The Company uses the terms “base revenue”, “adjusted operating ratio” and “adjusted operating income” throughout this MD&A. Adjusted operating ratio and adjusted operating income, as defined here, are non-GAAP financial measures as defined by the U.S. Securities and Exchange Commission (“SEC”). Management uses adjusted operating ratio and adjusted operating income as supplements to the Company’s GAAP results in evaluating certain aspects of its business, as discussed below.
Base revenue is calculated as operating revenue less fuel surcharge revenue and intercompany eliminations. Adjusted operating ratio is calculated as operating expenses excluding amortization of acquisition related intangibles, net of fuel surcharge revenue, as a percentage of operating revenue excluding fuel surcharge revenue. Adjusted operating income is defined as operating income excluding amortization of acquisition related intangibles, net of fuel surcharge revenue, from operating revenue, net of fuel surcharge revenue.
The Company’s chief operating decision-maker focuses on base revenue, adjusted operating ratio and adjusted operating income as indicators of the Company’s performance from period to period.
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