What changed in this filing

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Item 1. Financial Statements

2024-10-30 compared with 2024-08-01 · 69 added, 68 removed, 447 unchanged (23% of the section changed)

1 unchanged sentence

Condensed Consolidated Balance Sheets

June 30, December 31,

September 30, December 31,

(In millions, except per share data) 2024 2023

31 unchanged sentences

116 shares issued and outstanding as of

June 30, 2024 and December 31, 2023, respectively

September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 1,340 1,298

6 unchanged sentences

Condensed Consolidated Statements of Income

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

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

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

5 unchanged sentences

Insurance and claims 33 39 105 129

Gains on sales of property and equipment ( 4 ) ( 2 ) ( 5 ) ( 5 )

(Gains) losses on sales of property and equipment — 1 ( 5 ) ( 4 )

Depreciation and amortization expense 126 110 365 318

6 unchanged sentences

Income from continuing operations before income tax provision 135 117 372 182

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

Income tax provision 40 31 60 48

Income from continuing operations 95 86 312 134

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

Loss from discontinued operations, net of taxes — ( 2 ) — ( 3 )

Net income $ 95 $ 84 $ 312 $ 131

5 unchanged sentences

Basic earnings per share from continuing operations $ 0.81 $ 0.74 $ 2.68 $ 1.16

Basic earnings (loss) per share from discontinued operations — 0.01 — ( 0.01 )

Basic loss per share from discontinued operations — ( 0.01 ) — ( 0.02 )

Basic earnings per share $ 0.81 $ 0.73 $ 2.68 $ 1.14

Diluted earnings per share from continuing operations $ 0.79 $ 0.72 $ 2.60 $ 1.14

Diluted earnings (loss) per share from discontinued operations — 0.01 — ( 0.01 )

Diluted loss per share from discontinued operations — ( 0.01 ) — ( 0.02 )

Diluted earnings per share $ 0.79 $ 0.71 $ 2.60 $ 1.12

5 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

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

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

(In millions) 2024 2023 2024 2023

2 unchanged sentences

Foreign currency translation gain (loss), net of tax effect of $ 8 , $( 5 ),

$( 7 ) and $ 10

$ 30 $ ( 21 ) $ 20 $ 6

Unrealized gain on financial assets/liabilities designated as hedging

Unrealized gain (loss) on financial assets/liabilities designated as hedging

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

4 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

(In millions) 2024 2023

7 unchanged sentences

Accretion of debt 8 8

Deferred tax expense (benefit) 25 ( 6 )

Deferred tax expense 39 16

Gains on sales of property and equipment ( 5 ) ( 4 )

8 unchanged sentences

Proceeds from sale of property and equipment 17 19

Proceeds from settlement of cross-currency swaps — 2

Proceeds from sale of investment 8 —

Net cash used in investing activities from continuing operations ( 598 ) ( 473 )

26 unchanged sentences

Comprehensive Loss Total Equity

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

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

Net income — — — 95 — 95

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

Other comprehensive income — — — — 29 29

Exercise and vesting of stock compensation awards

3 unchanged sentences

— — 22 — — 22

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

Balance as of September 30, 2024 116,401 $ — $ 1,340 $ 496 $ ( 195 ) $ 1,641

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

2 unchanged sentences

Net income — — — 312 — 312

Other comprehensive loss — — — — ( 8 ) ( 8 )

Other comprehensive income — — — — 21 21

Exercise and vesting of stock compensation awards

4 unchanged sentences

— — 64 — — 64

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

Balance as of September 30, 2024 116,401 $ — $ 1,340 $ 496 $ ( 195 ) $ 1,641

(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

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

Net income — — — 84 — 84

1 unchanged sentence

Exercise and vesting of stock compensation awards

189 — — — — —

Tax withholdings related to vesting of stock compensation awards

2 unchanged sentences

— — 17 — — 17

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

Balance as of September 30, 2023 115,972 $ — $ 1,284 $ 127 $ ( 214 ) $ 1,197

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

10 unchanged sentences

Other — — 2 — — 2

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

Balance as of September 30, 2023 115,972 $ — $ 1,284 $ 127 $ ( 214 ) $ 1,197

Amounts may not add due to rounding.

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

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

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

3 unchanged sentences

Restricted Cash

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.

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

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 $ 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 maximum amount of net cash proceeds available at any one time under our securitization program, inclusive of any unsecured borrowings, is € 200 million (approximately $ 223 million as of September 30, 2024).

As of September 30, 2024, the maximum amount available under the program was utilized.

The weighted average interest rate was 5.37 % as of September 30, 2024.

The program expires in July 2026.

Information related to the trade receivables sold was as follows:

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

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

(In millions) 2024 2023 2024 2023

16 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 June 30, 2024 and December 31, 2023 due to their short-term nature and/or being receivable or payable on demand.

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

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

For information on the fair value hierarchy of our derivative instruments, see Note 5—Derivative Instruments and for information on financial liabilities, see Note 6—Debt.

The fair value hierarchy of cash equivalents was as follows:

(In millions) Carrying Value Fair Value Level 1

June 30, 2024 $ 208 $ 208 $ 208

September 30, 2024 $ 336 $ 336 $ 336

December 31, 2023 369 369 369

We measure Level 1 equity investments at fair value on a recurring basis using quoted prices in active markets.

As of September 30, 2024, the value of our equity investment was $ 3 million and is reflected within Other current assets on our Condensed Consolidated Balance Sheets.

During the three and nine months ended September 30, 2024, we recognized a gain on equity investments of $ 9 million and $ 13 million, respectively, in Corporate.

These amounts are included in Other income on our Condensed Consolidated Statements of Income.

For information on the fair value hierarchy of our derivative instruments, see Note 5—Derivative Instruments and for information on financial liabilities, see Note 6—Debt.

Accounting Pronouncements Issued but Not Yet Effective

21 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 debt extinguishment loss, interest expense, income tax provision (benefit), 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, 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 June 30, Six Months Ended June 30,

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

(in millions) 2024 2023 2024 2023

9 unchanged sentences

Interest expense 56 41 170 126

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

Income tax provision 40 31 60 48

Depreciation and amortization expense 126 110 365 318

1 unchanged sentence

Restructuring costs (2)

Other — 1 — 1

Income from continuing operations $ 95 $ 86 $ 312 $ 134

4 unchanged sentences

Total $ 126 $ 110 $ 365 $ 318

(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.

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

Transaction and integration costs for the three months ended September 30, 2024 and 2023 include $ 1 million and $ 1 million, respectively, related to our European Transportation segment, and $ 12 million and $ 7 million, respectively, related to Corporate.

Transaction and integration costs for the nine months ended September 30, 2024 and 2023 include $ 1 million and $ 0 million , respectively, related to our North American LTL segment, $ 2 million and $ 2 million, respectively, related to our European Transportation segment, and $ 36 million and $ 45 million, respectively, related to Corporate.

(2) Restructuring costs for the three months ended September 30, 2024 and 2023 include $ 2 million and $ 1 million, respectively, related to our European Transportation segment, and $ 1 million and $ 0 million , respectively, related to Corporate.

Restructuring costs for the nine months ended September 30, 2024 and 2023 include $ 2 million and $ 10 million, respectively, related to our North American LTL segment, $ 13 million and $ 9 million, respectively, related to our European Transportation segment, and $ 2 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 June 30, 2024

Three Months Ended September 30, 2024

(In millions) North American LTL European Transportation Total

5 unchanged sentences

Total $ 1,251 $ 803 $ 2,053

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

(In millions) North American LTL European Transportation Total

5 unchanged sentences

Total $ 1,228 $ 752 $ 1,980

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

(In millions) North American LTL European Transportation Total

5 unchanged sentences

Total $ 3,743 $ 2,407 $ 6,150

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

(In millions) North American LTL European Transportation Total

9 unchanged sentences

Our restructuring-related activity was as follows:

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

(In millions) Reserve Balance

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

June 30, 2024

September 30, 2024

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

2 unchanged sentences

Total $ 11 $ 14 $ ( 20 ) $ — $ 6

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.

We expect that the majority of the cash outlays related to the severance charges incurred in the first nine 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:

June 30, 2024

September 30, 2024

Derivative Assets Derivative Liabilities

17 unchanged sentences

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,

Three Months Ended September 30,

(In millions) 2024 2023 2024 2023 2024 2023

5 unchanged sentences

Six Months Ended June 30,

Nine Months Ended September 30,

(In millions) 2024 2023 2024 2023 2024 2023

7 unchanged sentences

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.

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

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.

June 30, 2024 December 31, 2023

September 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

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

September 30, 2024 $ 3,616 $ 2,276 $ 1,340

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 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.

As of September 30, 2024, our borrowing base was $ 557 million and our availability under our Second Amended and Restated Revolving Credit Agreement, as amended (the “ABL Facility”), was $ 556 million after considering outstanding letters of credit of less than $ 1 million.

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

Letters 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.

As of September 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

6 unchanged sentences

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.

The weighted average interest rate of our term loans was approximately 7.20 % as of September 30, 2024.

Senior Notes Due 2028 and 2031

4 unchanged sentences

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 June 30, Six Months Ended June 30,

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

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

Net income from continuing operations $ 95 $ 86 $ 312 $ 134

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

Net loss from discontinued operations — ( 2 ) — ( 3 )

Net income $ 95 $ 84 $ 312 $ 131

3 unchanged sentences

Basic earnings from continuing operations per share $ 0.81 $ 0.74 $ 2.68 $ 1.16

Basic earnings (loss) from discontinued operations per share — 0.01 — ( 0.01 )

Basic loss from discontinued operations per share — ( 0.01 ) — ( 0.02 )

Basic earnings per share $ 0.81 $ 0.73 $ 2.68 $ 1.14

Diluted earnings from continuing operations per share $ 0.79 $ 0.72 $ 2.60 $ 1.14

Diluted earnings (loss) from discontinued operations per share — 0.01 — ( 0.01 )

Diluted loss from discontinued operations per share — ( 0.01 ) — ( 0.02 )

Diluted earnings per share $ 0.79 $ 0.71 $ 2.60 $ 1.12

32 unchanged sentences

In June 2023, the trial court decided the parties’ cross-motions for summary judgment, leaving open the pollution exclusion and allocation issues.

The trial on the pollution exclusion issue is scheduled to take place in the fall of 2024, and the trial on allocation of defense costs among the applicable insurance policies is to take place in early 2025.

The trial on the pollution exclusion issue took place in October 2024 where the jury issued a favorable verdict for the Company, finding that the pollution exclusion applied to the General policy over several years for which Allianz seeks contribution.

The trial on allocation of defense and indemnity costs among the applicable insurance policies is to take place in early 2025.

We have accrued an immaterial amount for the potential exposure associated with ultimate allocation to the relevant policies;

however, any losses that may arise in connection with the fronting policies issued by defendant insurers ACE, Westport, and General are not reasonably estimable at this time.

California Environmental Matters

In August 2022, the Company received a letter from the San Bernardino County District Attorney’s Office (the “County”), written in cooperation with certain other California District Attorneys and the Los Angeles City Attorney, notifying the Company of an investigation into alleged violations with respect to underground storage tanks, hazardous materials, and hazardous waste in California, and offering a meeting.

Following meetings between the Company and County attorneys and the Los Angeles City Attorney and an assessment of the allegations and the underlying facts, the Company engaged in negotiations with the County and Los Angeles City Attorneys to address settlement of the alleged violations.

The Company previously accrued for this matter, and it was resolved for $ 7.9 million in April 2024.

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