OperatingTable results improvement is dependent on the successful implementation of numerous performance improvement initiatives throughout the Company. There can be no assurance that we will be successful in implementing these initiatives to improve future operating results and this could have a material adverse effect on our financial condition. Contents

FluctuationsTable in the price and availability of fuel may adversely impact future profitability. Contents

OurTable business is subject to seasonal fluctuations. In the trucking industry for a typical year, the second and third quarters usually have the highest business levels, while the first and fourth quarters generally have the lowest business levels. The fourth quarter holiday season and adverse weather conditions generally experienced in the first quarter of the year, such as heavy snow and ice storms, have a negative impact on operating results. Contents

WeTable face litigation risks that could have a material adverse effect on the operation of our business. Contents

WeTable depend on our information technology systems in order to deliver reliable transportation services to our customers in an efficient and timely manner. We have integrated the information technology and operations of our acquired companies and will integrate future acquisitions within our U.S. LTL business unit. Any disruption to our technology infrastructure could result in delays in delivery of transportation services to our clients and increased operating costs as a result of decreased operating efficiencies, each of which could adversely impact our customer service, revenues and profitability. While we have invested and continue to invest in technology security initiatives and disaster recovery plans, these measures cannot fully protect us from technology disruptions that could have a material adverse effect on us. Our information technology remains susceptible to outages, computer viruses, break-ins and similar disruptions that may inhibit our ability to provide services to our customers and the ability of our customers to access our systems. This may result in the loss of customers or a reduction in demand for our services. Integration initiatives may not realize the anticipated benefits due to operational issues, disruptions and distractions for employees and management, and potential failures in due diligence. Contents

•Table our quarterly or annual earnings or those of other companies in our industry;Contents

•Table sales of common shares by our directors and executive officers; andContents

Vitran’sTable corporateof office is located at 185 The West Mall, Suite 701, Toronto, Ontario, Canada, M9C 5L5. The 3,900 square foot office is occupied under a lease expiring in September 2015. Contents

NotTable applicable.of Contents

AtTable December 31, 2012, there was an unlimited number of common shares authorized and 16,399,241 common shares issued and outstanding. The holders of the common shares are entitled to one vote for each common share on all matters voted on at any meetings of Vitran’s shareholders, to any dividends that may be declared by the Company’s Board of Directors thereon, and in the event of the liquidation, dissolution or winding up of the Company, will be entitled to receive the remaining property. Contents

(3)Table Vitran recorded a non-cash tax expense of $38.9 million to establish a valuation allowance for deferred tax assets related to net operating losses and tax deductible goodwill in the United States.Contents

•Table theof Company’s expectation that revenue per hundredweight will increase in upcoming quarters as the freight mix and internal leadership in the pricing department impacts the LTL segment;Contents

SuchTable forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Vitran’s actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that may cause such differences include but are not limited to technological change, increase in fuel costs, regulatory change, the general health of the economy, changes in labor relations, geographic expansion, capital requirements, availability of financing, claims and insurance costs, environmental hazards, availability of qualified drivers and competitive factors. More detailed information about these and other factors is included in the MD&A and in Item 1A – Risk Factors. Many of these factors are beyond the Company’s control; therefore, future events may vary substantially from what the Company currently foresees. You should not place undue reliance on such forward-looking statements. Vitran Corporation Inc. does not assume the obligation to revise or update these forward-looking statements after the date of this document or to revise them to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws. Contents

OnTable February 12, 2013, Vitran signed an agreement to sell its SCO services business to Legacy for $97.0 million in cash, subject to working capital adjustments. The sale of the SCO business is expected to close by March 1, 2013, upon completion of the purchaser’s financing, and is subject to customary conditions for this type of transaction. A portion of the proceeds from the sale will be used to fully reduce Vitran’s debt under its revolving credit facility, except for outstanding letters of credit, and to support the development of Vitran’s LTL operation. The operating results of the SCO segment have been recorded as a discontinued operation. Contents

FinancialTable Overviewof Contents

FASBTable ASU No. 2011-04, Fair Value Measurement, provides guidance to improve the comparability of fair value measurements presented in financial statements prepared in accordance with GAAP and International Financial Reporting Standards. The new standard requires the Company to report the level in the fair value hierarchy of assets and liabilities not measured at fair value on the balance sheet, but for which the fair value is disclosed, and to expand existing disclosures. FASB ASU No. 2011-04 was adopted by the Company on January 1, 2012. Contents

25Table of Contents

DuringTable theof 2011 fourth quarter, the Company sold six facilities within the U.S. LTL business unit that were held for sale and not being utilized in operations. Vitran generated $1.3 million in proceeds and recorded a $0.5 million loss in loss from continuing operations. Furthermore, the Company will have cost savings from reduced Contents

(5)Table Revenue per hundredweight is the price obtained for transporting 100 pounds of LTL freight from point to point, calculated by dividing the revenue for an LTL shipment by the hundredweight (weight in pounds divided by 100) for a shipment.Contents

ManagementTable estimates that cash capital expenditures for the 2013 fiscal year will be between $10.0 million and $15.0 million. The Company may enter into operating leases to fund the acquisition of specific equipment should the business levels exceed the current equipment capacity of the Company. The Company expects to finance its capital requirements with cash flow from operations, operating leases and, if required, its $19.0 million of unused credit facilities. Contents

CRITICAL ACCOUNTINGTable POLICIESof AND ESTIMATES Contents

ClaimsTable and insurance accruals reflect the estimated ultimate total cost of claims, including amounts for claims incurred but not reported and future claims development, for cargo loss and damage, bodily injury and property damage, workers’ compensation, long-term disability and group health. In establishing these accrued expenses, management evaluates and monitors each claim individually and claim frequency. Factors such as historical experience, known trends and third party estimates help determine the appropriate reserves for the estimated liability. Changes in severity of previously reported claims, significant changes in the medical costs and legislative changes affecting the administration of the plans could significantly impact the determination of appropriate reserves in future periods. In Canada, the Company has a $50,000 deductible and in the United States Contents

PropertyTable and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives. Management establishes appropriate useful lives for all property and equipment based upon, among other considerations, historical experience, change in equipment manufacturing specifications, the used equipment market and prevailing industry practice. Management continually monitors events and changes in circumstances that could indicate that the carrying amounts of property and equipment may not be recoverable. When indicators of potential impairment are present, the recoverability of the assets would be assessed from the estimated undiscounted future operating cash flows expected from the use of the assets. Actual recoverability of assets could differ based on different assumptions, estimates or other factors. In the event that recoverability was impaired, the fair value of the asset would be recorded and an impairment loss would be recognized. Management believes its estimates of useful lives and salvage values have been reasonable as demonstrated by the insignificant amounts of gains and losses on revenue equipment dispositions. Contents

FASBTable ASC 740-10 requires that uncertain tax positions are evaluated in a two-step process, whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company would recognize the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement with the related tax authority. Contents

ITEM 7.Table A—QUANTITATIVEof AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Contents

33Table of Contents

/s/ KPMGTable LLPof Contents

(b)Table Basis of presentation:Contents

(d)Table Foreignof currency translation:Contents

NotesTable toof Consolidated Financial Statements Contents

(i)Table Propertyof and equipment:Contents

(k)Table Goodwillof and intangible assets:Contents

AdvertisingTable costsof are expensed as incurred. Advertising costs amounted to $264 in 2012 (2011 - $397; 2010 - $301). Contents

TheTable preparation of financial statements in accordance with United States GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the year. Significant estimates are used in determining, but not limited to, the allowance for doubtful accounts, deferred tax assets, claims and insurance accruals, share-based compensation, fair value measurements, intangible asset values and the fair value of reporting units for purposes of goodwill impairment tests. Actual results could differ from those estimates. Contents

TheTable followingof table summarizes the assets and liabilities from discontinued operations: Contents

5.Table Intangibleof assets:Contents

49Table of Contents

(c)Table The Company’s U.S. real estate term credit facility is secured by 18 transportation terminals in the United States. The Company had $16.8 million outstanding at December 31, 2012, bearing interest at 4.625% to 4.875% with an interest rate adjustment period of every three to five years. The facility matures on January 1, 2028. Proceeds from this term credit facility were used to repay the Company’s previous term bank credit facility secured by specific real estate in the United States. At December 31, 2011, the Company had $3.5 million outstanding under its previous term credit facility, bearing interest at 3.1%.Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2012~~2013

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-32449

VITRAN CORPORATION INC.

(Exact name of registrant as specified in its charter)


Ontario, Canada		98-0358363
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

185 The West Mall, Suite 701, Toronto, Ontario, Canada, M9C 5L5

(Address of principal executive offices and zip code)

416-596-7664

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registered

Common Shares

Toronto Stock Exchange – TSX^®

NASDAQ – Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Aggregate market value of the registrant’s voting stock held by persons other than Directors, Officers and registered holders of 10% of the outstanding voting stock, based upon the closing price per share on June 30, ~~2012~~2013 was approximately $7080,000,000

Number of shares of common stock outstanding as of ~~February~~March 1917, ~~2013~~2014: 16,~~399~~465,241

DOCUMENTS INCORPORATED BY REFERENCE

1) Portions of the Proxy Statement for the 2013 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed within 120 days of the end of the fiscal year ended December 31, 2012, are incorporated by reference in Part III hereof. Except with respect to information specifically incorporated by reference in this Form 10-K, the Proxy Statement is not deemed to be filed as part hereof.

TABLE OF CONTENTS

Item		Page
PART I
1.	Business		3
1. A	Risk Factors		7
1. B	Unresolved Staff Comments		1513
2.	Properties		1513
3.	Legal Proceedings		1614
4.	Mine Safety Disclosures		1614
PART II
5.	Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities		1715
6.	Selected Financial Data		1917
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		2118
7. A	Quantitative and Qualitative Disclosures about Market Risk		3329
8.	Financial Statements and Supplementary Data		3329
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		6052
9. A	Controls and Procedures		6052
9. B	Other Information		6355
PART III
10.	Directors and Executive Officers and Corporate Governance		6355
11.	Executive Compensation		6361
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		6477
13.	Certain Relationships and Related Transactions, and Director Independence		6477
14.	Principal Accounting Fees and Services		6477
PART IV
15.	Exhibits, Financial Statement Schedules		6477

Unless otherwise indicated, all dollar references herein are in United States dollars.

Forward-Looking Statements

Forward-looking statements appear in the Annual Report on Form 10-K, including but not limited to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other written and oral statement made by or on behalf of us. Our forward-looking statements are based on our beliefs and assumptions using information available at the time the statements are made. We direct the reader to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a more thorough description of forward-looking statements.

PART I

ITEM 1—BUSINESS

OVERVIEW

Vitran Corporation Inc. (“Vitran” or the “Company”) is a leading, predominantly non-union, provider of less-than-truckload surface transportation services (“LTL”) throughout Canada. ~~and~~Vitran inoffers ~~34 states in the eastern~~national, ~~southeastern~~regional, ~~central, southwestern,~~ expedited and ~~western~~transborder ~~United States. These~~ services ~~are~~through ~~provided~~its ~~by stand~~wholly-~~alone~~owned ~~business units within their respective countries~~subsidiaries. ~~The business units operate independently or in a complementary manner to provide solutions depending on a customer’s needs.~~ For the years ended December 31, ~~2012~~2013 and ~~2011~~2012, the Company had revenues of $~~702~~193.9 4 million and $~~686~~193.29 million, respectively.

~~The Company is also a provider of supply chain services throughout Canada and the United States which operates independently of the LTL business.~~ On ~~February~~December 129, 2013 , Vitran ~~signed~~entered aninto ~~agreement~~a todefinitive ~~sell~~agreement ~~its Supply Chain Operation~~ (the “~~SCO~~Manitoulin Agreement”) ~~services~~with ~~business~~2398946 toOntario ~~Legacy SCO~~ Inc. ~~(“Legacy”), an~~and ~~affiliate~~North Channel of ~~Legacy~~Georgian ~~Supply~~Bay ~~Chain,~~Holdings ~~for $97~~Ltd.0 ~~million~~(collectively, in“Manitoulin ~~cash,~~Transport”) ~~subject~~pursuant to ~~working~~which ~~capital~~Manitoulin ~~adjustments.~~Transport ~~Legacy~~agreed ~~has~~to ~~obtained~~acquire ~~written~~all ~~commitments~~of ~~from~~the ~~certain~~outstanding ~~financial~~common ~~institutions~~shares toof ~~provide~~Vitran ~~sufficient~~for ~~debt~~$6.00 ~~financing~~in tocash ~~close~~per ~~the~~share, ~~transaction.~~by ~~The financing~~way isof ~~subject~~a toplan ~~customary~~of arrangement ~~conditions~~under ~~and~~ the ~~financial~~Business ~~institutions’~~Corporations ~~completion~~Act of(Ontario). ~~confirmatory~~Subsequently, ~~due~~on ~~diligence.~~December 20, ~~The~~2013, ~~sale~~the board of ~~the~~directors ~~SCO~~of ~~business~~Vitran isdetermined ~~expected~~that toa ~~close~~proposal byfor ~~March 1,~~$6.50 ~~2013,~~in ~~upon~~cash ~~completion~~per ofshare ~~the~~received ~~Legacy~~from ~~financing,~~TransForce ~~and~~Inc. is(“TransForce”) ~~subject~~was toa ~~customary~~“superior ~~conditions~~proposal” for ~~this~~the ~~type~~purposes of ~~transaction.~~the Manitoulin Agreement.

On December 30, 2013, Manitoulin Transport waived its right to match the TransForce proposal. Vitran and Manitoulin Transport agreed to terminate the Manitoulin Agreement concurrent with the entering into a definitive arrangement agreement with TransForce (the “TransForce Agreement”) and the termination fee of $4.0 million payable to Manitoulin Transport was paid by Vitran. On December 30, 2013, Vitran entered into a definitive arrangement agreement with TransForce pursuant to which TransForce has agreed to acquire all of the outstanding common shares of Vitran not already owned by TransForce for $6.50 in cash per share.

The transaction with TransForce is structured as a Plan of Arrangement under the Business Corporations Act (Ontario) (the “Arrangement”). The Arrangement has been unanimously approved by the board of directors of Vitran and was subject to approval by the shareholders of Vitran at a special meeting held on March 5, 2014 (the “Special Meeting”). The proposal to approve the Arrangement was voted on and approved at the Special Meeting by the following vote:

For: 12,045,848* Against: 645,062 Abtain: 1,554 Non-Vote: Nil

*	Includes 3,278,232 common shares held by TransForce and its affiliates; 8,767,616 votes were recorded for this proposal if these shares are excluded.

The Arrangement was also subject to final approval of the Ontario Superior Court of Justice following the Special Meeting, which was granted by Order of the Court on March 6, 2014

The Arrangement remains subject to the receipt of applicable regulatory approvals (including approval under the Competition Act) and to satisfaction of other customary closing conditions. The Arrangement is not conditional on TransForce obtaining financing or on completion of due diligence. The TransForce Agreement contains customary non-solicitation provisions and provides that the board of directors of Vitran may, under certain circumstances, terminate the TransForce Agreement in order to accept an unsolicited superior proposal, subject to a matching right in favour of TransForce. If the TransForce Agreement is terminated in certain circumstances, including if Vitran accepts a superior proposal, TransForce is entitled to a termination payment of $4.0 million. The

Arrangement is expected to close in March 2014. An information circular (the “Information Circular”) outlining details of the Arrangement and Special Meeting was mailed to shareholders in February 2014. Copies of the Information Circular are available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

On September 23, 2013, Vitran entered into an agreement to sell the shares of its U.S. Less-Than-Truckload business unit (“U.S. LTL”) to Data Processing LLC, a company owned by industry veteran Matthew Moroun for cash consideration of $2.0 million and the assumption of $32.8 million of real estate and capital lease debt by the purchaser. In addition, the purchaser agreed to fund cash deficits incurred by U.S. LTL from September 23, 2013 through to the date of closing of the transaction. The transaction closed on October 7, 2013 and the purchaser had funded $1.4 million of cash deficits incurred by U.S. LTL between September 23, 2013 and October 7, 2013. Prior to closing the sale, the Company agreed to capitalize U.S. LTL with cash of $5.0 million. The Company recorded a loss of $45.9 million on the sale of its U.S. LTL business. The operating results and divestiture of the U.S. LTL business unit have been recorded as a discontinued operation.

On February 12, 2013, Vitran signed an agreement to sell its Supply Chain Operation (“SCO”) services business to Legacy SCO Inc. (“Legacy”), an affiliate of Legacy Supply Chain, for $97.0 million in cash, subject to working capital adjustments. On March 4, 2013, the Company completed the sale of SCO for $97.0 million in cash, and a portion of the proceeds was used to fully reduce Vitran’s debt under its revolving credit facility. The Company received an additional $1.8 million in proceeds in the second quarter of 2013 upon final determination of the aforementioned working capital adjustments. The Company recorded a gain of $84.6 million on the sale of its SCO business. The operating results and divestiture of the SCO segment have been recorded as a discontinued operation.

CORPORATE STRUCTURE

Vitran’s principal executive and registered office is located at 185 The West Mall, Suite 701, Toronto, Ontario, Canada, M9C 5L5. Vitran Corporation Inc. was incorporated in Ontario under the Business Corporation Act (Ontario) on April 29, 1981.

Vitran’s business is carried on through its subsidiaries which hold the relevant licenses and permits required to carry on business. The following are Vitran’s principal operating subsidiaries (including their jurisdiction of incorporation), all wholly owned as at December 31, ~~2012~~2013: Vitran Express Canada Inc. (Ontario); ~~Can-Am~~and ~~Logistics Inc. (Ontario); Vitran Logistics Ltd. (Ontario);~~ Expéditeur T.W. Ltée (Canada)~~; Vitran Corporation (Nevada); Vitran Express Inc~~. ~~(Pennsylvania); Vitran Logistics Corp. (Delaware); Vitran Logistics Inc. (Indiana); and Las Vegas/L.A. Express, Inc. (California).~~

OPERATING SEGMENTS

~~Segment~~Vitran ~~financial~~has ~~information~~grown isorganically ~~included~~and inmade ~~Note~~strategic 12acquisitions to ~~the~~build ~~Consolidated~~a ~~Financial~~comprehensive ~~Statements~~LTL network throughout Canada.

Vitran Express Canada is a leading regional and national LTL ~~Services~~service provider. With 18 terminals in major metropolitan areas across 10 provinces, freight is transported over the highway or via rail intermodal service. Vitran also provides a premium expedited service between Central and Western Canada, Maxximum, for time sensitive shipments reducing transit time by as much as 40% utilizing driver teams.

~~Vitran~~The ~~has grown~~Company ~~organically~~provides next-day service within Ontario, Quebec and ~~made~~parts ~~strategic~~of ~~acquisitions~~western toCanada, ~~build~~and agenerates ~~comprehensive~~most of its revenue from the movement of LTL ~~network~~freight ~~throughout~~within the three-to-five-day east-west service lanes. The majority of its trans-Canada ~~and~~freight inis ~~the~~shipped ~~eastern~~intermodally, ~~southeastern,~~whereby ~~central,~~the ~~southwestern,~~Company’s containers are loaded onto rail cars and ~~western~~trans-loaded ~~United~~to Vitran ~~States~~facilities where Vitran’s network of owner operators pick up and deliver the freight to various destinations. An expedited service solution is also offered nationally using over-the-road driver teams to complete these deliveries in a shorter time frame.

On May 31, 2005, Vitran expanded into the southwestern United States by acquiring Chris Truck Line (“CTL”), a Kansas-based regional less-than-truckload carrier serving 11 states. With the acquisition of CTL, Vitran obtained an additional 19 service centers covering 11 states, including new territory in Colorado, Kansas, Oklahoma, and Texas. On January 3, 2006, Vitran, through its subsidiary Vitran Express West Inc., expanded into the western United States by acquiring the assets of Sierra West Express (“SWE”), a Nevada-based regional less-than-truckload carrier serving three states. With the acquisition of SWE, Vitran expanded its footprint to California, Nevada, and Arizona. On October 2, 2006, Vitran expanded into the eastern United States by acquiring PJAX Freight System (“PJAX”), a Pennsylvania-based regional less-than-truckload carrier serving 11 states. With the acquisition of PJAX, Vitran obtained 22 service centers including expanded and new state coverage in New Jersey, Pennsylvania, Delaware, Maryland, West Virginia and Virginia. During 2008, the U.S. LTL business unit launched a new integrated operating system and completed the physical and operational integrations of all its LTL companies. On December 31, 2009, these acquired companies were re-organized for tax purposes with Vitran’s existing LTL operation, Vitran Express Inc. (Indiana), to form Vitran Express Inc. (Pennsylvania). On February 19, 2011, Vitran acquired selected assets of Milan Express Inc.’s (“Milan”) LTL division, a private LTL carrier headquartered in Milan, Tennessee. With the acquisition of Milan, Vitran added 19 service centers including expanded and new state coverage in Alabama, Georgia, Mississippi, North Carolina and South Carolina.

Within the United States, the Company operates primarily within the eastern, southeastern, central, southwestern and western United States and delivers approximately 80.0% of its freight shipments within one or two days. In addition, the Company offers its services to the other regions in the United States (other than Alaska and Hawaii) through its strategic inter-regional relationships. The service is provided over-the-road, mostly by Company drivers, which allows more control in servicing these time-sensitive shipments. Vitran’s U.S. LTL business represented approximately 72.4% of total LTL revenues for the year ended December 31, 2012.

Within Canada, the Company provides next-day service within Ontario, Quebec and parts of western Canada, and generates most of its revenue from the movement of LTL freight within the three- to five-day east-west service lanes. The majority of its trans-Canada freight is shipped intermodally, whereby the Company’s containers are loaded onto rail cars and trans-loaded to Vitran facilities where Vitran’s network of owner operators pick up and deliver the freight to various destinations. An expedited service solution is also offered nationally using over-the-road driver teams to complete these deliveries in a shorter time frame. Vitran’s Canadian LTL business represented approximately 27.6% of total LTL revenues for the year ended December 31, 2012.

Vitran’s Transborder Service Solution (inter-regional) provides over-the-road service between its Canadian LTL and U.S. LTL business units. This is the Company’s largest opportunity for growth and highest margin business, achieving a five-year compounded average growth rate of approximately 1% per annum at December 31, 2012.

Supply Chain Operation

On February 12, 2013 the Company signed an agreement to sell the shares of its operating subsidiaries that formed its SCO business to Legacy for $97.0 million in cash proceeds, subject to working capital adjustments. The sale of the SCO business is expected to close by March 1, 2013, upon completion of the Legacy financing, and is subject to customary conditions for this type of transaction. The operating results of the segment have been recorded as a discontinued operation.

Vitran’s SCO involves the management and transportation of goods and the provision of information about such goods as they pass through the supply chain from manufacturer to end user. SCO’s role is to design a supply chain network for a customer, contract with the necessary suppliers, as well as implement the design and management of the logistical system. Vitran’s SCO offers a range of services in Canada and the United States including cross-docks, inventory management, flow-through distribution facilities, and dedicated distribution facilities that focus primarily on long-term customized supply chain solutions. In addition, SCO provides over-the-road or intermodal freight brokerage services with sales offices in Toronto and Los Angeles, so as to capitalize on international traffic flows in North America.

Truckload

On November 30, 2010, the Company sold the majority of the rolling stock of the former Truckload segment for proceeds of $3.0 million and retained the net working capital of $2.0 million. The Company recorded a gain of $2.2 million on the equipment sold and wrote off the remaining $4.8 million of goodwill attributable to this business in Fiscal 2010. The operating results and divestiture of the segment have been recorded as a discontinued operation.

THE TRUCKING INDUSTRY

The trucking industry consists of two segments, specifically private fleets and “for-hire” carriers. The private carrier segment consists of fleets owned and operated by shippers who move their own goods. The “for-hire” segment is further divided into Truckload (“TL”) and LTL sub-segments, based on the typical shipment size handled by the carrier. TL refers to carriers transporting shipments greater than 10,000 pounds and LTL refers to carriers generally transporting shipments of less than 10,000 pounds. Vitran is predominantly an LTL carrier with a focus on regional and inter-regional LTL lanes.

LTL carriers transport freight for multiple customers to multiple destinations on each trailer or container. This service requires a network of local pick-up and delivery terminals, hub facilities, and driver fleets. The LTL business is capital intensive, and achieving significant density of operations ~~in a given region~~ can afford a competitive advantage since greater freight volumes are better able to support fixed costs. Vitran believes the national and regional LTL industry offers a favorable operating model and provides substantial growth opportunities for the following reasons:

• the trend among shippers toward minimal inventories, deferred air freight, and regional distribution has increased the demand for ~~next-day~~LTL ~~and second-day delivery service~~services;

• ~~regional~~ carriers with sufficient scale and freight density to support local terminal networks can offer greater service reliability and minimize the costs associated with intermediate handling; and

• ~~regional~~ carriers that are predominantly non-union, ~~which~~can ~~offers~~offer cost savings, greater flexibility, and a lower likelihood of service disruptions, compared with unionized carriers~~; and~~.

• there has been a reduction of capacity as weaker competitors exit the business.

MARKETING AND CUSTOMERS

Vitran derives its revenue from thousands of customers from a variety of geographic regions and industries in Canada ~~and the United States~~. The Company has no customer that represents more than 34.04% of Vitran’s revenues. At December 31, ~~2012~~2013, the Company employed ~~124~~40 sales associates. Sales associates maintain a dialogue with new and existing customers within the geographic market. New customers are obtained through referrals, cold calls and trade publications. The sales associates receive a base salary and, depending on the business unit, a variable compensation package that can be linked to revenue generation, business unit profitability and days-sales- outstanding.

The LTL segment analyzes the price level that is appropriate for each particular shipment of freight. When necessary, Vitran competes to secure revenue by participating in bid solicitations, provided its customer recognizes the Company as a core carrier over a contracted period of time.

EMPLOYEES

At December 31, ~~2012~~2013, Vitran employed approximately ~~5,443~~ 455 full- and part-time employees and contracted with approximately 183 owner operators. The ~~vast~~ majority of our employees are not represented by unionized collective bargaining agreements. The advantage of employing predominantly non-union labour is more work rules flexibility with respect to work schedules, routes and other similar items. Work rule flexibility is important in our business segments to meet the service level requirements of our customers.

A total of 119 Vitran employees are represented by two labor unions. The International Brotherhood of Teamsters and Unifor represent dock workers in two of Vitran’s Canadian terminals. The Company has never had a work stoppage. The collective bargaining agreements between the Company and its unionized employees expire on March 31, 2018 and on February 29, 2020, respectively.

A total of 110 Vitran employees are represented by two labor unions, representing 2.0% of the Company’s labour force. The International Brotherhood of Teamsters and the Canadian Auto Workers Association represent dock workers in two of Vitran’s Canadian terminals. The Company has never had a work stoppage. The collective bargaining agreements between the Company and its unionized employees expire on February 28, 2014 and on March 31, 2015, respectively.

INFORMATION TECHNOLOGY

Vitran uses technology to reduce costs, improve productivity, and enhance its customer service. Vitran allows its customers to access or exchange information with the Company via Vitran’s website, published web services, electronic data interchange, or over the telephone. The Company uses sophisticated freight handling software to maximize its load average, reduce freight handling, reduce transit times, and improve tracking of shipments through its system. ~~In the second quarter of 2012,~~ Vitran’s U.S. LTL business unit completed the process of migrating all of its U.S. LTL operations to in-cab tablet technology and real time dispatch management system that further enhanced the Company’s technology platform and helped deliver superior service to its customers. Vitran continues to develop its transportation operating systems to enhance the efficiency and effectiveness of service to its customers and improve productivity throughout the organization.

SEASONALITY

In the trucking industry for a typical year, the months of September and October usually have the highest business levels, while the months of December, January and February generally have the lowest business levels. Adverse weather conditions generally experienced in the first quarter of the year, such as heavy snow and ice storms, have a negative impact on operating results. Accordingly, revenue and profitability are normally lowest in the first quarter.

REGULATION

Regulatory agencies exercise broad powers over the trucking industry, generally governing such activities as authorization to engage in motor carrier operations, safety and financial reporting. The industry also may become subject to new or more restrictive regulations relating to fuel emissions, ergonomics, or limits on vehicle weight and size. Additional changes in the laws and regulations governing the trucking industry could affect the economics of the industry by requiring changes in operating practices or by influencing the demand for and the costs of providing services to customers. In addition to the U.S. Department of Transportation (“DOT”), Vitran is subject to regulations from, but not limited to, the Department for Homeland Security, Environmental Protection Agency, and the Food and Drug Administration.

From time to time, various legislative proposals that might affect the trucking industry are introduced, including proposals to increase federal, ~~state,~~ provincial or local taxes, including taxes on motor fuels. Vitran cannot predict whether, or in what form, any increase in such taxes applicable to the Company will be enacted. Increased taxes could adversely affect Vitran’s profitability.

Vitran’s employees and owner operators also must comply with the safety and fitness regulations promulgated by ~~the DOT,~~ ~~specifically, Comprehensive Safety Analysis 2010 (“CSA 2010”) mandated by the Federal Motor Carrier Safety Administration (“FMSCA”) and~~ various regulatory authorities in Canada, including those relating to drug and alcohol testing and hours of service.

COMPETITION

Vitran competes with many other transportation service providers of varying sizes ~~within Canada and the United States~~. ~~In the United States, Vitran competes mainly in the eastern, southeastern, central, southwestern and western states.~~ The transportation industry is highly competitive on the basis of both price and service. The Company competes with regional, inter-regional and national LTL carriers, truckload carriers, third-party logistics companies and, to a lesser extent, small-package carriers, air freight carriers and railroads. The Company competes effectively in its markets by providing high quality and timely service at competitive prices.

AVAILABLE INFORMATION

Vitran makes available free of charge on or through its website at www.vitran.com its Annual Report on Form 10-K (including the Company management’s discussion and analysis (“MD&A”) at December 31, 2013), Quarterly Reports on Form 10-Q, current reports on Form 8-K and other information releases, including all amendments to those reports, as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (“SEC”) and filed with Canadian Securities Administrators on the System for Electronic Document Analysis and Retrieval (“SEDAR”). The information can also be accessed through EDGAR at www.sec.gov or SEDAR at www.sedar.com.

~~AVAILABLE~~ITEM ~~INFORMATION~~1. A—RISK FACTORS

~~Vitran~~RISKS ~~makes~~AND ~~available~~UNCERTAINTIES free of charge on or through its website at www.vitran.com its Annual Report on Form 10-K (including the Company management’s discussion and analysis (“MD&A”) at December 31, 2012), Quarterly Reports on Form 10-Q, current reports on Form 8-K and other information releases, including all amendments to those reports, as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (“SEC”) and System for Electronic Document Analysis and Retrieval (“SEDAR”). The information can also be accessed through EDGAR at www.sec.gov or SEDAR at www.sedar.com.

~~ITEM 1~~An investment in our Company involves a high degree of risk. ~~A—RISK~~Before ~~FACTORS~~making an investment in the common shares of the Company, you should carefully consider the risks described below and the other information contained in this Annual Report on Form 10-K. The risks described below are not the only ones facing our Company or otherwise associated with an investment in our Company. If we do not successfully address any of the risks described herein or therein, there could be a material adverse effect on our financial condition, operating results and business, and the trading price of our common shares may decline. We can provide no assurance that we will successfully address these risks.

~~RISKS~~Risks ~~AND~~Relating ~~UNCERTAINTIES~~to Our Company

AnCompletion ~~investment in our Company involves a high degree~~ of ~~risk. Before making an investment in~~ the ~~common~~Arrangement shares of the Company, you should carefully consider the risks described below and the other information contained in this Annual Report on Form 10-K. The risks described below are not the only ones facing our Company or otherwise associated with an investment in our Company. If we do not successfully address any of the risks described herein or therein, there could be a material adverse effect on our financial condition, operating results and business, and the trading price of our common shares may decline. We can provide no assurance that we will successfully address these risks.

~~Risks~~The closing ~~Relating~~of the Arrangement is subject to ~~Our~~the ~~Company~~receipt of applicable regulatory approvals (including approval under the Competition Act) and to satisfaction of other customary closing conditions. No assurance can be given that the required approvals will be obtained and that the closing conditions will be satisfied.

~~The~~Our ~~announced~~industry ~~sale~~is ofhighly competitive, and our ~~Supply~~business ~~Chain~~will ~~Operation~~suffer ~~may~~if we are ~~not~~unable ~~close~~to adequately address potential downward pricing pressures and other factors that may adversely affect operations and profitability.

WeThe ~~have~~transportation ~~entered~~industry ~~into~~is anhighly ~~agreement~~competitive toon ~~sell~~ the ~~SCO~~basis ~~business~~of ~~for~~both ~~$97.0~~price ~~million~~and ~~in cash proceeds~~service. ~~Should~~We ~~the transaction~~compete ~~not~~with ~~close~~regional, itinter-regional ~~may~~and ~~have~~national LTL acarriers, ~~material~~TL ~~adverse~~carriers, ~~effect~~third onparty ~~our~~logistics ~~business~~companies ~~due~~and, to ~~the~~a ~~uncertainty~~lesser ~~that~~extent, ~~may~~small-package becarriers, ~~created~~air ~~for~~freight ~~our~~carriers ~~customers,~~and ~~employees~~railroads. ~~and~~Numerous ~~other~~competitive ~~constituents.~~factors ~~The~~could ~~transaction~~impair isour ~~expected~~ability to ~~close~~maintain byour ~~March 1,~~current ~~2013~~profitability. ~~but remains~~These ~~subject~~factors toinclude the ~~purchaser’s~~following: ~~financing and certain other conditions customary for transactions of this nature.~~

~~Our~~• ~~industry~~we ~~is highly~~compete ~~competitive~~with many other transportation service providers of varying sizes, ~~and~~many ~~our~~of ~~business~~which ~~will~~may ~~suffer~~have ifmore weequipment, ~~are~~a ~~unable~~broader tocoverage ~~adequately~~network, ~~address~~a ~~potential~~wider ~~downward~~range ~~pricing~~of ~~pressures~~services and ~~other~~greater ~~factors~~capital ~~that~~resources ~~may~~than ~~adversely~~we ~~affect~~do ~~operations~~or ~~and~~have ~~profitability.~~other competitive advantages;

~~The~~• ~~transportation~~some ~~industry is highly competitive on the basis~~ of ~~both~~our ~~price~~competitors ~~and~~periodically ~~service.~~reduce Wetheir ~~compete~~prices ~~with~~to ~~regional,~~gain ~~inter-regional and national LTL carriers~~business, ~~truckload~~especially ~~carriers,~~during ~~third~~times ~~party~~of ~~logistics~~reduced ~~companies~~growth ~~and,~~rates toin athe ~~lesser extent~~economy, ~~small-package~~which ~~carriers,~~may ~~air~~limit ~~freight carriers and railroads. Numerous competitive factors could impair~~ our ability to maintain or increase our ~~current profitability.~~prices ~~These~~or ~~factors~~realize ~~include~~significant ~~the~~growth ~~following:~~in our business;

• ~~we compete with~~ many ~~other~~customers ~~transportation~~reduce ~~service~~the ~~providers~~number of ~~varying~~carriers ~~sizes,~~they ~~many~~use ofby ~~which~~selecting ~~may~~so-called ~~have~~“core ~~more~~carriers” ~~equipment,~~as aapproved ~~broader~~transportation ~~coverage~~service ~~network~~providers, ~~a wider range of services~~ and ~~greater~~in ~~capital~~some ~~resources~~instances ~~than~~ we domay ornot ~~have~~be ~~other competitive advantages~~selected;

• ~~some of~~ our ~~competitors~~customers ~~periodically~~may ~~reduce~~negotiate ~~their prices to gain business, especially during times of reduced growth~~ rates inor ~~the~~contracts ~~economy,~~that ~~which~~minimize ~~may~~or ~~limit~~eliminate our ability to ~~maintain~~offset orfuel ~~increase~~price ~~our~~increases ~~prices~~through ora ~~maintain~~fuel ~~significant~~surcharge ~~growth~~on in our ~~business~~customers;

• many customers ~~reduce~~periodically ~~the~~accept ~~number~~bids offrom multiple carriers ~~they~~for ~~use~~their byshipping ~~selecting~~needs, ~~so-called~~and ~~“core~~this ~~carriers”~~process asmay ~~approved~~depress ~~transportation~~prices ~~service~~or ~~providers,~~result ~~and~~ in ~~some~~the ~~instances~~loss weof ~~may~~some ~~not~~business beto ~~selected~~competitors;

• ~~our~~the ~~customers~~trend ~~may~~towards ~~negotiate~~consolidation ~~rates~~in orthe ~~contracts~~surface ~~that~~transportation ~~minimize~~industry ormay ~~eliminate~~create ~~our~~other ~~ability~~large tocarriers ~~offset~~with ~~fuel~~greater ~~price~~financial ~~increases~~resources ~~through~~than aus ~~fuel~~and ~~surcharge~~other oncompetitive ~~our~~advantages ~~customers~~relating to their size;

• ~~many~~advances ~~customers~~in ~~periodically~~technology ~~accept~~may ~~bids~~require ~~from~~us ~~multiple~~to ~~carriers~~make increased investments for ~~their~~us ~~shipping~~to ~~needs~~remain competitive, and ~~this~~our ~~process~~customers may ~~depress~~not ~~prices~~be orwilling ~~result~~to inaccept ~~the~~higher ~~loss~~prices ofto ~~some~~cover ~~business~~the tocost ~~competitors~~of these investments; and

• ~~the~~competition ~~trend~~from ~~towards~~non-asset-based ~~consolidation~~logistics inand ~~the~~freight ~~surface~~brokerage ~~transportation~~companies ~~industry~~ may ~~create~~adversely ~~other~~affect ~~large~~our ~~carriers~~customer ~~with~~relationships ~~greater financial resources than us~~ and ~~other competitive advantages relating to their size;~~prices.

•We ~~advances~~are insubject ~~technology~~to ~~require~~general ~~increased~~economic ~~investments~~factors tothat ~~remain~~are ~~competitive,~~largely ~~and~~out of our ~~customers~~control, ~~may~~any ~~not~~of bewhich ~~willing~~could tohave ~~accept~~a ~~higher~~material ~~prices~~adverse toeffect ~~cover~~on the ~~cost~~results of ~~these~~our operations. ~~investments; and~~

•Our ~~competition~~business ~~from~~is ~~non-asset-based~~subject ~~logistics~~to a number of general economic factors that may have a material adverse effect on the results of our operations, many of which are largely out of our control. These include recessionary economic cycles and ~~freight~~downturns ~~brokerage~~in ~~companies~~customer business cycles, particularly in market segments and industries, such as retail, manufacturing and chemical, where we have a significant concentration of customers. Economic conditions may adversely affect the business levels of our ~~customer~~customers, ~~relationships~~the amount of transportation services they need and ~~prices.~~their

We ability ~~are~~to ~~subject~~pay for our services. It is not possible to ~~financial~~predict ~~covenants~~the ~~under~~long-term effects of the above-mentioned factors on the economy or on customer confidence in Canada or the United States, or the impact, if any, on our ~~revolving~~future ~~credit~~results ~~facility~~of operations. Adverse changes in economic conditions could result in declines to our revenues and a reduction in our current level of profitability.

~~Under~~If our current revolving credit facility, we are subject to a minimum fixed charge coverage ratio that requires compliance only when certain triggering events occur. This financial covenant, as well as other financial covenants that may in the future be imposed under our current or future credit facilities, could limit our ability to raise additional capital to fund future growth. In addition, any adverse change to our business that has a material negative impact on our financial performance could cause us not to be able to be in compliance with these covenants. Our inability to remain in compliance with our financial covenants could result in a default under our credit facilities which would require us to attempt to reworld-~~negotiate~~wide ~~these~~ financial ~~covenants,~~crisis ~~attempt to obtain new financing or scale back our business operations to achieve compliance. There is no assurance that we would be able to~~ re-~~negotiate our financial covenants in this event~~emerges, ~~which~~it could ~~reduce~~adversely ~~the~~impact ~~amount~~demand offor ~~credit available under~~ our ~~credit facilities~~services.

WeThe ~~are~~global ~~subject~~capital tomarkets ~~general~~have been experiencing significant disruption and volatility over the past few years as evidenced by a lack of liquidity in the debt markets, significant write-offs in the financial services sector, the re-pricing of credit risk in the broadly syndicated credit market and failure of certain major financial institutions. New market disruptions could cause broader economic ~~factors~~downturns ~~that~~which ~~are~~may ~~largely~~lead ~~out~~to lower demand for our services, increased incidence of customers’ inability to pay their accounts, or insolvency of our ~~control~~customers, any of which could ~~have~~adversely aaffect ~~material~~our ~~adverse~~results ~~effect~~of onoperations, liquidity, ~~the~~cash ~~results~~flows ofand ~~our~~financial ~~operations~~condition.

~~Our~~Moreover, ~~business~~such ismarket ~~subject~~disruptions ~~to a number of general economic factors that~~ may ~~have~~increase ~~a material adverse effect on the results of~~ our ~~operations, many~~cost of ~~which~~borrowing ~~are~~or ~~largely~~affect ~~out of~~ our ~~control.~~ability to ~~These~~access ~~include~~debt ~~recessionary economic cycles~~ and ~~downturns~~equity incapital ~~customer~~markets. ~~business~~Market ~~cycles,~~conditions ~~particularly~~may inaffect ~~market~~our ~~segments~~ability ~~and~~to ~~industries,~~refinance ~~such~~indebtedness as ~~retail, manufacturing~~ and ~~chemical,~~when ~~where~~it webecomes ~~have a significant concentration of customers~~due. ~~Economic~~We ~~conditions~~are ~~may~~unable ~~adversely~~to ~~affect~~predict the ~~business~~effect ~~levels~~the ofuncertainty ~~our~~in ~~customers,~~ the ~~amount~~capital ofmarkets ~~transportation~~may ~~services~~have ~~they~~on ~~need and their ability to pay for~~ our ~~services.~~financial ~~It is not possible to predict the~~condition, ~~long-term~~results ~~effects~~ of ~~the~~operations ~~above-mentioned factors on the economy~~ or oncash ~~customer~~flows. ~~confidence~~Our inability ~~Canada~~to orrepay ~~the United States,~~ or ~~the~~refinance ~~impact,~~our ifindebtedness ~~any,~~will ondepend upon our future ~~results~~operating ofperformance ~~operations.~~which ~~Adverse~~will ~~changes~~be inaffected ~~economic~~by ~~conditions~~general ~~could~~economic, ~~result~~financial, incompetitive, ~~declines~~legislative, ~~to our~~regulatory ~~revenues~~ and aother ~~reduction~~factors beyond in our ~~current level of profitability~~control.

IfIncreases ~~the~~in ~~world-wide~~our ~~financial~~operating ~~crisis~~expenses ~~re-intensifies, it~~ could ~~adversely~~ ~~impact~~cause ~~demand~~our ~~for~~profitability ~~our~~to ~~services~~decline.

~~The~~Our ~~global~~significant ~~capital~~cash ~~markets~~operating ~~have~~expenses ~~been~~include: ~~experiencing~~salaries, ~~significant~~wages ~~disruption~~ and ~~volatility~~ ~~over~~employee ~~the~~benefits, ~~past~~purchased ~~few~~transportation, ~~years~~maintenance asexpenses, ~~evidenced~~rents and byleases, aowner ~~lack~~operators, offuel ~~liquidity~~and infuel-related ~~the~~expenses. ~~debt~~Increases ~~markets,~~in ~~significant~~our ~~write-offs~~operating inexpenses ~~the~~will ~~financial~~adversely ~~services~~impact ~~sector,~~our profitability to the ~~re-pricing~~extent ofthat ~~credit~~we ~~risk~~are innot ~~the~~able ~~broadly~~to ~~syndicated~~pass ~~credit~~these ~~market~~increased ~~and~~expenses ~~failure~~on ofto ~~certain~~our ~~major~~customers through increased rates ~~financial~~for ~~institutions~~our transportation services. ~~Continued~~Many ~~market~~of ~~disruptions~~these ~~could~~operating ~~cause~~expenses ~~broader~~are ~~economic~~beyond ~~downturns~~our ~~which~~control ~~may~~and, ~~lead~~in toaddition, ~~lower~~are ~~demand~~subject ~~for~~to ~~our~~competitive ~~services~~forces. Further, ~~increased~~we ~~incidence~~operate ofin ~~customers’~~a ~~inability~~price tosensitive ~~pay~~industry ~~their~~where ~~accounts,~~customers orhave ~~insolvency~~many ofalternatives ~~our~~for ~~customers~~their transportation services and, ~~any of~~as ~~which~~a ~~could~~result, ~~adversely~~we ~~affect~~may ~~our~~have ~~results~~limited ofability ~~operations,~~to ~~liquidity,~~pass ~~cash~~on ~~flows~~increased ~~and~~operating ~~financial~~expenses ~~condition~~to our customers.

~~Moreover, such~~Unsuccessful ~~market~~execution ~~disruptions may increase our cost~~ of ~~borrowing or affect~~ our ability to access debt and equity capital markets. Market conditions may affect our ability to refinance indebtedness as and when it becomes due. We are unable to predict the effect the uncertainty in the capital markets may have on our financial condition, results of operations or cash flows. Our ability to repay or refinance our indebtedness will depend upon our future operating performance ~~which~~initiatives ~~will~~could behave ~~affected~~a bymaterial ~~general economic,~~adverse ~~financial, competitive, legislative, regulatory and other factors beyond our control~~effect.

8Operating results improvement is dependent on the successful implementation of numerous performance improvement initiatives throughout the Company. There can be no assurance that we will be successful in implementing these initiatives to improve future operating results and this could have a material adverse effect on our financial condition.

~~Table~~Significant ofongoing ~~Contents~~capital requirements could limit growth and affect future profitability.

~~Increases~~If inwe are unable to generate sufficient cash from operations to fund our ~~operating~~capital ~~expenses~~requirements, ~~could~~we ~~cause~~may have to limit our ~~profitability~~growth, or enter into additional financing arrangements. While we intend to ~~decline~~finance expansion and renovation projects with existing cash and cash flow from operations, we may require additional financing to support our continued growth. However, due to the existing uncertainty in the capital and credit markets, capital may not be available on terms acceptable to us. If we are unable in the future to generate sufficient cash flow from operations or borrow the necessary capital to fund our planned capital expenditures, we will be forced to limit our growth and/or operate our equipment for longer periods of time, resulting in increased maintenance costs, any of which could have a material adverse effect on our operating results.

~~Our~~If ~~significant~~any ~~cash~~of ~~operating~~the ~~expenses~~financial ~~include:~~institutions ~~salaries,~~that ~~wages~~have ~~and~~extended ~~employee~~credit ~~benefits,~~commitments ~~purchased~~to ~~transportation,~~us ~~maintenance~~are ~~expenses, rents~~or ~~and~~continue ~~leases,~~to ~~owner~~be ~~operators,~~adversely ~~fuel~~affected ~~and~~by ~~fuel-related~~current ~~expenses.~~economic conditions ~~Increases~~and indisruption ~~our~~to ~~operating~~the ~~expenses~~capital ~~will~~and ~~adversely~~credit ~~impact~~markets, onthey ~~our~~may ~~profitability~~become unable to ~~the~~fund ~~extent~~borrowings ~~that~~under wetheir ~~are~~credit ~~not~~commitments ~~able~~or tootherwise ~~pass~~fulfill ~~these~~their ~~increased~~obligations ~~expenses on~~ to ~~our~~us, ~~customers~~which ~~through increased~~could ~~rates~~have ~~for~~a ~~our~~material ~~transportation~~adverse ~~services.~~impact ~~Many~~on ~~of these operating expenses are beyond~~ our ~~control~~financial condition and, inour ~~addition,~~ability ~~are subject~~ to ~~competitive~~borrow ~~forces.~~additional ~~Further~~funds, weif ~~operate~~needed, ~~in a price sensitive industry where customers have many alternatives~~ for ~~their~~working ~~transportation services and~~capital, ascapital ~~a result~~expenditures, weacquisitions ~~may~~and ~~have~~other ~~limited~~corporate ~~ability to pass on increased operating expenses to our customers~~purposes.

~~Unsuccessful~~8 ~~execution of our operating performance initiatives could have a material adverse effect.~~

~~Unsuccessful~~Availability ~~execution~~and cost of ~~our~~real ~~acquisition~~estate ~~strategy~~ could ~~cause~~limit ~~our~~growth ~~business~~ and affect future ~~growth prospects to suffer~~profitability.

WeOur ~~may~~business ~~not~~in beCanada ~~able~~is todependent ~~implement~~on ~~our~~the ~~strategy~~cost toand ~~acquire~~availability ~~other~~of ~~transportation~~terminal ~~companies,~~facilities ~~which~~within ~~depends~~key inmarkets. ~~part~~Shortages onin the availability of ~~suitable~~existing ~~candidates.~~facilities Inand ~~addition, we may face competition~~ for ~~the~~sale ~~acquisition of attractive carriers from other consolidators in the freight transportation industry who may be larger~~ or ~~better~~lease ~~financed~~could ~~than~~increase ~~we are. Furthermore, there can be no assurance that if we acquire what we consider to be a suitable candidate in accordance with~~ our ~~growth~~operating ~~strategy,~~expenses weand ~~will~~prevent beus ~~able~~from toeffectively ~~successfully~~serving ~~integrate~~certain ~~the operations of the acquired company into our operations on an accretive basis~~markets. IfUnavailability ~~we are unable to successfully integrate the operations~~ of ~~the~~land ~~acquired~~for ~~company,~~purchase weand ~~may~~construction ~~not~~delays bedue ~~able~~ to ~~achieve~~various ~~the~~reasons ~~anticipated benefits of~~ such ~~acquisition~~as ~~and~~delays ~~the~~in ~~performance~~obtaining permits ofmay ~~our~~also ~~operations~~adversely ~~after~~impact ~~completion~~cash ~~of such acquisition could be adversely affected~~flows.

~~Significant~~Fluctuations ~~ongoing~~in ~~capital~~the ~~requirements~~price ~~could~~and ~~limit~~availability ~~growth~~of ~~and~~fuel ~~affect~~may adversely impact future profitability.

~~Our~~Fuel ~~business~~ is ~~capital~~a ~~intensive~~significant operating expense. IfWe wedo ~~are~~not ~~unable~~hedge toagainst ~~generate~~the ~~sufficient~~risk ~~cash~~of ~~from~~fuel ~~operations~~price toincreases. ~~fund~~Any ~~our~~increase ~~capital~~in ~~requirements,~~fuel wetaxes ~~may~~or ~~have~~fuel toprices ~~limit our growth, utilize our existing revolving credit facility,~~ or ~~enter~~any ~~into~~change ~~additional,~~in ~~financing arrangements. While we intend to finance expansion and renovation projects with existing cash~~federal, ~~cash~~state ~~flow~~or ~~from~~provincial ~~operations~~regulations ~~and~~that ~~available borrowings~~results ~~under~~in ~~our~~such ~~existing~~an ~~credit agreement~~increase, ~~we may require additional financing~~ to ~~support our continued growth. However, due to~~ the ~~existing~~extent ~~uncertainty~~that in the ~~capital~~increase ~~and~~is ~~credit markets, capital may~~ not beoffset ~~available~~by onfreight ~~terms~~rate ~~acceptable~~increases ~~to us. If we are unable in the future to generate sufficient cash flow from operations~~ or ~~borrow~~fuel ~~the~~surcharges ~~necessary capital~~ to ~~fund our planned capital expenditures~~customers, ~~we will be forced to limit our growth and/~~or ~~operate~~any ~~our~~interruption ~~equipment~~in ~~for~~the ~~longer~~supply ~~periods~~ of ~~time,~~ ~~resulting in increased maintenance costs~~fuel, ~~any of which~~ could have a material adverse effect on our ~~operating~~business, ~~results~~operations or financial condition.

IfWhile ~~any~~we have historically been able to ofadjust ~~the~~our ~~financial~~pricing ~~institutions~~to ~~that~~offset ~~have~~changes ~~extended~~to ~~credit~~the ~~commitments~~cost of fuel through changes to usbase ~~are~~rates and/or ~~continue~~fuel tosurcharges, bewe ~~adversely~~cannot ~~affected~~be bycertain ~~current~~that ~~economic~~we ~~conditions~~will ~~and~~be ~~disruption~~able to ~~the~~do ~~capital~~so ~~and~~in ~~credit~~the ~~markets,~~future. ~~they~~In ~~may~~addition, ~~become~~we ~~unable~~are subject to ~~fund~~risks ~~borrowings~~associated ~~under~~with ~~their credit~~the ~~commitments~~availability orof fuel, ~~otherwise~~which ~~fulfill~~are ~~their~~subject ~~obligations~~ to uspolitical, ~~which~~economic ~~could~~and ~~have~~market afactors ~~material~~that ~~adverse~~are ~~impact~~outside onof our ~~financial~~control. ~~condition~~We ~~and~~would ~~our~~be ~~ability~~adversely affected by an inability to ~~borrow~~obtain ~~additional~~fuel ~~funds,~~in ifthe ~~needed,~~future. ~~for~~Although ~~working~~historically ~~capital,~~we ~~capital~~have ~~expenditures,~~been ~~acquisitions~~able ~~and~~to obtain fuel from various ~~other~~sources ~~corporate~~and ~~purposes~~in the desired quantities, there can be no assurance that this will continue to be the case in the future.

~~Availability~~Our industry is subject to numerous laws and ~~cost~~regulations ofin ~~real~~Canada ~~estate~~and ~~could~~the ~~limit~~United ~~growth~~States, exposing us to potential claims and ~~affect~~compliance ~~future~~costs ~~profitability~~that could have a material adverse effect on our business.

~~Our~~We ~~businesses~~are insubject ~~the~~to ~~United~~numerous ~~States~~laws and ~~Canada~~regulations ~~are~~by ~~dependent~~the onU.S. ~~the~~Department ~~cost~~of Transportation (“DOT”), Environmental Protection Agency, Internal Revenue Service, Canada Revenue Agency and ~~availability~~various ofother ~~terminal~~federal, ~~facilities~~state, ~~within~~provincial ~~key~~and ~~markets~~municipal authorities. ~~Shortages~~ Such regulatory agencies exercise broad powers over our business, generally governing such activities as authorization to engage in ~~the~~motor ~~availability~~carrier ofoperations ~~existing~~and ~~facilities~~safety, and ~~for~~financial ~~sale~~reporting. orOur ~~lease~~employees ~~could~~and ~~increase~~owner ~~our~~operators ~~operating~~must ~~expenses~~also comply with the safety and ~~prevent~~fitness usregulations ~~from~~promulgated ~~effectively~~by ~~serving~~the ~~certain~~DOT ~~markets.~~and ~~Unavailability~~applicable Canadian regulators, including those relating to drug and alcohol testing, driver hours-of-service ~~land~~limitations, ~~for~~labour-organizing ~~purchase~~activities, stricter cargo-security requirements, tax laws and ~~construction~~environmental ~~delays~~matters, ~~due~~including topotential ~~various reasons~~limits ~~such~~on ascarbon ~~delays~~emissions inunder ~~obtaining~~climate-change ~~permits~~legislation. We may become ~~also~~subject ~~adversely~~to ~~impact~~new ~~cash~~or ~~flows~~more restrictive regulations relating to fuel emissions, ergonomics, or limits on vehicle weight and size.

9We are not able to accurately predict how new governmental laws and regulations, or changes to existing laws and regulations, will affect the transportation industry generally, or us in particular. Although government regulation that affects us and our competitors may simply result in higher costs that can be passed to customers, there can be no assurance that this will be the case. Any additional measures that may be required by future laws and regulations or changes to existing laws and regulations may require us to make changes to our operating practices or services provided to our customers and may result in additional costs, all of which could have an adverse effect on us.

~~Table~~Changes ofin ~~Contents~~governmental regulation may impact future cash flows and profitability.

~~The~~In ~~engines~~Canada, incarriers ~~our~~must ~~newer~~obtain ~~tractors~~licenses ~~are~~issued ~~subject~~by each provincial transport board in order to ~~new~~carry ~~emissions~~goods extra-~~control~~provincially ~~regulations~~or ~~which~~to transport goods within any province. Licensing from U.S. regulatory authorities is also required for the transportation of goods between Canada and the United States. Any change in these regulations could have an impact on the scope of our activities. There ~~substantially~~is ~~increase~~no ~~operating~~assurance ~~expenses~~that we will be in full compliance at all times with such policies and guidelines. As a result, we could be required, at some future date, to incur significant costs in order to maintain or improve our compliance record.

~~Tractor~~Results ~~engines~~of ~~that~~operations ~~comply~~may ~~with~~be ~~the~~affected ~~Environmental~~by ~~Protection~~seasonal ~~Agency~~factors ~~(EPA) emission-control design requirements that took effect on January 1, 2007 are possibly less fuel-efficient~~ and ~~have~~harsh ~~increased~~weather ~~maintenance costs compared to engines in tractors manufactured before these requirements became effective~~conditions. In addition, compliance with the more stringent EPA requirements that were made effective in 2010 could result in further declines in fuel efficiency and increases in maintenance costs. If we are unable to offset resulting increases in fuel expenses or maintenance costs with higher freight rates, our results of operations could be adversely affected.

WeOur ~~are~~business is subject to seasonal fluctuations. In the trucking industry for a ~~corporation~~typical ~~based~~year, ~~outside~~the second and third quarters usually have the highest business levels, while the ~~United~~first ~~States~~and fourth quarters generally have the lowest business levels. The fourth quarter holiday season and adverse weather conditions generally experienced in the first quarter of the year, such as heavy snow and ice storms, have a negative impact on operating results.

We9 are a Canadian-based corporation with substantial operations in the United States. Changes in United States laws or the application thereof, including regulatory, homeland security or taxation, that primarily impact foreign corporations could have a material adverse effect on our prospects, business, financial condition and results of operations. Increased regulation could increase both the time and cost of transportation across the United States/ Canada border with the result that demand for cross-border transportation services may decline and our costs of providing these services may increase.

~~Fuel~~If isadditional aemployees ~~significant operating expense. We do not hedge against the risk of fuel price increases. Any increase in fuel taxes or fuel prices or any change in federal~~unionize, state or provincial regulations that results in such an increase, to the extent that the increase is not offset by freight rate increases or fuel surcharges to customers, or any interruption in the supply of fuel, could have a material adverse effect on our ~~business,~~operating ~~operations~~costs orwould ~~financial condition~~increase.

~~While~~We we have ~~historically~~ ~~been~~a ~~able~~history toof ~~adjust~~positive ~~our~~labour ~~pricing~~relations that will continue to ~~offset~~be ~~changes~~important to ~~the~~future ~~cost~~success. Two of ~~fuel~~our ~~through~~terminals ~~changes~~in toCanada, representing ~~base~~119 ~~rates~~employees, ~~and/or~~are ~~fuel~~represented ~~surcharges,~~by wethe ~~cannot~~International beBrotherhood ~~certain~~of ~~that~~Teamsters weand ~~will~~Unifor. beThe ~~able~~collective tobargaining doagreements sobetween inus ~~the~~and ~~future.~~our Inunionized ~~addition~~employees expire on March 31, we2018, ~~are~~and ~~subject~~on toFebruary 29, ~~risks~~2020, ~~associated~~respectively. ~~with~~There ~~the~~can ~~availability~~be ofno ~~fuel,~~assurance ~~which~~that ~~are~~the ~~subject~~collective tobargaining ~~political,~~agreements ~~economic~~will ~~and~~be ~~market~~renegotiated ~~factors~~on ~~that~~terms ~~are~~acceptable ~~outside~~or offavourable ~~our~~to ~~control~~us. WeThere ~~would~~can be ~~adversely~~no ~~affected~~assurance bythat another ~~inability~~employees towill ~~obtain~~not ~~fuel~~unionize in the future. ~~Although~~From ~~historically~~time weto ~~have~~time ~~been~~there ~~able~~could be efforts to ~~obtain~~organize ~~fuel~~our ~~from~~employees at various ~~sources~~other terminals, which could increase our operating costs and inforce ~~the~~us ~~desired~~to ~~quantities,~~alter ~~there~~our ~~can~~operating bemethods. noThis ~~assurance~~could, ~~that~~in ~~this~~turn, ~~will~~have ~~continue~~a tomaterial beadverse ~~the~~effect ~~case~~on inour ~~the~~business, ~~future~~operations or financial condition.

~~Our~~Various ~~industry~~environmental ~~is subject to numerous~~ laws and regulations, inand ~~Canada~~costs ~~and~~of ~~the~~compliance ~~United~~with, ~~States~~liabilities under, ~~exposing~~or usviolations toof, ~~potential~~existing ~~claims~~or ~~and~~future environmental ~~compliance~~laws ~~costs~~or ~~that~~regulations could ~~have~~adversely aaffect ~~material adverse effect on~~ our ~~business~~ results.

WeOur operations are subject to ~~numerous~~environmental laws and regulations bydealing with the ~~U.S.~~handling ~~Department~~ of ~~Transportation~~hazardous ~~(“DOT”)~~materials, ~~Environmental~~ ~~Protection~~underground ~~Agency,~~fuel ~~Internal~~storage ~~Revenue~~tanks ~~Service,~~and ~~Canada~~discharge ~~Revenue Agency~~ and ~~various~~retention ~~other~~of ~~federal,~~storm ~~state, provincial and municipal authorities~~water. ~~Such~~We ~~regulatory~~operate ~~agencies~~in ~~exercise~~industrial ~~broad~~areas ~~powers~~where ~~over~~truck ~~our~~terminals ~~business,~~and ~~generally~~other ~~governing~~industrial ~~such~~ activities asare ~~authorization~~located toand ~~engage~~where groundwater inor ~~motor~~other ~~carrier~~forms ~~operations~~of ~~and~~environmental ~~safety,~~contamination ~~and~~may ~~financial~~have ~~reporting~~occurred. Our ~~employees~~operations ~~and~~involve ~~owner~~the ~~operators~~risks ~~must~~of ~~also~~fuel ~~comply~~spillage ~~with~~or ~~the~~seepage, ~~safety~~environmental damage and ~~fitness~~hazardous ~~regulations~~waste ~~promulgated~~disposal, byamong ~~the~~others. ~~DOT~~If ~~and~~we ~~applicable~~are ~~Canadian regulators,~~involved ~~including~~in ~~those~~a ~~relating~~spill toor ~~drug~~other accident ~~and~~involving ~~alcohol~~hazardous ~~testing,~~substances ~~driver~~or ~~hours-of-service~~if ~~limitations,~~we ~~labour-organizing~~are ~~activities,~~found ~~stricter~~to ~~cargo-security~~be ~~requirements,~~in ~~tax~~violation ~~laws~~of ~~and~~applicable ~~environmental~~laws ~~matters~~or regulations, ~~including~~it ~~potential~~could ~~limits~~have a material adverse effect on ~~carbon emissions~~our ~~under~~business ~~climate-change~~and ~~legislation~~operating results. WeIf ~~may~~we ~~become~~fail ~~subject~~ to ~~new~~comply orwith ~~more~~applicable ~~restrictive~~ environmental regulations, ~~relating~~we tocould ~~fuel~~be ~~emissions,~~subject ~~ergonomics,~~to substantial fines or ~~limits~~penalties onand ~~vehicle~~to ~~weight~~civil and ~~size~~criminal liability.

WeIn ~~are~~addition, ~~not~~as ~~able~~“climate change” toissues ~~accurately~~become ~~predict~~more ~~how~~prevalent, ~~new~~federal ~~governmental~~and ~~laws~~local governments and ~~regulations,~~our orcustomers ~~changes~~are beginning to ~~existing~~respond ~~laws~~to ~~and~~these ~~regulations,~~issues. ~~will~~This ~~affect the~~increased ~~transportation~~focus ~~industry~~on ~~generally,~~sustainability ormay usresult in ~~particular.~~new ~~Although~~regulations ~~government~~and ~~regulation~~customer requirements that ~~affects~~could negatively affect us. ~~and~~This ~~our~~could ~~competitors~~cause ~~may~~us ~~simply~~to ~~result~~incur inadditional ~~higher~~direct costs ~~that~~or ~~can~~to bemake ~~passed~~changes to ~~customers,~~our ~~there~~operations ~~can~~in beorder noto ~~assurance~~comply ~~that~~with ~~this~~any ~~will~~new beregulations ~~the~~and ~~case. Any~~customer ~~additional~~requirements, ~~measures~~as ~~that~~well ~~may~~as beincreased ~~required~~indirect bycosts ~~future~~or ~~laws~~loss ~~and~~of ~~regulations~~revenue orresulting ~~changes~~from, toamong other ~~existing~~things, ~~laws~~our ~~and~~customers ~~regulations~~incurring ~~may~~additional ~~require~~compliance uscosts tothat ~~make~~affect ~~changes~~our tocosts ~~our~~and ~~operating~~revenues. ~~practices~~We orcould ~~services~~also ~~provided~~lose torevenue if our customers ~~and~~divert ~~may~~business ~~result~~from inus ~~additional~~because we have not complied with their sustainability requirements. These costs, ~~all~~changes and loss of ~~which~~revenue could have ana material adverse effect on usour business, financial condition and results of operations.

10Loss of key personnel could harm our business, operations or financial condition.

~~Table~~The success of ~~Contents~~our business is dependent upon the active participation of certain management personnel who have extensive experience in the industry. The loss of the services of one or more of such personnel for any reason may have an adverse effect on our business if we are unable to secure replacement personnel that have sufficient experience in our industry and in the management of a transportation business such as ours. Our inability to successfully replace management personnel could result in a disruption to our business that could adversely impact our profitability and financial condition.

~~The~~We ~~Federal~~face ~~Motor~~litigation ~~Carrier~~risks ~~Safety~~that ~~Administration’s (“FMCSA”) Compliance, Safety, Accountability initiative (“CSA”)~~ could ~~adversely~~have ~~impact~~a ~~our~~material ~~ability~~adverse toeffect ~~hire~~on ~~qualified~~the ~~drivers~~operation ~~and~~of ~~maintain customer relationships~~our business.

InFrom ~~2010,~~time ~~the~~to ~~FMSCA~~time ~~implemented~~we ~~CSA,~~face alitigation. ~~new~~These ~~compliance~~proceedings ~~and~~may ~~enforcement~~be ~~initiative designed to monitor commercial motor vehicle safety. Under CSA~~time-consuming, ~~carriers~~expensive and ~~individual~~disruptive ~~drivers~~to ~~are evaluated and ranked~~normal ~~based~~business ~~on certain safety-related standards~~operations. ~~Our~~The ~~CSA~~defense ~~scores~~of ~~are~~such ~~dependent~~lawsuits ~~upon our safety and compliance experience, which~~ could ~~change~~result atin ~~any~~significant ~~time.~~expense Inand ~~addition,~~ the ~~safety~~diversion ~~standards~~of ~~set~~our bymanagement’s ~~the~~time ~~FMCSA~~and ~~could~~attention ~~change~~from ~~and~~operation ~~affect~~of our ~~ability to maintain a satisfactory score~~business. IfSome weor ~~obtain~~all anof ~~unsatisfactory~~the ~~score~~amount itwe ~~could~~may ~~adversely~~be ~~impact~~required ~~our~~to ~~relationships~~pay ~~with~~to ~~customers~~defend ~~and~~or ~~result~~to satisfy in a ~~loss~~judgment ofor ~~business.~~settlement ~~CSA~~of ~~could~~any ~~also~~or ~~cause~~all athese ~~reduction~~proceedings inmay ~~the~~not ~~driver~~be ~~pool~~covered asby ~~those~~insurance ~~with~~and ~~unfavorable scores~~ could ~~leave the~~have ~~industry~~a ~~increasing~~material ~~our~~adverse ~~operating~~effect ~~costs~~on ~~to attract, train and retain qualified drivers~~us.

~~Changes~~Exchange inrate ~~governmental~~and ~~regulation~~currency risks may impact ~~future~~our ~~cash~~financial ~~flows and profitability~~results.

InAs we operate both in the United States and in Canada, ~~carriers~~our ~~must~~financial ~~obtain~~results ~~licenses~~are ~~issued~~affected by ~~each~~changes ~~provincial transport board~~ in ~~order~~the toU.S. ~~carry~~dollar ~~goods~~exchange ~~extra-provincially~~rate or relative to ~~transport~~the ~~goods~~currencies ~~within~~of ~~any~~other ~~province.~~countries ~~Licensing~~including ~~from~~the UCanadian dollar.S. ~~regulatory~~To ~~authorities~~reduce isthe ~~also~~exposure ~~required~~to ~~for~~currency ~~the~~fluctuations, ~~transportation~~we ofmay ~~goods~~enter ~~between~~into ~~Canada~~limited ~~and~~foreign ~~the~~exchange ~~United~~contracts ~~States~~from ~~and~~time ~~within~~to ~~the United~~time, ~~States.~~but ~~Any~~these ~~change~~hedges indo ~~these~~not ~~regulations~~eliminate ~~could~~the ~~have~~potential anthat ~~impact~~such fluctuations onmay ~~the~~have ~~scope~~an ofadverse ~~our~~effect ~~activities~~on us. ~~There~~In isaddition, noforeign ~~assurance~~exchange ~~that~~contracts weexpose ~~will~~us beto inthe ~~full~~risk ~~compliance~~of atdefault ~~all~~by ~~times~~the ~~with~~counterparties to such ~~policies~~contracts, ~~and~~which ~~guidelines.~~could Ashave a ~~result,~~material weadverse ~~could~~effect beon ~~required,~~our atbusiness. ~~some~~Our inability to ~~future~~successfully ~~date,~~mitigate our exposure to ~~incur~~currency ~~significant~~fluctuations ~~costs~~could result in ~~order~~increased toexpenses ~~maintain~~attributable orto ~~improve~~foreign ~~our~~exchange ~~compliance record~~loss.

~~Results~~10 ~~of operations may be affected by seasonal factors and harsh weather conditions.~~

IfInsurance ~~additional~~and ~~employees~~claims ~~unionize,~~expenses ~~our~~could ~~operating~~significantly ~~costs~~reduce ~~would~~our ~~increase~~profitability.

WeOur ~~have~~operations aare ~~history~~subject ofto ~~positive~~risks ~~labour~~normally ~~relations~~inherent ~~that~~in ~~will~~the ~~continue~~freight totransportation beindustry, ~~important~~including topotential ~~future~~liability ~~success.~~which ~~Two~~could ofresult from, ~~our~~among ~~terminals~~other ~~in Canada~~circumstances, ~~representing~~ ~~2.0%~~personal ofinjury ~~our~~or ~~labour~~property ~~force,~~damage ~~are~~arising ~~represented~~from byaccidents ~~the~~or ~~International~~incidents ~~Brotherhood~~involving oftrucks ~~Teamsters~~operated ~~and~~by ~~the~~us ~~Canadian~~or ~~Auto~~our ~~Workers Association~~agents. The ~~collective~~availability ~~bargaining~~of, ~~agreements~~and ~~between~~ability usto ~~and~~collect ~~our~~on, ~~unionized~~insurance ~~employees~~coverage ~~expire~~is onsubject ~~February 28,~~to factors beyond ~~2014,~~our ~~and~~control. onIn ~~March 31~~addition, ~~2015,~~we ~~respectively.~~may ~~There~~become ~~can~~subject beto noliability ~~assurance~~for ~~that~~hazards ~~the~~which ~~collective~~we ~~bargaining~~cannot ~~agreements~~or ~~will~~may benot ~~renegotiated~~elect onto ~~terms~~insure ~~acceptable~~against orbecause ~~favourable~~of tohigh ~~us.~~premium ~~There~~costs ~~can~~or beother noreasons, ~~assurance~~or ~~that~~for ~~other~~occurrences ~~employees~~which ~~will~~exceed ~~not~~maximum ~~unionize~~coverage inunder ~~the~~our policies. Our future. ~~From~~insurance ~~time~~and toclaims ~~time~~expenses ~~there~~might ~~could~~exceed behistorical ~~efforts~~levels, towhich ~~organize~~could reduce our ~~employees~~earnings. atIncreases ~~various~~to ~~other~~our ~~terminals,~~premiums ~~which~~ could further increase our ~~operating~~insurance ~~costs~~ and ~~force~~claims expenses as current coverages expire or cause us to ~~alter~~raise our deductibles. ~~operating~~If ~~methods.~~the ~~This~~number ~~could~~or severity of claims for which we are self-insured increases, or we suffer adverse development in ~~turn~~claims compared with our reserves, or any claim exceeded the limits of our insurance coverage, this could have a material adverse effect on our business, operations or financial condition.

~~Changes~~Moreover, toany ~~our~~accident ~~compensation~~or ~~and~~incident ~~benefits~~involving us, even if we are fully insured or held not to be liable, could ~~adversely~~negatively affect our ~~ability~~reputation among customers and the public, thereby making it more difficult for us to ~~attract~~compete effectively, and ~~retain~~ ~~employees~~could significantly affect the cost and availability of insurance in the future.

~~Like~~We ~~many~~rely ~~other~~on ~~companies~~purchased transportation, wemaking ~~had~~us ~~implemented~~vulnerable ~~certain~~to ~~salary~~increases ~~and wage cost initiatives~~ in ~~2009.~~costs ~~Such initiatives include the suspension~~ of ~~our~~these ~~401(k) matching program and a 5% compensation reduction across all employees of the Company~~services. The Company had returned the 5% salary and wage reduction by the beginning of the fourth quarter in 2011. However, due to the salary and wage cost initiatives that we took in 2009, we may still find it difficult to attract, retain and motivate employees, and any such difficulty could materially adversely affect our business.

~~Various~~In ~~environmental~~Canada, ~~laws~~we ~~and~~use ~~regulations~~purchased transportation, ~~and~~primarily ~~costs~~intermodal ofrail ~~compliance~~from ~~with,~~CN ~~liabilities~~and ~~under~~CP Rail, to provide cost effective service on our east-west national LTL service offering. Any reduction in service by the railroads or ~~violations~~increase in the cost of such rail services is likely to increase costs for us and reduce the reliability, ~~existing~~timeliness orand ~~future~~overall ~~environmental~~attractiveness of rail-based services. This ~~laws~~would negatively impact our ability to provide our services, with the result that we may be forced to use more expensive or ~~regulations~~less ~~could~~efficient ~~adversely~~alternative ~~affect~~modes of transportation to provide our ~~results~~services to our customers.

Our ~~operations~~business are subject to environmental laws and regulations dealing with the handling of hazardous materials, underground fuel storage tanks and discharge and retention of storm water. We operate in industrial areas where truck terminals and other industrial activities are located and where groundwater or other forms of environmental contamination may ~~have~~be ~~occurred.~~adversely ~~Our~~affected ~~operations~~by ~~involve~~anti-terrorism ~~the risks of fuel spillage or seepage, environmental damage and hazardous waste disposal, among others~~measures. ~~If we are involved in a spill or other accident~~

11Federal, state, provincial and municipal authorities have implemented and are continuing to implement various anti-terrorism measures, including checkpoints and travel restrictions on large trucks. If additional security measures disrupt or impede the timing of our deliveries, we may fail to meet the needs of our customers or may incur increased expenses to do so. This could result in a reduction in demand for our cross-border transportation services and increase the cost of providing these services, each of which could negatively impact our profitability. There can be no assurance that new anti-terrorism measures will not be implemented and that such new measures will not have a material adverse effect on our business, operations or financial condition.

~~Table~~Difficulty ofin attracting ~~Contents~~qualified drivers could adversely affect our profitability and ability to grow.

~~involving~~We ~~hazardous~~are ~~substances~~dependent oron ifour wecartage agents’ ~~are~~ability ~~found~~ to behire inand ~~violation~~retain ofqualified ~~applicable~~drivers, ~~laws~~including orowner ~~regulations,~~operators. itThere ~~could~~is ~~have~~significant acompetition ~~material~~for ~~adverse~~qualified ~~effect~~drivers onwithin ~~our~~the ~~business~~trucking industry and ~~operating~~attracting ~~results~~and retaining drivers has become more challenging. If ~~we fail~~our cartage agents are unable to ~~comply~~attract ~~with~~drivers ~~applicable~~and ~~environmental~~contract ~~regulations~~with owner operators, we may experience shortages of qualified drivers that could beresult ~~subject~~in tous ~~substantial~~not ~~fines~~meeting orcustomer ~~penalties~~demands, ~~and~~pressure to ~~civil~~upwardly adjust cartage rates and/or ~~criminal~~use ~~liability~~of higher cost purchased transportation, all of which could have a material adverse effect on our operating results, our growth and profitability.

InOur information ~~addition,~~technology assystems ~~“climate change” issues become more prevalent, federal and local governments and our customers~~ are ~~beginning~~subject to ~~respond~~certain torisks ~~these issues. This increased focus on sustainability may result in new regulations and customer requirements~~ that could negatively affect us. This could cause us to incur additional direct costs or to make changes to our operations in order to comply with any new regulations and customer requirements, as well as increased indirect costs or loss of revenue resulting from, among other things, our customers incurring additional compliance costs that affect our costs and revenues. We could also lose revenue if our customers divert business from us because we ~~have~~cannot ~~not complied with their sustainability requirements~~control. ~~These costs, changes and loss of revenue could have a material adverse effect on our business, financial condition and results of operations.~~

~~Loss~~We depend on our information technology systems in order to deliver reliable transportation services to our customers in an efficient and timely manner. Any disruption to our technology infrastructure could result in delays in delivery of ~~key~~transportation ~~personnel~~services to our clients and increased operating costs as a result of decreased operating efficiencies, each of which could ~~harm~~adversely impact our ~~business~~customer service, ~~operations~~revenues and profitability. While we have invested and continue to invest in technology security initiatives and disaster recovery plans, these measures cannot fully protect us from technology disruptions that could have a material adverse effect on us. Our information technology remains susceptible to outages, computer viruses, break-ins and similar disruptions that may inhibit our ability to provide services to our customers and the ability of our customers to access our systems. This may result in the loss of customers or ~~financial~~a ~~condition~~reduction in demand for our services.

~~The~~11 success of our business is dependent upon the active participation of certain management personnel who have extensive experience in the industry. The loss of the services of one or more of such personnel for any reason may have an adverse effect on our business if we are unable to secure replacement personnel that have sufficient experience in our industry and in the management of a transportation business such as ours. Our inability to successfully replace management personnel could result in a disruption to our business that could adversely impact our profitability and financial condition.

~~From~~As ~~time~~a toholding ~~time~~company, weVitran ~~face~~is ~~litigation~~dependent ~~regarding~~on various ~~alleged~~factors ~~violations of state labor laws. These proceedings may be time-consuming, expensive and disruptive~~ to ~~normal~~meet ~~business~~its ~~operations.~~financial ~~The defense of such lawsuits could result in significant expense and the diversion of our management’s time and attention from operation of our business~~obligations. ~~Some or all of the amount we may~~ ~~be required to pay to defend or to satisfy a judgment or settlement of any or all these proceedings may not be covered by insurance and could have a material adverse effect on us.~~

~~Exchange~~Vitran ~~rate~~is ~~and~~a ~~currency~~holding ~~risks~~company. ~~may~~Vitran’s ~~impact~~ability ~~our~~to meet its financial ~~results~~obligations is dependant primarily upon the receipt of interest and principal payments on intercompany advances, management fee payments, cash dividends and other payments from Vitran’s subsidiaries together with the proceeds raised through the issuance of securities.

AsRisks weRelated ~~operate both in the United States and in Canada, our financial results are affected by changes in the U.S. dollar exchange rate relative~~ to the currencies of other countries including the Canadian dollar. To reduce the exposure to currency fluctuations, we may enter into limited foreign exchange contracts from time to time, but these hedges do not eliminate the potential that such fluctuations may have an adverse effect on us. In addition, foreign exchange contracts expose us to the risk of default by the counterparties to such contracts, which could have a material adverse effect on our ~~business.~~Common ~~Our~~Shares ~~inability to successfully mitigate our exposure to currency fluctuations could result in increased expenses attributable to foreign exchange loss.~~

~~Insurance and claims expenses could significantly reduce our profitability~~Dividends.

~~Our~~The ~~operations~~board ~~are~~of ~~subject~~directors toof ~~risks~~Vitran ~~normally~~has ~~inherent~~not indeclared ~~the~~dividends ~~freight~~on ~~transportation~~our ~~industry,~~common ~~including~~shares ~~potential~~since ~~liability~~December ~~which~~2001. ~~could result~~We ~~from,~~currently ~~among~~anticipate ~~other~~that we ~~circumstances,~~will ~~personal~~retain ~~injury~~future orearnings ~~property~~and ~~damage~~sufficient ~~arising~~cash ~~from~~resources ~~accidents or incidents involving trucks operated by us or our agents. The availability of, and ability~~ to ~~collect~~repay ondebt, ~~insurance coverage is subject~~ to ~~factors beyond~~support ~~our~~future ~~control.~~capital Inexpenditure ~~addition~~programs, ~~we may become subject~~ to ~~liability~~support ~~for~~the ~~hazards~~development ~~which we cannot or may not elect to insure against because~~ of ~~high~~the ~~premium~~LTL ~~costs or other reasons~~business, orand for ~~occurrences~~acquisitions. ~~which~~Payment ~~exceed~~of ~~maximum~~any ~~coverage under our policies. Our~~ future ~~insurance~~dividends ~~and~~will ~~claims~~be ~~expenses~~at ~~might exceed historical levels, which could reduce our earnings. Increases to our premiums could further increase our insurance and claims expenses as current coverages expire or cause us to raise our~~the ~~self-insured~~discretion ~~retention.~~of If the ~~number~~board orof ~~severity~~directors of ~~claims~~Vitran ~~for~~after ~~which~~taking weinto ~~are~~account ~~self-insured~~many ~~increases~~factors, orincluding ~~we suffer adverse development in claims compared with~~ our ~~reserves~~operating results, orfinancial ~~any claim exceeded the limits of our insurance coverage~~condition, ~~this~~and ~~could~~current ~~have~~and ~~a material~~anticipated ~~adverse~~cash ~~effect on our business, operations or financial condition~~needs.

~~Moreover,~~If ~~any~~additional ~~accident~~equity orfinancing ~~incident~~is ~~involving us~~required, ~~even~~ ifyou wemay ~~are~~suffer ~~fully~~dilution insured or held not to be liable, could negatively affect our reputation among customers and the public, thereby making it more difficult for us to compete effectively, and could significantly affect the cost and availability of ~~insurance~~ inyour ~~the future~~investment.

12We may require additional financing in order to make further investments, respond to competitive pressures or take advantage of unanticipated opportunities including acquisitions. Our ability to arrange such financing in the future will depend in part upon prevailing capital market conditions, as well as our business success. If additional financing is raised by the issuance of shares from Vitran’s treasury, control of Vitran may change and/or shareholders of Vitran may suffer additional dilution.

~~Table~~Investors who purchase the common shares may pay more for the common shares than the amounts paid by existing shareholders of ~~Contents~~Vitran for their common shares. As a result, investors in the offering may incur immediate and substantial dilution. In the past, Vitran has issued options and other convertible securities to acquire the common shares at prices below the prevailing market prices or prices that may be negotiated with selling shareholders. To the extent these outstanding options and other convertible securities are ultimately exercised, investors in the offering will incur further dilution.

WeThe ~~rely~~price onof ~~purchased~~our ~~transportation,~~common ~~making~~shares usmay fluctuate ~~vulnerable to increases in costs of these services~~significantly.

InVolatility ~~Canada, we use purchased transportation, primarily intermodal rail from CN and CP Rail, to provide cost effective service on our east-west national LTL service offering. Any reduction~~ in ~~service by~~ the ~~railroads~~market orprice ~~increase in the cost~~ of ~~such~~our ~~rail~~common ~~services~~shares ismay ~~likely~~prevent toan ~~increase~~investor ~~costs~~from ~~for~~being usable ~~and~~to ~~reduce~~sell the ~~reliability, timeliness and overall attractiveness of~~ ~~rail-based~~common ~~services.~~shares ~~This~~at, ~~would~~or ~~negatively impact our ability to provide our services~~above, ~~with~~ the ~~result~~price ~~that~~paid wefor ~~may~~the becommon ~~forced~~shares. toThe ~~use~~market ~~more~~price ~~expensive~~of orour ~~less~~common ~~efficient~~shares ~~alternative~~could ~~modes~~fluctuate ofsignificantly ~~transportation~~for tovarious ~~provide~~reasons ~~our~~which ~~services~~include: ~~to our customers.~~

In• ~~the United States, we use purchased transportation primarily to handle lane imbalances and to accommodate surges in business. We will also, on occasion, augment~~ our ~~linehaul~~quarterly ~~capacity~~or ~~during~~annual ~~certain~~earnings ~~peak~~or ~~periods~~those ~~through the use~~ of ~~purchased~~other ~~transportation.~~companies ~~A reduction~~ in ~~the availability of purchased transportation may require us to incur increased costs to satisfy customer shipping orders and we may be unable to pass along increases in third party shipping prices to~~ our ~~customers.~~ industry;

~~Our business~~• ~~may~~the bepublic’s ~~adversely~~reaction ~~affected~~to byour ~~anti-terrorism~~press ~~measures.~~releases, our other public announcements and our regulatory filings;

~~Federal,~~• ~~state,~~changes ~~provincial~~in ~~and~~earnings ~~municipal~~estimates ~~authorities have implemented and are continuing to implement various anti-terrorism measures, including checkpoints and travel restrictions on large trucks. If additional security measures disrupt~~ or ~~impede~~recommendations ~~the~~by ~~timing~~research ofanalysts ~~our~~who ~~deliveries,~~follow ~~we may fail to meet the needs of~~ our ~~customers~~stock or ~~may incur increased expenses to do so. This could result in a reduction in demand for our cross-border transportation services and increase~~ the ~~cost~~stock of ~~providing~~other ~~these~~trucking services, each of which could negatively impact our profitability. There can be no assurance that new anti-terrorism measures will not be implemented and that such new measures will not have a material adverse effect on our business, operations or financial condition. companies;

~~Interest~~• ~~rate~~changes ~~fluctuations~~in ~~will~~general ~~impact~~conditions ~~our~~in ~~financial~~the ~~results~~Canadian, U.S. and global economy, financial markets or trucking industry, including those resulting from war, incidents of terrorism or responses to such events;

~~Management~~• ~~continues~~sales toof ~~evaluate~~common ~~our~~shares ~~need~~by ~~to fix interest rate exposure. Our inability to successfully mitigate~~ our ~~exposure~~directors toand ~~interest~~executive ~~rate~~officers; ~~risk could result in us being exposed to increases to interest rates, which interest rate increases would increase our operating costs.~~ and

~~Difficulty~~• inother ~~attracting~~factors ~~qualified~~beyond ~~drivers~~our ~~could~~control, ~~adversely affect~~including ~~our~~those ~~profitability~~described ~~and~~in ~~ability~~these to“Risk ~~grow~~Factors”.

WeIn ~~are~~addition, ~~dependent~~in onrecent ~~our~~years, ~~ability~~the tostock ~~hire~~market ~~and~~has ~~retain~~experienced ~~qualified~~extreme ~~drivers, including~~price ~~owner~~and ~~operators~~volume fluctuations. ~~There~~This isvolatility ~~significant~~has ~~competition~~had ~~for~~a ~~qualified~~significant impact ~~drivers~~on ~~within~~ the ~~trucking~~market ~~industry~~price ~~and~~of ~~attracting~~securities ~~and~~issued ~~retaining~~by ~~drivers~~many ~~has~~companies, ~~become~~including ~~more~~companies ~~challenging~~in our industry. IfThe wechanges ~~are~~frequently ~~unable~~appear to ~~attract~~occur ~~drivers~~without ~~and~~regard ~~contract~~to ~~with~~the ~~owner~~operating ~~operators, we~~performance ~~may~~of ~~experience~~these ~~shortages~~companies. The price of ~~qualified~~the ~~drivers~~common ~~that~~shares could fluctuate ~~result~~based inupon usfactors ~~not~~that ~~meeting~~have ~~customer~~little ~~demands,~~or ~~pressure~~nothing to ~~upwardly~~do ~~adjust~~with our ~~driver compensation package~~business, ~~underutilization of our truck fleet~~ and~~/or~~ ~~use~~these offluctuations ~~higher cost purchased transportation, all of which~~ could ~~have~~materially areduce ~~material~~the ~~adverse~~price ~~effect~~of onthe ~~our~~common ~~operating results, our growth and profitability~~shares.

~~Our information~~12 ~~technology systems are subject to certain risks that we cannot control.~~

13An investment in our common shares is highly speculative.

~~Table~~An investment in our common shares is highly speculative and may result in the loss of ~~Contents~~an investor’s entire investment. Only potential investors who are experienced in high risk investments and who can afford to lose their entire investment should consider an investment in our common shares. Additional risks not currently known to us or that we currently deem immaterial may also impair our operations.

AnIt ~~increase~~may inbe ~~the~~difficult ~~cost~~to ofmaintain ~~healthcare~~and ~~benefits~~enforce injudgments ~~the~~against ~~United~~us ~~States~~because ~~could~~of ~~have a negative impact on~~ our ~~profitability~~Canadian residency.

WeVitran ~~maintain~~is ~~and~~a ~~sponsor~~Canadian ~~health~~corporation, ~~insurance~~and ~~for~~the ~~our~~majority ~~employees,~~of ~~retirees~~its assets and ~~their~~operations ~~dependents~~are inlocated, and the ~~United~~ ~~States~~majority ~~through~~of ~~preferred~~its ~~provider~~revenues ~~organizations~~are derived, outside ~~and~~the ~~offer~~United aStates. ~~competitive~~In ~~healthcare~~addition, ~~program~~a tomajority ~~attract~~of Vitran’s directors and ~~retain~~officers ~~our~~are ~~employees.~~residents ~~These~~of ~~benefits~~Canada ~~comprise~~and all or a ~~significant~~substantial portion of ~~our~~the ~~operating~~assets ~~expenses.~~of ~~Lower~~those ~~interest~~directors ~~rates~~ and~~/or~~ ~~lower returns~~officers onare ~~plan~~or ~~assets~~ may ~~cause~~be ~~increases~~located inoutside the ~~expense~~United ~~of,~~States. ~~and~~As ~~funding requirements for~~a result, ~~our~~it ~~healthcare~~may ~~plans.~~not Webe ~~remain~~possible ~~subject~~for investors to ~~volatility~~effect ~~associated~~service ~~with~~of ~~interest~~process ~~rates,~~within ~~returns~~the onUnited ~~plan~~States ~~assets,~~upon ~~and~~those ~~funding~~persons, ~~requirements.~~or Itto isenforce ~~possible~~against ~~that healthcare~~them ~~costs~~judgments ~~could~~obtained ~~become~~in ~~increasingly~~United ~~cost~~States ~~prohibitive~~courts, ~~either~~including ~~forcing~~judgments uspredicated toupon ~~make~~the ~~changes~~civil toliability provisions ~~our~~of ~~benefits~~United ~~program~~States orfederal ~~negatively~~and ~~impacting~~state ~~our~~securities ~~future profitability~~laws.

AsITEM a1. ~~holding~~B—UNRESOLVED ~~company,~~STAFF ~~Vitran is dependent on various factors to meet its financial obligations.~~ COMMENTS

~~Vitran is a holding company~~None. Vitran’s ability to meet its financial obligations is dependant primarily upon the receipt of interest and principal payments on intercompany advances, management fee payments, cash dividends and other payments from Vitran’s subsidiaries together with the proceeds raised through the issuance of securities.

~~Risks~~ITEM 2—PROPERTIES ~~Related to our Common Shares~~

~~Dividends~~Vitran’s corporate office is located at 185 The West Mall, Suite 701, Toronto, Ontario, Canada, M9C 5L5. The 3,900 square foot office is occupied under a lease expiring in September 2015.

~~The~~Each ~~board~~ of ~~directors of~~ Vitran’s ~~has~~operating ~~not~~subsidiaries ~~declared~~also ~~dividends~~maintains ona ~~our~~head ~~common~~office ~~shares since December 2001. We currently anticipate that we will~~as ~~retain~~well ~~future~~as ~~earnings~~numerous ~~and~~operating ~~sufficient~~facilities. ~~cash~~Vitran ~~resources~~has tonot ~~repay~~experienced ~~debt, to support future capital expenditure programs, to support the development of the LTL business,~~ and ~~for~~does ~~acquisitions.~~not ~~Payment~~anticipate ofdifficulties ~~any~~in ~~future~~renewing ~~dividends~~existing ~~will~~leases beon atfavorable ~~the~~terms ~~discretion~~or ~~of the~~obtaining ~~board~~new offacilities ~~directors~~as ~~of Vitran after taking into account many factors, including our operating results, financial condition~~ and ~~current~~when ~~and anticipated cash needs~~required.

IfVitran ~~additional~~operates ~~equity~~18 ~~financing~~terminals isall ~~required~~located in Canada with a total of 591 loading doors. The 10 largest operating terminals, ~~you~~in ~~may~~terms ~~suffer~~of ~~dilution~~the number of ~~your~~loading ~~investment~~doors, are listed below.

We may require additional financing in order to make further investments, respond to competitive pressures or take advantage of unanticipated opportunities including acquisitions. Our ability to arrange such financing in the future will depend in part upon prevailing capital market conditions, as well as our business success. If additional financing is raised by the issuance of shares from Vitran’s treasury, control of Vitran may change and/or shareholders of Vitran may suffer additional dilution.


Terminals	Doors		Owned/Leased
Toronto		134		Owned
Montreal		85		Owned
Vancouver		85		Owned
Edmonton		69		Owned
Winnipeg		61		Owned
Calgary		55		Leased
Kitchener		37		Leased
London		25		Leased
Gatineau		16		Leased
Saskatoon		13		Leased

~~Investors~~As ~~who~~at ~~purchase~~December ~~the~~31, ~~common~~2013, ~~shares may pay more for~~ the ~~common~~ ~~shares~~Company’s ~~than~~LTL ~~the~~operation ~~amounts~~operated ~~paid~~1,822 bypieces ~~existing shareholders~~ of ~~Vitran~~owned ~~for~~or ~~their~~leased rolling ~~common shares~~stock. As aThe ~~result,~~Company ~~investors~~primarily inpurchases ~~the~~or ~~offering~~utilizes ~~may~~lease ~~incur~~facilities ~~immediate~~for ~~and substantial dilution. In~~ the ~~past,~~acquisition ~~Vitran~~of ~~has~~new ~~issued~~rolling ~~options~~stock ~~and~~for ~~other~~its ~~convertible securities~~operations; tohowever, ~~acquire~~ the ~~common~~Company ~~shares~~occasionally atpurchases ~~prices~~pre-owned ~~below~~equipment ~~the prevailing market prices or prices~~ that ~~may~~meets beits ~~negotiated~~specifications. ~~with~~As ~~selling~~at December 31, ~~shareholders.~~2013, To the ~~extent~~Company’s ~~these~~LTL ~~outstanding~~operation ~~options~~owned ~~and~~or ~~other~~leased ~~convertible securities are ultimately exercised, investors in~~ the ~~offering~~following ~~will incur further dilution~~equipment.

The price of our common shares may fluctuate significantly.


	Owned		Leased
Tractors		1		8
Trailers		651		197
Containers		463		29
Chassis		473		—

Total		1,588		234

~~Volatility~~13 in the market price of our common shares may prevent an investor from being able to sell the common shares at, or above, the price paid for the common shares. The market price of our common shares could fluctuate significantly for various reasons which include:

•ITEM 3—LEGAL ~~the~~PROCEEDINGS ~~public’s reaction to our press releases, our other public announcements and our regulatory filings;~~

•Vitran ~~changes~~is subject to various legal proceedings and claims that have arisen in ~~earnings~~the ~~estimates~~ordinary course of its business that have not been fully adjudicated. Many of these are covered in whole or ~~recommendations~~in part by ~~research~~insurance. ~~analysts~~The ~~who~~management ~~follow~~of ~~our~~Vitran ~~stock~~does ornot ~~the~~believe ~~stock~~that these actions, when finally concluded and determined, will have a material adverse effect upon Vitran’s financial condition, results of ~~other~~operations, ~~trucking~~or ~~companies;~~cash flows.

•ITEM 4—MINE ~~changes~~SAFETY inDISCLOSURES ~~general conditions in the Canadian, U.S. and global economy, financial markets or trucking industry, including those resulting from war, incidents of terrorism or responses to such events;~~

14Not applicable.

~~Table~~14 ~~of Contents~~

•PART ~~other~~II ~~factors beyond our control, including those described in these “Risk Factors”.~~

InITEM ~~addition,~~5— inMARKET ~~recent~~FOR ~~years,~~REGISTRANT’S ~~the~~COMMON ~~stock market has experienced extreme price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies~~EQUITY, ~~including~~RELATED ~~companies~~STOCKHOLDER inMATTERS ~~our~~AND ~~industry.~~ISSUER ~~The~~PURCHASES ~~changes~~OF frequently appear to occur without regard to the operating performance of these companies. The price of the common shares could fluctuate based upon factors that have little or nothing to do with our business, and these fluctuations could materially reduce the price of the common shares. SECURITIES

AnDescription ~~investment~~of inShare ~~our~~Capital ~~common shares is highly speculative.~~

AnAt ~~investment~~December 31, in2013, ~~our~~there was an unlimited number of common shares isauthorized ~~highly~~and ~~speculative~~16,465,241 common shares issued and ~~may~~outstanding. ~~result~~The inholders of the ~~loss~~common ofshares anare ~~investor’s~~entitled ~~entire~~to ~~investment.~~one ~~Only~~vote ~~potential~~for ~~investors~~each ~~who~~common ~~are~~share ~~experienced~~on inall ~~high~~matters ~~risk~~voted ~~investments~~on ~~and~~at ~~who~~any meetings ~~can~~of ~~afford~~Vitran’s shareholders, to ~~lose~~any ~~their~~dividends ~~entire~~that ~~investment~~may ~~should consider~~be andeclared ~~investment~~by inthe ~~our~~Company’s ~~common~~Board ~~shares.~~of ~~Additional~~Directors ~~risks~~thereon, ~~not~~and ~~currently~~in ~~known~~the toevent usof the liquidation, dissolution or ~~that~~winding weup ~~currently~~of ~~deem~~the ~~immaterial~~Company, ~~may~~will ~~also~~be ~~impair~~entitled ~~our~~to ~~operations~~receive the remaining property.

ItVitran’s ~~may~~common beshares ~~difficult~~trade toon ~~maintain~~the Toronto Stock Exchange (“TSX”) and ~~enforce~~the ~~judgments~~NASDAQ ~~against~~Global usSelect ~~because~~Market under the symbols VTN and VTNC, respectively. On March 17, 2014, there were approximately 43 registered holders of ~~our~~record ~~Canadian~~of ~~residency~~the Company’s common shares. Because many of such shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders.

Vitran isdid anot ~~Canadian~~pay ~~corporation,~~any dividends ~~and~~on ~~some~~common ofshares ~~its~~in ~~assets~~fiscal ~~and~~2013 ~~operations are located,~~ and ~~some of its revenues are derived, outside the United States~~2012. InThe ~~addition,~~Board ~~a majority~~ of ~~Vitran’s~~Directors ~~directors~~is ~~and officers~~responsible ~~are residents of Canada and all or a substantial portion of the assets of those directors and officers are or may be located outside the United States. As a result, it may not be possible~~ for ~~investors~~determining ~~to effect service of process within~~ the ~~United~~Company’s ~~States~~dividend upon those persons, or to enforce against them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of United States federal and state securities lawspolicy.

~~ITEM 1.B—UNRESOLVED~~The ~~STAFF~~following ~~COMMENTS~~table sets forth the high and low bid prices of our common stock for the periods indicated, as reported by the TSX and the NASDAQ:

None.


	TSX						NASDAQ
Quarter	High		Low		Volume		High		Low		Volume
	(in Canadian dollars)						(in United States dollars)
2013
Fourth Quarter	$	7.14	$	5.09		162,200	$	6.74	$	4.87		12,660,900
Third Quarter	$	6.95	$	3.99		158,400	$	6.66	$	3.89		5,863,600
Second Quarter	$	7.00	$	4.25		585,300	$	6.69	$	4.25		3,563,000
First Quarter	$	7.80	$	5.00		1,323,700	$	7.73	$	4.96		3,722,000
2012
Fourth Quarter	$	6.22	$	4.16		1,047,600	$	6.53	$	4.12		3,223,000
Third Quarter	$	6.17	$	3.60		234,800	$	6.20	$	3.64		5,777,800
Second Quarter	$	8.75	$	6.10		37,600	$	8.95	$	5.72		1,797,700
First Quarter	$	8.50	$	5.55		82,000	$	8.67	$	5.53		3,325,800

	TSX						NASDAQ
2013 Monthly	High		Low		Volume		High		Low		Volume
	(in Canadian dollars)						(in United States dollars)
December	$	7.14	$	5.73		66,100	$	6.74	$	5.31		8,230,500
November	$	5.84	$	5.10		55,100	$	5.60	$	5.01		1,249,200
October	$	6.00	$	5.09		41,000	$	5.86	$	4.87		3,181,200
September	$	5.25	$	3.99		80,900	$	5.18	$	3.89		3,961,500
August	$	5.15	$	4.50		18,200	$	5.03	$	4.28		966,600
July	$	6.95	$	4.96		59,300	$	6.66	$	4.80		935,500
June	$	7.00	$	5.05		173,600	$	6.69	$	4.82		1,075,700
May	$	5.05	$	4.25		48,000	$	4.99	$	4.25		1,214,400
April	$	6.13	$	4.72		363,700	$	6.16	$	4.51		1,272,900
March	$	6.81	$	5.85		55,400	$	6.69	$	5.70		1,453,200
February	$	7.80	$	6.01		93,800	$	7.73	$	5.91		1,262,900
January	$	7.12	$	5.00		1,174,500	$	7.00	$	4.96		1,005,900

~~ITEM 2—PROPERTIES~~15

~~Each~~Stock ofOption ~~Vitran’s~~Plan operating subsidiaries also maintains a head office as well as numerous operating facilities. Vitran has not experienced and does not anticipate difficulties in renewing existing leases on favorable terms or obtaining new facilities as and when required.

Vitran operates 124 facilities, 23 of which are located in Canada and 101 of which are located in the United States. The Company’s LTL segment operates 107 terminals with a total of 3,424 loading doors in the United States and with a total of 591 loading doors in Canada. The 10 largest operating terminals in Vitran’s LTL segment, in terms of the number of loading doors, are listed below.


Plan Category	Number of securities to be issued upon exercise of outstanding options		Weighted average exercise price of outstanding options		Number of securities remaining available for future issuance (excluding securities reflected in column (a))
	(a)		(b)		(c)
Equity compensation plans approved by security holders		557,750	$	11.93		950,150
Total ⁽¹⁾		557,750	$	11.93		950,150

Terminals	Doors		Owned/Leased
Toronto		134	Owned
Indianapolis		116	Owned
Toledo		101	Owned
Louisville		100	Leased
Charlotte		96	Leased
Montreal		85	Owned
Vancouver		85	Owned
Chicago		84	Leased
Pittsburgh		80	Owned
Memphis		80	Owned

⁽¹⁾	As at December 31, 2013.

~~SCO~~Vitran ~~operates~~maintains 16a ~~facilities,~~stock ~~five~~option plan to assist in ~~Canada~~attracting, retaining and 11motivating inits ~~the United States~~directors, ~~for~~officers ~~major~~and ~~retailers~~employees. inThe ~~their respective~~details ~~markets.~~of ~~SCO~~the ~~has~~Company’s ~~approximately~~authorized ~~2.1 million~~stock ~~square~~option ~~feet~~plan ofare ~~warehouse~~described ~~and~~in ~~distribution~~Note ~~space~~7 ~~under~~of ~~management~~the atConsolidated ~~December 31,~~Financial ~~2012~~Statements.

15Issuer Purchases of Equity Securities

~~Table~~None. ~~of Contents~~

AsRecent atSales ~~December 31, 2012, the Company’s LTL operation operated 10,349 pieces~~ of ~~owned~~ or leased rolling stock. The Company primarily purchases or utilizes operating lease facilities for the acquisition of new rolling stock for its operations; however, the Company occasionally purchases pre-owned equipment that meets itsUnregistered ~~specifications.~~Securities ~~As at December 31, 2012, the Company’s LTL operation owned or leased the following equipment.~~

	Owned		Leased
Tractors		1,352		1,085
Trailers		4,565		2,387
Containers		483		29
Chassis		448		—
Total		6,848		3,501

None.

~~ITEM 3—LEGAL~~Transfer ~~PROCEEDINGS~~ Agents

~~Vitran~~Computershare isInvestor ~~subject~~Services ~~to various legal proceedings and claims that have arisen in the ordinary course of its business that have not been fully adjudicated~~Inc. ~~Many~~Montreal, ofToronto ~~these~~Canada ~~are~~Computershare ~~covered~~Trust inCompany ~~whole or in part by insurance~~Inc. ~~The~~Denver ~~management~~United ~~of Vitran does not believe that these actions, when finally concluded and determined, will have a material adverse effect upon Vitran’s financial condition, results of operations, or cash flows.~~ States

~~ITEM 4—MINE~~16 ~~SAFETY DISCLOSURES~~

16ITEM 6—SELECTED FINANCIAL DATA

~~Table~~The following selected financial data is derived from and should be read in conjunction with the Consolidated Financial Statements and Notes under Item 8 of ~~Contents~~this Annual Report on Form 10-K. For a summary of quarterly financial data for fiscal 2013 and 2012, please see the Supplemental Schedule of Quarterly Financial Information included in the Consolidated Financial Statements. The selected financial data should also be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

~~PART~~Selected IIFinancial Data (Thousands of dollars, except per share amounts)

ITEM 5—MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF SECURITIES


Year	2013			2012			2011			2010			2009
Statements of Income
Revenue	$	193,389		$	193,943		$	192,315		$	172,870		$	148,239

Income (loss) from continuing operations		(1,108	)		4,145			5,348			4,320			2,820
Net loss from continuing operations		(3,026	)		(219	)		(1,318	)		(36,763	)		(4,894	)

Net income (loss) from discontinued operations		(20,191	)		(35,756	)		(12,695	)		(3,419	)		922

Net loss	$	(23,217	)	$	(35,975	)	$	(14,013	)	$	(40,182	)	$	(3,972	)

Loss per share basic and diluted:
Net loss from continuing operations	$	(0.18	)	$	(0.01	)	$	(0.08	)	$	(2.26	)	$	(0.34	)
Net loss	$	(1.41	)	$	(2.19	)	$	(0.86	)	$	(2.47	)	$	(0.28	)
Weighted average number of shares		16,426,455			16,391,252			16,326,760			16,277,522			14,293,747
Balance Sheets
*Assets:*
Property and equipment, net	$	52,521		$	53,365		$	46,298		$	49,630		$	49,210
Goodwill		5,219			5,579			5,458			5,581			5,281
Other assets		35,838			179,528			190,540			190,959			239,847

Total assets	$	93,578		$	238,472		$	242,296		$	246,170		$	294,338

*Liabilities and Stockholders’ Equity:*
Other liabilities	$	23,088		$	128,513		$	111,863		$	91,052		$	87,545
Long-term debt		52,097			60,302			45,460			56,271			71,006
Total stockholders’ equity	$	18,393		$	49,657		$	84,973		$	98,847		$	135,787
Total commitments under operating leases
	$	5,638		$	6,634		$	6,271		$	5,116		$	4,472

~~Description~~17 ~~of Share Capital~~

~~Vitran’s~~ITEM ~~common~~7— shares trade on the Toronto Stock Exchange (“TSX”) and the NASDAQ Global Select Market under the symbols VTN and VTNC, respectively. On February 19, 2013, there were approximately 43 registered holders of record of the CompanyMANAGEMENT’sS ~~common~~DISCUSSION ~~shares.~~AND ~~Because~~ANALYSIS ~~many~~OF ofFINANCIAL ~~such~~CONDITION ~~shares are~~AND ~~held~~RESULTS byOF ~~brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders.~~ OPERATIONS

~~Vitran~~Forward-Looking ~~did~~Statements ~~not pay any dividends on common shares in fiscal 2012 and 2011. The Board of Directors is responsible for determining the Company’s dividend policy.~~

~~The~~In ~~following~~addition to ~~table~~historical ~~sets~~information, ~~forth~~this ~~the~~Annual ~~high~~Report on Form 10-K and ~~low~~MD&A ~~bid~~contain ~~prices~~forward-looking ofstatements ~~our~~within ~~common~~the ~~stock~~meaning ~~for~~of the ~~periods~~United ~~indicated,~~States asPrivate ~~reported~~Securities byLitigation ~~the~~Reform ~~TSX~~Act of 1995 and ~~the~~applicable Canadian securities laws concerning ~~NASDAQ:~~Vitran’s business, operations, and financial performance and condition.

	TSX						NASDAQ
Quarter	High		Low		Volume		High		Low		Volume
	(in Canadian dollars)						(in United States dollars)
2012
Fourth Quarter	$	6.22	$	4.16		1,047,600	$	6.53	$	4.12		3,223,000
Third Quarter	$	6.17	$	3.60		234,800	$	6.20	$	3.64		5,777,800
Second Quarter	$	8.75	$	6.10		37,600	$	8.95	$	5.72		1,797,700
First Quarter	$	8.50	$	5.55		82,000	$	8.67	$	5.53		3,325,800
2011
Fourth Quarter	$	6.25	$	3.91		228,000	$	6.42	$	3.66		5,469,200
Third Quarter	$	13.35	$	3.95		493,300	$	14.34	$	3.84		5,947,400
Second Quarter	$	15.15	$	12.38		137,500	$	16.00	$	12.55		3,020,800
First Quarter	$	14.80	$	11.86		64,500	$	15.00	$	11.78		3,011,700
	TSX						NASDAQ
2012 Monthly	High		Low		Volume		High		Low		Volume
	(in Canadian dollars)						(in United States dollars)
December	$	4.88	$	4.41		1,025,200	$	5.04	$	4.33		1,218,300
November	$	5.52	$	4.16		5,100	$	5.79	$	4.12		745,600
October	$	6.22	$	4.89		17,300	$	6.53	$	4.76		1,259,100
September	$	5.85	$	3.60		157,500	$	6.00	$	3.64		2,739,600
August	$	4.75	$	3.96		55,800	$	4.64	$	3.98		1,052,100
July	$	6.17	$	4.66		21,500	$	6.20	$	4.50		1,986,100
June	$	7.32	$	6.10		6,100	$	7.09	$	5.72		433,900
May	$	8.43	$	6.64		20,700	$	8.65	$	6.37		700,200
April	$	8.75	$	7.89		10,800	$	8.95	$	7.48		663,600
March	$	8.50	$	7.64		32,200	$	8.67	$	7.50		837,400
February	$	8.31	$	6.66		19,300	$	8.31	$	6.69		1,450,100
January	$	7.22	$	5.55		30,500	$	7.39	$	5.53		1,038,300

Forward-looking statements may be generally identifiable by use of the words “believe”, “anticipate”, “intend”, “estimate”, “expect”, “project”, “may”, “plans”, “continue”, “will”, “focus”, “should”, “endeavor” or the negative of these words or other variation on these words or comparable terminology. These forward-looking statements are based on current expectations and are subject to uncertainty and changes in circumstances that may cause actual results to differ materially from those expressed or implied by such forward-looking statements.

17These forward-looking statements contain forward-looking statements regarding, but not limited to, the following:

~~Table~~• ofthe ~~Contents~~Company’s expectation that the TransForce Agreement will successfully close;

~~Stock~~• ~~Option~~the ~~Plan~~Company’s expectation that revenue per hundredweight will increase slightly in upcoming quarters until market conditions change;

Plan Category	Number of securitiesto be issued uponexercise of outstandingoptions		Weighted averageexercise price ofoutstanding options		Number of securitiesremaining available forfuture issuance(excluding securitiesreflected in column (a))
	(a)		(b)		(c)
Equity compensation plans approved by security holders		742,800	$	11.80		31,100
Equity compensation plans not approved by security holders		—		—		—
Total (1)		742,800	$	11.80		31,100

•

the Company’s expectation that it will be able to reduce maintenance expense as a percentage of revenue;

~~(1)~~• Asthe atCompany’s ~~December~~expectation ~~31,~~that ~~2012.~~activity levels will continue to increase;

~~Vitran~~• ~~maintains a stock option plan to assist in attracting, retaining and motivating its directors, officers and employees. The details of~~ the Company’s ~~authorized~~ability ~~stock~~to ~~option~~maintain ~~plan~~days ~~are~~sale ~~described in~~outstanding ~~Note~~(“DSO”) 9below of40 ~~the Consolidated Financial Statements.~~ days;

~~Issuer~~• ~~Purchases~~the Company’s intention to purchase a specified level of ~~Equity~~property ~~Securities~~and equipment and to finance such acquisitions with cash flow from operations, capital and operating leases;

~~None.~~• the Company’s ability to generate future operating cash flows from profitability and managing working capital to fund operating and capital requirements as well as service contractual obligations;

~~Recent~~• ~~Sales~~the ~~of Unregistered~~Company’s ~~Securities~~operational plan will improve density and efficiencies leading to improved financial results; and

~~None.~~• the Company’s ability to benefit from an improvement in the economic and pricing environment.

~~Transfer~~Such ~~Agents~~forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Vitran’s actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that may cause such differences include but are not limited to technological change, increase in fuel costs, regulatory change, the general health of the economy, changes in labor relations, geographic expansion, capital requirements, availability of financing, claims and insurance costs, environmental hazards, availability of qualified drivers and competitive factors. More detailed information about these and other factors is included in the MD&A and in Item 1A – Risk Factors. Many of these factors are beyond the Company’s control; therefore, future events may vary substantially from what the Company currently foresees. You should not place undue reliance on such forward-looking statements. Vitran Corporation Inc. does not assume the obligation to revise or update these forward-looking statements after the date of this document or to revise them to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.

~~Computershare~~Unless ~~Investor~~otherwise ~~Services~~indicated, ~~Inc~~all dollar references herein are in U.S. ~~Montreal~~dollars. The Company’s Annual Report on Form 10-K, ~~Toronto~~as ~~Canada~~well ~~Computershare~~as ~~Trust~~all the Company’s ~~Inc~~other required filings, may be obtained from the Company at www.vitran.com ~~Denver~~or ~~United~~from ~~States~~www.sedar.com or from www.sec.gov .

~~ITEM 6—SELECTED~~OVERVIEW ~~FINANCIAL DATA~~

~~The~~Vitran ~~following~~Corporation ~~selected~~Inc. ~~financial~~(“Vitran” ~~data~~or isthe ~~derived~~“Company”) ~~from~~is ~~and~~a ~~should~~leading, bepredominantly ~~read~~non-union, inprovider ~~conjunction~~of ~~with~~freight ~~the Consolidated Financial Statements and~~surface ~~Notes~~transportation ~~under~~throughout ~~Item 8 of this Annual Report on Form 10-K~~Canada. ~~For~~As ais ~~summary~~more offully ~~quarterly~~described ~~financial~~in ~~data~~Item 1 ~~for fiscal 2012 and 2011~~“Business”, ~~please see~~ the ~~Supplemental~~LTL ~~Schedule~~segment oftransports ~~Quarterly~~shipments ~~Financial Information included~~ in ~~the~~less-than-full ~~Consolidated~~trailer ~~Financial Statements.~~load ~~The~~quantities ~~selected~~through ~~financial~~freight ~~data~~service ~~should~~center ~~also be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”~~networks.

~~Selected~~Vitran’s ~~Financial~~operating ~~Data~~results ~~(Thousands~~are generally expected to depend on the number and weight of ~~dollars~~shipments transported, ~~except~~the ~~per~~prices ~~share~~received ~~amounts)~~for the services provided, and the mix of services supplied to clients. Vitran must manage its fixed and variable operating cost infrastructure in the face of fluctuating volumes to realize appropriate margins while maintaining the quality service expected by its customers.

Year	2012			2011			2010			2009			2008
Statements of Income
Revenue	$	702,914		$	686,242		$	581,594		$	519,215		$	610,933
Impairment of goodwill(1)		—			—			—			—			107,351
Loss from continuing operations (2)		(37,852	)		(14,584	)		(52	)		(6,680	)		(103,012	)
Net loss from continuing operations(3)		(42,626	)		(20,780	)		(42,362	)		(8,720	)		(75,628	)
Net income from discontinued operations		6,651			6,767			2,180			4,748			4,403
Net loss	$	(35,975	)	$	(14,013	)	$	(40,182	)	$	(3,972	)	$	(71,225	)
Loss per share basic and diluted:
Net loss from continuing operations	$	(2.60	)	$	(1.27	)	$	(2.60	)	$	(0.61	)	$	(5.61	)
Net loss	$	(2.19	)	$	(0.86	)	$	(2.47	)	$	(0.28	)	$	(5.28	)
Weighted average number of shares		16,391,252			16,326,760			16,277,522			14,293,747			13,485,132
Balance Sheets
Assets:
Property and equipment, net	$	131,640		$	123,521		$	130,394		$	134,817		$	139,989
Intangible assets		2,707			4,773			6,954			9,170			11,401
Goodwill		5,579			5,458			5,581			5,281			5,420
Other assets		98,571			108,506			102,593			145,070			136,782
Total assets	$	238,497		$	242,258		$	245,522		$	294,338		$	293,592
Liabilities and Stockholders’ Equity:
Other liabilities	$	86,843		$	90,213		$	96,837		$	85,595		$	88,872
Long-term debt		101,997			67,072			49,838			72,956			93,477
Total stockholders’ equity	$	49,657		$	84,973		$	98,847		$	135,787		$	111,243
Total commitments under operating leases	$	88,039		$	75,777		$	47,253		$	48,440		$	27,009

As described under “Part I – Overview”, on December 30, 2013, Vitran entered into a definitive arrangement agreement with TransForce pursuant to which TransForce has agreed to acquire all of the outstanding common shares of Vitran not already owned by TransForce for $6.50 in cash per share. Manitoulin Transport waived its right to match under the Manitoulin Agreement pursuant to which Manitoulin Transport had agreed to acquire all of the outstanding common shares of Vitran for $6.00 in cash per share. Manitoulin Transport was paid a termination fee of $4.0 million. The Arrangement with TransForce was approved at a special meeting of shareholders on March 5, 2014.

19On September 23, 2013, Vitran entered into an agreement to sell the shares of its U.S. Less-Than-Truckload business unit (“U.S. LTL”) to Data Processing LLC, a company owned by industry veteran Matthew Moroun for cash consideration of $2.0 million and the assumption of $32.8 million of real estate and capital lease debt by the purchaser. In addition, the purchaser agreed to fund cash deficits incurred by U.S. LTL from September 23, 2013 through to the date of closing of the transaction. The transaction closed on October 7, 2013 and the purchaser funded $1.4 million of cash deficits incurred by U.S. LTL between September 23, 2013 and October 7, 2013. Prior to closing the sale, the Company agreed to capitalize U.S. LTL with cash of $5.0 million. The Company recorded a loss of $45.9 million on the sale of its U.S. LTL business. The operating results and divestiture of U.S. LTL have been recorded as a discontinued operation.

~~Table~~On February 12, 2013, Vitran signed an agreement to sell its Supply Chain Operation (“SCO”) services business to Legacy SCO Inc. (“Legacy”), an affiliate of ~~Contents~~Legacy Supply Chain, for $97.0 million in cash, subject to working capital adjustments. On March 4, 2013, the Company completed the sale of SCO for $97.0 million in cash, and a portion of the proceeds was used to fully reduce Vitran’s debt under its revolving credit facility. The Company received an additional $1.8 million in proceeds in the second quarter of 2013 upon final determination of the aforementioned working capital adjustments. The Company recorded a gain of $84.6 million on the sale of its SCO business. The operating results and divestiture of the SCO segment have been recorded as a discontinued operation.

~~Notes:~~EXECUTIVE SUMMARY

~~(1)~~The 2013 ~~Vitran~~fiscal ~~recorded~~year was a ~~pre-tax~~transformative ~~non-cash~~year ~~goodwill~~for ~~impairment~~Vitran. ~~charge~~The Company sold its SCO business for total proceeds of $~~107~~98.48 million atincluding ~~December~~the ~~31,~~additional ~~2008~~proceeds from the working capital adjustment and used these funds to repay its borrowings under the senior revolving credit facility. ~~The~~Subsequent ~~assessment~~to the sale of the SCO business, the Company underwent a strategic review which ultimately resulted in the divestiture of its financially underperforming U.S. LTL business. The aforementioned businesses have both been recorded as discontinued operations. Vitran’s ~~goodwill~~Canadian ~~for~~LTL ~~impairment~~business isunit, ~~discussed~~as ~~further~~in previous years, prospered financially and operationally in ~~Item~~2013. 7Excluding ~~under~~the ~~“Critical~~negative ~~Accounting~~impact ~~Policies~~of foreign exchange, the Canadian LTL business unit increased revenue and ~~Estimates~~income from operations 2.”9% and 10.0%, respectively, over 2012. These results were achieved in a difficult economic and operating environment and are the result of tireless effort and support from the management, office staff and the front line drivers and dock workers at Vitran.

~~(2)~~19 ~~Vitran recorded a loss on sale of properties and a write-down to estimated fair value for held for sale properties totaling $2.1 million in 2011.~~

~~(4)~~RESULTS ~~Operating~~OF ~~ratio~~OPERATIONS (“OR”) is a non-GAAP financial measure which does not have any standardized meaning prescribed by GAAP. OR is the sum of total operating expenses minus goodwill impairment charge, divided by revenue. OR excludes the impact of the goodwill impairment charge. OR allows management to measure the Company and its various segments’ operating efficiency. OR is a widely recognized measure in the transportation industry which provides a comparable benchmark for evaluating the Company’s performance compared to its competitors. Investors should also note that the Company’s presentation of OR may not be comparable to similarly titled measures by other companies. OR is calculated as follows:

	Year ended December 31,
	2012			2011			2010			2009			2008
Total operating expenses	$	740,766		$	700,826		$	581,646		$	525,895		$	713,945
Goodwill impairment charge		—			—			—			—			(107,351	)
Adjusted operating expense		740,766			700,826			581,646			525,895			606,594
Revenue	$	702,914		$	686,242		$	581,594		$	519,215		$	610,933
Operating ratio (“OR”)		105.4	%		102.1	%		100.0	%		101.3	%		99.3	%

2013 COMPARED TO 2012

20CONSOLIDATED RESULTS

~~Table~~The following table summarizes the Consolidated Statements of ~~Contents~~Income (Loss) for the three years ended December 31:

ITEM 7—MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


(in thousands of dollars)	2013			2012			2011			2013 vs 2012			2012 vs 2011
Revenue	$	193,389		$	193,943		$	192,315			(0.3	%)		0.8	%

Salaries, wages and employee benefits		27,544			24,973			24,697			10.3	%		1.1	%
Purchased transportation		67,119			70,416			69,850			(4.7	%)		0.8	%
Depreciation and amortization		3,154			3,155			3,197			0.0	%		(1.3	%)
Maintenance		7,995			10,164			10,957			(21.3	%)		(7.2	%)
Rents and leases		2,599			2,788			2,663			(6.8	%)		4.7	%
Owner operators		50,426			48,345			46,905			4.3	%		3.1	%
Fuel and fuel related expenses		21,899			21,956			20,361			(0.3	%)		7.8	%
Other operating expenses		14,071			8,044			8,398			74.9	%		(4.2	%)
Other income		(310	)		(43	)		(61	)		620.9	%		(29.5	%)

Total operating expenses		194,497			189,798			186,967			2.5	%		1.5	%

Income (loss) from continuing operations		(1,108	)		4,145			5,348			(126.7	%)		(22.5	%)
Interest expense, net		3,551			3,124			5,498			13.7	%		(43.2	%)
Income tax expense (recovery)		(1,633	)		1,240			1,168			(231.7	%)		6.2	%

Net loss from continuing operations		(3,026	)		(219	)		(1,318	)		1,281.7	%		(83.4	%)
Net loss from discontinued operations		(20,191	)		(35,756	)		(12,695	)		(43.5	%)		181.7	%

Net loss	$	(23,217	)	$	(35,975	)	$	(14,013	)		(35.5	%)		156.7	%


	2013			2012			2011			2013 vs 2012			2012 vs 2011
Loss per share:
Basic and diluted – continuing operations	$	(0.18	)	$	(0.01	)	$	(0.08	)		1,700.0	%		(87.5	%)
Basic and diluted – net loss	$	(1.41	)	$	(2.19	)	$	(0.86	)		(35.6	%)		154.7	%
Operating Ratio⁽¹⁾		100.6	%		97.9	%		97.2	%

~~Forward-Looking~~Financial ~~Statements~~Overview

InRevenue ~~addition~~decreased by 0.3% to ~~historical~~$193.4 ~~information,~~million ~~this~~in ~~Annual~~2013 ~~Report~~from on$193.9 ~~Form~~million ~~10-K~~in ~~and~~2012. ~~MD&A~~Revenue ~~contain~~for ~~forward-looking~~the ~~statements~~2013 ~~within~~year ~~the~~was negatively impacted by a weaker ~~meaning~~Canadian ofdollar ~~the~~and ~~United~~was ~~States~~partially ~~Private~~offset ~~Securities~~by ~~Litigation~~an ~~Reform~~increase ~~Act~~in fuel surcharge revenue, resulting in a reduction of ~~1995~~$10.6 million in revenue. Excluding the impact of fuel surcharge revenue and ~~applicable~~a weaker Canadian ~~securities~~dollar, ~~laws~~revenue ~~concerning~~improved ~~Vitran’s~~5.2%. ~~business,~~Shipments increased ~~operations,~~3.4% and ~~financial~~tonnage ~~performance~~decreased ~~and~~0.4% ~~condition~~respectively compared to 2012.

~~Forward-looking~~Salaries, ~~statements~~wages ~~may~~and beemployee ~~generally~~benefits ~~identifiable~~increased by10.3% ~~use~~to of$27.5 million ~~the~~for ~~words~~2013 ~~“believe”,~~compared ~~“anticipate”, “intend”,~~to ~~“estimate”,~~$25.0 ~~“expect”,~~million ~~“project”,~~in ~~“may”,~~2012. ~~“plans”,~~This ~~“continue”,~~is ~~“will”,~~due ~~“focus”,~~to ~~“should”,~~an ~~“endeavor”~~increase orin ~~the~~shipment ~~negative~~activity ofand ~~these~~a ~~words or~~2.5% ~~other~~wage ~~variation~~increase on ~~these~~February 1, ~~words or comparable terminology~~2013. ~~These~~Also, ~~forward-looking~~included ~~statements~~in ~~are~~salaries, ~~based~~wages ~~on current expectations~~ and ~~are~~employee ~~subject~~benefits tois ~~uncertainty~~$1.7 ~~and~~million ~~changes~~ in ~~circumstances~~severance ~~that~~to ~~may~~the previous ~~cause~~President ~~actual~~and ~~results~~Chief toExecutive ~~differ~~Officer ~~materially~~of ~~from~~Vitran, ~~those expressed~~recorded orin ~~implied~~the bysecond ~~such~~quarter ~~forward-looking~~of ~~statements~~2013.

Purchased transportation decreased 4.7% in 2013 compared to 2012. The Company has been focused on operating efficiencies within its intermodal business, which includes optimizing load factors and taking advantage of lower cost schedules on the rail. These ~~forward-looking~~efficiency ~~statements~~and ~~contain~~cost ~~forward-looking~~control ~~statements~~initiatives ~~regarding,~~resulted ~~but~~in ~~not~~a ~~limited~~decrease in purchased transportation costs as a percentage of revenue of 1.6% compared to, the ~~following:~~same period a year ago.

•Depreciation ~~the~~and ~~Company’s~~amortization ~~expectation~~expense ~~that~~was flat in 2013 compared to 2012. This is a result of trailing equipment becoming fully depreciated in 2013 offset primarily by the ~~sale~~completion of the ~~SCO~~Company’s ~~business~~Winnipeg ~~will~~facility ~~close~~in onthe orfourth ~~before~~quarter ~~March~~of 1,2012. ~~2013~~The ~~based~~Company onexpects ~~the~~to ~~agreement~~purchase ~~signed~~more ontrailing ~~February~~equipment ~~12,~~as ~~2013~~financial ~~and~~performance ~~that~~improves ~~Legacy~~and ~~will~~therefore ~~close~~expects ~~its~~depreciation ~~financing~~expense to increase ~~fund~~in ~~the~~coming ~~purchase~~years. ~~price;~~

•20 ~~the Company’s expectation that efficiencies and optimization of technology within the U.S. LTL business unit will reduce salaries, wages and employee benefits expense as a percentage of revenue;~~

•Maintenance ~~the~~expense decreased 21.3% to $8.0 million for 2013 compared to $10.2 million for 2012. Maintenance expense has significantly decreased as a result of older equipment being sold. The Company purchased 77 new trailers, 30 new chassis and 82 new containers which were delivered in the fourth quarter of 2013. As the new trailing equipment is put into service, it is management’s expectation that itthe Company will becontinue ~~able~~ to reduce its maintenance expense as a percentage of revenue;.

•Rents ~~the~~and ~~Company’s~~leases ~~expectation~~expense ~~that~~decreased ~~operating~~6.8% ~~initiatives~~for ~~implemented~~2013 ~~will~~compared ~~continue~~to 2012. This is attributable to ~~improve~~moving ~~productivity~~operations ~~and~~from ~~service~~the ~~levels~~previously ~~within~~leased facility in Winnipeg into the ~~U.S.~~new ~~LTL~~company-owned ~~business~~facility ~~unit;~~in the fourth quarter of 2012.

•Owner ~~the~~operator ~~Company’s~~expenses ~~expectation~~increased ~~that~~4.3% ~~fuel~~for ~~economy~~2013 compared ~~will continue~~ to ~~improve~~2012, ~~moderately~~driven ~~and~~by asincreased aactivity ~~result~~levels ~~fuel~~compared ~~costs~~to ~~will~~2012. ~~decrease;~~

•Fuel ~~the~~and fuel-related expenses decreased 0.3% for 2013 compared to 2012. The Company’s ~~expectation~~utilizes ~~that~~intermodal ~~operational~~and ~~improvements~~over-the-road ~~within~~moves to complete its linehaul function. Fuel surcharges charged to the UCompany by the rail and owner operators are included in fuel and fuel-related expenses.S. ~~LTL~~Overall ~~business~~for ~~unit~~the ~~will~~2013 ~~have~~year, the average fuel surcharge paid increased compared to 2012 due to an increase in shipment activity, however, was offset by a ~~positive~~weaker ~~impact~~Canadian dollar positively impacting the expense line. The fuel surcharge charged to the Company fluctuates quarter over quarter and varies based on ~~future~~the ~~financial~~price ~~results;~~of diesel, mix in type of freight move (intermodal or over-the road), number of shipments, destination and weight per shipment.

•Other operating expenses include the aforementioned $4.0 million termination fee paid to Manitoulin Transport concurrent with entering into the TransForce Agreement. Also recorded in other operating expenses is $0.8 million related to two fairness opinions delivered to the Company’s ~~expectation~~board ~~that~~of ~~activity~~directors ~~levels~~by ~~will~~Stephens ~~improve;~~Inc., Vitran’s financial advisor.

•The Company incurred net interest expense of $3.6 million in 2013 compared to interest expense of $3.1 million in 2012. Included in interest expense is $0.8 million of deferred financing costs that were written off in the current year due to the Company amending its senior revolving credit agreement for the sale of SCO and again for the sale of U.S. LTL. The Company’s balance ~~ability~~sheet todebt ~~maintain~~net ~~DSO~~of ~~below~~cash 40at ~~days;~~December 31, 2013 is $37.9 million.

•In accordance with Financial Accounting Standard Board (“FASB”) Accounting Standard Codification (“FASB ASC”) 740-10, the Company’s ~~intention~~had torecorded ~~purchase~~ a ~~specified~~valuation ~~level~~allowance for all U.S. deferred tax assets. The sale of ~~property~~SCO ~~and~~resulted ~~equipment~~in ~~and~~a totaxable ~~finance~~gain ~~such~~in ~~acquisitions~~the United States, which the Company was able to offset with ~~cash~~the ~~flow~~utilization of its available net operating loss carryforwards from ~~operations~~previous years of $17.6 million. Subsequent to the sale of SCO, ~~capital~~the Company sold its U.S. LTL business and ~~operating~~therefore, ~~leases~~recorded the impact on its U.S. deferred tax assets and valuation allowance in discontinued operations. In Canada, ifthe ~~necessary~~Company has CAD $2.6 million of net operating loss carryforwards available to offset future years’ taxable income recognized as deferred tax assets. Management believes the Company will generate sufficient taxable income to use these losses in the future. In Canada, the Company incurred a capital loss of approximately CAD $85.6 million from the sale of U.S. LTL. A full valuation allowance was recorded as it is uncertain whether the capital losses will be utilized to offset future capital gains. As at December 31, 2013, the valuation allowance recorded was $20.5 million. Consequently, the Company’s ~~revolving~~recorded ~~credit~~a ~~facilities;~~consolidated tax recovery of $1.6 million compared to a consolidated tax expense of $1.2 million in 2012.

•Net loss from continuing operations was $3.0 million for 2013 compared to a net loss from continuing operations of $0.2 million in 2012. This resulted in basic and diluted loss per share from continuing operations of $0.18 for the ~~Company’s~~current ~~ability~~year compared to ~~generate~~a ~~future~~loss ~~operating~~of ~~cash~~$0.01 ~~flows~~per basic and diluted share from continuing ~~profitability~~operations in 2012. Loss from discontinued operations was $20.2 million in 2013 compared to $35.8 million in 2012. Therefore, the Company posted a net loss of $23.2 million for 2013 compared to a net loss of $36.0 million in 2012. This resulted in a basic and ~~managing~~diluted ~~working~~loss ~~capital;~~per share of $1.41 for the current year compared to a loss per basic and diluted share of $2.19 in 2012. The weighted average number of shares for 2013 was 16.4 million basic and diluted shares, consistent with the basic and diluted shares for 2012.

•FASB Accounting Standard Update (“ASU”) No. 2013-02 “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” requires expanded disclosures for amounts reclassified out of accumulated other comprehensive income by component. The guidance requires the ~~Company’s~~presentation ~~operational~~of ~~plan~~amounts ~~will~~reclassified ~~improve~~out ~~service~~of accumulated ~~and~~other ~~efficiencies~~comprehensive inincome by the ~~U.S.~~respective ~~LTL~~line ~~business~~items ~~unit;~~of ~~and~~net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting

•21 ~~the Company’s ability to benefit from an improvement in the economic and pricing environment.~~

21 period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, a cross-reference to other disclosures that provide additional detail about those amounts is required. The guidance is to be applied prospectively for reporting periods beginning after December 15, 2012. ASU No. 2013-02 was adopted by the Company on January 1, 2013. The new guidance affects disclosures only and did not have an impact on the Company’s results of operations or financial position.

~~Table~~Operations ofOverview ~~Contents~~

Unless otherwise indicated, all dollar references herein are in U.S. dollars. The Company’s Annual Report on Form 10-K, as well as all the Company’s other required filings, may be obtained from the Company at www.vitran.com or from www.sedar.com or from www.sec.gov.


	2013		2012		2011		2013 vs 2012			2012 vs 2011
Number of shipments⁽²⁾		892,051		863,049		840,280		3.4	%		2.7	%
Weight (000s of lbs)⁽³⁾		1,686,408		1,692,415		1,627,335		(0.4	%)		4.0	%
Revenue per shipment⁽⁴⁾	$	216.79	$	224.72	$	228.87		(3.5	%)		(1.8	%)
Revenue per hundredweight⁽⁵⁾	$	11.47	$	11.46	$	11.82		0.1	%		(3.0	%)

~~OVERVIEW~~Shipments increased 3.4% for 2013 compared to 2012. This is attributable to the Canadian LTL management team executing on its sales plan and leveraging Vitran’s status as a high quality LTL transportation provider in the Canadian market place. The pricing environment continues to remain a challenge and revenue per hundredweight remained flat for the year compared to 2012. Management expects revenue per hundredweight to increase slightly in the upcoming quarters until market conditions change – for example, should there be a reduction in capacity in the Canadian market place, management would expect a positive impact on the Company’s revenue per hundredweight.

~~Vitran~~During ~~Corporation Inc. (“Vitran” or the “Company”) is a leading~~2013, ~~predominantly~~management ~~non-union,~~focused ~~provider~~on ofimproving ~~freight~~operating ~~surface~~efficiencies ~~transportation~~ and ~~related~~cost ~~supply~~control ~~chain~~initiatives ~~services~~to ~~throughout~~drive ~~Canada~~income ~~and~~from inoperations 34growth ~~states~~ in the ~~eastern,~~Canadian ~~southeastern,~~LTL ~~central,~~business ~~southwestern~~unit. ~~and~~The ~~western~~Canadian ~~United~~LTL ~~States.~~operation’s ~~These~~load ~~services~~factor ~~are~~has ~~provided~~increased byover ~~stand-alone~~1.5% ~~business~~in ~~units~~2013 ~~within~~compared ~~their respective~~to ~~regions~~2012. ~~Depending~~At onthe asame ~~customer’s needs~~time, the ~~units~~Company utilized ~~can~~lower ~~operate~~cost ~~independently~~off-peak orrail inschedules afor ~~complementary~~its ~~manner~~intermodal linehaul moves. AsIn isaddition, ~~more~~management ~~fully~~expects ~~described~~maintenance incosts ~~Item 1~~to ~~“Business”,~~continue to improve as the ~~LTL~~Company ~~segment~~moves ~~transports~~out ~~shipments~~older inequipment ~~less-than-full trailer~~and ~~load~~replaces ~~quantities~~it ~~through~~with ~~freight~~the ~~service~~aforementioned ~~center~~new ~~networks~~trailers and containers purchased in 2013.

~~Vitran’s~~Lastly, ~~operating~~management ~~results~~believes ~~are~~that ~~generally~~with ~~expected~~additional ~~to depend~~shipment ~~on the number and weight of shipments transported~~gains, ~~the~~future ~~prices~~improvement ~~received~~in ~~for~~ the ~~services~~Canadian ~~provided~~pricing environment, ~~and~~combined ~~the~~with ~~mix~~a ofcontinued ~~services~~focus ~~supplied~~on tooperational ~~clients. Vitran must manage its fixed~~ and ~~variable operating~~ cost ~~infrastructure~~control ininitiatives, the ~~face~~Canadian ofLTL ~~fluctuating volumes~~operation toshould ~~realize~~be ~~appropriate~~well ~~margins~~positioned ~~while~~to ~~maintaining~~improve ~~the~~income ~~quality~~from ~~service~~operations ~~expected~~over bythe ~~its~~long ~~customers~~term.

~~The~~Other long-term mission of the Company is to build a premier North American transportation infrastructure in both Canada and the United States offering regional, inter-regional, national, and transborder LTL services.

InMr. Rick ~~2010,~~Gaetz ~~Vitran~~resigned ~~divested~~as President ofand ~~substantially~~Chief ~~all~~Executive ofOfficer ~~the rolling stock~~ of ~~its~~Vitran ~~Truckload~~effective ~~business.~~April 4, ~~The~~2013 ~~Truckload~~and ~~business~~the ~~delivered~~Company ~~full trailer~~recorded ~~loads~~severance ~~point~~expense toof ~~point~~$1.7 onmillion. ~~a predominantly short-haul basis~~Mr. William ~~This~~Deluce ~~operation~~ was ~~not~~appointed ~~connected~~Interim toPresident ~~the LTL segment~~ and ~~was~~Chief ~~not~~Executive ~~considered~~Officer ~~strategic~~effective to the ~~continuing~~same ~~operations~~day ofto replace ~~Vitran~~Mr. Gaetz.

On22 February 19, 2011, Vitran acquired selected assets of Milan Express Inc.’s LTL division, a private LTL carrier headquartered in Milan, Tennessee. With the acquisition of Milan, Vitran added 19 service centers, including expanded and new state coverage in Alabama, Georgia, Mississippi, North Carolina and South Carolina.

~~EXECUTIVE~~RESULTS ~~SUMMARY~~OF OPERATIONS

~~The~~ 2012 ~~fiscal~~COMPARED ~~year~~TO ~~marked~~2011 a difficult yet extremely exciting year for Vitran. Although the Company operated through a number of challenges in its U.S. LTL business unit, a foundation has been built to recover the operating results of this business unit in 2013. Notwithstanding the U.S. LTL business unit, Vitran’s other business units prospered operationally in 2012 and as a whole, Vitran had a number of important accomplishments:

•CONSOLIDATED ~~completed~~RESULTS ~~the construction of a new terminal in Winnipeg, Manitoba and subsequently financed the facility by adding it to the portfolio of the Company’s Canadian real estate term credit facility;~~

•Financial Overview ~~enhanced liquidity by obtaining a new real estate term facility secured by 18 of the Company’s U.S. transportation terminals;~~

•Revenue ~~the~~increased ~~CDN~~by ~~LTL~~0.8% ~~business~~to ~~continued~~$193.9 tomillion ~~post~~in ~~solid~~2012 ~~results~~from $192.3 million in 2011. Revenue for the 2012; year was negatively impacted by a weaker Canadian dollar and by a decrease in fuel surcharge revenue, resulting in a reduction of $2.2 million in revenue. Excluding the impact of fuel surcharge revenue and a weaker Canadian dollar, revenue improved 2.0%. Shipments and tonnage increased 2.7% and 4.0% respectively compared to 2011.

•Salaries, ~~completed~~wages ~~the~~and ~~build-up~~employee ofbenefits ~~the~~increased ~~new~~1.1% Uto $25.S0 million for 2012 compared to $24.7 ~~LTL~~million ~~management~~in 2011. This is due to an increase in shipment activity and ~~leadership~~a ~~team;~~2.75% wage increase on February 1, 2012.

•Purchased ~~introduced~~transportation ~~new~~increased ~~enhanced~~0.8% ~~technology~~in 2012 compared to ~~the~~2011 ~~U.S.~~due ~~LTL~~to ~~operations;~~an ~~and~~increase in shipment activity.

•Depreciation ~~focus~~and onamortization ~~North~~expense ~~American~~declined ~~LTL~~1.3% ~~business~~for ~~with~~2012 ~~divestiture~~compared to 2011, and is primarily attributable to a weaker Canadian dollar positively impacting the expense line. Excluding the impact of ~~SCO~~foreign exchange depreciation expense increased slightly due to the completion of the Winnipeg, Manitoba terminal in the fourth quarter of 2012.

~~These~~Maintenance ~~achievements~~expense ~~were~~decreased ~~the~~7.2% ~~result~~to of$10.2 ~~tireless~~million ~~effort~~for ~~and~~2012 ~~support~~compared ~~from~~to ~~the~~$11.0 ~~management,~~million ~~office~~for ~~staff~~2011. ~~and~~Maintenance ~~most~~expense ~~importantly~~decreased as a result of older equipment being sold. The Company purchased 137 new trailers, ~~the~~which ~~front~~were ~~line~~delivered ~~drivers~~in ~~and~~the ~~dock~~first ~~workers~~quarter atof ~~Vitran~~2012.

22Rents and leases expense increased 4.7% for 2012 compared to 2011. The increase is a result of the aforementioned new trailers leased in the first quarter of 2012.

~~Table~~Owner ofoperator ~~Contents~~expenses increased 3.1% for 2012 compared to 2011, attributable to increased activity levels compared to 2011.

~~RESULTS~~Fuel OFand ~~OPERATIONS~~fuel-related expenses increased 7.8% for 2012 compared to 2011. Fuel surcharges charged to the Company by the rail and owner operators are included in fuel and fuel-related expenses. Overall for the 2012 year, the average fuel surcharge paid increased compared to 2011 due to an increase in shipment activity.

The Company incurred net interest expense of $3.1 million in 2012 ~~COMPARED~~compared TOto interest expense of $5.5 million in 2011. Included in interest expense in 2011 is $1.0 million of deferred financing costs that were written off related to the previous senior term and revolving credit facilities. The Company’s interest rate spread on its revolving and term debt was on average 44 basis points less than 2011.

~~CONSOLIDATED~~In ~~RESULTS~~accordance with Financial Accounting Standard Board (“FASB”) Accounting Standard Codification (“FASB ASC”) 740-10, the Company had recorded a valuation allowance for all U.S. deferred tax assets. As required by this standard, the Company increased the valuation allowance by $15.5 million, which would have been the tax recovery attributable to the Company’s U.S. based companies for 2012. The increase in valuation allowance was recorded in discontinued operations. The Company recorded a consolidated tax expense from continuing operations of $1.2 million in 2012 and 2011.

~~The~~Net ~~following~~loss ~~table~~from ~~summarizes~~continuing ~~the~~operations ~~Consolidated~~was $0.2 million for 2012 compared to a net loss from continuing operations of $1.3 million in ~~Statements~~2011. This resulted in basic and diluted loss per share from continuing operations for 2012 of ~~Income~~$0.01 (compared to a loss per basic and diluted share from continuing operations of $0.08 in 2011. Loss) ~~for~~from discontinued operations was $35.8 million in 2012 compared to $12.7 million in 2011. Therefore, the ~~three~~Company ~~years~~posted ~~ended~~a ~~December 31:~~net loss of $36.0 million for 2012 compared to a net loss of $14.0 million in 2011. This resulted in a basic and diluted loss per share of $2.19 for 2012 compared to a loss per basic and diluted share of $0.86 in 2011.

(in thousands of dollars)	2012			2011			2010			2012 vs 2011			2011 vs 2010
Revenue	$	702,914		$	686,242		$	581,594			2.4	%		18.0	%
Salaries, wages and employee benefits		305,033			283,363			241,200			7.6	%		17.5	%
Purchased transportation		104,447			109,133			99,222			(4.3	%)		10.0	%
Depreciation and amortization		15,435			14,969			16,748			3.1	%		(10.6	%)
Maintenance		34,201			32,217			25,603			6.2	%		25.8	%
Rents and leases		33,823			26,321			18,104			28.5	%		45.4	%
Owner operators		48,345			46,905			42,889			3.1	%		9.4	%
Fuel and fuel related expenses		135,365			130,294			87,105			3.9	%		49.6	%
Other operating expenses		64,352			55,679			50,916			15.6	%		9.4	%
Other loss (income)		(235	)		1,945			(141	)		(112.1	%)		(1,479.4	%)
Loss from continuing operations		(37,852	)		(14,584	)		(52	)		159.5	%		27,946.2	%
Interest expense, net Income tax expense (recovery)		5,417 (643	)		6,808 (612	)		7,325 34,985			(20.4 5.1	%) %		(7.1 (101.7	%) %)
Net loss from continuing operations		(42,626	)		(20,780	)		(42,362	)		105.1	%		(50.9	%)
Net income from discontinued operations		6,651			6,767			2,180			(1.7	%)		210.4	%
Net loss	$	(35,975	)	$	(14,013	)	$	(40,182	)		156.7	%		(65.1	%)
	2012			2011			2010			2012 vs 2011			2011 vs 2010
Loss per share:
Basic and diluted – continuing operations	$	(2.60	)	$	(1.27	)	$	(2.60	)		104.7	%		(51.2	%)
Basic and diluted – net loss	$	(2.19	)	$	(0.86	)	$	(2.47	)		154.7	%		(65.2	%)
Operating ratio(1)		105.4	%		102.1	%		100.0	%

~~Revenue~~Notes: increased by 2.4% to $702.9 million in 2012 from $686.2 million in 2011. Revenue for the 2012 year was impacted by a stronger Canadian dollar and an increase in fuel surcharge revenue accounting for approximately $2.8 million of the revenue improvement. Excluding the impact of fuel surcharge revenue and a stronger Canadian dollar, 2012 revenue compared to 2011 improved 2.0%. Shipments and tonnage increased 1.8% and 0.5% respectively compared to 2011.

~~Salaries,~~(1) ~~wages~~Operating ~~and~~ratio ~~employee~~(“OR”) ~~benefits~~is ~~increased~~a ~~7.6%~~non-GAAP tofinancial ~~$305.0~~measure ~~million~~which ~~for~~does ~~2012~~not ~~compared~~have toany ~~$283.4~~standardized ~~million in~~meaning ~~2011.~~prescribed ~~This~~by ~~compares with a 1~~GAAP.1% ~~increase~~OR inis ~~employee~~calculated ~~headcount~~as ~~compared~~total tooperating ~~2011.~~expenses ~~Furthermore,~~divided ~~management~~by ~~committed to its U~~revenue.S. ~~LTL~~OR ~~business~~allows ~~unit~~management ~~employees~~ to ~~return~~measure ~~a quarter of~~ the ~~2008~~Company’s 5%operating ~~wage~~efficiency. ~~reduction~~OR atis ~~the~~a ~~commencement~~widely ofrecognized ~~each~~measure ~~calendar quarter~~ in ~~2011, therefore,~~ the ~~full~~transportation ~~impact~~industry ofwhich ~~the~~provides 5%a ~~wage~~comparable ~~increase~~benchmark ~~is included~~ for aevaluating ~~full year in 2012. In addition,~~ the Company’s ~~has~~performance ~~increased~~compared ~~wage rates in certain parts of the U.S.~~ to ~~attract~~its ~~and retain drivers~~competitors. ~~Salary,~~Investors ~~wages~~should ~~and~~also ~~employee~~note ~~benefit expenses~~that inthe ~~2013~~Company’s ~~should~~presentation ~~outpace~~of ~~the~~OR ~~prior~~may ~~year~~not ~~expenses,~~be ~~but~~comparable asto ~~management~~similarly ~~improves~~titled ~~efficiencies~~measures ~~within~~by ~~the~~other Ucompanies.S. ~~LTL~~OR ~~business unit, it~~ is ~~expected~~calculated toas ~~decline on a percentage of revenue basis.~~ follows:

Purchased transportation decreased 4.3% in 2012 compared to 2011 due to a decrease in the use of purchased transportation in the U.S. LTL business unit. The revamped linehaul structure in the U.S., along with a concerted effort to reduce purchased miles, decreased purchased transportation costs during the year compared to 2011. It is management’s intention to replace purchased transportation with company drivers and equipment as lane density, revenue per hundredweight and financial results appear sustainable and warrant the commitment to company drivers and the investment in equipment.


	Year ended December 31,
	2013			2012			2011			2010			2009
Total operating expenses	$	194,497		$	189,798		$	186,967		$	168,550		$	145,419
Revenue	$	193,389		$	193,943		$	192,315		$	172,870		$	148,239

OR		100.6	%		97.9	%		97.2	%		97.5	%		98.1	%

~~Depreciation~~(2) ~~and~~A ~~amortization~~shipment ~~expense increased 3.1% for 2012 compared to 2011, and~~ is ~~primarily~~a ~~attributable~~single tomovement ~~the purchase~~ of ~~rolling stock,~~goods ~~dock~~from ~~equipment~~a ~~and~~point ~~buildings~~of inorigin ~~2012. The Company expects~~ to ~~purchase~~its ~~more~~final ~~rolling~~destination ~~stock~~ as ~~financial~~described ~~performance~~on ~~improves~~a ~~and~~bill ~~therefore~~of ~~expects~~lading ~~depreciation expense to increase in coming years~~document.

23(3) Weight represents the total pounds shipped.

~~Table~~(4) Revenue per shipment represents revenue divided by the number of ~~Contents~~shipments.

~~Maintenance~~(5) ~~expense~~Revenue ~~increased~~per ~~6.2%~~hundredweight tois ~~$34.2~~the ~~million~~price ~~for~~obtained ~~2012 compared to $32.2 million~~ for ~~2011.~~ Astransporting a100 ~~percentage~~pounds of ~~revenue,~~LTL ~~maintenance~~freight ~~expense~~from ~~increased~~point to ~~4.9% compared to 4.7% for 2011. However~~point, oncalculated aby ~~sequential~~dividing ~~basis~~the ~~maintenance expense as a percentage of~~ revenue ~~was~~for ~~comparable~~an inLTL ~~the~~shipment ~~fourth~~by ~~quarter of 2012 compared to~~ the ~~third quarter~~hundredweight of(weight ~~2012.~~in ~~Management~~pounds isdivided ~~focused~~by on100) ~~reducing~~for ~~this expense and it is management’s expectation that the Company will reduce its maintenance costs as~~ a ~~percentage of revenue in future periods~~shipment.

~~Rents~~LIQUIDITY ~~and~~AND ~~leases~~CAPITAL ~~expense~~RESOURCES increased 28.5% for 2012 compared to 2011. The increase is attributable to the 400 new tractors received in 2011, 200 new tractors received by the U.S. LTL business unit in 2012 and 950 new trailers received in 2012 within the LTL segment.

~~Owner~~Cash ~~operator~~flow ~~expenses~~from ~~increased~~continuing 3operations consumed $2.7 million in 2013 compared to generating $4.1% ~~for~~million in 2012. The Company generated an increased net loss from continuing operations in 2013 compared to ~~2011~~2012, ~~driven~~mostly byattributable to the ~~increase~~$4.0 inmillion ~~owner~~termination ~~operator~~fee ~~expenses~~paid to Manitoulin Transport and the $1.7 million in severance paid to the ~~Canadian~~previous ~~LTL~~President ~~business~~and ~~unit~~CEO. Accounts receivable, the critical influencer for working capital changes at a transportation company, decreased at December 31, 2013 compared to December 31, 2012 due to a decrease in fourth quarter revenue and increased ~~activity~~collections ~~levels~~compared to the same period in 2012. The Company’s average days sales outstanding (“DSO”) increased to 35.5 days compared to ~~2011~~34. 6 days at December 31, 2012.

~~Fuel and fuel-related expenses increased 3.9% for 2012 compared to 2011.~~ The ~~average~~Company’s ~~price~~future ofoperating ~~diesel~~cash ~~increased~~flows ~~approximately 2.8%~~are inlargely ~~2012~~dependent ~~compared~~upon ~~2011. Furthermore,~~ the Company’s ~~fuel~~profitability ~~consumption~~and ~~increased~~its ~~due~~ability to ~~the~~manage ~~increase~~its working incapital ~~activity~~requirements, asprimarily ~~indicated~~accounts byreceivable, ~~the~~accounts ~~1.8%~~payable, ~~increase~~and inwage ~~shipments~~and ~~within~~benefit ~~the LTL segment~~accruals. ~~Management expects to receive moderately improved fuel economy from improved operating practices in future periods.~~

~~The~~On ~~Company~~September 23, ~~incurred~~2013, Vitran ~~net~~entered ~~interest~~into ~~expense~~an agreement to sell the shares of $5its U.4S. ~~million~~LTL ~~in 2012~~business ~~compared~~unit tofor ~~interest~~cash ~~expense~~consideration of $62.0 million and the assumption of $32.8 million inof ~~2011~~U.S. ~~Included~~real inestate ~~interest~~and ~~expense~~capital inlease ~~2011~~debt isby $1the purchaser.0 ~~million~~In ofaddition, ~~deferred~~the ~~financing~~purchaser agreed ~~costs~~to ~~that~~fund ~~were~~cash ~~written~~deficits ~~off~~incurred ~~related~~by U.S. LTL from September 23, 2013 through to the ~~previous~~date ~~senior~~of ~~term~~closing ~~and~~of ~~revolving~~the ~~credit facilities~~transaction. The ~~Company’s~~ ~~balance~~transaction ~~sheet~~closed ~~debt~~on ~~net~~October 7, of2013 ~~cash~~and atthe ~~December 31,~~purchaser ~~2012~~has isfunded $321.4 million ~~greater~~of ~~than~~cash ~~December 31,~~deficits ~~2011~~incurred by U.S. ~~However~~LTL between September 23, ~~the~~2013 ~~Company’s~~and ~~interest~~October 7, ~~rate~~2013. ~~spread~~Prior onto ~~its~~closing ~~revolving~~the ~~and~~sale, ~~term~~the ~~debt~~Company ~~was~~agreed onto ~~average~~capitalize 44U.S. ~~basis~~LTL ~~points~~with ~~less~~cash ~~than 2011~~of $5.0 million.

InOn ~~accordance~~March 4, ~~with Financial Accounting Standard Board (“FASB”) Accounting Standard Codification (“FASB ASC”) 740-10~~2013, ~~included in~~ the ~~2010~~Company ~~tax~~completed ~~expense is~~ the ~~recognition~~sale of aits ~~$39.6~~SCO ~~million~~business ~~valuation~~to ~~allowance~~Legacy for ~~all U~~$97.S.0 ~~deferred~~million ~~tax~~in ~~assets~~cash. AsThe ~~required~~Company byused ~~this~~a ~~standard,~~portion of the ~~Company~~proceeds ~~increased~~to ~~the~~fully ~~valuation~~reduce ~~allowance~~its byoutstanding ~~$15.5~~debt ~~million,~~under ~~which~~its ~~would have~~senior ~~been~~revolving ~~the~~credit ~~tax~~facility. ~~recovery~~During ~~attributable to~~ the ~~Company’s~~second ~~U.S.~~quarter ~~based~~of ~~companies~~2013 ~~for 2012. Consequently,~~ the Company ~~recorded~~received aadditional ~~consolidated~~proceeds ~~tax recovery~~ of $01.68 million inupon ~~2012.~~final ~~The~~determination ~~majority~~ of the ~~deferred~~working ~~tax~~capital ~~assets~~adjustment ~~were for timing differences related to tax deductible goodwill~~ and net loss carryforwards. The net operating loss carryforwards will begin to expire in 2027 and will continue to be available to offset future years taxable income. Management believes the Company will generate ~~sufficient~~paid ~~taxable~~ income totaxes ~~use~~of ~~these~~$1.4 ~~losses~~million inrelated ~~the future, but not~~ to the ~~level of certainty required by FASB ASC 740-10~~sale.

~~Net~~At ~~loss~~December 31, ~~from~~2013, ~~continuing~~interest-bearing ~~operations~~debt was $4252.61 million ~~for~~consisting ~~2012 compared to a net loss from continuing operations~~ of $2046.81 million ~~in 2011.~~of ~~This~~real ~~resulted~~estate interm ~~basic~~debt and ~~diluted~~$6.0 ~~loss~~million ~~per~~of ~~share~~capital ~~from~~leases. ~~continuing~~There ~~operations~~were ofno ~~$2.60~~amounts ~~for~~outstanding under the ~~current~~Company’s ~~year~~senior ~~compared~~revolving tocredit afacility ~~loss~~at ~~per~~December 31, ~~basic~~2013, ~~and~~except ~~diluted~~for ~~share~~outstanding ~~from~~letters ~~continuing operations~~ of $1credit.27 inAt December 31, ~~2011.~~2012, ~~Income~~interest-bearing ~~from~~debt ~~discontinued operations~~ was $660.7 3 million inconsisting ~~2012~~of ~~compared to~~ $6.8.5 million indrawn ~~2011.~~under ~~Therefore,~~ the ~~Company~~syndicated ~~posted~~asset abased ~~net~~revolving ~~loss~~credit offacility, $3650.05 million ~~for 2012 compared to a net loss~~ of ~~$14.0~~real ~~million~~estate interm ~~2011.~~debt ~~This resulted in a basic~~ and ~~diluted loss per share of~~ $21.193 ~~for~~million ~~the current year compared to a loss per basic and diluted share~~ of $0capital leases.~~86.~~

~~FASB~~During ~~Accounting~~the ~~Standard~~year, ~~Update~~the ~~(“ASU”)~~Company Norepaid $1. ~~2011-08 “Testing~~1 ~~Goodwill~~million ~~for~~of ~~Impairment”~~real ~~permits~~estate ~~entities~~term todebt, ~~first~~$0.2 ~~assess~~million ~~qualitative~~of ~~factors~~capital toleases ~~determine~~and ~~whether~~$8.5 itmillion ~~is more likely than not that the fair value~~ of ~~a reporting unit is less than~~ its ~~carrying~~revolving credit ~~amount~~facilities. asAt aDecember 31, ~~basis~~2013, ~~for~~the ~~determining whether~~Company ithad is$0.6 ~~necessary~~million toin ~~perform~~outstanding ~~the~~letters ~~two-step~~of ~~goodwill~~credit ~~impairment~~and ~~test~~$14.2 ~~FASB~~million ~~ASU~~of ~~Update~~available ~~No. 2011-08~~cash ~~was adopted by the Company~~ on ~~January 1,~~its ~~2012~~balance sheet.

~~FASB~~24 ASU No. 2011-05 “Presentation of Comprehensive Income” requires entities to present net income and comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and comprehensive income. FASB has amended ASU No. 2011-05 with ASU 2011-12, which defers the effective date of certain requirements outlined in FASB ASU No. 2011-05 until further deliberated and reinstates the requirements for presentation of reclassifications out of accumulated other comprehensive income that were in place before the issuance of FASB ASU No. 2011-05. FASB ASU No. 2011–5 was adopted by the Company on January 1, 2012.

~~FASB~~In ~~ASU~~January ~~No.~~2014 ~~2013-02~~all ~~“Reporting~~outstanding ofletters ~~Amounts Reclassified Out~~ of ~~Accumulated~~credit ~~Other~~were ~~Comprehensive~~returned ~~Income”~~and ~~requires~~cancelled ~~expanded disclosures for amounts reclassified out of accumulated other comprehensive income~~ by ~~component. The guidance requires~~ the ~~presentation of amounts reclassified out of accumulated other comprehensive income by the respective line items of net income~~ ~~but~~Company’s ~~only~~bank ifsyndicate ~~the~~and ~~amount~~on ~~reclassified~~January 21, is2014, ~~required under GAAP to be reclassified to net income in its entirety in~~ the ~~same~~Company’s ~~reporting~~senior ~~period.~~revolving ~~For~~credit ~~other~~agreement ~~amounts~~was ~~that~~terminated are not required under GAAP to be reclassified in their entirety to net income, a cross-reference to other disclosures that provide additional detail about those amounts is required. The guidance is to be applied prospectively for reporting periods beginning after December 15, 2012. The new guidance affects disclosures only and ~~will~~all ~~have~~security noheld ~~impact~~by on the ~~Company’s~~bank ~~results~~syndicate ~~of operations or financial position~~released.

24The Company generated $0.3 million in proceeds and a gain of $0.3 million, on the divestiture of surplus trailing equipment throughout the year. Capital expenditures amounted to $5.7 million for 2013 and were primarily funded through capital leases and cash on hand. The capital expenditures in 2013 were for rolling stock, dock equipment and information technology expenditures.

~~Table~~The oftable ~~Contents~~below sets forth the Company’s capital expenditures for the years ended December 31, 2013, 2012 and 2011.

Operations Overview


(in thousands of dollars)	Year ended December 31,
	2013		2012		2011
Real estate and buildings	$	577	$	6,944	$	347
Trailing fleet		4,995		1,779		22
Information technology		55		299		490
Leasehold improvements		—		—		24
Other equipment		87		186		14

Total	$	5,714	$	9,208	$	897

	2012		2011		2010		2012 vs 2011			2011 vs 2010
Number of shipments(2)		4,374,202		4,295,432		3,946,952		1.8	%		8.8	%
Weight (000s of lbs)(3)		6,432,070		6,402,437		5,867,822		0.5	%		9.1	%
Revenue per shipment(4)	$	160.70	$	159.76	$	147.35		0.6	%		8.4	%
Revenue per hundredweight(5)	$	10.93	$	10.72	$	9.91		2.0	%		8.2	%

Management estimates that cash capital expenditures for the 2014 fiscal year will be between $1.5 million and $2.5 million. The Company may enter into capital or operating leases to fund the acquisition of specific equipment should the business levels exceed the current equipment capacity of the Company. The Company expects to finance its capital requirements with cash flow from operations and, if required, capital or operating leases.

~~Shipments~~The ~~per~~Company ~~day~~has incontractual ~~the~~obligations ~~U.S.~~that include ~~LTL~~long-term ~~business~~debt ~~unit~~consisting ~~increased~~of ~~2.0%~~term ~~for~~debt ~~2012~~facilities, ~~compared~~capital toleases ~~2011,~~for ~~however, decreased~~operating ~~8.4%~~equipment inand ~~the~~off-balance ~~fourth~~sheet ~~quarter~~operating ofleases ~~2012~~primarily ~~compared~~consisting toof ~~the~~trailing ~~same~~fleet ~~quarter~~and areal ~~year~~estate ~~ago~~leases. ~~This~~Operating isleases ~~attributable~~form toan ~~softness~~integral inpart ~~the~~of ~~U.S. market and management~~the Company’s ~~internal~~financial ~~focus~~structure onand ~~improving~~operating ~~operations~~methodology inas ~~the~~they ~~U.S.~~provide ~~LTL~~an ~~business~~alternative ~~unit. On a year~~cost-~~over-year basis,~~effective ~~2012~~and ~~compared~~flexible toform ~~2011, average length~~ of ~~haul increased 1~~financing.0% ~~and~~The ~~average~~following ~~revenue~~table ~~per~~summarizes ~~hundredweight increased 1.9%. Management expects~~ the ~~revenue~~Company’s ~~per~~significant ~~hundredweight~~contractual toobligations ~~increase~~and incommercial commitments ~~the upcoming quarters~~ as ~~the~~of ~~pricing~~December 31, ~~environment~~2013: ~~continues to favor LTL carriers in the North American market place.~~

The U.S. LTL business unit had a challenging year operationally in 2012 and did not perform to management’s expectations. However, the focus in 2012 was on creating a management structure, operational improvements and technological enhancements, the purpose being to lay a foundation for operating results improvements in 2013.


(in thousands of dollars)			Payments due by period
Contractual Obligations	Total		2014		2015 & 2016		2017 & 2018		Thereafter
Real estate facility		46,144		1,140		2,440		2,683		39,881
Capital lease obligations		5,953		706		1,529		1,840		1,878
Estimated interest payments ⁽¹⁾		11,280		2,429		4,581		4,163		107

Sub-total	$	63,377	$	4,275	$	8,550	$	8,686	$	41,866
Off-balance sheet commitments
Operating leases		5,638		1,936		2,387		881		434

Total contractual obligations	$	69,015	$	6,211	$	10,937	$	9,567	$	42,300

~~There~~(1) were a number of important initiatives completed in 2012. First, the U.S. LTL business unit added key personnel to leadership positions throughout the organization. This initiative was completed in August 2012 with a number of experienced executives joining the leadership team. Second, the restructuring of the business unit’s linehaul network was also completed during the year. This initiative has positively resulted in reduced miles, increase in weight per trailer and improved efficiencies in some key areas of operations. Third, is the technology introduction into the business unit throughout 2012. The ~~customer~~Company ~~experience~~ has ~~been~~estimated ~~greatly~~its ~~improved~~interest ~~with~~obligation ~~the~~on ~~introduction~~its ofreal ~~tablet~~estate ~~technology~~term tofacility ~~the~~using ~~pick-up and delivery team and an improved dispatch interface. In addition, new technology was introduced to~~ the ~~operations~~fixed ~~team in~~interest ~~the~~rates ~~fourth quarter~~ of ~~2012 to continue to improve operating efficiencies and customer service levels~~4. The technology has given the leadership team visibility into operations to accurately measure and optimize processes, and in combination with all the initiatives completed and underway, forms the foundation for improved operating efficiencies and customer service levels30%—4. 75%.

~~The~~A ~~Canadian~~significant ~~LTL~~decrease ~~business~~in ~~unit~~demand ~~posted~~for aour ~~solid~~services ~~2012~~could ~~benefiting~~limit ~~from~~the aCompany’s ~~strong~~ability ~~Canadian~~to ~~economy~~generate cash flow and aaffect ~~stable~~its ~~operation~~profitability. Assuming ~~compared~~no significant decline in business levels or financial performance, Management expects that existing working capital, together with available cash, will be sufficient to fund operating and capital requirements as well as service the contractual Uobligations.S. ~~LTL~~Management ~~business~~also ~~unit~~expects it will be able to secure bank financing in the form of a term or revolving credit facility in the future.

It25 is management’s expectation that as the use of the new technology is optimized, the U.S. LTL business unit gains traction from a new operations leadership group and the adoption of all the new systems and processes, the Company will improve customer service levels, sales and operating efficiency. Lastly, management believes that with additional density gains, continued momentum in the North American pricing environment, combined with a continued focus on operational improvements, the LTL segment is well positioned to improve income from operations over the long-term.

~~Table~~OUTLOOK ~~of Contents~~

~~RESULTS~~Management OFbelieves ~~OPERATIONS~~its Canadian LTL business unit is one of Canada’s premier providers of LTL services. It has a consistent track record of profitability, stability, and cash flow generation. The Canadian LTL management team continues to focus on initiatives to improve operating efficiencies and improving density in the business. Management believes executing on its revenue plan and remaining disciplined in pricing should position the Company to improve operating results in future periods.

~~2011~~CRITICAL ~~COMPARED~~ACCOUNTING POLICIES TOAND ~~2010~~ESTIMATES

~~CONSOLIDATED~~Revenue ~~RESULTS~~Recognition

~~Financial~~The ~~Overview~~Company’s LTL operations recognize revenue upon the delivery of the related freight and direct shipment costs as incurred. For transportation services not completed at the end of a reporting period, revenue is recognized based on relative transit time in each period with expenses recognized as incurred. Critical revenue-related policies and estimates for the Company’s LTL business unit relate to revenue adjustments and allowance for doubtful accounts. Critical revenue-related policies include allowance for doubtful accounts. At December 31, 2013, the allowance for doubtful accounts was $0.4 million or approximately 2.2% of total trade receivables. The Company believes that its revenue recognition policies are appropriate and that its revenue-related estimates and judgments provide a reasonable approximation of actual revenue earned.

~~Revenue~~Estimated ~~increased by 18.0% to $686.2 million in 2011 from $581.6 million in 2010.~~ Revenue ~~for~~Adjustments the 2011 year was impacted by a stronger Canadian dollar and an increase in fuel surcharge revenue accounting for approximately $48.4 million of the consolidated revenue improvement. Excluding the impact of fuel surcharge revenue and a stronger Canadian dollar, 2011 revenue compared to 2010 improved 9.7%. Revenue net of fuel surcharge was impacted by the additional business from the Milan acquisition on February 19, 2011 as indicated by the increase in shipments and tonnage of 8.8% and 9.1% respectively compared to 2010.

~~Salaries~~Generally, ~~wages~~the ~~and~~pricing ~~employee~~assessed ~~benefits~~by ~~increased~~companies ~~17.5%~~in tothe ~~$283.4~~LTL ~~million~~business ~~for~~is ~~2011~~subject ~~compared~~to ~~$241.2~~subsequent ~~million~~adjustments indue ~~2010. Employee headcount was expected~~ to ~~increase~~several byfactors, ~~approximately~~including ~~600~~weight and ~~individuals~~freight ~~resulting~~classification ~~from~~verifications, ~~the~~shipper ~~acquisition~~bill of ~~the~~lading ~~Milan LTL assets on February 19~~errors, ~~2011.~~pricing ~~However,~~discounts ~~headcount~~and ~~increased~~other ~~approximately~~miscellaneous ~~1,000~~revenue ~~employees~~adjustments. toRevenue ~~handle~~adjustments ~~the~~are ~~increase~~evaluated ~~in business~~ and to ~~recover~~updated ~~from~~based ~~the~~on ~~acquired~~revenue ~~backlog of freight at Milan. Furthermore~~levels, ~~management~~current ~~committed~~trends toand ~~its~~historical Uexperience.S. These ~~LTL~~revenue ~~business~~adjustments ~~unit~~are ~~employees~~recorded toas ~~return~~ a ~~quarter of the 2008 5% wage~~ reduction atin ~~the~~revenue ~~commencement~~from ofoperations ~~each~~and ~~calendar~~accrued ~~quarter~~for in ~~2011.~~the Asallowance ~~of December 31,~~for ~~2011~~doubtful ~~four quarterly increases of 1~~accounts.~~25%~~ ~~have been issued.~~

~~Purchased~~Allowance ~~transportation increased 10.0% in 2011~~for ~~compared~~Doubtful toAccounts 2010 due to an increase in LTL segment activity as indicated by the 8.8% increase in shipments and the 3.1% increase in length of haul within the U.S. LTL business unit. Furthermore, the acquisition of Milan on February 19, 2011 required additional purchased transportation to service Vitran’s expanded geographic footprint. Intermodal shipments in the Canadian LTL business unit increased 2.5%, requiring additional railway transportation expense compared to the 2010 comparative period. The Company’s U.S. LTL business received 400 additional tractors near the end of the second quarter and beginning of the third quarter of 2011. The additional tractors, along with a concerted effort to reduce purchased miles, decreased purchased transportation costs as a percentage of revenue within the U.S. LTL business unit in the fourth quarter of 2011 compared to the third quarter of 2011.

~~Depreciation~~The ~~and~~Company ~~amortization~~records ~~expense~~an ~~declined~~allowance ~~10.6%~~ for ~~2011~~doubtful ~~compared~~accounts related to ~~2010,~~accounts ~~and~~receivable isthat ~~primarily~~may ~~attributable~~potentially tobe impaired. ~~the~~The ~~sale~~Company’s allowance is estimated by (1) a percentage of ~~rolling stock~~its ~~and~~aged ~~buildings~~receivables ~~during~~reflecting the ~~year.~~current ~~Furthermore~~business environment, ~~cash~~customer ~~capital~~and ~~expenditures~~industry ~~have~~concentrations, ~~also~~and ~~been~~historical ~~lower~~experience ~~than~~and ~~historical~~(2) an ~~trends~~additional ~~over~~allowance for specifically identified accounts that are significantly impaired. A change to these factors could impact the ~~past~~estimated 2allowance. ~~years~~The ~~resulting~~provision for bad debts is recorded in ~~less~~selling, ~~depreciation~~general ~~expense~~and administrative expenses.

~~Maintenance~~Claims ~~expense increased 25.8% to $32.2 million for 2011 compared to $25.6 million for 2010. Additional maintenance expense for the Milan acquired fleet~~ and ~~continued~~Insurance ~~focus~~Accruals ~~on the Company’s preventative maintenance program increased maintenance expense as a percentage of revenue to 4.7% compared to 4.4% for 2010.~~

~~Rents~~Claims and insurance ~~leases~~accruals ~~expense~~reflect ~~increased~~the ~~45.4%~~estimated ~~for~~ultimate ~~2011~~total ~~compared~~cost toof ~~2010.~~claims, ~~The~~including ~~increase~~amounts isfor aclaims ~~result~~incurred ofbut ~~the~~not ~~aforementioned~~reported ~~new~~and ~~tractors,~~future ~~leased equipment~~claims ~~added~~development, infor ~~the~~cargo ~~Milan~~loss ~~acquisition~~and asdamage, ~~well~~bodily asinjury ~~the~~and ~~new~~property ~~short~~damage, long-term ~~leased~~disability ~~facilities~~and group inhealth. ~~the~~In ~~newly~~establishing ~~acquired~~these ~~territory~~accrued expenses, management evaluates and monitors each claim individually and claim frequency. InFactors ~~addition~~such as historical experience, known trends and third party estimates help determine the Uappropriate reserves for the estimated liability.S. ~~LTL~~Changes ~~business~~in ~~unit~~severity ~~expanded~~of ~~into~~previously ~~new~~reported ~~leased~~claims, ~~facilities~~significant changes in ~~South~~the ~~Plainfield,~~medical NJcosts and ~~Louisville,~~legislative KYchanges ataffecting the ~~beginning~~ administration of the ~~2011~~plans ~~fourth~~could ~~quarter~~significantly impact the determination of appropriate reserves in future periods. The Company has a $50,000 deductible for auto liability, casualty and cargo claims.

~~Owner~~In ~~operator~~addition to ~~expenses~~estimates ~~increased~~within 9the self-insured retention, management makes judgments concerning the coverage limits.4% ~~for~~If ~~2011~~any ~~compared~~claim was to ~~2010~~exceed the coverage limits, ~~attributable~~the Company would have to accrue for the excess amount. The estimate would include evaluation ~~increase~~whether ina ~~owner~~claim ~~operator~~may ~~expenses~~exceed insuch ~~the~~limits ~~Canadian~~and, ~~LTL~~if ~~business~~so, ~~unit~~by ashow amuch. ~~result~~A claim or group of ~~increased~~claims ~~activity~~of ~~levels~~this ~~compared~~nature tocould ~~2010~~have a material adverse effect on the Company’s results from operations. Currently management is not aware of any claims exceeding the coverage limit.

~~Fuel~~26 and fuel-related expenses increased 49.6% for 2011 compared to 2010. The average price of diesel increased approximately 27.6% in 2011 compared 2010. Furthermore, the LTL segment’s consumption increased due to the increase in activity as indicated by the 8.8% improvements in shipments and the expanded fleet and territory attributable to the Milan acquisition.

26Goodwill

~~Table~~The Company performs its goodwill impairment test annually and more frequently if events or changes in circumstances indicate that an impairment loss may have occurred. Impairment is tested at the reporting unit level by assessing qualitative factors to determine whether it is more likely than not that the fair value of ~~Contents~~a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. In the event goodwill is determined to be impaired, a charge to earnings would be required. As at September 30, 2013, Vitran completed its annual goodwill impairment test and concluded that there was no impairment.

~~property~~Property ~~taxes, property insurance~~ and ~~general~~Equipment upkeep of the sold facilities. The remaining facilities held for sale are required to be recorded at the lower of net book value or estimated fair value. At December 31, 2011, Vitran recorded a $1.5 million valuation loss against these properties, for a total loss of $2.1 million recorded in loss from continuing operations.

~~The~~Property ~~Company~~and ~~incurred~~equipment ~~net~~are ~~interest~~recorded ~~expense~~at ofcost ~~$6.8~~and ~~million~~depreciated inon ~~2011~~a ~~compared~~straight-line tobasis ~~interest~~over ~~expense~~their ofestimated ~~$7.3 million~~useful ~~in 2010~~lives. ~~Included~~Management inestablishes ~~interest~~appropriate ~~expense~~useful islives ~~$1.0~~for ~~million~~all ofproperty ~~deferred~~and ~~financing~~equipment ~~costs~~based ~~that~~upon, ~~were~~among ~~written~~other ~~off~~considerations, historical experience, change in equipment manufacturing specifications, the ~~fourth~~used ~~quarter~~equipment ofmarket ~~2011~~and ~~related~~prevailing toindustry practice. Management continually monitors events and changes in circumstances that could indicate that the ~~previous~~carrying ~~senior~~amounts ~~term~~of property and ~~revolving~~equipment ~~credit~~may ~~facilities~~not be recoverable. OnWhen ~~November 30,~~indicators ~~2011~~of potential impairment are present, the ~~Company~~recoverability ~~refinanced~~of ~~its~~the ~~previous~~assets would be ~~senior~~assessed ~~term~~from ~~and~~the ~~revolving~~estimated ~~debt~~undiscounted ~~facilities~~future ~~with~~operating acash ~~new~~flows ~~three-year~~expected ~~asset~~from ~~based~~the ~~revolving~~use ~~debt~~of ~~facility~~the ~~and~~assets. aActual ~~new~~recoverability ~~seven-year~~of ~~real~~assets ~~estate~~could ~~term~~differ ~~facility.~~based ~~The~~on ~~Company~~different ~~reduced~~assumptions, ~~interest~~estimates ~~rate~~or ~~spreads~~other afactors. ~~minimum~~In ofthe ~~125~~event ~~basis~~that ~~points~~recoverability ~~under~~was impaired, the ~~new~~fair value of the asset~~-based revolving~~ ~~credit~~would ~~facility.~~be ~~The~~recorded ~~Company’s~~and ~~interest~~an ~~rate~~impairment ~~spread~~loss onwould be recognized. Management believes its ~~revolving~~estimates of useful lives and ~~term~~salvage ~~debt~~values ~~was~~have onbeen ~~average~~reasonable 75as ~~basis~~demonstrated ~~points~~by ~~less~~the ~~than~~insignificant ~~2010~~amounts of gains and losses on revenue equipment dispositions.

~~In accordance with Financial Accounting Standard Board (“FASB”) Accounting Standard Codification (“FASB ASC”) 740~~Share-~~10,~~Based ~~included~~Compensation in the 2010 tax expense is the recognition of a $39.6 million valuation allowance for all U.S. deferred tax assets. As required by this standard, the Company increased the valuation allowance by $8.7 million, which would have been the tax recovery attributable to the Company’s U.S. based companies for 2011. Consequently, the Company recorded a consolidated tax recovery of $0.6 million in 2011. The majority of the deferred tax assets were for timing differences related to tax deductible goodwill and net loss carryforwards. The net operating loss carryforwards will begin to expire in 2027 and will continue to be available to offset future years taxable income. Management believes the Company will generate sufficient taxable income to use these losses in the future, but not to the level of certainty required by FASB ASC 740-10.

~~Net~~Under ~~loss~~the ~~from~~Company’s ~~continuing~~stock ~~operations~~option ~~was~~plan, ~~$20.8~~options ~~million~~to ~~for~~purchase ~~2011~~common ~~compared~~shares toof athe ~~net loss~~Company ~~from~~may ~~continuing~~be ~~operations~~granted to key employees, ~~including~~officers and directors of the ~~aforementioned~~Company ~~tax~~and ~~valuation~~its ~~allowance,~~affiliates by the Board of ~~$42.4~~Directors ~~million~~or inby ~~2010~~the Company’s Compensation Committee. ~~This~~The ~~resulted~~Company accounts for stock options in ~~basic~~accordance ~~and~~with ~~diluted~~FASB ~~loss~~ASC ~~per~~718 ~~share~~with ~~from~~compensation ~~continuing~~expense ~~operations~~amortized ofover ~~$1.27~~the ~~for~~vesting period based on the ~~current~~Black-Scholes-Merton ~~year~~fair ~~compared~~value on the grant date. The assumptions used to avalue ~~loss~~stock ~~per~~options ~~basic and~~are ~~diluted~~dividend ~~share~~yield, ~~from~~expected ~~continuing~~volatility, ~~operations~~risk-free ofinterest ~~$2.60~~rate inand ~~2010~~expected life. ~~Income~~The ~~from~~Company ~~discontinued~~does ~~operations~~not ~~was~~pay ~~$6.8~~any ~~million~~dividends inon ~~2011~~its ~~compared~~common shares, totherefore ~~$2.2~~the ~~million~~dividend inyield ~~2010~~is zero. ~~Therefore,~~We use the ~~Company~~historical ~~posted~~method ato ~~net~~calculate ~~loss~~volatility with the historical period being equal to the expected life of ~~$14~~each option.0 ~~million~~This ~~for~~calculation ~~2011~~is ~~compared~~then used to aapproximate ~~net~~the ~~loss~~potential for the share price to increase over the expected life of ~~$40~~the option.2 ~~million~~The inrisk-free ~~2010.~~interest ~~This~~rate ~~resulted~~is inbased aon ~~basic~~the ~~and~~government ~~diluted~~of ~~loss~~Canada ~~per~~issued ~~share~~bond rate in effect at the time of $0the grant.86 ~~for~~Expected life represents the ~~current~~length ~~year~~of ~~compared~~time the option is estimated to abe outstanding ~~loss~~before ~~per~~being ~~basic~~exercised ~~and~~or ~~diluted~~forfeited. ~~share~~Historical ofinformation $2is used to determine the forfeiture rate to measure compensation expense recognized.~~47.~~

~~Operations~~Income ~~Overview~~Taxes

~~Shipments~~The ~~per~~Company ~~day~~uses in the ~~U.S.~~asset and ~~LTL~~liability ~~business~~method ~~unit increased~~of ~~10.4%~~accounting for ~~2011~~income ~~compared~~taxes. toUnder ~~2010.~~the ~~This~~asset ~~can~~and beliability ~~primarily~~method, deferred tax assets and liabilities are recognized for the deferred tax consequences attributable to differences between the ~~acquisition~~financial statement carrying amounts of ~~Milan~~existing onassets ~~February 19,~~and ~~2011.~~liabilities ~~The~~and ~~addition~~their ofrespective ~~Milan~~tax bases. Deferred tax assets and ~~its~~liabilities ~~pre-existing~~are ~~customer~~measured ~~base~~using ~~resulted~~enacted intax arates ~~one-time~~expected ~~reduction~~to apply to taxable income in ~~revenue~~the ~~per~~years in which those temporary differences are expected to ~~hundredweight~~be ~~and~~recovered ~~length~~or settled. Significant judgment is required in determining whether deferred tax assets will be realized in full or in part. If it were ever estimated that it is more likely than not that all or some portion of ~~haul~~specific asdeferred ~~Milan~~tax assets ~~was~~will ~~primarily~~not be realized, a ~~short~~valuation ~~haul~~allowance ~~LTL~~must ~~carrier~~be ~~within~~established ~~its~~for ~~region~~the amount of deferred tax assets that is estimated not to be realized. ~~Therefore~~Accordingly, onif ~~sequential~~the ~~basis~~facts ~~from~~or ~~March 31,~~financial ~~2011~~results ~~compared~~were to ~~December 31~~change, ~~2011,~~thereby ~~length~~impacting the likelihood of realizing ~~haul~~the ~~increased~~deferred ~~5.8%~~tax ~~and~~assets, ~~revenue~~judgment ~~per hundredweight~~would ~~increased~~have 7to be applied to estimate the amount of valuation allowance required in any given period.~~9%.~~

~~Although~~FASB ~~revenue~~ASC ~~increased~~740-10 inrequires ~~the~~that ~~U.S.~~uncertain ~~LTL~~tax ~~business~~positions ~~unit,~~are ~~the~~evaluated ~~business~~in ~~unit~~a ~~did~~two-step ~~not~~process, ~~perform~~whereby ~~to management~~(1) the ~~expectations.~~Company ~~Wages~~determines ~~and~~whether ~~purchased~~it is ~~transportation~~more ~~costs~~likely ~~were higher~~ than ~~expected~~not ~~partially~~that ~~attributed to~~ the ~~challenge~~tax ofpositions ~~working~~will ~~out~~be ofsustained ~~the~~based ~~backlog~~on ~~of freight created by~~ the ~~first~~technical ~~quarter~~merits ~~weather~~of ~~issues that were further intensified by~~ the ~~Milan~~position ~~acquisition which in~~ and ~~of itself was significantly backlogged with~~ (2.5) for ~~days~~those oftax ~~freight.~~positions ~~The~~that ~~deterioration~~meet ~~of service as~~ the ~~Company~~more-likely-than-not ~~worked~~recognition ~~out~~threshold, ~~of this backlog resulted in some loss of business and identified areas of inefficiencies within~~ the ~~U.S.~~Company ~~LTL~~would ~~business~~recognize ~~unit’s operations. Management has focused on operational improvements throughout~~ the ~~year~~largest amount ~~which~~of ~~have~~tax ~~positively~~benefit ~~impacted~~that ~~service,~~is ~~operating~~greater ~~metrics and resulted in returning business to the Company. Higher~~ than ~~expected~~ ~~workers’~~fifty ~~compensation~~percent ~~and~~likely ~~healthcare~~of ~~expense~~being ~~also~~realized ~~negatively~~upon ~~impacted~~ultimate ~~results~~settlement inwith the ~~fourth~~related ~~quarter~~tax ~~of 2011 and the year~~authority.

~~The~~Management ~~Canadian~~judgment ~~LTL~~is ~~business~~also ~~unit~~required ~~posted~~regarding ana ~~excellent~~variety ~~2011~~of ~~benefiting~~other ~~from~~factors, aincluding ~~strong Canadian~~the ~~economy~~appropriateness ~~and~~of atax ~~stable~~strategies, ~~operation~~expected ~~compared~~future tax consequences, and to the Uextent tax strategies are challenged by taxing authorities.S We utilize certain income tax planning strategies to reduce our overall cost of income taxes. ~~LTL~~It ~~business~~is ~~unit~~possible that certain strategies might be disallowed, resulting in an increased liability for income taxes. Significant management judgments are involved in assessing the likelihood of sustaining the strategies and an ultimate result worse than our expectations could adversely affect our results of operations.

~~Notes:~~CHANGES IN ACCOUNTING POLICY

~~(1)~~See ~~Refer~~Note 1 to ~~note~~the 4accompanying inconsolidated ~~Item~~financial 6statements –for ~~Selected~~discussion ~~Financial~~of ~~Data~~United States GAAP recent accounting pronouncements.

~~(2)~~RELATED APARTIES ~~shipment is a single movement of goods from a point of origin to its final destination as described on a bill of lading document.~~

~~(3) Weight represents the total pounds shipped by each LTL business unit~~None.

~~(4)~~28 ~~Revenue per shipment represents revenue divided by the number of shipments.~~

~~LIQUIDITY~~ITEM 7. A—QUANTITATIVE AND ~~CAPITAL~~QUALITATIVE ~~RESOURCES~~ DISCLOSURES ABOUT MARKET RISK

~~Cash~~INTEREST ~~flow~~RATE ~~from~~SENSITIVITY continuing operations consumed $16.2 million in 2012 compared to $3.2 million in 2011. The Company generated an increased net loss from continuing operations in 2012 compared to 2011. Accounts receivable, the critical influencer for working capital changes at a transportation company, decreased at December 31, 2012 compared to December 31, 2011 due to a decrease in fourth quarter revenue and increased collections compared to the same period in 2011. The Company’s average days sales outstanding (“DSO”) improved to 39.3 days compared to 40.0 days at December 31, 2011.

~~The~~We ~~Company’s~~estimate ~~future~~that ~~operating~~the ~~cash~~fair ~~flows~~value ~~are~~of ~~largely dependent upon~~ the ~~Company’s profitability~~long-term ~~and~~debt ~~its~~approximates ~~ability to manage~~ its ~~working~~carrying ~~capital requirements, primarily accounts receivable, accounts payable, and wage and benefit accruals~~value.

On February 12, 2013, the Company reached an agreement to sell its SCO business to Legacy for U.S. $97.0 million in cash, subject to certain working capital adjustments. The sale is expected to close March 1, 2013, upon completion of the purchaser’s financing, and is subject to customary conditions for this type of transaction. Vitran intends to use a portion of the net proceeds from this transaction to fully reduce its outstanding debt under its senior revolving credit facility, and will have approximately $50.0 million of remaining cash on the balance sheet.


(in thousands of dollars)				Payments due by period
Long-term debt	Total			2014			2015 & 2016			2017 & 2018			Thereafter
Fixed Rate
Real estate facility		46,144			1,140			2,440			2,683			39,881
Interest Rate		4.30% - 4.75	%		4.30% - 4.75	%		4.30% - 4.75	%		4.30% - 4.75	%		4.30% - 4.75	%
Capital lease obligations		5,953			706			1,529			1,840			1,878
Average interest rate		5.37	%		5.37	%		5.37	%		5.37	%		5.37	%

Total	$	52,097		$	1,846		$	3,969		$	4,523		$	41,759

OnThe ~~October 31,~~Company ~~2012,~~is ~~the~~exposed ~~Company~~to ~~added~~foreign ~~the~~currency ~~newly~~risk ~~constructed~~as ~~Winnipeg,~~fluctuations MBin ~~facility~~the toUnited ~~its~~States dollar against the Canadian ~~real~~dollar ~~estate~~can ~~term~~impact ~~facility.~~the ~~The~~financial ~~proceeds~~results toof the Company ~~were Cdn~~. ~~$5.5~~The ~~million~~Company’s atCanadian aoperations ~~fixed~~realize ~~interest rate~~foreign ofcurrency ~~4.3%~~exchange gains and ~~25-year~~losses ~~amortization~~on United States dollar denominated revenue generated against Canadian dollar denominated expenses. ~~The~~Furthermore, ~~new~~the ~~drawdown~~Company ~~will~~reports ~~mature~~its ~~commensurate~~results ~~with~~in United States dollars thereby exposing the ~~existing~~results ~~Canadian~~of ~~real~~the ~~estate~~Company’s ~~term~~Canadian ~~facility~~operations onto ~~November 30,~~foreign ~~2018~~currency fluctuations.

In ~~the~~addition ~~fourth quarter of 2012 Vitran received a commitment for up~~ to ~~a $33.0 million U.S. real estate term facility secured by specific real estate in~~ the ~~United~~information ~~States~~disclosed ~~subject to customary due diligence including environmental assessments. On December 28~~above, ~~2012,~~further ~~Vitran~~information ~~entered~~required ~~into the first 15 year U.S. real estate term facility for $16.8 million, secured~~ by 18Item 7A of ~~the~~Form ~~U.S~~10-K ~~transportation~~appears ~~facilities.~~in ~~The new U~~Item 1.S.A ~~real estate term facility has an~~and ~~average~~Item 7 ~~fixed interest rate~~ of ~~4.875%~~this ~~adjusted~~Annual ~~every~~Report ~~three~~on toForm ~~five~~10-K ~~years~~under ~~and a 15 year amortization period. On January 22, 2013,~~ the ~~Company~~headings ~~entered~~“Risks ~~into~~and aUncertainties” ~~second~~and 15“Liquidity ~~year~~and ~~U.S.~~Capital ~~real estate term facility for $7.0 million~~Resources”, ~~secured by an additional seven of the U~~respectively.S. ~~transportation facilities on the same aforementioned terms.~~

~~At December~~ITEM ~~31,~~8—FINANCIAL ~~2012, interest-bearing~~STATEMENTS ~~debt~~AND ~~was~~SUPPLEMENTARY ~~$105.3~~DATA million consisting of $31.7 million drawn under the syndicated asset based revolving credit facility, $67.3 million of real estate term debt and $6.3 million of capital leases. At December 31, 2011, interest-bearing debt was $73.9 million consisting of $21.9 million drawn under the syndicated asset based revolving credit facility, $45 million of real estate term debt, $3.5 million of term debt and $3.5 million of capital leases.

~~During~~Consolidated ~~the~~Balance ~~year,~~Sheets ~~the~~as ~~Company~~of ~~repaid~~December 31, ~~$4.5~~2013 ~~million~~and of2012, ~~term~~and ~~debt,~~the ~~$3.0~~Consolidated ~~million~~Statements of ~~capital~~Income ~~leases~~(Loss), ~~and~~Comprehensive ~~drew~~Income (Loss), ~~down~~Shareholders’ ~~$9.8~~Equity ~~million under~~and ~~its~~Cash ~~revolving~~Flows ~~credit~~for ~~facilities.~~the Atyears ended December 31, ~~2012~~2013, ~~the~~2012 ~~Company~~and ~~had~~2011, ~~$19.0~~are ~~million~~reported ofon ~~availability~~by inKPMG ~~its revolving credit facility~~LLP, ~~net~~Chartered ofProfessional ~~outstanding~~Accountants. ~~letters~~These ofstatements ~~credit~~are toprepared ~~achieve~~in ~~its~~accordance ~~future~~with ~~operational~~United ~~and~~States ~~capital objectives~~GAAP.

~~The~~MANAGEMENT ~~Company~~RESPONSIBILITY ~~generated~~OVER ~~$2.2~~FINANCIAL ~~million~~REPORTING in proceeds and a gain of $0.2 million, on the divestiture of surplus facilities in Springfield, MS; Louisville, KY; Toledo, OH; and Flint, MI, as well as miscellaneous equipment throughout the year. Capital expenditures amounted to $22.4 million for 2012 and were primarily funded out of proceeds from the Winnipeg real estate term facility, capital leases and the revolving credit facility. The capital expenditures in 2012 were for a facility in Memphis, TN, construction of the Winnipeg, MB facility, rolling stock, dock equipment and information technology expenditures.

28The Consolidated Financial Statements of the Company are the responsibility of management and have been prepared in accordance with United States GAAP and, where appropriate, reflect estimates based on management’s judgement. In addition, all other information contained in the Annual Report on Form 10-K is also the responsibility of management.

~~Table~~The Company maintains systems of ~~Contents~~internal accounting and administrative controls designed to provide reasonable assurance that the financial information provided is accurate and complete and that all assets are properly safeguarded.

The ~~table~~Board ~~below~~of ~~sets~~Directors ~~forth~~is ~~the~~responsible ~~Company’s~~for ensuring ~~capital~~that ~~expenditures~~management fulfills its responsibility for financial reporting and is ultimately responsible for reviewing and approving the ~~years~~Consolidated ~~ended~~Financial Statements. The Board appoints the Audit Committee, comprised of non-management ~~December 31~~directors, ~~2012~~which meets with management and KPMG LLP, ~~2011~~the external auditors, at least once a year to review, among other things, accounting policies, annual financial statements, the result of the external audit examination, and ~~2010~~the management discussion and analysis included in the Annual Report on Form 10-K. The Audit Committee reports its findings to the Board of Directors so that the Board may properly approve the financial statements.

(in thousands of dollars)	Year ended December 31,
	2012		2011		2010
Real estate and buildings	$	8,644	$	4,647	$	4,954
Tractors		5,841		1,081		722
Trailing fleet		1,921		250		1,141
Information technology		943		913		331
Leasehold improvements		1,286		254		326
Other equipment		3,764		1,815		796
Total	$	22,399	$	8,960	$	8,270

~~The~~REPORT ~~Company~~OF ~~has~~INDEPENDENT ~~contractual~~REGISTERED ~~obligations~~PUBLIC ~~that~~ACCOUNTING ~~include~~FIRM long-term debt consisting of term debt facilities, revolving credit facilities, capital leases for operating equipment and off-balance sheet operating leases primarily consisting of tractor, trailing fleet and real estate leases. Operating leases form an integral part of the Company’s financial structure and operating methodology as they provide an alternative cost-effective and flexible form of financing. The following table summarizes our significant contractual obligations and commercial commitments as of December 31, 2012:

(in thousands of dollars)			Payments due by period
Contractual Obligations	Total		2013		2014 & 2015		2016 & 2017		Thereafter
Real estate facility		67,287		1,877		4,167		4,574		56,669
Revolving credit facilities		31,750		Nil		31,750		Nil		Nil
Capital lease obligations		6,299		1,462		2,514		1,956		367
Estimated interest payments (1)		22,764		4,353		7,293		5,719		5,399
Sub-total	$	128,100	$	7,692	$	45,724	$	12,249	$	62,435
Off-balance sheet commitments
Operating leases		88,039		26,698		39,782		16,145		5,414
Total contractual obligations	$	216,139	$	34,390	$	85,506	$	28,394	$	67,849

To the Shareholders and Board of Directors of Vitran Corporation Inc.

~~(1)~~We ~~The~~have ~~Company~~audited ~~has~~the ~~estimated~~accompanying ~~its~~consolidated ~~interest~~balance ~~obligation~~sheets onof ~~its~~Vitran ~~fixed~~Corporation ~~and~~Inc. ~~variable~~as ~~rate~~of ~~obligations.~~December 31, ~~For~~2013 ~~fixed~~and ~~rate~~December 31, ~~debt~~2012, and the related ~~fixed~~consolidated ~~rate~~statements ~~was~~of ~~used~~income to(loss), ~~determine~~comprehensive income (loss), shareholders’ equity and cash flows for each of the ~~interest~~years ~~rate~~in ~~obligation~~the three-year period ended December 31, 2013. ~~For~~In ~~variable~~connection ~~rate~~with ~~debt~~our audits of the consolidated financial statements, we have also audited the ~~variable~~financial ~~rate~~statement schedules included in ~~place~~Item 15(a)(2) atof ~~December~~Form ~~31,~~10-K. ~~2012~~These ~~was~~consolidated ~~used~~financial tostatements ~~determine~~are the ~~total~~responsibility ~~interest~~of ~~obligation~~Vitran Corporation Inc.’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedules based on our audits.

InWe ~~addition~~conducted toour ~~the~~audits ~~above-noted~~in accordance ~~contractual~~with ~~obligations,~~the asstandards atof ~~December 31, 2012~~ the Public Company ~~utilized~~Accounting ~~the~~Oversight ~~revolving~~Board ~~credit~~(United ~~facility~~States). ~~for~~Those ~~standby~~standards ~~letters~~require ofthat ~~credit~~we ofplan ~~$21.1~~and ~~million.~~perform ~~The~~the ~~letters~~audit ~~of credit~~to ~~are~~obtain ~~used~~reasonable asassurance ~~collateral~~about ~~for~~whether ~~self-insured~~the ~~retention~~financial ofstatements ~~insurance~~are ~~claims~~free of material misstatement. ~~Export~~An ~~Development~~audit ~~Canada~~includes ~~(“EDC”)~~examining, on a ~~Crown~~test ~~corporation~~basis, ~~wholly~~evidence ~~owned~~supporting by the ~~government~~amounts ofand ~~Canada,~~disclosures ~~provides~~in ~~guarantees~~the upfinancial ~~to $12~~statements.2 ~~million~~An onaudit ~~LOC’s~~also to includes assessing the ~~Company’s~~accounting ~~syndicated~~principles ~~lenders.~~used Inand sosignificant ~~doing~~estimates made by management, ~~the~~as well ~~Company’s~~as ~~definition~~evaluating ofthe ~~available~~overall ~~debt~~financial instatement ~~the~~presentation. ~~associated~~We ~~revolving~~believe ~~credit~~that ~~agreement~~our ~~excludes~~audits ~~LOC’s~~provide ~~guaranteed~~a byreasonable ~~the~~basis ~~EDC~~for our opinion.

AIn ~~significant decrease in demand for~~ our ~~services could limit~~ opinion, the ~~Company’s~~financial ~~ability~~statements referred to ~~generate~~above ~~cash~~present ~~flow~~fairly, ~~and~~in ~~affect~~all ~~its profitability.~~material ~~The~~respects, ~~Company’s~~the ~~asset-based~~consolidated ~~revolving~~financial ~~credit~~position ~~agreement~~of isVitran ~~subject~~Corporation toInc. ~~financial~~as ~~maintenance~~of ~~tests~~December 31, ~~that~~2013 ~~trigger~~and ~~when~~December 31, ~~certain events occur~~2012, ~~that~~and ~~will require~~ the ~~Company~~results ~~to achieve stated levels~~ of ~~financial~~its ~~performance,~~operations ~~which,~~and ~~if not~~its ~~achieved,~~cash ~~could~~flows ~~cause~~for aneach ~~acceleration~~ of the ~~payment~~years ~~schedules.~~in ~~Should~~ the ~~current macro~~three-~~economic~~year ~~environment~~period ~~destabilize~~ended December 31, ~~and if triggered~~2013, ~~the~~in ~~Company~~conformity ~~may fail to comply~~ with ~~the~~U.S. generally ~~aforementioned~~accepted ~~debt~~accounting ~~covenants within the next twelve months~~principles. ~~Assuming~~ noAlso, ~~significant decline~~ in ~~business~~our ~~levels or financial performance~~opinion, ~~Management~~the ~~expects~~related ~~that~~financial ~~existing~~statement ~~working capital~~schedules, ~~together~~when ~~with~~considered ~~cash~~in relation ~~from~~to the ~~pending~~basic ~~sale~~consolidated offinancial ~~the~~statements ~~SCO~~taken ~~business,~~as ~~and~~a ~~available~~whole, ~~revolving~~presents ~~credit facilities~~fairly, ~~will~~in ~~be sufficient~~all tomaterial ~~fund~~respects, ~~operating~~the ~~and~~information ~~capital~~set ~~requirements~~forth ~~as well as service the contractual obligations~~therein.

29We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Vitran Corporation Inc.’s internal control over financial reporting as of December 31, 2013, based on the criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 13, 2014 expressed an unqualified opinion on the effectiveness of Vitran Corporation Inc.’s internal control over financial reporting.

~~Table~~/s/ ofKPMG ~~Contents~~LLP

~~OUTLOOK~~Chartered Professional Accountants, Licensed Public Accountants

~~The 2012 fiscal year was another challenging year for the Company~~Toronto, ~~however,~~Canada also at the same time an exciting year for the organization as the foundation has been laid for future success. Management expects to close the sale of SCO by March 1, 2013 which will strengthen the balance sheet of Vitran.

~~The~~March most significant opportunity remains in the U.S. LTL business unit and management’s continued focus is to improve the contribution to operating results of this business unit. The new management team has executed on many initiatives and continues to implement many more projects to improve service13, ~~productivity~~2014 ~~and efficiency of the operation. Executing on these plans will allow management to expand revenue through increased pricing and density.~~

~~Management~~30 is optimistic, should the U.S. LTL business unit successfully execute its operational plan, activity levels and pricing initiatives continue to improve, that the Company is positioned to improve operating results in the future.

~~Revenue~~VITRAN ~~Recognition~~CORPORATION INC.

~~The~~Consolidated ~~Company’s~~Balance ~~LTL~~Sheets operations recognize revenue upon the delivery of the related freight and direct shipment costs as incurred. Transportation services not completed at the end of a reporting period, revenue is recognized based on relative transit time in each period with expenses recognized as incurred. Critical revenue-related policies and estimates for the Company’s LTL business unit relate to revenue adjustments and allowance for doubtful accounts. Critical revenue-related policies include allowance for doubtful accounts. At December 31, 2012, the allowance for doubtful accounts was $2.5 million or approximately 3.6% of total trade receivables. The Company believes that its revenue recognition policies are appropriate and that its revenue-related estimates and judgments provide a reasonable approximation of actual revenue earned.

~~Estimated~~(Amounts ~~Revenue~~in ~~Adjustments~~thousands of United States dollars)

~~Generally~~December 31, ~~the~~2013 ~~pricing assessed by companies in the LTL business is subject to subsequent adjustments due to several factors, including weight~~ and ~~freight~~2012 classification verifications, shipper bill of lading errors, pricing discounts and other miscellaneous revenue adjustments. Revenue adjustments are evaluated and updated based on revenue levels, current trends and historical experience. These revenue adjustments are recorded as a reduction in revenue from operations and accrued for in the allowance for doubtful accounts.

Allowance for Doubtful Accounts


	2013			2012
Assets
Current assets:
Cash and cash equivalents	$	14,176		$	233
Accounts receivable		17,873			17,925
Inventory, deposits and prepaid expenses		1,920			3,506
Income taxes recoverable		1,764			—
Current assets of discontinued operations (note 2)		—			65,402
Deferred income taxes (note 6)		105			92

Total current assets		35,838			87,158
Property and equipment (note 3)		52,521			53,365
Goodwill (note 4)		5,219			5,579
Long-term assets of discontinued operations (note 2)		—			92,370

Total assets	$	93,578		$	238,472

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities (note 1(q))	$	22,818		$	24,146
Income taxes payable		—			554
Current liabilities of discontinued operations (note 2)		—			59,610
Current portion of long-term debt (note 5)		1,846			1,333

Total current liabilities		24,664			85,643
Long-term debt (note 5)		50,251			58,969
Deferred income taxes (note 6)		270			1,175
Long-term liabilities of discontinued operations (note 2)		—			43,028
Shareholders’ equity:
Common shares, no par value, unlimited authorized, 16,465,241 and 16,399,241 issued and outstanding in 2013 and 2012, respectively (note 7)		100,427			99,954
Additional paid-in capital		5,837			5,708
Accumulated deficit		(84,106	)		(60,889	)
Accumulated other comprehensive income (loss)		(3,765	)		4,884

Total shareholders’ equity		18,393			49,657
Lease commitments (note 10)
Contingent liabilities (note 12)
Subsequent events (note 13)

Total liabilities and shareholders’ equity	$	93,578		$	238,472

~~The~~See ~~Company~~accompanying ~~records~~notes ~~an allowance for doubtful accounts related~~ to ~~accounts~~consolidated ~~receivable~~financial ~~that may potentially be impaired~~statements. The Company’s allowance is estimated by (1) a percentage of its aged receivables reflecting the current business environment, customer and industry concentrations, and historical experience and (2) an additional allowance for specifically identified accounts that are significantly impaired. A change to these factors could impact the estimated allowance. The provision for bad debts is recorded in selling, general and administrative expenses.

~~Claims~~31 ~~and Insurance Accruals~~

30VITRAN CORPORATION INC.

~~Table~~Consolidated Statements of ~~Contents~~Income (Loss)

~~$350,000 self-insurance retention~~ (~~“SIR”)~~Amounts ~~per~~in ~~incident~~thousands ~~for~~of ~~auto liability, casualty and cargo claims. In the~~ United States, ~~the Company has a $500~~dollars,~~000~~ ~~SIR~~except per ~~incident~~share ~~for~~amounts) ~~workers’ compensation and $250,000 SIR per incident for employee medical.~~

InYears ~~addition~~ended ~~to estimates within the self-insured retention~~December 31, ~~management~~ ~~makes judgments concerning the coverage limits. If any claim was to exceed the coverage limits~~2013, ~~the~~2012 ~~Company would have to accrue for the excess amount. The estimate would include evaluation whether a claim may exceed such limits~~ and, ~~if so,~~2011 by how much. A claim or group of claims of this nature could have a material adverse effect on the Company’s results from operations. Currently management is not aware of any claims exceeding the coverage limit.

Goodwill and Intangible Assets


	2013			2012			2011
Revenue	$	193,389		$	193,943		$	192,315

Salaries, wages and other employee benefits		27,544			24,973			24,697
Purchased transportation		67,119			70,416			69,850
Depreciation and amortization		3,154			3,155			3,197
Maintenance		7,995			10,164			10,957
Rents and leases		2,599			2,788			2,663
Owner operators		50,426			48,345			46,905
Fuel and fuel related expenses		21,899			21,956			20,361
Other operating expenses		14,071			8,044			8,398
Other income		(310	)		(43	)		(61	)

		194,497			189,798			186,967

Income (loss) from continuing operations before the undernoted		(1,108	)		4,145			5,348
Interest on long-term debt		(3,733	)		(3,124	)		(5,498	)
Interest income		182			—			—

		(3,551	)		(3,124	)		(5,498	)

Income (loss) from continuing operations before income taxes		(4,659	)		1,021			(150	)
Income tax expense (recovery) (note 6)		(1,633	)		1,240			1,168

Net loss from continuing operations		(3,026	)		(219	)		(1,318	)
Discontinued operations, net of income taxes (note 2)		(20,191	)		(35,756	)		(12,695	)

Net loss	$	(23,217	)	$	(35,975	)	$	(14,013	)

Loss per share:
Basic and Diluted:
Loss from continuing operations	$	(0.18	)	$	(0.01	)	$	(0.08	)
Loss from discontinued operations		(1.23	)		(2.18	)		(0.78	)
Net loss		(1.41	)		(2.19	)		(0.86	)
Weighted average number of shares:
Basic and Diluted		16,426,455			16,391,252			16,326,760

~~The~~See ~~Company~~accompanying ~~performs~~notes its goodwill impairment test annually and more frequently if events or changes in circumstances indicate that an impairment loss may have occurred. Impairment is tested at the reporting unit level by assessing qualitative factors to ~~determine~~consolidated ~~whether~~financial ~~it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test~~statements. In the event goodwill is determined to be impaired, a charge to earnings would be required. As at September 30, 2012, Vitran completed its annual goodwill impairment test and concluded that there was no impairment.

~~Property~~32 ~~and Equipment~~

~~Share-Based~~VITRAN ~~Compensation~~CORPORATION INC.

~~Under~~Consolidated ~~the~~Statements ~~Company’s stock option plan, options to purchase common shares~~ of ~~the~~Comprehensive ~~Company~~Income ~~may~~(Loss) be granted to key employees, officers and directors of the Company and its affiliates by the Board of Directors or by the Company’s Compensation Committee. The Company accounts for stock options in accordance with FASB ASC 718 with compensation expense amortized over the vesting period based on the Black-Scholes-Merton fair value on the grant date. The assumptions used to value stock options are dividend yield, expected volatility, risk-free interest rate, expected life and anticipated forfeiture. The Company does not pay any dividends on its common shares, therefore the dividend yield is zero. We use the historical method to calculate volatility with the historical period being equal to the expected life of each option. This calculation is then used to approximate the potential for the share price to increase over the expected life of the option. The risk-free interest rate is based on the government of Canada issued bond rate in effect at the time of the grant. Expected life represents the length of time the option is estimated to be outstanding before being exercised or forfeited. Historical information is used to determine the forfeiture rate.

~~Income~~(Amounts ~~Taxes~~in thousands of United States dollars)

~~The Company~~Years ~~uses~~ended ~~the~~December 31, ~~asset and liability method of accounting for income taxes. Under the asset and liability method~~2013, ~~deferred~~2012 ~~tax assets~~ and ~~liabilities~~2011 are recognized for the deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Significant judgment is required in determining whether deferred tax assets will be realized in full or in part. If it were ever estimated that it is more likely than not that all or some portion of specific deferred tax assets will not be realized, a


	2013			2012			2011
Net loss	$	(23,217	)	$	(35,975	)	$	(14,013	)
Other comprehensive income (loss):
Change in foreign currency translation adjustment (net of income tax expense (recovery) of $7, ($7) and ($333) for the years ended December 31, 2013, 2012 and 2011, respectively)		(1,938	)		77			(818	)
Foreign currency translation reclassified from accumulated other comprehensive income (loss) (note 2)		(6,711	)		—			—
Change in unrealized fair value of derivatives designated as cash flow hedges (net of income tax expense of $146)		—			—			373

Other comprehensive income (loss)	$	(8,649	)	$	77		$	(445	)

Comprehensive loss	$	(31,866	)	$	(35,898	)	$	(14,458	)

~~Table~~See ofaccompanying ~~Contents~~notes to consolidated financial statements.

~~valuation~~33 allowance must be established for the amount of deferred tax assets that is estimated not to be realized. A valuation allowance for deferred tax assets of $63.9 million was recorded at December 31, 2012. Accordingly, if the facts or financial results were to change, thereby impacting the likelihood of realizing the deferred tax assets, judgment would have to be applied to estimate the amount of valuation allowance required in any given period.

~~Management~~VITRAN ~~judgment~~CORPORATION is also required regarding a variety of other factors, including the appropriateness of tax strategies, expected future tax consequences, and to the extent tax strategies are challenged by taxing authoritiesINC. We utilize certain income tax planning strategies to reduce our overall cost of income taxes. It is possible that certain strategies might be disallowed, resulting in an increased liability for income taxes. Significant management judgments are involved in assessing the likelihood of sustaining the strategies and an ultimate result worse than our expectations could adversely affect our results of operations.

~~CHANGES~~Consolidated INStatements ~~ACCOUNTING~~of ~~POLICY~~Shareholders’ Equity

~~See~~(Amounts ~~Note~~in 1thousands ~~to the accompanying consolidated financial statements for discussion~~ of United States ~~GAAP~~dollars) ~~recent accounting pronouncements.~~

~~RELATED~~Years ~~PARTIES~~ended December 31, 2013, 2012 and 2011

None.


	Common shares				Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive income (loss)			Total shareholders’ equity
	Number		Amount		Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive income (loss)			Total shareholders’ equity
December 31, 2012		16,399,241	$	99,954	$	5,708		$	(60,889	)	$	4,884		$	49,657
Shares issued upon exercise of employee stock options		66,000		473		(141	)		—			—			332
Net loss		—		—		—			(23,217	)		—			(23,217	)
Other comprehensive loss		—		—		—			—			(8,649	)		(8,649	)
Share-based compensation (note 7)		—		—		270			—			—			270

December 31, 2013		16,465,241	$	100,427	$	5,837		$	(84,106	)	$	(3,765	)	$	18,393


	Common shares				Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive income			Total shareholders’ equity
	Number		Amount		Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive income			Total shareholders’ equity
December 31, 2011		16,331,241	$	99,746	$	5,334		$	(24,914	)	$	4,807		$	84,973
Shares issued upon exercise of employee stock options		68,000		208		(57	)		—			—			151
Net loss		—		—		—			(35,975	)		—			(35,975	)
Other comprehensive income		—		—		—			—			77			77
Share-based compensation (note 7)		—		—		431			—			—			431

December 31, 2012		16,399,241	$	99,954	$	5,708		$	(60,889	)	$	4,884		$	49,657


	Common shares				Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive income (loss)			Total shareholders’ equity
	Number		Amount		Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive income (loss)			Total shareholders’ equity
December 31, 2010		16,300,041	$	99,658	$	4,838		$	(10,901	)	$	5,252		$	98,847
Shares issued upon exercise of employee stock options		31,200		88		(5	)		—			—			83
Net loss		—		—		—			(14,013	)		—			(14,013	)
Other comprehensive loss		—		—		—			—			(445	)		(445	)
Share-based compensation (note 7)		—		—		501			—			—			501

December 31, 2011		16,331,241	$	99,746	$	5,334		$	(24,914	)	$	4,807		$	84,973

32See accompanying notes to consolidated financial statements.

~~Table~~34 ~~of Contents~~

~~INTEREST~~VITRAN ~~RATE~~CORPORATION ~~SENSITIVITY~~INC.

~~The~~Consolidated ~~Company~~Statements ~~is exposed to the impact~~ of ~~interest~~Cash ~~rate~~Flows changes. The Company’s exposure to changes in interest rates is limited to borrowings under the term bank facilities and revolving credit facilities that have variable interest rates tied to the LIBOR rate. We estimate that the fair value of the long-term debt approximates its carrying value.

(in thousands of dollars)				Payments due by period
Long-term debt	Total			2013			2014 & 2015			2016 & 2017			Thereafter
Variable Rate
Revolving credit facility		31,750			Nil			31,750			Nil			Nil
Average interest rate (LIBOR based)		2.96	%					2.96	%
Fixed Rate
Real estate facility		67,287			1,877			4,167			4,574			56,669
Interest Rate		4.75	%		4.75	%		4.75	%		4.75	%		4.75	%
Capital lease obligations		6,299			1,462			2,514			1,956			367
Average interest rate		6.15	%		6.15	%		6.15	%		6.15	%		6.15	%
Total	$	105,336		$	3,339		$	38,431		$	6,530		$	57,036

(Amounts in thousands of United States dollars)

~~The~~Years ~~Company~~ended is exposed to foreign currency risk as fluctuations in the United States dollar against the Canadian dollar can impact the financial results of the Company. The Company’s Canadian operations realize foreign currency exchange gains and losses on United States dollar denominated revenue generated against Canadian dollar denominated expenses. FurthermoreDecember 31, ~~the Company reports its results in United States dollars thereby exposing the results of the Company’s Canadian operations to foreign currency fluctuations. In addition~~2013, ~~the~~2012 ~~Company’s~~and ~~United~~2011 ~~States dollar debt of $8.5 million is designated as a hedge of the investment in the United States’ self-sustaining foreign operations.~~

In addition to the information disclosed above, further information required by Item 7A of Form 10-K appears in Item 1.A and Item 7 of this Annual Report on Form 10-K under the headings “Risks and Uncertainties” and “Liquidity and Capital Resources”, respectively.


	2013			2012			2011
Cash provided by (used in):
Operations:
Net loss	$	(23,217	)	$	(35,975	)	$	(14,013	)
Items not involving cash from operations:
Depreciation and amortization		3,154			3,155			3,197
Deferred income taxes		(923	)		10			288
Gain on sale of property and equipment		(310	)		(43	)		(61	)
Share-based compensation expense		270			431			501
Loss on discontinued operations		20,191			35,756			12,695
Change in non-cash working capital components		(1,837	)		725			1,663

Continuing operations		(2,672	)		4,059			4,270
Discontinued operations		(51,050	)		(13,445	)		1,667

		(53,722	)		(9,386	)		5,937
Investments:
Proceeds from sale of businesses, net of cash divested		88,883			—			—
Purchases of property and equipment		(726	)		(7,737	)		(897	)
Proceeds on sale of property and equipment		306			80			65

Continuing operations		88,463			(7,657	)		(832	)
Discontinued operations		1,181			(7,680	)		(603	)

		89,644			(15,337	)		(1,435	)
Financing:
Change in revolving credit facility and bank overdraft		(8,500	)		7,990			16,310
Repayment of long-term debt		(1,125	)		(990	)		(16,000	)
Proceeds from long-term debt		—			5,506			—
Repayment of capital leases		(229	)		(167	)		—
Financing costs		(121	)		(150	)		(2,286	)
Issue of common shares upon exercise of stock options		332			151			83

Continuing Operations		(9,643	)		12,340			(1,893	)
Discontinued Operations		(12,608	)		11,502			(1,000	)

		(22,251	)		23,842			(2,893	)
Effect of foreign exchange translation on cash		272			(90	)		(405	)

Increase (decrease) in cash and cash equivalents		13,943			(971	)		1,204
Cash and cash equivalents, beginning of year		233			1,204			–

Cash and cash equivalents, end of year	$	14,176		$	233		$	1,204

Change in non-cash working capital components:
Accounts receivable	$	102		$	(508	)	$	2,309
Inventory, deposits and prepaid expenses		1,707			370			1,179
Income taxes recoverable/payable		(2,318	)		(397	)		652
Accounts payable and accrued liabilities		(1,328	)		1,260			(2,477	)

	$	(1,837	)	$	725		$	1,663

Supplemental cash flow information:
Interest paid	$	4,256		$	4,452		$	5,104
Income taxes paid		2,094			3,677			2,410
Supplemental disclosure of non-cash transactions:
Capital lease additions		4,988			5,745			1,317

~~ITEM 8—FINANCIAL~~See ~~STATEMENTS~~accompanying ~~AND SUPPLEMENTARY~~notes ~~DATA~~to consolidated financial statements.

~~Consolidated~~35 Balance Sheets as of December 31, 2012 and 2011 and the Consolidated Statements of Income (Loss), Comprehensive Income (Loss), Shareholders’ Equity and Cash Flows for the years ended December 31, 2012, 2011 and 2010, are reported on by KPMG LLP, Chartered Accountants. These statements are prepared in accordance with United States GAAP.

~~Table~~VITRAN ofCORPORATION ~~Contents~~INC.

~~MANAGEMENT~~Notes ~~RESPONSIBILITY~~to ~~OVER~~Consolidated ~~FINANCIAL~~Financial ~~REPORTING~~Statements

~~The~~(In ~~Consolidated~~thousands ~~Financial Statements~~ of ~~the Company are the responsibility of management and have been prepared in accordance with~~ United States ~~GAAP and~~dollars, ~~where~~except ~~appropriate,~~per ~~reflect~~share ~~estimates~~amounts ~~based~~where onnoted) ~~management’s judgement. In addition, all other information contained in the Annual Report on Form 10-K is also the responsibility of management.~~

~~The~~Years ~~Company~~ended ~~maintains~~December ~~systems~~31, of2013, ~~internal~~2012 ~~accounting~~ and ~~administrative~~2011 ~~controls designed to provide reasonable assurance that the financial information provided is accurate and complete and that all assets are properly safeguarded.~~

The Board of Directors is responsible for ensuring that management fulfills its responsibility for financial reporting and is ultimately responsible for reviewing and approving the Consolidated Financial Statements1. ~~The~~Significant ~~Board appoints the Audit Committee, comprised of non-management directors, which meets with management and KPMG LLP, the external auditors, at least once a year to review, among other things,~~ accounting policies, annual financial statements, the result of the external audit examination, and the management discussion and analysis included in the Annual Report on Form 10-K. The Audit Committee reports its findings to the Board of Directors so that the Board may properly approve the financial statements. Additional commentary on corporate governance will appear in the Company’s proxy statement for the 2013 Annual Meeting of its Shareholders, which is anticipated to be filed with the SEC within 120 days following the end of the fiscal year ended December 31, 2012, and the information therein is incorporated herein by reference. :

34(a) Description of the business:

~~Table~~Vitran Corporation Inc. (“Vitran” or the “Company”) is a provider of ~~Contents~~freight services to a wide variety of companies and industries. Vitran offers less-than-truckload (“LTL”) services throughout Canada.

~~REPORT~~On OFDecember 9, ~~INDEPENDENT~~2013 ~~REGISTERED~~, ~~PUBLIC~~Vitran ~~ACCOUNTING~~entered ~~FIRM~~into a definitive agreement with 2398946 Ontario Inc. and North Channel of Georgian Bay Holdings Ltd. (collectively, “Manitoulin Transport”) pursuant to which Manitoulin Transport agreed to acquire all of the outstanding common shares of Vitran for $6.00 in cash per share. Subsequently, on December 20, 2013, the board of directors of Vitran determined that a proposal for $6.50 in cash per share received from TransForce Inc. (“TransForce”) was a “superior proposal” for the purposes of the arrangement agreement (the “Manitoulin Agreement”) among Vitran, and Manitoulin Transport.

ToOn December 30, 2013, Manitoulin Transport waived its right to match the ~~Shareholders~~TransForce proposal. Vitran and ~~Board~~Manitoulin Transport agreed to terminate the Manitoulin Agreement concurrent with the entering into of ~~Directors~~a definitive arrangement agreement with TransForce (the “TransForce Agreement”) and the termination fee of $4.0 million payable to Manitoulin Transport was paid by Vitran. ~~Corporation~~On ~~Inc~~December 30, 2013, Vitran entered into a definitive arrangement agreement with TransForce pursuant to which TransForce has agreed to acquire all of the outstanding common shares of Vitran not already owned by TransForce for $6.50 in cash per share.

WeThe ~~have~~transaction ~~audited~~with ~~the~~TransForce ~~accompanying~~is ~~consolidated~~structured ~~balance~~as ~~sheets~~a Plan of ~~Vitran~~Arrangement ~~Corporation~~under the ~~Inc~~Business Corporations Act (Ontario) (the “Arrangement”). asThe Arrangement has been unanimously approved by the board of ~~December 31,~~directors ~~2012~~of Vitran and ~~December 31,~~was ~~2011,~~subject ~~and~~to ~~the~~approval ~~related~~by ~~consolidated~~the ~~statements~~shareholders of ~~income~~Vitran ~~(loss),~~at a special meeting to be held ~~comprehensive~~on ~~income~~March 5, 2014 (~~loss~~the “Special Meeting”),. ~~shareholders’~~The ~~equity~~proposal to approve the Arrangement was voted on and ~~cash~~approved ~~flows~~at ~~for~~the ~~each~~Special Meeting. The Arrangement was also subject to final approval of the ~~years~~Ontario inSuperior Court of Justice following the ~~three-year~~Special ~~period~~Meeting, ~~ended~~which ~~December~~was granted by Order of the Court on March 316, ~~2012~~2014. InRefer ~~connection~~to ~~with~~Note ~~our~~13 ~~audits~~“Subsequent ofevents”. The Arrangement remains subject to the ~~consolidated~~receipt ~~financial~~of ~~statements,~~applicable weregulatory ~~have~~approvals ~~also~~(including ~~audited~~approval under the ~~financial~~Competition ~~statement~~Act), ~~schedules~~and ~~included~~to insatisfaction ~~Item 15(a)(2)~~of other customary closing conditions. The Arrangement is not conditional on TransForce obtaining financing or on completion of ~~Form~~due ~~10-K~~diligence. ~~These~~The ~~consolidated~~TransForce ~~financial~~Agreement ~~statements~~contains ~~are~~customary non-solicitation provisions and provides that the ~~responsibility~~board of directors of Vitran ~~Corporation~~may, ~~Inc~~under certain circumstances, terminate the TransForce Agreement in order to accept an unsolicited superior proposal, subject to a matching right in favour of TransForce.’s ~~management~~If the TransForce Agreement is terminated in certain circumstances, including if Vitran accepts a superior proposal, TransForce is entitled to a termination payment of $4.0 ~~Our~~million. ~~responsibility~~The Arrangement is expected to ~~express~~close anin ~~opinion~~March on2014. ~~these~~An ~~consolidated~~information ~~financial~~circular ~~statements~~(the “Information Circular”) outlining details of the Arrangement and ~~financial~~Special ~~statement~~Meeting ~~schedules~~was ~~based~~mailed to shareholders in February 2014. Copies of the Information Circular are available on ~~our~~SEDAR ~~audits~~at www.sedar.com and on EDGAR at www.sec.gov.

~~We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board~~ (~~United States~~b). ~~Those~~Basis ~~standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free~~ of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation~~. We believe that our audits provide a reasonable basis for our opinion.~~ :

InThese ~~our~~consolidated ~~opinion, the~~ financial statements ~~referred~~include ~~to above present fairly, in all material respects,~~ the ~~consolidated~~accounts ~~financial position~~ of ~~Vitran Corporation Inc. as of December 31, 2012 and December 31, 2011, and~~ the Company ~~results of its operations~~ and its ~~cash~~wholly ~~flows~~owned ~~for each of the years in the three-year period ended December 31, 2012, in conformity with U~~subsidiaries.~~S. generally~~ ~~accepted~~All ~~accounting~~material ~~principles.~~intercompany ~~Also,~~transactions inand ~~our~~balances ~~opinion,~~have ~~the~~been ~~related~~eliminated ~~financial~~on ~~statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein~~consolidation.

We36 also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Vitran Corporation Inc.’s internal control over financial reporting as of December 31, 2012, based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 19, 2013 expressed an unqualified opinion on the effectiveness of Vitran Corporation Inc.’s internal control over financial reporting.

~~Chartered~~VITRAN ~~Accountants,~~CORPORATION ~~Licensed~~INC. ~~Public Accountants~~

~~Toronto,~~Notes ~~Canada~~to Consolidated Financial Statements

~~February 19~~(In thousands of United States dollars, ~~2013~~except per share amounts where noted)

35Years ended December 31, 2013, 2012 and 2011

~~Table~~1. ofSignificant ~~Contents~~accounting policies (continued):

~~VITRAN~~These ~~CORPORATION~~consolidated ~~INC~~financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). Canadian Securities regulations allow issuers that are required to file reports with the Securities and Exchange Commission in the United States to file financial statements under United States GAAP to meet their continuous disclosure obligations in Canada. All amounts in these consolidated financial statements are expressed in United States dollars, unless otherwise stated.

~~Consolidated~~(c) ~~Balance~~New ~~Sheets~~accounting pronouncements:

Financial Accounting Standards Board (“FASB”) Accounting Standard Update (“ASU”) No. 2013-02 “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” requires expanded disclosures for amounts reclassified out of accumulated other comprehensive income by component. The guidance requires the presentation of amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in ~~thousands~~its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, a cross-reference to other disclosures that provide additional detail about those amounts is required. The guidance is to be applied prospectively for reporting periods beginning after December 15, 2012. ASU No. 2013-02 was adopted by the Company on January 1, 2013. The new guidance affects disclosures only and did not have an impact on the Company’s results of ~~United~~operations ~~States~~or ~~dollars)~~financial position.

~~December 31,~~(d) ~~2012~~Foreign ~~and~~currency ~~2011~~ translation:

	2012			2011
Assets
Current assets:
Cash and cash equivalents	$	233		$	1,204
Accounts receivable		65,291			73,439
Inventory, deposits and prepaid expenses		10,131			10,819
Current assets of discontinued operations (note 2)		11,436			11,093
Deferred income taxes (note 8)		92			175
Total current assets		87,183			96,730
Property and equipment (note 4)		131,640			123,521
Intangible assets (note 5)		2,707			4,773
Goodwill (note 6)		5,579			5,458
Long-term assets of discontinued operations (note 2)		11,388			11,776
Total assets	$	238,497		$	242,258
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities (note 1(r))	$	67,744		$	66,378
Income and other taxes payable		517			912
Current liabilities of discontinued operations (note 2)		14,068			14,855
Current portion of long-term debt (note 7)		3,339			6,817
Total current liabilities		85,668			88,962
Long-term debt (note 7)		101,997			67,072
Deferred income taxes (note 8)		1,175			1,251
Shareholders’ equity:
Common shares, no par value, unlimited authorized, 16,399,241 and 16,331,241 issued and outstanding in 2012 and 2011, respectively (note 9)		99,954			99,746
Additional paid-in capital		5,708			5,334
Accumulated deficit		(60,889	)		(24,914	)
Accumulated other comprehensive income		4,884			4,807
Total shareholders’ equity		49,657			84,973
Lease commitments (note 14)
Contingent liabilities (note 16)
Subsequent events (note 17)
Total liabilities and shareholders’ equity	$	238,497		$	242,258

A majority of the Company’s shareholders and industry analysts are located in the United States. Accordingly, the Company has adopted the United States dollar as its reporting currency.

~~See~~The Canadian ~~accompanying~~dollar ~~notes~~is tothe ~~consolidated~~functional ~~financial~~currency ~~statements~~of the Company’s Canadian operations. In respect of transactions denominated in currencies other than the Canadian dollar, the monetary assets and liabilities of the Company are translated at the year-end rates. Revenue and expenses are translated at rates of exchange prevailing on the transaction dates. All of the exchange gains or losses resulting from these transactions are recognized in income.

36For reporting purposes, the consolidated operations are translated into United States dollars using the current rate method. Under this method, all assets and liabilities are translated at the period-end rate of exchange and all revenue and expense items are translated at the average rate of exchange for the period. The resulting translation adjustment is recorded as a separate component of shareholders’ equity.

~~Table~~(e) ofRevenue ~~Contents~~recognition:

~~VITRAN~~The ~~CORPORATION~~Company ~~INC~~recognizes revenue upon the delivery of the related freight and direct shipment costs as incurred. Revenue for transportation services not completed at the end of a reporting period is recognized based on relative transit time in each period with expenses recognized as incurred.

~~Consolidated~~Revenue ~~Statements~~adjustments are estimated at the end of ~~Income~~each ~~(Loss)~~quarterly reporting period. These adjustments result from several factors, including weight and freight classification verifications, shipper bill of lading errors, pricing discounts and other miscellaneous revenue adjustments. Revenue adjustments are recorded as a reduction in revenue from operations and accrued for as part of the allowance for doubtful accounts. Allowance for doubtful accounts is recorded as a contra-account to accounts receivable.

~~(Amounts~~Historical experience, intrends ~~thousands~~and ofcurrent ~~United~~information ~~States~~are ~~dollars~~used to update and evaluate the estimate. As at December 31, ~~except~~2013, ~~per~~revenue ~~share~~adjustments ~~amounts)~~as a percentage of revenue were not material.

~~Years~~37 ~~ended December 31, 2012, 2011 and 2010~~

	2012			2011			2010
Revenue	$	702,914		$	686,242		$	581,594
Salaries, wages and other employee benefits		305,033			283,363			241,200
Purchased transportation		104,447			109,133			99,222
Depreciation and amortization		15,435			14,969			16,748
Maintenance		34,201			32,217			25,603
Rents and leases		33,823			26,321			18,104
Owner operators		48,345			46,905			42,889
Fuel and fuel related expenses		135,365			130,294			87,105
Other operating expenses		64,352			55,679			50,916
Other loss (income)		(235	)		1,945			(141	)
		740,766			700,826			581,646
Loss from continuing operations before the undernoted		(37,852	)		(14,584	)		(52	)
Interest on long-term debt		(5,417	)		(6,809	)		(7,328	)
Interest income		—			1			3
		(5,417	)		(6,808	)		(7,325	)
Loss from continuing operations before income taxes		(43,269	)		(21,392	)		(7,377	)
Income tax expense (recovery) (note 8)		(643	)		(612	)		34,985
Net loss from continuing operations		(42,626	)		(20,780	)		(42,362	)
Discontinued operations, net of income taxes (note 2)		6,651			6,767			2,180
Net loss	$	(35,975	)	$	(14,013	)	$	(40,182	)
Income (loss) per share:
Basic and Diluted:
Loss from continuing operations	$	(2.60	)	$	(1.27	)	$	(2.60	)
Discontinued operations income		0.41			0.41			0.13
Net loss		(2.19	)		(0.86	)		(2.47	)
Weighted average number of shares:
Basic		16,391,252			16,326,760			16,277,522
Diluted		16,391,252			16,326,760			16,277,522

~~See~~VITRAN ~~accompanying~~CORPORATION ~~notes to consolidated financial statements~~INC.

37Notes to Consolidated Financial Statements

~~Table~~(In thousands of United ~~Contents~~States dollars, except per share amounts where noted)

~~VITRAN~~Years ~~CORPORATION~~ended ~~INC.~~December 31, 2013, 2012 and 2011

~~Consolidated~~1. ~~Statements~~Significant ofaccounting ~~Comprehensive~~policies ~~Income~~ (~~loss~~continued) :

(~~Amounts in thousands of United States dollars~~f) Accounts receivable:

~~Years~~Accounts ~~ended~~receivable are presented, net of allowance for doubtful accounts of $0.4 million at December 31, 2013 (2012,—$0.4 ~~2011~~million). ~~and 2010~~

	2012			2011			2010
Net loss	$	(35,975	)	$	(14,013	)	$	(40,182	)
Other comprehensive income (loss):
Change in foreign currency translation adjustment (net of income tax expense (recovery) of ($7), ($333) and $516 for the years ended December 31, 2012, 2011 and 2010, respectively)		77			(818	)		1,942
Change in unrealized fair value of derivatives designated as cash flow hedges (net of income tax expense of $146 and $246 for the years ended December 31, 2011 and 2010, respectively)		—			373			652
Other comprehensive income (loss)	$	77		$	(445	)	$	2,594
Comprehensive loss	$	(35,898	)	$	(14,458	)	$	(37,588	)

(g)

Cash and cash equivalents:

~~See~~Cash ~~accompanying~~and ~~notes~~cash toequivalents ~~consolidated~~include ~~financial~~cash ~~statements~~on account and short-term investments with original maturities of three months or less and are stated at cost, which approximates fair value.

38(h) Inventory:

~~Table~~Inventory consists of ~~Contents~~tires and spare parts and is valued at the lower of average cost and replacement cost.

~~VITRAN~~(i) ~~CORPORATION~~Property ~~INC.~~and equipment:

~~Consolidated~~Property ~~Statements~~and equipment are recorded at cost. Depreciation of ~~Shareholders’~~property and ~~Equity~~equipment is provided on a straight-line basis from the date assets are put in service over their estimated useful lives as follows:

(Amounts in thousands of United States dollars)


Buildings			30 years
Leasehold interests and improvements			Over term of lease
Vehicles:
Trailers and containers			12 years
Trucks			8 years
Machinery and equipment			4 - 10 years

~~Years~~Tires ~~ended~~purchased ~~December 31,~~as ~~2012,~~part ~~2011~~of ~~and~~a ~~2010~~vehicle are capitalized as a cost to the vehicle. Replacement tires are expensed when placed in service.

	Common shares				Additionalpaid-incapital			Accumulateddeficit			AccumulatedOthercomprehensiveincome (loss)			Totalshareholders’equity
	Number		Amount
December 31, 2011		16,331,241	$	99,746	$	5,334		$	(24,914	)	$	4,807		$	84,973
Shares issued upon exercise of employee stock options		68,000		208		(57	)		—			—			151
Net loss		—		—		—			(35,975	)		—			(35,975	)
Other comprehensive income		—		—		—			—			77			77
Share-based compensation (note 9)		—		—		431			—			—			431
December 31, 2012		16,399,241	$	99,954	$	5,708		$	(60,889	)	$	4,884		$	49,657
	Common shares				Additionalpaid-incapital			Accumulateddeficit			AccumulatedOthercomprehensiveincome (loss)			Totalshareholders’equity
	Number		Amount
December 31, 2010		16,300,041	$	99,658	$	4,838		$	(10,901	)	$	5,252		$	98,847
Shares issued upon exercise of employee stock options		31,200		88		(5	)		—			—			83
Net loss		—		—		—			(14,013	)		—			(14,013	)
Other comprehensive loss		—		—		—			—			(445	)		(445	)
Share-based compensation (note 9)		—		—		501			—			—			501
December 31, 2011		16,331,241	$	99,746	$	5,334		$	(24,914	)	$	4,807		$	84,973
	Common shares				Additionalpaid-incapital			RetainedEarnings(accumulated)deficit)			AccumulatedOtherComprehensiveincome (loss)			Totalshareholders’equity
	Number		Amount
December 31, 2009		16,266,441	$	99,584	$	4,264		$	29,281		$	2,658		$	135,787
Shares issued upon exercise of employee stock options		33,600		74		—			—			—			74
Net loss		—		—		—			(40,182	)		—			(40,182	)
Other comprehensive income		—		—		—			—			2,594			2,594
Share-based compensation (note 9)		—		—		574			—			—			574
December 31, 2010		16,300,041	$	99,658	$	4,838		$	(10,901	)	$	5,252		$	98,847

(j)

Goodwill:

~~See~~FASB ~~accompanying~~Accounting ~~notes~~Standards Codification (“ASC”) 350 requires that goodwill be assessed for impairment on an annual basis and, more frequently, if indicators of impairment exist. In the event goodwill is determined to ~~consolidated~~be ~~financial~~impaired, ~~statements~~a charge to earnings would be required. FASB ASU No. 2011-08, Testing Goodwill for Impairment, permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. As at September 30, 2013, the Company completed its annual goodwill impairment test and concluded that there was no impairment. At December 31, 2013, the Company has not identified any indicators that would require re-testing for impairment.

3938

VITRAN CORPORATION INC.

~~Consolidated~~Notes ~~Statements~~to ofConsolidated ~~Cash~~Financial ~~Flows~~Statements

(~~Amounts~~In in thousands of United States dollars, except per share amounts where noted)

Years ended December 31, ~~2012~~2013, ~~2011~~2012 and ~~2010~~2011

	2012			2011			2010
Cash provided by (used in):
Operations:
Net loss	$	(35,975	)	$	(14,013	)	$	(40,182	)
Items not involving cash from operations:
Depreciation and amortization		15,435			14,969			16,748
Deferred income taxes		10			288			38,419
Loss (gain) on sale of property and equipment		(235	)		1,945			(141	)
Share-based compensation expense		431			501			574
Income on discontinued operations		(6,651	)		(6,767	)		(2,180	)
Change in non-cash working capital components		10,787			(122	)		88
Continuing operations		(16,198	)		(3,199	)		13,326
Discontinued operations		6,812			9,136			8,676
		(9,386	)		5,937			22,002
Investments:
Purchases of property and equipment		(16,654	)		(7,644	)		(8,269	)
Proceeds on sale of property and equipment		2,200			1,808			1,800
Proceeds on sale of selected Frontier assets		—			—			3,011
Acquisition of business assets		—			(1,737	)		—
Continuing operations		(14,454	)		(7,573	)		(3,458	)
Discontinued operations		(883	)		6,138			(982	)
		(15,337	)		(1,435	)		(4,440	)
Financing:
Change in revolving credit facility and bank overdraft		9,830			18,920			(1,559	)
Repayment of long-term debt		(4,490	)		(16,000	)		(14,480	)
Proceeds from long-term debt		22,299			—			3,500
Repayment of capital leases		(2,968	)		(3,610	)		(4,358	)
Financing costs		(980	)		(2,286	)		—
Issue of common shares upon exercise of stock options		151			83			74
		23,842			(2,893	)		(16,823	)
Effect of foreign exchange translation on cash		(90	)		(405	)		(739	)
Increase (decrease) in cash and cash equivalents		(971	)		1,204			—
Cash and cash equivalents, beginning of year		1,204			—			—
Cash and cash equivalents, end of year	$	233		$	1,204		$	—
Change in non-cash working capital components:
Accounts receivable	$	8,148		$	(9,989	)	$	(4,475	)
Inventory, deposits and prepaid expenses		1,668			601			1,118
Income and other taxes payable		(395	)		613			(165	)
Accounts payable and accrued liabilities		1,366			8,653			3,610
	$	10,787		$	(122	)	$	88
Supplemental cash flow information:
Interest paid	$	4,452		$	5,104		$	6,471
Income taxes paid		3,677			2,410			2,553
Supplemental disclosure of non-cash transactions:
Capital lease additions		5,745			1,317			—

1.	Significant accounting policies (continued):

~~See~~(k) ~~accompanying~~Income ~~notes to consolidated financial statements.~~ taxes:

40The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Significant judgment is required in determining whether deferred tax assets will be realized in full or in part. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the date of enactment. FASB ASC 740-10, Accounting for Uncertainty in Income Taxes, requires that uncertain tax positions are evaluated in a two-step process, whereby (i) the Company determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, the Company would recognize the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement with the related tax authority.

~~Table~~(l) ofShare-based ~~Contents~~compensation:

~~VITRAN~~Under ~~CORPORATION~~the ~~INC~~Company’s stock option plan, options to purchase common shares of the Company may be granted to key employees, officers and directors of the Company by the Board of Directors or by the Company’s Compensation Committee. There are 557,750 options outstanding under the plan. The term of each option is 10 years and the vesting period is five years. The exercise price for options is the trading price of the common shares of the Company on The Toronto Stock Exchange on the day of the grant. Note 7, “Common shares” provides supplemental disclosure for the Company’s stock options.

~~Notes~~(m) toAdvertising ~~Consolidated Financial Statements~~ costs:

~~(In thousands~~Advertising ofcosts ~~United~~are ~~States~~expensed ~~dollars,~~as ~~except~~incurred. ~~per~~Advertising ~~share~~costs ~~amounts~~amounted ~~where~~to $417 ~~noted~~in 2013 (2012—$264; 2011—$397).

~~Years~~(n) ~~ended~~Impairment ~~December 31,~~of ~~2012,~~long-lived ~~2011 and 2010~~ assets:

1An impairment is recognized when the carrying amount of a long-lived asset to be held and used exceeds the sum of undiscounted cash flows expected from its use and disposal, and is measured as the amount by which the carrying amount of an asset exceeds its fair value. ~~Significant~~A ~~accounting~~long-lived ~~policies:~~asset should be tested when events or circumstances indicate that its carrying amount may not be recoverable. During the third quarter of 2013, the Company recorded an impairment charge of $49.7 million on the carrying amount of its U.S. LTL business unit in discontinued operations. Refer to Note 2 “Discontinued operations”.

(ao) ~~Description~~Derivative ~~of the business~~instruments:

~~Vitran~~Derivative ~~Corporation~~instruments are recognized on the consolidated balance ~~Inc~~sheets at fair value based on quoted market prices and are recorded in either current or non-current assets or liabilities based on their maturity. ~~(“Vitran”~~Changes in the fair values of derivatives are recorded in income or other comprehensive income, based on whether the ~~“Company”)~~instrument is designated as a ~~North~~hedge ~~American~~transaction ~~provider~~and, if so, the type of ~~freight~~hedge ~~services~~transaction. Gains or losses on derivative instruments reported in other comprehensive income are reclassified to aincome ~~wide~~in ~~variety~~the ofperiod ~~companies~~the ~~and~~hedged ~~industries~~item affects income. If ~~Vitran~~the ~~offers~~underlying ~~less-than-truckload~~hedged ~~(“LTL”)~~transaction ~~services~~ceases ~~throughout~~to ~~Canada~~exist, ~~and~~any associated amounts reported in other comprehensive income are reclassified into income at that time. Any ineffectiveness is recognized in income in the ~~United States~~current year.

~~The~~39 Company has entered into an agreement to sell its Supply Chain Operation (“SCO”) segment for cash proceeds of $97.0 million with an expected closing date of March 1, 2013. Further details of the sale are set out in Note 17, “Subsequent events”. As a result of the sale arrangement, the operating results of this segment have been recorded as a discontinued operation. A portion of the proceeds from the sale will be used to fully reduce the Company’s debt under its revolving credit facility, except for outstanding letters of credit, and to support the development of the Company’s LTL business.

~~These consolidated~~VITRAN ~~financial~~CORPORATION ~~statements include the accounts of the Company and its wholly owned subsidiaries~~INC. ~~All material intercompany transactions and balances have been eliminated on consolidation.~~

~~These~~Notes consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). Canadian Securities regulations allow issuers that are required to ~~file~~Consolidated ~~reports~~Financial ~~with~~Statements the Securities and Exchange Commission in the United States to file financial statements under United States GAAP to meet their continuous disclosure obligations in Canada. All amounts in these consolidated financial statements are expressed in United States dollars, unless otherwise stated.

(c)In ~~New~~thousands ~~accounting~~of United ~~pronouncements:~~States dollars, except per share amounts where noted)

~~FASB~~Years ~~Accounting Standard~~ended ~~Update~~December ~~(“ASU”) No. 2011-08~~31, ~~Testing Goodwill for Impairment~~2013, ~~permits~~2012 ~~entities~~and to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. FASB ASU No. 2011~~-08~~ ~~was adopted by the Company on January 1, 2012.~~

~~FASB ASU No~~1. ~~2011-05,~~ ~~Presentation~~Significant ofaccounting ~~Comprehensive~~policies Income, requires entities to present net income and comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and comprehensive income. FASB has amended FASB ASU No. 2011-05 with FASB ASU No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards No. 2011-05, which defers the effective date of certain requirements outlined in FASB ASU No. 2011-05 until further deliberated and reinstates the requirements for presentation of reclassifications out of accumulated other comprehensive income that were in place before the issuance of FASB ASU No. 2011-05. FASB ASU No. 2011-05 was adopted by the Company on January 1, 2012. (continued):

~~FASB~~The ~~ASU~~Company ~~No. 2011-04,~~formally ~~Fair~~documents ~~Value~~all ~~Measurement~~significant relationships between hedging instruments and hedged items, ~~provides~~as ~~guidance~~well toas ~~improve~~its ~~the~~risk ~~comparability~~management ~~of fair~~objective ~~value~~and ~~measurements~~strategy ~~presented~~for inundertaking ~~financial~~various ~~statements~~hedge ~~prepared~~transactions. inThis ~~accordance~~process ~~with~~includes ~~GAAP~~linking all derivatives to specific assets and ~~International~~liabilities ~~Financial~~on ~~Reporting~~the ~~Standards~~balance sheet or to specific firm commitments or anticipated transactions. The ~~new~~Company ~~standard~~assesses ~~requires~~all ~~the~~hedging ~~Company~~relationships to ~~report~~determine whether the ~~level~~criteria infor hedge accounting are met. To qualify for hedge accounting, the ~~fair~~hedging ~~value~~relationship ~~hierarchy~~must be appropriately documented at inception of ~~assets~~the hedge and ~~liabilities~~ ~~not~~there ~~measured~~must be reasonable assurance, both at ~~fair~~the ~~value~~inception onand throughout the ~~balance~~term ~~sheet,~~of ~~but~~the ~~for~~hedge, ~~which~~that the hedging relationship will be effective. Effectiveness requires a high degree of correlation of changes in fair ~~value~~values isor ~~disclosed,~~cash ~~and~~flows between tothe ~~expand~~hedged ~~existing~~item ~~disclosures.~~and ~~FASB~~the ~~ASU~~hedging Noinstrument. ~~2011-04~~ ~~was~~Effectiveness ~~adopted~~is byassessed on an ongoing basis through the term of the hedge in order to determine if hedge accounting remains appropriate. The Company ondid ~~January~~not have any derivative instruments as at December 131, ~~2012~~2013.

41(p) Claims and insurance accruals:

~~Table~~Claims and insurance accruals reflect the estimated total cost of ~~Contents~~claims, including amounts for claims incurred but not reported, for cargo loss and damage, bodily injury and property damage, workers’ compensation, long-term disability and group health. The Company has self-insurance retention amounts per incident for auto liability, casualty and cargo claims. In establishing these accruals, management evaluates and monitors each claim individually, and uses factors, such as historical experience, known trends and third party estimates to determine the appropriate reserves for potential liability.

~~VITRAN~~(q) ~~CORPORATION~~Accounts ~~INC.~~payable and accrued liabilities:

Notes to Consolidated Financial Statements


	2013		2012
Accounts payable	$	15,439	$	18,398
Accrued wages and benefits		1,302		1,452
Accrued claims, self-insurance and workers’ compensation		844		698
Other		5,233		3,598

	$	22,818	$	24,146

(Inr) ~~thousands~~Deferred ~~of United States dollars, except per~~ share ~~amounts where noted)~~ units:

~~Years~~The ~~ended~~Company ~~December~~maintains 31a deferred share unit (“DSU”) plan for all directors. Under this plan, ~~2012~~all directors receive units at the end of each quarter based on the market price of common shares equivalent to the director’s entitlement. The entitlement amount varies based on the director’s position on the Board. The maximum entitlement amount varies between CAD$35,000.00 ~~2011~~and CAD$60,000.00 per annum. The Company records compensation expense and ~~2010~~the corresponding liability each period based on the market price of common shares.

1In addition to the directors’ DSU plan, the Company has adopted a DSU plan for senior executives. ~~Significant~~Under ~~accounting~~this ~~policies~~plan, ~~(continued):~~eligible senior executives receive units at the end of each quarter based on the market price of common shares equivalent to the senior executive’s entitlement. The entitlement amount varies based on the senior executive’s position in the Company and the years of eligible service. The maximum entitlement amount varies between $2,500.00 and $20,000.00 per annum. The Company records compensation expense and the corresponding liability each period based on the market price of common shares.

~~FASB~~40 ASU No. 2013-02 “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” requires expanded disclosures for amounts reclassified out of accumulated other comprehensive income by component. The guidance requires the presentation of amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, a cross-reference to other disclosures that provide additional detail about those amounts is required. The guidance is to be applied prospectively for reporting periods beginning after December 15, 2012. The new guidance affects disclosures only and will have no impact on the Company’s results of operations or financial position.

~~A majority~~VITRAN ofCORPORATION ~~the Company’s shareholders, customers and industry analysts are located in the United States~~INC. ~~Accordingly, the Company has adopted the United States dollar as its reporting currency.~~

~~The~~Notes ~~United~~to ~~States~~Consolidated ~~dollar~~Financial isStatements ~~the functional currency of the Company’s operations in the United States. The Canadian dollar is the functional currency of the Company’s Canadian operations.~~

~~Each~~(In ~~operation~~thousands ~~translates foreign currency-denominated~~of ~~transactions~~United ~~into~~States ~~its~~dollars, ~~functional~~except ~~currency~~per ~~using~~share ~~the~~amounts ~~rate~~where ofnoted) ~~exchange in effect at the date of the transaction.~~

~~Monetary~~Years ~~assets and~~ended ~~liabilities~~December ~~denominated~~31, in2013, a2012 ~~foreign~~and ~~currency~~2011 ~~are translated into the functional currency of the operation using the year-end rate of exchange giving rise to a gain or loss that is recognized in income during the current year.~~

The revaluation of United States dollar denominated debt held by the parent entity with a Canadian functional currency, that hedges the net investment in the Company’s United States dollar denominated self-sustaining subsidiaries, is recorded to other comprehensive income1. InSignificant aaccounting ~~hedge~~policies of a net investment in self-sustaining foreign subsidiaries, the portion of the gain or loss on the hedging item that is determined to be an effective hedge is recognized in other comprehensive income and the ineffective portion is recognized in earnings. For consolidation purposes, the United States operations are translated into Canadian dollars using the current period-end rate with the resulting translation adjustment recorded in other comprehensive income. For reporting purposes, the consolidated operations are translated into United States dollars using the current rate method. Under this method, all assets and liabilities are translated at the period-end rate of exchange and all revenue and expense items are translated at the average rate of exchange for the period. The resulting translation adjustment is recorded as a separate component of shareholders’ equity. (continued):

In(s) ~~respect~~Use of other transactions denominated in currencies other than the Canadian dollar, the monetary assets and liabilities of the Company are translated at the year-end rates. Revenue and expenses are translated at rates of exchange prevailing on the transaction dates. All of the exchange gains or losses resulting from these other transactions are recognized in income. estimates:

~~(e)~~The ~~Revenue~~preparation ~~recognition:~~of financial statements in accordance with United States GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the year. Significant estimates are used in determining, but not limited to, the allowance for doubtful accounts, deferred tax assets, claims and insurance accruals, share-based compensation and fair value measurements. Actual results could differ from those estimates.

~~The Company recognizes revenue upon the delivery of the related freight and direct shipment costs as incurred~~2. ~~Revenue~~Discontinued ~~for transportation services not completed at the end of a reporting period is recognized based on relative transit time in each period with expenses recognized as incurred.~~ operations:

~~Within~~On March 4, 2013, the ~~LTL~~Company ~~business~~completed ~~unit,~~the ~~revenue~~sale ~~adjustments~~of ~~are~~its ~~estimated~~Supply atChain ~~the~~Operation ~~end~~business ofunit ~~each~~(“SCO”), ~~quarterly~~which was ~~reporting~~previously ~~period~~a reportable segment. ~~These adjustments~~The ~~result~~proceeds from ~~several~~the ~~factors~~transaction were $98.8 million, including ~~weight~~an ~~and~~adjustment ~~freight~~on ~~classification~~account ~~verifications,~~of ~~shipper~~working ~~bill~~capital. As of ~~lading~~December 31, ~~errors~~2013, ~~pricing~~the ~~discounts~~Company ~~and~~has ~~other~~received ~~miscellaneous~~net ~~revenue~~cash ~~adjustments~~proceeds of $94.1 ~~The~~million, ~~revenue~~net ~~adjustments~~of ~~are~~cash divested ~~recorded~~of as$0.4 amillion, ~~reduction~~direct ~~in revenue~~selling ~~from~~costs ~~operations~~of ~~and~~$2.9 ~~accrued~~million ~~for~~and asincome ~~part~~taxes of $1.4 million. The Company used the ~~allowance~~proceeds ~~for~~to ~~doubtful~~reduce ~~accounts~~its outstanding debt under its revolving credit facility. ~~Allowance~~The ~~for~~operating ~~doubtful~~results ~~accounts~~and isgain on sale of SCO have been recorded as a ~~contra-account~~discontinued ~~to accounts receivable~~operation.

42On September 23, 2013, the Company entered into an agreement to sell the shares of its U.S. Less-Than-Truckload business unit (“U.S. LTL”) to Data Processing LLC, a company owned by Matthew Moroun, for cash consideration of $2.0 million and the assumption of $32.8 million of real estate and capital lease debt by the purchaser. In addition, the purchaser agreed to fund cash deficits incurred by U.S. LTL from September 23, 2013 through to the date of closing of the transaction. The transaction closed on October 7, 2013 and the purchaser funded $1.4 million of cash deficits incurred by U.S. LTL between September 23, 2013 and October 7, 2013. Prior to closing the sale, the Company agreed to capitalize U.S. LTL with cash of $5.0 million. As of December 31, 2013, the Company paid $5.2 million related to the sale of U.S. LTL, which includes cash divested of $0.4 million and direct selling costs of $3.2 million. The operating results and loss on sale of U.S. LTL have been recorded as a discontinued operation.

~~Table~~At the end of ~~Contents~~the third quarter of 2013, as required by U.S. GAAP, the Company compared the fair value less costs to sell of the net assets of U.S. LTL to its carrying amount. As a result of the comparison, the Company recorded a $49.7 million non-cash write-down in discontinued operations to write-down the U.S. LTL net assets to zero. During the fourth quarter of 2013, the Company recorded the sale of U.S. LTL. The total net loss of $45.9 million is recorded in discontinued operations.

~~VITRAN~~41 ~~CORPORATION INC.~~

~~(In~~VITRAN ~~thousands~~CORPORATION ofINC. ~~United States dollars, except per share amounts where noted)~~

~~Years~~Notes ~~ended~~to ~~December~~Consolidated ~~31,~~Financial ~~2012,~~Statements ~~2011 and 2010~~

1.(In ~~Significant~~thousands ~~accounting~~of United ~~policies~~States ~~(continued~~dollars, except per share amounts where noted):

~~Historical~~Years ~~experience,~~ended ~~trends and current information are used to update and evaluate the estimate. As at~~ December 31, ~~2012~~2013, ~~revenue~~2012 ~~adjustments~~and as2011 ~~a percentage of revenue were not material.~~

~~(f)~~2. ~~Accounts~~Discontinued ~~receivable~~operations (continued):

~~Accounts~~The ~~receivable~~following ~~are~~table ~~presented,~~summarizes ~~net~~the ofoperations ~~allowance~~ for ~~doubtful~~all ~~accounts~~periods ofpresented ~~$2.5~~to ~~million~~classify atU.S. ~~December 31,~~LTL and ~~2012~~SCO ~~(2011~~operations -as ~~$2.7~~discontinued ~~million).~~operations:

(g) Cash and cash equivalents:


	2013			2012			2011
Revenue	$	350,241		$	628,714		$	613,283

Loss from discontinued operations		(58,434	)		(34,255	)		(10,974	)
Income tax expense		(433	)		(1,501	)		(1,721	)

Loss from discontinued operations, net of income tax		(58,867	)		(35,756	)		(12,695	)


Gain on sale of SCO		87,892			—			—
Income tax expense (note 6)		(19,019	)		—			—
Utilization of net operating loss carry-forwards (note 6)		17,613			—			—

		86,486			—			—
Reclassification of foreign currency translation from accumulated other comprehensive income		(1,865	)		—			—

Net gain on sale of SCO		84,621			—			—


Loss on sale of U.S. LTL		(54,521	)		—			—
Income tax recovery (note 6)		21,743			—			—
Valuation allowance (note 6)		(21,743	)		—			—

		(54,521	)		—			—
Reclassification of foreign currency translation from accumulated other comprehensive income		8,576			—			—

Net loss on sale of U.S. LTL		(45,945	)		—			—


Net loss from discontinued operations	$	(20,191	)	$	(35,756	)	$	(12,695	)

~~Cash~~The ~~and~~following ~~cash~~table ~~equivalents include~~summarizes ~~cash~~the onassets ~~account~~ and ~~short-term~~liabilities ~~investments~~from ~~with~~discontinued ~~original~~operations: ~~maturities of three months or less and are stated at cost, which approximates fair value.~~

(h) Inventory:


	2013		2012
Accounts receivable	$	—	$	57,587
Income taxes recoverable		—		157
Inventory, deposits and prepaid expenses		—		7,658
Property and equipment		—		79,910
Intangible assets		—		3,457
Goodwill		—		8,872
Deferred income taxes		—		64,048
Deferred income taxes valuation allowance		—		(63,917	)

Total assets from discontinued operations	$	—	$	157,772

Accounts payable and accrued liabilities	$	—	$	57,604
Real estate debt and capital leases		—		45,034

Total liabilities from discontinued operations	$	—	$	102,638

~~Inventory~~42 ~~consists of tires and spare parts and is valued at the lower of average cost and replacement cost.~~

~~Property~~VITRAN ~~and~~CORPORATION ~~equipment are recorded at cost~~INC. ~~Depreciation of property and equipment is provided on a straight-line basis from the date assets are put in service over their estimated useful lives as follows:~~

Buildings		30 - 31.5 years
Leasehold interests and improvements		Over term of lease
Vehicles:
Trailers and containers		12 years
Trucks		8 years
Machinery and equipment		5 - 10 years

Notes to Consolidated Financial Statements

~~Tires~~(In ~~purchased~~thousands ~~as part~~ of United aStates ~~vehicle~~dollars, ~~are~~except ~~capitalized~~per asshare aamounts ~~cost~~where tonoted) ~~the vehicle. Replacement tires are expensed when placed in service.~~

~~(j)~~Years ~~Assets~~ended ~~held~~December ~~for~~31, ~~sale:~~2013, 2012 and 2011

The Company has certain assets that are classified as assets held for sale. These assets are carried on the balance sheet at the lower of the carrying amount or estimated fair value less cost to sell. Once an asset is classified as held for sale, there is no further depreciation taken on the asset. At December 31, 2012, the net book value of assets held for sale was approximately $2.1 million (2011 - $3.5 ~~million).~~Property and equipment:

This amount is included in property and equipment on the consolidated balance sheets. The Company recorded charges of $1.5 million for the year ended December 31, 2011 to reduce properties held for sale to estimated fair value less cost to sell. These charges are included in other loss (income) in the accompanying statements of consolidated income (loss).


	2013		2012
Land	$	14,549	$	15,449
Buildings		35,606		37,570
Leasehold interests and improvements		240		284
Vehicles		26,693		27,135
Machinery and equipment		3,581		7,838

		80,669		88,276
Less accumulated depreciation		28,148		34,911

	$	52,521	$	53,365

43Depreciation expense was $3.2 million in 2013 (2012—$3.2 million; 2011—$ 3.2 million).

~~Table~~4. ~~of Contents~~Goodwill:

VITRAN CORPORATION INC.


	2013			2012
Balance at January 1	$	5,579		$	5,458
Foreign exchange		(360	)		121

Balance at December 31	$	5,219		$	5,579

~~Notes~~5. toLong-term ~~Consolidated Financial Statements~~ debt:

(In thousands of United States dollars, except per share amounts where noted)


	2013		2012
Revolving credit facility (a)	$	—	$	8,500
Canadian real estate facilities (b)		46,144		50,495
Capital leases (c)		5,953		1,307

		52,097		60,302
Less current portion		1,846		1,333

	$	50,251	$	58,969

~~Years~~On ~~ended~~March 4, ~~December~~2013, 31in conjunction with the sale of SCO, ~~2012~~the Company amended its senior asset based revolving credit facility. The amended credit facility provided up to $50.0 million of borrowing capacity, ~~2011~~compared ~~and~~to ~~2010~~$85.0 million previously. As a result of the amendment, the Company wrote off $0.4 million of previously capitalized financing fees. This non-cash expense was recorded in interest expense on the consolidated statements of income (loss).

1.43 ~~Significant accounting policies (continued):~~

~~FASB Accounting~~VITRAN ~~Standards~~CORPORATION ~~Codification (“ASC”) 350 requires that goodwill and certain intangible assets be assessed for impairment on an annual basis and, more frequently, if indicators of impairment exist~~INC. In the event goodwill is determined to be impaired, a charge to earnings would be required. FASB ASU No 2011-08, Testing Goodwill for Impairment, permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. As at September 30, 2012, the Company completed its annual goodwill impairment test and concluded that there was no impairment. At December 31, 2012, the Company has not identified any indicators that would require re-testing for impairment.

~~Intangible~~Notes ~~assets consist of not-~~to~~-compete~~ ~~covenants~~Consolidated ~~and~~Financial ~~customer~~Statements relationships and are amortized on a straight-line basis over their expected lives ranging from three to eight years. During 2012 and 2011, the Company has not identified any indicators that would require testing for an impairment.

(l)In ~~Income~~thousands ~~taxes:~~of United States dollars, except per share amounts where noted)

~~The~~Years ~~Company~~ended ~~uses~~December ~~the asset and liability method of accounting for income taxes. Under the asset and liability method~~31, deferred tax assets and liabilities are recognized for the deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Significant judgment is required in determining whether deferred tax assets will be realized in full or in part. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the date of enactment. FASB ASC 740-102013, ~~Accounting~~2012 for Uncertainty in Income Taxes, requires that uncertain tax positions are evaluated in a two-step process, whereby (i) the Company determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and ~~(ii) for~~2011 those tax positions that meet the more-likely-than-not recognition threshold, the Company would recognize the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement with the related tax authority.

~~(m)~~5. ~~Share~~Long-~~based~~term ~~compensation~~debt (continued):

~~Under the~~On ~~Company’s~~October 7, ~~stock option plan~~2013, ~~options~~in toconjunction ~~purchase~~with ~~common~~the ~~shares~~sale of U.S. LTL, the Company ~~may~~further amended beits ~~granted~~senior toasset ~~key~~based ~~employees,~~revolving ~~officers~~credit ~~and~~facility. ~~directors~~The amended credit facility provided $26.3 million of availability, which was the ~~Company~~amount byof the ~~Board~~letters of ~~Directors~~credit oroutstanding byfor the ~~Company’s~~U.S. ~~Compensation~~LTL ~~Committee.~~business ~~There~~unit ~~are~~as of October 7, 2013. As ~~742~~part of the sale transaction,~~800~~ ~~options~~the ~~outstanding~~obligations under the ~~plan.~~letters ~~The~~of ~~term~~credit ofremained ~~each~~guaranteed ~~option~~by isthe ~~10 years~~Company. ~~and~~However, the ~~vesting~~purchaser ~~period~~agreed isto ~~five~~reduce ~~years.~~such ~~The~~letters ~~exercise~~of ~~price~~credit ~~for~~to ~~options~~zero iswithin 90 days from the ~~trading~~date ~~price~~of closing of the ~~common~~sale. ~~shares~~As of December 31, 2013, $0.6 million in letters of credit were outstanding. As a result of the amendment, the Company onwrote ~~The~~off ~~Toronto~~$0.4 ~~Stock~~million ~~Exchange~~of previously capitalized financing fees. This non-cash expense was recorded within interest expense on the ~~day~~consolidated statements of ~~the~~income ~~grant~~(loss). ~~Note~~On 9January 21, ~~“Common~~2014, ~~shares”~~the ~~provides~~credit ~~supplemental~~facility ~~disclosure~~was ~~for~~terminated. ~~the~~Refer ~~Company’s~~to ~~stock~~Note ~~options~~13 “Subsequent events.”

44On November 1, 2012, the Company entered into a new real estate term facility for CAD $5.5 million. The facility is secured by the Company’s transportation facility in Winnipeg, Manitoba and matures on November 30, 2018.

~~Table~~On November 30, 2011, the Company entered into a new three-year bank syndicated asset based revolving credit agreement which provided up to $85.0 million of ~~Contents~~borrowing capacity. In addition, on November 30, 2011, the Company entered into a new seven-year CAD $45.7 million real estate term credit facility, secured by specific real estate in Canada. The proceeds from the new credit facilities were used to extinguish the previous senior term and revolving credit facilities which were to mature in July 2012. Deferred financing costs of $1.0 million related to the previous credit agreement were written off in 2011. This non-cash expense was recorded within interest expense on the consolidated statements of income (loss).

~~VITRAN~~(a) ~~CORPORATION~~The ~~INC~~Company’s asset based revolving credit facility was secured by accounts receivable, certain equipment and general security agreements covering the assets of the Company and all of its subsidiaries. The provisions of the revolving credit facility imposed certain financial maintenance tests if availability falls below a certain threshold. At December 31, 2013, the Company was not required to measure these covenants. Refer to Note 13 “Subsequent events”.

~~Notes~~(b) The Company’s Canadian real estate term credit facility is secured by five transportation terminals in Canada and matures on November 30, 2018. The Company has CAD $49.1 million outstanding at December 31, 2013 (2012 – CAD $50.2 million), bearing interest at 4.30% to ~~Consolidated~~4.75% ~~Financial~~(2012 ~~Statements~~– 4.30% to 4.75%).

(Inc) ~~thousands~~During 2013, the Company financed certain equipment by entering into additional capital leases of ~~United~~CAD ~~States~~$5.3 ~~dollars,~~million. ~~except~~The ~~per share~~Company ~~amounts~~had ~~where~~CAD ~~noted~~$6.3 million (2012 – CAD $1.3 million) of capital leases remaining at December 31, 2013.

~~Years~~At ~~ended~~ December 31, ~~2012~~2013, ~~2011~~the required future principal repayments on all long-term debt and capital ~~2010~~leases are as follows:

1. Significant accounting policies (continued):


Year ending December 31:
2014	$	1,846
2015		1,938
2016		2,031
2017		2,138
2018		2,384
Thereafter		41,760

		$52,097

~~(n)~~44 ~~Advertising costs:~~

~~(o)~~VITRAN ~~Impairment~~CORPORATION ofINC. ~~long-lived assets:~~

~~An impairment~~Notes ~~is recognized when the carrying amount of a long-lived asset~~ to beConsolidated ~~held~~Financial ~~and~~Statements used exceeds the sum of undiscounted cash flows expected from its use and disposal, and is measured as the amount by which the carrying amount of an asset exceeds its fair value. A long-lived asset should be tested when events or circumstances indicate that its carrying amount may not be recoverable. During 2012 and 2011, the Company has not identified any indicators that would require testing for an impairment.

(p)In ~~Derivative~~thousands ~~instruments:~~of United States dollars, except per share amounts where noted)

~~Derivative~~Years ~~instruments~~ended ~~are~~December ~~recognized~~31, on the consolidated balance sheets at fair value based on quoted market prices and are recorded in either current or non-current assets or liabilities based on their maturity. Changes in the fair values of derivatives are recorded in income or other comprehensive income2013, ~~based~~2012 ~~on whether the instrument is designated as a hedge transaction~~ and, if2011 so, the type of hedge transaction. Gains or losses on derivative instruments reported in other comprehensive income are reclassified to income in the period the hedged item affects income. If the underlying hedged transaction ceases to exist, any associated amounts reported in other comprehensive income are reclassified into income at that time. Any ineffectiveness is recognized in income in the current year.

The Company formally documents all significant relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions6. ~~This~~Income process includes linking all derivatives to specific assets and liabilities on the balance sheet or to specific firm commitments or anticipated transactions. The Company assesses all hedging relationships to determine whether the criteria for hedge accounting are met. To qualify for hedge accounting, the hedging relationship must be appropriately documented at inception of the hedge and there must be reasonable assurance, both at the inception and throughout the term of the hedge, that the hedging relationship will be effective. Effectiveness requires a high degree of correlation of changes in fair values or cash flows between the hedged item and the hedging instrument. Effectiveness is assessed on an ongoing basis through the term of the hedge in order to determine if hedge accounting remains appropriate. taxes:

Income tax expense (qrecovery) ~~Claims~~differs from the amount that would be obtained by applying statutory federal, and ~~insurance~~provincial income ~~accruals~~tax rates to the respective year’s income (loss) from continuing operations before income taxes as follows:

Claims and insurance accruals reflect the estimated total cost of claims, including amounts for claims incurred but not reported, for cargo loss and damage, bodily injury and property damage, workers’ compensation, long-term disability and group health. In Canada and the United States, the Company has self-insurance retention amounts per incident for auto liability, casualty and cargo claims. In the United States, the Company has self-insurance retention amounts per incident for workers’ compensation and employee medical. In establishing these accruals, management evaluates and monitors each claim individually, and uses factors, such as historical experience, known trends and third party estimates to determine the appropriate reserves for potential liability.


	2013			2012			2011
Effective statutory federal, state and provincial income tax rate		26.50	%		26.50	%		28.25	%

Effective tax expense (recovery) on income (loss) from continuing operations before income taxes	$	(1,235	)	$	271		$	(42	)
Increase (decrease) results from:
Non-deductible share-based compensation expense		69			114			141
Income taxed at different rates in foreign jurisdictions		33			38			(1,395	)
Tax benefit on capital loss		(461	)		—			—
Income from discontinued operations		84			762			2,345
Other		(123	)		55			119

Income tax expense (recovery) from continuing operations	$	(1,633	)	$	1,240		$	1,168


Income tax expense (recovery):
	2013			2012			2011
Current income tax expense (recovery):
Canada:
Federal	$	(404	)	$	699		$	454
Provincial		(304	)		530			319
Other		(2	)		1			107

	$	(710	)	$	1,230		$	880
Deferred income tax expense (recovery):
Canada:
Federal		(526	)		6			169
Provincial		(397	)		4			119

	$	(923	)	$	10		$	288

	$	(1,633	)	$	1,240		$	1,168

VITRAN CORPORATION INC.

Notes to Consolidated Financial Statements

(In thousands of United States dollars, except per share amounts where noted)

Years ended December 31, ~~2012~~2013, ~~2011~~2012 and ~~2010~~2011

16. ~~Significant~~Income ~~accounting~~taxes ~~policies~~ (continued):

~~(r)~~A ~~Accounts~~summary ~~payable~~of ~~and~~the ~~accrued~~principal components of deferred income tax assets and liabilities is as follows:

	2012			2011
	2013			2012
Accounts payable	$	35,697		$	36,083
Current deferred income tax assets:
Accrued wages and benefits		7,350			8,018
Financing costs	$	105		$	92
Accrued claims, self-insurance and workers’ compensation		14,261			10,592
Non-current deferred income tax assets:
Other		10,436			11,685
Loss carry-forwards	$	21,130		$	—
	$	67,744		$	66,378
Other timing differences		390			386
Valuation allowance		(20,480	)		—
		1,040			386
Non-current deferred income tax liabilities:
Property and equipment		(1,305	)		(1,481	)
Financing costs		(5	)		(80	)
		(1,310	)		(1,561	)
	$	(270	)	$	(1,175	)

In accordance with Financial Accounting Standard Board (s“FASB”) ~~Deferred~~Accounting ~~share~~Standard ~~units:~~Codification (“FASB ASC”) 740-10, the Company had recorded a valuation allowance for all U.S. deferred tax assets. The sale of SCO resulted in a taxable gain in the United States, which the Company was able to offset with the utilization of its available net operating loss carry forwards from previous years of $17.6 million. Subsequent to the sale of SCO the Company sold its U.S. LTL business and therefore, recorded the impact on its U.S. deferred tax assets and valuation allowance in discontinued operations.

~~The~~In Canada, the Company ~~maintains~~incurred a ~~deferred~~capital ~~share~~loss ~~unit~~of ~~(“DSU”)~~approximately ~~plan~~CAD ~~for~~$85.6 ~~all~~million ~~directors~~from the sale of U.S. ~~Under~~LTL. ~~this~~A valuation ~~plan,~~allowance ~~all~~of ~~directors~~$21.7 ~~receive~~million ~~units~~was atrecorded as it is uncertain whether the ~~end~~ ofcapital ~~each~~losses ~~quarter~~will ~~based~~be onutilized ~~the~~to ~~market~~offset ~~price~~future capital gains. The Company utilized CAD $3.7 million of ~~common~~the ~~shares~~aforementioned ~~equivalent~~capital losses as it is allowed to ~~Cdn.~~carry back ~~$2,500~~current tax losses three years to offset previous year capital gains.~~00.~~ The Company ~~records~~recognized ~~compensation~~a tax benefit of $0.5 million in income tax expense ~~and~~from ~~the~~continuing ~~corresponding~~operations ~~liability~~as ~~each~~a ~~period~~result ~~initially~~of ~~for~~the ~~Cdn~~allowable carry-back. $2As at December 31,~~500~~ 2013, the valuation allowance recorded was $20.005 ~~and~~million. ~~subsequently~~The ~~based~~capital onlosses ~~changes~~would inexpire upon the ~~market~~ ~~price~~completion of ~~common~~the ~~shares~~Arrangement with TransForce (Note 1).

In ~~addition to the directors’ DSU plan~~Canada, the Company ~~adopted~~has aCAD ~~DSU plan for senior executives~~$2.6 ~~Under~~million ~~this plan, eligible senior executives receive units at the end~~ of ~~each~~net ~~quarter~~operating ~~based~~loss oncarry-forwards ~~the~~available ~~market price of common shares equivalent~~ to ~~the~~reduce ~~senior~~future ~~executive~~years’s ~~entitlement~~taxable income. The ~~entitlement~~net operating ~~amount~~losses ~~varies~~were ~~based~~recognized onas ~~the~~a ~~senior executive’s~~deferred ~~position~~income intax ~~the~~asset ~~Company~~ and ~~the~~expire ~~years~~between of2032 ~~eligible~~and ~~service.~~2033 ~~The~~if ~~maximum~~not ~~entitlement amount varies between $2,500~~utilized.00 ~~and~~Management ~~$20,000.00~~believes ~~per~~the ~~annum. The~~ Company ~~records~~will ~~compensation~~generate ~~expense~~sufficient ~~and~~taxable ~~the~~income ~~corresponding~~to ~~liability~~use ~~each~~these ~~period~~losses ~~based on~~in the ~~market price of common shares~~future.

~~(t)~~46 ~~Use of estimates:~~

46VITRAN CORPORATION INC.

~~Table~~Notes ofto ~~Contents~~Consolidated Financial Statements

~~VITRAN~~(In ~~CORPORATION~~thousands ~~INC.~~of United States dollars, except per share amounts where noted)

~~Notes~~Years toended ~~Consolidated~~December ~~Financial~~31, ~~Statements~~2013, 2012 and 2011

~~(In~~7. ~~thousands~~Common ~~of United States dollars, except per share amounts where noted)~~ shares:

~~Years~~The ~~ended~~Company ~~December~~provides 31a stock option plan to key employees, ~~2012~~officers and directors to encourage executives to acquire a meaningful equity ownership interest in the Company over a period of time and, ~~2011~~as a result, reinforce executives’ attention on the long-term interest of the Company and ~~2010~~its shareholders. Under the plan, options to purchase common shares of the Company may be granted to key employees, officers and directors of the Company by the Board of Directors or by the Company’s Compensation Committee. There are 557,750 options outstanding under the plan. The term of each option is 10 years and the vesting period is five years. The exercise price for options is the trading price of the common shares of the Company on The Toronto Stock Exchange on the day of the grant. The weighted average estimated fair value at the date of the grant for the options granted during 2013 was $3.82 (2012—$3.54; 2011—$2.96) per share.

2.The ~~Discontinued~~fair ~~operations~~value of each option granted was estimated on the date of grant using the Black-Scholes-Merton fair value option pricing model with the following assumptions:

On February 12, 2013, the Company reached an agreement to sell its SCO division, which was previously a reportable segment. The sale of the SCO segment is expected to close by March 1, 2013. Refer to Note 17, “Subsequent events”.

2013

2012

2011

Risk-free interest rate

1.54%

1.52% – 1.74%

1.67% – 2.91%

Volatility factor of the future expected market price of the Company’s common shares

61.32%

56.40% – 57.20%

49.18% – 56.29%

Expected life of the options

6 years

~~During~~Details ~~2010, the Company completed the sale~~ of ~~selected~~stock ~~assets~~options ofare ~~Frontier~~as ~~Transport~~follows: Corporation (“Frontier”), Vitran’s truckload operation, which was previously a reportable segment. The proceeds from the transaction were $3.0 million plus a $0.1 million working capital adjustment.

The following table summarizes the operations for all periods presented to classify SCO and Frontier’s operations as discontinued operations:


	2013					2012
	Number			Weighted average exercise price		Number			Weighted average exercise price
Outstanding, beginning of year		742,800		$	11.80		841,900		$	11.70
Granted		41,100			6.51		67,000			6.52
Forfeited		(160,150	)		12.67		(98,100	)		14.01
Exercised		(66,000	)		5.25		(68,000	)		2.20

Outstanding, end of year		557,750		$	11.93		742,800		$	11.80

Exercisable, end of year		419,080		$	13.70		468,960		$	14.44

	2012			2011			2010
Revenue	$	119,743		$	119,356		$	123,736
Goodwill charge	$	—		$	—		$	(4,765	)
Gain on sale of assets		—			—			2,203
Income from discontinued operations		10,035			10,268			6,927
Income tax expense		(3,384	)		(3,501	)		(2,185	)
Net income from discontinued operations	$	6,651		$	6,767		$	2,180

	2012			2011
Accounts receivable	$	10,284		$	10,040
Income and other taxes recoverable		120			—
Deposits and prepaid expenses		1,032			1,053
Property and equipment		1,635			1,698
Intangible assets		750			1,032
Goodwill		8,872			8,856
Deferred income taxes		159			190
Deferred income taxes valuation allowance		(28	)		—
Total assets from discontinued operations	$	22,824		$	22,869
Accounts payable and accrued liabilities	$	14,068		$	14,501
Income and other taxes payable		—			354
Total liabilities from discontinued operations	$	14,068		$	14,855

VITRAN CORPORATION INC.

47Notes to Consolidated Financial Statements

~~Table~~(In thousands of United ~~Contents~~States dollars, except per share amounts where noted)

~~VITRAN~~Years ~~CORPORATION~~ended ~~INC.~~December 31, 2013, 2012 and 2011

~~Notes~~7. toCommon ~~Consolidated~~shares ~~Financial Statements~~ (continued):

~~(In~~At ~~thousands~~December 31, of2013, ~~United~~the ~~States~~range ~~dollars~~of exercise prices, ~~except~~the ~~per~~weighted average exercise price ~~share~~and ~~amounts~~the ~~where~~weighted ~~noted)~~average remaining contractual life are as follows:

Years ended December 31, 2012, 2011 and 2010


	Options outstanding						Options exercisable
Range of exercise prices	Number outstanding		Weighted average remaining contractual life (years)		Weighted average exercise price		Number exercisable		Weighted average remaining contractual life (years)		Weighted average exercise price
$5.25 - $8.45		168,650		8.12	$	5.87		47,840		7.98	$	5.61
$9.80 - $18.99		389,100		2.90	$	14.56		371,240		2.73	$	14.75

$5.25 - $18.99		557,750		4.48	$	11.93		419,080		3.32	$	13.70

3Compensation expense related to stock options was $270 for the year ended December 31, 2013 (2012—$431; 2011—$501). ~~Acquisition:~~

~~On February 19, 2011, the Company acquired selected assets of Milan Express Inc~~8.’s ~~(“Milan”)~~Computation ~~LTL business, a private carrier headquartered in Milan, Tennessee for $7.6 million. Milan added new coverage to Vitran’s network in the states~~ of ~~Alabama,~~loss ~~Georgia,~~per Mississippi, North Carolina and South Carolina. The total purchase price was allocated to the fair value of tractor, trailer and other capital assets acquired. A majority of the tractors and trailers were financed by Milan with third parties. As part of the purchase, Vitran identified a third party finance company who agreed to consolidate Milan’s financing and provide the Company a $6.0 million operating lease. The ownership of the assets resides with the finance company and these assets are being leased to Vitran in the form of an operating lease. The lease meets the criteria of an operating lease pursuant to United States GAAP. The remaining $1.7 million of the purchase price was financed by the Company’s revolving credit facility of which $0.1 million of cash consideration was due in six months from the closing date contingent on Vitran continuing to operate in three out of the five aforementioned states that were added to the Company’s existing network. During the third quarter of 2011, the condition for payment was met and therefore the Company paid the additional consideration due. The results of operations of Milan are included as part of the LTL segment in the consolidated results of the Company commencing on February 19, 2011. share:

4. Property and equipment:


	2013			2012			2011
Numerator:
Net loss from continuing operations	$	(3,026	)	$	(219	)	$	(1,318	)
Net loss from discontinued operations		(20,191	)		(35,756	)		(12,695	)
Net loss		(23,217	)		(35,975	)		(14,013	)

Denominator:
Basic and dilutive weighted average shares outstanding		16,426,455			16,391,252			16,326,760

Basic and diluted loss per share from continuing operations		(0.18	)		(0.01	)		(0.08	)
Basic and diluted loss per share from discontinued operations		(1.23	)		(2.18	)		(0.78	)
Basic and diluted loss per share		(1.41	)		(2.19	)		(0.86	)

	2012		2011
Land	$	37,782	$	37,352
Buildings		76,347		68,543
Leasehold interests and improvements		1,651		1,106
Vehicles		100,337		98,452
Machinery and equipment		28,419		24,843
		244,536		230,296
Less accumulated depreciation		112,896		106,775
	$	131,640	$	123,521

Diluted loss per share excludes the effect of 557,750 anti-dilutive options for the year ended December 31, 2013 (2012 – 742,800; 2011 – 773,900). Due to the net loss for the years ended December 31, 2012 and 2011, dilutive shares of 3,494 and 46,100, respectively, have no effect on the loss per share.

~~Depreciation~~48 ~~expense was $13.3 million in 2012 (2011 - $12.8 million).~~

	2012		2011
Customer relationships	$	13,840	$	13,840
Covenants not-to-compete		2,985		2,985
		16,825		16,825
Less accumulated amortization		14,118		12,052
	$	2,707	$	4,773

VITRAN CORPORATION INC.

48Notes to Consolidated Financial Statements

~~Table~~(In thousands of United ~~Contents~~States dollars, except per share amounts where noted)

~~VITRAN~~Years ~~CORPORATION~~ended ~~INC.~~December 31, 2013, 2012 and 2011

~~Notes~~9. ~~to Consolidated~~ Financial ~~Statements~~ instruments:

~~(In~~The ~~thousands~~fair values of ~~United~~cash ~~States~~and ~~dollars~~cash equivalents, ~~except~~accounts ~~per~~receivable and accounts payable and accrued liabilities approximate ~~share~~their ~~amounts~~carrying ~~where~~values ~~noted)~~because of the short-term nature of these financial instruments. The fair value of the Company’s long-term debt, determined based on the future cash flows associated with each debt instrument discounted using an estimate of the Company’s current borrowing rate for similar debt instruments of comparable maturity, is approximately equal to their carrying value at December 31, 2013 and December 31, 2012.

~~Years~~FASB ~~ended~~ASC ~~December~~820-10-05 ~~31,~~establishes ~~2012~~a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The fair value of the Company’s cash and cash equivalents and long-term debt are classified as Level 1 and Level 2 measurements, ~~2011~~respectively. The fair values of accounts receivable and ~~2010~~accounts payable and accrued liabilities are classified as Level 2 measurements.

510. ~~Intangible~~Lease ~~assets (continued)~~commitments:

~~Amortization~~At ~~expense~~December 31, ~~was~~2013, ~~$2.1~~future ~~million~~minimum inrental ~~2012~~payments ~~(2011~~relating -to ~~$2.2~~operating ~~million).~~leases ~~Amortization expense~~ for ~~the~~premises ~~following~~and ~~two~~equipment ~~years~~are ~~is estimated to be~~ as follows:

Year ending December 31:
2013	$	1,659
2014	$	1,936
2014		1,048
2015		1,598
	$	2,707
2016		789
2017		484
2018		397
Thereafter		434
		$5,638

6Total rental expense under operating leases was $2.3 ~~Goodwill:~~million for the year ended December 31, 2013 (2012 - $2.5 million; 2011 - $2.3 million).

	2012			2011
Balance at January 1
Goodwill	$	115,832		$	115,955
Accumulated impairment losses		(110,374	)		(110,374	)
		5,458			5,581
Foreign exchange		121			(123	)
Balance at December 31	$	5,579		$	5,458
Balance at December 31
Goodwill	$	115,953		$	115,832
Accumulated impairment losses		(110,374	)		(110,374	)
	$	5,579		$	5,458

11.

Employee benefits:

7The Company sponsors defined contribution plans in Canada. ~~Long-term~~The ~~debt:~~Company matches the employee’s contribution to their registered retirement savings plan up to a maximum contribution. The expense related to the plan was $0.5 million for the year ended December 31, 2013 (2012—$0.5 million; 2011—$0.5 million).

	2012		2011
Revolving credit facility (a)	$	31,750	$	21,910
Canadian real estate facilities (b)		50,494		44,961
U.S. real estate facilities (c)		16,793		—
Term bank credit facility (c)		—		3,500
Capital leases (d)		6,299		3,518
		105,336		73,889
Less current portion		3,339		6,817
	$	101,997	$	67,072

~~Table~~VITRAN ofCORPORATION ~~Contents~~INC.

~~VITRAN~~Notes ~~CORPORATION~~to ~~INC.~~Consolidated Financial Statements

~~Notes~~(In tothousands ~~Consolidated~~of United ~~Financial~~States ~~Statements~~dollars, except per share amounts where noted)

~~(In~~Years ~~thousands~~ended ofDecember ~~United~~31, ~~States dollars~~2013, ~~except~~2012 ~~per share~~and ~~amounts~~2011 ~~where noted)~~

~~Years~~12. ~~ended~~Contingent ~~December 31, 2012, 2011 and 2010~~ liabilities:

7The Company is subject to legal proceedings that arise in the ordinary course of business. ~~Long-term~~In ~~debt~~the ~~(continued):~~opinion of management, the aggregate liability, if any, with respect to these actions, will not have a material adverse effect on the consolidated financial position, results of operations or cash flows. Legal costs are expensed as incurred.

OnThe ~~December 28,~~Company ~~2012,~~has ~~the~~corporate ~~Company~~guarantees ~~entered~~outstanding ~~into~~of aapproximately ~~new~~$ 15.5 million ~~year~~as ~~real~~at ~~estate~~December 31, ~~term credit~~2013, ~~facility~~ for acertain ~~total~~operating leases ofpreviously ~~$16.8~~entered ~~million.~~into ~~The real estate term credit facility is secured~~ by 18the ~~transportation~~former ~~facilities~~SCO ~~throughout~~business ~~the United States~~unit. The ~~proceeds~~Company ~~from~~is in the ~~new~~process ~~real~~of ~~estate~~being ~~term~~removed ~~credit~~as ~~facility~~guarantor ~~were~~under ~~used~~these toleases ~~repay the Company’s term bank credit facility~~ and ~~asset~~is ~~based~~fully ~~revolving~~indemnified ~~credit facility. On January 22, 2013, the Company entered into a second real estate term credit facility secured~~ by ~~an additional five transportation facilities in~~ the ~~United States~~purchaser for ~~proceeds~~any oflosses ~~$7.0~~incurred ~~million.~~under ~~Refer~~the ~~to Note 17, “Subsequent events”~~guarantees.

~~On November 1, 2012, the Company entered into a new real estate term facility for Cdn~~13. ~~$5.5~~Subsequent ~~million. The facility is secured by the Company’s transportation facility in Winnipeg, Manitoba and matures on November 30, 2018.~~ events:

OnIn ~~November 30,~~January ~~2011~~2014, the ~~Company~~remaining ~~entered~~outstanding ~~into~~letters aof ~~new~~credit ~~three-year~~were ~~bank~~returned ~~syndicated~~and ~~asset~~cancelled ~~based~~by ~~revolving~~the ~~credit~~lending ~~agreement~~group ~~providing~~and ~~up to $85 million. In addition,~~ on ~~November~~ January 3021, ~~2011,~~2014 the Company’s entered into a new seven-year Cdn. $45.7 million real estate term credit facility, secured by specific real estate in Canada. The proceeds from the new credit facilities were used to extinguish the previous senior ~~term and~~ revolving credit ~~facilities~~agreement ~~which~~was ~~were~~terminated toand ~~mature~~all insecurity ~~July~~held ~~2012.~~by ~~Deferred financing costs of $1.0 million related to~~ the ~~previous~~lending ~~credit~~group ~~agreement~~was ~~were written off in 2011~~released.

~~(a)~~ The ~~Company’s~~Arrangement ~~asset~~was ~~based~~approved ~~revolving~~by ~~credit~~the ~~facility~~shareholders isof ~~secured~~Vitran byat ~~accounts~~a ~~receivable,~~special ~~certain~~meeting ~~equipment~~held ~~and~~on ~~general~~March 5, ~~security~~2014 ~~agreements~~with ~~covering~~approximately ~~the~~94.9% ~~assets~~ of the votes ~~Company~~cast ~~and~~at ~~all~~the ofmeeting ~~its~~voting ~~subsidiaries.~~in ~~The~~favour ~~revolving~~of ~~credit~~the ~~facility~~Arrangement. ~~provides~~In upaddition, toapproximately ~~$85~~93.01% ~~million,~~of ~~maturing~~the onvotes ~~November~~cast ~~30,~~by ~~2014.~~disinterested ~~The~~shareholders, ~~Company~~being ~~had~~shareholders ~~$31.8~~other ~~million~~than ~~outstanding~~TransForce atand ~~December~~its 31affiliates, ~~2012~~were ~~(2011~~voted –in ~~$21.9~~favour ~~million),~~of ~~bearing~~the ~~interest at 2~~Arrangement.~~96%~~ Approval toof ~~5.00%~~the ~~(2011~~Arrangement –was ~~2.8%~~granted toby ~~4.75%).~~Order ~~The provisions~~ of the ~~revolving~~Court ~~credit~~on ~~facility~~March 6, ~~impose~~2014. ~~certain~~The ~~financial~~Arrangement ~~maintenance~~remains ~~tests~~subject ifto ~~availability~~the ~~falls~~receipt ~~below~~of aapplicable ~~certain~~regulatory ~~threshold.~~approvals At(including ~~December~~approval ~~31,~~under ~~2012,~~ the ~~Company~~Competition ~~was~~Act), ~~not~~and ~~required~~ to ~~measure~~satisfaction ~~these~~of ~~covenants~~other customary closing conditions.

~~(b) The Company’s Canadian real estate term credit facility is secured by five transportation terminals in Canada and matures on November 30, 2018. The Company has Cdn. $~~50.2 ~~million outstanding at December 31, 2012 (2011 – Cdn. $45.7 million), bearing interest at 4.30% to 4.75% (2011 – 4.75%).~~

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

~~(d)~~VITRAN ~~During~~CORPORATION ~~2012, the Company financed certain equipment by entering into additional capital leases of $5~~INC.7 ~~million. The Company had $6.3 million (2011 - $3.5 million) of capital leases remaining at December 31, 2012.~~

50Consolidated Supplemental Schedule of Quarterly Financial Information

~~Table~~(In thousands of ~~Contents~~United States dollars, except per share amounts where noted)

~~VITRAN~~Years ~~CORPORATION~~ended ~~INC.~~December 31, 2013 and 2012

Notes to Consolidated Financial Statements


2013 (Unaudited)	First quarter			Second quarter			Third quarter			Fourth quarter
Revenue	$	47,038		$	49,625		$	49,373		$	47,353

Income (loss) from continuing operations after depreciation and amortization	$	365		$	(97	)	$	2,187		$	(3,563	)
Net income (loss) from continuing operations		(821	)		(709	)		1,398			(2,894	)
Income (loss) from discontinued operations	$	68,493		$	(16,264	)	$	(74,092	)	$	1,672
Net income (loss)		67,672			(16,973	)		(72,694	)		(1,222	)

Income (loss) per share:
Basic and Diluted	$	(0.05	)	$	(0.04	)	$	0.09		$	(0.18	)
– continuing operations

2012 (Unaudited)	First quarter			Second quarter			Third quarter			Fourth quarter
Revenue	$	45,683		$	48,195		$	49,626		$	50,439

Income (loss) from continuing operations after depreciation and amortization	$	(88	)	$	991		$	1,969		$	1,273
Net income (loss) from continuing operations		(812	)		28			737			(172	)
Loss from discontinued operations	$	(5,004	)	$	(4,191	)	$	(10,837	)	$	(15,724	)
Net loss		(5,816	)		(4,163	)		(10,100	)		(15,896	)

Filing Compare · VITRAN CORP INC