What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-07 · 185 added, 62 removed, 271 unchanged (48% of the section changed)

1 unchanged sentence

Condensed Consolidated Balance Sheets

June 30, December 31,

September 30, December 31,

(Dollars in millions, shares in thousands, except per share amounts) 2024 2023

29 unchanged sentences

10,000 shares authorized;

0 shares issued and outstanding as of June 30, 2024 and December 31, 2023

0 shares issued and outstanding as of September 30, 2024 and December 31, 2023

Common stock, $ 0.01 par value;

300,000 shares authorized;

117,607 and 117,026 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

160,790 and 117,026 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 1,914 590

5 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(Dollars in millions, shares in thousands, except per share amounts) 2024 2023 2024 2023

13 unchanged sentences

Earnings (loss) per share data

Basic earnings (loss) per share $ ( 0.06 ) $ 0.03 $ ( 0.19 ) $ 0.03

Diluted earnings (loss) per share $ ( 0.06 ) $ 0.03 $ ( 0.19 ) $ 0.03

Basic $ ( 1.81 ) $ ( 0.01 ) $ ( 2.15 ) $ 0.02

Diluted $ ( 1.81 ) $ ( 0.01 ) $ ( 2.15 ) $ 0.02

Weighted-average common shares outstanding

Basic weighted-average common shares outstanding 117,579 116,894 117,398 116,748

Diluted weighted-average common shares outstanding 117,579 119,457 117,398 119,414

Basic 134,095 116,970 123,004 116,823

Diluted 134,095 116,970 123,004 119,415

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2024 2023 2024 2023

7 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

(In millions) 2024 2023

4 unchanged sentences

Stock compensation expense 17 16

Deferred tax expense (benefit) ( 9 ) 2

Deferred tax benefit ( 12 ) ( 1 )

Deemed non-pro rata distribution 216 —

Changes in assets and liabilities

3 unchanged sentences

Accrued expenses and other liabilities 15 ( 48 )

Net cash provided by operating activities 2 66

Net cash provided by (used in) operating activities ( 5 ) 70

Investing activities

Payment for purchases of property and equipment ( 33 ) ( 46 )

Business acquisition, net of cash acquired ( 1,019 ) —

Other — ( 1 )

Net cash used in investing activities ( 1,052 ) ( 47 )

2 unchanged sentences

Repayment of borrowings on revolving credit facilities ( 193 ) —

Proceeds from issuance of common stock and pre-funded warrants 1,125 —

Payment for equity issuance costs ( 30 ) —

Payment for tax withholdings related to vesting of stock compensation awards ( 4 ) ( 12 )

1 unchanged sentence

Repayment of debt and finance leases ( 3 ) ( 3 )

Other ( 1 ) ( 1 )

Net cash provided by (used in) financing activities 1,107 ( 17 )

5 unchanged sentences

Leased assets obtained in exchange for new operating lease liabilities $ 97 $ 60

Leased assets obtained in exchange for new finance lease liabilities — 1

Cash paid for income taxes, net 3 25

3 unchanged sentences

(Dollars in millions, shares in thousands) Shares Amount Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Loss Total Equity

Balance as of March 31, 2024 117,544 $ 1 $ 593 $ ( 9 ) $ ( 3 ) $ 582

Balance as of June 30, 2024 117,607 $ 1 $ 599 $ ( 16 ) $ ( 5 ) $ 579

Net loss — — — ( 243 ) — ( 243 )

2 unchanged sentences

Vesting of stock compensation awards 113 — — — — —

Balance as of June 30, 2024 117,607 $ 1 $ 599 $ ( 16 ) $ ( 5 ) $ 579

Tax withholdings related to vesting of stock compensation awards — — ( 2 ) — — ( 2 )

Deemed non pro-rata distribution — — 216 — — 216

Issuance of common stock and pre-funded warrants, net of issuance costs 43,070 1 1,095 — — 1,096

Balance as of September 30, 2024 160,790 $ 2 $ 1,914 $ ( 259 ) $ ( 5 ) $ 1,652

(Dollars in millions, shares in thousands) Shares Amount Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Loss Total Equity

5 unchanged sentences

Tax withholdings related to vesting of stock compensation awards — — ( 4 ) — — ( 4 )

Balance as of June 30, 2024 117,607 $ 1 $ 599 $ ( 16 ) $ ( 5 ) $ 579

Deemed non pro-rata distribution — — 216 — — 216

Issuance of common stock and pre-funded warrants, net of issuance costs 43,070 1 1,095 — — 1,096

Balance as of September 30, 2024 160,790 $ 2 $ 1,914 $ ( 259 ) $ ( 5 ) $ 1,652

(Dollars in millions, shares in thousands) Shares Amount Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Equity

Balance as of March 31, 2023 116,853 $ 1 $ 586 $ 2 $ ( 4 ) $ 585

Net income — — — 3 — 3

Balance as of June 30, 2023 116,954 $ 1 $ 587 $ 5 $ ( 4 ) $ 589

Net loss — — — ( 1 ) — ( 1 )

Stock compensation expense — — 5 — — 5

2 unchanged sentences

Repurchase of common stock — — — — — —

Balance as of June 30, 2023 116,954 $ 1 $ 587 $ 5 $ ( 4 ) $ 589

Balance as of September 30, 2023 117,002 $ 1 $ 589 $ 4 $ ( 4 ) $ 590

(Dollars in millions, shares in thousands) Shares Amount Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Equity

5 unchanged sentences

Repurchase of common stock ( 100 ) — ( 2 ) — — ( 2 )

Balance as of June 30, 2023 116,954 $ 1 $ 587 $ 5 $ ( 4 ) $ 589

Balance as of September 30, 2023 117,002 $ 1 $ 589 $ 4 $ ( 4 ) $ 590

See accompanying notes to condensed consolidated financial statements.

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In management’s opinion, the condensed consolidated financial statements reflect all adjustments that are of a normal recurring nature and are necessary for a fair presentation of financial condition, results of operations and cash flows for the interim periods presented.

Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Significant Accounting Policies

Our significant accounting policies are disclosed in Note 2 to the 2023 Form 10-K.

There have been no material changes to the Company’s significant accounting policies as of June 30, 2024.

There have been no material changes to the Company’s significant accounting policies as of September 30, 2024, except for the additional critical accounting policy below.

Business Combinations

We apply the acquisition method of accounting with respect to the identifiable assets and liabilities of a business combination and record the assets acquired and liabilities assumed at their estimated fair values as of the acquisition date.

The excess of the cost of the acquired business and the fair value of the assets acquired and liabilities assumed is recognized as goodwill.

Estimates of fair value represent management’s best estimate of assumptions and about future events and uncertainties, including significant judgments related to future cash flows, discount rates, competitive trends, margin and revenue growth assumptions, including customer attrition rates, market comparables and others.

Inputs used are generally obtained from historical data supplemented by current and anticipated market conditions and growth rates.

While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement.

As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.

Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recognized in our consolidated statements of operations.

Significant judgment is required in estimating the fair value of identifiable intangible assets and in assigning their respective useful lives.

The fair value estimates are based on historical information and on future expectations and assumptions deemed reasonable by management, but which are inherently uncertain.

See Note 3—Acquisition to our condensed consolidated financial statements included elsewhere in this Form 10-Q for further information regarding the fair value determination of each of the classes of identifiable intangible assets.

Determining the useful life of an intangible asset also requires judgment.

The useful lives of identifiable intangibles with determinable useful lives are based on a variety of factors, including but not limited to, the competitive environment, historical customer attrition rates, market share, operating plans and the macroeconomic environment.

The costs of determinable-lived intangible assets are amortized to expense over the estimated useful life.

Lease liabilities, included in Short-term operating lease liabilities and Long-term operating lease liabilities in the condensed consolidated balance sheets as of the acquisition date, are measured at the present value of the future minimum lease payments over the remaining lease term and the incremental borrowing rate of RXO as if the acquired leases were new leases as of the acquisition date.

Right-of-use assets, included in Operating lease assets in the condensed consolidated balance sheets as of the acquisition date, are equal to the amount of the lease liability at the acquisition date adjusted for any off-market terms of the lease.

The remaining lease term is based on the remaining term at the acquisition date plus any renewal or extension options that the Company is reasonably certain to exercise.

Accounting Pronouncements Issued but Not Yet Effective

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Early adoption is permitted.

We are currently evaluating the impact of the new guidance.

We are continuing to evaluate the impact of the new guidance, which we expect to be disclosure only, with no impact to the Company’s consolidated balance sheet, consolidated statement of operations, and consolidated statement of cash flows.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosure.” The ASU seeks to enhance income tax information primarily through changes in the rate reconciliation and income taxes paid information.

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We are currently evaluating the impact the rules will have on our disclosures.

Pending Acquisition

On June 21, 2024, the Company, United Parcel Service of America, Inc.

(“UPS”) and certain subsidiaries of UPS entered into a Purchase Agreement (the “Purchase Agreement”), pursuant to which, following the satisfaction or waiver of certain conditions, the Company will purchase (the “Coyote Acquisition”) UPS’ technology-driven, asset-light based truckload freight brokerage services business, as well as certain assets used to conduct haulage, dedicated transport and warehousing services in the United Kingdom for $ 1.025 billion in cash, subject to certain customary adjustments.

On September 16, 2024 (the “acquisition date”), the Company acquired the technology-driven, asset-light based truckload freight brokerage services business, as well as certain assets used to conduct haulage, dedicated transport and warehousing services in the United Kingdom (collectively, “Coyote”) from United Parcel Service of America, Inc.

(“UPS”) and certain subsidiaries of UPS (the “Transaction”).

We acquired Coyote for $ 1.038 billion in cash, subject to certain additional customary adjustments.

We believe the acquisition of Coyote enhances our competitive position with greater scale, a broader array of service offerings and strengths in a more diverse set of end markets.

The Transaction was accounted for under the acquisition method of accounting.

The purchase price was preliminarily allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date.

The condensed consolidated financial statements as of and for the three and nine months ended September 30, 2024 include the financial results of Coyote from the acquisition date.

The Company incurred acquisition-related costs of $ 21 million and $ 26 million for the three and nine months ended September 30, 2024, respectively, which are included in Transaction and integration costs in the condensed consolidated statements of operations.

The following table summarizes the preliminary allocation of consideration to Coyote’s identifiable tangible and intangible assets acquired and liabilities assumed by the Company at the acquisition date.

(In millions)

Cash and cash equivalents $ 19

Accounts receivable 398

Other current assets 35

Property and equipment 60

Intangible assets 509

Operating lease assets 89

Other long-term assets 16

Total assets $ 1,126

Accounts payable $ ( 208 )

Accrued expenses ( 50 )

Short-term operating lease liabilities ( 18 )

Deferred tax liabilities ( 115 )

Long-term operating lease liabilities ( 71 )

Other long-term liabilities ( 23 )

Total liabilities $ ( 485 )

Net assets acquired $ 641

Purchase price $ 1,038

Goodwill recorded $ 397

The purchase price exceeded the estimated fair value of the net assets acquired, and, as such, the excess was allocated to goodwill.

Goodwill will not be amortized but instead will be reviewed for impairment at least annually, absent any indicators of impairment.

Goodwill is attributable to synergies expected to be achieved from the combined operations of the Company and Coyote and the assembled workforce.

Goodwill recognized in the Transaction is not expected to be deductible for tax purposes.

The fair values of the assets acquired and liabilities assumed are considered preliminary and subject to adjustment as additional information is obtained and reviewed.

The final allocation of the purchase price may differ from the preliminary allocation based on completion of the valuation.

The Company expects to finalize the purchase price allocation within the measurement period, which will not exceed one year from the acquisition date.

The following table summarizes the preliminary purchase price allocated to the identifiable intangible assets acquired:

(In millions) Fair Value Weighted Average Useful Life (Years)

Customer relationships $ 494 15

Trademarks 15 4

Total $ 509 15

Coyote’s results of operations are included in the condensed consolidated statements of operations from the acquisition date.

The revenue and pre-tax loss included in the condensed consolidated statements of operations for the Coyote acquisition subsequent to the acquisition date was $ 105 million and $ 2 million, respectively, for the three and nine months ended September 30, 2024.

The following unaudited pro forma financial information presents the Company’s results of operations as if the Coyote acquisition occurred on January 1, 2023.

The unaudited pro forma information includes adjustments for intangible assets acquired and elimination of historical intercompany transactions between RXO and Coyote.

The pro forma results for the nine months ended September 30, 2023 includes a non-recurring charge of $ 216 million related to the deemed non-pro rata distribution.

The unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the acquisition been completed as of January 1, 2023 or of the results of our future operations of the combined business.

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2024 2023 2024 2023

Revenue $ 1,574 $ 1,711 $ 4,723 $ 5,308

Loss before income taxes ( 32 ) ( 4 ) ( 68 ) ( 211 )

Revenue Recognition

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Approximately 8 % and 7 % of our revenues were generated outside the U.S.

(primarily in Canada, Mexico and Asia) for the three months ended June 30, 2024 and 2023, respectively.

(primarily in Canada, Mexico, Asia and Europe) for the three months ended September 30, 2024 and 2023, respectively.

Approximately 8 % and 7 % of our revenues were generated outside the U.S.

(primarily in Canada, Mexico and Asia) for the six months ended June 30, 2024 and 2023, respectively.

(primarily in Canada, Mexico, Asia and Europe) for the nine months ended September 30, 2024 and 2023, respectively.

Our revenue disaggregated by service offering is as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2024 2023 2024 2023

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Total $ 1,040 $ 976 $ 2,883 $ 2,949

Revenue of $ 105 million for the Coyote acquisition subsequent to the acquisition date is included in Truck brokerage.

Our revenue disaggregated by industry sector is as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2024 2023 2024 2023

1 unchanged sentence

Industrial/manufacturing 202 188 579 562

Automotive 103 105 204 207

Food and beverage 125 117 324 329

Automotive 101 103 305 310

Logistics and transportation 62 52 145 146

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(i) have original expected durations of one year or less or (ii) contain variable consideration.

As of June 30, 2024, the fixed consideration component of our remaining performance obligation was approximately $ 48 million, and we expect approximately 100 % of that amount to be recognized over the next 3 years.

As of September 30, 2024, the fixed consideration component of our remaining performance obligations was approximately $ 39 million, and we expect approximately 100 % of that amount to be recognized over the next 3 years.

We estimate remaining performance obligations at a point in time and actual amounts may differ from these estimates due to contract revisions or terminations.

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The following is a rollforward of the Company’s restructuring liability, which is included in Accrued expenses in the Condensed Consolidated Balance Sheets:

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

(In millions) Reserve Balance

December 31, 2023 Charges Incurred Payments Reserve Balance

June 30, 2024

December 31, 2023 Acquisition Charges Incurred Payments Reserve Balance

September 30, 2024

Severance $ 4 $ 1 $ 10 $ ( 11 ) $ 4

2 unchanged sentences

Total $ 6 $ 1 $ 15 $ ( 15 ) $ 7

We expect the majority of the cash outlays related to the remaining restructuring liability at June 30, 2024 to be complete within twelve months.

We expect the majority of the cash outlays related to the remaining restructuring liability at September 30, 2024 to be complete within twelve months.

Property and Equipment

The following table summarizes our property and equipment:

(In millions) September 30, 2024 December 31, 2023

Property and equipment

Buildings and leasehold improvements $ 45 $ 33

Vehicles, tractors and trailers 24 24

Machinery and equipment 44 41

Computer software and equipment 362 319

Total property and equipment, gross 475 417

accumulated depreciation ( 300 ) ( 293 )

Total property and equipment, net $ 175 $ 124

Net book value of capitalized internally-developed software included in property and equipment, net $ 103 $ 63

Depreciation of property and equipment and amortization of computer software was $ 16 million and $ 43 million for the three and nine months ended September 30, 2024.

Depreciation of property and equipment and amortization of computer software was $ 12 million and $ 42 million for the three and nine months ended September 30, 2023.

Goodwill and Intangible Assets

The following table presents the changes in Goodwill for the nine months ended September 30, 2024:

(In millions)

Balance as of December 31, 2023 $ 630

Acquired goodwill 397

Balance as of September 30, 2024 $ 1,027

Acquired goodwill represents the excess of consideration transferred over the estimated fair value of the underlying net assets acquired resulting from RXO’s acquisition of Coyote.

There were no cumulative goodwill impairments as of September 30, 2024.

Our identifiable intangible assets consist of customer relationships and trade names, all of which are definite-lived.

We did not recognize any impairment of our identified intangible assets in the three and nine months ended September 30, 2024 and 2023, respectively.

The following table summarizes the balance of our identifiable intangible assets:

(In millions) September 30, 2024 December 31, 2023

Customer relationships $ 680 $ 186

Trade name 15 —

Total identifiable intangible assets, gross 695 186

Accumulated amortization ( 130 ) ( 118 )

Total identifiable intangible assets, net $ 565 $ 68

Estimated future amortization expense for amortizable intangible assets for the next five years and thereafter is as follows:

(In millions) Remaining 2024 2025 2026 2027 2028 Thereafter

Estimated amortization expense $ 17 $ 50 $ 45 $ 44 $ 41 $ 368

Actual amounts of amortization expense may differ from estimated amounts due to changes in estimated fair value of intangibles acquired in the acquisition of Coyote during the one-year measurement period, changes in foreign currency exchange rates, additional intangible asset acquisitions, future impairment of intangible assets, accelerated amortization of intangible assets and other events.

Intangible asset amortization expense was $ 5 million and $ 11 million for the three and nine months ended September 30, 2024, respectively.

Intangible asset amortization expense was $ 4 million and $ 10 million for the three and nine months ended September 30, 2023, respectively.

The following table summarizes the principal balance and carrying value of our debt:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(In millions) Principal Balance Carrying Value Principal Balance Carrying Value

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Total long-term debt and obligations under finance leases $ 358 $ 352 $ 364 $ 356

(1) The carrying value of the 7.50 % Notes due 2027 is presented net of unamortized debt issuance cost and discount of $ 7 million and $ 8 million as of June 30, 2024 and December 31, 2023, respectively.

(1) The carrying value of the 7.50 % Notes due 2027 is presented net of unamortized debt issuance cost and discount of $ 6 million and $ 8 million as of September 30, 2024 and December 31, 2023, respectively.

Revolving Credit Facilities

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The Company is required to pay a commitment fee on any unused commitment, based on pricing levels set forth in the agreement.

The covenants in the Revolver are customary for financings of this type.

The Revolver requires the Company to maintain a maximum consolidated leverage ratio not greater than 3.50 :1.00 and minimum interest coverage ratio of not less than 3.00 :1.00.

At June 30, 2024, the Company was in compliance with the covenants of the Revolver.

There were no letters of credit outstanding on the Revolver at June 30, 2024.

On November 2, 2023, the Company exercised a feature to increase the total commitments under the Revolver from $ 500 million to $ 600 million.

On April 11, 2024, the Company and lenders entered into an amendment to increase the consolidated leverage ratio financial covenant level applicable under the Revolver from the fiscal quarter ending June 30, 2024 through the fiscal quarter ending March 31, 2025 (the “Covenant Relief Period”), as follows:

(i) to 4.25 :1.00 for the fiscal quarters ending June 30, 2024 and September 30, 2024;

(ii) to 4.00 :1.00 for the fiscal quarter ending December 31, 2024;

(iii) to 3.75 :1.00 for the fiscal quarter ending March 31, 2025;

and (iv) returns to 3.50 :1.00 beginning with the fiscal quarter ending June 30, 2025.

In addition, during the Covenant Relief Period, the Company and its subsidiaries are subject to restrictions with respect to paying dividends or other distributions on equity interests, share repurchases, and other restricted payments, as well as certain material acquisitions, in each case subject to certain exceptions.

The Company can elect to terminate the Covenant Relief Period and the restrictions thereunder if the consolidated leverage ratio financial covenant as of any fiscal quarter end is not greater than 3.50 :1.00.

The covenants in the Revolver are customary for financings of this type.

The Revolver requires the Company to maintain a minimum interest coverage ratio of not less than 3.00 :1.00.

On August 8, 2024, the Company and lenders entered into an amendment, which, following the completion of the Coyote acquisition on September 16, 2024, increased the Company’s maximum consolidated leverage ratio to not greater than 4.50 :1.00.

At September 30, 2024, the Company was in compliance with the covenants of the Revolver.

There were no letters of credit outstanding on the Revolver at September 30, 2024.

In addition, the amendment extended, upon the completion date of the Coyote acquisition, the Revolver maturity date five years from the amendment date to September 16, 2029.

To the extent there is more than $ 50 million of the Company’s Notes (as defined below) outstanding on the date that is 91 days prior to the earlier of the extended maturity date and the maturity date of the Notes, then the extended maturity date will be subject to a springing earlier maturity date that is 91 days prior to the earlier of the extended maturity date and the Notes maturity date, unless the Notes are refinanced or replaced with debt that matures at least 91 days after the extended maturity date.

We also have a non-U.S.

revolving credit facility with a maximum commitment of approximately $ 15 million.

This facility has a one-year term and we had $ 13 million outstanding as of June 30, 2024 classified as short-term debt.

This facility has a one-year term and we had $ 13 million outstanding as of September 30, 2024 classified as short-term debt.

On October 25, 2022, we completed an offering of $ 355 million in aggregate principal amount of unsecured notes (the “Notes” or the “ 7.50 % Notes due 2027”).

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The Notes were issued at an issue price of 98.962 % of par.

The effective interest rate on the Notes was 8.13 % as of June 30, 2024.

The effective interest rate on the Notes was 8.13 % as of September 30, 2024.

We may redeem the Notes, in whole or in part, at any time on or after November 15, 2024 at a redemption price equal to (i) 103.750 % of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on November 15, 2024, (ii) 101.875 % of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on November 15, 2025 and (iii) 100 % of the principal amount to be redeemed if the redemption occurs on or after November 15, 2026, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

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The Notes contain covenants customary for debt securities of this nature.

At June 30, 2024, the Company was in compliance with the covenants of the Notes.

At September 30, 2024, the Company was in compliance with the covenants of the Notes.

Fair Value Measurements

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The Company bases its fair value estimates on market assumptions and available information.

The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and short-term debt and current maturities of long-term debt approximated their fair values as of June 30, 2024 and December 31, 2023, due to their short-term nature and/or being receivable or payable on demand.

The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and short-term debt and current maturities of long-term debt approximated their fair values as of September 30, 2024 and December 31, 2023, due to their short-term nature and/or being receivable or payable on demand.

The fair value of our debt and classification in the fair value hierarchy is as follows:

(In millions) Level June 30, 2024 December 31, 2023

(In millions) Level September 30, 2024 December 31, 2023

Revolver 3 $ — $ 5

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Stockholders’ Equity

On August 12, 2024, the Company entered into purchase agreements with investors to which the Company agreed to issue and sell to the investors in a private placement an aggregate of 20,954,780 shares of the Company’s common stock, par value $ 0.01 per share (“common stock”), at a purchase price of $ 20.21 per share and pre-funded warrants to purchase 6,259,471 shares of common stock at a purchase price of $ 20.20 per warrant.

The aggregate gross proceeds from the private placement were $ 550 million before deducting offering expenses.

The Company incurred $ 6 million in equity issuance costs related to the private placement, which were recorded as a reduction to Additional paid-in capital in the condensed consolidated balance sheets.

Net proceeds from the private placement were used to finance a portion of the acquisition of Coyote on September 16, 2024.

In connection with the private placement, a deemed non-pro rata distribution of $ 216 million was recorded within Other expense in the condensed consolidated statements of operations for the three and nine months ended September 30, 2024, based on the difference between the issuance price and the closing market price of common stock on August 12, 2024, the effective date of the private placement.

On September 9, 2024 the Company agreed to sell 19,230,770 shares of the Company’s common stock at a public offering price of $ 26.00 per share.

In connection with the offering, the Company granted the underwriters an option to purchase up to an additional 2,884,615 shares of common stock, which was exercised in full.

The aggregate gross proceeds from the public offering, including the shares issued pursuant to the option granted to and exercised by the underwriters, were $ 575 million before deducting offering expenses.

The Company incurred $ 24 million in equity issuance costs related to the public offering, which were recorded as a reduction to Additional paid-in capital in the condensed consolidated balance sheets.

Net proceeds from the public offering were used to finance a portion of the acquisition of Coyote on September 16, 2024.

On May 2, 2023, the Company’s Board of Directors authorized the repurchase of up to $ 125 million of the Company’s common stock (the “2023 Share Repurchase Program”).

During 2023, the Company repurchased 100,000 shares of its common stock for $ 2 million at an average price of $ 20.53 per share, funded by available cash.

There were no share repurchases under the 2023 Share Repurchase Program in the six months ended June 30, 2024.

As of June 30, 2024, $ 123 million remained approved to be used for share repurchases under the 2023 Share Repurchase Program.

There were no share repurchases under the 2023 Share Repurchase Program in the nine months ended September 30, 2024.

As of September 30, 2024, $ 123 million remained approved to be used for share repurchases under the 2023 Share Repurchase Program.

The 2023 Share Repurchase Program does not have an expiration date and may be suspended or discontinued at any time at the discretion of the Company’s Board of Directors.

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The computations of basic and diluted earnings per share are as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(Dollars in millions, shares in thousands, except per share data) 2024 2023 2024 2023

1 unchanged sentence

Basic weighted-average common shares (1)

134,095 116,970 123,004 116,823

Dilutive effect of stock-based awards — — — 2,593

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Antidilutive shares excluded from diluted weighted-average common shares 2,880 2,755 2,677 522

(1) Of the 6,259,471 pre-funded warrants issued in the private placement, warrants to purchase 2,558,753 shares of common stock do not require stockholder approval.

Therefore, basic and diluted weighted-average common shares include 2,558,753 pre-funded warrants from their August 13, 2024 issuance date, as the exercise price of $0.01 per share is not substantive.

(2) Amounts may not be additive due to rounding.

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These proceedings may include claims for property damage or personal injury incurred in connection with the transportation of freight, environmental liability, commercial disputes, and employment-related claims, including claims involving asserted breaches of employee restrictive covenants.

These matters also include several class action and collective action cases involving claims that the contract carriers with which we contract for performance of delivery services, or their delivery workers, should be treated as employees, rather than independent contractors (“misclassification claims”) and may seek substantial monetary damages (including claims for unpaid wages, overtime, unreimbursed business expenses, deductions from wages, penalties and other items), injunctive relief, or both.

Plaintiffs in such cases may seek substantial monetary damages (including claims for unpaid wages, overtime, unreimbursed business expenses, deductions from wages, penalties and other items), injunctive relief, or both.

We establish accruals for specific legal proceedings when it is considered probable that a loss has been incurred and the amount of the loss can be reasonably estimated.

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RXO Last Mile, Inc.

, we recently reached an agreement to settle the matter without admitting any liability.

We have accrued the full amount of the settlement which still requires court approval.

Despite this settlement, we continue to believe the other misclassification claims are without merit and we intend to defend the Company vigorously against these matters.

We are unable at this time to determine the amount of the possible loss or range of loss, if any, that we may incur as a result of the other misclassification claims.

, we recently reached an agreement to settle the matter for an immaterial amount without admitting any liability.

We have accrued the full amount of the settlement.

We continue to believe the other misclassification claims are without merit and we intend to defend the Company vigorously in these matters.

We do not believe that the incurrence of a loss is probable at this time and, accordingly, we have not accrued for any losses in these matters.

Further, the plaintiffs have not quantified damages sought in the other misclassification claims and we are unable at this time to determine the amount of the possible loss or range of loss, if any, that we may incur as a result of the other misclassification claims.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements