Vitran (VTNC) 8-K Business Acquisition Report of

Business Acquisition Report of

VITRAN CORPORATION INC.

BUSINESS ACQUISITION REPORT

Item 1 Identity of Company

Item 1.1 Name and Address of Company

Vitran Corporation Inc.
185 The West Mall, Suite 701
Toronto, Ontario
M9C 5L5

Item 1.2 Executive Officer

Sean P. Washchuk, Vice President Finance and Chief Financial Officer, 416-596-7664

Items 2 Details of Acquisition

Item 2.1 Nature of Business Acquired

Vitran Corporation Inc. (“Vitran”), through its wholly-owned subsidiary Vitran Corporation acquired all of the common shares of R.A. Christopher, Inc. and Kansas Motor Freight Corp., collectively operating as Chris Truck Line (“CTL”). Prior to the acquisition by Vitran, CTL was a privately held Kansas-based regional less-than-truckload freight carrier, providing coverage to the Midwestern and Southwestern United States.

Item 2.2 Date of Acquisition

May 31, 2005

Item 2.3 Consideration

The purchase price of CTL is USD$29.3 million, comprised of USD$26.5 million of cash and 202,458 common shares of Vitran valued at USD$2.8 million. Approximately USD$1.7 million of additional consideration is contingent upon a joint election to structure the transaction as an asset sale for tax purposes. The cash portion of the transaction was financed from existing cash balances.

Item 2.4 Effect on Financial Position

The acquisition of CTL provides Vitran with new coverage into the Southwestern United States, and will allow Vitran to leverage its existing customer base into this new region.

There are no plans or proposals for material changes in the business affairs of CTL which may have a significant effect on the consolidated results of operations and financial position of Vitran including CTL.

Item 2.5 Prior Valuations

None

Item 2.6 Parties to Transaction

Not applicable

Item 2.7 Date of Report

DATED this 3^rd day of August, 2005

Vitran Corporation Inc.
By:	/s/ SEAN P. WASHCHUK
	Sean P. Washchuk
	Vice President Finance and Chief Financial Officer

Item 3 Financial Statements

The following financial statements are included as part of this Business Acquisition Report;

(a)	Audit report and financial statements of CTL for the year ended December 31, 2004 including the reconciliation of differences between United States and Canadian Generally Accepted Accounting Principles;
(b)	Unaudited financial statements of CTL for the three month period ended March 31, 2005 including the reconciliation of differences between United States and Canadian Generally Accepted Accounting Principles; and
(c)	Compilation report and unaudited pro forma consolidated income statements of Vitran for the six months ended June 30, 2005 and year ended December 31, 2004 including the reconciliation of differences between United States and Canadian Generally Accepted Accounting Principles.

Combined Financial Statements
(In U.S. dollars)

CHRIS TRUCK LINE

Year ended December 31, 2004

KPMG LLP
Chartered Accountants
Yonge Corporate Centre
4100 Yonge Street Suite 200
Toronto ON M2P 2H3
Canada Telephone (416) 228-7000
Fax (416) 228-7123
Internet www.kpmg.ca

AUDITORS’ REPORT TO THE DIRECTORS

We have audited the combined balance sheet of Chris Truck Line as at December 31, 2004 and the combined statements of income, shareholders’ equity and cash flows for the year then ended. These combined financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these combined financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards and 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 whether the combined financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined 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.

In our opinion, these combined financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2004 and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

We have not audited the combined balance sheet of Chris Truck Line as at December 31, 2003 and the combined statements of income, shareholders’ equity and cash flows for the year then ended, and accordingly, we do not express an opinion on them.

Chartered Accountants

Toronto, Canada
June 30, 2005

KPMG LLP, a Canadian limited liability partnership is the Canadian
member firm of KPMG International, a Swiss cooperative.

CHRIS TRUCK LINE

Combined Balance Sheets
(In thousands of U.S. dollars)

December 31, 2004, with comparative figures for 2003

	2004		2003
			(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	3,213	$	1,919
Accounts receivable		2,669		2,298
Inventory, deposits and prepaid expenses		322		449
		6,204		4,666
Capital assets (note 2)		8,753		7,554
	$	14,957	$	12,220
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	1,805	$	1,578
Current portion of long-term debt (note 3)		1,729		2,053
		3,534		3,631
Long-term debt (note 3)		5,506		4,365
Shareholders’ equity:
Capital stock:
Authorized:
10,000,000 common shares, $1 par value
Issued and outstanding:
50,500 common shares		50		50
Retained earnings		5,867		4,174
		5,917		4,224
Operating lease commitments (note 4)
Contingent liabilities (note 5)
Subsequent event (note 9)
	$	14,957	$	12,220

See accompanying notes to combined financial statements.

On behalf of the Board:

/s/ RICHARD E. GAETZ                            Director

/s/ GREGORY PATCHETT                       Director

1

CHRIS TRUCK LINE

Combined Statements of Income
(In thousands of U.S. dollars)

Year ended December 31, 2004, with comparative figures for 2003

	2004			2003
				(Unaudited)
Revenue	$	26,480		$	22,802
Operating expenses		16,827			15,098
Selling, general and administrative expenses		4,280			4,203
Other expense (income)		22			(1	)
Depreciation		1,536			1,454
		22,66			520,754
Income from operations before the undernoted		3,815			2,048
Interest expense on long-term debt		(282	)		(306	)
Interest income		7			12
Other non-operating income		53			34
Net income	$	3,593		$	1,788

See accompanying notes to combined financial statements.

2

CHRIS TRUCK LINE

Combined Statements of Shareholders’ Equity
(In thousands of U.S. dollars)

Year ended December 31, 2004

										Total
	Common			Additional			Retained			shareholders'
	shares			paid-in capital			earnings			equity
Balance, December 31, 2002 (unaudited)	$	54		$	94		$	4,917		$	5,065
Net income		—			—			1,788			1,788
Issuance of common shares		1			—			—			1
Adjustment due to purchase of common shares (note 7)		(5	)		(94	)		(282	)		(381	)
Dividends		—			—			(2,249	)		(2,249	)
Balance, December 31, 2003 (unaudited)		50			—			4,174			4,224
Net income		—			—			3,593			3,593
Dividends		—			—			(1,900	)		(1,900	)
Balance, December 31, 2004	$	50		$	—		$	5,867		$	5,917

See accompanying notes to combined financial statements.

3

CHRIS TRUCK LINE

Combined Statements of Cash Flows
(In thousands of U.S. dollars)

Year ended December 31, 2004, with comparative figures for 2003

	2004				2003
					(Unaudited)
Cash and cash equivalents provided by (used in):
Operations:
Net income	$	3,593			$	1,788
Items not involving cash:
Depreciation		1,536				1,454
Loss (gain) on sale of capital assets		22				(1	)
Change in non-cash operating working capital		(17	)			(283	)
		5,134				2,958
Financing:
Increase in long-term debt		2,909		��		4,371
Repayment of long-term debt		(2,092	)			(5,470	)
Issue of common shares		—				1
Dividends		(1,900	)			(2,249	)
		(1,083	)			(3,347	)
Investments:
Purchase of capital assets		(2,959	)			(2,283	)
Proceeds on sale of capital assets		202				1,445
Advance to shareholder		—				623
		(2,757	)			(215	)
Increase (decrease) in cash and cash equivalents		1,294				(604	)
Cash and cash equivalents, beginning of year		1,919				2,523
Cash and cash equivalents, end of year	$	3,213			$	1,919
Change in non-cash operating working capital:
Accounts receivable	$	(371	)		$	(316	)
Inventory, deposits and prepaid expenses		127				(77	)
Accounts payable and accrued liabilities		227				110
	$	(17	)		$	(283	)
Supplemental cash flow information:
Interest paid	$	280			$	300

See accompanying notes to combined financial statements.

4

CHRIS TRUCK LINE

Notes to Combined Financial Statements
(In thousands of U.S. dollars)

Year ended December 31, 2004

Chris Truck Line (the “Company”) is a provider of freight services to a wide variety of companies and industries. The Company offers less-than-truckload services throughout the South-Western United States.

1. Significant accounting policies:

(a)	Basis of presentation:
	These combined financial statements include the accounts of R.A. Christopher, Inc. and Kansas Motor Freight Corporation, collectively operating as Chris Truck Line. All material intercompany transactions and balances have been eliminated on combination.
	All amounts in these combined financial statements are expressed in U.S. dollars.
(b)	Revenue recognition:
	The Company recognizes revenue and direct shipment costs upon delivery of the related freight.
(c)	Cash and cash equivalents:
	Cash and cash equivalents include cash on account and short-term investments with maturities of three months or less at date of purchase and are stated at cost, which approximates market value.
(d)	Inventory:
	Inventory consists of tire and spare parts and is valued at the lower of average cost and replacement cost.

5

CHRIS TRUCK LINE

Notes to Combined Financial Statements (continued)
(In thousands of U.S. dollars)

Year ended December 31, 2004

1. Significant accounting policies (continued):

(e)	Capital assets:
	Capital assets are recorded at cost. Depreciation of capital assets is provided on a straight-line basis from the date the assets are put in service over their estimated useful lives as follows:

Buildings	15-40 years
Vehicles:
Trailers	10 years
Trucks	5 years
Machinery and equipment	5-10 years

(f)	Impairment of long-lived assets:
	An impairment is recognized when the carrying amount of an asset to be held and used exceeds the sum of the undiscounted cash flows expected from its use and disposal, and is measured as the amount by which the carrying amount of assets exceeds its fair value. During 2004, the Company has not identified any indicators that would require recognition of impairment.
(g)	Asset retirement obligations:
	Asset retirement obligations require a company to recognize, measure and disclose certain legal obligations with respect to the retirement of long-lived tangible assets. The Company does not have such obligations at December 31, 2004.
(h)	Accounts receivable:
	Accounts receivable are presented net of an allowance for doubtful accounts of $67 at December 31, 2004 (2003 — $52 (unaudited)).

6

CHRIS TRUCK LINE

Notes to Combined Financial Statements (continued)
(In thousands of U.S. dollars)

Year ended December 31, 2004

1. Significant accounting policies (continued):

(i) Accounts payable and accrued liabilities:

	2004		2003
			(Unaudited)
Accounts payable	$	1,107	$	954
Accrued wages and benefits		489		480
Accrued claims, self insurance and workers’ compensation		128		104
Other		81		40
	$	1,805	$	1,578

(j)	Advertising costs:
	Advertising costs are expensed as incurred. Advertising costs amounted to $15 (2003 — $14 (unaudited)).
(k)	Use of estimates:
	The preparation of financial statements 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. Actual results could differ from those estimates.
(l)	Income taxes:
	On the date of incorporation, the Company filed an election under Internal Revenue Code Section 1362(a), to be treated as an S-Corporation effective January 1, 1988. As a result of this election, no income taxes will be paid at the corporate level as all earnings, losses and other tax benefits are passed to the individual shareholders and reported on their federal and state individual income tax returns.

7

CHRIS TRUCK LINE

Notes to Combined Financial Statements (continued)
(In thousands of U.S. dollars)

Year ended December 31, 2004

2. Capital assets:

	2004		2003
			(Unaudited)
Land	$	61	$	61
Buildings		806		806
Vehicles		13,569		11,833
Machinery and equipment		1,157		1,056
		15,593		13,756
Less accumulated depreciation		6,840		6,202
	$	8,753	$	7,554

3.	Long-term debt:
	Long-term debt consists of various notes payable with interest rates varying from 3.13% to 5.80% due at various times up to 2012.
	At December 31, 2004, the required future repayments on all long-term debt are as follows:

2005	$	1,729
2006		1,377
2007		1,625
2008		1,306
2009		437
Thereafter		761
	$	7,235

The notes payable are secured by equipment and real estate. Notes payable of $3,299 (2003 — $2,131 (unaudited)) are due to related parties.

8

CHRIS TRUCK LINE

Notes to Combined Financial Statements (continued)
(In thousands of U.S. dollars)

Year ended December 31, 2004

4.	Operating lease commitments:
	The Company has entered into various operating leases for its terminal facilities. At December 31, 2004, future minimum rental payments are as follows:

2005	$	218
2006		79
	$	297

	The Company leases various properties from a related party. Total rents paid to related parties were $347 in 2004 (2003 — $203 (unaudited)). Total rental expense was $720 in 2004 (2003 — $600 (unaudited)).
5.	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 combined financial position, results of operations or cash flows. Legal costs are expensed as incurred.
6.	Employee benefits:
	The Company sponsors a 401(k) plan which covers all employees and part-time employees that work 1000 hours annually and meet age requirements. Plan contributions are based on participant voluntary payroll deductions, subject to a maximum contribution per participant. The Company may match employee contributions at its discretion. The Company’s total contribution for the year ended December 31, 2004 was $12 (2003 — $11 (unaudited)).
7.	Related party transactions:
	On June 1, 2003, the Company purchased 5,500 common shares with a book value of $5 owned by a related party in exchange for assets with a book value of $381. A charge of $94 was made against additional paid-in capital and a charge of $282 was made to retained earnings as a result of the transaction.
	In 2003, the Company sold land and a building to a related party for proceeds of $1,300 which resulted in a nominal gain.

9

CHRIS TRUCK LINE

Notes to Combined Financial Statements (continued)
(In thousands of U.S. dollars)

Year ended December 31, 2004

8.	Financial instruments:
	The fair values of cash and cash equivalents, accounts receivable and accounts payable and accrued liabilities approximate the carrying values because of the short-term nature of these instruments. The fair value of the 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 the carrying value at December 31, 2004.
9.	Subsequent event:
	On May 31, 2005 the shareholders of the Company sold all the common shares of Chris Truck Line to Vitran Corporation Inc.
10.	United States and Canadian accounting policy differences:
	There are no policy differences between United States and Canadian generally accepted accounting principles.

10

Combined Financial Statements
(In U.S. dollars)

CHRIS TRUCK LINE

Three months ended March 31, 2005 and 2004
(Unaudited)

CHRIS TRUCK LINE

Combined Balance Sheets
(In thousands of U.S. dollars)
(Unaudited)

	March 31,		December 31,
	2005		2004
Assets
Current assets:
Cash and cash equivalents	$	3,750	$	3,213
Accounts receivable		3,088		2,669
Inventory, deposits and prepaid expenses		608		322
		7,446		6,204
Capital assets		8,203		8,753
	$	15,649	$	14,957
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	1,904	$	1,805
Current portion of long-term debt		1,729		1,729
		3,633		3,534
Long-term debt		4,876		5,506
Shareholders’ equity:
Capital stock:
Authorized:
10,000,000 common shares, $1 par value
Issued and outstanding:
50,500 common shares		50		50
Retained earnings		7,090		5,867
		7,140		5,917
	$	15,649	$	14,957

See accompanying notes to combined financial statements.

1

CHRIS TRUCK LINE

Combined Statements of Income and Retained Earnings
(In thousands of U.S. dollars)

Three months ended March 31, 2005 and 2004
(Unaudited)

	2005			2004
Revenue	$	7,283		$	6,005
Operating expenses		4,496			3,903
Selling, general and administrative expenses		1,101			1,002
Other income		(23	)		(1	)
Depreciation		386			338
Income from operations before the undernoted		1,323			763
Interest expense, net		(75	)		(60	)
Other non-operating income		12			14
Net income		1,260			717
Retained earnings, beginning of period		5,867			4,174
Dividends		(37	)		(49	)
Retained earnings, end of period	$	7,090		$	4,842

See accompanying notes to combined financial statements.

2

CHRIS TRUCK LINE

Combined Statements of Cash Flows
(In thousands of U.S. dollars)

Three months ended March 31, 2005 and 2004
(Unaudited)

	2005			2004
Cash and cash equivalents provided by (used in):
Operations:
Net income	$	1,260		$	717
Items not involving cash:
Depreciation		386			338
Gain on sale of capital assets		(23	)		(1	)
Change in non-cash operating working capital		(606	)		(364	)
		1,017			690
Financing:
Increase in long-term debt		—			739
Repayment of long-term debt		(630	)		(485	)
Dividends		(37	)		(49	)
		(667	)		205
Investments:
Purchase of capital assets		(11	)		(853	)
Proceeds on sale of capital assets		198			6
		187			(847	)
Increase in cash and cash equivalents		537			48
Cash and cash equivalents, beginning of period		3,213			1,919
Cash and cash equivalents, end of period	$	3,750		$	1,967
Change in non-cash operating working capital:
Accounts receivable	$	(419	)	$	(364	)
Inventory, deposits and prepaid expenses		(286	)		(52	)
Accounts payable and accrued liabilities		99			52
	$	(606	)	$	(364	)

See accompanying notes to combined financial statements.

3

CHRIS TRUCK LINE

Notes to Combined Financial Statements
(In thousands of U.S. dollars)

Three months ended March 31, 2005 and 2004
(Unaudited)

1.	Significant accounting policies:
	These interim combined financial statements include the accounts of R.A. Christopher, Inc. and Kansas Motor Freight Corporation, collectively operating as Chris Truck Line.
	The interim combined financial statements have been prepared in accordance with United States generally accepted accounting principles with reconciliation to Canadian generally accepted accounting principles in note 4 and follow the same accounting principles and methods of application as the most recent annual combined financial statements. The interim combined financial statements do not contain all the disclosures required by United States and Canadian generally accepted accounting principles. The interim combined financial statements should be read in conjunction with the Company’s annual audited financial statements for the year ended December 31, 2004.
2.	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 combined financial position, results of operations or cash flows. Legal costs are expensed as incurred.
3.	Subsequent event:
	On May 31, 2005 the shareholders of the Company sold all the common shares of Chris Truck Line to Vitran Corporation Inc.
4.	United States and Canadian accounting policy differences:
	There are no policy differences between United States and Canadian generally accepted accounting principles.

4

Pro Forma Consolidated Income Statements
(Expressed in thousands of United States dollars)

Vitran Corporation Inc.

Six months ended June 30, 2005 (unaudited) and
year ended December 31, 2004 (unaudited)

KPMG LLP
Chartered Accountants
Yonge Corporate Centre
4100 Yonge Street Suite 200
Toronto ON M2P 2H3
Canada Telephone (416) 228-7000
Fax (416) 228-7123
Internet www.kpmg.ca

COMPILATION REPORT ON PRO FORMA CONSOLIDATED INCOME STATEMENTS

The Board of Directors

Vitran Corporation Inc.

We have read the accompanying unaudited pro forma consolidated income statements of Vitran Corporation Inc. (“Vitran”) for the six months ended June 30, 2005 and for the year ended December 31, 2004, and have performed the following procedures:

1.	Compared the figures in the columns captioned “Vitran Corporation Inc.” to the unaudited consolidated financial statements of Vitran for the six months ended June 30, 2005, and the audited consolidated financial statements of Vitran for the year ended December 31, 2004, respectively, and found them to be in agreement.
2.	Compared the figures in the columns captioned “Chris Truck Line” to the unaudited combined financial statements of Chris Truck Line for the three months ended March 31, 2005, and the audited combined financial statements of Chris Truck Line for the year ended December 31, 2004, respectively, and found them to be in agreement.
3.	Made enquiries of certain officials of Vitran who have responsibility for financial and accounting matters about:

(a)	The basis for determination of the pro forma adjustments; and
(b)	Whether the pro forma consolidated income statements comply as to form in all material respects with the published requirements of securities legislation.

The officials:

(a)	described to us the basis for determination of the pro forma adjustments; and
(b)	stated that the pro forma income statements comply as to form in all material respects with the published requirements of securities legislation.

4.	Read the notes to the pro forma consolidated income statements, and found them to be consistent with the basis described to us for determination of the pro forma adjustments.
5.	Recalculated the application of the pro forma adjustments to the aggregate of the amounts in the columns captioned “Vitran Corporation Inc.” for the six months ended June 30, 2005 and “Chris Truck Line” for the three months ended March 31, 2005, and for the year ended December 31, 2004, and found the amounts in the column captioned “Pro forma consolidated” to be arithmetically correct.

KPMG LLP, a Canadian limited liability partnership is the Canadian
member firm of KPMG International, a Swiss cooperative.

Page 2

A pro forma financial statement is based on management’s assumptions and adjustments which are inherently subjective. The foregoing procedures are substantially less than either an audit or a review, the objective of which is the expression of assurance with respect to management’s assumptions, the pro forma adjustments, and the application of the adjustments to the historical financial information. Accordingly, we express no such assurance. The foregoing procedures would not necessarily reveal matters of significance to the pro forma financial statements and we, therefore, make no representation about the sufficiency of the procedures for the purposes of a reader of such statements.

Chartered Accountants

Toronto, Canada
July 29, 2005

Vitran Corporation Inc.
Pro Forma Consolidated Income Statement
Six Months Ended June 30, 2005 (unaudited)

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

	Six months			Three months
	ended			ended
	June 30,			March 31,
	2005			2005
	Vitran			Chris
	Corporation			Truck			Pro forma						Pro forma
	Inc.			Line			adjustments			Notes			consolidated
Revenue	$	198,991		$	7,283		$	4,904			2	(a)	$	211,178
Operating expenses		166,886			4,496			3,061			2	(a)		174,443
Selling, general and administrative expenses		18,612			1,089			893			2	(a)		20,594
Other income		(27	)		(23	)		—						(50	)
Depreciation and amortization		2,848			386			343			2	(b)		3,577
		188,319			5,948			4,297						198,564
Income from operations before undernoted		10,672			1,335			607						12,614
Interest expense, net		(38	)		(75	)		(259	)		2	(c)		(372	)
Income from operations before income taxes		10,634			1,260			348						12,242
Income taxes		3,084			—			466			2	(d)		3,550
Net income based on Canadian and United States GAAP		7,550			1,260			(118	)					8,692
Other comprehensive income:
Change in cumulative translation adjustment		(1,656	)		—			—						(1,656	)
Comprehensive income based on United States GAAP	$	5,894		$	1,260		$	(118	)				$	7,036
Earnings per share based on Canadian and United States GAAP:
Basic	$	0.61											$	0.69
Diluted	$	0.59											$	0.67
Weighted average number of shares based on Canadian and United States GAAP:
Basic		12,429,732						168,901			2	(e)		12,598,633
Potential exercise of options		337,402												337,402
Diluted shares		12,767,134						168,901			2	(e)		12,936,035

1

Vitran Corporation Inc.
Pro Forma Consolidated Income Statement
Year ended December 31, 2004 (unaudited)

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

	Vitran			Chris
	Corporation			Truck			Pro forma						Pro forma
	Inc.			Line			adjustments			Notes			consolidated
Revenue	$	374,595		$	26,480		$	—					$	401,075
Operating expenses		319,295			16,827			—						336,122
Selling, general and administrative expenses		31,263			4,227			—						35,490
Other expense (income)		(146	)		22			—						(124	)
Depreciation and amortization		5,206			1,536			157			2	(b)		6,899
		355,618			22,612			157						378,387
Income from operations before undernoted		18,977			3,868			(157	)					22,688
Interest expense, net		(51	)		(275	)		(352	)		2	(c)		(678	)
Income from operations before income taxes		18,926			3,593			(509	)					22,010
Income taxes		3,983			—			762			2	(d)		4,745
Net income based on Canadian and United States GAAP		14,943			3,593			(1,271	)					17,265
Other comprehensive income:
Change in cumulative translation adjustment		4,524			—			—						4,524
Unrealized gain on marketable securities		6			—			—						6
Comprehensive income based on United States GAAP	$	19,473		$	3,593		$	(1,271	)				$	21,795
Earnings per share based on Canadian and United States GAAP:
Basic	$	1.22											$	1.38
Diluted	$	1.17											$	1.33
Weighted average number of shares based on Canadian and United States GAAP:
Basic		12,285,400						202,458			2	(e)		12,487,858
Potential exercise of options		455,077												455,077
Diluted shares		12,740,477						202,458			2	(e)		12,942,935

2

1.	Basis of presentation
	The accompanying unaudited pro forma consolidated income statements for the six months ended June 30, 2005 and year ended December 31, 2004, have been prepared in accordance with Canadian generally accepted accounting principles with a reconciliation to United States generally accepted accounting principles. The accompanying unaudited pro forma consolidated income statements give effect to the acquisition by Vitran Corporation Inc. (“Vitran”) of Chris Truck Line (“CTL”) as though it had taken place on January 1, 2004. An unaudited pro forma consolidated balance sheet is not required as Vitran has previously filed a consolidated balance sheet at June 30, 2005 including CTL in its quarterly report on Form 10-Q on SEDAR and EDGAR. The transaction closed on May 31, 2005.
	The unaudited pro forma consolidated income statements have been prepared from information derived from the audited consolidated income statement of Vitran for the year ended December 31, 2004, the audited combined income statement of CTL for the year ended December 31, 2004, the unaudited consolidated income statement of Vitran for the six months ended June 30, 2005, the unaudited combined income statement of CTL for the three months ended March 31, 2005, and the adjustments and assumptions outlined below. The accounting policies used in the preparation of the unaudited pro forma consolidated income statements are those disclosed in Vitran’s annual report on Form 10-K as of and for the year ended December 31, 2004.
	The unaudited pro forma consolidated income statements are based on preliminary estimates and assumptions set forth in the notes to such information. These statements are not intended to present or be indicative of the consolidated financial position or consolidated results of operations that would have occurred if the transaction had been in effect on the dates indicated or of the financial position or operating results that may be obtained in the future.
	The unaudited pro forma consolidated income statements should be read in conjunction with Vitran’s 2004 annual report on Form 10-K and CTL’s audited financial statements at December 31, 2004.

2.	Unaudited pro forma income statements
	The following pro forma adjustments have been made for the purpose of the unaudited pro forma income statements:

(a)	An increase in revenue, operating expenses and selling, general and administrative expenses to account for the months of April 2005 and May 2005 for CTL in the unaudited pro forma consolidated income statement for the six months ended June 30, 2005. June 2005 operating results of CTL were included in Vitran’s reported consolidated operating results on its quarterly report on Form 10-Q for the period ended June 30, 2005.
(b)	An increase in amortization due to identifiable intangible assets being amortized based on a preliminary estimate by management. This is offset by a decrease in depreciation based on a change to Vitran’s depreciation policy at December 31, 2004. The adjustment for the six months ended June 30, 2005 also includes depreciation of capital assets for April 2005 and May 2005.
(c)	An increase in interest expense for the year ended December 31, 2004 and six months ended June 30, 2005, representing the elimination of CTL’s interest expense during the periods. In addition, the elimination of Vitran’s interest income as the cash portion of the acquisition of CTL was funded from existing cash balances.
(d)	Adjustments to income taxes as a result of the pro forma adjustments in (a) to (c) above and to reflect income taxes that would have been incurred by CTL on income from operations before income taxes earned had CTL not been a “Sub S Corporation” prior to being acquired by Vitran.
(e)	Vitran issued 202,458 common shares as part of the consideration paid for CTL. This results in an increase in the weighted average shares outstanding at December 31, 2004 of the total 202,458 shares. At June 30, 2005, an adjustment of 168,901 shares is required to increase the weighted average shares outstanding with respect to the CTL acquisition to 202,458 shares.