exercised	  				  	 	21,761	 	 	 	16,831	 
	Ascribed value credited to share capital on stock options exercised	  				  	 	5,641	 	 	 	4,009	 
	Issuance of shares on settlement of RSUs	  				  	 	954	 	 	 	2,756	 
	Balance, end of year	  	 	 	 	  	 	680,233	 	 	 	704,510	 


 Pursuant to the normal course issuer bid (“NCIB”) which began on October 2, 2019 and
expiring on October 1, 2020, the Company is authorized to repurchase for cancellation up to a maximum of 7,000,000 of its common shares under certain conditions. As at December 31, 2019, and since the inception of this NCIB, the Company
has repurchased and cancelled 679,100 common shares. 
 During 2019, the Company repurchased 6,409,446 common shares at a price ranging
from $33.89 to $44.00 per share for a total purchase price of $255.7 million relating to the NCIB. During 2018, the Company repurchased 3,755,002 common shares at a price ranging from $32.18 to $44.00 per share for a total purchase price of
$139.6 million relating to a previous NCIB. The excess of the purchase price paid over the carrying value of the shares repurchased in the amount of $203.1 million (2018 – $109.5 million) was charged to retained earnings as share
repurchase premium. 
 Contributed surplus 

The contributed surplus account is used to record amounts arising on the issue of equity-settled share-based payment awards (see note 21).

 Accumulated other comprehensive income (“AOCI”) 

At December 31, 2019 and 2018, AOCI is comprised of accumulated foreign currency translation differences arising from the translation
of the financial statements of foreign operations, financial assets measured at fair value through OCI, gain or loss on net investment hedge, realized gains on investments, cash flow hedges and defined benefit plan remeasurement gain or loss. 

Dividends 

In 2019, the Company declared quarterly dividends amounting to a total of 98.0 cents per outstanding common share when the dividend was
declared (2018 – 87.0 cents) for a total of $81.1 million (2018 - $76.1 million). On February 10, 2020, the Board of Directors approved a quarterly dividend of $0.26 per outstanding common share of the Company’s capital for an
expected aggregate payment of $21.2 million which will be paid on April 15, 2020 to shareholders of record at the close of business on March 31, 2020. 

  

			
	



 	 	38
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 20.    Earnings per share 

 

									
	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)	  	 	2019	 	 	 	2018	 
	Net income attributable to owners of the Company	  	 	310,283	 	 	 	291,994	 
	Issued common shares, beginning of year	  	 	86,397,588	 	 	 	89,123,588	 
	Effect of stock options exercised	  	 	846,690	 	 	 	512,020	 
	Effect of repurchase of own shares	  	 	(3,854,133	) 	 	 	(1,669,980	) 
	Weighted average number of common shares	  	 	83,390,145	 	 	 	87,965,628	 
			
	Earnings per share – basic (in dollars)	  	 	3.72	 	 	 	3.32	 
	Earnings per share from continuing operations – basic (in dollars)	  	 	3.89	 	 	 	3.32	 


 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)	  	 	2019	 	  	 	2018	 
	Net income attributable to owners of the Company	  	 	310,283	 	  	 	291,994	 
	Weighted average number of common shares	  	 	83,390,145	 	  	 	87,965,628	 
	Dilutive effect:	  				  			
	    Stock options and restricted share units	  	 	1,974,038	 	  	 	2,838,361	 
	Weighted average number of diluted common shares	  	 	85,364,183	 	  	 	90,803,989	 
	Earnings per share - diluted (in dollars)	  	 	3.63	 	  	 	3.22	 
	Earnings per share from continuing operations – diluted (in dollars)	  	 	3.80	 	  	 	3.22	 


 As at December 31, 2019, 900,545 stock options were excluded from the calculation of diluted
earnings per share (2018 – nil) as these options 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. 

  

			
	



 	 	39
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 21.    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. The table below summarizes the changes in the outstanding stock options: 

 

																	
	(in thousands of options and in dollars)	  	2019	 	  	2018	 
	  	  	Number
of
options	 	 	 Weighted

average
 exercise price
	 	  	Number
of
options	 	 	 Weighted
average

exercise price
	 
	Balance, beginning of year	  	 	5,031	 	 	 	21.01	 	  	 	5,493	 	 	 	19.22	 
	Granted	  	 	909	 	 	 	40.36	 	  	 	618	 	 	 	29.92	 
	Exercised	  	 	(1,462	) 	 	 	14.88	 	  	 	(1,029	) 	 	 	16.36	 
	Forfeited	  	 	(56	) 	 	 	36.68	 	  	 	(51	) 	 	 	29.65	 
	Balance, end of year	  	 	4,422	 	 	 	26.82	 	  	 	5,031	 	 	 	21.01	 
					
	Options exercisable, end of year	  	 	3,040	 	 	 	22.21	 	  	 	3,864	 	 	 	18.44	 


  

													
	The following table summarizes information about stock options outstanding and exercisable at December 31, 2019:	  

	(in thousands of options and in dollars)	  	 	Options outstanding	 	 	 
	Options
exercisable	 
 
	Exercise prices	  	 

	Number
of
options	 
 
 	  	 


 
	Weighted
average
remaining
 contractual life(in years
	 
 
 
  ) 
	 	 
 
 
	Number
 of

options
	 
  

 

	9.46	  	 	556	 	  	 	0.6	 	 	 	556	 
	20.18	  	 	499	 	  	 	0.6	 	 	 	499	 
	24.93	  	 	600	 	  	 	2.6	 	 	 	600	 
	24.64	  	 	741	 	  	 	3.6	 	 	 	741	 
	25.14	  	 	267	 	  	 	1.6	 	 	 	267	 
	29.92	  	 	573	 	  	 	5.1	 	 	 	184	 
	35.02	  	 	312	 	  	 	4.1	 	 	 	193	 
	40.36	  	 	874	 	  	 	6.1	 	 	 	-	 
	 	  	 	4,422	 	  	 	3.3	 	 	 	3,040	 


 Of the options outstanding at December 31, 2019, a total of 3,463,098 (2018 – 3,836,102)
are held by key management personnel. 
 The weighted average share price at the date of exercise for stock options exercised in 2019
was $42.26 (2018 – $42.77). 
 In 2019, the Group recognized a compensation expense of $4.5 million (2018 – $3.0 million)
with a corresponding increase to contributed surplus. 
 On February 27, 2019, the Board of Directors approved the grant of 909,404
stock options under the Company’s stock option plan of which 562,452 were granted to key management personnel, at that date. The options vest in equal installments over three years and have a life of seven years. The fair value of the stock
options granted was estimated using the Black-Scholes option pricing model using the following weighted average assumptions: 

  

			
	



 	 	40
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 
									
	  	  	February 27, 2019	 	 	February 20, 2018	 
	Exercise price	  	 	$40.36	 	 	 	$29.92	 
	Average expected option life	  	 	4.5 years	 	 	 	4.5 years	 
	Risk-free interest rate	  	 	1.88%	 	 	 	1.83%	 
	Expected stock price volatility	  	 	24.3%	 	 	 	21.92%	 
	Average dividend yield	  	 	2.72%	 	 	 	2.56%	 
	Weighted average fair value per option of options granted	  	 	$6.74	 	 	 	$4.55	 
	  
 Deferred share unit plan for board members
(cash-settled)
  
 The Company offers a deferred share unit
(“DSU”) plan for its board members. Under this plan, board members may 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)	  	 	2019	 	 	 	2018	 
	Balance, beginning of year	  	 	306,042	 	 	 	281,323	 
	Board members compensation	  	 	34,144	 	 	 	27,666	 
	Deferred share units redeemed	  	 	-	 	 	 	(9,418	) 
	Dividends paid in units	  	 	7,845	 	 	 	6,471	 
	Balance, end of year	  	 	348,031	 	 	 	306,042	 


 In 2019, the Group recognized, as a result of DSUs, a compensation expense of $1.5 million
(2018 - $1.1 million) with a corresponding increase to trade and other payables. In addition, in other finance costs, the Group recognized a mark-to-market loss on
DSUs of $3.2 million for the year ended 2019 (2018 – 0.9 million). 
 As at 2019, the total carrying amount of liabilities for
cash-settled arrangements recorded in trade and other payables amounted to $15.5 million (2018 - $10.8 million). 

Performance contingent restricted share unit plan (equity-settled) 

The Company offers an equity incentive plan for the benefit of senior employees of the Group. The plan provides for the issuance of
restricted share units (‘’RSUs’’) under conditions to be determined by the Board of Directors. The RSUs will vest in December of the second year from the grant date. Upon satisfaction of the required service period, the plan
provides for settlement of the award through shares. 
 On February 27, 2019, the Company granted a total of 152,965 RSUs under the
Company’s equity incentive plan of which 93,921 were granted to key management personnel, at that date. 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 $40.36 per unit. 
  

																	
	 The table below summarizes changes to the outstanding RSUs:

 
	 
	(in thousands of RSUs and in dollars)	  	2019	 	  	2018	 
	  	  	Number
of
RSUs	 	 	Weighted
average
exercise
price	 	  	Number
of
RSUs	 	 	Weighted
average
exercise
price	 
	Balance, beginning of year	  	 	147	 	 	 	31.84	 	  	 	206	 	 	 	27.74	 
	Granted	  	 	153	 	 	 	40.36	 	  	 	95	 	 	 	29.92	 
	Reinvested	  	 	7	 	 	 	35.60	 	  	 	7	 	 	 	28.30	 
	Settled	  	 	(59	) 	 	 	34.89	 	  	 	(144	) 	 	 	24.78	 
	Forfeited	  	 	(9	) 	 	 	37.33	 	  	 	(17	) 	 	 	29.83	 
	Balance, end of year	  	 	239	 	 	 	36.44	 	  	 	147	 	 	 	31.84	 



  

			
	



 	 	41
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  


											
	 The following table summarizes information about RSUs outstanding and exercisable as at December 31, 2019:

 
	  
 

	(in thousands of RSUs and in dollars) 	  	 	  	 	 	 
	 	  	 	  	 	RSUs outstanding	 
	Exercise prices	  	 	  	 
 
	Number of
 RSUs
	 
  
	  	 
 
	Remaining
 contractual life(in years
	 
  ) 

	29.92	  		  	 	90	 	  	 	1.0	 
	40.36	  		  	 	149	 	  	 	2.0	 
	 	  	 	  	 	239	 	  	 	1.6	 



The weighted average share price at the date of settlement of RSUs vested in 2019 was $43.11 (2018 – $43.49). The excess of the
purchase price paid over the carrying value of shares repurchased for settlement of the award, in the amount of $1.4 million (2018 – $5.4 million), was charged to retained earnings as share repurchase premium. 

In 2019, the Group recognized, as a result of RSUs, a compensation expense of $3.8 million (2018 - $3 million) with a corresponding
increase to contributed surplus. 
 Of the RSUs outstanding at December 31, 2019, a total of 155,974 (2018 – 87,486) are held
by key management personnel. 
 In February 2020, upon the recommendation of the Human Resources and Compensation Committee the Board
approved the following changes to the long-term incentive plan (“LTIP”) policy for designated eligible participants in 2020 and future years. Each participant’s annual LTIP allocation will be split in two equally weighted awards of
Performance Share Units (“PSUs”) and of RSUs. The PSUs will be subject to both performance and time cliff vesting conditions on the third anniversary of the award whereas the RSUs will only be subject to a time cliff vesting condition on
the third anniversary of the award. The performance conditions attached to the PSUs will be equally weighted between an absolute earnings before interest and income tax objective and relative total shareholder return (“TSR”). For purposes
of the relative TSR portion, there will be two equally weighted comparisons: the first portion will be compared against the TSR of a group of transportation industry peers and the second portion will be compared against the S&P/TSX60 index. 

22.    Materials and services expenses 

The Group’s materials and services expenses are primarily costs related to independent contractors and vehicle operation: vehicle
operation expenses, primarily fuel, repairs and maintenance, vehicle leasing costs (in 2018), insurance, permits and operating supplies. 
  

											
	 	  	 	  	 	2019	 	  	 	2018	 
	Independent contractors	  		  	 	2,018,274	 	  	 	2,054,767	 
	Vehicle operation expenses	  	 	  	 	813,796	 	  	 	859,229	 
	 	  	 	  	 	2,832,070	 	  	 	2,913,996	 
	  
 23.    Personnel expenses

 
	 
  



	 	  	Note	  	 	2019	 	  	 	2018	 
	Short-term employee benefits	  		  	 	1,271,804	 	  	 	1,225,901	 
	Contributions to defined contribution plans	  		  	 	8,165	 	  	 	11,355	 
	Current and past service costs related to defined benefit plans	  	16	  	 	658	 	  	 	695	 
	Termination benefits	  		  	 	7,564	 	  	 	8,972	 
	Equity-settled share-based payment transactions	  	21	  	 	8,269	 	  	 	5,926	 
	Cash-settled share-based payment transactions	  	21	  	 	1,469	 	  	 	1,126	 
	 	  	 	  	 	1,297,929	 	  	 	1,253,975	 



  

			
	



 	 	42
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 24.    Finance income and finance costs 

 

									
	 Recognized in income or loss:
  
	  	 	 	 	 	 
	(Income) costs	  	2019	 	 	2018	 
	Interest expense on long-term debt	  	 	58,290	 	 	 	54,609	 
	Interest expense on lease liabilities	  	 	18,551	 	 	 	-	 
	Interest income and accretion on promissory note	  	 	(3,001	) 	 	 	(2,807	) 
	Net change in fair value and accretion expense of contingent considerations	  	 	263	 	 	 	(12,189	) 
	Net foreign exchange loss	  	 	267	 	 	 	630	 
	Net change in fair value of foreign exchange derivatives	  	 	-	 	 	 	(311	) 
	Net change in fair value of interest rate derivatives	  	 	-	 	 	 	(46	) 
	Mark-to-market loss on DSUs	  	 	3,241	 	 	 	887	 
	Other financial expenses	  	 	8,030	 	 	 	7,533	 
	Net finance costs	  	 	85,641	 	 	 	48,306	 
	Presented as:	  				 			
	 Finance income
	  	 	(3,001)	 	 	 	(15,353	) 
	 Finance costs
	  	 	88,642	 	 	 	63,659	 


 25.    Income tax expense 

 

									
	Income tax recognized in income or loss:  
	 
	  	  	2019	 	 	2018	 
	Current tax expense	  				 			
	 Current year
	  	 	88,807	 	 	 	96,480	 
	 Adjustment for prior years
	  	 	(2,926	) 	 	 	(3,268	) 
	 	  	 	85,881	 	 	 	93,212	 
	Deferred tax expense (recovery)	  				 			
	 Origination and reversal of temporary differences
	  	 	11,015	 	 	 	(5,408	) 
	 Variation in tax rate
	  	 	(3,128	) 	 	 	(221	) 
	 Adjustment for prior years
	  	 	7,735	 	 	 	2,641	 
	 	  	 	15,622	 	 	 	(2,988	) 
	Income tax expense	  	 	101,503	 	 	 	90,224	 


  

																									
	Income tax recognized in other comprehensive income:  
	  	 	 	 	 	 
	  	  	2019	 	 	2018	 
	  	  	Before
tax	 	 	 Tax

(benefit)
expense
	 	 	 Net of

tax
	 	 	 Before

Tax
	 	 	 Tax

(benefit)
 expense
	 	 	Net of
tax	 
	Change in fair value of investment in equity securities	  	 	6,766	 	 	 	903	 	 	 	5,863	 	 	 	(5,416	) 	 	 	(723	) 	 	 	(4,693	) 
	Foreign currency translation differences	  	 	(52,502	) 	 	 	-	 	 	 	(52,502	) 	 	 	101,972	 	 	 	-	 	 	 	101,972	 
	Defined benefit plan remeasurement gains (losses)	  	 	(2,177	) 	 	 	(558	) 	 	 	(1,619	) 	 	 	1,612	 	 	 	431	 	 	 	1,181	 
	Employee benefit	  	 	61	 	 	 	19	 	 	 	42	 	 	 	(227	) 	 	 	(68	) 	 	 	(159	) 
	 Reclassification to retained earnings of accumulated unrealized loss on investment in equity
securities
	  	 	(5,234	) 	 	 	(697	) 	 	 	(4,537	) 	 	 	-	 	 	 	-	 	 	 	-	 
	Gain (loss) on net investment hedge	  	 	18,597	 	 	 	2,482	 	 	 	16,115	 	 	 	(30,796	) 	 	 	(4,119	) 	 	 	(26,677	) 
	Loss on cash flow hedge	  	 	(13,314	) 	 	 	(3,479	) 	 	 	(9,835	) 	 	 	(3,876	) 	 	 	(1,034	) 	 	 	(2,842	) 
	 	  	 	(47,803	) 	 	 	(1,330	) 	 	 	(46,473	) 	 	 	63,269	 	 	 	(5,513	) 	 	 	68,782	 



  

			
	



 	 	43
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 
																	
	Reconciliation of effective tax rate:  
	  	 	 	 	 	 	 	 	 	 	 	 
	  	  	2019	 	 	2018	 
	Income before income tax	  	 	 	 	 	 	425,979	 	 	 	 	 	 	 	382,218	 
	Income tax using the Company’s statutory tax rate	  	 	26.6	% 	 	 	113,310	 	 	 	26.7	% 	 	 	102,052	 
	Increase (decrease) resulting from:	  				 				 				 			
	 Rate differential between jurisdictions
	  	 	(3.0	%) 	 	 	(12,884	) 	 	 	(3.4	%) 	 	 	(13,106	) 
	 Variation in tax rate
	  	 	(0.7	%) 	 	 	(3,128	) 	 	 	(0.1	%) 	 	 	(221	) 
	 Non-deductible expenses
	  	 	1.1	% 	 	 	4,549	 	 	 	0.8	% 	 	 	2,593	 
	 Tax exempt income
	  	 	(2.2	%) 	 	 	(9,308	) 	 	 	(1.1	%) 	 	 	(3,038	) 
	 Adjustment for prior years
	  	 	1.1	% 	 	 	4,809	 	 	 	(0.1	%) 	 	 	(627	) 
	 Others
	  	 	1.0	% 	 	 	4,155	 	 	 	0.0	% 	 	 	2,571	 
	 	  	 	23.9	% 	 	 	101,503	 	 	 	22.8	% 	 	 	90,224	 


 On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs
Act (“U.S. Tax Reform”). The U.S. Tax Reform reduces the U.S. federal corporate income tax rate from 35% to 21%, effective as of January 1, 2018. The U.S. Tax Reform also allows for immediate capital expensing of new investments in
certain qualified depreciable assets made after September 27, 2017, which will be phased down starting in year 2023. 
 The U.S.
Tax Reform introduces other important changes to U.S. corporate income tax laws that may significantly affect the Group in future years including the creation of a new Base Erosion Anti-abuse Tax (BEAT) that subjects certain payments from U.S.
corporations to foreign related parties to additional taxes, and limitations to the deduction for net interest expense incurred by U.S. corporations. Future regulations and interpretations to be issued by U.S. authorities may also impact the
Group’s estimates and assumptions used in calculating its income tax provisions. 
 26.
  Financial instruments and financial risk management 
 Derivative financial instruments
designated as effective cash flow hedge instruments’ fair values were as follows: 
  

									
	  	  	December 31, 2019	 	  	December 31, 2018	 
	Current assets	  				  			
	 Interest rate derivatives
	  	 	39	 	  	 	5,430	 
	Non-current assets	  				  			
	 Interest rate derivatives
	  	 	-	 	  	 	2,946	 
	Current liabilities	  				  			
	 Interest rate derivatives
	  	 	843	 	  	 	-	 
	Non-current liabilities	  				  			
	 Interest rate derivatives
	  	 	888	 	  	 	-	 



  

			
	



 	 	44
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 
																	
	
As at December 31, 2019 and 2018, the impact to income or loss and other comprehensive income is as 
follows: 
	 
	  	  	Finance loss (income)	 	 	 Other comprehensive (loss)

income
	 
	  	  	2019	 	  	2018	 	 	2019	 	  	2018	 
	Derivative financial instruments measured at fair value through income or loss:	  				  				 				  			
	 Interest rate derivatives
	  	 	-	 	  	 	(46	) 	 	 	-	 	  	 	-	 
	 Embedded foreign exchange derivatives in finance leases
	  	 	-	 	  	 	(311	) 	 	 	-	 	  	 	-	 
					
	 Derivative financial instruments measured at fair value through other comprehensive income:
	  				  				 				  			
	 Interest rate derivatives
	  	 	-	 	  	 	-	 	 	 	13,314	 	  	 	3,876	 
	 	  	 	-	 	  	 	(357	) 	 	 	13,314	 	  	 	3,876	 


 Risks 

In the normal course of its operations and through its financial assets and liabilities, the Group is exposed to the following risks: 

 

	 	•	 	 credit risk 



	 	•	 	 liquidity risk 



	 	•	 	 market risk. 



This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives and processes for
managing risk, and the Group’s management of capital. Further quantitative disclosures are included throughout these consolidated financial statements. 

Risk management framework 

The Group’s management identifies and analyzes the risks faced by the Group, sets appropriate risk limits and controls, and monitors
risks and adherence to limits. Risk management is reviewed regularly to reflect changes in market conditions and the Group’s activities. 

The Board of Directors has overall responsibility of the Group’s risk management framework. The Board of Directors monitors the
Group’s risks through its audit committee. The audit committee reports regularly to the Board of Directors on its activities. 

The Group’s audit committee oversees how management monitors and manages the Group’s risks and is assisted in its oversight role
by the Group’s internal audit. Internal audit undertakes both regular and ad hoc reviews of risk, the results of which are reported to the audit committee. 

a)     Credit risk 

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligation, and arises principally from the Group’s trade receivables. The Group grants credit to its customers in the ordinary course of business. Management believes that the credit risk of trade receivables is limited due to the
following reasons: 
  

	 	•	 	 There is a broad base of customers with dispersion across different market segments; 



	 	•	 	 No single customer accounts for more than 5% of the Group’s revenue; 



	 	•	 	 Approximately 94.2% (2018 – 94.6%) of the Group’s trade receivables are not past due or 30 days or less past
due; 



	 	•	 	 Bad debt expense has been approximately 0.1% (2018 – 0.1%) of consolidated revenues for the last 3 years.




  

			
	



 	 	45
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 Exposure to credit risk 

The Group’s maximum credit exposure corresponds to the carrying amount of the financial assets. The maximum exposure to credit risk
at the reporting date was: 
  

									
	  	  	2019	 	    	2018	 
	Trade and other receivables	  	 	587,370	 	    	 	631,727	 
	Promissory note	  	 	24,814	 	    	 	22,686	 
	Derivative financial assets	  	 	39	 	    	 	8,376	 
	 	  	 	612,223	 	    	 	662,789	 


 Impairment losses 

The aging of trade and other receivables at the reporting date was: 

 

																	
	  	  	 Total

2019
	 	  	 Impairment

2019
	 	  	 Total

2018
	 	  	 Impairment

2018
	 
	Not past due	  	 	449,324	 	  	 	-	 	  	 	474,320	 	  	 	-	 
	Past due 1 – 30 days	  	 	104,738	 	  	 	869	 	  	 	123,991	 	  	 	695	 
	Past due 31 – 60 days	  	 	22,686	 	  	 	2,608	 	  	 	22,007	 	  	 	2,085	 
	Past due more than 60 days	  	 	19,314	 	  	 	5,215	 	  	 	18,360	 	  	 	4,171	 
	 	  	 	596,062	 	  	 	8,692	 	  	 	638,678	 	  	 	6,951	 


 The movement in the allowance for impairment in respect of trade and other receivables during the
year was as follows: 
  

									
	  	  	2019	 	    	2018	 
	Balance, beginning of year	  	 	6,951	 	    	 	6,931	 
	Business combinations	  	 	525	 	    	 	104	 
	Bad debt expenses	  	 	2,857	 	    	 	1,944	 
	Amount written off and recoveries	  	 	(1,641	) 	    	 	(2,028	) 
	Balance, end of year	  	 	8,692	 	    	 	6,951	 


 The impaired trade receivables are mostly due from customers that are experiencing financial
difficulties. 
 The promissory note has been individually evaluated for impairment and has been collected in full on February 1,
2020. 
 b)    Liquidity risk 

Liquidity risk is the risk that the Group will not be able to meet its financial obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to its reputation. 
 Cash inflows and cash outflows
requirements from Group’s entities are monitored closely and separately to ensure the Group optimizes its cash return on investment. Typically, the Group ensures that it has sufficient cash to meet expected operational expenses; this excludes
the potential impact of extreme circumstances that cannot reasonably be predicted. The Group monitors its short and medium-term liquidity needs on an ongoing basis using forecasting tools. In addition, the Group maintains revolving facilities, which
have $605.1 million availability at December 31, 2019 (2018 - $455.3 million) and an additional $250 million credit available (C$245 million and US$5 million). The additional credit is available under certain conditions
under the Group’s syndicated bank agreement (2018 - $250 million, C$245 million and US$5 million). 

  

			
	



 	 	46
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 The following are the contractual maturities of the financial liabilities, including
estimated interest payment: 
  

																									
	  	  	 Carrying

amount
	 	  	 Contractual

cash flows
	 	  	 Less than

1 year
	 	  	1 to 2
years	 	  	2 to 5
years	 	  	 More than

5 years
	 
	December 31, 2019	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 
	Bank indebtedness	  	 	3,801	 	  	 	3,801	 	  	 	3,801	 	  	 	-	 	  	 	-	 	  	 	-	 
	Trade and other payables	  	 	443,468	 	  	 	443,468	 	  	 	443,468	 	  	 	-	 	  	 	-	 	  	 	-	 
	Long-term debt	  	 	1,744,687	 	  	 	1,959,582	 	  	 	110,729	 	  	 	773,532	 	  	 	865,273	 	  	 	210,048	 
	Derivatives financial liabilities	  	 	1,731	 	  	 	1,731	 	  	 	843	 	  	 	444	 	  	 	444	 	  	 	-	 
	Other financial liability	  	 	5,174	 	  	 	5,400	 	  	 	2,700	 	  	 	2,700	 	  	 	-	 	  	 	-	 
	 	  	 	2,198,861	 	  	 	2,413,982	 	  	 	561,541	 	  	 	776,676	 	  	 	865,717	 	  	 	210,048	 
							
	December 31, 2018	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 
	Bank indebtedness	  	 	12,334	 	  	 	12,334	 	  	 	12,334	 	  	 	-	 	  	 	-	 	  	 	-	 
	Trade and other payables	  	 	475,585	 	  	 	475,585	 	  	 	475,585	 	  	 	-	 	  	 	-	 	  	 	-	 
	Long-term debt	  	 	1,584,423	 	  	 	1,754,909	 	  	 	181,932	 	  	 	411,567	 	  	 	1,160,505	 	  	 	905	 
	Other financial liability	  	 	5,594	 	  	 	6,000	 	  	 	2,000	 	  	 	2,000	 	  	 	2,000	 	  	 	-	 
	 	  	 	2,077,936	 	  	 	2,248,828	 	  	 	671,851	 	  	 	413,567	 	  	 	1,162,505	 	  	 	905	 


 It is not expected that the contractual cash flows could occur significantly earlier, or at
significantly different amounts. 
 c)    Market risk 

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Group’s
income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposure within acceptable parameters, while optimizing the return. 

The Group buys and sells derivatives, and also incurs financial liabilities, in order to manage market risks. All such transactions are
carried out within the guidelines set by the Group’s management and it does not use derivatives for speculative purposes. 

d)    Currency risk 

The Group is exposed to currency risk on financial assets and liabilities, sales and purchases that are denominated in a currency other
than the respective functional currencies of Group entities. Primarily the Canadian entities are exposed to U.S. dollars and entities having a functional currency other than the Canadian dollars (foreign operations) are not significantly exposed to
currency risk. The Group mitigates and manages its future US$ cash flow by creating offsetting positions through the use of foreign exchange contracts and US$ debt. 

To mitigate its financial net liabilities exposure to foreign currency risk related to Canadian entities, the Group designated a portion
of its U.S. dollar denominated debt as a hedging item in a net investment hedge. 
 The Group’s financial assets and liabilities
exposure to foreign currency risk related to Canadian entities was as follows based on notional amounts: 
  

									
	(in thousands of U.S. dollars)	  	2019	 	 	2018	 
	Trade and other receivables	  	 	30,733	 	 	 	38,030	 
	Trade and other payables	  	 	(2,573	) 	 	 	(3,108	) 
	Long-term debt	  	 	(478,566	) 	 	 	(330,447	) 
	Balance sheet exposure	  	 	(450,406	) 	 	 	(295,525	) 
	Long-term debt designated as investment hedge	  	 	325,000	 	 	 	325,000	 
	Net balance sheet exposure	  	 	(125,406	) 	 	 	29,475	 


 The Group estimates its annual net US$ denominated cash flow from operating activities at
approximately $330 million (2018 - $310 million). This cash flow is earned evenly throughout the year. 

  

			
	



 	 	47
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 The following exchange rates applied during the year: 

 

									
	  	  	2019	 	    	2018	 
	Average US$ for the year ended December 31	  	 	1.3269	 	    	 	1.2957	 
	Closing US$ as at December 31	  	 	1.2988	 	    	 	1.3642	 


 Sensitivity analysis 

A 1-cent increase in the U.S. dollar at the reporting date, assuming all other variables, in
particular interest rates, remain constant, would have increased (decreased) equity and income or loss by the amounts shown below. The analysis is performed on the same basis for 2018. 

 

																	
	  	  	2019	 	  	2018	 
	  	  	1-cent
Increase	 	  	1-cent
Decrease	 	  	1-cent
Increase	 	  	1-cent
Decrease	 
	Balance sheet exposure	  	 	(3,468	) 	  	 	3,468	 	  	 	(2,166	) 	  	 	2,166	 
	Long-term debt designated as investment hedge	  	 	2,502	 	  	 	(2,502	) 	  	 	2,382	 	  	 	(2,382	) 
	Net balance sheet exposure	  	 	(966	) 	  	 	966	 	  	 	216	 	  	 	(216	) 


 Net impact on change in fair value of foreign exchange derivatives is not significant. 

e)    Interest rate risk 

The Group’s intention is to minimize its exposure to changes in interest rates by maintaining a significant portion of fixed-rate
interest-bearing long-term debt. This is achieved by entering into interest rate swaps. 
 The Group enters into interest rate swaps
designated for cash flow hedges. At December 31, 2019, the Group has no interest rate swaps that hedge variable interest debt set using the 30-day Banker`s Acceptance rate (2018 – C$300 million). At
December 31, 2019, the Group has US$325 million interest rate swaps that hedge variable interest debt set using the 30-day Libor rate (2018 – US$325 million). A $13.3 million loss,
$9.8 million net of tax, (2018 – $3.9 million loss, $2.8 million net of tax) was recorded on the marking-to-market of the interest rate derivative to
other comprehensive income for these cash flow hedges. 
 Ineffectiveness in hedging stems from differences between the hedged item and
hedging instruments with respect to interest rate characteristics, currency, notional values and term. For the year ended December 31, 2019, the derivatives designated as cash flow hedges were considered to be fully effective and no
ineffectiveness has been recognized in net income. 
 At December 31, 2019 and 2018, the interest rate profile of the Group’s
carrying amount interest-bearing financial instruments excluding the effects of interest rate derivatives was: 
  

									
	  	  	2019	 	    	2018	 
	Fixed rate instruments	  	 	533,311	 	    	 	345,062	 
	Variable rate instruments	  	 	1,211,376	 	    	 	1,239,361	 
	 	  	 	1,744,687	 	    	 	1,584,423	 



  

			
	



 	 	48
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 
																																									
	 The Group’s interest rate derivatives are as follows: 
	 
	  	  	2019	 	 	2018	 
	  	  	 Average

B.A.
rate
	 	  	Notional
Contract
Amount
CDN$	 	  	Average
Libor
rate	 	  	Notional
Contract
Amount
US$	 	  	Fair
value
CDN$	 	 	Average
B.A.
rate	 	  	Notional
Contract
Amount
CDN$	 	  	Average
Libor
rate	 	  	Notional
Contract
Amount
US$	 	  	Fair
value
CDN$	 
	Coverage period:	  				  				  				  				  				 				  				  				  				  			
	 Less than 1 year
	  	 	0.99%	 	  	 	75,000	 	  	 	1.90%	 	  	 	293,750	 	  	 	(804	) 	 	 	0.99%	 	  	 	225,000	 	  	 	1.92%	 	  	 	325,000	 	  	 	5,430	 
	 1 to 2 years
	  	 	-	 	  	 	-	 	  	 	1.92%	 	  	 	100,000	 	  	 	(444	) 	 	 	-	 	  	 	-	 	  	 	1.89%	 	  	 	237,500	 	  	 	1,812	 
	 2 to 3 years
	  	 	-	 	  	 	-	 	  	 	1.92%	 	  	 	100,000	 	  	 	(444	) 	 	 	-	 	  	 	-	 	  	 	1.92%	 	  	 	100,000	 	  	 	648	 
	 3 to 4 years
	  	 	-	 	  	 	-	 	  	 	-	 	  	 	-	 	  	 	-	 	 	 	-	 	  	 	-	 	  	 	1.92%	 	  	 	75,000	 	  	 	486	 
	Asset (liability)	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	(1,692	) 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	8,376	 
	Presented as:	  				  				  				  				  				 				  				  				  				  			
	 Current assets
	  				  				  				  				  	 	39	 	 				  				  				  				  	 	5,430	 
	 Non-current assets
	  				  				  				  				  	 	-	 	 				  				  				  				  	 	2,946	 
	 Current liabilities
	  				  				  				  				  	 	(843	) 	 				  				  				  				  	 	-	 
	 Non-current liabilities
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	(888	) 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	-	 


 The fair value of the interest rate swaps has been estimated using industry standard valuation
models which use rates published on financial capital markets, adjusted for credit risk. 
 Fair value sensitivity analysis for
fixed rate instruments 
 The Group does not account for any fixed rate financial liabilities at fair value through income or
loss. Therefore a change in interest rates at the reporting date would not affect income or loss. 
 Cash flow sensitivity
analysis for variable rate instruments 
 A 1% change in interest rates at the reporting date would have increased (decreased)
equity and net income or net loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for 2018. 

 

																	
	  	  	2019	 	 	2018	 
	  	  	1% increase	 	 	1% decrease	 	 	1% increase	 	 	1% decrease	 
	Interest on variable rate instrument	  	 	(5,786	) 	 	 	5,786	 	 	 	(3,633	) 	 	 	3,633	 
					
	 Impact on instruments used in cash flow hedge:
  
	  				 				 				 			
	 	  	 	2019	 	 	 	2018	 
	 	  	 	1% increase	 	 	 	1% decrease	 	 	 	1% increase	 	 	 	1% decrease	 
	Interest on variable rate instrument	  	 	(3,251	) 	 	 	3,251	 	 	 	(4,896	) 	 	 	4,896	 
	Interest on interest rate swaps	  	 	3,251	 	 	 	(3,251	) 	 	 	4,896	 	 	 	(4,896	) 
	  	  	-	 	 	-	 	 	-	 	 	-	 


  
 Net impact on change in fair
value of interest rate swaps is not significant. 
 f)     Capital management 

For the purposes of capital management, capital consists of share capital and retained earnings of the Group. The Group’s objectives
when managing capital are: 
  

	 	•	 	 To ensure proper capital investment in order to provide stability and competitiveness to its operations;



  

	 	•	 	 To ensure sufficient liquidity to pursue its growth strategy and undertake selective acquisitions; 



 

	 	•	 	 To maintain an appropriate debt level so that there are no financial constraints on the use of capital; and



  

	 	•	 	 To maintain investors, creditors and market confidence. 



  

			
	



 	 	49
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 The Group seeks to maintain a balance between the highest returns that might be possible
with higher level of borrowings and the advantages and security by a sound capital position. 
 The Group monitors its long-term debt
using the ratios below to maintain an appropriate debt level. The Group’s debt-to-equity and
debt-to-capitalization ratios are as follows: 
  

									
	  	  	2019	 	    	2018	 
	Long-term debt	  	 	1,744,687	 	    	 	1,584,423	 
	Shareholders’ equity	  	 	1,506,835	 	    	 	1,576,854	 
	Debt-to-equity ratio	  	 	1.16	 	    	 	1.00	 
	Debt-to-capitalization ratio1	  	 	0.54	 	    	 	0.50	 


 1 Long-term debt divided by the sum of
shareholders’ equity and long-term debt. 
 There were no changes in the Group’s approach to capital management during the
year. 
 The Group’s credit facility agreement requires monitoring two ratios on a quarterly basis. The first is a ratio of total
debt plus letters of credit and some other long-term liabilities to net income or loss from continuing operations before finance income and costs, income tax expense (recovery), depreciation, amortization, impairment of intangible assets, bargain
purchase gain, and gain or loss on sale of land and buildings, assets held for sale and intangible assets (“Adjusted EBITDA”). The second is a ratio of adjusted earnings before interest, income taxes, depreciation and amortization and rent
expense (“EBITDAR”), and, including last twelve months adjusted EBITDAR from acquisitions to interest and net rent expenses. These ratios are measured on a consolidated last twelve-month basis and are calculated as prescribed by the credit
agreement which, among other things, requires the exclusion of the impact of IFRS 16. These ratios must be kept below a certain threshold so as not to breach a covenant in the Group’s syndicated bank. At December 31, 2019 and
December 31, 2018, the Group was in compliance with its financial covenants. 
 Management believes that the Group has sufficient
liquidity to continue both its operations as well as its acquisition strategy. 
 Upon maturity of the Group’s long-term debt, the
Group’s management and its Board of Directors will assess if the long-term debt should be renewed at its original value, increased or decreased based on the then required capital need, credit availability and future interest rates. 

  

			
	



 	 	50
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 g)    Accounting classification and fair values 

The fair values of financial assets and liabilities, together with the carrying amounts shown in the statements of financial position, are
as follows: 
  

																	
	  	  	            2019	 	    	            2018	 
	  	  	Carrying
Amount	 	    	Fair
Value	 	    	Carrying
Amount	 	    	Fair
Value	 
	 Financial assets
	  				    				    				    			
	 Assets carried at fair value
	  				    				    				    			
	 Derivative financial instruments
	  	 	39	 	    	 	39	 	    	 	8,376	 	    	 	8,376	 
	 Investment in equity securities
	  	 	1,391	 	    	 	1,391	 	    	 	1,498	 	    	 	1,498	 
	 Assets carried at amortized cost
	  				    				    				    			
	 Trade and other receivables
	  	 	587,370	 	    	 	587,370	 	    	 	631,727	 	    	 	631,727	 
	 Promissory note
	  	 	24,814	 	    	 	24,814	 	    	 	22,686	 	    	 	22,686	 
	 	  	 	613,614	 	    	 	613,614	 	    	 	664,287	 	    	 	664,287	 
					
	 Financial liabilities
	  				    				    				    			
	 Liabilities carried at fair value
	  				    				    				    			
	 Derivative financial instruments
	  	 	1,731	 	    	 	1,731	 	    	 	-	 	    	 	-	 
	 Other financial liability
	  	 	5,174	 	    	 	5,174	 	    	 	5,594	 	    	 	5,594	 
	 Liabilities carried at amortized cost
	  				    				    				    			
	 Bank indebtedness
	  	 	3,801	 	    	 	3,801	 	    	 	12,334	 	    	 	12,334	 
	 Trade and other payables
	  	 	443,468	 	    	 	443,468	 	    	 	475,585	 	    	 	475,585	 
	 Long-term debt
	  	 	1,744,687	 	    	 	1,748,556	 	    	 	1,584,423	 	    	 	1,647,146	 
	 	  	 	2,198,861	 	    	 	2,202,730	 	    	 	2,077,936	 	    	 	2,140,659	 


 Interest rates used for determining fair value 

The interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve at December 31
plus an adequate credit spread, and were as follows: 
  

									
	  	  	2019	 	    	2018	 
	 Long-term debt
	  	 	3.3%	 	    	 	3.9%	 


 Fair value hierarchy 

Group’s financial assets and liabilities recorded at fair value on a recurring basis are investment in equity securities and the
derivative financial instruments discussed above. Investment in equity securities is measured using level-1 inputs of the fair value hierarchy and derivative financial instruments are measured using level-2 inputs. 
 The fair value of the promissory note represents the present value of the future
cash flows, based on the interest rate of the note, discounted by the company specific rate of the counterparty of the note. The company specific rate is comprised of a risk-free market rate and a company specific premium based on their risk
profile. The counterparty to the note is GFL, a private company, for which limited publicly available information exists. At the issuance of the promissory note, the fair value was established using public information on the source of funding to
acquire the Waste Management segment. Subsequent to the initial measurement, adjustments to the company risk premium are made based on the analysis of published financial information and on significant macro environmental factors impacting their
segment. The risk-free market rate is publicly available. 
 27.     Contingencies, letters of credit and other commitments

 a)    Contingencies 

There are pending operational and personnel related claims against the Group. The Group has accrued $2.6 million for claim
settlements that are presented in long-term provisions on the consolidated statements of financial position (2018 – $10.3 million in long-term provisions). In the opinion of management, these claims are adequately provided for and
settlement should not have a significant impact on the Group’s financial position or results of operations. 

  

			
	



 	 	51
















			
	 TFI International Inc.

(Tabular amounts in thousands of Canadian dollars, unless otherwise noted.)
	  	 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2019 AND 2018


  

 b)     Letters of credit 

As at December 31, 2019, the Group had $41.7 million of outstanding letters of credit (2018 - $39.4 million). 

c)     Other commitments 

As at December 31, 2019, the Group had $35.2 million of purchase commitments (2018 – $51.0 million) and
$12.0 million of purchase orders for leases that the Group intends to enter into and that are expected to materialize within a year (2018 – nil). 

28. Related parties 

Parent and ultimate controlling party 

There is no single ultimate controlling party. The shares of the Company are widely held. 

Transactions with key management personnel 

Board members of the Company, executive officers and top managers of major Group’s entities are deemed to be key management
personnel. No compensation (2018 – $0.1 million) was paid to a board member for consulting services provided during 2019. There were no other transactions with key management personnel other than their respective compensation. 

Key management personnel compensation 

In addition to their salaries, the Company also provides non-cash benefits to board members and
executive officers. 
 Executive officers also participate in the Company’s stock option and performance contingent restricted
share unit plans and board members are entitled to deferred share units, as described in note 21. Costs incurred for key management personnel in relation to these plans are detailed below. 

 

									
	Key management personnel compensation comprised:	  	 	 	    	 
	  	  	2019	 	    	2018 
	Short-term benefits	  	 	14,919	 	    	 	14,756	 
	Post-employment benefits	  	 	834	 	    	 	959	 
	Equity-settled share-based payment transactions	  	 	4,909	 	    	 	4,193	 
	Cash-settled share-based payment transactions	  	 	1,469	 	    	 	1,126	 
	 	  	 	22,131	 	    	 	21,034	  



  

			
	



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