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In addition, we offer technology-enabled managed expedite services that automate transportation procurement for time-critical freight moved by road and air charter carriers.
−Removed: We also offer freight forwarding services, including facilitation of ocean and air transportation, customs brokerage and additional domestic services.
+Added: We also offer freight forwarding services, including facilitation of ocean and air transportation, customs brokerage and additional domestic services including middle mile.
Our last mile offering is an asset-light service that facilitates consumer deliveries performed by highly qualified third-party contractors.
−Removed: We are the largest provider of outsourced last mile transportation for heavy goods in the United States, positioned within 125 miles of the vast majority of the U.S.
+Added: We are the largest provider of outsourced last mile transportation for heavy goods in the U.S., positioned within 125 miles of the vast majority of the U.S.
population and serving a customer base of omnichannel and e-commerce retailers and direct-to-consumer manufacturers.
−Removed: The Separation
−Removed: On November 1, 2022, we completed the separation from XPO, which we refer to as the Separation.
−Removed: The Separation was accomplished by the distribution of 100 percent of the outstanding common stock of RXO to XPO stockholders as of the close of business on October 20, 2022, the record date for the distribution.
−Removed: XPO stockholders received one share of RXO common stock for every share of XPO common stock held at the close of business on the record date.
−Removed: On November 1, 2022, RXO became a standalone publicly-traded company.
The Coyote Acquisition
−Removed: On the acquisition date, the Company acquired Coyote from UPS and certain subsidiaries of UPS.
+Added: On September 16, 2024, the Company acquired Coyote from UPS and certain subsidiaries of UPS.
We acquired Coyote for $ 1.038 billion in cash, subject to certain additional customary adjustments.
−Removed: 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: The purchase price was subsequently increased by $ 10 million for working capital and other post-closing adjustments, which was paid in the first quarter of 2025.
Refer to Note 3 — Acquisition to the consolidated financial statements in this Annual Report on Form 10-K for disclosures regarding the Company’s acquisition of Coyote.
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Economic inflation can have a negative impact on our operating costs, and any economic recession could depress activity levels and adversely affect our results of operations.
−Removed: A prolonged period of inflation could cause interest rates, fuel, wages and other costs to continue to increase, which would adversely affect our results of operations unless our pricing to our customers correspondingly increases.
+Added: A prolonged period of inflation could cause interest rates, fuel, wages and other costs to increase, which would adversely affect our results of operations unless our pricing to our customers correspondingly increases.
Generally, inflationary increases in labor and operating costs related to our operations have historically been offset through price increases.
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Basis of Presentation
−Removed: Prior to the Separation, the Company’s financial statements were prepared on a standalone combined basis and were derived from the consolidated financial statements and accounting records of XPO (the “historical financial statements”).
−Removed: On November 1, 2022, the Company became a standalone publicly traded company, and its financial statements post-Separation are prepared on a consolidated basis.
−Removed: The combined financial statements for all periods presented prior to the Separation are now also referred to as “consolidated financial statements,” and have been prepared under the U.S.
−Removed: generally accepted accounting principles (“GAAP”).
Cost of transportation and services (exclusive of depreciation and amortization) primarily includes the cost of providing or procuring freight transportation for RXO customers.
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and gains and losses on sales of property and equipment.
−Removed: Sales, general and administrative expense (“SG&A”), including the allocated costs of XPO prior to the Separation, primarily consists of salaries and commissions for the sales function;
+Added: Sales, general and administrative expense (“SG&A”) primarily consists of salaries and commissions for the sales function;
salary and benefit costs for executive and certain administration functions;
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and legal costs.
−Removed: Prior to the Separation, the historical results of operations included allocations of XPO costs and expenses including XPO’s corporate function which incurred a variety of expenses including, but not limited to, information technology, human resources, accounting, sales and sales operations, procurement, executive services, legal, corporate finance and communications.
−Removed: An allocation of these expenses is included to burden all business units comprising XPO’s historical results of operations, including RXO.
−Removed: The charges reflected have either been specifically identified or allocated using drivers including proportionally adjusted earnings before interest, taxes, depreciation and amortization, which includes adjustments for transaction and integration costs, as well as restructuring costs and other adjustments, or headcount.
−Removed: The Company believes the assumptions regarding allocations of XPO corporate expenses are reasonable.
−Removed: Nevertheless, the consolidated financial statements may not reflect the results of operations, cash flows and financial position had the Company been a standalone entity during the periods presented.
−Removed: The majority of these allocated costs are recorded within SG&A;
−Removed: Depreciation and amortization expense;
−Removed: Transaction and integration costs;
−Removed: and Restructuring costs in the Consolidated Statements of Operations.
−Removed: All charges and allocations for facilities, functions and services performed by XPO organizations have been deemed settled in cash by RXO to XPO in the year in which the cost was recorded in the Consolidated Statements of Operations.
−Removed: For the periods ended before the Separation, XPO investment represents XPO’s historical investment in RXO and includes the net effects of transactions with and allocations from XPO as well as RXO’s accumulated earnings.
−Removed: Certain transactions between RXO and XPO, including XPO’s non-RXO subsidiaries, have been included in these consolidated financial statements, and are considered to be effectively settled at the time the transaction is recorded.
−Removed: The total net effect of the cash settlement of these transactions is reflected in the Consolidated Statements of Cash Flows as a financing activity and in the Consolidated Statements of Changes in Equity as XPO investment.
−Removed: The components of the net transfers to and from XPO include certain costs allocated from XPO’s corporate functions, income tax expense, certain cash receipts and payments made on behalf of RXO and general financing activities.
−Removed: For the periods ended before the Separation, the Company was a member of the XPO consolidated group, and its U.S.
−Removed: taxable income was included in XPO’s consolidated U.S.
−Removed: federal income tax return as well as in the tax returns filed by XPO with certain state and local taxing jurisdictions.
−Removed: For the periods ended after the Separation, the Company will file a consolidated U.S.
−Removed: federal income tax return as well as certain state and local income tax returns.
The Company’s consolidated financial statements include the accounts of RXO, Inc.
and its majority-owned subsidiaries.
−Removed: The Company has eliminated intercompany accounts and transactions.
+Added: All intercompany accounts and transactions have been eliminated.
RXO has one reportable segment.
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Restructuring costs 38 33 16 0.7 % 0.7 % 0.4 %
+Added: Goodwill impairment 12 — — 0.2 % — % — %
Operating income (loss) (79) (56) 39 (1.4) % (1.2) % 1.0 %
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Revenue increased by 26.2% to $5.7 billion in 2025, compared with $4.6 billion in 2024.
−Removed: The year-over-year increase in revenue was driven primarily by a $796 million increase in revenue as a result of the Coyote acquisition in our truck brokerage business.
−Removed: This was partially offset by (i) a $125 million decrease in legacy RXO truck brokerage revenue, driven primarily by a 7% decrease in revenue per load, which was impacted by a combination of fuel prices, freight mix and transportation market rates, partially offset by a 1% increase in legacy RXO load volume and (ii) a $90 million decrease in revenue in our managed transportation business, driven primarily by a decrease in ocean and expedite air rates and volume.
+Added: The year-over-year increase in revenue in 2025 was driven by (i) a $1.2 billion increase in truck brokerage revenue, primarily as a result of the Coyote acquisition and (ii) a $141 million increase in last mile revenue, primarily as a result of a 13% increase in volume.
+Added: This was partially offset by a $51 million decrease in revenue in our managed transportation business, driven primarily by a decrease in automotive expedite volume.
Cost of transportation and services (exclusive of depreciation and amortization) in 2025 was $4.6 billion, or 80.3% of revenue, compared with $3.6 billion, or 78.4% of revenue in 2024.
−Removed: The year-over-year increase as a percentage of revenue in 2024 was driven primarily by (i) a 1.6 percentage point increase in truck brokerage cost of transportation and services as a percentage of revenue, as lower freight rates were not fully offset by corresponding reductions in cost of purchased transportation, and (ii) a 0.5 percentage point increase in last mile cost of transportation and services as a percentage of revenue as a result of freight mix changes.
−Removed: Direct operating expense (exclusive of depreciation and amortization) of $202 million in 2024 decreased $33 million, or 14.0%, compared with $235 million in 2023.
−Removed: As a percentage of revenue, direct operating expense (exclusive of depreciation and amortization) decreased to 4.4% in 2024 compared to 6.0% in 2023 due to cost reduction initiatives.
−Removed: SG&A of $666 million in 2024 increased $75 million, or 12.7%, from $591 million in 2023, primarily due to the Coyote acquisition.
−Removed: As a percentage of revenue, SG&A decreased to 14.6% in 2024 compared with 15.0% in 2023 driven primarily by cost savings from restructuring actions executed in 2024.
+Added: The $1.0 billion increase is primarily attributable to a full year of Coyote activity in 2025.
+Added: The year-over-year increase as a percentage of revenue during 2025 was driven primarily by (i) a 0.5 percentage point increase in truck brokerage cost of transportation and services as a percentage of revenue as the market tightened during 2025, with capacity rapidly exiting in certain regions driven primarily by regulatory changes and enforcement, which caused buy rates to increase faster than our contractual sell rates and (ii) a 2.7 percentage point increase in last mile cost of transportation and services as a percentage of revenue as a result of freight mix changes.
+Added: Direct operating expense (exclusive of depreciation and amortization) of $190 million in 2025 decreased $12 million, or 5.9%, from $202 million in 2024.
+Added: As a percentage of revenue, direct operating expense (exclusive of depreciation and amortization) decreased to 3.3% in 2025 compared to 4.4% in 2024 driven primarily by cost reduction initiatives and improved leverage as a result of increased scale due to the Coyote acquisition.
+Added: SG&A of $832 million in 2025 increased $166 million, or 24.9%, from $666 million in 2024, primarily attributable to a full year of Coyote activity in 2025.
+Added: As a percentage of revenue, SG&A decreased to 14.5% in 2025 compared with 14.6% in 2024 driven primarily by improved leverage as a result of increased scale due to the Coyote acquisition, as well as cost savings from restructuring actions.
Depreciation and amortization expense in 2025 was $116 million, compared with $87 million in 2024.
−Removed: Depreciation and amortization expense for 2024 included $19 million as a result of the Coyote acquisition.
−Removed: Transaction and integration costs in 2024 and 2023 were $53 million and $12 million, respectively.
−Removed: Transaction and integration costs for 2024 included $49 million as a result of the Coyote acquisition.
−Removed: Transaction and integration costs for 2023 primarily comprised spin-off related costs.
−Removed: Restructuring costs in 2024 and 2023 were $33 million and $16 million, respectively, and primarily comprised severance and operating lease impairment costs.
−Removed: Other expense in 2024 includes a one-time charge of $216 million representing a deemed non-pro rata distribution in connection with the private placement common stock issuance completed in August 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: Depreciation and amortization expense for 2025 included an increase of $28 million attributable to a full year of Coyote activity in 2025.
+Added: Transaction and integration costs in 2025 were $22 million, compared with $53 million in 2024.
+Added: Transaction and integration costs for 2025 and 2024 included $19 million and $49 million, respectively, attributable to the Coyote acquisition.
+Added: Restructuring costs in 2025 and 2024 were $38 million and $33 million, respectively, and primarily comprised severance costs and operating lease impairments.
+Added: Goodwill impairment in 2025 was $12 million and was driven by the impairment of our ground and air express reporting unit resulting from our annual goodwill assessment.
+Added: Other expense in 2024 included a one-time charge of $216 million representing a deemed non-pro rata distribution in connection with the private placement common stock issuance completed in August 2024.
Our effective income tax rates were 13.3% and 4.6% for 2025 and 2024, respectively.
Our effective tax rate for 2025 differs from the U.S.
−Removed: corporate income tax rate of 21% primarily due to the effect of large non-deductible tax items associated with the Coyote acquisition and related common stock issuances.
+Added: corporate income tax rate of 21% primarily due to the effect of non-deductible expenses when experiencing a pre-tax loss.
Our effective tax rate for 2024 differs from the U.S.
−Removed: corporate income tax rate of 21% primarily due to a discrete tax benefit of $2 million from changes in reserves for uncertain tax positions.
+Added: corporate income tax rate of 21% primarily due to the effect of large non-deductible tax items associated with the Coyote acquisition and related common stock issuances.
Liquidity and Capital Resources
−Removed: Our ability to fund our operations and anticipated capital needs are reliant upon the generation of cash from operations, supplemented as necessary by utilization of our revolving credit facilities.
+Added: Our ability to fund our operations and anticipated capital needs are reliant upon the generation of cash from operations, supplemented as necessary by utilization of our revolving credit facility.
Our principal uses of cash in the future will be primarily to fund our operations, working capital needs, capital expenditures, repayment of borrowings, share repurchases and strategic business development transactions.
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Debt and Financing Arrangements
+Added: 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”).
+Added: The Notes bear interest at a rate of 7.50% per annum payable semiannually in cash in arrears on May 15 and November 15 of each year, beginning May 15, 2023, and mature on November 15, 2027, unless earlier repurchased or redeemed.
+Added: RXO is permitted to redeem some or all of the Notes prior to their maturity at redemption prices described in the indenture governing the Notes.
+Added: The Notes were issued at a price of 98.962% of par.
+Added: Refer to Note 10 — Debt to the consolidated financial statements for additional information.
Revolving Credit Facilities
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Loans under the Revolver bear interest at a fluctuating rate plus an applicable margin based on the Company's credit ratings.
−Removed: There were no amounts outstanding under the Revolver as of December 31, 2024.
+Added: There was $35 million outstanding under the Revolver as of December 31, 2025.
On November 2, 2023, the Company exercised a feature to increase the total commitments under its Revolver from $500 million to $600 million.
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Refer to Note 10 — Debt to the consolidated financial statements for additional information.
+Added: As of December 31, 2025, the Company had $565 million committed under the Revolver, net of outstanding borrowings.
+Added: As of December 31, 2025, the Company's available borrowing capacity under the Revolver, after giving effect to the financial covenants described above, was $202 million.
+Added: In connection with entering into the ABL Facility, on February 5, 2026, the existing Revolver was fully repaid and terminated.
We also have a non-U.S.
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This facility has a one-year term and we had $15 million outstanding as of December 31, 2025 classified as short-term debt.
−Removed: 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”).
−Removed: The Notes bear interest at a rate of 7.50% per annum payable semiannually in cash in arrears on May 15 and November 15 of each year, beginning May 15, 2023, and mature on November 15, 2027, unless earlier repurchased or redeemed.
−Removed: RXO is permitted to redeem some or all of the Notes prior to their maturity at redemption prices described in the indenture governing the Notes.
−Removed: The Notes were issued at a price of 98.962% of par.
+Added: On February 5, 2026, we entered into an asset-based five-year revolving credit facility (the “ABL Facility”) in an amount of up to $450 million, with $100 million available for the issuance of letters of credit.
+Added: Proceeds from loans under the ABL Facility were used to repay and terminate the existing Revolver.
+Added: Loans under the ABL Facility bear interest at a rate per annum equal to, at the Company’s election:
+Added: (i) a base rate plus an applicable margin or (ii) an adjusted term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin;
+Added: interest is payable quarterly.
+Added: The Company is required to pay a commitment fee on any unused commitment, based on pricing levels set forth in the agreement.
+Added: The ABL Facility contains customary representations and warranties, events of default and financial, affirmative and negative covenants for facilities of this type, including, but not limited to, financial covenants relating to a fixed charge coverage ratio, a minimum liquidity requirement and a minimum excess availability requirement, and restrictions on indebtedness, liens, investments and acquisitions, asset dispositions, specified agreements, restricted payments and prepayment of certain indebtedness.
Refer to Note 10 — Debt to the consolidated financial statements for additional information.
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Financial Condition
−Removed: The following table summarizes our asset and liability balances as of December 31, 2024 and 2023:
+Added: Our asset and liability balances are summarized as follows:
(In millions) 2025 2024 $ Change % Change
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Total long-term liabilities 698 737 (39) (5.3) %
−Removed: Total assets and liabilities increased from December 31, 2023 to December 31, 2024, primarily due to the acquisition of Coyote.
−Removed: Refer to Note 3 — Acquisition for additional information related to assets acquired and liabilities assumed.
+Added: Total assets decreased by $137 million from December 31, 2024 to December 31, 2025, primarily due to (i) an $18 million decrease in cash and cash equivalents, as described in the Cash Flow Activity section below, (ii) a $46 million decrease in identifiable intangible assets as a result of amortization and (iii) a $38 million decrease in operating lease assets primarily as a result of amortization.
+Added: Total liabilities decreased by $66 million from December 31, 2024 to December 31, 2025, primarily due to (i) a $30 million decrease in short-term and long-term operating lease liabilities as a result of lease payments and (ii) a $37 million decrease in deferred tax liabilities.
+Added: These decreases were partially offset by a $36 million increase in long-term debt and obligations under finance leases.
Cash Flow Activity
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Net cash used in investing activities (71) (1,064) 993
−Removed: Net cash provided by (used in) financing activities 1,108 (117) 1,225
+Added: Net cash provided by financing activities 1 1,108 (1,107)
Effect of exchange rates on cash, cash equivalents and restricted cash 2 (2) 4
Net increase (decrease) in cash, cash equivalents and restricted cash $ (17) $ 30 $ (47)
−Removed: Net cash used in operating activities for 2024 decreased by $101 million compared with 2023.
−Removed: The decrease in cash provided by operating activities was due primarily to the decrease in net income between periods and changes in working capital.
−Removed: The $294 million decrease in net income was driven primarily by higher non-cash adjustments including a $216 million deemed non-pro rata distribution and increased depreciation and amortization expense related to the Coyote acquisition.
−Removed: Investing activities used $1,064 million of cash in 2024 compared with $66 million of cash used in 2023.
−Removed: The primary uses of cash in 2024 were (i) $1,019 million for the acquisition of Coyote, net of cash acquired, and (ii) $45 million to purchase property and equipment.
−Removed: The primary use of cash in 2023 was to purchase property and equipment.
−Removed: Financing activities provided $1,108 million of cash in 2024 compared with using $117 million of cash in 2023.
−Removed: The primary source of cash from financing activities in 2024 was $1,095 million in net proceeds from the issuance of common stock.
−Removed: The primary uses of cash from financing activities in 2023 were (i) $104 million for debt and finance lease repayments, driven primarily by the payoff of the $100 million term loan facility and (ii) $14 million for payments of tax withholdings related to vesting of stock compensation awards.
+Added: Net cash provided by operating activities in 2025 was $51 million compared with $12 million used in 2024.
+Added: The increase in net cash provided by operating activities was primarily due to higher income and changes in working capital.
+Added: Net cash used in investing activities in 2025 was $71 million compared with $1.1 billion used in 2024.
+Added: The primary uses of cash in 2025 were (i) $59 million for purchases of property and equipment and (ii) $10 million paid related to the Coyote acquisition for working capital and post-closing adjustments.
+Added: The primary uses of cash in 2024 were (i) $1.0 billion for the acquisition of Coyote, net of cash acquired, and (ii) $45 million for purchases of property and equipment.
+Added: Net cash provided by financing activities in 2025 was $1 million compared with $1.1 billion in 2024.
+Added: The primary source of cash in 2025 was $33 million in net proceeds from borrowings on revolving credit facilities, partially offset by $19 million in payments for tax withholdings primarily attributable to the vesting of stock compensation awards held by non-RXO employees at the spin which are now substantially complete.
+Added: The primary source of cash from financing activities in 2024 was $1.1 billion in net proceeds from the issuance of common stock.
Contractual Obligations
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The Notes mature on November 15, 2027, unless earlier repurchased or redeemed, if applicable.
−Removed: As of December 31, 2024, we had no amounts outstanding under the Revolver.
+Added: As of December 31, 2025, we had $35 million outstanding under the Revolver.
Interest on any outstanding borrowings is payable monthly or quarterly, depending on RXO’s upfront election.
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See Note 10 — Debt to the consolidated financial statements for additional information.
+Added: In connection with entering into the ABL Facility, on February 5, 2026, the existing Revolver was fully repaid and terminated.
In addition, we have obligations for agreements to purchase goods or services entered into in the ordinary course of business that are enforceable and legally binding.
Critical Accounting Policies and Estimates
−Removed: We prepare our consolidated financial statements in accordance with GAAP.
+Added: We prepare our consolidated financial statements in accordance with U.S.
+Added: generally accepted accounting principles (“GAAP”).
A summary of our significant accounting policies is contained in Note 2 — Basis of Presentation and Significant Accounting Policies to our consolidated financial statements.
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For our 2025 goodwill assessment, we performed a quantitative analysis for our reporting units using a combination of the income and market approaches.
−Removed: As of November 30, 2024, we completed our annual impairment tests for goodwill with all of our reporting units having fair values in excess of their carrying values, resulting in no impairment of goodwill.
+Added: As of November 30, 2025, we completed our annual impairment tests for goodwill.
+Added: During 2025, our ground and air express reporting unit experienced lower than anticipated operating results and changing market fundamentals, resulting in the decision to restructure the reporting unit.
+Added: Based on the quantitative assessment performed in 2025, we recognized an impairment loss of $12 million to fully impair the goodwill of our ground and air express reporting unit as the discounted cash flows expected to be generated by the reporting unit were not sufficient to recover its carrying value.
+Added: No impairments resulted for our remaining reporting units as their assessed fair values exceeded their carrying values.
+Added: As of November 30, 2025, our Managed Solutions reporting unit had $116 million in goodwill and the excess of its estimated fair value over carrying value was 9%.
+Added: Should our estimates change based on Managed Solutions’ operating results, market conditions, long-term growth projections or other assumptions underlying our forecast, including changes to the discount rate, the Managed Solutions reporting unit may become subject to goodwill impairment in future periods.
A quantitative goodwill impairment test, when performed, includes estimating the fair value of a reporting unit using an income approach and/or a market-based approach.
−Removed: The income approach of determining fair value is based on the present value of estimated future cash flows, which requires us to make various judgmental assumptions, including assumptions about the timing and amount of future cash flows, growth rates and discount rates.
+Added: The income approach of determining fair value is based on the present value of estimated future cash flows, which requires us to make various assumptions, including assumptions about the timing and amount of future cash flows, growth rates and discount rates.
The discount rates reflect management’s judgment and are based on a risk adjusted weighted-average cost of capital utilizing industry market data of businesses similar to the reporting units.
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Changes in assumptions or estimates could materially affect the estimate of the fair value of a reporting unit, and therefore could affect the likelihood and amount of any potential impairment.
−Removed: We participate in a combination of self-insurance programs and purchased insurance that are managed to provide for the costs of medical, casualty, liability, vehicular, cargo, workers’ compensation, cyber risk and property claims.
+Added: We participate in a combination of self-insurance programs, partially through our wholly-owned captive insurance company, and purchased insurance that are managed to provide for the costs of medical, casualty, liability, vehicular, cargo, workers’ compensation, cyber risk and property claims.
Insurance coverage levels are adjusted annually based on risk tolerance and premium expense.
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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.