1 unchanged sentence
Index to Consolidated Financial Statements
−Removed: Report of Independent Registered Public Accounting Firm
+Added: Report of Independent Registered Public Accounting Firm (PCAOB ID 34 )
+Added: Report of Independent Registered Public Accounting Firm (PCAOB ID 185 )
Consolidated Balance Sheets as of December 31, 2024 and 2023
Consolidated Statements of Operations for the Years Ended December 31, 2024, 2023 and 2022
−Removed: Consolidated Statements of Comprehensive Income for the Years Ended December 31, 202 3 , 202 2 and 20 21
+Added: Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2024, 2023 and 2022
Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022
2 unchanged sentences
Report of Independent Registered Public Accounting Firm
−Removed: To the Stockholders and Board of Directors
−Removed: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
−Removed: We have audited the accompanying consolidated balance sheets of RXO, Inc.
−Removed: and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).
−Removed: We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
−Removed: In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S.
−Removed: generally accepted accounting principles.
−Removed: Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
−Removed: Basis for Opinions
−Removed: The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting.
−Removed: Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.
−Removed: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
+Added: To the shareholders and the Board of Directors of RXO, Inc.
+Added: Opinion on the Financial Statements
+Added: We have audited the accompanying consolidated balance sheet of RXO, Inc.
+Added: and subsidiaries (the "Company") as of December 31, 2024, the related consolidated statements of operations, comprehensive income (loss), cash flows, and changes in equity, for the year ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
+Added: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting.
+Added: Basis for Opinion
+Added: These financial statements are the responsibility of the Company's management.
+Added: Our responsibility is to express an opinion on the Company's financial statements based on our audits.
+Added: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audits in accordance with the standards of the PCAOB.
−Removed: Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
−Removed: Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
−Removed: Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
−Removed: Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
−Removed: Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.
−Removed: Our audits also included performing such other procedures as we considered necessary in the circumstances.
−Removed: We believe that our audits provide a reasonable basis for our opinions.
+Added: We conducted our audit in accordance with the standards of the PCAOB.
+Added: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
+Added: Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
+Added: Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
+Added: Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
+Added: We believe that our audit provides a reasonable basis for our opinion.
+Added: Critical Audit Matters
+Added: The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
+Added: Acquisition — Coyote Logistics — Customer Relationships — Refer to Note 3 to the financial statements
+Added: Critical Audit Matter Description
+Added: On September 16, 2024, the Company acquired Coyote for an aggregate purchase price of $1.048 billion.
+Added: The Company accounts for acquired businesses using the acquisition method of accounting by recording assets and liabilities acquired at their respective fair values.
+Added: Related to the acquisition, the Company recorded intangible assets related to customer relationships.
+Added: The determination of the acquisition date fair value of the customer relationship intangible assets required the Company to make significant estimates and assumptions regarding estimated future
+Added: revenues, estimated future earnings before interest, taxes, depreciation and amortization (“estimated future EBITDA”), and discount rate.
+Added: We identified the fair value of an acquired customer relationship intangible asset as a critical audit matter because of the significant estimates and assumptions management makes to fair value these assets.
+Added: This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management's forecast of future revenue and EBITDA and the selection of the discount rate for the customer relationships.
+Added: How the Critical Audit Matter Was Addressed in the Audit
+Added: Our audit procedures related to the Company’s forecasted revenue and EBITDA and the selection of the discount rate included the following, among others:
+Added: • We tested the design and operating effectiveness of controls over management’s purchase price allocation procedures, including controls over forecasts of revenue growth rates, EBITDA margins and the determination of the discount rate.
+Added: • We evaluated the reasonableness of management’s forecasts by comparing the forecasts to:
+Added: ◦ Historical results
+Added: ◦ Third-party economic research, industry performance, and peer company performance
+Added: • With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology and the discount rate by performing certain procedures, that included:
+Added: ◦ Evaluating whether the fair value models being used are appropriate considering the acquired entity’s circumstances and valuation methodology employed
+Added: ◦ Testing the underlying source information and mathematical accuracy of the calculations
+Added: ◦ Evaluating the discount rate, including testing the underlying market-based source information and the mathematical accuracy of the calculations, and developing a range of independent valuation assumptions and comparing those to the discount rate selected by management
+Added: Self-insurance Liabilities – Refer to Note 2 to the financial statements
+Added: Critical Audit Matter Description
+Added: The Company participates in a combination of self-insurance programs and purchased insurance that are managed to provide for the costs of liability, vehicular, and workers compensation (self-insured claims).
+Added: The Company records estimates of the undiscounted liabilities associated with claims incurred as of the balance sheet date, including estimates of claims incurred, but not yet reported, by considering historical experience, demographic, and severity factors, and judgments about current and expected levels of cost per claim and retention levels.
+Added: We identified the assessment of the estimated liabilities for self-insured claims as a critical audit matter.
+Added: The subjectivity of estimating the claims accruals for pending claims and incurred but not reported claims requires a high degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial specialists, when performing audit procedures to evaluate whether claims accruals are appropriately stated as of December 31, 2024.
+Added: How the Critical Audit Matter Was Addressed in the Audit
+Added: Our audit procedures related to the self-insured claims accrual included the following, among others:
+Added: • Evaluated the design and tested the operating effectiveness of certain internal controls related to the self-insured claims accruals, including controls over the projected development of known claims and incurred but not reported claims.
+Added: • Tested the underlying data and inputs for completeness and accuracy that served as the basis for the actuarial analysis, including reconciling the claims data to the Company's actuarial analysis and testing current year claims and payment data.
+Added: • Evaluated assumptions used in determining the liability, including expected level of cost per claim, in relation to recent historical loss payment trends and severity factors.
+Added: • With the assistance of our actuarial specialists, we developed an independent range of estimates of the claims accruals, utilizing loss development factors from the Company's historical data and industry claim development factors, and compared our estimated range to management's recorded reserve.
+Added: • Evaluating the reasonableness of the methodologies used in management's estimate based on actuarial methods followed in the insurance industry associated with such liabilities.
+Added: /s/ Deloitte & Touche LLP
+Added: Charlotte, North Carolina
+Added: February 26, 2025
+Added: We have served as the Company’s auditor since 2024.
+Added: Report of Independent Registered Public Accounting Firm
+Added: To the shareholders and the Board of Directors of RXO, Inc.
+Added: Opinion on Internal Control over Financial Reporting
+Added: We have audited the internal control over financial reporting of RXO, Inc.
+Added: and subsidiaries (the "Company") as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
+Added: In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
+Added: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 26, 2025, expressed an unqualified opinion on those financial statements
+Added: As described in Management’s Annual Report on Internal Control over Financial Reporting, management has excluded Coyote from its assessment of internal control over financial reporting as of December 31, 2024, because it was acquired by the Company in a business combination purchase during the year ended December 31, 2024.
+Added: We have also excluded Coyote from our audit of internal control over financial reporting.
+Added: Coyote is a wholly owned subsidiary whose total assets (excluding goodwill and intangibles, which were included in management's assessment of internal control over financial reporting as of December 31, 2024) and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 36% and 17%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.
+Added: Basis for Opinion
+Added: The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting.
+Added: Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.
+Added: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
+Added: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
+Added: We conducted our audit in accordance with the standards of the PCAOB.
+Added: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
+Added: Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.
+Added: We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
2 unchanged sentences
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
−Removed: and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
+Added: and (3) provide reasonable
+Added: assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
−Removed: Critical Audit Matter
−Removed: The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:
−Removed: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
−Removed: Liabilities for self-insured claims
−Removed: As discussed in Note 2 to the consolidated financial statements, the Company participates in a combination of self-insurance programs and purchased insurance that are managed to provide for the costs of liability, vehicular, and workers’ compensation (self-insured claims).
−Removed: The Company records estimates of the undiscounted liabilities associated with claims incurred as of the balance sheet date, including estimates of claims incurred but not reported, by considering historical cost experience, demographic, and severity factors, and judgments about current and expected levels of cost per claim and retention levels.
−Removed: Insurance liabilities, including those related to claims managed through self-insurance and purchased insurance, amounted to $62 million as of December 31, 2023 and are recorded within Accrued expenses and Other long-term liabilities.
−Removed: We identified the assessment of the estimated liabilities for self-insured claims as a critical audit matter.
−Removed: The evaluation of the uncertainty in the amounts that will ultimately be paid to settle these claims required subjective auditor judgment.
−Removed: Assumptions that may affect the estimated liability of self-insured claims include the consideration of historical cost experience, demographic and severity factors, and judgments about current and expected levels of cost per claim that have uncertainty related to future occurrences or events and conditions.
−Removed: Additionally, the Company’s liabilities for self-insured claims included estimates for expenses of claims that have been incurred but have not been reported, and specialized skills were needed to evaluate the actuarial methods and assumptions used to make these estimates.
−Removed: The following are the primary procedures we performed to address this critical audit matter.
−Removed: We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s self-insurance process.
−Removed: This included controls over the assumptions used in estimating the liabilities for self-insured claims.
−Removed: In addition, for a sample of claims we compared the Company’s estimates of liabilities to current available information, which included incident and case reports, current and historical cost experience, or other evidence.
−Removed: We involved actuarial professionals with specialized skills and knowledge, who assisted in:
−Removed: • comparing the Company’s actuarial reserving methodologies with accepted actuarial methods and procedures
−Removed: • evaluating assumptions used in determining the liability, including expected level of cost per claim, in relation to recent historical loss payment trends, and demographic and severity factors
−Removed: • developing an independent expected range of liabilities, including liabilities for claims that have been incurred but have not been reported, based on actuarial methodologies
−Removed: • comparing the Company’s recorded liability to the independently developed liability range.
−Removed: We have served as the Company’s auditor since 2022.
−Removed: Stamford, Connecticut
+Added: /s/ Deloitte & Touche LLP
+Added: Charlotte, North Carolina
February 26, 2025
+Added: We have served as the Company’s auditor since 2024.
+Added: Report of Independent Registered Public Accounting Firm
+Added: To the Stockholders and Board of Directors
+Added: Opinion on the Consolidated Financial Statements
+Added: We have audited the accompanying consolidated balance sheet of RXO, Inc.
+Added: and subsidiaries (the Company) as of December 31, 2023, the related consolidated statements of operations, comprehensive income (loss), cash flows, and changes in equity for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).
+Added: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with U.S.
+Added: generally accepted accounting principles.
+Added: Basis for Opinion
+Added: These consolidated financial statements are the responsibility of the Company’s management.
+Added: Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
+Added: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
+Added: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
+Added: We conducted our audits in accordance with the standards of the PCAOB.
+Added: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
+Added: Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
+Added: Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
+Added: Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
+Added: We believe that our audits provide a reasonable basis for our opinion.
+Added: We served as the Company’s auditor from 2022 to 2023.
+Added: Charlotte, North Carolina
+Added: February 12, 2024, except for Note 4, as to which the date is February 26, 2025
Consolidated Balance Sheets
17 unchanged sentences
Accrued expenses 373 199
−Removed: Current maturities of long-term debt 3 4
+Added: Short-term debt and current maturities of long-term debt 17 3
Short-term operating lease liabilities 81 53
3 unchanged sentences
Long-term debt and obligations under finance leases 351 356
−Removed: Deferred tax liability 7 16
+Added: Deferred tax liabilities 88 7
Long-term operating lease liabilities 215 146
9 unchanged sentences
Additional paid-in capital 1,904 590
−Removed: Retained earnings 6 2
+Added: Retained earnings (Accumulated deficit) ( 284 ) 6
Accumulated other comprehensive loss ( 10 ) ( 3 )
12 unchanged sentences
Restructuring costs 33 16 13
−Removed: Operating income 39 123 192
+Added: Operating income (loss) ( 56 ) 39 123
Other expense 218 3 —
Interest expense, net 30 32 4
−Removed: Income before income taxes 4 119 191
−Removed: Income tax provision — 27 41
−Removed: Net income $ 4 $ 92 $ 150
−Removed: Earnings per share data
−Removed: Basic earnings per share $ 0.03 $ 0.80 $ 1.30
−Removed: Diluted earnings per share $ 0.03 $ 0.79 $ 1.30
+Added: Income (loss) before income taxes ( 304 ) 4 119
+Added: Income tax provision (benefit) ( 14 ) — 27
+Added: Net income (loss) $ ( 290 ) $ 4 $ 92
+Added: Earnings (loss) per share data
+Added: Basic $ ( 2.17 ) $ 0.03 $ 0.80
+Added: Diluted $ ( 2.17 ) $ 0.03 $ 0.79
Weighted-average common shares outstanding
−Removed: Basic weighted-average common shares outstanding 116,871 115,335 115,163
−Removed: Diluted weighted-average common shares outstanding 119,456 115,791 115,163
+Added: Basic 133,412 116,871 115,335
+Added: Diluted 133,412 119,456 115,791
See accompanying notes to consolidated financial statements.
−Removed: Consolidated Statements of Comprehensive Income
+Added: Consolidated Statements of Comprehensive Income (Loss)
Years Ended December 31,
(In millions) 2024 2023 2022
−Removed: Net income $ 4 $ 92 $ 150
+Added: Net income (loss) $ ( 290 ) $ 4 $ 92
Other comprehensive income (loss), net of tax
2 unchanged sentences
Other comprehensive income (loss) ( 7 ) 1 ( 2 )
−Removed: Comprehensive income $ 5 $ 90 $ 150
+Added: Comprehensive income (loss) $ ( 297 ) $ 5 $ 90
See accompanying notes to consolidated financial statements.
3 unchanged sentences
Operating activities
−Removed: Net income $ 4 $ 92 $ 150
−Removed: Adjustments to reconcile net income to net cash from operating activities
+Added: Net income (loss) $ ( 290 ) $ 4 $ 92
+Added: Adjustments to reconcile net income (loss) to net cash from operating activities
Depreciation and amortization expense 87 67 86
1 unchanged sentence
Deferred tax benefit ( 19 ) ( 8 ) ( 20 )
+Added: Deemed non-pro rata distribution 216 — —
+Added: Impairment of operating lease assets 13 — —
Changes in assets and liabilities
Accounts receivable ( 109 ) 158 92
−Removed: Other assets ( 14 ) 14 ( 4 )
+Added: Other current assets and other long-term assets 8 ( 14 ) 14
Accounts payable ( 65 ) ( 86 ) ( 14 )
−Removed: Accrued expenses and other liabilities ( 60 ) 22 27
−Removed: Net cash provided by operating activities 89 310 155
+Added: Accrued expenses, other current liabilities and other long-term liabilities 117 ( 60 ) 22
+Added: Net cash provided by (used in) operating activities ( 12 ) 89 310
Investing activities
Payment for purchases of property and equipment ( 45 ) ( 64 ) ( 57 )
+Added: Business acquisition, net of cash acquired ( 1,019 ) — —
Proceeds from sale of property and equipment — — 1
2 unchanged sentences
Financing activities
−Removed: Proceeds from borrowings on revolving credit facility 76 — —
−Removed: Repayment of borrowings on revolving credit facility ( 71 ) — —
+Added: Proceeds from borrowings on revolving credit facilities 238 76 —
+Added: Repayment of borrowings on revolving credit facilities ( 226 ) ( 71 ) —
+Added: Proceeds from issuance of common stock and pre-funded warrants 1,125 — —
+Added: Payment for equity issuance costs ( 30 ) — —
Proceeds from issuance of debt — — 451
5 unchanged sentences
Other 11 ( 2 ) ( 1 )
−Removed: Net cash used in financing activities ( 117 ) ( 183 ) ( 158 )
+Added: Net cash provided by (used in) financing activities 1,108 ( 117 ) ( 183 )
Effect of exchange rates on cash, cash equivalents and restricted cash ( 2 ) 1 ( 2 )
5 unchanged sentences
Cash paid for interest, net 27 32 —
+Added: Purchases of property and equipment in accounts payable 3 2 4
+Added: Accrued tax withholdings related to vesting of stock compensation awards 15 — —
See accompanying notes to consolidated financial statements.
Consolidated Statements of Changes in Equity
−Removed: (Dollars in millions, shares in thousands) Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss XPO Investment Total Equity
+Added: (Dollars in millions, shares in thousands) Shares Amount Additional Paid-In Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Loss XPO Investment Total Equity
Balance as of December 31, 2021
1 unchanged sentence
Net income — — — 2 — 90 92
−Removed: Stock compensation expense — — — — — 8 8
−Removed: Net transfers to XPO — — — — ( 156 ) ( 156 )
−Removed: Balance as of December 31, 2021 — $ — $ — $ — $ ( 2 ) $ 1,072 $ 1,070
−Removed: Net income — — — 2 — 90 92
Other comprehensive loss — — — — ( 2 ) — ( 2 )
12 unchanged sentences
Balance as of December 31, 2023 117,026 $ 1 $ 590 $ 6 $ ( 3 ) $ — $ 594
+Added: Net loss — — — ( 290 ) — — ( 290 )
+Added: Other comprehensive loss — — — — ( 7 ) — ( 7 )
+Added: Stock compensation expense — — 23 — — — 23
+Added: Vesting of stock compensation awards 739 — — — — — —
+Added: Tax withholdings related to vesting of stock compensation awards — — ( 19 ) — — — ( 19 )
+Added: Deemed non pro-rata distribution — — 216 — — — 216
+Added: Issuance of common stock and pre-funded warrants, net of issuance costs 44,752 1 1,094 — — — 1,095
+Added: Balance as of December 31, 2024 162,517 $ 2 $ 1,904 $ ( 284 ) $ ( 10 ) $ — $ 1,612
See accompanying notes to consolidated financial statements.
3 unchanged sentences
The largest component is our core truck brokerage business.
−Removed: Our operations also include three asset-light, brokered transportation services, all of which complement our truck brokerage business:
−Removed: managed transportation, last mile and freight forwarding.
+Added: Our operations also include asset-light managed transportation and last mile services, which complement our truck brokerage business.
We present our operations in the consolidated financial statements as one reportable segment.
32 unchanged sentences
federal income tax return as well as certain state and local income tax returns.
−Removed: The Company’s foreign income tax returns are filed on a full-year basis.
The Company’s consolidated financial statements include the accounts of RXO, Inc.
4 unchanged sentences
The Company bases its estimates and judgments on historical information and on various other assumptions that it believes are reasonable under the circumstances.
−Removed: GAAP requires the Company to make estimates and judgments in several areas, including, but not limited to, those related to revenue recognition, income taxes, loss contingencies, valuation of long-lived assets including goodwill and intangible assets and their associated estimated useful lives, collectability of accounts receivable and the fair value of financial instruments.
+Added: GAAP requires the Company to make estimates and judgments in several areas, including, but not limited to, those related to revenue recognition, income taxes, loss contingencies, insurance reserves, valuation of long-lived assets including goodwill and intangible assets and their associated estimated useful lives, collectability of accounts receivable and the fair value of financial instruments.
Actual results may vary from those estimates.
Significant Accounting Policies
+Added: Business Combinations
+Added: 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.
+Added: The excess of the cost of the acquired business and the fair value of the assets acquired and liabilities assumed is recognized as goodwill.
+Added: 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.
+Added: Inputs used are generally obtained from historical data supplemented by current and anticipated market conditions and growth rates.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: Significant judgment is required in estimating the fair value of identifiable intangible assets and in assigning their respective useful lives.
+Added: The fair value estimates are based on historical information and on future expectations and assumptions deemed reasonable by management, but which are inherently uncertain.
+Added: See Note 3 — Acquisition for further information regarding the fair value determination of each of the classes of identifiable intangible assets.
+Added: Determining the useful life of an intangible asset also requires judgment.
+Added: 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.
+Added: The costs of determinable-lived intangible assets are amortized to expense over the estimated useful life.
Revenue Recognition
−Removed: We recognize revenue when we transfer control of promised products or services to customers in an amount equal to the consideration we expect to receive for those products or services.
+Added: We recognize revenue when we transfer control of promised services to customers in an amount equal to the consideration we expect to receive for those products or services.
Performance Obligations
14 unchanged sentences
The estimate of variable consideration is determined by the expected value or most likely amount method and factors in current, past and forecasted experience with the customer.
−Removed: Customers are billed based on terms specified in the revenue contract and they pay us according to approved payment terms.
Cash and Cash Equivalents
6 unchanged sentences
We write off accounts receivable balances once the receivables are no longer deemed collectible.
−Removed: The roll-forward of the allowance for credit losses is as follows:
+Added: The rollforward of the allowance for credit losses is as follows:
Years Ended December 31,
7 unchanged sentences
Property and Equipment
−Removed: Property and equipment, which includes assets recorded under finance leases, are stated at cost less accumulated depreciation or, in the case of acquired property and equipment, at fair value at the date of acquisition.
+Added: Property and equipment, which includes assets recorded under finance leases, is stated at cost less accumulated depreciation or, in the case of acquired property and equipment, at fair value at the date of acquisition.
Maintenance and repair expenditures are charged to expense as incurred.
2 unchanged sentences
Capitalized software also includes the fair value of acquired internally-developed technology.
+Added: Certain costs incurred for implementation, setup, and other upfront activities in a hosting arrangement that is a service contract are capitalized during the application development stage.
+Added: Upgrades and enhancements are capitalized if they will result in additional functionality.
+Added: Amortization of capitalized costs is recorded on a straight-line basis over the term of the associated hosting arrangement, inclusive of reasonably certain renewal periods.
We compute depreciation expense on a straight-line basis over the estimated useful lives of the assets as follows:
5 unchanged sentences
We have operating leases primarily for real estate, tractors and trailers and finance leases for equipment.
−Removed: We determine if an arrangement is a lease at inception.
−Removed: We recognize operating lease right-of-use assets and liabilities at the lease commencement date based on the estimated present value of the lease payments over the lease term.
−Removed: As most of our leases do not provide an implicit rate, we use the incremental borrowing rates of RXO based on the information available at commencement date to determine the present value of future lease payments.
+Added: We determine if an arrangement is a lease at inception and evaluate whether the lease is an operating lease or finance lease at the commencement date.
+Added: We recognize operating lease right-of-use assets and lease liabilities at the lease commencement date based on the estimated present value of the lease payments over the lease term.
+Added: As most of our leases do not provide an implicit rate, we use the incremental borrowing rates of RXO based on the information available at the commencement date to determine the present value of future lease payments.
This rate is determined from a hypothetical yield curve available at the lease commencement date that takes into consideration market yield levels of RXO’s relevant debt outstanding as well as the index that matches RXO’s credit rating, and then adjusts as if the borrowings were collateralized.
+Added: Lease liabilities assumed through acquisitions 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.
+Added: Right-of-use assets are equal to the amount of the lease liability at the acquisition date adjusted for any off-market terms of the lease.
+Added: The remaining lease term is based on the remaining term at the acquisition date, and may include options to extend or terminate the lease when it is reasonably certain the Company will exercise that option.
We include options to extend or terminate a lease in the lease term when we are reasonably certain to exercise such options.
3 unchanged sentences
Lease expense for operating leases is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred.
−Removed: Segment Reporting
−Removed: We conduct our business and track our results as one reportable segment based upon the aggregation of our operating segments.
−Removed: Our chief operating decision maker regularly reviews financial information at the operating segment level to allocate resources and assess performance.
−Removed: We have determined that all our operating segments share the following similar economic and qualitative characteristics and therefore meet the criteria for operating segments to be aggregated into one reportable segment:
−Removed: • The operating segments have similar economic characteristics (e.g., comparable adjusted earnings before interest, taxes, depreciation and amortization margins, our measure of segment profitability), and similar long-term financial models;
−Removed: • The nature of the services offered by each operating segment is similar:
−Removed: all the services leverage technology and an asset-light infrastructure to arrange for the transportation of customer goods by qualified independent carriers;
−Removed: • The operating segments all operate within the transportation industry and in primarily the same geography (North America);
−Removed: • All operating segments provide business-to-business services, with no segment transacting directly with the end-user customer;
−Removed: • Each operating segment’s customer base spans diversified industry verticals that overlap with other operating segments and have a common salesforce engaged in significant cross-selling activities;
−Removed: • All operating segments conduct business in a similar regulatory environment applicable to the transportation industry, including regulation and licensing by various governmental agencies;
−Removed: most notably, the Federal Motor Carrier Safety Administration of the U.S.
−Removed: Department of Transportation.
−Removed: All of our operating segments can be expected to have similar future prospects as they have similar economic attributes.
−Removed: The causes for fluctuations in operating and financial performance are generally the same among the operating segments and include such factors as:
−Removed: (i) changes in overall demand for outsourced freight transportation services, (ii) changes in prices charged by third-party carriers, (iii) decisions by customers to develop or expand internal transportation capabilities, and (iv) macroeconomic impacts on supply chains for materials, parts and finished goods.
+Added: Finance lease expense is recognized based on the effective interest method over the lease term.
+Added: Other Current Assets
+Added: The components of other current assets are as follows:
+Added: (In millions) 2024 2023
+Added: Prepaid expenses $ 37 $ 22
+Added: Contract assets 17 11
+Added: Other current assets 23 15
+Added: Total other current assets $ 77 $ 48
We measure goodwill as the excess of consideration transferred over the fair value of net assets acquired in business combinations.
We allocate goodwill to our reporting units for the purpose of impairment testing.
−Removed: We evaluate goodwill for impairment annually, or more frequently if an event or circumstance indicates an impairment loss may have been incurred.
+Added: We evaluate goodwill for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable.
We measure goodwill impairment, if any, at the amount a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill.
19 unchanged sentences
We estimate fair value using the expected future cash flows discounted at a rate comparable with the risks associated with the recovery of the asset.
−Removed: Our intangible assets subject to amortization consist of customer relationships.
+Added: Our intangible assets subject to amortization consist of customer relationships and trade names.
We amortize intangible assets on a straight-line basis or on a basis consistent with the pattern in which the economic benefits are realized.
−Removed: The estimated useful life for customer relationships is 4 to 16 years.
+Added: The estimated useful life is 4 to 16 years for customer relationships and 0.5 to 15 years for trade names.
Accrued Expenses
11 unchanged sentences
Additionally, claims may emerge in future years for events that occurred in a prior year at a rate that differs from previous actuarial projections.
−Removed: At December 31, 2023 and 2022, our insurance liabilities amounted to $ 62 million and $ 60 million, respectively, and were included in Accrued expenses and Other long-term liabilities on our Consolidated Balance Sheets.
+Added: At December 31, 2024 and 2023, our insurance liabilities amounted to $ 111 million and $ 62 million, respectively, and are included in Accrued expenses and Other long-term liabilities on our Consolidated Balance Sheets.
We account for income taxes using the asset and liability method on a legal entity and jurisdictional basis, under which we recognize the amount of taxes payable or refundable for the current year and deferred tax assets and liabilities for the future tax consequences of events that have been recognized in our financial statements or tax returns.
13 unchanged sentences
The assets and liabilities of our foreign subsidiaries that use their local currency as their functional currency are translated to U.S.
−Removed: dollars (“USD”) using the exchange rate prevailing at each balance sheet date, with balance sheet currency translation adjustments recorded in accumulated other comprehensive income (loss) (“AOCI”) on our Consolidated Balance Sheets.
+Added: dollars (“USD”) using the exchange rate prevailing at each balance sheet date, with balance sheet currency translation adjustments recorded in accumulated other comprehensive loss on our Consolidated Balance Sheets.
The assets and liabilities of our foreign subsidiaries whose local currency is not their functional currency are remeasured from their local currency to their functional currency and then translated to USD.
5 unchanged sentences
For grants of restricted stock units (“RSUs”) subject to service-based or performance-based vesting conditions only, the Company establishes the fair value based on the market price on the date of the grant.
+Added: For grants of RSUs subject to market-based vesting conditions, we establish the fair value using the Monte Carlo simulation lattice model.
The Company recognizes the grant date fair value of equity awards as compensation cost over the requisite service period.
The Company accounts for forfeitures as they occur.
−Removed: Reclassifications
−Removed: Certain amounts reported for prior years have been reclassified to conform to the current year’s presentation.
Adoption of New Accounting Standard
−Removed: In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, “Liabilities - Supplier Finance Programs (Subtopic 405-50):
−Removed: Disclosure of Supplier Finance Program Obligations.” The ASU increases the transparency surrounding supplier finance programs by requiring the buyer to disclose information on an annual basis about the key terms of the program, the outstanding obligation amounts as of the end of the period, a roll-forward of such amounts, and the balance sheet presentation of the related amounts.
−Removed: Additionally, the obligation amount outstanding at the end of the period must be disclosed in interim periods.
−Removed: The amendments are effective for fiscal years beginning after December 15, 2022 except for the requirement to disclose the roll-forward information, which is effective for fiscal years beginning after December 15, 2023.
−Removed: We adopted this standard on January 1, 2023, on a prospective basis.
−Removed: The adoption did not have an impact on our financial statement disclosures.
−Removed: Accounting Pronouncements Issued but Not Yet Effective
−Removed: In March 2023, the FASB issued ASU 2023-01, “Leases (Topic 842) - Common Control Arrangements.” The amendments in this update improve current GAAP by clarifying the accounting treatment for leasehold improvements associated with common control leases in order to create uniformity in practice.
−Removed: The ASU seeks to provide guidance to more accurately match the amortization expense of leasehold improvements under common control arrangements with the useful life of the improvements to the consolidated entity as a whole.
−Removed: The amendments are effective for fiscal years beginning after December 15, 2023.
−Removed: Early adoption is permitted.
−Removed: We are currently evaluating the impact of the new guidance.
−Removed: In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures.” The amendments in this update improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses.
+Added: In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures.” The amendments in this update improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses.
The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets.
All disclosure requirements of the ASU are required for entities with a single reportable segment.
−Removed: The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods for our fiscal years beginning after December 15, 2024, and should be applied on a retrospective basis to all periods presented.
+Added: The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods for our fiscal years beginning after December 15, 2024.
+Added: We adopted this standard on January 1, 2024, on a retrospective basis.
+Added: Refer to Note 4 — S egment R e porting for required disclosures.
+Added: Accounting Pronouncements Issued but Not Yet Effective
+Added: 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.
+Added: The amendments are effective for annual periods beginning after December 15, 2024 on a prospective basis.
Early adoption is permitted.
We are currently evaluating the impact of the new guidance.
−Removed: In December 2023, the FASB issued 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.
−Removed: The amendments are effective for annual periods beginning after December 15, 2024 on a prospective basis.
+Added: In March 2024, the SEC issued the final rules under SEC Release No.
+Added: 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors.
+Added: In April 2024, the SEC voluntarily stayed implementation of the final rules as a result of pending judicial review.
+Added: These rules, if adopted, will require registrants to disclose certain climate-related information, including Scope 1 and Scope 2 greenhouse gas emissions and other climate-related topics, in registration statements and annual reports, when material.
+Added: Disclosure requirements, absent the results of pending judicial review, will begin phasing in with the Company’s annual reporting for the year ending December 31, 2025.
+Added: We are currently evaluating the impact the rules will have on our disclosures.
+Added: In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures:
+Added: Disaggregation of Income Statement Expenses”.
+Added: The ASU seeks to improve the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses in commonly presented expense captions.
+Added: The amendments are effective for annual periods beginning after December 15, 2026 and interim reporting periods after December 15, 2027 on either a prospective or retrospective basis.
Early adoption is permitted.
We are currently evaluating the impact of the new guidance.
+Added: 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.
+Added: (“UPS”) and certain subsidiaries of UPS (the “Transaction”).
+Added: We acquired Coyote for $ 1.038 billion in cash, subject to certain additional customary adjustments.
+Added: The purchase price was subsequently increased by $ 10 million for working capital and other post-closing adjustments totaling $ 10 million, which was paid in the first quarter of 2025.
+Added: 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.
+Added: The Transaction was accounted for under the acquisition method of accounting.
+Added: The purchase price was preliminarily allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date.
+Added: The consolidated financial statements as of and for the year ended December 31, 2024 include the financial results of Coyote from the acquisition date.
+Added: 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.
+Added: (In millions)
+Added: Cash and cash equivalents $ 19
+Added: Accounts receivable 394
+Added: Other current assets 35
+Added: Property and equipment 25
+Added: Intangible assets 459
+Added: Operating lease assets 86
+Added: Other long-term assets 25
+Added: Total assets $ 1,043
+Added: Accounts payable $ ( 208 )
+Added: Accrued expenses ( 58 )
+Added: Short-term operating lease liabilities ( 19 )
+Added: Deferred tax liabilities ( 98 )
+Added: Long-term operating lease liabilities ( 65 )
+Added: Other long-term liabilities ( 40 )
+Added: Total liabilities $ ( 488 )
+Added: Net assets acquired $ 555
+Added: Purchase price $ 1,048
+Added: Goodwill recorded $ 493
+Added: The purchase price exceeded the estimated fair value of the net assets acquired, and, as such, the excess was allocated to goodwill.
+Added: Goodwill will not be amortized but instead will be reviewed for impairment at least annually, absent any indicators of impairment.
+Added: Goodwill is attributable to synergies expected to be achieved from the combined operations of the Company and Coyote and the assembled workforce.
+Added: Goodwill recognized in the Transaction is not expected to be deductible for tax purposes.
+Added: The fair values of the assets acquired and liabilities assumed are considered preliminary and subject to adjustment as additional information is obtained and reviewed.
+Added: The final allocation of the purchase price may differ from the preliminary allocation based on completion of the valuation.
+Added: The Company expects to finalize the purchase price allocation within the measurement period, which will not exceed one year from the acquisition date.
+Added: The following table summarizes the preliminary purchase price allocated to the identifiable intangible assets acquired:
+Added: (In millions) Fair Value Weighted Average Useful Life (Years)
+Added: Customer relationships $ 444 15
+Added: Trademarks 15 4
+Added: Total $ 459 15
+Added: The Company’s results of operations included $ 796 million of revenue and a $ 21 million pre-tax loss attributable to Coyote for the year ended December 31, 2024.
+Added: The Company incurred acquisition-related costs of $ 43 million for the year ended December 31, 2024, which are included in Transaction and integration costs in the consolidated statements of operations.
+Added: The following unaudited pro forma financial information presents the Company’s results of operations as if the Coyote acquisition occurred on January 1, 2023.
+Added: The unaudited pro forma information includes adjustments for intangible assets acquired and elimination of historical intercompany transactions between RXO and Coyote.
+Added: The pro forma results for the year ended December 31, 2023 include a non-recurring charge of $ 216 million related to the deemed non-pro rata distribution, as further discussed in Note 13 — Stockholders ’ Equity .
+Added: 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.
+Added: Years Ended December 31,
+Added: (In millions) 2024 2023
+Added: Revenue $ 6,390 $ 7,079
+Added: Loss before income taxes ( 92 ) ( 298 )
+Added: Segment Reporting
+Added: The Company is a brokered transportation platform defined by cutting-edge technology and an asset-light business model.
+Added: The largest component is our core truck brokerage business.
+Added: Our operations also include asset-light managed transportation and last mile services, which complement our truck brokerage business.
+Added: Our chief operating decision maker (“CODM”), identified as our chief executive officer, regularly reviews financial information at the operating segment level to allocate resources and assess performance.
+Added: The CODM assesses operating segment performance by using segment adjusted earnings before interest, taxes, depreciation and amortization (“segment adjusted EBITDA”).
+Added: The CODM uses segment adjusted EBITDA predominantly in the annual budget and forecasting process.
+Added: The CODM considers budget-to-actual variances for this profit measure when making decisions about the allocation of operating and capital resources.
+Added: The CODM also uses adjusted EBITDA to evaluate pricing strategy and to assess the overall performance of the Company.
+Added: We have determined that all our operating segments share the following similar economic and qualitative characteristics and therefore meet the criteria for operating segments to be aggregated into one reportable segment:
+Added: • The operating segments have similar economic characteristics (e.g., comparable segment adjusted EBITDA margins, our measure of segment profitability), and similar long-term financial models;
+Added: • The nature of the services offered by each operating segment is similar:
+Added: all the services leverage technology and an asset-light infrastructure to arrange for the transportation of customer goods by qualified independent carriers;
+Added: • The operating segments all operate within the transportation industry and in primarily the same geography (North America);
+Added: • All operating segments provide business-to-business services, with no segment transacting directly with the end-user customer;
+Added: • Each operating segment’s customer base spans diversified industry verticals that overlap with other operating segments and have a common salesforce engaged in significant cross-selling activities;
+Added: • All operating segments conduct business in a similar regulatory environment applicable to the transportation industry, including regulation and licensing by various governmental agencies;
+Added: most notably, the Federal Motor Carrier Safety Administration of the U.S.
+Added: Department of Transportation.
+Added: All of our operating segments can be expected to have similar future prospects as they have similar economic attributes.
+Added: The causes for fluctuations in operating and financial performance are generally the same among the operating segments and include such factors as:
+Added: (i) changes in overall demand for outsourced freight transportation services, (ii) changes in prices charged by third-party carriers, (iii) decisions by customers to develop or expand internal transportation capabilities, and (iv) macroeconomic impacts on supply chains for materials, parts and finished goods.
+Added: The tables below provide information about the Company’s reportable segment:
+Added: Years Ended December 31,
+Added: (In millions) 2024 2023 2022
+Added: Revenue $ 4,550 $ 3,927 $ 4,796
+Added: Cost of transportation and services (exclusive of depreciation and amortization
+Added: 3,565 2,967 3,624
+Added: Direct operating expense (exclusive of depreciation and amortization)
+Added: Segment sales, general and administrative expense (1)
+Added: Other segment items (2)
+Added: ( 1 ) 1 ( 1 )
+Added: Segment adjusted EBITDA $ 136 $ 169 $ 329
+Added: Unallocated corporate expenses 15 35 22
+Added: Depreciation and amortization expense 87 67 86
+Added: Transaction and integration costs 53 12 84
+Added: Restructuring and other costs 36 17 13
+Added: Other expense 219 2 1
+Added: Interest expense, net 30 32 4
+Added: Consolidated income (loss) before income taxes $ ( 304 ) $ 4 $ 119
+Added: (1) Excludes unallocated corporate expenses and other costs.
+Added: (2) Other segment items category includes other expense.
+Added: (In millions) 2024 2023
+Added: Segment assets
+Added: $ 3,345 $ 1,776
+Added: Corporate assets
+Added: Total assets $ 3,414 $ 1,825
Revenue Recognition
3 unchanged sentences
Approximately 7 %, 7 % and 9 % of our revenues were generated outside the U.S.
−Removed: (primarily in Canada, Mexico and Asia) for the years ended December 31, 2023, 2022 and 2021, respectively.
+Added: (primarily in Canada, Mexico, Asia and Europe) for the years ended December 31, 2024, 2023 and 2022, respectively.
Our revenue disaggregated by service offering is as follows:
4 unchanged sentences
Managed transportation 600 690 945
−Removed: Freight forwarding 251 422 434
Eliminations ( 134 ) ( 135 ) ( 139 )
14 unchanged sentences
(i) have original expected durations of one year or less or (ii) contain variable consideration.
−Removed: As of December 31, 2023, the fixed consideration component of our remaining performance obligation was approximately $ 71 million, and we expect approximately 99 % of that amount to be recognized over the next 3 years and the remainder thereafter.
+Added: As of December 31, 2024, the fixed consideration component of our remaining performance obligation was approximately $ 41 million, and we expect approximately 95 % of that amount to be recognized over the next three years and the remainder thereafter.
We estimate remaining performance obligations at a point in time and actual amounts may differ from these estimates due to contract revisions or terminations.
1 unchanged sentence
We engage in restructuring actions as part of our ongoing efforts to best use our resources and infrastructure.
−Removed: These actions generally include severance and facility-related costs, including impairment of operating lease assets, and are intended to improve our efficiency and profitability going forward.
−Removed: The following is a rollforward of the Company’s restructuring liability, which is included in Accrued expenses in the Consolidated Balance Sheets:
+Added: These actions generally include severance and impairment of real estate operating lease assets, and are intended to improve our efficiency and profitability going forward.
+Added: The following is a rollforward of the Company’s restructuring activity:
Year Ended December 31, 2024
(In millions) Reserve Balance
−Removed: December 31, 2022 Charges Incurred Payments Other Reserve Balance
+Added: December 31, 2023 Acquisition Charges Incurred Payments Reserve Balance
December 31, 2024
1 unchanged sentence
Facilities 2 — 19 ( 6 ) 15
+Added: Contract termination — — 1 ( 1 ) —
Total $ 6 $ 1 $ 33 $ ( 20 ) $ 20
1 unchanged sentence
(In millions) Reserve Balance
−Removed: December 31, 2021 Charges Incurred Payments Other Reserve Balance
+Added: December 31, 2022 Charges Incurred Payments Reserve Balance
December 31, 2023
1 unchanged sentence
Facilities 1 4 ( 3 ) 2
−Removed: Contract termination — 1 ( 1 ) — —
Total $ 3 $ 16 $ ( 13 ) $ 6
67 unchanged sentences
As of December 31, 2024, we had additional operating leases that have not yet commenced with future undiscounted lease payments of $ 50 million.
−Removed: These operating leases will commence in 2024, with initial lease terms ranging from 3 years to 7 years .
+Added: These operating leases will commence in 2025 and 2026, with initial lease terms ranging from 3 years to 11 years .
Goodwill and Intangible Assets
+Added: The following table presents the changes in Goodwill for the year ended December 31, 2024:
+Added: (In millions)
+Added: Balance as of December 31, 2023 $ 630
+Added: Acquired goodwill 493
+Added: Balance as of December 31, 2024 $ 1,123
+Added: 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 December 31, 2024.
−Removed: Our identifiable intangible assets consist entirely of customer relationships, all of which are definite-lived.
+Added: 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 2024 or 2023.
−Removed: During 2023 we retired $ 1 million of fully amortized customer relationship intangible assets.
+Added: Identifiable intangible assets as of December 31, 2023 consisted entirely of customer relationships, with a gross carrying amount of $ 186 million and accumulated amortization of $ 118 million.
+Added: The following table summarizes the balance of our identifiable intangible assets as of December 31, 2024.
+Added: (In millions) Gross Carrying Amount
+Added: Accumulated Amortization
+Added: Net Book Value
+Added: Customer relationships $ 630 $ ( 139 ) $ 491
+Added: Trade name 15 ( 7 ) 8
+Added: Total $ 645 $ ( 146 ) $ 499
Estimated future amortization expense for amortizable intangible assets for the next five years and thereafter is as follows:
1 unchanged sentence
Estimated amortization expense $ 46 $ 42 $ 41 $ 38 $ 37 $ 295
−Removed: Actual amounts of amortization expense may differ from estimated amounts due to changes in foreign currency exchange rates, additional intangible asset acquisitions, future impairment of intangible assets, accelerated amortization of intangible assets and other events.
+Added: 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 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 $ 28 million, $ 13 million and $ 21 million for the years ended December 31, 2024, 2023 and 2022, respectively.
3 unchanged sentences
Revolver $ — $ — $ 5 $ 5
−Removed: Term Loan — — 100 100
7.50 % Notes due 2027 (1)
8 unchanged sentences
Principal payments on debt $ 15 $ — $ 355 $ — $ — $ —
−Removed: Revolving Credit Agreement
−Removed: On October 18, 2022, we entered into a five-year , unsecured multi-currency revolving credit facility (the “Revolver”).
−Removed: The Revolver borrowing capacity is up to $ 500 million, of which $ 50 million is available for the issuance of letters of credit.
−Removed: Loans under the Revolver bear interest at a fluctuating rate plus an applicable margin based on the Company’s credit ratings.
+Added: Revolving Credit Facilities
+Added: On October 18, 2022, we entered into a five-year , $ 500 million, unsecured multi-currency revolving credit facility (the “Revolver”), with $ 50 million available for the issuance of letters of credit.
+Added: Loans under the Revolver bear interest at a fluctuating rate plus an applicable margin based on the Company’s credit ratings, with interest payable quarterly.
The Company is required to pay a commitment fee on any unused commitment, based on pricing levels set forth in the agreement.
+Added: On November 2, 2023, the Company exercised a feature to increase the total commitments under its Revolver from $ 500 million to $ 600 million.
The covenants in the Revolver are customary for financings of this type.
−Removed: The Revolver requires the Company to maintain a maximum consolidated leverage ratio and minimum interest coverage ratio.
+Added: The Revolver requires the Company to maintain a minimum interest coverage ratio of not less than 3.00 :1.00.
+Added: 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 December 31, 2024, the Company was in compliance with the covenants of the Revolver.
−Removed: As of December 31, 2023, we had $ 5 million outstanding under the Revolver, with interest payable quarterly.
−Removed: Borrowings under the Revolver are payable, at our option, at any time prior to or at maturity on October 18, 2027.
−Removed: The effective interest rate on the Revolver was 6.82 % as of December 31, 2023.
−Removed: On November 2, 2023, the Company exercised a feature to increase the total commitments under its Revolver from $ 500 million to $ 600 million.
−Removed: Term Loan Credit Agreement
−Removed: On October 18, 2022, we entered into a five-year $ 100 million unsecured term loan facility (the “Term Loan”).
−Removed: The original maturity date of the Term Loan was November 1, 2027.
−Removed: In connection with the Revolver commitment increase, on November 2, 2023, the Company repaid all of the outstanding obligations in respect of the $ 100 million principal amount, interest and fees under the Term Loan and terminated the Term Loan.
+Added: There were no letters of credit outstanding on the Revolver at December 31, 2024.
+Added: 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.
+Added: 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.
+Added: We also have a non-U.S.
+Added: revolving credit facility with a maximum commitment of approximately $ 14 million.
+Added: This facility has a one-year term and we had $ 14 million outstanding as of December 31, 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”).
2 unchanged sentences
The effective interest rate on the Notes was 8.13 % as of December 31, 2024.
−Removed: 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.
−Removed: At any time prior to November 15, 2024, we may also redeem up to 40 % of the Notes with the net cash proceeds of certain equity offerings at a redemption price equal to 107.500 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
−Removed: In addition, at any time prior to November 15, 2024, we may redeem the Notes, in whole or in part, at a redemption price equal to 100 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date plus an applicable “make-whole” premium.
+Added: We may redeem the Notes, in whole or in part, at any time 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.
The Notes are guaranteed by each of our direct and indirect wholly-owned domestic subsidiaries (other than certain excluded subsidiaries).
12 unchanged sentences
The Company bases its fair value estimates on market assumptions and available information.
−Removed: The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and current maturities of long-term debt approximated their fair values as of December 31, 2023 and December 31, 2022, due to their short-term nature and/or being receivable or payable on demand.
+Added: 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 December 31, 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:
1 unchanged sentence
Revolver 3 $ — $ 5
−Removed: Term Loan 2 — 95
7.50% Notes due 2027 1 365 366
We valued Level 1 debt using quoted prices in active markets.
−Removed: We valued Level 2 debt using bid evaluation pricing models or quoted prices of securities with similar characteristics.
We valued Level 3 debt using unobservable inputs which reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date.
4 unchanged sentences
Stockholders’ Equity
+Added: 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.
+Added: The aggregate gross proceeds from the private placement were $ 550 million before deducting offering expenses.
+Added: 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 consolidated balance sheets.
+Added: Net proceeds from the private placement were used to finance a portion of the acquisition of Coyote on September 16, 2024.
+Added: In connection with the private placement, a deemed non-pro rata distribution of $ 216 million was recorded within Other expense in the consolidated statements of operations for the year ended December 31, 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: The Company incurred $ 25 million in equity issuance costs related to the public offering, which were recorded as a reduction to Additional paid-in capital in the consolidated balance sheets.
+Added: 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”).
−Removed: During the twelve months ended 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.
−Removed: There were no share repurchases in the fourth quarter of 2023.
+Added: 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.
+Added: There were no share repurchases under the 2023 Share Repurchase Program during 2024.
As of December 31, 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.
−Removed: We are not obligated to repurchase any specific number of shares.
+Added: We are not obligated to repurchase any specific number of shares or use a specific dollar amount of the approved and remaining $ 123 million.
Stock-Based Compensation
5 unchanged sentences
In connection with the Separation, certain holders of outstanding XPO share-based compensation awards received an adjusted award consisting of both shares of XPO common stock and shares of RXO common stock.
−Removed: Non-vested shares outstanding, as shown in the table below, exclude 1.7 million and 2.8 million shares held by non-RXO employees at December 31, 2023 and December 31, 2022, respectively, consisting of certain XPO employees, former employees of XPO as of the distribution date, and XPO non-employee directors who remained on the XPO Board of Directors on the distribution date, that will be settled in RXO common stock once vested under the EMA.
+Added: Non-vested shares outstanding, as shown in the table below, exclude 0.2 and 1.7 million shares held by non-RXO employees at December 31, 2024 and December 31, 2023, respectively, consisting of certain XPO employees, former employees of XPO as of the distribution date, and XPO non-employee directors who remained on the XPO Board of Directors on the distribution date, that will be settled in RXO common stock once vested under the EMA.
Additionally, one employee of RXO was granted RSUs and PRSUs in XPO stock in connection with the Separation.
13 unchanged sentences
Tax benefit on stock-based compensation $ 6 $ 4 $ 8
−Removed: Restricted Stock, Restricted Stock Units and Performance-Based Restricted Stock Units
+Added: RSUs and PRSUs
We grant RSUs and PRSUs to our key employees, officers and directors with various vesting requirements.
2 unchanged sentences
The holders of the RSUs and PRSUs do not have the rights of a stockholder and do not have voting rights until the shares are issued and delivered in settlement of the awards.
−Removed: The number of RSUs and PRSUs vested includes shares of our common stock that we withheld on behalf of our employees to satisfy the minimum tax withholdings.
−Removed: We estimate the fair value of PRSUs subject to market-based vesting conditions using a Monte Carlo simulation lattice model.
+Added: The number of RSUs and PRSUs vested includes shares of our common stock that we withheld or sold on behalf of our employees to satisfy the minimum tax withholdings.
A summary of RSU and PRSU award activity for the year ended December 31, 2024 is presented below:
9 unchanged sentences
Total aggregate fair value of awards vested prior to the Separation was derived from XPO’s stock price at grant.
−Removed: As of December 31, 2023, all outstanding RSUs vest subject to service conditions and all outstanding PRSUs vest subject to service and performance conditions.
+Added: As of December 31, 2024, all outstanding RSUs vest subject to service conditions.
+Added: Of the outstanding PRSUs as of December 31, 2024, 607 thousand vest subject to service and performance conditions and 494 thousand vest subject to service and market conditions.
As of December 31, 2024, unrecognized compensation cost related to unvested RSUs and PRSUs of $ 35 million is anticipated to be recognized over a weighted-average period of approximately 1.54 years.
4 unchanged sentences
federal income tax return as well as certain state and local income tax returns.
−Removed: The Company’s foreign income tax returns are filed on a full-year basis.
Income before taxes related to our U.S.
4 unchanged sentences
Foreign 3 6 31
−Removed: Income before income taxes $ 4 $ 119 $ 191
+Added: Income (loss) before income taxes $ ( 304 ) $ 4 $ 119
The components of the income tax provision (benefit) consist of the following:
7 unchanged sentences
Foreign ( 2 ) 1 —
−Removed: Total deferred income tax provision (benefit) ( 8 ) ( 20 ) 3
−Removed: Total income tax provision $ — $ 27 $ 41
+Added: Total deferred income tax benefit ( 19 ) ( 8 ) ( 20 )
+Added: Total income tax provision (benefit) $ ( 14 ) $ — $ 27
The reconciliation of the statutory federal income tax rate to the effective income tax rate consists of the following:
10 unchanged sentences
Changes in uncertain tax positions — ( 55.5 ) ( 0.4 )
+Added: Non-deductible deemed non-pro rata distribution ( 14.9 ) — —
Other 0.5 ( 156.3 ) ( 0.8 )
8 unchanged sentences
Accrued expenses 33 13
+Added: Property and equipment 6 —
Total deferred tax asset 73 31
10 unchanged sentences
Other long-term assets $ 4 $ 2
−Removed: Deferred tax liability ( 7 ) ( 16 )
+Added: Deferred tax liabilities ( 88 ) ( 7 )
Net deferred tax liability $ ( 84 ) $ ( 5 )
3 unchanged sentences
Federal net operating losses for all U.S.
−Removed: operations $ — $ 4
+Added: operations Indefinite
Tax effect (before federal benefit) of state net operating losses Various times starting in 2027 (1)
Foreign net operating losses available to offset future taxable income Various times starting in 2028 (1)
+Added: Federal tax credit carryforwards Various times starting in 2044 2 —
State tax credit carryforwards Various times starting in 2026 — 1
14 unchanged sentences
Beginning balance $ — $ — $ 1
+Added: Gross amount of increase recorded against goodwill for uncertainties arising from acquisition 8 — —
Reductions due to the statute of limitations — — ( 1 )
3 unchanged sentences
Total unrecognized tax benefits that, if recognized, would impact the effective income tax rate as of the end of the year $ 8 $ — $ —
−Removed: We are subject to taxation in the United States and various states and foreign jurisdictions.
+Added: We are subject to taxation in the U.S.
+Added: and various states and foreign jurisdictions.
As of December 31, 2024, we have no tax years under examination by the IRS or in any foreign jurisdictions.
2 unchanged sentences
returns after 2010 are open under relevant statutes of limitations and are subject to audit.
+Added: We consider prior year earnings and current year earnings to be permanently reinvested to the extent of working capital needs in each of the Company’s foreign subsidiaries.
+Added: To the extent current earnings are in excess of working capital needs, we do not assert permanent reinvestment.
+Added: Additionally, circumstances may arise in which current earnings are in excess of working capital needs, but due to regulatory restrictions, the excess earnings remain in the local jurisdictions.
+Added: Where necessary, taxes resulting from foreign distributions of current and accumulated earnings have been considered in our provision for income taxes.
+Added: For the years ended December 31, 2024 and December 31, 2023, $ 1 million and $ 1 million of deferred tax liability was recorded.
+Added: We have not recorded incremental income taxes for outside basis differences in its investments in foreign subsidiaries as these amounts are indefinitely reinvested.
+Added: Determining the amount of unrecognized deferred tax liability related to the outside basis differences in these entities is not practicable.
Earnings Per Share
5 unchanged sentences
As of the Separation date, 3.3 million total shares, including 2.4 million RSUs and 0.9 million PRSUs, were converted in this manner.
−Removed: Approximately 1.1 million and 0.5 million of these awards vested or were forfeited in 2023 and 2022, respectively, resulting in 1.7 million and 2.8 million shares remaining outstanding at December 31, 2023 and December 31, 2022, respectively.
+Added: Approximately 1.5 million, 1.1 million and 0.5 million of these awards vested or were forfeited in 2024, 2023 and 2022, respectively, resulting in 0.2 million, 1.7 million and 2.8 million shares remaining outstanding at December 31, 2024, 2023 and 2022, respectively.
The adjusted RSU awards are subject to the same terms and vesting conditions that applied to the original XPO award immediately before the distribution.
The adjusted PRSU awards are subject to the same terms and vesting conditions that applied to the original XPO award immediately before the distribution, provided that the XPO Compensation Committee may modify the applicable performance-based vesting conditions prior to the effective time (including by deeming the applicable performance-based vesting conditions to be achieved at a designated performance level).
−Removed: As these awards will ultimately be settled in RXO shares upon vesting, they have been included in our calculation of diluted weighted-average common shares outstanding as of December 31, 2023 and December 31, 2022.
−Removed: On November 1, 2022, the date of the Separation, 115,162,555 shares of common stock of RXO were distributed to XPO stockholders of record as of the record date.
−Removed: This share amount is utilized for the calculation of basic and diluted earnings per share for all years presented prior to the Separation.
−Removed: For all periods prior to the Separation, it is assumed that there are no dilutive equity instruments as there were no equity awards of RXO outstanding prior to the Separation.
+Added: As these awards will ultimately be settled in RXO shares upon vesting, they have been included in our calculation of diluted weighted-average common shares outstanding as of December 31, 2024, 2023 and 2022.
Diluted earnings per share is computed by giving effect to all potentially dilutive stock awards that are outstanding.
3 unchanged sentences
(Dollars in millions, shares in thousands, except per share amounts) 2024 2023 2022
−Removed: Net income $ 4 $ 92 $ 150
+Added: Net income (loss) $ ( 290 ) $ 4 $ 92
Basic weighted-average common shares (1)
+Added: 133,412 116,871 115,335
Dilutive effect of stock-based awards — 2,585 456
Diluted weighted-average common shares (1) (2)
−Removed: Basic earnings per share $ 0.03 $ 0.80 $ 1.30
−Removed: Diluted earnings per share $ 0.03 $ 0.79 $ 1.30
+Added: 133,412 119,456 115,791
+Added: Basic earnings (loss) per share $ ( 2.17 ) $ 0.03 $ 0.80
+Added: Diluted earnings (loss) per share $ ( 2.17 ) $ 0.03 $ 0.79
Antidilutive shares excluded from diluted weighted-average common shares
+Added: 2,783 396 1,095
+Added: (1) Of the 6,259,471 pre-funded warrants issued in the private placement, warrants to purchase 2,558,753 shares of common stock did not require stockholder approval;
+Added: therefore, basic and diluted weighted-average common shares include 2,558,753 pre-funded warrants from their August 13, 2024 issuance date.
+Added: Stockholder approval for the remaining warrants was obtained on December 5, 2024;
+Added: therefore, basic and diluted weighted-average common shares include 3,700,718 pre-funded warrants from the December 5, 2024 approval date.
+Added: For all pre-funded warrants, the exercise price of $ 0.01 per share is not substantive.
+Added: (2) Amounts may not be additive due to rounding.
Commitments and Contingencies
1 unchanged sentence
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.
−Removed: 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.
+Added: 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”).
+Added: 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.
3 unchanged sentences
We believe that we have adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable.
−Removed: We do not believe that the ultimate resolution of any matters to which we are presently a party will have a material adverse effect on our results of operations, cash flows and financial position.
−Removed: However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on our results of operations, cash flows and financial position.
+Added: We do not believe that the ultimate resolution of any matters to which we are presently a party will have a material adverse effect on our results of operations, cash flows or financial condition.
+Added: However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on our results of operations, cash flows or financial condition.
Legal costs incurred related to these matters are expensed as incurred.
1 unchanged sentence
The liability and excess umbrella insurance policies generally do not cover the misclassification claims described in this note.
−Removed: In the event we are required to satisfy a legal claim outside the scope of the coverage provided by insurance, our results of operations, cash flows or financial position could be negatively impacted.
+Added: In the event we are required to satisfy a legal claim outside the scope of the coverage provided by insurance, our results of operations, cash flows or financial condition could be negatively impacted.
Our last mile subsidiary is involved in several class action and collective action cases involving misclassification claims.
The misclassification claims related solely to our last mile business, which operated as a wholly owned subsidiary of XPO until the spin-off of RXO was completed.
−Removed: As of November 1, 2022, pursuant to the Separation and Distribution Agreement between XPO and RXO, the liabilities of XPO’s last mile subsidiary, including legal liabilities, if any, related to the misclassification claims, were spun-off as part of RXO.
+Added: Pursuant to the Separation and Distribution Agreement between XPO and RXO, the liabilities of XPO’s last mile subsidiary, including legal liabilities, if any, related to the misclassification claims, were spun-off as part of RXO as of November 1, 2022.
Pursuant to the Separation and Distribution Agreement, RXO has agreed to indemnify XPO for certain matters relating to RXO, including indemnifying XPO from and against any liabilities, damages, costs, or expenses incurred by XPO arising out of or resulting from the misclassification claims.
1 unchanged sentence
RXO Last Mile, Inc.
−Removed: , the court has granted plaintiffs partial summary judgment and determined our last mile subsidiary misclassified the plaintiff owner/operators as independent contractors when they should have been deemed employees.
−Removed: We are vigorously defending ourselves in this matter and believe we have a number of meritorious defenses, and there are unresolved questions of law and fact that could be important to the ultimate resolution of this matter.
−Removed: We believe the misclassification claims, including Muniz v.
−Removed: RXO Last Mile, Inc.
−Removed: , are without merit and we intend to defend the Company vigorously.
−Removed: 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 these matters.
+Added: , we settled the matter in July 2024 for an immaterial amount without admitting any liability.
+Added: We continue to believe the other misclassification claims are without merit and we intend to defend the Company vigorously in these matters.
+Added: 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.
+Added: 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.
Related Party
5 unchanged sentences
Post-Separation, costs were no longer allocated from XPO to the Company;
−Removed: therefore, no related amounts were reflected on the Company’s financial statements for the year ended December 31, 2023.
+Added: therefore, no related amounts were reflected on the Company’s financial statements for the years ended December 31, 2024 and December 31, 2023.
Prior to the Separation, certain shared costs were allocated to the Company from XPO’s corporate overhead.
3 unchanged sentences
Costs included in our Consolidated Statements of Operations for our allocated share of XPO’s corporate overhead are as follows:
−Removed: Years Ended December 31,
+Added: Year Ended December 31,
(In millions) 2022
3 unchanged sentences
Restructuring costs 7
−Removed: Total $ 112 $ 72
Transactions with XPO and its non-RXO Subsidiaries
Revenue and costs generated from related parties are as follows:
−Removed: Years Ended December 31,
+Added: Year Ended December 31,
(In millions) 2022
Revenue $ 109
−Removed: Costs $ 52 $ 79
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
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.