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

or

¨ 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.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

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 was approximately $70,000,000

Number of shares of common stock outstanding as of February 19, 2013: 16,399,241

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		15
2.	Properties		15
3.	Legal Proceedings		16
4.	Mine Safety Disclosures		16
PART II
5.	Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities		17
6.	Selected Financial Data		19
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
7. A	Quantitative and Qualitative Disclosures about Market Risk		33
8.	Financial Statements and Supplementary Data		33
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		60
9. A	Controls and Procedures		60
9. B	Other Information		63
PART III
10.	Directors and Executive Officers and Corporate Governance		63
11.	Executive Compensation		63
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		64
13.	Certain Relationships and Related Transactions, and Director Independence		64
14.	Principal Accounting Fees and Services		64
PART IV
15.	Exhibits, Financial Statement Schedules		64

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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 in 34 states in the eastern, southeastern, central, southwestern, and western United States. These services are provided by stand-alone business units within their respective countries. 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 and 2011, the Company had revenues of $702.9 million and $686.2 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 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. Legacy has obtained written commitments from certain financial institutions to provide sufficient debt financing to close the transaction. The financing is subject to customary conditions and the financial institutions’ completion of confirmatory due diligence. 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.

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: Vitran Express Canada Inc. (Ontario); Can-Am 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 financial information is included in Note 12 to the Consolidated Financial Statements.

LTL Services

Vitran has grown organically and made strategic acquisitions to build a comprehensive LTL network throughout Canada and in the eastern, southeastern, central, southwestern, and western United States.

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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.

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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. 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 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 and second-day delivery service;

• 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;

• regional carriers are predominantly non-union, which offers 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 3.0% of Vitran’s revenues. At December 31, 2012, the Company employed 124 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, Vitran employed approximately 5,443 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.

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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.

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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, 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. A—RISK FACTORS

RISKS AND UNCERTAINTIES

An investment in our Company involves a high degree of risk. Before 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 Relating to Our Company

The announced sale of our Supply Chain Operation may not close.

We have entered into an agreement to sell the SCO business for $97.0 million in cash proceeds. Should the transaction not close it may have a material adverse effect on our business due to the uncertainty that may be created for our customers, employees and other constituents. The transaction is expected to close by March 1, 2013 but remains subject to the purchaser’s financing and certain other conditions customary for transactions of this nature.

Our industry is highly competitive, and our business will suffer if we are unable to adequately address potential downward pricing pressures and other factors that may adversely affect operations and profitability.

The transportation industry is highly competitive on the basis of both price and service. We compete 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. Numerous competitive factors could impair our ability to maintain our current profitability. These factors include the following:

• we compete with many other transportation service providers of varying sizes, many of which may have more equipment, a broader coverage network, a wider range of services and greater capital resources than we do or have other competitive advantages;

• some of our competitors periodically reduce their prices to gain business, especially during times of reduced growth rates in the economy, which may limit our ability to maintain or increase our prices or maintain significant growth in our business;

• many customers reduce the number of carriers they use by selecting so-called “core carriers” as approved transportation service providers, and in some instances we may not be selected;

• our customers may negotiate rates or contracts that minimize or eliminate our ability to offset fuel price increases through a fuel surcharge on our customers;

• many customers periodically accept bids from multiple carriers for their shipping needs, and this process may depress prices or result in the loss of some business to competitors;

• the trend towards consolidation in the surface transportation industry may create other large carriers with greater financial resources than us and other competitive advantages relating to their size;

• advances in technology require increased investments to remain competitive, and our customers may not be willing to accept higher prices to cover the cost of these investments; and

• competition from non-asset-based logistics and freight brokerage companies may adversely affect our customer relationships and prices.

7

We are subject to financial covenants under our revolving credit facility.

Under 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 re-negotiate these financial covenants, 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, which could reduce the amount of credit available under our credit facilities.

We are subject to general economic factors that are largely out of our control, any of which could have a material adverse effect on the results of our operations.

Our business is subject 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 downturns in 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 customers, the amount of transportation services they need and their ability to pay for our services. It is not possible to predict the 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 future results of operations. Adverse changes in economic conditions could result in declines to our revenues and a reduction in our current level of profitability.

If the world-wide financial crisis re-intensifies, it could adversely impact demand for our services.

The global capital markets 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. Continued market disruptions could cause broader economic downturns which may lead to lower demand for our services, increased incidence of customers’ inability to pay their accounts, or insolvency of our customers, any of which could adversely affect our results of operations, liquidity, cash flows and financial condition.

Moreover, such market 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 will be affected by general economic, financial, competitive, legislative, regulatory and other factors beyond our control.

8

Increases in our operating expenses could cause our profitability to decline.

Our significant cash operating expenses include: salaries, wages and employee benefits, purchased transportation, maintenance expenses, rents and leases, owner operators, fuel and fuel-related expenses. Increases in our operating expenses will adversely impact on our profitability to the extent that we are not able to pass these increased expenses on to our customers through increased rates for our transportation services. Many of these operating expenses are beyond our control and, in addition, are subject to competitive forces. Further, we operate in a price sensitive industry where customers have many alternatives for their transportation services and, as a result, we may have limited ability to pass on increased operating expenses to our customers.

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

Operating 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.

Unsuccessful execution of our acquisition strategy could cause our business and future growth prospects to suffer.

We may not be able to implement our strategy to acquire other transportation companies, which depends in part on the availability of suitable candidates. In addition, we may face competition for the acquisition of attractive carriers from other consolidators in the freight transportation industry who may be larger or better financed than 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 strategy, we will be able to successfully integrate the operations of the acquired company into our operations on an accretive basis. If we are unable to successfully integrate the operations of the acquired company, we may not be able to achieve the anticipated benefits of such acquisition and the performance of our operations after completion of such acquisition could be adversely affected.

Significant ongoing capital requirements could limit growth and affect future profitability.

Our business is capital intensive. If we are unable to generate sufficient cash from operations to fund our capital requirements, we may have to limit our growth, utilize our existing revolving credit facility, or enter into additional, financing arrangements. While we intend to finance expansion and renovation projects with existing cash, cash flow from operations and available borrowings under our existing credit agreement, 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.

If any of the financial institutions that have extended credit commitments to us are or continue to be adversely affected by current economic conditions and disruption to the capital and credit markets, they may become unable to fund borrowings under their credit commitments or otherwise fulfill their obligations to us, which could have a material adverse impact on our financial condition and our ability to borrow additional funds, if needed, for working capital, capital expenditures, acquisitions and other corporate purposes.

Availability and cost of real estate could limit growth and affect future profitability.

Our businesses in the United States and Canada are dependent on the cost and availability of terminal facilities within key markets. Shortages in the availability of existing facilities and for sale or lease could increase our operating expenses and prevent us from effectively serving certain markets. Unavailability of land for purchase and construction delays due to various reasons such as delays in obtaining permits may also adversely impact cash flows.

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The engines in our newer tractors are subject to new emissions-control regulations which could substantially increase operating expenses.

Tractor engines that comply with the Environmental Protection Agency (EPA) emission-control design requirements that took effect on January 1, 2007 are possibly less fuel-efficient and have increased maintenance costs compared to engines in tractors manufactured before these requirements became effective. 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.

We are a corporation based outside the United States.

We 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.

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

Fuel is a 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, 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, operations or financial condition.

While we have historically been able to adjust our pricing to offset changes to the cost of fuel through changes to base rates and/or fuel surcharges, we cannot be certain that we will be able to do so in the future. In addition, we are subject to risks associated with the availability of fuel, which are subject to political, economic and market factors that are outside of our control. We would be adversely affected by an inability to obtain fuel in the future. Although historically we have been able to obtain fuel from various sources and in the desired quantities, there can be no assurance that this will continue to be the case in the future.

Our industry is subject to numerous laws and regulations in Canada and the United States, exposing us to potential claims and compliance costs that could have a material adverse effect on our business.

We are subject to numerous laws and regulations by the U.S. Department of Transportation (“DOT”), Environmental Protection Agency, Internal Revenue Service, Canada Revenue Agency and various other federal, state, provincial and municipal authorities. Such regulatory agencies exercise broad powers over our business, generally governing such activities as authorization to engage in motor carrier operations and safety, and financial reporting. Our employees and owner operators must also comply with the safety and fitness regulations promulgated by the DOT and applicable Canadian regulators, including those relating to drug and alcohol testing, driver hours-of-service limitations, labour-organizing activities, stricter cargo-security requirements, tax laws and environmental matters, including potential limits on carbon emissions under climate-change legislation. We may become subject to new or more restrictive regulations relating to fuel emissions, ergonomics, or limits on vehicle weight and size.

We 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.

10

The Federal Motor Carrier Safety Administration’s (“FMCSA”) Compliance, Safety, Accountability initiative (“CSA”) could adversely impact our ability to hire qualified drivers and maintain customer relationships.

In 2010, the FMSCA implemented CSA, a new compliance and enforcement initiative designed to monitor commercial motor vehicle safety. Under CSA, carriers and individual drivers are evaluated and ranked based on certain safety-related standards. Our CSA scores are dependent upon our safety and compliance experience, which could change at any time. In addition, the safety standards set by the FMCSA could change and affect our ability to maintain a satisfactory score. If we obtain an unsatisfactory score it could adversely impact our relationships with customers and result in a loss of business. CSA could also cause a reduction in the driver pool as those with unfavorable scores could leave the industry increasing our operating costs to attract, train and retain qualified drivers.

Changes in governmental regulation may impact future cash flows and profitability.

In Canada, carriers must obtain licenses issued by each provincial transport board in order to carry goods extra-provincially or 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 and within the United States. Any change in these regulations could have an impact on the scope of our activities. There is no assurance 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.

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

Our 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.

If additional employees unionize, our operating costs would increase.

We have a history of positive labour relations that will continue to be important to future success. Two of our terminals in Canada, representing 2.0% of our labour force, are represented by the International Brotherhood of Teamsters and the Canadian Auto Workers Association. The collective bargaining agreements between us and our unionized employees expire on February 28, 2014, and on March 31, 2015, respectively. There can be no assurance that the collective bargaining agreements will be renegotiated on terms acceptable or favourable to us. There can be no assurance that other employees will not unionize in the future. From time to time there could be efforts to organize our employees at various other terminals, which could increase our operating costs and force us to alter our operating methods. This could, in turn, have a material adverse effect on our business, operations or financial condition.

Changes to our compensation and benefits could adversely affect our ability to attract and retain employees.

Like many other companies, we had implemented certain salary and wage cost initiatives in 2009. Such initiatives include the suspension of our 401(k) matching program and a 5% compensation reduction across all employees of the Company. 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 environmental laws and regulations, and costs of compliance with, liabilities under, or violations of, existing or future environmental laws or regulations could adversely affect our results.

Our operations 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 occurred. Our operations involve the risks of fuel spillage or seepage, environmental damage and hazardous waste disposal, among others. If we are involved in a spill or other accident

11

involving hazardous substances or if we are found to be in violation of applicable laws or regulations, it could have a material adverse effect on our business and operating results. If we fail to comply with applicable environmental regulations, we could be subject to substantial fines or penalties and to civil and criminal liability.

In addition, as “climate change” issues become more prevalent, federal and local governments and our customers are beginning to respond to 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 not complied with their sustainability requirements. These costs, changes and loss of revenue could have a material adverse effect on our business, financial condition and results of operations.

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

The 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.

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

From time to time we face litigation regarding various alleged violations of state labor laws. These proceedings may be time-consuming, expensive and disruptive to normal business operations. 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. 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 rate and currency risks may impact our financial results.

As we 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. Our 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.

Our operations are subject to risks normally inherent in the freight transportation industry, including potential liability which could result from, among other circumstances, personal injury or property damage arising from accidents or incidents involving trucks operated by us or our agents. The availability of, and ability to collect on, insurance coverage is subject to factors beyond our control. In addition, we may become subject to liability for hazards which we cannot or may not elect to insure against because of high premium costs or other reasons, or for occurrences which exceed maximum coverage under our policies. Our future insurance and claims expenses 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 self-insured retention. If the number or severity of claims for which we are self-insured increases, or we suffer adverse development in 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.

Moreover, any accident or incident involving us, even if we are fully 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 in the future.

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We rely on purchased transportation, making us vulnerable to increases in costs of these services.

In 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 or increase in the cost of such rail services is likely to increase costs for us and reduce the reliability, timeliness and overall attractiveness of rail-based services. This would negatively impact our ability to provide our services, with the result that we may be forced to use more expensive or less efficient alternative modes of transportation to provide our services 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 capacity during certain peak periods through the use of purchased transportation. 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.

Our business may be adversely affected by anti-terrorism measures.

Federal, 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.

Interest rate fluctuations will impact our financial results.

Management continues to evaluate our need to fix interest rate exposure. Our inability to successfully mitigate our exposure to interest rate risk could result in us being exposed to increases to interest rates, which interest rate increases would increase our operating costs.

Difficulty in attracting qualified drivers could adversely affect our profitability and ability to grow.

We are dependent on our ability to hire and retain qualified drivers, including owner operators. There is significant competition for qualified drivers within the trucking industry and attracting and retaining drivers has become more challenging. If we are unable to attract drivers and contract with owner operators, we may experience shortages of qualified drivers that could result in us not meeting customer demands, pressure to upwardly adjust our driver compensation package, underutilization of our truck fleet and/or use of higher cost purchased transportation, all of which could have a material adverse effect on our operating results, our growth and profitability.

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

We 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.

13

An increase in the cost of healthcare benefits in the United States could have a negative impact on our profitability.

We maintain and sponsor health insurance for our employees, retirees and their dependents in the United States through preferred provider organizations, and offer a competitive healthcare program to attract and retain our employees. These benefits comprise a significant portion of our operating expenses. Lower interest rates and/or lower returns on plan assets may cause increases in the expense of, and funding requirements for, our healthcare plans. We remain subject to volatility associated with interest rates, returns on plan assets, and funding requirements. It is possible that healthcare costs could become increasingly cost prohibitive, either forcing us to make changes to our benefits program or negatively impacting our future profitability.

As a holding company, Vitran is dependent on various factors to meet its financial obligations.

Vitran is a holding company. 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 Related to our Common Shares

Dividends.

The board of directors of Vitran has not declared dividends on our common shares since December 2001. We currently anticipate that we will retain future earnings and sufficient cash resources to repay debt, to support future capital expenditure programs, to support the development of the LTL business, and for acquisitions. Payment of any future dividends will be at the discretion of the board of directors of Vitran after taking into account many factors, including our operating results, financial condition and current and anticipated cash needs.

If additional equity financing is required, you may suffer dilution of your investment.

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.

Investors who purchase the common shares may pay more for the common shares than the amounts paid by existing shareholders of 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.

The price of our common shares may fluctuate significantly.

Volatility 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:

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

• the public’s reaction to our press releases, our other public announcements and our regulatory filings;

• changes in earnings estimates or recommendations by research analysts who follow our stock or the stock of other trucking companies;

• changes in 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;

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

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

In addition, in recent years, the 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, including companies in our industry. The changes 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.

An investment in our common shares is highly speculative.

An investment in our common shares is highly speculative and may result in the loss of 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.

It may be difficult to maintain and enforce judgments against us because of our Canadian residency.

Vitran is a Canadian corporation, and some of its assets and operations are located, and some of its revenues are derived, outside the United States. In addition, a majority of Vitran’s directors and officers 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 to effect service of process within the United States 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 laws.

ITEM 1.B—UNRESOLVED STAFF COMMENTS

None.

ITEM 2—PROPERTIES

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.

Each of Vitran’s 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.

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

SCO operates 16 facilities, five in Canada, and 11 in the United States, for major retailers in their respective markets. SCO has approximately 2.1 million square feet of warehouse and distribution space under management at December 31, 2012.

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As at 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 its specifications. 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

ITEM 3—LEGAL PROCEEDINGS

Vitran is subject to various legal proceedings and claims that have arisen in the ordinary course of its business that have not been fully adjudicated. Many of these are covered in whole or in part by insurance. The management 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.

ITEM 4—MINE SAFETY DISCLOSURES

Not applicable.

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PART II

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

Description of Share Capital

At 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.

Vitran’s common 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 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 did 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 following 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:

	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

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Stock Option Plan

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		742,800	$	11.80		31,100
Equity compensation plans not approved by security holders		—		—		—
Total (1)		742,800	$	11.80		31,100

⁽¹⁾  As at December 31, 2012.

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 stock option plan are described in Note 9 of the Consolidated Financial Statements.

Issuer Purchases of Equity Securities

None.

Recent Sales of Unregistered Securities

None.

Transfer Agents

Computershare Investor Services Inc.	Montreal, Toronto	Canada
Computershare Trust Company Inc.	Denver	United States

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ITEM 6—SELECTED FINANCIAL DATA

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 this Annual Report on Form 10-K. For a summary of quarterly financial data for fiscal 2012 and 2011, 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”.

Selected Financial Data (Thousands of dollars, except per share amounts)

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

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Notes:

(1) Vitran recorded a pre-tax non-cash goodwill impairment charge of $107.4 million at December 31, 2008. The assessment of the Company’s goodwill for impairment is discussed further in Item 7 under “Critical Accounting Policies and Estimates.”

(2) 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.

(3) 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.

(4) Operating ratio (“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	%

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

Forward-Looking Statements

In addition to historical information, this Annual Report on Form 10-K and MD&A contain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws concerning Vitran’s business, operations, and financial performance and condition.

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.

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

• the Company’s expectation that the sale of the SCO business will close on or before March 1, 2013 based on the agreement signed on February 12, 2013 and that Legacy will close its financing to fund the purchase price;

• 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;

• the 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;

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

• the Company’s expectation that operating initiatives implemented will continue to improve productivity and service levels within the U.S. LTL business unit;

• the Company’s expectation that fuel economy will continue to improve moderately and as a result fuel costs will decrease;

• the Company’s expectation that operational improvements within the U.S. LTL business unit will have a positive impact on future financial results;

• the Company’s expectation that activity levels will improve;

• the Company’s ability to maintain DSO below 40 days;

• the Company’s intention to purchase a specified level of property and equipment and to finance such acquisitions with cash flow from operations, capital and operating leases and, if necessary, from the Company’s revolving credit facilities;

• the Company’s ability to generate future operating cash flows from profitability and managing working capital;

• the Company’s operational plan will improve service and efficiencies in the U.S. LTL business unit; and

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

Such 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.

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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.

OVERVIEW

Vitran Corporation Inc. (“Vitran” or the “Company”) is a leading, predominantly non-union, provider of freight surface transportation and related supply chain services throughout Canada and in 34 states in the eastern, southeastern, central, southwestern and western United States. These services are provided by stand-alone business units within their respective regions. Depending on a customer’s needs, the units can operate independently or in a complementary manner. As is more fully described in Item 1 “Business”, the LTL segment transports shipments in less-than-full trailer load quantities through freight service center networks.

Vitran’s operating results are generally expected to depend on the number and weight of shipments transported, the prices received 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.

The 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.

In 2010, Vitran divested of substantially all of the rolling stock of its Truckload business. The Truckload business delivered full trailer loads point to point on a predominantly short-haul basis. This operation was not connected to the LTL segment and was not considered strategic to the continuing operations of Vitran.

On 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.

On 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.

EXECUTIVE SUMMARY

The 2012 fiscal year marked 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:

• completed 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;

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

• the CDN LTL business continued to post solid results in 2012;

• completed the build-up of the new U.S. LTL management and leadership team;

• introduced new enhanced technology to the U.S. LTL operations; and

• focus on North American LTL business with divestiture of SCO.

These achievements were the result of tireless effort and support from the management, office staff and most importantly, the front line drivers and dock workers at Vitran.

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RESULTS OF OPERATIONS

2012 COMPARED TO 2011

CONSOLIDATED RESULTS

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

(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	%

Financial Overview

Revenue 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, wages and employee benefits increased 7.6% to $305.0 million for 2012 compared to $283.4 million in 2011. This compares with a 1.1% increase in employee headcount compared to 2011. Furthermore, management committed to its U.S. LTL business unit employees to return a quarter of the 2008 5% wage reduction at the commencement of each calendar quarter in 2011, therefore, the full impact of the 5% wage increase is included for a full year in 2012. In addition, the Company has increased wage rates in certain parts of the U.S. to attract and retain drivers. Salary, wages and employee benefit expenses in 2013 should outpace the prior year expenses, but as management improves efficiencies within the U.S. LTL business unit, it is expected to decline on a percentage of revenue basis.

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.

Depreciation and amortization expense increased 3.1% for 2012 compared to 2011, and is primarily attributable to the purchase of rolling stock, dock equipment and buildings in 2012. The Company expects to purchase more rolling stock as financial performance improves and therefore expects depreciation expense to increase in coming years.

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Maintenance expense increased 6.2% to $34.2 million for 2012 compared to $32.2 million for 2011. As a percentage of revenue, maintenance expense increased to 4.9% compared to 4.7% for 2011. However, on a sequential basis maintenance expense as a percentage of revenue was comparable in the fourth quarter of 2012 compared to the third quarter of 2012. Management is focused on reducing this expense and it is management’s expectation that the Company will reduce its maintenance costs as a percentage of revenue in future periods.

Rents and leases expense 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 operator expenses increased 3.1% for 2012 compared to 2011, driven by the increase in owner operator expenses in the Canadian LTL business unit due to increased activity levels compared to 2011.

Fuel and fuel-related expenses increased 3.9% for 2012 compared to 2011. The average price of diesel increased approximately 2.8% in 2012 compared 2011. Furthermore, the Company’s fuel consumption increased due to the increase in activity as indicated by the 1.8% increase in shipments within the LTL segment. Management expects to receive moderately improved fuel economy from improved operating practices in future periods.

The Company incurred net interest expense of $5.4 million in 2012 compared to interest expense of $6.8 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 balance sheet debt net of cash at December 31, 2012 is $32.4 million greater than December 31, 2011. However, the Company’s interest rate spread on its revolving and term debt was on average 44 basis points less than 2011.

In accordance with Financial Accounting Standard Board (“FASB”) Accounting Standard Codification (“FASB ASC”) 740-10, included 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 $15.5 million, which would have been the tax recovery attributable to the Company’s U.S. based companies for 2012. Consequently, the Company recorded a consolidated tax recovery of $0.6 million in 2012. 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 loss from continuing operations was $42.6 million for 2012 compared to a net loss from continuing operations of $20.8 million in 2011. This resulted in basic and diluted loss per share from continuing operations of $2.60 for the current year compared to a loss per basic and diluted share from continuing operations of $1.27 in 2011. Income from discontinued operations was $6.7 million in 2012 compared to $6.8 million in 2011. Therefore, the Company posted a 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 the current year compared to a loss per basic and diluted share of $0.86.

FASB Accounting Standard Update (“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. FASB ASU Update No. 2011-08 was adopted by the Company on January 1, 2012.

FASB 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 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.

FASB 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.

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Operations Overview

	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	%

Shipments per day in the U.S. LTL business unit increased 2.0% for 2012 compared to 2011, however, decreased 8.4% in the fourth quarter of 2012 compared to the same quarter a year ago. This is attributable to softness in the U.S. market and management’s internal focus on improving operations in the U.S. LTL business unit. On a year-over-year basis, 2012 compared to 2011, average length of haul increased 1.0% and average revenue per hundredweight increased 1.9%. Management expects the revenue per hundredweight to increase in the upcoming quarters as the pricing environment 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.

There 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 experience has been greatly improved with the introduction of tablet technology to the pick-up and delivery team and an improved dispatch interface. In addition, new technology was introduced to the operations team in the fourth quarter of 2012 to continue to improve operating efficiencies and customer service levels. 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 levels.

The Canadian LTL business unit posted a solid 2012 benefiting from a strong Canadian economy and a stable operation compared to the U.S. LTL business unit.

It 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.

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RESULTS OF OPERATIONS

2011 COMPARED TO 2010

CONSOLIDATED RESULTS

Financial Overview

Revenue increased by 18.0% to $686.2 million in 2011 from $581.6 million in 2010. Revenue for 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, wages and employee benefits increased 17.5% to $283.4 million for 2011 compared $241.2 million in 2010. Employee headcount was expected to increase by approximately 600 individuals resulting from the acquisition of the Milan LTL assets on February 19, 2011. However, headcount increased approximately 1,000 employees to handle the increase in business and to recover from the acquired backlog of freight at Milan. Furthermore, management committed to its U.S. LTL business unit employees to return a quarter of the 2008 5% wage reduction at the commencement of each calendar quarter in 2011. As of December 31, 2011 four quarterly increases of 1.25% have been issued.

Purchased transportation increased 10.0% in 2011 compared to 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 and amortization expense declined 10.6% for 2011 compared to 2010, and is primarily attributable to the sale of rolling stock and buildings during the year. Furthermore, cash capital expenditures have also been lower than historical trends over the past 2 years resulting in less depreciation expense.

Maintenance 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 focus 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 and leases expense increased 45.4% for 2011 compared to 2010. The increase is a result of the aforementioned new tractors, leased equipment added in the Milan acquisition as well as the new short-term leased facilities in the newly acquired territory. In addition, the U.S. LTL business unit expanded into new leased facilities in South Plainfield, NJ and Louisville, KY at the beginning of the 2011 fourth quarter.

Owner operator expenses increased 9.4% for 2011 compared to 2010, attributable to the increase in owner operator expenses in the Canadian LTL business unit as a result of increased activity levels compared to 2010.

Fuel 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.

During the 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

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property taxes, property insurance and general 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 Company incurred net interest expense of $6.8 million in 2011 compared to interest expense of $7.3 million in 2010. Included in interest expense is $1.0 million of deferred financing costs that were written off in the fourth quarter of 2011 related to the previous senior term and revolving credit facilities. On November 30, 2011, the Company refinanced its previous senior term and revolving debt facilities with a new three-year asset based revolving debt facility and a new seven-year real estate term facility. The Company reduced interest rate spreads a minimum of 125 basis points under the new asset-based revolving credit facility. The Company’s interest rate spread on its revolving and term debt was on average 75 basis points less than 2010.

In accordance with Financial Accounting Standard Board (“FASB”) Accounting Standard Codification (“FASB ASC”) 740-10, included 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 loss from continuing operations was $20.8 million for 2011 compared to a net loss from continuing operations, including the aforementioned tax valuation allowance, of $42.4 million in 2010. This resulted in basic and diluted loss per share from continuing operations of $1.27 for the current year compared to a loss per basic and diluted share from continuing operations of $2.60 in 2010. Income from discontinued operations was $6.8 million in 2011 compared to $2.2 million in 2010. Therefore, the Company posted a net loss of $14.0 million for 2011 compared to a net loss of $40.2 million in 2010. This resulted in a basic and diluted loss per share of $0.86 for the current year compared to a loss per basic and diluted share of $2.47.

Operations Overview

Shipments per day in the U.S. LTL business unit increased 10.4% for 2011 compared to 2010. This can be primarily attributable to the acquisition of Milan on February 19, 2011. The addition of Milan and its pre-existing customer base resulted in a one-time reduction in revenue per hundredweight and length of haul as Milan was primarily a short haul LTL carrier within its region. Therefore, on sequential basis from March 31, 2011 compared to December 31, 2011, length of haul increased 5.8% and revenue per hundredweight increased 7.9%.

Although revenue increased in the U.S. LTL business unit, the business unit did not perform to management expectations. Wages and purchased transportation costs were higher than expected partially attributed to the challenge of working out of the backlog of freight created by the first quarter weather issues that were further intensified by the Milan acquisition which in and of itself was significantly backlogged with 2.5 days of freight. The deterioration of service as the Company worked out of this backlog resulted in some loss of business and identified areas of inefficiencies within the U.S. LTL business unit’s operations. Management has focused on operational improvements throughout the year which have positively impacted service, operating metrics and resulted in returning business to the Company. Higher than expected workers’ compensation and healthcare expense also negatively impacted results in the fourth quarter of 2011 and the year.

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The Canadian LTL business unit posted an excellent 2011 benefiting from a strong Canadian economy and a stable operation compared to the U.S. LTL business unit.

Notes:

(1) Refer to note 4 in Item 6 – Selected Financial Data

(2) A 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.

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

(5) 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.

LIQUIDITY AND CAPITAL RESOURCES

Cash flow from 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 Company’s future operating cash flows are largely dependent upon the Company’s profitability and its ability to manage its working capital requirements, primarily accounts receivable, accounts payable, and wage and benefit accruals.

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.

On October 31, 2012, the Company added the newly constructed Winnipeg, MB facility to its Canadian real estate term facility. The proceeds to the Company were Cdn. $5.5 million at a fixed interest rate of 4.3% and 25-year amortization. The new drawdown will mature commensurate with the existing Canadian real estate term facility on November 30, 2018.

In the 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 States subject to customary due diligence including environmental assessments. On December 28, 2012, Vitran entered into the first 15 year U.S. real estate term facility for $16.8 million, secured by 18 of the U.S transportation facilities. The new U.S. real estate term facility has an average fixed interest rate of 4.875% adjusted every three to five years and a 15 year amortization period. On January 22, 2013, the Company entered into a second 15 year U.S. real estate term facility for $7.0 million, secured by an additional seven of the U.S. transportation facilities on the same aforementioned terms.

At December 31, 2012, interest-bearing debt was $105.3 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 the year, the Company repaid $4.5 million of term debt, $3.0 million of capital leases and drew down $9.8 million under its revolving credit facilities. At December 31, 2012, the Company had $19.0 million of availability in its revolving credit facility, net of outstanding letters of credit to achieve its future operational and capital objectives.

The Company generated $2.2 million 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.

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The table below sets forth the Company’s capital expenditures for the years ended December 31, 2012, 2011 and 2010.

(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

Management 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.

The Company has contractual obligations that include 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

(1) The Company has estimated its interest obligation on its fixed and variable rate obligations. For fixed rate debt, the fixed rate was used to determine the interest rate obligation. For variable rate debt, the variable rate in place at December 31, 2012 was used to determine the total interest obligation.

In addition to the above-noted contractual obligations, as at December 31, 2012 the Company utilized the revolving credit facility for standby letters of credit of $21.1 million. The letters of credit are used as collateral for self-insured retention of insurance claims. Export Development Canada (“EDC”), a Crown corporation wholly owned by the government of Canada, provides guarantees up to $12.2 million on LOC’s to the Company’s syndicated lenders. In so doing, the Company’s definition of available debt in the associated revolving credit agreement excludes LOC’s guaranteed by the EDC.

A significant decrease in demand for our services could limit the Company’s ability to generate cash flow and affect its profitability. The Company’s asset-based revolving credit agreement is subject to financial maintenance tests that trigger when certain events occur, that will require the Company to achieve stated levels of financial performance, which, if not achieved, could cause an acceleration of the payment schedules. Should the current macro-economic environment destabilize, and if triggered, the Company may fail to comply with the aforementioned debt covenants within the next twelve months. Assuming no significant decline in business levels or financial performance, Management expects that existing working capital, together with cash from the pending sale of the SCO business, and available revolving credit facilities, will be sufficient to fund operating and capital requirements as well as service the contractual obligations.

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OUTLOOK

The 2012 fiscal year was another challenging year for the Company, however, 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 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 service, productivity and efficiency of the operation. Executing on these plans will allow management to expand revenue through increased pricing and density.

Management 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.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Revenue Recognition

The Company’s LTL 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 Revenue Adjustments

Generally, the pricing assessed by companies in the LTL business is subject to subsequent adjustments due to several factors, including weight and freight 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

The Company records an allowance for doubtful accounts related to accounts receivable that may potentially be impaired. 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 and Insurance Accruals

Claims 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

30

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

In addition to estimates within the self-insured retention, management makes judgments concerning the coverage limits. If any claim was to exceed the coverage limits, the Company would have to accrue for the excess amount. The estimate would include evaluation whether a claim may exceed such limits and, if so, 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

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 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, 2012, Vitran completed its annual goodwill impairment test and concluded that there was no impairment.

Property and Equipment

Property 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.

Share-Based Compensation

Under the 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 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 Taxes

The 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. 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

31

valuation 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.

FASB 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.

Management judgment 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 authorities. 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 IN ACCOUNTING POLICY

See Note 1 to the accompanying consolidated financial statements for discussion of United States GAAP recent accounting pronouncements.

RELATED PARTIES

None.

32

ITEM 7. A—QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE SENSITIVITY

The Company is exposed to the impact of interest rate 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

The Company 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. Furthermore, 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, the Company’s United 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.

ITEM 8—FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Consolidated 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.

33

MANAGEMENT RESPONSIBILITY OVER FINANCIAL REPORTING

The 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.

The Company maintains systems of 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 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 Statements. The 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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

We have audited the accompanying consolidated balance sheets of Vitran Corporation Inc. as of December 31, 2012 and December 31, 2011, and the related consolidated statements of income (loss), comprehensive income (loss), shareholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2012. In connection with our audits of the consolidated financial statements, we have also audited the financial statement schedules included in Item 15(a)(2) of Form 10-K. These consolidated financial statements are the responsibility of 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.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those 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.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Vitran Corporation Inc. as of December 31, 2012 and December 31, 2011, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial 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.

We 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.

/s/  KPMG LLP

Chartered Accountants, Licensed Public Accountants

Toronto, Canada

February 19, 2013

35

VITRAN CORPORATION INC.

Consolidated Balance Sheets

(Amounts in thousands of United States dollars)

December 31, 2012 and 2011

	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

See accompanying notes to consolidated financial statements.

36

VITRAN CORPORATION INC.

Consolidated Statements of Income (Loss)

(Amounts in thousands of United States dollars, except per share amounts)

Years 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 accompanying notes to consolidated financial statements.

37

VITRAN CORPORATION INC.

Consolidated Statements of Comprehensive Income (loss)

(Amounts in thousands of United States dollars)

Years ended December 31, 2012, 2011 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	)

See accompanying notes to consolidated financial statements.

38

VITRAN CORPORATION INC.

Consolidated Statements of Shareholders’ Equity

(Amounts in thousands of United States dollars)

Years ended December 31, 2012, 2011 and 2010

	Common shares				Additional paid-in capital			Accumulated deficit			Accumulated Other comprehensive income (loss)			Total shareholders’ 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				Additional paid-in capital			Accumulated deficit			Accumulated Other comprehensive income (loss)			Total shareholders’ 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				Additional paid-in capital			Retained Earnings (accumulated) deficit)			Accumulated Other Comprehensive income (loss)			Total shareholders’ 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

See accompanying notes to consolidated financial statements.

39

VITRAN CORPORATION INC.

Consolidated Statements of Cash Flows

(Amounts in thousands of United States dollars)

Years ended December 31, 2012, 2011 and 2010

	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			—

See accompanying notes to consolidated financial statements.

40

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, 2011 and 2010

1. Significant accounting policies:

(a) Description of the business:

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

The 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.

(b) Basis of presentation:

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

These 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 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.

(c) New accounting pronouncements:

FASB Accounting Standard Update (“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. FASB ASU No. 2011-08 was adopted by the Company on January 1, 2012.

FASB 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 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.

FASB 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.

41

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, 2011 and 2010

1. Significant accounting policies (continued):

FASB 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.

(d) Foreign currency translation:

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

The United States dollar is 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 operation translates foreign currency-denominated transactions into its functional currency using the rate of exchange in effect at the date of the transaction.

Monetary assets and liabilities denominated in a foreign currency 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 income. In a hedge 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.

In respect 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.

(e) Revenue recognition:

The Company 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.

Within the LTL business unit, revenue adjustments are estimated at the end of each 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. The 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.

42

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, 2011 and 2010

1. Significant accounting policies (continued):

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

(f) Accounts receivable:

Accounts receivable are presented, net of allowance for doubtful accounts of $2.5 million at December 31, 2012 (2011 - $2.7 million).

(g) Cash and cash equivalents:

Cash and cash equivalents include cash on account and short-term investments with original maturities of three months or less and are stated at cost, which approximates fair value.

(h) Inventory:

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

(i) Property and equipment:

Property and equipment are recorded at cost. 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

Tires purchased as part of a vehicle are capitalized as a cost to the vehicle. Replacement tires are expensed when placed in service.

(j) Assets held for sale:

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).

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).

43

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, 2011 and 2010

1. Significant accounting policies (continued):

(k) Goodwill and intangible assets:

FASB Accounting Standards 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. 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 assets consist of not-to-compete covenants and customer 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) Income taxes:

The 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.

(m) Share-based compensation:

Under the 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 742,800 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 9, “Common shares” provides supplemental disclosure for the Company’s stock options.

44

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, 2011 and 2010

1. Significant accounting policies (continued):

(n) Advertising costs:

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

(o) Impairment of long-lived assets:

An 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. 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) Derivative instruments:

Derivative instruments are recognized 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 income, based on whether the instrument is designated as a hedge transaction and, if 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 transactions. This 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.

(q) Claims and insurance accruals:

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.

45

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, 2011 and 2010

1. Significant accounting policies (continued):

(r) Accounts payable and accrued liabilities:

	2012		2011
Accounts payable	$	35,697	$	36,083
Accrued wages and benefits		7,350		8,018
Accrued claims, self-insurance and workers’ compensation		14,261		10,592
Other		10,436		11,685
	$	67,744	$	66,378

(s) Deferred share units:

The Company maintains a deferred share unit (“DSU”) plan for all directors. Under this plan, all directors receive units at the end of each quarter based on the market price of common shares equivalent to Cdn. $2,500.00. The Company records compensation expense and the corresponding liability each period initially for Cdn. $2,500.00 and subsequently based on changes in the market price of common shares.

In addition to the directors’ DSU plan, the Company adopted a DSU plan for senior executives. Under this plan, 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.

(t) Use of estimates:

The 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.

46

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, 2011 and 2010

2. Discontinued operations:

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”.

During 2010, the Company completed the sale of selected assets of Frontier Transport 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:

	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

The following table summarizes the assets and liabilities from discontinued operations:

	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

47

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, 2011 and 2010

3. Acquisition:

On February 19, 2011, the Company acquired selected assets of Milan Express Inc.’s (“Milan”) 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, Georgia, 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.

4. Property and equipment:

	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

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

5. Intangible assets:

	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

48

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, 2011 and 2010

5. Intangible assets (continued):

Amortization expense was $2.1 million in 2012 (2011 - $2.2 million). Amortization expense for the following two years is estimated to be as follows:

Year ending December 31:
2013	$	1,659
2014		1,048
	$	2,707

6. Goodwill:

	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

7. Long-term debt:

	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

49

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, 2011 and 2010

7. Long-term debt (continued):

On December 28, 2012, the Company entered into a new 15 year real estate term credit facility for a total of $16.8 million. The real estate term credit facility is secured by 18 transportation facilities throughout the United States. The proceeds from the new real estate term credit facility were used to repay the Company’s term bank credit facility and asset based revolving 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 for proceeds of $7.0 million. Refer to Note 17, “Subsequent events”.

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

On November 30, 2011, the Company entered into a new three-year bank syndicated asset based revolving credit agreement providing up to $85 million. In addition, on November 30, 2011, the Company 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 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.

(a) The Company’s asset based revolving credit facility is secured by accounts receivable, certain equipment and general security agreements covering the assets of the Company and all of its subsidiaries. The revolving credit facility provides up to $85.0 million, maturing on November 30, 2014. The Company had $31.8 million outstanding at December 31, 2012 (2011 – $21.9 million), bearing interest at 2.96% to 5.00% (2011 – 2.8% to 4.75%). The provisions of the revolving credit facility impose certain financial maintenance tests if availability falls below a certain threshold. At December 31, 2012, the Company was not required to measure these covenants.

(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%).

(c) 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%.

(d) During 2012, the Company financed certain equipment by entering into additional capital leases of $5.7 million. The Company had $6.3 million (2011 - $3.5 million) of capital leases remaining at December 31, 2012.

50

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, 2011 and 2010

7. Long-term debt (continued):

At December 31, 2012, the required future principal repayments on all long-term debt and capital leases are as follows:

Year ending December 31:
2013	$	3,339
2014		35,003
2015		3,428
2016		3,586
2017		2,944
Thereafter		57,036
	$	105,336

8. Income taxes:

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

	2012			2011			2010
Effective statutory federal, state and provincial income tax rate		26.50	%		28.25	%		31.00	%
Effective tax recovery on loss from continuing operations before income taxes	$	(11,466	)	$	(6,043	)	$	(2,287	)
Increase (decrease) results from:
Non-deductible share-based compensation expense		114			141			175
Income taxed at different rates in foreign jurisdictions		(5,673	)		(4,440	)		(3,012	)
Increase in valuation allowance		15,480			8,737			38,879
State and other state taxes		511			615			1,845
Unrecognized tax benefits, net		—			—			(1,358	)
Other		391			378			743
Actual income tax expense (recovery)	$	(643	)	$	(612	)	$	34,985

51

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, 2011 and 2010

8. Income taxes (continued):

Income tax expense (recovery):

	2012			2011			2010
Current income tax expense (recovery):
Canada:
Federal	$	699		$	453		$	(848	)
Provincial		530			319			(575	)
United States:
Federal		(2,394	)		(2,394	)		(3,360	)
State		511			615			1,209
Other		1			107			140
		(653	)		(900	)		(3,434	)
Deferred income tax expense:
Canada:
Federal		6			169			86
Provincial		4			119			59
United States:
Federal		—			—			30,636
State		—			—			7,638
		10			288			38,419
	$	(643	)	$	(612	)	$	34,985

A summary of the principal components of deferred income tax assets and liabilities is as follows:

	2012			2011
Current deferred income tax assets:
Allowance for doubtful accounts	$	581		$	585
Accruals and reserves		4,692			3,152
Financing costs		92			175
Valuation allowance		(5,273	)		(3,737	)
	$	92		$	175
Non-current deferred income tax assets:
Loss carryforwards		42,138			26,695
Other timing differences		7,582			7,586
Goodwill and intangible assets		19,812			21,621
Valuation allowance		(58,616	)		(44,672	)
		10,916			11,230
Non-current deferred income tax liabilities:
Property and equipment		(5,871	)		(7,414	)
Financing costs		(80	)		(106	)
Other		(6,140	)		(4,961	)
		(12,091	)		(12,481	)
	$	(1,175	)	$	(1,251	)

52

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, 2011 and 2010

8. Income taxes (continued):

At December 31, 2012, the Company had approximately $103.0 million (2011 - $65.0 million) of net operating loss carryforwards available to reduce future years’ taxable income. The net operating losses will expire between 2027 and 2032 if not utilized. As required by FASB ASC 740-10, the Company increased its valuation allowance by $15.5 million in 2012 and the valuation allowance recorded at December 31, 2012 amounted to $63.9 million.

The Company and its subsidiaries file income tax returns in U.S. and Canadian federal jurisdictions, and various states, provinces and foreign jurisdictions. Overall, the years 2009 to 2011 remain open to examination by tax authorities.

9. Common shares:

The Company provides a stock option plan to key employees, officers and directors to encourage executives to acquire a meaningful equity ownership interest in the Company over a period of time and, as a result, reinforce executives’ attention on the long-term interest of the Company and 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 742,800 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 2012 was $3.54 (2011 - $2.96; 2010 - $5.34) per share.

The fair 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:

	2012			2011			2010
Risk-free interest rate		1.52 – 1.74	%		1.67 - 2.91	%		2.30	%
Volatility factor of the future expected market price of the Company’s common shares		56.40 – 57.20	%		49.18 - 56.29	%		48.78	%
Expected life of the options		6 years			6 years			6 years

53

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, 2011 and 2010

9. Common shares (continued):

Details of stock options are as follows:

	2012					2011
	Number			Weighted average exercise price		Number			Weighted average exercise price
Outstanding, beginning of year		841,900		$	11.70		864,700		$	13.10
Granted		67,000			6.52		160,500			5.63
Forfeited		(98,100	)		14.01		(152,100	)		15.12
Exercised		(68,000	)		2.20		(31,200	)		2.59
Outstanding, end of year		742,800		$	11.80		841,900		$	11.70
Exercisable, end of year		468,960		$	14.44		515,700		$	13.68

At December 31, 2012, the range of exercise prices, the weighted average exercise price and the weighted average remaining contractual life are as follows:

	Options outstanding						Options exercisable
Range of exercise prices	Number outstanding		Weighted average remaining contractual life (years)		Weighted average exercise price		Number exercisable		Weighted average exercise price
$5.25 - $  8.45		219,100		8.98	$	5.64		30,420	$	5.25
$9.80 - $18.99		523,700		4.08	$	14.37		438,540	$	15.07
$5.25 - $18.99		742,800		5.52	$	11.80		468,960	$	14.44

Compensation expense related to stock options was $431 for the year ended December 31, 2012 (2011 - $501; 2010 - $574).

54

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, 2011 and 2010

10. Computation of income (loss) per share:

	2012			2011			2010
Numerator:
Net loss from continuing operations	$	(42,626	)	$	(20,780	)	$	(43,362	)
Net income from discontinued operations		6,651			6,767			2,180
Net loss		(35,975	)		(14,013	)		(40,182	)
Denominator:
Basic and dilutive weighted average shares outstanding		16,391,252			16,326,760			16,277,522
Basic and diluted loss per share from continuing operations		(2.60	)		(1.27	)		(2.60	)
Basic and diluted income per share from discontinued operations		0.41			0.41			0.13
Basic and diluted loss per share		(2.19	)		(0.86	)		(2.47	)

Diluted income per share excludes the effect of 742,800 anti-dilutive options for the year ended December 31, 2012 (2011 – 773,900; 2010 – 765,500). Due to the net loss for the years ended December 31, 2012, 2011 and 2010, the 3,494 (2011 – 46,100; 2010 – 84,025) dilutive shares have no effect on the loss per share.

11. Risk management activities:

The Company is exposed to market risks, including the effect of changes in foreign currency exchange rates and interest rates.

Interest rates:

The Company’s exposure to changes in interest rates is limited to borrowings under the revolving credit facility that has variable interest rates tied to the LIBOR rate. At December 31, 2012, 31% of the Company’s long-term debt was subject to variable interest rates.

Hedges of net investment in self-sustaining operations:

United States dollar denominated debt of $8.5 million held by an entity with a Canadian dollar functional currency is designated as a hedge against the Company’s exposure for a portion of its net investment in self-sustaining U.S. dollar denominated subsidiaries with a view to reducing the impact of foreign exchange fluctuations. The foreign exchange effect of both the U.S. dollar debt and the net investment in U.S. dollar denominated subsidiaries is reported in other comprehensive income. As at December 31, 2012, the Company’s net investment in U.S. dollar denominated subsidiaries totalled $174.6 million (2011 - $220.0 million). No ineffectiveness has been recorded in earnings as the notional amounts of the hedging item equals the portion of the net investment balance being hedged.

55

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, 2011 and 2010

12. Segmented information:

The Company’s continuing business operations are in one operating segment: LTL, which provides transportation services in Canada and the United States.

Geographic information for revenue from point of origin and total assets is as follows:

	2012		2011		2010
Revenue:
Canada	$	193,943	$	192,315	$	172,869
United States		508,971		493,927		408,725
	$	702,914	$	686,242	$	581,594

	2012		2011
Total assets:
Canada	$	86,660	$	80,164
United States		151,837		162,094
	$	238,497	$	242,258

	2012		2011
Total long-lived assets:
Canada	$	60,185	$	53,079
United States		91,129		92,449
	$	151,314	$	145,528

Long-lived assets include property and equipment, goodwill and intangible assets.

13. Financial instruments:

The fair values of cash and cash equivalents, bank overdraft, accounts receivable and accounts payable and accrued liabilities approximate their carrying values 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, 2012 and 2011.

FASB ASC 820-10-05 establishes 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, respectively. The fair values of accounts receivable and accounts payable and accrued liabilities are classified as level 2 measurements.

56

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, 2011 and 2010

14. Lease commitments:

At December 31, 2012, future minimum rental payments relating to operating leases for premises and equipment are as follows:

Year ending December 31:
2013	$	26,698
2014		22,362
2015		17,420
2016		11,257
2017		4,888
Thereafter		5,415
	$	88,040

Total rental expense under operating leases was $28.5 million for the year ended December 31, 2012 (2011 - $21.2 million; 2010 - $15.2 million).

The Company has guaranteed a portion of the residual values of certain assets under operating leases. If the market value of the assets at the end of the lease terms is less than the guaranteed residual value, the Company must, under certain circumstances, compensate the lessor for a portion of the shortfall. The maximum exposure under these guarantees is $10.6 million.

15. Employee benefits:

The Company sponsors defined contribution plans in Canada and the United States. In Canada, the Company matches the employee’s contribution to their registered retirement savings plan up to a maximum contribution. In the United States, the Company sponsors 401(k) savings plans. The Company matches a percentage of the employee’s contribution subject to a maximum contribution. The expense related to the plans was $0.5 million for the year ended December 31, 2012 (2011 - $0.5 million; 2010 - $0.5 million).

16. Contingent liabilities:

The Company is subject to legal proceedings that arise in the ordinary course of business. In the 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.

17. Subsequent events:

On January 22, 2013, the Company entered into an additional 15 year real estate term credit facility with a real estate mortgage lender for $7.0 million. The real estate term credit facility is secured by five additional transportation facilities throughout the United States, bringing the total facilities secured to 23. The real estate term agreement bears interest at 4.625% to 4.875% with an interest rate adjustment period of every three to five years.

57

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, 2011 and 2010

17. Subsequent events (continued):

On February 12, 2013, the Company reached an agreement to sell its SCO segment to Legacy SCO Inc. (“Legacy”), an affiliate of Legacy Supply Chain, based in Portsmouth, New Hampshire, for U.S. $97.0 million in cash, subject to certain working capital adjustments. Legacy has commitments from certain financial institutions to provide sufficient debt financing to close the transaction. The financing is subject to the financial institution’s completion of confirmatory due diligence. The sale of the SCO segment 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.

58

VITRAN CORPORATION INC.

Consolidated Supplemental Schedule of Quarterly Financial Information

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

Years ended December 31, 2012 and 2011

2012 (Unaudited)	First quarter			Second quarter			Third quarter			Fourth quarter
Revenue:
Less-than-truckload	$	178,587		$	183,789		$	176,209		$	164,329
Total revenue	$	178,587		$	183,789		$	176,209		$	164,329
Loss from continuing operations after depreciation and amortization	$	(6,265	)	$	(4,555	)	$	(10,474	)	$	(16,558	)
Income from discontinued operations	$	1,371		$	1,560		$	1,660		$	2,060
Net loss from continuing operations		(7,187	)		(5,723	)		(11,760	)		(17,956	)
Net loss		(5,816	)		(4,163	)		(10,100	)		(15,896	)
Loss per share:
Basic and Diluted – continuing operations	$	(0.44	)	$	(0.35	)	$	(0.72	)	$	(1.09	)

2011 (Unaudited)	First quarter			Second quarter			Third quarter			Fourth quarter
Revenue:
Less-than-truckload	$	158,989		$	178,362		$	176,407		$	172,484
Total revenue	$	158,989		$	178,362		$	176,407		$	172,484
Loss from continuing operations after depreciation and amortization	$	(583	)	$	(2,578	)	$	(3,661	)	$	(7,762	)
Income from discontinued operations	$	1,395		$	1,570		$	1,908		$	1,894
Net loss from continuing operations
Net Loss		(1,619	)		(3,867	)		(5,328	)		(9,966	)
		(224	)		(2,297	)		(3,420	)		(8,072	)
Loss per share:
Basic and Diluted – continuing operations	$	(0.10	)	$	(0.24	)	$	(0.33	)	$	(0.61	)

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ITEM 9—CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

During the Company’s last two fiscal years, there were no disagreements with KPMG LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of KPMG LLP, would have caused them to make reference to the subject matter of the disagreement in connection with their reports.

ITEM 9. A—CONTROLS AND PROCEDURES

Disclosure controls and procedures, as such term is defined in Rule 13a-15(e) of the Exchange Act, are controls and other procedures that are designed to ensure that information required to be disclosed by our Company is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our Company’s management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. Our CEO and CFO are responsible for establishing and maintaining disclosure controls and procedures for our Company.

As of the end of the period covered by this Annual Report on Form 10-K, the Company carried out an evaluation, under the supervision and with the participation of Company management, including our CEO and CFO, of the effectiveness of the design, implementation and operation of its disclosure controls and procedures. Based on this evaluation, the Company’s CEO and CFO have concluded that the Company’s disclosure controls and procedures are effective as of December 31, 2012.

There have been no significant changes in our internal control over financial reporting, which we define in accordance with Exchange Act Rule 13a-15(f) to include our control environment, control procedures, and accounting systems, or any other factors that could materially affect or are reasonably likely to materially affect our internal control over financial reporting during the fourth quarter of 2012.

Inherent Limitation of the Effectiveness of Internal Control

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all the control issues and instances of management override or improper acts, if any, have been detected. These inherent limitations include the realities that judgment in decision making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to management override may have adverse and material effects on our business, financial condition and results of operations.

Management’s Report on Internal Control over Financial Reporting

The management of Vitran Corporation Inc. (“Vitran”) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Vitran’s management team assessed the effectiveness of its internal control over financial reporting using the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and based on that assessment concluded that internal control over financial reporting was effective as of December 31, 2012.

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KPMG LLP, an independent public accounting firm registered with the PCAOB, has issued an attestation report on the effectiveness of Vitran’s internal control over financial reporting, as stated in their report which is included herein.

February 21, 2013	/s/ Richard E. Gaetz, President and Chief Executive Officer
	/s/ Fayaz D. Suleman, Vice President Finance and Chief Financial Officer

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Vitran Corporation Inc.:

We have audited Vitran Corporation Inc.’s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Vitran Corporation Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting under the heading Management’s Report on Internal Control over Financial Reporting included in Form 10-K. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Vitran Corporation Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Vitran Corporation Inc. as of December 31, 2012 and December 31, 2011, and the related consolidated statements of income (loss), comprehensive income (loss), shareholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2012, and our report dated February 19, 2013 expressed an unqualified opinion on those consolidated financial statements.

/s/  KPMG LLP

Chartered Accountant, Licensed Public Accountants

Toronto, Canada

February 19, 2013

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ITEM 9. B—OTHER INFORMATION

None.

PART III

ITEM 10—DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information for directors, Section 16(a) beneficial ownership reporting and other compliance as required by Item 407 of Regulation S-K, will be reported in the Company’s definitive proxy statement anticipated to be filed with the SEC pursuant to Regulation 14A within 120 days following the end of the fiscal year ended December 31, 2012, and is incorporated herein by reference. The following table sets forth certain information concerning our executive officers:

Name	Age	Position	History
Richard E. Gaetz (Mississauga, Canada)	55	President and Chief Executive Officer	Mr. Gaetz has been working in the transportation and logistics industry for more than 30 years. He has been actively involved with the growth and development of Vitran and has been responsible for Vitran’s freight and supply chain operations since he joined in 1989. He was elected to the Board of Directors of Vitran in 1995. Mr. Gaetz has extensive experience on both sides of the border. Prior to joining Vitran, he spent ten years with Clarke Transport, a large Canadian freight company, in various positions including Vice President. Mr. Gaetz received a Bachelor of Commerce degree from Dalhousie University in Halifax in 1979. He is an Executive Director of the Ontario Trucking Association and a director of the Canadian Trucking Alliance.
Fayaz D. Suleman (Mississauga, Canada)	34	Vice President Finance and Chief Financial Officer	Mr. Suleman joined Vitran in 2003 and was Vitran’s Corporate Controller since 2005. He was appointed Vice President Finance and Chief Financial Officer in 2011. Prior to joining Vitran, he gained his public accounting experience at KPMG LLP in the assurance and business advisory services practice. Mr. Suleman is a Chartered Accountant with the Ontario Institute and received an Honors Bachelor of Business Administration from Wilfrid Laurier University in Ontario.

CODE OF ETHICS

The Company has adopted a Code of Ethics and Professional Conduct (the “Code”) for all senior executives and directors, including the Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer. The Code is available free of charge on the Company’s website at www.vitran.com. The Code requires that the Company’s senior executives and directors deal fairly with customers, suppliers, fellow employees and the general public. Acceptance of the Code is mandatory for the Company’s senior executives and directors. We intend to disclose future amendments to, or waivers from, certain provisions of the Code on our website within five business days following the adoption of such amendment or waiver.

ITEM 11—EXECUTIVE COMPENSATION

The information required by Item 11 of Form 10-K will appear in the Company’s definitive 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), reference to which is hereby made, and the information therein is incorporated herein by reference.

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ITEM 12—SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by Item 12 of Form 10-K will appear in the Company’s proxy statement for the 2013 Annual Meeting of its Shareholders, reference to which is hereby made, and the information therein is incorporated herein by reference.

ITEM 13—CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by Item 13 of Form 10-K will appear in the Company’s proxy statement for the 2013 Annual Meeting of its Shareholders, reference to which is made, and the information therein is incorporated by reference.

ITEM 14—PRINCIPAL ACCOUNTING FEES AND SERVICES

KPMG LLP has served as the Company’s auditors since 1989. For the fiscal years ended December 31, 2012 and 2011, fees billed by KPMG LLP to Vitran for services were:

	Year ended December 31,
	2012		2011
Audit and audit-related fees	$	568,569	$	570,647
Tax fees		Nil		Nil
All other fees		Nil		Nil
	$	568,569	$	570,647

All services provided by KPMG to Vitran for 2012 and 2011 were approved by the Audit Committee. The Audit Committee pre-approves all non-audit services to be provided to the Company or its subsidiary entities by its independent auditors. For further details regarding the Audit Committee approval process, please review the Audit Committee charter which is available free of charge on Vitran’s website at www.vitran.com.

For information regarding the members and other applicable information of the Audit Committee, please review the Company’s proxy statement for the 2013 Annual Meeting of its Shareholders, reference to which is hereby made, and the information therein is incorporated herein by reference.

PART IV

ITEM 15—EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) (1) Financial Statements

Consolidated Balance Sheets as at 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.

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(2) Financial Statement Schedules:

Schedule II—Valuation and Qualifying Accounts

Vitran Corporation Inc.

Three years ended December 31, 2012

Allowance for Doubtful Accounts
(in thousands of dollars) Description	Balance at beginning of year		Charges to costs and expenses		Deductions			Balance at end of year
Year ended December 31, 2010
Accounts receivable allowances for revenue adjustments and doubtful accounts	$	3,292	$	187	$	(936	)	$	2,543
Year ended December 31, 2011
Accounts receivable allowances for revenue adjustments and doubtful accounts	$	2,543	$	940	$	(741	)	$	2,742
Year ended December 31, 2012
Accounts receivable allowances for revenue adjustments and doubtful accounts	$	2,742	$	560	$	(757	)	$	2,545
Deferred Tax Valuation Allowance
(in thousands of dollars) Description	Balance at beginning of year		Charges to costs and expenses		Deductions			Balance at end of year
Year ended December 31, 2010
Deferred tax asset valuation allowance	$	—	$	39,644	$	—		$	39,644
Year ended December 31, 2011
Deferred tax asset valuation allowance	$	39,644	$	8,737	$	—		$	48,381
Year ended December 31, 2012
Deferred tax asset valuation allowance	$	48,381	$	15,480	$	—		$	63,861

(3) Exhibits Filed

The exhibits listed in the accompanying Exhibit Index are filed as part of this Annual Report on Form 10-K.

(b) Separate Financial Statements

None.

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Exhibit Number	Description of Exhibit
4.1	Articles of Incorporation effective April 29, 1981 (1)
4.2	Articles of Amendment effective May 27, 1987 (2)
4.3	Articles of Amendment effective July 16, 1987 (3)
4.4	Articles of Arrangement effective February 5, 1991 (4)
4.5	Articles of Amendment effective April 22, 2004 (5)
4.6	Amended By-Laws effective February 7, 2008 (6)
4.7	By-law to authorize the directors to borrow and give security effective July 16, 1987 (7)
10.1	Employee Stock Option Plan (8)
10.3	Deferred share unit plan for Directors, dated September 14, 2005 (9)
10.4	Deferred share unit plan for Senior Executives, dated March 10, 2006 (10)
10.5	Employment Agreement dated March 16, 2009 between the Registrant and Rick E. Gaetz (11)
10.6	Securities Purchase Agreement dated September 17, 2009 (12)
10.7	Registration Rights Agreement dated September 21, 2009 (13)
10.8	Share Purchase Agreement between Vitran Express Canada Inc., Vitran Corporation and Legacy SCO, Inc. dated February 12, 2013(20)
10.9	Credit Agreements between Standard Insurance Company and Vitran Properties USA, Inc. and subsidiaries dated December 19, 2012 and January 15, 2013 (21)
10.10	Credit Agreement between JPMorgan Chase Bank, N.A. as Agent and JPMorgan Chase Bank, N.A., JPMorgan Chase Bank, N.A., Toronto Branch, those other financial institutions whose names appear on the signature pages hereto and the other persons from time to time party hereto as Lenders and J.P. Morgan Securities Inc. as Co-Lead Arranger and Sole Bookrunner and Royal Bank of Canada, as Co-Lead Arranger and Fifth Third Bank and Export Development Canada And Vitran Corporation Inc., Vitran Express Canada Inc. and Vitran Corporation and subsidiaries as Borrowers Dated as of November 30, 2011 (16)
10.11	Amendment No. 1 to Credit Agreement between JPMorgan Chase Bank N.A. and those banks whose names appear on the signature pages hereto and Vitran Corporation Inc., Vitran Express Canada Inc. and Vitran Corporation Dated December 29, 2011 (17)
10.12	Amendment No. 2 to Credit Agreement between JPMorgan Chase Bank N.A. and those banks whose names appear on the signature pages hereto and Vitran Corporation Inc., Vitran Express Canada Inc. and Vitran Corporation Dated October 10, 2012 (19)
10.13	Amendment No. 3 to Credit Agreement between JPMorgan Chase Bank N.A. and those banks whose names appear on the signature pages hereto and Vitran Corporation Inc., Vitran Express Canada Inc. and Vitran Corporation Dated December 28, 2012 (21)
10.14	Amendment No. 4 to Credit Agreement between JPMorgan Chase Bank N.A. and those banks whose names appear on the signature pages hereto and Vitran Corporation Inc., Vitran Express Canada Inc. and Vitran Corporation Dated February 12, 2013 (21)
10.15	Credit Agreement between CMLS Financial Ltd. as Lender and Vitran Corporation Inc., Vitran Express Canada Inc. and Expediteur T.W. Ltee., as Covenantor and Vitran Express Canada Inc. and Expediteur T.W. Ltee. as Borrowers Dated as of November 30, 2011 (18)
10.16	Amended Credit Agreement between CMLS Financial Ltd. as Lender and Vitran Corporation Inc. and Expediteur T.W. Ltee as Covenantor and Vitran Express Canada Inc. and Vitran Environmental Systems Inc. as Borrowers Dated October 31, 2012 (21)
14.1	Code of Conduct for Employees (14)
14.2	Code of Conduct for Directors (15)
23.1	Consent of Independent Registered Public Accounting Firm (21)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (21)
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (21)
32.1	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (21)

66

Notes:

⁽¹⁾  Filed as Exhibit 1.1 to the Registrant’s Registration Statement on Form 20-F filed with the Commission on June 14, 1995.

⁽²⁾  Filed as Exhibit 1.2 to the Registrant’s Registration Statement on Form 20-F filed with the Commission on June 14, 1995.

⁽³⁾  Filed as Exhibit 1.3 to the Registrant’s Registration Statement on Form 20-F filed with the Commission on June 14, 1995.

⁽⁴⁾  Filed as Exhibit 1.4 to the Registrant’s Registration Statement on Form 20-F filed with the Commission on June 14, 1995.

⁽⁵⁾  Filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on May 7, 2004.

⁽⁶⁾  Filed as Exhibit 4.6 to the Registrant’s Registration Statement on Form S-8 filed with the Commission on September 11, 2009

⁽⁷⁾  Filed as Exhibit 1.6 to the Registrant’s Registration Statement on Form 20-F filed with the Commission on June 14, 1995.

⁽⁸⁾  Filed as Exhibit 99.1 to the Registrant’s Registration Statement on Form S-8 filed with the Commission on September 11, 2009.

⁽⁹⁾  Filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on September 15, 2005.

⁽¹⁰⁾  Filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on March 13, 2006.

⁽¹¹⁾  Filed as Exhibit 10.23 to the Registrant’s Current Report on Form 8-K filed on March 17, 2009.

⁽¹²⁾  Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on September 18, 2009.

⁽¹³⁾  Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on September 22, 2009.

⁽¹⁴⁾  Filed as Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed on August 3, 2004.

⁽¹⁵⁾  Filed as Exhibit 99.2 to the Registrant’s Current Report on Form 8-K filed on August 3, 2004.

⁽¹⁶⁾  Filed as Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K filed on February 9, 2012.

⁽¹⁷⁾  Filed as Exhibit 10.9 to the Registrant’s Annual Report on Form 10-K filed on February 9, 2012.

⁽¹⁸⁾  Filed as Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K filed on February 9, 2012.

⁽¹⁹⁾  Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on November 5, 2012.

⁽²⁰⁾  Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on February 19, 2013.

⁽²¹⁾  Filed as an exhibit to this Annual Report on Form 10-K.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Toronto, Province of Ontario, on the 21st day of February, 2013.

Vitran Corporation Inc.
By:	/s/    FAYAZ D. SULEMAN
	Fayaz D. Suleman
	Vice President Finance and
	Chief Financial Officer

68

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signatures	Title	Date
/s/ RICHARD D. McGRAW	Chairman of the Board	February 21, 2013
Richard D. McGraw
/s/ RICHARD E. GAETZ	President and Chief Executive Officer, Director	February 21, 2013
Richard E. Gaetz
/s/ GEORGES L. HÉBERT	Director	February 21, 2013
Georges L. Hébert
/s/ WILLIAM S. DELUCE	Director	February 21, 2013
William S. Deluce
/s/ ANTHONY F. GRIFFITHS	Director	February 21, 2013
Anthony F. Griffiths
/s/ JOHN R. GOSSLING	Director	February 21, 2013
John R. Gossling
/s/ FAYAZ D. SULEMAN	Vice President Finance and Chief Financial Officer	February 21, 2013
Fayaz D. Suleman	(Principal Financial Officer)
/s/ BILL G. ANDREOPOULOS	Corporate Controller	February 21, 2013
Bill G. Andreopoulos	(Principal Accounting Officer)

69