What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-01 compared with 2024-05-03 · 122 added, 48 removed, 393 unchanged (30% of the section changed)

1 unchanged sentence

Condensed Consolidated Balance Sheets

March 31, December 31,

June 30, December 31,

(In millions, except per share data) 2024 2023

30 unchanged sentences

300 shares authorized;

116 shares issued and

outstanding as of March 31, 2024 and December 31, 2023

116 shares issued and outstanding as of

June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 1,322 1,298

6 unchanged sentences

Condensed Consolidated Statements of Income

Three Months Ended March 31,

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

(In millions, except per share data) 2024 2023 2024 2023

11 unchanged sentences

Other income ( 6 ) ( 3 ) ( 16 ) ( 8 )

Debt extinguishment loss — 23 — 23

Interest expense 56 43 114 85

Income from continuing operations before income tax provision 147 44 237 65

Income tax provision 23 4

Income tax provision (benefit) ( 3 ) 13 20 17

Income from continuing operations 150 31 217 48

Loss from discontinued operations, net of taxes — ( 3 )

Income (loss) from discontinued operations, net of taxes — 2 — ( 1 )

Net income $ 150 $ 33 $ 217 $ 47

16 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended March 31,

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

(In millions) 2024 2023 2024 2023

1 unchanged sentence

Other comprehensive income (loss), net of tax

Foreign currency translation gain (loss), net of tax effect of $( 3 ) and $ 8

Unrealized gain on financial assets/liabilities designated as hedging instruments, net of tax

effect of $ — and $ 1

Foreign currency translation gain (loss), net of tax effect of $( 4 ), $ 2 ,

$( 7 ) and $ 10

$ ( 3 ) $ 14 $ ( 9 ) $ 27

Unrealized gain on financial assets/liabilities designated as hedging

instruments, net of tax effect of $( 1 ), $ — , $( 1 ) and $ 1

Other comprehensive income (loss) ( 3 ) 15 ( 8 ) 30

3 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

(In millions) 2024 2023

20 unchanged sentences

Cash flows from financing activities of continuing operations

Proceeds from issuance of debt — 1,977

Repurchase of debt — ( 2,003 )

Repayment of debt and finance leases ( 39 ) ( 35 )

22 unchanged sentences

Comprehensive Loss Total Equity

Balance as of March 31, 2024 116,312 $ — $ 1,302 $ 252 $ ( 222 ) $ 1,332

Net income — — — 150 — 150

Other comprehensive loss — — — — ( 3 ) ( 3 )

Exercise and vesting of stock compensation awards

Tax withholdings related to vesting of stock compensation awards

— — ( 3 ) — — ( 3 )

Stock compensation expense

— — 23 — — 23

Balance as of June 30, 2024 116,344 $ — $ 1,322 $ 402 $ ( 225 ) $ 1,499

(Shares in thousands, dollars in millions) Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other

Comprehensive Loss Total Equity

Balance as of December 31, 2023 116,073 $ — $ 1,298 $ 185 $ ( 217 ) $ 1,266

7 unchanged sentences

— — 42 — — 42

Balance as of June 30, 2024 116,344 $ — $ 1,322 $ 402 $ ( 225 ) $ 1,499

(Shares in thousands, dollars in millions) Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other

Comprehensive Loss Total Equity

Balance as of March 31, 2023 115,750 $ — $ 1,252 $ 10 $ ( 207 ) $ 1,055

Net income — — — 33 — 33

Other comprehensive loss — — — — 15 15

Exercise and vesting of stock compensation awards

189 — — — — —

Tax withholdings related to vesting of stock compensation awards

— — ( 4 ) — — ( 4 )

Stock compensation expense

— — 19 — — 19

Balance as of June 30, 2023 115,939 $ — $ 1,268 $ 43 $ ( 192 ) $ 1,119

(Shares in thousands, dollars in millions) Shares Amount Additional Paid-In Capital Retained Earnings (Accumulated Deficit) Accumulated Other

9 unchanged sentences

— — 41 — — 41

Balance as of March 31, 2023 115,750 $ — $ 1,252 $ 10 $ ( 207 ) $ 1,055

Other — — 1 — — 1

Balance as of June 30, 2023 115,939 $ — $ 1,268 $ 43 $ ( 192 ) $ 1,119

Amounts may not add due to rounding.

6 unchanged sentences

Strategic Developments

In December 2023, we acquired 28 LTL service centers in the U.S.

In December 2023, we acquired 28 less-than-truckload (“LTL”) service centers in the U.S.

previously operated by Yellow Corporation.

9 unchanged sentences

The Condensed Consolidated Financial Statements are not audited but reflect all adjustments that are of a normal recurring nature and are necessary for a fair presentation of the financial condition, operating results and cash flows for the interim periods presented.

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

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

The historical results of operations and financial positions of RXO, Inc., GXO Logistics, Inc.

3 unchanged sentences

Restricted Cash

As of March 31, 2024 and December 31, 2023, our restricted cash included in Other long-term assets on our Condensed Consolidated Balance Sheets was $ 7 million.

As of June 30, 2024 and December 31, 2023, our restricted cash included in Other long-term assets on our Condensed Consolidated Balance Sheets was $ 6 million and $ 7 million, respectively.

Trade Receivables Securitization and Factoring Programs

2 unchanged sentences

We use trade receivables securitization and factoring programs to help manage our cash flows and offset the impact of extended payment terms for some of our customers.

The maximum amount of net cash proceeds available at any one time under our securitization program, inclusive of any unsecured borrowings, is € 200 million (approximately $ 216 million as of March 31, 2024).

As of March 31, 2024, the maximum amount available under the program was utilized.

The weighted average interest rate was 5.41 % as of March 31, 2024.

The maximum amount of net cash proceeds available at any one time under our securitization program, inclusive of any unsecured borrowings, is € 200 million (approximately $ 214 million as of June 30, 2024).

As of June 30, 2024, € 6 million (approximately $ 6 million) was available under the program.

The weighted average interest rate was 5.36 % as of June 30, 2024.

The program expires in July 2026.

Information related to the trade receivables sold was as follows:

Three Months Ended March 31,

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

(In millions) 2024 2023 2024 2023

1 unchanged sentence

Receivables sold in period

$ 449 $ 470 $ 899 $ 910

Cash consideration

449 470 899 910

Factoring programs

10 unchanged sentences

We base our fair value estimates on market assumptions and available information.

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 March 31, 2024 and December 31, 2023 due to their short-term nature and/or being receivable or payable on demand.

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

The Level 1 cash equivalents include money market funds valued using quoted prices in active markets and a cash deposit for the securitization program.

2 unchanged sentences

(In millions) Carrying Value Fair Value Level 1

March 31, 2024 $ 186 $ 186 $ 186

June 30, 2024 $ 208 $ 208 $ 208

December 31, 2023 369 369 369

13 unchanged sentences

We are organized into two reportable segments:

North American Less-Than-Truckload (“LTL”), the largest component of our business, and European Transportation.

North American LTL, the largest component of our business, and European Transportation.

In our North American LTL segment, we provide shippers with geographic density and day-definite domestic and cross-border services to the U.S., as well as Mexico, Canada and the Caribbean.

1 unchanged sentence

In our European Transportation segment, we serve an extensive base of customers within the consumer, trade and industrial markets.

We offer dedicated truckload, LTL, truck brokerage, managed transportation, last mile, freight forwarding and multimodal solutions, such as road-rail and road-short sea combinations.

We offer dedicated truckload, LTL, truck brokerage, managed transportation, last mile, freight forwarding, warehousing and multimodal solutions, such as road-rail and road-short sea combinations.

Corporate includes corporate headquarters costs for executive officers and certain legal and financial functions, and other costs and credits not attributed to our reportable segments.

2 unchanged sentences

We do not provide asset information by segment to the CODM.

Our CODM evaluates segment profit (loss) based on adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), which we define as income from continuing operations before interest expense, income tax, depreciation and amortization expense, transaction and integration costs, restructuring costs and other adjustments.

Our CODM evaluates segment profit (loss) based on adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), which we define as income from continuing operations before debt extinguishment loss, interest expense, income tax provision (benefit), depreciation and amortization expense, transaction and integration costs, restructuring costs and other adjustments.

Segment Adjusted EBITDA includes an allocation of corporate costs.

Selected financial data for our segments is as follows:

Three Months Ended March 31,

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

(in millions) 2024 2023 2024 2023

7 unchanged sentences

Total Adjusted EBITDA 343 244 631 454

Debt extinguishment loss — 23 — 23

Interest expense 56 43 114 85

Income tax provision 23 4

Income tax provision (benefit) ( 3 ) 13 20 17

Depreciation and amortization expense 122 107 239 208

7 unchanged sentences

Total $ 122 $ 107 $ 239 $ 208

(1) Transaction and integration costs for the first quarter of 2024 and 2023 are primarily comprised of stock-based compensation for certain employees related to strategic initiatives.

Transaction and integration costs for the three months ended March 31, 2024 and 2023 include $ 1 million and $ 1 million, respectively, related to our European Transportation segment, and $ 13 million and $ 21 million, respectively, related to Corporate.

(2) Restructuring costs for the three months ended March 31, 2024 and 2023 include $ 0 million and $ 6 million, respectively, related to our North American LTL segment, $ 8 million and $ 7 million, respectively, related to our European Transportation segment, and $ 0 million and $ 11 million, respectively, related to Corporate.

(1) Transaction and integration costs for the periods ended June 30, 2024 and June 30, 2023 are primarily comprised of stock-based compensation for certain employees related to strategic initiatives, while the 2023 periods also include retention awards for certain employees related to strategic initiatives.

Transaction and integration costs for the three months ended June 30, 2024 and 2023 include $ 1 million and $ 0 million , respectively, related to our European Transportation segment, and $ 11 million and $ 17 million, respectively, related to Corporate.

Transaction and integration costs for the six months ended June 30, 2024 and 2023 include $ 1 million and $ 0 million , respectively, related to our North American LTL segment, $ 1 million and $ 1 million, respectively, related to our European Transportation segment, and $ 24 million and $ 38 million, respectively, related to Corporate.

(2) Restructuring costs for the three months ended June 30, 2024 and 2023 include $ 1 million and $ 4 million, respectively, related to our North American LTL segment, $ 3 million and $ 1 million, respectively, related to our European Transportation segment, and $ 1 million and $ 5 million, respectively, related to Corporate.

Restructuring costs for the six months ended June 30, 2024 and 2023 include $ 2 million and $ 10 million, respectively, related to our North American LTL segment, $ 11 million and $ 8 million, respectively, related to our European Transportation segment, and $ 1 million and $ 16 million, respectively, related to Corporate.

See Note 4— Restructuring Charges for further information on our restructuring actions.

2 unchanged sentences

Our revenue disaggregated by geographic area based on sales office location was as follows:

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

(In millions) North American LTL European Transportation Total

5 unchanged sentences

Total $ 1,272 $ 808 $ 2,079

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

(In millions) North American LTL European Transportation Total

5 unchanged sentences

Total $ 1,136 $ 781 $ 1,917

Six Months Ended June 30, 2024

(In millions) North American LTL European Transportation Total

United States $ 2,438 $ — $ 2,438

North America (excluding United States) 55 — 55

France — 664 664

United Kingdom — 497 497

Europe (excluding France and United Kingdom) — 443 443

Total $ 2,493 $ 1,605 $ 4,097

Six Months Ended June 30, 2023

(In millions) North American LTL European Transportation Total

United States $ 2,209 $ — $ 2,209

North America (excluding United States) 47 — 47

France — 671 671

United Kingdom — 450 450

Europe (excluding France and United Kingdom) — 447 447

Total $ 2,256 $ 1,568 $ 3,824

Restructuring Charges

2 unchanged sentences

Our restructuring-related activity was as follows:

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

(In millions) Reserve Balance

December 31, 2023 Charges Incurred Payments Reserve Balance

March 31, 2024

December 31, 2023 Charges Incurred Payments Foreign Exchange and Other Reserve Balance

June 30, 2024

North American LTL $ 2 $ — $ ( 2 ) $ 1 $ 2

2 unchanged sentences

Total $ 11 $ 11 $ ( 16 ) $ — $ 7

We expect that the majority of the cash outlays related to the severance charges incurred in the first three months of 2024 will be completed within 12 months.

In addition to the severance charges noted in the table above, we recorded non-cash charges in our North American LTL and European Transportation segments of $ 2 million and $ 1 million, respectively, during the first six months of 2024.

We expect that the majority of the cash outlays related to the severance charges incurred in the first six months of 2024 will be completed within 12 months.

Derivative Instruments

5 unchanged sentences

The fair value of our derivative instruments and the related notional amounts were as follows:

March 31, 2024

June 30, 2024

Derivative Assets Derivative Liabilities

16 unchanged sentences

The effect of derivative and nonderivative instruments designated as hedges on our Condensed Consolidated Statements of Income was as follows:

Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)

Three Months Ended March 31,

Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives Amount of Gain Reclassified from AOCI into Net Income Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)

Three Months Ended June 30,

(In millions) 2024 2023 2024 2023 2024 2023

4 unchanged sentences

Total $ 5 $ ( 2 ) $ — $ 1 $ 2 $ 2

Six Months Ended June 30,

(In millions) 2024 2023 2024 2023 2024 2023

Derivatives designated as cash flow hedges

Interest rate swaps $ 2 $ 2 $ 1 $ 1 $ — $ —

Derivatives designated as net investment hedges

Cross-currency swap agreements 18 ( 13 ) — — 5 4

Total $ 21 $ ( 11 ) $ 1 $ 1 $ 5 $ 4

Cross-Currency Swap Agreements

We enter into cross-currency swap agreements to manage the foreign currency exchange risk related to our international operations by effectively converting our fixed-rate USD-denominated debt, including the associated interest payments, to fixed-rate, euro (“EUR”)-denominated debt.

The risk management objective of these transactions is to manage foreign currency risk relating to net investments in subsidiaries denominated in foreign currencies and reduce the variability in the functional currency equivalent cash flows of this debt.

During the term of the swap contracts, we will receive interest on a quarterly basis from the counterparties based on USD fixed interest rates, and we will pay interest, also on a quarterly basis, to the counterparties based on EUR fixed interest rates.

fixed interest rates.

At maturity, we will repay the original principal amount in EUR and receive the principal amount in USD.

12 unchanged sentences

Cash flows related to the interest rate swaps are included in Cash flows from operating activities of continuing operations on our Condensed Consolidated Statements of Cash Flows.

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

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

14 unchanged sentences

(In millions) Fair Value Level 1 Level 2

March 31, 2024 $ 3,553 $ 2,226 $ 1,327

June 30, 2024 $ 3,546 $ 2,214 $ 1,333

December 31, 2023 3,583 2,235 1,348

1 unchanged sentence

We valued Level 2 debt using bid evaluation pricing models or quoted prices of securities with similar characteristics.

As of March 31, 2024, our borrowing base was $ 565 million and our availability under our Second Amended and Restated Revolving Credit Agreement, as amended (the “ABL Facility”) was $ 564 million after considering outstanding letters of credit of less than $ 1 million.

As of March 31, 2024, we were in compliance with the ABL Facility’s financial covenants.

As of June 30, 2024, our borrowing base was $ 587 million and our availability under our Second Amended and Restated Revolving Credit Agreement, as amended (the “ABL Facility”) was $ 586 million after considering outstanding letters of credit of less than $ 1 million.

As of June 30, 2024, we were in compliance with the ABL Facility’s financial covenants.

Letters of Credit Facility

As of March 31, 2024, we had issued $ 138 million in aggregate face amount of letters of credit under our $ 200 million uncommitted secured evergreen letter of credit facility.

As of June 30, 2024, we had issued $ 137 million in aggregate face amount of letters of credit under our $ 200 million uncommitted secured evergreen letter of credit facility.

Term Loan Facility

The applicable interest rate for the two tranches of the term loan facility approximated 7.32 % as of March 31, 2024.

In 2015, we entered into a Term Loan Credit Agreement that provided for a single borrowing of $ 1.6 billion, which was subsequently amended to increase the principal balance to $ 2.0 billion and to extend the maturity date to February 2025 (the “Existing Term Loan Facility”).

In the second quarter of 2023, we amended the Term Loan Credit Agreement to obtain $ 700 million of new term loans (the “New Term Loan Facility”) having substantially similar terms as the Existing Term Loan Facility, except with respect to maturity date, issue price, interest rate, prepayment premiums in connection with certain voluntary prepayments and certain other provisions.

The New Term Loan Facility was issued at 99.5 % of the face amount and will mature in May 2028.

In the same period, we used net proceeds from the New Term Loan Facility, the Senior Secured Notes due 2028 (as defined below) and the Senior Notes due 2031 (as defined below), together with cash on hand, to repay $ 2.0 billion of outstanding principal under the Existing Term Loan Facility and to pay related fees, expenses and accrued interest.

We recorded a debt extinguishment loss of $ 23 million in the second quarter 2023 due to this repayment.

In the fourth quarter of 2023, we entered into an incremental amendment to the Term Loan Credit Agreement to obtain $ 400 million of incremental term loans (the “Incremental Term Loans”).

The Incremental Term Loans are a new tranche of loans under the Term Loan Credit Agreement and will mature in February 2031.

The applicable interest rate for the two tranches of the term loan facility approximated 7.34 % as of June 30, 2024.

Senior Notes Due 2028 and 2031

In the second quarter of 2023, we completed private placements of $ 830 million aggregate principal amount of senior secured notes due 2028 (the “Senior Secured Notes due 2028”) and $ 450 million aggregate principal amount of senior notes due 2031 (the “Senior Notes due 2031”).

The Senior Secured Notes due 2028 mature in June 2028 and bear interest at a rate of 6.25 % per annum.

The Senior Notes due 2031 mature in June 2031 and bear interest at a rate of 7.125 % per annum.

Interest is payable semi-annually in cash in arrears and commenced December 1, 2023.

These notes were issued at par and were used to repay our Existing Term Loan Facility as described above.

During the second quarter of 2024, the Company executed a legal entity reorganization in our European Transportation business that resulted in a one-time tax benefit of $ 41 million in the second quarter of 2024.

Earnings (Loss) per Share

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

Three Months Ended March 31,

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

(In millions, except per share data) 2024 2023 2024 2023

Net income from continuing operations $ 150 $ 31 $ 217 $ 48

Net loss from discontinued operations — ( 3 )

Net income (loss) from discontinued operations — 2 — ( 1 )

Net income $ 150 $ 33 $ 217 $ 47

12 unchanged sentences

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.

We review and adjust accruals for loss contingencies quarterly and as additional information becomes available.

We review and adjust, as appropriate, accruals for loss contingencies at least quarterly and as additional information becomes available.

If a loss is not both probable and reasonably estimable, or if an exposure to loss exists in excess of the amount accrued, we assess whether there is at least a reasonable possibility that a loss, or additional loss, may have been incurred.

34 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements