What changed in this filing

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Item 1. Financial Statements

2025-04-30 compared with 2024-10-30 · 140 added, 187 removed, 329 unchanged (50% of the section changed)

1 unchanged sentence

Condensed Consolidated Balance Sheets

September 30, December 31,

March 31, December 31,

(In millions, except per share data) 2025 2024

30 unchanged sentences

300 shares authorized;

116 shares issued and outstanding as of

September 30, 2024 and December 31, 2023, respectively

118 and 117 shares issued and outstanding

as of March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 1,227 1,274

6 unchanged sentences

Condensed Consolidated Statements of Income

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

Three Months Ended March 31,

(In millions, except per share data) 2025 2024

5 unchanged sentences

Insurance and claims 35 38

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

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

Depreciation and amortization expense 123 117

Legal matter ( 11 ) —

Transaction and integration costs 3 14

4 unchanged sentences

Interest expense 56 58

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

Income before income tax provision 91 90

Income tax provision 22 23

Income from continuing operations 95 86 312 134

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

Net income $ 69 $ 67

Net income (loss)

Continuing operations $ 95 $ 86 $ 312 $ 134

Discontinued operations — ( 2 ) — ( 3 )

Net income $ 95 $ 84 $ 312 $ 131

Earnings (loss) per share data

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

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

Earnings per share data

Basic earnings per share $ 0.59 $ 0.58

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

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

Diluted earnings per share $ 0.58 $ 0.56

5 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

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

Three Months Ended March 31,

(In millions) 2025 2024

1 unchanged sentence

Other comprehensive income (loss), net of tax

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

$ 30 $ ( 21 ) $ 20 $ 6

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

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

Foreign currency translation gain (loss), net of tax effect of $ 6 and $( 3 )

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

net of tax effect of $ — and $ —

Other comprehensive income (loss) 17 ( 5 )

3 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

(In millions) 2025 2024

Cash flows from operating activities of continuing operations

Cash flows from operating activities

Net income $ 69 $ 67

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

Income from continuing operations 312 134

Adjustments to reconcile income from continuing operations to net cash from operating

Adjustments to reconcile net income to net cash from operating activities

Depreciation and amortization 123 117

8 unchanged sentences

Accrued expenses and other liabilities 35 21

Net cash provided by operating activities from continuing operations 619 443

Cash flows from investing activities of continuing operations

Net cash provided by operating activities 142 145

Cash flows from investing activities

Payment for purchases of property and equipment ( 199 ) ( 306 )

Proceeds from sale of property and equipment 7 7

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 )

Cash flows from financing activities of continuing operations

Proceeds from issuance of debt — 1,977

Repurchase of debt — ( 2,003 )

Net cash used in investing activities ( 191 ) ( 299 )

Cash flows from financing activities

Repayment of debt and finance leases ( 18 ) ( 21 )

2 unchanged sentences

Payment for tax withholdings for restricted shares ( 47 ) ( 15 )

Other ( 1 ) 1

Net cash used in financing activities from continuing operations ( 59 ) ( 72 )

Cash flows from discontinued operations

Operating activities of discontinued operations — ( 11 )

Investing activities of discontinued operations — 2

Net cash used in discontinued operations — ( 9 )

Net cash used in financing activities ( 30 ) ( 29 )

Effect of exchange rates on cash, cash equivalents and restricted cash 1 —

6 unchanged sentences

Cash paid for interest 42 25

Cash paid for income taxes 71 36

Cash paid (received) for income taxes, net of refunds ( 2 ) 3

Amounts may not add due to rounding.

3 unchanged sentences

Comprehensive Loss Total Equity

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

Net income — — — 95 — 95

Other comprehensive income — — — — 29 29

Exercise and vesting of stock compensation awards

Tax withholdings related to vesting of stock compensation awards

— — ( 4 ) — — ( 4 )

Stock compensation expense

— — 22 — — 22

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 December 31, 2024 117,174 $ — $ 1,274 $ 572 $ ( 246 ) $ 1,601

7 unchanged sentences

— — 15 — — 15

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

Balance as of March 31, 2025 117,788 $ — $ 1,227 $ 641 $ ( 228 ) $ 1,640

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

Comprehensive Loss Total Equity

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

Net income — — — 84 — 84

Other comprehensive loss — — — — ( 22 ) ( 22 )

Exercise and vesting of stock compensation awards

Tax withholdings related to vesting of stock compensation awards

— — ( 2 ) — — ( 2 )

Stock compensation expense

— — 17 — — 17

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

Comprehensive Loss Total Equity

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

Net income — — — 67 — 67

Other comprehensive income — — — — 8 8

Other comprehensive loss — — — — ( 5 ) ( 5 )

Exercise and vesting of stock compensation awards

4 unchanged sentences

— — 19 — — 19

Other — — 2 — — 2

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

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

Amounts may not add due to rounding.

6 unchanged sentences

Strategic Developments

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

previously operated by Yellow Corporation.

In connection with this transaction, we purchased 26 of the service centers and assumed existing leases for the other two locations.

This strategic acquisition of assets aligns with our commitment to invest in expanding our LTL network capacity.

Our Board of Directors has previously authorized the divestiture of our European business.

In December 2023, we completed the acquisition of 28 service centers previously operated by Yellow Corporation, purchasing 26 less-than-truckload (“LTL”) service centers and assuming existing leases for two additional locations.

This targeted expansion of our network aligns with our commitment to invest in growth capacity in key markets and operate the network more efficiently.

The previously announced authorization by our Board of Directors to divest our European business remains in effect.

There can be no assurance that the divestiture will occur, or of the terms or timing of a transaction.

5 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 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.

and our intermodal operation are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented.

Within the Condensed Consolidated Financial Statements and associated notes, certain amounts may not add due to the use of rounded numbers.

Percentages presented are calculated from the underlying numbers in millions.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

Within our Condensed Consolidated Financial Statements and the accompanying notes, certain amounts may not add due to the use of rounded numbers.

Unless otherwise indicated, percentages presented are calculated from the underlying numbers in millions.

Restricted Cash

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.

As of March 31, 2025 and December 31, 2024, our restricted cash included in Other long-term assets on our Condensed Consolidated Balance Sheets was $ 9 million and $ 53 million, respectively.

Our restricted cash balance as of December 31, 2024 included approximately $ 47 million of proceeds received from the sale of a service center in our North American LTL segment in December 2024.

In January 2025, the proceeds from this sale were used to purchase four new service centers that were previously leased.

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 $ 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 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, 2025).

As of March 31, 2025, € 1 million (approximately $ 1 million) was available under the program.

The weighted average interest rate was 4.77 % as of March 31, 2025.

The program expires in July 2026.

Information related to the trade receivables sold was as follows:

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

Three Months Ended March 31,

(In millions) 2025 2024

1 unchanged sentence

Receivables sold in period

$ 440 $ 452 $ 1,339 $ 1,362

Cash consideration

440 452 1,339 1,362

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 September 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 March 31, 2025 and December 31, 2024 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.

1 unchanged sentence

(In millions) Carrying Value Fair Value Level 1

September 30, 2024 $ 336 $ 336 $ 336

March 31, 2025 $ 172 $ 172 $ 172

December 31, 2024 205 205 205

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.

We have no equity investments as of March 31, 2025 and, as of December 31, 2024, the value of our equity investment, reflected within Other current assets on our Condensed Consolidated Balance Sheets, was not material.

During the three months ended March 31, 2025 and March 31, 2024, we recognized a gain on equity investments of $ 0 million and $ 3 million, respectively, in Other income on our Condensed Consolidated Statements of Income.

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

Accounting Pronouncements Issued but Not Yet Effective

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” The ASU modifies income tax disclosures by requiring (i) consistent categories and greater disaggregation of information in the rate reconciliations and (ii) the disclosure of income taxes paid disaggregated by jurisdiction, among other requirements.

This ASU is effective for annual periods beginning in 2025, and should be applied on a prospective basis, with the option to apply retrospectively.

In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40).” The ASU requires new tabular disclosures disaggregating prescribed expense categories within relevant income statement captions.

In addition, the ASU requires disclosure of the total amount of selling expenses and, in annual periods, an entity’s definition of selling expenses, among other disclosure requirements.

This ASU is effective for annual periods beginning in 2027, and for interim periods beginning January 1, 2028.

Early adoption is permitted.

We are currently evaluating the impact of the new standard, which is limited to financial statement disclosures.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” The amendments in the ASU increase reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit and loss, and provide new segment disclosure requirements for entities with a single reportable segment, among other disclosure requirements.

This ASU is effective on a retrospective basis for annual periods beginning in 2024, and for interim periods beginning January 1, 2025.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

This ASU is effective for annual periods beginning in 2025, and should be applied on a prospective basis, with the option to apply retrospectively.

Early adoption is permitted.

We are currently evaluating the impact of the new standard, which is limited to financial statement disclosures.

The company expects to adopt the guidance as of the effective date.

Segment Reporting

2 unchanged sentences

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.

Our North American LTL segment also includes the results of our trailer manufacturing operations.

Our North American LTL segment also includes the results of our trailer manufacturing operation.

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

1 unchanged sentence

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.

Our chief operating decision maker (“CODM”) regularly reviews financial information at the operating segment level to allocate resources to the segments and to assess their performance.

We include items directly attributable to a segment, and those that can be allocated on a reasonable basis, in segment results reported to the CODM.

Our chief operating decision maker (“CODM”) is our chief executive officer.

Our CODM regularly reviews financial information at the operating segment level to allocate resources to the segments and to assess their performance.

We include items directly attributable to a segment, and those that can be allocated on a reasonable basis, including corporate costs, in segment results reported to the CODM.

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, 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 September 30, Nine Months Ended September 30,

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

Our CODM uses adjusted EBITDA to allocate resources, including property and equipment and financial or capital resources, to the segments and to assess their performance by monitoring budget-to-actual and year-over-year variances.

The following tables present revenue and significant segment expenses that are included within adjusted EBITDA:

Three Months Ended March 31, 2025

(in millions) North American LTL European Transportation Corporate (1)

Revenue $ 1,172 $ 782 $ — $ 1,954

Salaries, wages and employee benefits 615 212 4 832

Purchased transportation 37 363 — 399

Fuel, operating expenses and supplies 232 162 — 393

Operating taxes and licenses 16 3 — 19

Insurance and claims 24 10 — 35

Gains on sales of property and equipment — ( 1 ) — ( 2 )

Pension (income) expense ( 2 ) — — ( 1 )

Adjusted EBITDA $ 250 $ 32 $ ( 4 ) $ 278

Three Months Ended March 31, 2024

(in millions) North American LTL European Transportation Corporate (1)

Revenue $ 1,221 $ 797 $ — $ 2,018

Salaries, wages and employee benefits 613 215 5 834

Purchased transportation 78 360 — 438

Fuel, operating expenses and supplies 243 170 — 413

Operating taxes and licenses 16 3 — 19

Insurance and claims 21 14 3 38

(Gains) losses on sales of property and equipment 2 ( 4 ) — ( 2 )

Pension income ( 6 ) — — ( 6 )

Other (income) expense — — ( 3 ) ( 3 )

Adjusted EBITDA $ 255 $ 38 $ ( 5 ) $ 288

(1) Primarily represents unallocated corporate costs, as well as investment income of approximately $ 3 million within Other (income) expense in the first quarter of 2024.

The following table presents adjusted EBITDA by segment and provides a reconciliation to consolidated net income:

Three Months Ended March 31,

(in millions) 2025 2024

North American LTL $ 1,251 $ 1,228 $ 3,743 $ 3,484

European Transportation 803 752 2,407 2,320

Total $ 2,053 $ 1,980 $ 6,150 $ 5,804

Adjusted EBITDA

7 unchanged sentences

Depreciation and amortization expense 123 117

Legal matter (1)

Transaction and integration costs 3 14

Restructuring costs 12 8

Other — 1 — 1

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

Net Income $ 69 $ 67

(1) Reflects the settlement of claims against certain truck manufacturers related to purchases by our European Transportation segment covering periods prior to our acquisition of Norbert Dentressangle SA in 2015.

The following table presents depreciation and amortization expense by segment:

Three Months Ended March 31,

(in millions) 2025 2024

Depreciation and amortization expense

3 unchanged sentences

Total $ 123 $ 117

(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.

As of March 31, 2025 and December 31, 2024, we held long-lived tangible assets outside of the U.S., including right of use assets, of $ 742 million and $ 715 million, respectively.

Revenue Recognition

1 unchanged sentence

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

Three Months Ended September 30, 2024

(In millions) North American LTL European Transportation Total

United States $ 1,224 $ — $ 1,224

North America (excluding United States) 27 — 27

France — 320 320

United Kingdom — 269 269

Europe (excluding France and United Kingdom) — 214 214

Total $ 1,251 $ 803 $ 2,053

Three Months Ended September 30, 2023

(In millions) North American LTL European Transportation Total

United States $ 1,202 $ — $ 1,202

North America (excluding United States) 26 — 26

France — 309 309

United Kingdom — 232 232

Europe (excluding France and United Kingdom) — 211 211

Total $ 1,228 $ 752 $ 1,980

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

(In millions) North American LTL European Transportation Total

5 unchanged sentences

Total $ 1,172 $ 782 $ 1,954

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

(In millions) North American LTL European Transportation Total

9 unchanged sentences

Our restructuring-related activity was as follows:

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

(In millions) Reserve Balance

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

September 30, 2024

December 31, 2024 Charges Incurred Payments Reserve Balance

March 31, 2025

North American LTL $ 3 $ — $ ( 1 ) $ 1

2 unchanged sentences

Total $ 5 $ 10 $ ( 6 ) $ 9

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 nine months of 2024.

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.

In addition to the severance charges noted in the table above, we recorded non-cash charges in our European Transportation segment of $ 2 million during the first three months of 2025.

We expect that the majority of the cash outlays related to the severance charges incurred in the first three months of 2025 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:

September 30, 2024

March 31, 2025

Derivative Assets Derivative Liabilities

9 unchanged sentences

Derivatives designated as hedges

Cross-currency swap agreements $ 652 Other current assets $ — Other current liabilities $ ( 34 )

Cross-currency swap agreements 652 Other long-term assets 7 Other long-term liabilities ( 5 )

Interest rate swaps 200 Other current assets — Other current liabilities —

Interest rate swaps 200 Other long-term assets — Other long-term liabilities —

Total $ 7 $ ( 5 )

2 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 Reclassified from AOCI into Net Income Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)

Three Months Ended September 30,

(In millions) 2024 2023 2024 2023 2024 2023

Derivatives designated as cash flow hedges

Interest rate swaps $ ( 1 ) $ ( 1 ) $ — $ 1 $ — $ —

Derivatives designated as net investment hedges

Cross-currency swap agreements ( 23 ) 20 — — 2 2

Total $ ( 24 ) $ 19 $ — $ 1 $ 2 $ 2

Nine Months Ended September 30,

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,

(In millions) 2025 2024 2025 2024

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 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.

4 unchanged sentences

The change in the fair value due to foreign exchange remains in AOCI and the initial component excluded from effectiveness testing will initially remain in AOCI and then will be reclassified from AOCI to Interest expense each period in a systematic manner.

Cash flows related to the periodic exchange of interest payments for these net investment hedges are included in Cash flows from operating activities of continuing operations on our Condensed Consolidated Statements of Cash Flows.

Cash flows related to the periodic exchange of interest payments for these net investment hedges are included in Cash flows from operating activities on our Condensed Consolidated Statements of Cash Flows.

Interest Rate Hedging

2 unchanged sentences

We designated the interest rate swaps as qualifying hedging instruments and account for these derivatives as cash flow hedges.

The outstanding interest rate swaps mature on various dates in 2024 and 2025.

The outstanding interest rate swaps mature in the first quarter of 2026.

We record gains and losses resulting from fair value adjustments to the designated portion of interest rate swaps in AOCI and reclassify them to Interest expense on the dates that interest payments accrue.

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.

September 30, 2024 December 31, 2023

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

March 31, 2025 December 31, 2024

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

14 unchanged sentences

(In millions) Fair Value Level 1 Level 2

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

March 31, 2025 $ 3,539 $ 2,209 $ 1,330

December 31, 2024 3,541 2,223 1,318

1 unchanged sentence

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

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.

Revolving Credit Facility

In February 2025, we terminated our Second Amended and Restated Revolving Credit Agreement, as amended (the “ABL Facility”), and entered into a Revolving Credit Agreement (the “Revolving Credit Agreement”).

The Revolving Credit Agreement provides for revolving credit commitments in an aggregate amount of $ 600 million (the “Revolving Credit Facility”), of which $ 200 million is available for issuances of letters of credit.

The maturity date of the Revolving Credit Facility is April 30, 2030.

As of March 31, 2025, we have $ 599 million available to draw under our Revolving Credit Facility, after considering outstanding letters of credit of less than $ 1 million.

Our borrowings under the Revolving Credit Facility bear interest at a rate equal to:

(a) for loans denominated in U.S.

Dollars, Term Secured Overnight Financing Rate (“SOFR”) or the Base Rate and (b) for loans denominated in Canadian Dollars, Term Canadian Overnight Repo Rate (“CORRA”) or the Canadian base rate plus (i) in the case of base rate loans, an applicable rate ranging from 0.25 % to 1.00 % or, (ii) in the case of Term SOFR or Term CORRA loans, an applicable rate ranging from 1.25 % to 2.00 %, which is determined based on our Consolidated Total Net Leverage Ratio (as defined in the Revolving Credit Agreement).

In addition, we are required to pay an unused commitment fee of between 0.20 % and 0.30 % on the undrawn commitments under the Revolving Credit Facility, determined based on our Consolidated Total Net Leverage Ratio.

The Revolving Credit Facility is secured by a lien on substantially all of our assets and the assets of our guarantors, with certain exceptions, and contains representations and warranties, affirmative and negative covenants, and events of default customary for agreements of this nature.

Security interests and certain covenants under the Revolving Credit Agreement will release, terminate or be amended upon, among other things, the Company’s achievement of investment grade ratings from at least two rating agencies.

As of March 31, 2025, we were in compliance with the Revolving Credit Facility’s financial covenants.

Letters 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.

As of March 31, 2025, we had issued $ 133 million in aggregate face amount of letters of credit under our $ 200 million uncommitted secured evergreen letter of credit facility.

Term Loan Facility

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 weighted average interest rate of our term loans was approximately 7.20 % as of September 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 for the second quarter of 2024 ($ 40 million for the nine months ended September 30, 2024).

Earnings (Loss) per Share

In February 2025, we amended our Senior Secured Term Loan Credit Agreement.

Pursuant to the amendment, the lenders provided the company (a) a term loan B facility in an aggregate principal amount of $ 700 million, maturing on May 24, 2028 (the “Refinancing Term Loan B-2 Facility”), and (b) a term loan B facility in an aggregate principal amount of $ 400 million, maturing on February 1, 2031 (the “Refinancing Term Loan B-3 Facility” and together with the Refinancing Term Loan B-2 Facility, the “Refinancing Term Loan Facilities”).

The proceeds of the Refinancing Term Loan Facilities were used to refinance our existing term loans.

We recorded a debt extinguishment loss of $ 5 million due to this refinancing.

The Refinancing Term Loan Facilities bear interest at a rate per annum equal to, at the Company’s option, either alternate base rate (“ABR”) or Term SOFR plus (i) in the case of ABR Loans, 0.75 % or, (ii) in the case of Term SOFR Loans, 1.75 %, which, in each case after September 30, 2025, shall be reduced by 0.25 % upon the achievement of a Consolidated First Lien Net Leverage Ratio (as defined in the Amended Term Loan Credit Agreement) of less than or equal to 1.21 to 1.00.

The Refinancing Term Loan Facilities are secured by a lien on substantially all of our assets and the assets of our guarantors, with certain exceptions.

The amended Term Loan Credit Agreement contains customary mandatory prepayment requirements, representations and warranties, events of default, reporting and other affirmative covenants and negative covenants, including limitations on indebtedness, liens, investments, dividends, repayments of junior financings and asset sales, in each case subject to a number of important exceptions and qualifications.

The weighted average interest rate of our term loans was approximately 6.07 % as of March 31, 2025.

Stockholders’ Equity

Share Repurchases

In March 2025, our Board of Directors authorized repurchases of up to $ 750 million of our common stock.

Our share repurchase authorization permits us to purchase shares in both the open market and in private transactions, with the timing and number of shares dependent on a variety of factors, including price, general business and market conditions, alternative investment opportunities and funding considerations.

The new share repurchase program has no expiration date and may be utilized over time, with no obligation to repurchase any specific number of shares.

We may suspend or discontinue the program at any time.

This plan replaces our previous share repurchase plan, authorized in February 2019, which had $ 503 million remaining.

There were no share repurchases during the first quarter of 2025 and our remaining share repurchase authorization as of March 31, 2025 is $ 750 million.

Earnings per Share

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

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

Three Months Ended March 31,

(In millions, except per share data) 2025 2024

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

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

Net income $ 69 $ 67

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Diluted weighted-average common shares 120 120

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

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

Basic earnings per share $ 0.59 $ 0.58

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

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

Diluted earnings per share $ 0.58 $ 0.56

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We are involved, and expect to continue to be involved, in numerous proceedings arising out of the conduct of our business.

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

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

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

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If there is a reasonable possibility that a loss, or additional loss, may have been incurred, we disclose the estimate of the possible loss or range of loss if it is material and an estimate can be made, or disclose that such an estimate cannot be made.

The determination as to whether a loss can reasonably be considered to be possible or probable is based on our assessment, together with legal counsel, regarding the ultimate outcome of the matter.

The determination as to whether a loss can be considered reasonably possible or probable is based on our assessment, together with legal counsel, regarding the ultimate outcome of the matter.

We believe that we have adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable.

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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.

The trial on allocation of defense and indemnity costs among the applicable insurance policies is taking place over multiple dates from March to June 2025.

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

1 unchanged sentence

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