Purolator Inc. - 2011 annual review

REACHING MORE FACES IN MORE PLACES

2011 ANNuAl REvIEw

International

Purolator International will have a total of 30 branches in its u.S. network by the end of 2012. whether your freight or packages are coming from, going to or going across Canada, Purolator delivers the experience, confidence and solutions to get it done right.

Inside1 Message from the Chairman

2 Message from the President

4 Service offerings

5 Our guiding principles

6 Building relationships

7 looking at the next plateau

8 Delivering the promise

9 looking for solutions

10 People First

11 Evolving with the Purolator family

12 The sum of its teammates

13 A commitment to people

14 Teammates with heart

15 Across countries, one goal

16 It’s all about communication

17 what makes a great day?

18 Corporate social responsibility

20 Honouring employee excellence

22 President’s office

22 Board of Directors

23 Governance statement

24 Financial highlights

Corporate profile Purolator is Canada’s leading integrated freight and parcel solutions provider. Celebrating 50 years of delivering Canada, the company continues to expand its reach to more people, more businesses and more places across the country and around the world. Purolator is proud of its Canadian heritage and is positioning itself for future growth and success. As a recent recipient of the logistics Quarterly Third-Party logistics Sustainability Award, Purolator is growing globally in a sustainable manner while contributing to the well-being of the communities where its over 12,000 teammates live, work and play.

Message from the Chairman“ On behalf of the Board of Directors, I am pleased to share the results of Purolator’s performance for 2011.”

Against the backdrop of a sluggish economy, Purolator showed great strength in each of our lines of business in 2011. Total revenues increased by $123 million over the previous year’s, exceeding plan by $1 million. with revenue growth of 8.2 per cent in 2011, Purolator continues to hold the largest market share, by revenue, in the Canadian express market and remains the leading integrated freight and parcel solutions provider in Canada.

In March of 2011, Purolator changed its name from Purolator Courier ltd. to Purolator Inc., and Purolator uSA, Inc. became Purolator International, Inc. The name changes are timely and reflect the evolution of Purolator from a courier company to a comprehensive logistics service provider that has delivered Canada for more than 50 years.

Today the Purolator brand is synonymous with high-quality, flexible and responsive delivery services. with our full range of multi-modal capabilities, and our international presence, we have the tools to deliver superior flexible distribution solutions. But even as our volumes improved in 2011, globalization and industry consolidation continue to drive customers to outsource more of their supply chain and transportation needs. Competition remains fierce as more customers than ever choose suppliers based on their ability to offer creative solutions and a wider range of logistics services.

To retain our competitive advantage and differentiate ourselves from our competitors, Purolator must main-tain a strong customer focus and continue to deliver technology improvements and innovation. By building a high-performance culture that enables employees to help customers succeed, our superior customer experi-ence and brand leadership gives us a sustainable market advantage that will continue to fuel profitable growth.

As we help our customers to succeed in a changing world, Purolator will continue investing in areas that enhance our overall strategy while holding ourselves accountable to our values.

I am serving with an exceptional Board, and together we embrace our mandate to provide oversight and support to Purolator’s management team. I look forward to reporting Purolator’s progress to you in the 2012 Annual Review.

Stewart Bacon Chairman of the Board

Stewart BaconChairman of the Board

Purolator 2011 Annual Review 1

Message from the President “In 2011, our Purolator team delivered strong revenue growth while setting us up well for 2012 and beyond.”

I sincerely thank our Purolator teammates, customers, business partners and Board of Directors for navigating us successfully through a challenging 2011.

In a close-to-flat economy, we achieved more than eight per cent year-over-year revenue growth. we also made significant enhancements in critical areas such as people development, information technology and sales resources for the small-to-medium customer segment. In addition, we doubled the number of our branches in the u.S. from 10 to 20.

with all these investments, we still achieved a two per cent earnings increase over 2010.

Here are 10 of the many performance highlights of our past year:

1. In our company-wide employee engagement study, 76 per cent of our teammates said they’re proud to work for Purolator. And as a testament to their high engagement levels, they made more than 75,000 visits to PuroBlog.

2. For the first time in our history, we renewed our agreement early with our almost 10,000 unionized

teammates, and we signed a five-year agreement —also a historic first.

3. Purolator International recorded its highest-ever scores for customer satisfaction and employee engagement.

4. Our Freight business grew by almost 20 per cent over 2010.

5. we rolled out revenue-generating innovation such as our reweigh tool.

6. Purolator won the inaugural logistics Quarterly Third-Party logistics Sustainability Award— recognizing the impact of our sustainable supply chain practices, including our fleet of hybrid electric vehicles. Purolator operates almost 600 HEvs, the largest HEv fleet of any freight and parcel solutions provider in North America.

7. Currently in its 10th season, Purolator Tackle Hunger has now helped deliver the equivalent of more than 4.5 million pounds of food to local food banks across Canada.

8. Purolator did not miss a beat throughout the volume influx resulting from the Canada Post lockout, and we maintained our high service levels.

9. we won over notable customers from our competitors.

10. In conjunction with our sister companies, Canada Post and SCI, we closed new business with large accounts such as Xerox Canada ltd. and The Shopping Channel.

As I mentioned, we delivered these achievements at the same time as our Purolator team made the necessary investments to continue our success in 2012 and beyond.

Specifically, we invested in people development and sales support. with these investments, we’ve repos-itioned our sales force to represent Purolator’s entire portfolio so that sales team members can match the right Purolator offering with the specific needs of each customer.

with our increased sales force, we’ll deliver our industry-leading portfolio approach to more current and prospective customers than ever. we’ll continue our strong growth

2 Purolator 2011 Annual Review

across both our Courier and Freight businesses. At the same time, we’ll continue to grow our Purolator Inter-national business, as we grow to as many as 30 branches in our u.S. network by the end of 2012.

All of us remain rigorously focused on our #1 business objective: to hold us accountable to growth—not just any growth, but profitable and sustainable growth.

while a principal responsibility is to drive financial success, how we choose to do business is equally important. we call this The Purolator way. Our five corporate values — People First, Customer Focus, Corporate Stewardship, Transparency and Performance Excellence—form the foundation of how we approach every business day. we recognize that in order for Purolator to be successful in the marketplace this year and in future years, we can’t ignore the fact that we are a part of society, and we are dependent on our finite environment.

In line with our value of Corporate Stewardship, last year we said we would focus on four areas: People, Communities, Environment and Ethics. In 2012, we are turning to our stakeholders to hold up the mirror to our organization, and help us understand our strengths as

well as where we are falling short. we are also formal-izing where we stand on material issues that impact our stakeholders, and plan to soon share what we have learned and where we want to go.

Purolator will continue to unlock its potential as we continue to make decisions that align people, planet and profits.

I’m proud of our Purolator team for their contributions in 2011, and for embracing our corporate values to make us a stronger organization. we have the right people focused on the right game plan. Together we can look forward to achieving remarkable results and a successful year in 2012.

Tom Schmitt President and Chief Executive Officer


Delivering Canada and beyond is what we do and excel in, daily. Purolator offers a suite of different shipping, delivery and importing options catered to every shipping budget and need within Canada, to the united States and around the globe.

From Purolator Express 9AM to Purolator Express Evening, Purolator Ground and Purolator Same Day to Purolator Freight and Purolator International, we’ve got Canada covered. And we are continuing to grow our presence in the united States and internationally—bringing Canada to the world and the world to Canada.

Known for our responsive, flexible and dependable service, Purolator stays ahead of the game with its People First and Customer Focus principles.

As Canada’s leading integrated freight and parcel solutions provider, Purolator has an extensive network and the capability to match the right Purolator offering(s) with the specific needs of each customer, helping independent consumers, small- to medium-sized businesses and large cor- porations save money and grow their businesses.

In addition, Purolator customers enjoy peace of mind with our range of e-shipping solutions, which give them full visibility of their shipments online, 24 hours a day, seven days a week, anytime, anywhere.

At Purolator, every day presents an opportunity for us to excel and provide exceptional service to customers while, at the same time, contributing meaningfully to the communities where we live, work and play.

Service offerings

We deliver


Our guiding principlesAt Purolator, how we achieve great results is as important as the results themselves. Purolator’s five corporate values, which we adopted last year, act as our guiding principles in all that we do. As Purolator teammates, we give our best every day. we put people first, and we provide exceptional service for our customers. we openly abide by these principles in all that we do while managing our business in an ethical and sustainable way.

People Firstwe recognize that our teammates and their families are key stakeholders. we will only be successful as a business if we provide our teammates with a safe and healthy workplace and we have the right people in the right roles with the support they need to succeed. we hire for attitude and train for skills.

Customer Focuswe can only create long-term, sustainable shareholder value if we deliver products and services that our customers value and are willing to compensate us fairly for. we need to give our customers compelling reasons to choose us over our competition, and we must always be proud ambassadors of the Purolator brand in our professional and personal lives.

Corporate Stewardshipwe are all custodians of this great Canadian institution called Purolator. we must strive to make Purolator a better place for our teammates and work together to strengthen the communities we serve. This requires us to manage our business ethically and sustainably, being thoughtful of our stakeholders.

TransparencyTrust, a value that is universally cherished, can only be earned and maintained if we are open and honest with our employees, customers, suppliers and other stakeholders. Except to the extent necessary to comply with the law or protect competitively sensi-tive information, we will ensure that everyone has a common understanding of where we are, where we are going and how we arrive at significant decisions.

Performance Excellencewe can achieve all of the above only if we work collaboratively, as one big team, and give our best to each and every one of our teammates. we will demand and recognize excellence, both in terms of what we achieve and how we achieve it.


“I’d taken three years off to stay home with my twin boys. I decided in 1987 to go back to work. I saw in the newspaper one day that Purolator was hiring. I had about 15 minutes to make it to the interview. Fortunately, Purolator is only five minutes from my home. I was hired. And here I am now, 15 years later, sitting on the back of my truck.

Purolator provides me with a safe work environment and gives me the skills I need to do my job. The company treats us right. Everyone here is open and honest. But when I leave the depot, I’m on my own. There’s nobody staring over my shoulder.

I see my customers on a daily basis. I build relationships with them. I believe in them. These people are very important to me. People share. They tell me what happens. I’ve had customers cry. I’ve given customers hugs. I listen to them, show interest in their lives. You’ve got to stay within your corporate boundaries, but you’ve also got to be interested in your customers. And let’s face it, customers are what make any corporation grow.

I’ve grown a lot, too. I’ve learned to be more trusting, more balanced. I’ve learned to communicate more, to open myself up to new ideas. I’ve learned to share my emotions, and I’ve implemented that at home, as well, with my children. You have to grow as a person to keep up with the company and the expectations of your customers.

Purolator has become a family to me. That’s what drives me. And my customers mean the world to me. I always exceed their expectations.

Employees don’t leave Purolator. I still can’t get holidays in July or August, and I’ve been here 15 years.”

To watch the full interview, visit

www.purolator.com/annualreview

Building relationshipsSheryl Toop, Courier, Burnaby, British Columbia


Looking at the next plateauSerge viola, General Manager, Fleet, Ground Support Equipment and Ground linehaul

“About 12 years ago, Purolator came along and gave me a challenging role: to work with a lot of good people and develop a fleet. At the time, our fleet was in disrepair. It needed a lot of work and a lot of attention. we introduced new policies and new procedures. we intro-duced new vehicles, environmentally friendly vehicles, hybrid vehicles, electric vehicles. Today we have a totally different fleet than when I started. It’s one that everybody can feel proud of.

Our goal is to continually improve on our fleet. we get input from the couriers themselves on what we can do to improve our vehicles. we look for new ergonomic features and new safety features. we also look at more environ-mentally friendly options like a fully electric vehicle for downtown core deliveries. Our vehicles today are more environmentally friendly and a lot more ergonomically friendly. They have a lot more safety features, and they’re a lot less stressful for our drivers.

The generation we’re hiring today is very involved in the environment. It’s important for them to know that the company they work for is environmentally responsible. They want to work for a company that contributes to a sustainable environment. It’s important to our customers, as well.

whenever we make a decision on a vehicle, we always consider the effect on our teammates and our customers. That’s very important. Take care of your people, and everything else will be taken care of.

Purolator gives people the opportunity to try different things, to think outside the box, not just follow the status quo. Giving people the opportunity to do that encourages them and makes them happy to come to work every day. People are always looking for that next win. That makes Purolator a special place to work.

we’ve done a lot of work on the fleet over the last 10 years. But we’re not finished. we’re look-ing at the next plateau. we don’t know what it is yet, but we know it’s there.”

To watch the full interview, visit www.purolator.com/annualreview


Delivering the promiseDon virgin, General Manager, Operations, Metro

“we have 1,200 employees in 11 districts in Metropolitan Toronto. The territory runs from Mississauga to Belleville. we strive every day to make sure that our customers get the service that they’ve been promised.

I started in 1982 as a courier and worked my way up through the organization. My expertise is in operations. I work with different depart-ments to make sure that, when we pick up a customer’s package, it gets to where it should be in the time we say it will get there. It’s not just me. It’s our whole team of 12,000 employees across Canada delivering on our promise.

My role first and foremost is looking after our people, making sure they work safely and come home to their families every night. It’s also my role to look after our customers, to make sure we deliver their packages as promised. And we have to do this in a cost-efficient manner so that we remain profitable.

I’ve been with Purolator for 30 years. I’ve met a lot of nice people and worked with a lot of great teammates. The camaraderie and can-do attitude of getting the job done and delivering on our promise to our customers is always prevalent in this organization.

Purolator has been around for 50 years because of the service that we’ve provided to our customers. Our goal is to make sure that we’re around for another 50 years. To reach that goal, we have to continue delivering on our promise. we have to continue looking after our people. And we have to continue looking after our customers.”




Looking for solutionsJohanne lépine, Accounts Receivable Team lead, Collection and Customer Review Department

“I started with Purolator after it bought the courier company that I was working for. I’ve been here for 24 years—for the last 22 years in Accounts Receivable. There are 14 employees in our department. I’m assistant to the supervisor. I like what I do. I work with numbers a lot—that’s a choice I made as a teenager—and I like speaking to customers.

when I started, everything was manual. There was one computer for two people. we took orders manually, and I worked with account books. we wrote it all down. As we progressed, we integrated technology. But it all started with manual procedures.

My objective is to use all the knowl-edge that I’ve acquired to satisfy

our customers. If they’re not happy, I’ll listen to them to find out exactly what they want and why they’re not satisfied. I have to put myself in their shoes and empathize with how they feel. I have to approach them the way I’d want to be approached to settle their account.

we learn in our training how to satisfy customers, how to make ourselves understood on the phone, how to approach them, to never say no, always respond with a positive remark and to say, I’ll get back to you. That’s what keeps clients happy.

My personal strength is my patience. I got that from my father. He let us express ourselves and he was very attentive. I try to listen to people, to pay attention to them to find a

solution. That’s what I do with my colleagues and clients. I’m always listening. I got that from him.

Purolator’s management shows great confidence in the company’s employees. At the supervisory level, we have a lot of scope in terms of choosing direction. we’re able to give our full capacity without interference. we still have to do our job, to be realistic and to understand our objectives.

I take pride in my work. I try to smile and always give the maximum that I can give in terms of service, as much at work as I do at home. At work we’re a team. we’re like a big family. we have to work together in harmony.”



People FirstJessica Antoine, legal Counsel

“I worked in shipping for about a year, in 2005, after I finished my undergraduate degree. But I always intended to go to law school. One of our HR consultants, Ann-Marie Smith, set up a meeting for me with Purolator’s labour and employment lawyer, Marsha lindsay. She encour-aged me. I went to law school in England, but I kept in contact with people at the company. when I finished, I came back.

I look after claims. I do some litiga-tion, and I support our labour and employment lawyer.

I try always to put my best foot forward, especially with tasks I don’t particularly want to tackle. I usually attack those tasks first. I always apply fairness and diligence to my job and look at the circumstances so I can advise my internal clients on the best resolution of any problem that

comes before me. You’ve got to apply your best no matter how small or big the task. You’ve got to give 110 per cent to whatever you do.

I’d like to become general counsel someday. But Purolator is such a diverse company in terms of oppor-tunities that I may decide as I get to know the company better that I’m interested in something else. I’ll look for opportunities to grow and develop. If it’s not general counsel, it will be something else just as great.

As for mentors and examples, I look at Marsha lindsay and our general manager of legal, Kristine Chandler. Marsha always puts people first. And Kristine is tireless in her efforts to develop the people in her depart-ment. She’s a great leader, and they’re both great mentors.”



Evolving with the Purolator familySylvie Dupont, Retail Centre Agent, Montreal

“we’re not focused on just one task at our centre. we see all types of situations. Clients bring packages to send. Others are trying to get more information about a package. we have some regular clients, but never the same shipment. The technology evolves. work procedures evolve. I’ve evolved as well.

It’s important to remember that it’s not the client who’s at my service; it’s me serving the client. It’s like a visit. The client leaves the comfort of his home or his office and comes directly here to find the service he needs. It’s important that I welcome him and try to exceed his needs so he’ll never hesitate to come back again.

It’s also important to be honest with the client, to say we’ll do everything in our power to do what the customer wants or offer an alterna-tive. That’s one of my own personal values, too. I’m known for my honesty. I don’t lie.

last year, my best experience came during a really busy time, when our business increased by 200 per cent. Instead of 50 customers a day, we saw 150 to 200. I learned to work in a team. what I found extraordinary was the harmony between the four of us here in the centre. It was spontaneous. we didn’t have to negotiate. we left our comfort zone without a problem. we were never overwhelmed by events. Our team stayed tight-knit after that. we all have our own lives, but we stayed attached, formed a small family. To this day, we talk about it.

I started working for Purolator 24 years ago in Drummondville. It’s a francophone environment. The job allowed me to get out of a difficult financial situation. when I moved to Montreal, my English was not advanced. It was a challenge, and I’m still learning. Now I’m older, head of a single-parent family, and I’m going to be a grandmother. I hope I can continue to evolve at Purolator.”



“I joined Purolator 30 years ago because of the information I received about the management style of the company and because, on the weekend I made my decision, I saw a Purolator delivery van. I’ve never regretted my choice. The company is always growing, and it allows people to express themselves and seek oppor-tunities for advancement.

In our division, all teammates contribute to the management of the business. we have business plans and business meetings, but it’s more about our commitment to achieve what we set out to do. what we set out to do is provide good service.

we’re blessed with good people who serve our customers in an impeccable way. The Quebec division has been the number one division in Canada for seven years in a row. And for the month of January, the Atlantic division was the best. And that’s thanks to our employees, who are simply amazing.

Purolator Tackle Hunger is a good example of the engagement of our teammates in their community and shows our values in action. Purolator Tackle Hunger touches people directly. It’s tangible, and the relief it gives is immediate. Our teammates started collecting food for

those in need, and those collections evolved into Purolator Tackle Hunger. The program has continued for 10 years, through good and bad economic times, and it continues to ensure that people in need have the food they need. It’s both a pleasure and an obligation to do our part for the community that we’re serving.

Purolator is the sum of all the teammates at the company. It’s the whole team, from Newfoundland to vancouver. It’s the pride people have toward the company. And that’s why Purolator has been a leader in its field for 50 years.

Purolator grows from within, hires from within, trains and invests time in its people and allows teammates to engage in running the business. Purolator encourages people to grow. we have people who’ve started part-time and are now vice Presidents. we have generations of families working here. I can’t see why anyone would not like working here.”



The sum of its teammatesDenis Roch, General Manager, Operations, Quebec & Atlantic


A commitment to peopleSarah Hamza, Director, Public Affairs

“I started with Purolator out of university. My career has evolved from the strategy team to regulatory affairs, government relations and now public affairs, which includes corporate social responsibility and philanthropy. My role is to help Purolator tell its story.

Purolator doesn’t regard corporate social responsibility (CSR) as an add-on. It’s fundamental to what we do. we’re publishing our first external CSR report in 2013 to tell our stakeholders what’s important to us: a more aggressive volunteerism policy so that more employees can get involved in Purolator Tackle Hunger across Canada; investing in environmental efficiencies; working with suppliers who share our commitment to the environment; and making sure that all of our employees sign on to our code of conduct and ethics.

Purolator also takes responsibility to honour the commitments that employees have at work and away from work. Each of us plays a number of roles every day. we may be mothers or fathers, sisters or brothers, children to aging parents.

when I started at Purolator, I was single. In the 10 years since then, I got married, and we now have two small children. As any mother knows, the balance between work and home life is a constant struggle. we have an additional challenge in our family because our youngest child has been diagnosed with a degenerative genetic disorder. My Purolator family has helped me with this challenge. My manager recog-nized, when we first learned about our child’s disorder, that I had to be a mother and a parent first and an employee second.

I try to understand that my team-mates have lots going on in their lives, too. This is just part of what they do. If we feel engaged in what we do, it lightens everything else that might be happening in our lives. Our productivity goes up, our ability to deliver on our promises to our customers goes up, and our ability to do a great job goes up.”



Teammates with heartJames Elias, General Manager, Operations, Greater Ontario

“Being GM of this division has taken me out of my comfort zone and given me an oppor-tunity to stretch myself. Most of my 15 years at Purolator I’ve spent in accounting, auditing and finance. I’ve learned a great deal from people here with expertise I don’t have. I also have a responsibility to pass along what I’ve learned to others.

we’re proud at Purolator to be open and honest with our teammates, our customers, our suppliers and anybody else we come into contact with. This transparency enables us to speak the truth without fear and builds trust with all our stakeholders.

I can’t tell you how many times our customers go out of their way to tell me how much they value our frontline people and our support teams. Our people form this wonderful bond with our customers based on excellent service and professionalism. They make my job easier, and they earn for us the right to do more busi-ness with our customers.

like everything we do in the company, we continually improve our Purolator Tackle Hunger challenge by doing the little things that collectively add up to something amaz-ing. It could mean donating money, collecting food, transporting it to the agencies that get it closer to the people who need it, volunteer-ing at food processing centres or food banks. More than ever, people count on us so they don’t go hungry. I ask all my teammates to donate as much as they can. Contact with those who need our support makes you feel good because it comes from the right place, and that’s your heart.”




“I joined Purolator about eight years ago. I’m based in long Island, New York. Our division was in its early stages when I joined. It’s been pretty exciting to participate in its growth since then.

In Canada, Purolator is an institution. The company’s been in business for more than 50 years. Operationally, there’s no other network in Canada as vast as Purolator’s. People like the fact that Purolator delivers their packages whether they’re at work or at home. In the u.S., when we’re bringing on customers, we leverage those two facts: Canadians’ high regard for Purolator and the breadth of the network.

we create relationships with our customers at all levels. It starts with sales. when we start serving the customer, the operations people

get involved. Then IT and customer service build relationships.

Customers have to feel they can trust their vendors, and transparency creates trust. whether you’re dealing with employees, customers, peers or subordinates, as long as you’re transparent in dealing with them, it creates trust and good working relationships. Sometimes we’ll involve a customer in our strategic discussions to let them know what’s important to Purolator and so they can let us know what’s important to them, as our customers. Then every-one is aligned in working toward common goals.

Transparency is also part of life. I remember my parents instilling in me the golden rule: Treat people the way you’d like to be treated. If you treat people with dignity and

respect, they’ll feel good about working with you. Being honest, dealing with integrity with people, at work or in your family—it’s just part of life.

I take personal accountability for the role I play and the work we do at Purolator. A willingness to get down in the trenches and work with people creates higher standards in the organization. But even when you implement personal accountability and leadership, sometimes you forget recognition. Everyone in the organization is striving toward excellence. You have to recognize them for their contribution.”

Across countries, one goalJohn Sweeney, vice President, Field Sales & Service Quality, Purolator International



“I started with Purolator three years ago. I still remember the date: January 16, 2009. It was during the recession. A friend recommended that I apply here.

I’ve stayed because there’s a good atmosphere here. I get a lot of respect from my peers and my managers.

I’ve always wanted to move up and show that I’ve done something with my life. Purolator has given me the chance. In my first year, I became a power-equipment operator and a health-and-safety representative. I became a workplace trainer in my second year, and I recently accepted a position as an operations trainer in Edmonton. So I’m moving up pretty quickly.

I feel like I’m making a difference within the company. I train new hires. I take care of their orientation, make sure they know what Purolator is about, the purposes and values of the company. I give them pointers about things that may affect them on the job, like proper lifting or how to spot a dangerous good. I answer questions if I can, or I direct them to the right person to ask.

Our managers have an open-door policy. They want teammates to be candid. Teammates can also write whatever’s on their mind on the President’s blog. They can take credit for what they say, or they can keep it anonymous. It shows that Purolator is listening. It’s one of the most respect-ful companies around. It also shows

that Purolator cares about the people who work for the company, and these people will care for the customers, as well. That will help the company to grow.

Everyone needs to know how the company works. Everyone needs to work on the same page as the managers or the President and the C.E.O. If they don’t have that infor-mation, they won’t know how to make it easy for our customers. It’s all about communication.”

It’s all about communicationJustin Singh, previous Sorter, Richmond Hub, British Columbia, now Operations Trainer, Edmonton, Alberta



What makes a great day? Sean Joseph, Hub Manager, Ontario Hub / Metro west

“I’m the manager of the Ontario Hub. we have two buildings, 30 managers, 850 people. we process almost 300,000 shipments a night and send them out to all parts of the country.

I began at Purolator in 1987 as a sorter, loading and unloading trailers. I kept going after different positions. I became a team leader and, eventually, got into management.

I had a great mentor. He was one of my managers. He taught me a great management style that I embrace today. It’s a style that puts people first. I try to put myself in their shoes. I try to understand the different situations that may happen on our floor, and I find unique ways to resolve them.

This company gives me an opportunity to apply my different skill sets. It has helped me to become who I am today. I’m still learning, and I’m still enjoying myself here. Purolator’s a fantastic place to work.

This is a very competitive business. If we don’t provide service that exceeds our customers’ expectations, they’ll

go elsewhere. Our customers are unique individuals with unique requests, and we have to deliver above and beyond the competition.

I ask my managers to think of themselves as customers. I say, what kind of service would you like? what kind of performance would you prefer? You want to do every-thing you can to make sure the customer feels satisfied with the service we provide.

when a customer chooses us over the competition, says we’ve done a good job and walks away with a satisfying experience, that will give us an edge over the competition.

when I walk out of the building at the end of my day, I try to make sure that everything was done right and that we’ve done everything we can to satisfy the customer. That’s what they’re looking for, and that’s what makes a great day.”



Corporate social responsibility Purolator began its journey in 2003, when the company focused on managing its business in a sustainable manner and on leveraging its extensive logistics and transportation network across Canada to help alleviate hunger.

At Purolator, we take great pride in what we do, but our true strength lies in how we do it. Our corporate social responsibility is held up by four pillars: People, Environment, Communities and Ethics.

Our People: Purolator is committed to support-ing our teammates so that they can be successful

in a safe and healthy workplace. Every year, the company recognizes select teammates for their commitment to our corporate values, their leadership, their years of service, safe driving and their sales achievement.

Purolator also administers a scholarship program that helps our teammates’ children to gain access to higher education.

Purolator pays close attention to our teammates’ health and safety, as well. From 2006 to 2010, our health and safety initiatives helped to improve our lost-time injury rate by 32 per cent, days lost from injury by 12 per cent and vehicle accident frequency rate by eight per cent.

last year, the Canadian Human Rights Commission recognized Purolator as a sector leader in the represen-tation of Aboriginal Peoples among our teammates.

Our Environment: At Purolator, we manage our business sustainably and protect the communities

where we live, work and play.

Purolator began testing hybrid electric vehicle (HEv) prototypes in 2003 and was the first courier company in Canada to introduce HEvs as part of its fleet.

Now with 586 HEvs—the largest HEv fleet of any freight and parcel solutions provider in North America—Purolator makes deliveries cleaner every day. To date, the fleet has logged 15.1 million kilometres, saving 1,655,000 litres of fuel and preventing the emission of over 4,010 tonnes of greenhouse gas.

Purolator eliminated 12,450 tonnes of greenhouse gases annually through the optimization of its ground network in 2010 and 2011, and continues to explore how to create more efficiency in its service delivery.

The company reduced energy consumption by up to 30 per cent at 46 of our terminals by retrofitting the lighting and has entered into an agreement to install solar panels on up to 11 of our facilities in Ontario as part of the Government of Ontario’s Feed-in-Tariff Program. If approved, these systems are expected to generate as much as 2.24 Mw of clean electricity over 20 years.

Since 2003, Purolator has achieved several major accomplishments:

•Wehave586hybridelectricvehiclesontheroadtoday,nowrepresenting19percentofourpick-upanddeliveryfleet.

•PurolatorTackleHungerhashelpeddelivertheequivalentofmorethan4.5millionpoundsoffoodtolocalfoodbanksacrossCanada.

•WelaunchedPurolatorTackleHungerWeek,duringwhichthousandsofouremployeehoursaredonatedtohelpraisefoodandfundsforlocalcommunitiesacrossCanada.In2011,120teammateswerechampionsofthiseffort,andmobilizedthecompanytoraisetheequivalentof322,100poundsoffood.

• Purolatorreceivedthe2011LogisticsQuarterlyThird-PartyLogisticsSustainabilityAward.


Our Communities: Purolator is committed to tackling hunger in Canada and strives to

make a positive difference in the communities where we operate.

Purolator began its Tackle Hunger program in 2003 and pledged:

• ToraiseawarenessabouttheissueofhungerinCanada

• ToencouragecommunitiesacrossCanadatomakedonations to local food banks

• Tosupportfrontline,grassrootsorganizationsthathelpthose affected by hunger

After 10 years, and with the support of our teammates, customers and suppliers, Purolator Tackle Hunger has delivered the equivalent of more than 4.5 million pounds of food to local food banks, directly supporting some of the 900,000 Canadians who are assisted by food banks every month.1 Purolator recently donated two trucks, one to the Eden Community Food Bank in Mississauga, Ontario, and another to the FEED NOvA SCOTIA organization in Halifax, Nova Scotia. The company has given 11 trucks in total to community groups over the past 10 years.

Purolator has also raised more than $3 million since 1995 through its annual united way workplace giving

campaigns. This annual donation helps united ways and member agencies to improve lives, advocate, and collaborate with each other to help alleviate hunger in our communities.

Our Ethics: At Purolator, we are committed to conducting our business with honesty, transparency

and accountability to our stakeholders. we fulfill this commitment in several ways:

• PurolatorteammatesareguidedbyourCodeof Business Conduct and Ethics.

• Thecompanyencouragesfullandtimelyreportingofwrongdoing in accordance with Purolator’s Confidential Submissions Policy, with direct Board oversight.

• Throughourprivacypoliciesandtrainingprograms, Purolator educates employees and reinforces the importance of safeguarding personal information entrusted to the company.

Where we are going: Purolator has made progress since we began our CSR journey, but we know there are many challenges and opportunities ahead. we will continue to invest for the future and work with our stakeholders to help us understand how we can create greater value for our business, our people, our community and our environment.

with strong and committed business leaders, engaged and passionate teammates, and the support of our customers and suppliers, we are establishing commitments and targets to ensure ongoing leadership in sustainable business practices.

Next year, Purolator will publish our inaugural CSR report, which will follow the Global Reporting Initiative guidelines.

we will continue our commitment to explore ways to develop a more sustainable fleet and have cleaner deliveries in our communities.

As part of our Purolator Tackle Hunger program, we’ve set a target to raise the equivalent of one million pounds of food in Canada this year.

we are also celebrating 10 years of Purolator Tackle Hunger by donating 10 retired curbside vehicles from our fleet to 10 deserving organizations that help to alleviate hunger in Canada.

whether on the dock or at a desk, every Purolator teammate makes a difference.

At Purolator, this is how we choose to do business— it’s The Purolator way.

1. Based on the number published by Food Banks Canada.


Honouring employee excellence

Circle of Excellence value Ambassador•WayneSwaby,Manager,International

Quality and Compliance, Head Office

Circle of Excellence• LuigiBarbieri,UnitManager,Toronto1

• CharlesBeaulieu,HumanResourcesConsultant, Montreal

• KyleBirchard,Manager,Business Development, Purolator International

• BrunoBoucher,CustomerAutomationTechnical Consultant, Boucherville

• BrendaBowes,QualitySpecialist, Head Office

•MelanieBowie,Manager,CustomerCareOperations and Telephony, Moncton

• BrianCollins,Manager,Corporate Sponsorship, Head Office

• ChrisCsuk,DistrictManager, Thunder Bay

• FernandoDaSilva,Manager,NationalQuality, Head Office

• DawnDownes,MarketingSpecialist,Purolator International

•MichelFerland,UnitManager,Quebec

•MarioFortin,SectionManager,Quebec

• LionelGaudet,DistrictManager, Fredericton

• BhushanJoshi,Manager,MarketingandCustomer Analytics, Head Office

• JasonKey,DistrictManager, Scarborough

• GarnetMcDonald,District Manager, Hamilton

• DaliaMikhail,Manager,Finance, Head Office

• LandonMorris,UnitManager, Bracebridge

• EwaOkon,Manager,Organizational Effectiveness, Head Office

• KanthPathmanathan,FinancialAnalyst,Head Office

• NicolePyle,Manager,ProposalCentre,Head Office

• LeoScorca,HubOperationsManager,Martin Grove

• JohnSeitz,ProcurementProfessional,Head Office

• RiikkaTardiff,Manager,Corporate Accounting, Head Office

• AndrewVicencio,Manager,OperationsSystems, Head Office

• ChristopherWashburn,RampManager,Moncton Air Operations

• ArnoZlamal,DistrictManager, Burnaby


President’s Club Account Executives• RobertBiggar,GTANorth

• AlexandraCasanova,GTACentral

• JulieFisher,Ottawa

• BrandonKazuta,Richmond

• JasonMohammed,EasternCanada

• SarahOlson,SouthernAlberta

•MichaelPeragine,Burnaby

• LisaSweers,GTACentral

National Account Executives• GerryMarini,CentralCanada

• JerryNewton,CentralCanada

Account Executive, Freight• SueCalder,FreightCentral

• GeofDolejsi,FreightWestern

Major Account Executive• DanielMcGauley,Burnaby

Regional Sales Manager• BarbaraLeClair,Ottawa

• Jean-PhilippeSerafini,EasternCanada

Regional Sales Manager, Freight•MartyLuciw,FreightWestern

US Strategic Account Executive• RosemaryHill,EasternDistrict

US Branch Manager• SharonSiar,SouthernDistrict

US Strategic Account Manager• RyanHopp,CentralDistrict

Director of Sales• DeanMills,Pacific

General Manager• PaulMerrick,Prairies&Pacific

Officer• JimPeeples,VicePresident,

Engineering & Network

Ring Club• StevedeMello,FreightCentral

• AmyJacobs,Guelph

• BrandonKazuta,Richmond

• BrandonKeaveney,National Accounts Central

• JulieThibaudeau,EasternCanada

Sales Manager of the Year• FrankFigliomeni,National

Accounts Central

President’s Award winner• DanielMcGauley,Burnaby


Board of Directors

Stewart BaconChairman of the Board, Purolator Holdings ltd.

Bonnie Boretskyvice-President, General Counsel, Corporate Secretary and Compliance, Canada Post Corporation

David BurkeChief Executive Officer, StarDyne Technologies Inc.

Wayne CheesemanChief Financial Officer, Canada Post Corporation

Deepak ChopraPresident and Chief Executive Officer, Canada Post Corporation

Jacques CôtéGroup President, Physical Delivery Network, Canada Post Corporation

André JoronSenior vice-President, Human Resources, Canada Post Corporation

Barry LapointePresident and Chief Executive Officer, Kelowna Flightcraft Air Charter ltd.

Tom SchmittPresident and Chief Executive Officer, Purolator Holdings ltd. and Purolator Inc.

Mary TraversySenior vice-President, Mail, Canada Post Corporation

President’s office

Tom SchmittPresident and Chief Executive Officer

John T. CostanzoPresident, Purolator International

Deb CravenSenior vice President and Chief Financial Officer

Michael Coté Senior vice President and Chief Commercial Officer

Mike BoucherSenior vice President and Chief Operations Officer


Phyo Kyivice President and Chief Information Officer

Scott GassonDirector, Internal Audit

Chris Faulknervice President, Human Resources (Interim)

Sarah HamzaDirector, Public Affairs

Kristine ChandlerGeneral Manager, General Counsel and Corporate Secretary (Interim)

Governance statement

Purolator’s Board of Directors is respon-sible for the stewardship of Purolator. That stewardship consists primarily of the duty to manage, or supervise the management of, the business and affairs of Purolator.

The Board’s supervisory duties include determining Purolator’s vision and long-term strategic framework, approving Purolator’s strategic plan, determining Purolator’s approach to corporate governance, appointing the President and C.E.O. and Purolator’s other officers and planning for their succession, monitoring the effectiveness of Purolator’s compliance controls and risk management practices, monitoring

the integrity of Purolator’s financial reporting and approving significant borrowing and other transactions.

In supervising the management of Purolator’s business and affairs, each Board member is required to act honestly and in good faith with a view to the best interests of Purolator and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Board members demonstrate their commitment by, among other things, familiarizing themselves with the business and affairs of Purolator, regularly attending meetings of the Board and its committees, and actively participating in Board decisions.

while the Board has delegated much of the day-to-day management of Purolator to the President and C.E.O., the President and C.E.O. is required to (i) keep the Board fully informed of Purolator’s progress towards the achievement of the objectives set out in the approved strategy and (ii) report all significant facts and changes concerning Purolator’s business and affairs. If the Board considers it to be in Purolator’s best interests, the Board may intervene in the management of Purolator’s business and affairs.

Purolator is committed to good gover-nance. To this end, Purolator maintains a Code of Business Conduct and Ethics

which sets out the standard of conduct expected of all Board members and employees of Purolator, and a Confidential Submissions Policy (a.k.a. “whistleblower policy”) which allows for the confidential submission of wrongdoing. Commencing in 2012, the Board streamlined its committee structure and redrafted its mandate and committee charters to place a greater emphasis on long-term strategic planning and enterprise risk management. Through these and other governance enhance-ments, Purolator seeks to maintain the trust and confidence of its stakeholders.


Revenue from operationsDespite severe competition, revenue from each line of business increased in 2011 over prior years, as economic conditions recovered. Total revenues increased by $123 million over the previous year.

Revenues from our courier business and Purolator Freight contributed six per cent and 20 per cent respectively, toward this year-over-year increase. Purolator International contributed 33 per cent.

Cost of operationswith increased volumes and higher fuel costs, our cost of operations increased in 2011 by $126 million over 2010. Increased volumes resulted from Canada Post Corporation’s labour disruption in the summer. However, Purolator was able to maintain our service level for existing customers while providing the same level of service for customers impacted by the labour disruption. To temper these increased costs, Purolator focused on obtaining

greater efficiencies from our national network and leveraging asset utilization across our lines of business.

Capital investmentIn 2011, Purolator increased its investment in technology and infrastructure over the prior year, as we completed the customer migration project to new customer- facing systems. we implemented several new tools within the Sales team and increased our investment in environmentally sustainable technologies while maintaining industry-leading service levels.

Purolator conducted an assessment of critical business systems in 2011 to ensure the resiliency, responsiveness and recovery capability of business-critical applications. Purolator invested $40 million of capital in 2011 into air, ground and less-than-truckload capacity through a capital lease facility, and continued to finance environmentally friendly vehicle purchases, bringing our total capital investment in 2011 to $68 million.

Outlook for 2012Purolator will remain externally driven and market focused in 2012, ensuring that we deliver on our commitments to our customers and employees. The company will strive for profitable growth in all lines of business as we identify areas of efficiencies and maintain cost controls.

Focusing on areas with the most potential for profitable growth, improved customer service and employee development and engagement, Purolator will continue to optimize our investment activities. Our long-term strategy will build on existing strengths, identify new opportunities, increase the reach and scope of our distribution network and make it easier to find distribution solutions that best meet customer requirements. with these initiatives, we will continue to provide the customer experience that has made Purolator Canada’s leading provider of freight and parcel solutions to, from and within Canada.

Financial highlights

with revenue growth of 8.2 per cent in 2011, Purolator continues to hold the largest market share, by revenue, in the Canadian express market and remains Canada’s leading integrated freight and parcel solutions provider. Revenue from Purolator Freight and Purolator International business segments continued to increase while they built the infrastructure required for profitable growth.

Key financial indicators

$(000’s) 2011 2010 2010

IFRS IFRS CGAAP

Revenue 1,615,602 1,492,965 1,492,965

Total expenses* 1,542,443 1,417,004 1,421,234

EBT 73,159 75,961 71,731

Return on equity** 9.7% 9.1% 9.1%

Investment in fixed assets 68,755 31,468 31,468

Cash flow from operations 84,732 67,528 67,528 * IFRS expenses impacted by long-term employee benefits** Based on monthly weighted average


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© Purolator Inc. All Rights Reserved 2012. Purolator, Purolator Express, Purolator Freight, Purolator International, Purolator Tackle Hunger, the Purolator logo, the checkmark design and all associated word marks and designs and logos used in this 2011 Annual Review are trademarks of Purolator Inc.

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Purolator Inc. - 2011 annual review

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