2010 annual review we deliver canada - purolator · country’s most respected companies and...

WE DELIVER CANADA2010 ANNUAL REVIEW

message from the Chairman 1message from the president 2looking Back, moving forward, Celebrating employees 3our Guiding principles 12Honouring employee excellence 14environmental sustainability 16Hunger for positive social Change 17Governance statement 18Board of Directors and executive team 20financial Highlights Inside Back Cover

CoRpoRATE pRoFILE

purolator is celebrating 50 years of delivering Canada and continues to expand its reach to more people, more businesses and more places across our country. We’re proud of our Canadian heritage and of the company

we’ve built. But most of all, we’re proud of our people. their talent and commitment has made us one of this country’s most respected companies and admired corporate cultures. and it is our people who will ensure that

we deliver Canada for the next 50 years.

purolator is well-positioned for future growth and success in business and in the communities we serve. We are delivering Canada to and from more markets in the u.s., and growing globally. We are a comprehensive

freight and parcel solutions provider operating in a sustainable manner while contributing to the well-being of the communities in which we live, work and play.

WHat’s insiDe

19601987Purolator introduced an innovative retail concept in the Canadian courier industry with the opening of its first Retail Centre (the first of its kind in Canada) at Toronto’s Yonge/Sheppard Centre.

1960Purolator began operations on December 5, 1960 as Trans Canadian Couriers Ltd., a subsidiary of American Courier Corporation. With a staff of two, the company spent its infancy in the heart of Eastern Canada with restricted operating licenses for the provinces of Ontario and Quebec.

1989Purolator developed a unique automated shipping system for high volume customers consisting of a computer, scale and printer.

1998Purolator’s United States operations were launched as Purolator USA (now Purolator International).

1997Purolator became the first Canadian courier company to offer courier pick up requests on the Internet.

1995Purolator launched its presence on the Internet at www.purolator.com, now one of the busiest e-commerce sites in Canada, processing more than 350,000 transactions per business day.

20102005Purolator became the first Canadian logistics company to start the transition to hybrid electric vehicles.

2004Purolator introduced Purolator Freight, a premium less-than-truckload (LTL) service.

2008Purolator’s new E-Ship Server (ESS) was launched. ESS is a user-friendly, Windows-based stand-alone operating system, designed for large customers with multiple facilities and numerous users.

2010Purolator provided pick up and delivery for all documentation and packages going into and out of the various Olympic venues, leading up to and during the 2010 Winter Games. This included the delivery of approximately 800,000 2010 Winter Games tickets.

2003Purolator received ISO 9001:2000 registration, which enabled the company to clearly define its quality focus and align strategically with its efforts to deliver superior customer care.

STEWART BACONChairman of the Board

In 2010 Purolator generated net operating revenue of $1.493 billion, an increase of $59 million relative to the prior year. In doing so, Purolator increased earnings to $71.7 million.

On September 9th, 2010 Purolator welcomed Tom Schmitt, our new President and CEO. He is an exceptional leader and his customer focus and passion for performance excellence make him the ideal candidate to lead Purolator.

Purolator has long been recognized for the delivery of flexible, responsive service and solutions across all lines of its business. Domestic and international customers, parcel, freight and supply chain customers all benefit from the dedication of Purolator’s people and their commitment to service excellence. On behalf of the Board of Directors I would like to convey our appreciation for this dedication to serving our customers.

During 2010, Purolator made notable improvements in processes and quality assurance, as well as investments like the ongoing replacement of conventional diesel vehicles with new hybrid-electric vehicles. These initiatives will create value for Purolator’s customers and the communities in which we operate, build brand leadership and position Purolator to perform well as we emerge from the economic recovery. Looking forward, Purolator will continue to make investments in its business where there are strong opportunities to improve and expand its current service offering.

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 2011 Annual Review.

Message froM the ChairMan

On behalf of the Board of Directors, I am pleased to share the results of Purolator’s performance for 2010.

2010 Annual Review 1

I wish to express a heartfelt ‘thank you’ to my teammates, our customers, business partners and our Board of Directors for playing a major role in making 2010 a successful year for our Purolator team.

In 2010 we got back to our ‘good habit’ of remarkable profitable growth. We grew our revenues by more than 4% and our earnings before taxes by 35%. We strengthened the profitability in our core Canadian parcel business while growing our freight and international business by double-digits.

Personally, I was here only for the last four months of 2010 having joined on September 9, after 12 years with FedEx in Memphis. Eight months into my tenure as a ‘Puro’, I still feel as grateful and fortunate as I did on day one. We have an amazing spirit across our 11,500 teammates and I’m proud to be part of it. That spirit combined with a high level of competence led to remarkable results in 2010 and we are far from being done.

Before reviewing some of the many 2010 highlights, first things first: thank youto Bill Henderson. Bill led our Purolator team as CEO for much of last year and, through his action-focused leadership, has laid the foundation for a strong year.

LET mE NOW REvIEW SOmE Of ThE mANy hIghLIghTS: - Purolator delivered the 2010 Olympics as the Games’ exclusive carrier, earning

the Vancouver Olympic Committee Sustainability Star in the process. Our delivery was so flawless that the 2012 and 2014 Olympic organizing committees reached out to Purolator for our best practices: a great recognition of our first class operations teams.

- We put our first long combination vehicle (LCV) into service between Edmonton and Calgary.

- Our Moncton Contact Centre won three industry awards: for Technology and Innovation, Business Leader of the Year and Employer of the Year.

- Our 11,500 teammates living and working on our Canadian home turf had a record year in another dimension that matters profoundly to Purolator: we delivered more food through our ‘Tackle Hunger’ program, run in collaboration with the Canadian Football League, than ever before.

Message froM the President

Through the eight years since the program’s inception, we have collected more than 3.7 million pounds of food in support of Canadian food banks.

- On December 6, Purolator turned 50, a milestone we are proud of, but one we will not rest on.

- By the end of 2010, Purolator had 405 Hybrid Electric Vehicles (HEVs) in service. - As we become less fuel dependent we are evolving into the industry leader in

environmental stewardship: no other transportation company has that many HEVs in service. Not in Canada, and not globally.

- In November, we simplified our leadership structure, making access to our three lines of business (Parcel, Freight and International) easier internally and easier for our customers.

There are many more highlights, but in summary: 2010 was a good year setting us up for an even stronger 2011. This year we expect to grow both our revenues and bottom line significantly. We have set up our team and our initiatives well to ‘deliver Canada fully and sustainably’. ‘Fully’ by:- defending and growing market share in our Canadian parcel business- turbocharging growth in our Freight business, propelled by access to our

express expertise and assets- providing access to the Canadian market to more and more shippers outside

Canada, with U.S. northbound shipments being the biggest lever

‘Sustainably’ by:- extending our environmental leadership, such as turning more downtown

areas into all-hybrid-electric-vehicle pickup and delivery markets- upgrading our aircraft fleet- being a responsible citizen and neighbour in all the communities we live,

work, and play in.

I am proud of the 2010 performance that our Purolator teammates delivered. And equally thrilled about our prospects for 2011 and beyond.

“Our Purolator team had a strong 2010 – setting us up for continued profitable growth in 2011 and beyond.”

TOm SChmITTPresident and Chief Executive Officer

2010 Annual Review2

MORE THAN

TEAMMATES11,500


TRACy TREmBLAyConsultant, human Resources

What is your first memory of working at Purolator?My first impression was that the people were amazing!

What/who inspired you to dedicate your career to Purolator? Loretta Neeley, Director of Organizational Effectiveness – she’s my mentor. I’ve learned so much from her. She has always guided me in the right direction. She tells me when I’m right and when I’m wrong – and helped me grow into the person I am today. Whenever I need guidance, I can always count on Loretta.

What are some key highlights you draw on when thinking about your career at Purolator? The support Purolator gave me in completing my Human Resources Management certificate. This includes tuition reimbursement, paid time off for exams, and helping me maintain a work-life balance while juggling my career and a nine-course workload. I am now on my way to becoming a certified Human Resources professional.

What Purolator milestones have you witnessed?Achieving ISO certification was huge. It required a lot of change – it broke down barriers, established work procedures and allowed everyone to see how people connected to each other. The Ontario Hub was the first to achieve certification and I was part of the team that helped implement the new work procedures. Now Purolator has fully ISO certified facilities nationwide, providing quality service coast-to-coast.

are there any unusual opportunities Purolator has given you?My son and I were in a Purolator ‘Tackle Hunger’ commercial that aired during the 2008 regular CFL season. My son was very excited, and I enjoyed meeting teammates from across the country who also participated in the filming of the commercial.

10 Years of serViCe

gERRy SChENKENBERgDistrict manager (Nanaimo)

how are Purolator’s operations different today than they were in 1992?Changes in technology have brought our operations a long way. Our systems are a lot more efficient, and the service we provide our customers is a lot more reliable. The quality of work we do is higher than when I first started. We’re a much tighter, more progressive organization today. A lot of investment has gone into infrastructure, into systems and into people, securing a future for the company and for the people of Purolator.

What milestones have you witnessed since working here?Purolator’s purchase by Canada Post Corporation was key to securing the stability of the organization. We experienced a real financial turnaround under the leadership of our president and CEO, and his executive team at the time. Today, the company’s financial success is shared by employees through our share ownership plan. That is really significant to the mindset of the organization.

Why have you dedicated 19 years to Purolator?From the start, I saw a lot of potential within the organization. The work is always challenging, and I take pride in knowing that whatever I’ve done has played a small role in contributing to the success of Purolator. The future looks bright.

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Tracy’s photo was taken on location in Hamilton Gerry’s photo was taken on location in Richmond

mIChELLE TOmLINSONCoordinator, Communications

Who inspired you to dedicate your career to Purolator? I met someone who really inspired me when I was interviewed for a position at the call centre. The person who interviewed me asked me where I see myself at Purolator. And I replied: “I see myself in your position”, despite all the interview guide books that tell you not to say that. The interviewer replied: “Good answer.“ His response planted something in me: recognize and walk through every door of opportunity that is presented my way. Ann-Mary Smith and Iain Gair were also great mentors in assisting me in my Human Resources career path.

What is your first memory of working at Purolator?The first full week of training was very exciting and fun though the content was rather bland. We had a trainer named Michelle St-Pierre who was very quiet until she got up in front of the class. Then she became very dynamic and brought Purolator to life. I learned at that point the importance of customer service.

What do you think sets us apart from the competition?Hands down, our commitment to our employees. Purolator is a place for everyone: whether you’re an engineer or a customer service agent, there’s a place for you within the company. You also have the opportunity to grow and move within the organization. That’s a great motivator!

What inspires you when you think about your career at Purolator? The dedication of our frontline employees, our couriers and clerical staff towards our customers. It was amazing to hear customers call in to the Contact Centre and terminal, insisting they have their couriers back after a terminal had gone through a route optimization, due to the relationship that had been established over the years.

LAuRIE WESTONmanager, National Retail

What was your first impression of the company?It was Canadian – that came through loud and clear. From the very first day I felt I was part of something bigger. That was a very good feeling.

What are some of your favourite memories/highlights from working here?In 2010 I took part in Leaders’ Edge. I had the privilege of working closely with 25 other up-and-coming leaders. We were presented with a strategic problem around social media that we had to find a solution for. The presentation to the executive team was the biggest moment for me. I was nervous about the outcome and the presentation – but my team and I did a great job! Actually, the company is looking to implement some of our ideas. That was a very proud moment for me.

Why have you decided to dedicate such a large part of your career to Purolator?There is something unique about Purolator. We’re a big company and yet you can’t help but feel connected…like you’re part of a community working towards a common goal. Purolator is a place that challenges people to be the best they can be. And they back it up by supporting and developing their employees. I feel like I won the lottery working here!

share your most unique Purolator customer service story with us.It was Christmas Day and I was hosting my family at home when I received a call that a customer’s shipment was sitting at one of our locations. This customer needed the shipment, as it was the only gift her granddaughter would get for Christmas. I arranged to pick up the shipment myself and deliver it personally. The child cried for joy when she received it, and it gave me a great feeling inside to be able to help out that customer.

Michelle’s photo was taken on location in Hamilton Laurie’s photo was taken on location in Mississauga

PAuL mERRICKgeneral manager, Operations (Pacific and Prairies)

Where did you begin your career?I started out in the East. I was a Unit Manager in Barrie and applied to be a Unit Manager in Richmond, B.C. It was like coming to a new job. I left my wife and three kids behind in Ontario and flew out to Richmond, rented a car and settled into this new job. After three months, I flew back to Ontario and drove my family back to B.C.

What’s the most significant change you’ve seen during your career?We’re trying to be a good corporate citizen, which is probably the biggest way we’ve changed. It’s all about doing the right thing and being a better organization. One way is through our leadership in environmental responsibility and our investment in hybrid electric vehicles. We’re an organization that’s very responsible that way.

What makes Purolator’s culture so unique?Any manager would be remiss not to mention the strength and tenacity of the employee group. I came to Richmond when things were tough and employees were looking for leadership. They saw me as the guy who would turn it around. I was one of many who contributed, but it was a collective effort. Our proudest moments are always about the team of people that helped accomplish something – regardless of whether it was a small or big gain.

20 Years of serViCe

DENIS ROChgeneral manager, Operations (Québec and Atlantic)

What did Purolator’s fleet look like when you joined the company?When I joined the company, we had Ford Custom 500s with the backseats pulled out, open to the trunk. As the company grew, we went from cars to Econolines to 14-foot vehicles. I remember, years ago, being at Boucherville and everyone was sitting around looking at this truck backed onto the dock. The truck was in the way, so I asked why no one was moving it. Turns out no one knew how to drive standard shift. I ended up moving the truck, but even today, all of our vehicles are automatic.

What is the biggest change you’ve witnessed at Purolator?The company has gone through such amazing growth. There were two districts in Montreal when I started. Now we have five on the Island and we’ve added new facilities, like the Montreal Hub. Seeing the Hub go up is something we’ve been dreaming about for 10 years. Our air network is unrivalled and our ground network…well, just the size of our network is impossible to replace.

Why have you decided to dedicate such a large part of your career to Purolator?I still love the job, still love the people and am still amazed at all the things we can do. It’s a Canadian company – that’s a big point of pride. We’re number one in Canada and number one in Quebec, my home. You don’t have to go anywhere to experience something new with Purolator. It’s a company where your dreams can come true.

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Paul’s photo was taken on location in Richmond Denis’ photo was taken on location in Montreal

guS TZATZANISCoach, Organizational Effectiveness

how has your career at Purolator evolved?I originally started in 1987, and spent my first 10 years as a courier. I became the ‘unofficial’ workplace trainer. I was able to attend a lot of courses, and soon the company asked me to become a unit manager. I said, “I need to go to this development program, or else I’m not going to be a good manager.” I wanted to expand my skill set. I knew that if I were going to lead and support a team, I wanted to learn how to do it properly.

From there, I went on to become a Training Specialist. The next position was a Quality Manager. My current role is as Coach, Organizational Effectiveness. The job is about understanding our business, mentoring people and putting programs together for our managers to support their learning paths. It’s new and it’s a great new thing for our organization.

I applaud Purolator for allowing our people to learn, grow and develop. I’ve always felt that Purolator gave me opportunities to grow.

Why have you dedicated so many years here?I’ve been asked this before. I look back at the opportunities I’ve had at Purolator…the development opportunities Purolator has given me; the personal growth opportunities Purolator has allowed me to experience; and the managers who support the people who work here. We’re an awesome company – we really are!

JIm mACINTOShvice President, field Operations

What was your first impression of Purolator?I remember being new and so nervous about doing the right thing. The people I worked with would make it a point to introduce themselves. They were so helpful and so ready to make you feel comfortable and teach you stuff that you didn’t know.

On-time departures were key. There was a sense of urgency around making sure all of the freight got on the right truck and that the trucks were closed and ready to leave on time. These guys talked about it with such a sense of pride that it was contagious. Everything was in order and we were set up to get clear at 10 p.m.

What was one of your most memorable experiences? We opened a new hub in Toronto in 1987. That first evening was a night to remember. It didn’t go as smoothly as we would have liked. It took longer to process the freight with new employees and a new conveyer system, but I look back at it now as one of the best learning experiences I’ve had with this organization. It was a unique opportunity to work on a project of that magnitude. Back in 1987 – it was pretty significant. I certainly grew from it, personally and professionally, and came to understand how much commitment is required to work on a project of that size. We had to implement it over a very short period of time, while protecting service to our customers.

2010 Annual Review 7Gus’ photo was taken on location in Mississauga Jim’s photo was taken on location in Mississauga

mIKE BOuChER Acting Senior vice President and Chief Operating Officer

What was your first impression of the company?I thought, “This is insane!” We were loading everything from five-ton trucks to Ford LTDs, which had the back seats taken out of them. Everyone moved with a purpose – it was like urgency on steroids. There was no such thing as coffee breaks or lunch breaks. We ate lunch, drank coffee and took breaks on the run. We were busy all the time.

and now?I walked through the Ontario Hub a couple of months ago and that pride and passion and sense of urgency and commitment is still there. There are no training manuals for that. This is a culture that’s been created. We’ve come such a long way from those early days but we still have that entrepreneurial attitude. We have a lot of bright people, very driven by contribution and results. There’s a sense of community, a sense of national belonging and a connection from coast-to-coast.

What keeps you at Purolator?I have the greatest job in the world. We’ve got Serge Viola, Director Fleet and Ground Line haul, leading our industry in the adoption of hybrid vehicles and greening our fleet. Our air operations are amazing. I get a huge rush going to Hamilton or Vancouver. You see these guys who have worked all day or all night and it’s cold or wet or raining, but they’ll still stand around and wait to watch the aircraft depart because it’s so thrilling to see those planes take off.

Our Ontario Hub is this ‘old lady’ who’s getting kind of tired and rundown, but 600 employees think she’s the greatest thing. And because of that, a building that was designed to handle 80,000 packages per day is now processing over 200,000 packages a day. Our Montreal Hub is the most sophisticated automated sorting facility in Canada, and the dedicated employees there are so proud of that building and their accomplishments. How could you work anywhere else?

30 Years of serViCe

DIANE BELANgERDirector, Operations (Québec)

What jobs have you done at Purolator?I started in the billing department in Ville Saint-Pierre in July, 1981. Right away, I saw the possibility of finding a job at Purolator that I’d really enjoy. I worked in administration for seven or eight years, and moved into operations in 1990. My responsibility there was to make sure the correct processes were followed in each terminal.

That’s how I learned the operations side of our business, and I knew I wanted to continue in that field. Soon I became a Dock Manager, followed by Unit Manager, District Manager, Divisional District Manager and now Operations Director. Sometimes I have to remind myself of the amazing evolution I’ve gone through! This company believes in its people.

how is the operation different now than from when you started? There’s greater visibility of the packages and more communication. The levels of quality and service the company provides are much higher. Today, we don’t just think we did something or achieved something, now we know. We can prove our success and if that’s not the case, we have the tools to fix it.

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Mike’s photo was taken on location in Mississauga Diane’s photo was taken on location in Montreal

CLAuDE DESROChERSCourier

Claude Desrochers has been with Purolator for 44 years, the longest record of service for any Purolator driver on the road today. His sons, Benoit and Alain, have followed in their father’s footsteps. Both are couriers at the Laval terminal and are establishing impressive driving records of their own. Benoit and Alain joined Purolator 24 years ago. Between them, the Desrochers family has accumulated 92 years of experience at Purolator.

What was your first impression of the company?I joined Purolator on December 13, 1966 as a courier and it was like a second home. Working for Purolator is like working for yourself. We all give our best to make the company grow.

is it still your second home?It has always been like that. We feel as if we are among our family. It is always the best service that counts. If a new client decides to send a package and it arrives on time, chances are that within a day or so, he’ll have another two or three packages to send. Before you know it, he’s sending packages by the truckload…that’s how business grows!

You have the best driving record of anyone at Purolator. What’s your secret?You have to stay alert and anticipate the actions of other drivers and pedestrians. My goal is to provide the best customer service I can and return to the terminal safely every day. And with the driving skills and abilities I’ve acquired with Purolator, I am able to do exactly that.

What do you think about the fact that your two sons work for Purolator?I am very happy. Purolator is a good work environment. As soon as the boys got out of school, they came to me and told me they were interested in working for Purolator. They saw me work for this company for many years and were excited by the idea of working for Purolator too.

40+ Years of serViCe

BENOIT DESROChERSCourier

What attracted you to working at Purolator?All through my youth, I saw my father work for Purolator. I was not interested in an office job. I was interested in the idea of working with the public and serving people around me.

What do you think about working with your brother and your father at Purolator? It makes me proud…proud to have contributed to the growth of Purolator in our region. We can see the tangible impact of our work.

ALAIN DESROChERSCourier

What was your best moment working for Purolator?Every day of work has been a best moment for me. I have a good job and I love it. I also love the idea of following in my father’s footsteps and perhaps even surpassing them.

how do you like working with your father and brother at Purolator?I love it. It is certain that our weekend conversations around the dinner table are about the company. Having the dean of Purolator around the table definitely means we’ll get good advice, and have good times too.

40+

2010 Annual Review 9Claude, Benoit and Alain’s photo was taken on location in Montreal

Purolator is Canada’s loGistiCs ComPany and behind our Good name, stand the Good names of our emPloyees

50 YEARS OF THANKS

2010 Annual Review 112010 Annual Review10

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 the competition, and we must always be proud ambassadors of the Purolator brand in our professional and personal lives.

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 sensitive 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.

oUr gUiding PrinCiPLes

CORPORATE STEWARDShIPWe are all custodians of this great, Canadian institution called Purolator. We must all 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 all our stakeholders.

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.

getting great results is important. It is equally important how we achieve these results and our corporate values provide the guiding principles for this ‘how to’. Purolator has five new corporate values that guide everything we do. As our organization brings them to life over the days, weeks and years to come –

success at Purolator will mean living these values.

2010 Annual Review12

ADRIAN BALAhDistrict Manager, Barrie

ALLIE CARSONIT Business Analyst, Jericho, New York

ANDRé fABIERKIEWICZProject Manager, Facilities, Mississauga, Ont.

BRAD mIfSuDMarketing Revenue Manager, Mississauga, Ont.

CAThERINE BROWNHuman Resources Business Specialist, Ottawa, Ont.

DENISE ROBERTSSection Manager, Ground Transportation Toronto, Toronto, Ont.

ELAINE RuDmANBilling Supervisor, Farmingdale, New York

éRIC PILONDistrict Manager, Montreal Hub, Montreal, Que.

gAéTAN véZINADistrict Manager, Boucherville/Drummondville/Saint-Jean-sur-Richelieu/ Victoriaville/Tees Road

gARNET mCDONALDDistrict Manager, Hamilton/Niagara-on-the-Lake

JAmIE WRIghTDistrict Manager, Metro West, Toronto, Ont.

JOE LOmBARDOGround Linehaul Manager, Mississauga, Ont.

KAREN LELLIOperations Manager, Purolator Freight, Martin Grove, Toronto, Ont.

KyLE DuNBARDistrict Manager, Regina

KyLE vAN DE KRAATSDivisional Quality Manager, Metro, Mississauga, Ont.

mARTIN OuELLETBilling Control Business Analyst, Montreal Hub, Montreal, Que.

mARy BABAKOSCommunications Consultant, Mississauga, Ont.

mELANIE ChENg-KAI-ONSMB Strategic Planning and Insights Manager, Mississauga, Ont.

mONTy mCKAyPartner Services Manager, Nanaimo

NATALLIA SmALIuKAccounting Analyst, Mississauga, Ont.

PIETRO DI TOmASSODistrict Manager, Anjou/Granby/Sherbrooke

SAm huTChEONChannel Services Support Specialist, Mississauga, Ont.

ShIRLEy ShIELDSProduct Manager, Mississauga, Ont.

STEPhEN NOSEWORThyDistrict Manager, St. John’s, Newfoundland

WALTER vANDENBOOmENDivisional Manager, Operations Finance, Dartmouth, Nova Scotia

WILLIAm EL-KhOuRINetwork Engineering Manager, Mississauga, Ont.

yOLLANDE gEITZBusiness Support Specialist, Mississauga, Ont.

CIRCLE Of ExCELLENCE

COMMITTEDTO OUREMPLOYEES

HONOURING EMPLOYEE ExCELLENCE


Employee dedication is not something found on a balance sheet but it certainly is essential to a healthy one. At Purolator, we appreciate the efforts and contributions of our employees and honour those top performers whose dedication to our customers best demonstrates Purolator’s commitment to service excellence. In recognition of exceptional employee performance, we are pleased to present the 2010 Circle of Excellence Award winners and President’s Club Award winners.

mARy-ELLEN DEfORESTQuality Manager, Head Office

ACCOuNT ExECuTIvES KImBERLEy SLINNBurlington, Ont.

CAThy LAPLAuNTGTA East, Ont.

CARLy CAuCCIBurlington, Ont.

ERIN COghLANEdmonton, Alta.

DAvID CARRILLOBurlington, Ont.

ANDREW KINgEdmonton, Alta.

DENyS CROISETIEREQue.

SCOTT gARRIESEdmonton, Alta.

NATIONAL ACCOuNT ExECuTIvESBRANDON KEAvENEyCentral West

RIChARD SCOTTCentral West

mAJOR ACCOuNT ExECuTIvEDANIEL mCgAuLEyBurnaby, BC

uS STRATEgIC ACCOuNT ExECuTIvERyAN hOPPCentral US

uS mAJOR ACCOuNT ExECuTIvEOZZIE hERNANDEZJericho, NY

uS BRANCh SALES mANAgERfRANK JACKETTIPhiladelphia, PA

REgIONAL SALES mANAgERSmIKE ATTWELLEdmonton, Alta.

PAuL ChESSBurnaby, BC

NATIONAL ACCOuNT mANAgERfRANK fIgLIOmENICentral Canada

DIRECTOR Of SALESDEAN mILLSPacific

PuROLATOR fREIghTChAD IRWINWinnipeg, Man.

gENERAL mANAgERPAuL mERRICKPrairies and Pacific

CITIZENShIP AWARD PRESIDENT’S CLuB

CAThy LAPLAuNTGTA East

CARLy CAuCCIBurlington, Ont.

ERIN COghLANEdmonton, Alta.

DANIEL mCgAuLEyBurnaby, BC

mIKE ATTWELLRegional Sales ManagerEdmonton, Alta.

ShuBh mANNNational Accounts, Central Canada

RINg CLuB SALES mANAgER Of ThE yEAR PRESIDENT’S AWARD

HONOURING EMPLOYEE ExCELLENCE


hyBRID ELECTRIC vEhICLESAfter testing a prototype in 2003, Purolator became the first courier company in Canada to make hybrid electric vehicles (HEVs) part of its fleet. Currently, Purolator’s 405 HEVs constitute the largest such fleet in North America. To date, the fleet has logged more than 5.2 million kilometres – saving 645,000 litres of fuel and preventing the emission of over 2,100 tonnes of greenhouse gas emissions.

ThE INSIDER ON ThE QuICKSIDERWhat’s the Quicksider? It’s a battery-operated pick up and delivery vehicle that is the next big thing in environmentally sustainable fleets. After testing it out in Toronto, we found it reduced up to 85% of greenhouse gas emissions. This vehicle was featured during the 2010 Olympic and Paralympic Winter Games, and helped earn Purolator the Vancouver 2010 Sustainability Star award.

LONg COmBINATION vEhICLES: hERE’S ThE ShORT STORyA long combination vehicle (LCV) consists of one tractor pulling two 53-foot trailers. In association with the Ontario Ministry of Transportation and the Ontario Trucking Association, Purolator participated in a pilot program to test the effectiveness of LCVs. In testing on select routes between Toronto and Montreal, Purolator’s LCVs logged more than 250,000 kilometres – consuming 30% less fuel than two tractor trailers! To minimize its footprint, Purolator Freight also operates an LCV between Edmonton and Calgary.

enVironMentaL sUstainaBiLitY

WE’RE PuShINg ThE ENvELOPE ON SuSTAINABILITyIn addition to our fleet initiatives, Purolator is implementing environmentally friendly technologies and processes including Purolator Express Envelopes, made from 50% recycled fibres, and Purolator boxes, made from 95% recycled fibres. We’ve also eliminated carbon paper inserts from domestic manual bills of lading, and reduced 22 tonnes of greenhouse gas emissions annually.

Lighting retrofits in 37 of our terminals have reduced energy consumption by up to 40 per cent, improved the amount of available light in our facilities by up to 30 per cent and reduced greenhouse gas emissions by 1,380 tonnes annually.

Substantial efficiencies were realized in our air operations facilities with the use of 12 ground power units (GPUs), which are used to supply electricity to aircraft while on the ground, eliminating the need to run the auxiliary power unit of jet engines during loading and unloading. This has resulted in a reduction of 2,400 tonnes of greenhouse gas emissions every year.

PLANTINg NEW ROuTES AND NEW gREEN POLICIESOngoing initiatives by resourceful Purolator teams demonstrate what’s good for the environment is good for business. A case in point is our route optimization program, which reduces overall distance travelled by our vehicles while minimizing fuel consumption and emissions. As well, Purolator’s strict no-idling policy further helps conserve fuel and reduce emissions – better for our organization and better for the environment.

Purolator’s commitment to conducting business in an eco-friendly way begins with its Environmental Policy. The policy establishes the company’s environmental responsibilities to its customers, employees and community and reflects its commitment to

pollution reduction in all business activities. In reality, this policy formalizes a commitment to being eco-friendly that we’ve practiced and lived for years. We haven’t been ‘blowing our own horn’ about it, because at Purolator we know it’s just the right thing to do.


Hunger is a pressing issue facing every community, and at Purolator we have adopted it as ‘our cause’. Since 2003, we have partnered with Food Banks Canada to enhance Canada’s National Food Sharing System. We help by sharing what we do well: using our expertise in logistics and distribution to move more food to more people who desperately need it. Through our ability to reach virtually every destination point in Canada, we are making a meaningful difference in the fight to end hunger.

PuROLATOR AND ThE CfL TACKLE huNgERPurolator teams up with the Canadian Football League (CFL) to collect non-perishable food items for food banks at CFL games in cities across the country. Fans have the opportunity to have their picture taken with the Grey Cup at select games in exchange for their donation. In addition, every time a quarterback gets sacked, Purolator donates the equivalent of the quarterback’s weight in food to a CFL hometown food bank. Thanks to the tireless efforts of our employees and strong support of our customers, the program has helped hold the line against hunger. Through the eight years since the program’s inception, we have collected more than 3.7 million pounds of food in support of Canadian food banks. To find out more about the Tackle Hunger program, visit http://www.cfl.ca/purolator.

RAISINg AWARENESS TO REDuCE huNgERHunger can be a hidden issue within the community, so every year Purolator celebrates National Hunger Awareness Day (NHAD) to help increase awareness and understanding of what food banks provide in our communities, and the

hUnger for PositiVe soCiaL Change

people they serve. Posters are displayed in our Retails Centres across Canada, while employees are encouraged to visit the NHAD website to learn more about how to help end hunger in Canada. Each year, Purolator employees initiate projects to collect and distribute food and money to local food banks.

AT ThE COmmuNITy’S SERvICEPurolator’s fully paid Community Service Sabbatical Program grants two employees up to six months of paid leave to support local charitable organizations of their choice. The Employee Sabbatical Program is an opportunity for select employees to build relationships with charitable organizations within their community – a valuable experience that Purolator is proud to be able to make a reality.

It’s the ‘Purolator way’ to cultivate a culture that promotes community-positive values. Our employees energetically embrace this credo by contributing to the betterment of the communities where they live, work and play.


The Board’s supervisory duties include approving Purolator’s strategy, 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 keep the Board

goVernanCe stateMent

fully informed of Purolator’s progress towards the achievement of its primary objective(s), and 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 governance. 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. In 2010, Purolator implemented a comprehensive new Delegation of Authority policy which, together with updates to Purolator’s internal controls over financial reporting, served to further strengthen Purolator’s internal control environment. Through its governance framework, Purolator seeks to maintain the trust of all of its stakeholders.

Purolator’s Board of Directors is responsible 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.



STEWART BACONChairman of the BoardPurolator Holdings Ltd.

JACQuES CÔTéChief Operating OfficerCanada Post Corporation

BONNIE BORETSKyVice President, General Counsel,Corporate Secretary and ComplianceCanada Post Corporation

BARRy LAPOINTEPresident and Chief Executive OfficerKelowna Flightcraft Air Charter Ltd.

DEEPAK ChOPRAPresident and Chief Executive Officer, Canada Post Corporation

LOuIS O’BRIENSenior Vice President and Chief Customer OfficerCanada Post Corporation

DAvID BuRKEChief Executive OfficerStardyne Technologies Inc.

TOm SChmITTPresident and Chief Executive Officer, Purolator Holdings Ltd. and Purolator Inc.

WAyNE ChEESEmANChief Financial OfficerCanada Post Corporation

mARy TRAvERSySenior Vice-President, Transaction Mail, Canada Post Corporation

DENySE ChICOyNECorporate DirectorPurolator Holdings Ltd.

Board of direCtors and eXeCUtiVe teaM

TOm SChmITTPresident and Chief Executive Officer

mIChAEL COTéSenior Vice President and Chief Commercial Officer

mIKE BOuChERActing Senior Vice President and Chief Operating Officer

DEB CRAvENSenior Vice President and Chief Financial Officer

JOhN T. COSTANZOPresident, Purolator International

DENNIS LOPESSenior Vice President, Chief Legal Officer and Corporate Secretary

CINDy gORELLESenior Vice President, Chief Human Resources Officer

Senior Executive team members as of May 1, 2011.

JIm PEEPLES Vice President, Engineering & Quality

ChRIS fAuLKNERDirector, Human Resources and Labour Relations

BOARD Of DIRECTORS SENIOR ExECuTIvE TEAm

ExECuTIvE SuPPORT TEAm

Purolator Inc.5995 Avebury Roadmississauga ONCanadaL5R 3T8

905.712.10841 888 ShIP-123 (1 888 744-7123)

www.purolator.com


© Purolator Inc. All Rights Reserved 2011. The trademark Purolator, Purolator Express, Purolator Freight, Purolator International, Purolator Tackle Hunger, the Purolator logo and all other trademarks used in this 2010 Annual Review are owned by Purolator Inc.

19601987Purolator introduced an innovative retail concept in the Canadian courier industry with the opening of its first Retail Centre (the first of its kind in Canada) at Toronto’s Yonge/Sheppard Centre.

1960Purolator began operations on December 5, 1960 as Trans Canadian Couriers Ltd., a subsidiary of American Courier Corporation. With a staff of two, the company spent its infancy in the heart of Eastern Canada with restricted operating licenses for the provinces of Ontario and Quebec.

1989Purolator developed a unique automated shipping system for high volume customers consisting of a computer, scale and printer.

1998Purolator’s United States operations were launched as Purolator USA (now Purolator International).

1997Purolator became the first Canadian courier company to offer courier pick up requests on the Internet.

1995Purolator launched its presence on the Internet at www.purolator.com, now one of the busiest e-commerce sites in Canada, processing more than 350,000 transactions per business day.

20102005Purolator became the first Canadian logistics company to start the transition to hybrid electric vehicles.

2004Purolator introduced Purolator Freight, a premium less-than-truckload (LTL) service.

2008Purolator’s new E-Ship Server (ESS) was launched. ESS is a user-friendly, Windows-based stand-alone operating system, designed for large customers with multiple facilities and numerous users.

2010Purolator provided pick up and delivery for all documentation and packages going into and out of the various Olympic venues, leading up to and during the 2010 Winter Games. This included the delivery of approximately 800,000 2010 Winter Games tickets.

2003Purolator received ISO 9001:2000 registration, which enabled the company to clearly define its quality focus and align strategically with its efforts to deliver superior customer care.

Revenue fRom opeRationspurolator generated net operating revenue of $1,493 million in 2010, an increase of $59 million over 2009. this increase was due primarily to improved economic conditions but was tempered by an intense competitive environment.

Revenues in each of our lines of business increased from previous years. Revenue from purolator freight increased by an impressive 31% from 2009. purolator international was affected by a more severe economic downturn in the u.s. but still managed a 3.5% increase in its revenue.

Cost of opeRationsin 2010, the cost of operations totalled $1,421 million, an increase of $40 million over 2009. as revenues began to recover in 2010, purolator focused on profitable growth, obtaining greater efficiencies from its national network and leveraging asset utilization across all lines of business. the company also streamlined its management team, and reduced ground line haul costs and air transport costs. Both purolator freight and purolator international maintained effective cost controls as revenues increased from 2009.

FINANCIAL HIGHLIGHTS

Capital investmentinvestments in technology and infrastructure were reduced compared to prior years, since significant infrastructure and customer investments are nearing completion. these investments in new service platforms will provide flexibility going forward to meet our customers’ diverse needs.

purolator invested $17 million in capital to complete the migration of customers to a new shipping system; implement salesforce.com (a system that provides purolator’s sales team with the tool they need to manage their activities); acquire equipment to improve scanning consistency; and, implement various health and safety initiatives. as well, a new fleet purchase including hybrid electric vehicles was financed through a capital lease facility in 2010, bringing the total capital invested to $31 million.

outlook foR 2011the outlook for 2011 is good - purolator remains focused on fulfilling its commitments to its customers and employees. the company’s objectives are straightforward: to achieve profitable growth in all lines of business; leverage further operational efficiencies; and maintain cost controls. together, these strategies will allow purolator to take advantage of favourable opportunities as market conditions improve.

purolator was not immune to the 2008/2009 global recession. the good news for 2010 is that with revenue growth of 4.1%, purolator continues to hold the largest market share, by revenue, in the Canadian express market. purolator freight and purolator’s international business segments continue to enjoy strong growth, both in terms

of revenues and profitability.

$(000s) 2010 2009

Revenue 1,492,965 1,433,579 total expenses 1,421,234 1,380,658 earnings Before taxes 71,731 52,921

Return on equity* 9.1% 8.4%

investment in fixed assets 31,468 68,729

Cash flow from operations 67,528 52,326 *Based on monthly weighted average

keY finanCial inDiCatoRs

keY finanCial inDiCatoRs

www.purolator.com1 888 SHIP-123 (1 888 744-7123)

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