XPO, Inc. 10-Q

Item 1. Financial Statements. XPO, Inc. Condensed Consolidated Balance Sheets (Unaudited) June 30, December 31, (In millions, except per share data) 2026 2025 ASSETS Current assets Cash and cash equivalents $ 298 $ 310 Accounts receivable, net of allowances of $ 40 and $ 40 , respectively 1,267 1,035 Other current assets 249 285 Total current assets 1,814 1,630 Long-term assets Property and equipment, net of $ 2,427 and $ 2,360 in accumulated depreciation, respectively 3,658 3,664 Operating lease assets 782 777 Goodwill 1,528 1,547 Identifiable intangible assets, net of $ 604 and $ 580 in accumulated amortization, respectively 280 311 Other long-term assets 270 265 Total long-term assets 6,518 6,564 Total assets $ 8,333 $ 8,194 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $ 486 $ 455 Accrued expenses 823 760 Short-term borrowings and current maturities of long-term debt 159 60 Short-term operating lease liabilities 170 166 Other current liabilities 155 113 Total current liabilities 1,794 1,555 Long-term liabilities Long-term debt 3,047 3,253 Deferred tax liability 508 482 Employee benefit obligations 83 86 Long-term operating lease liabilities 612 611 Other long-term liabilities 328 345 Total long-term liabilities 4,577 4,778 Stockholders’ equity Common stock, $ 0.001 par value; 300 shares authorized; 117 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively — — Additional paid-in capital 1,005 1,160 Retained earnings 1,151 888 Accumulated other comprehensive loss ( 194 ) ( 187 ) Total equity 1,962 1,861 Total liabilities and equity $ 8,333 $ 8,194 Amounts may not add due to rounding. See accompanying notes to condensed consolidated financial statements. 1 Table of Contents XPO, Inc. Condensed Consolidated Statements of Income (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (In millions, except per share data) 2026 2025 2026 2025 Revenue $ 2,355 $ 2,080 $ 4,451 $ 4,034 Salaries, wages and employee benefits 929 871 1,809 1,703 Purchased transportation 464 426 887 826 Fuel, operating expenses and supplies 476 384 899 777 Operating taxes and licenses 22 21 43 40 Insurance and claims 40 40 75 75 Gains on sales of property and equipment ( 7 ) ( 1 ) ( 8 ) ( 3 ) Depreciation and amortization expense 134 131 265 254 Pre-Con-way acquisition environmental matter 1 — 1 — Legal matters — ( 2 ) — ( 13 ) Transaction and integration costs 2 3 4 6 Restructuring costs 22 8 31 20 Operating income 271 198 445 349 Other income ( 4 ) ( 2 ) ( 7 ) ( 3 ) Debt extinguishment loss 5 — 5 5 Interest expense 51 56 104 112 Income before income tax provision 218 143 342 234 Income tax provision 56 37 79 59 Net income $ 162 $ 106 $ 263 $ 175 Earnings per share data Basic earnings per share $ 1.38 $ 0.90 $ 2.24 $ 1.49 Diluted earnings per share $ 1.36 $ 0.89 $ 2.22 $ 1.47 Weighted-average common shares outstanding Basic weighted-average common shares outstanding 117 118 117 118 Diluted weighted-average common shares outstanding 118 119 119 119 Amounts may not add due to rounding. See accompanying notes to condensed consolidated financial statements. 2 Table of Contents XPO, Inc. Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Net income $ 162 $ 106 $ 263 $ 175 Other comprehensive income (loss), net of tax Foreign currency translation gain (loss), net of tax effect of $( 1 ), $ 14 , $( 4 ) and $ 20 $ — $ 29 $ ( 8 ) $ 47 Unrealized gain (loss) on financial assets/liabilities designated as hedging instruments, net of tax effect of $ — , $ — , $ — and $ — — — 2 ( 1 ) Other comprehensive income (loss) — 29 ( 7 ) 46 Comprehensive income $ 162 $ 135 $ 256 $ 222 Amounts may not add due to rounding. See accompanying notes to condensed consolidated financial statements. 3 Table of Contents XPO, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, (In millions) 2026 2025 Cash flows from operating activities Net income $ 263 $ 175 Adjustments to reconcile net income to net cash from operating activities Depreciation and amortization 265 254 Stock compensation expense 30 31 Accretion of debt 5 5 Deferred tax expense 21 6 Gains on sales of property and equipment ( 8 ) ( 3 ) Other 18 14 Changes in assets and liabilities Accounts receivable ( 262 ) ( 124 ) Other assets 50 26 Accounts payable 29 ( 22 ) Accrued expenses and other liabilities 79 26 Net cash provided by operating activities 491 389 Cash flows from investing activities Payment for purchases of property and equipment ( 238 ) ( 395 ) Proceeds from sale of property and equipment 33 12 Payment for settlement of cross-currency swaps ( 3 ) — Net cash used in investing activities ( 208 ) ( 382 ) Cash flows from financing activities Proceeds from issuance of debt 885 — Repayment of debt ( 985 ) — Repayment of finance leases and other debt ( 39 ) ( 36 ) Payment for debt issuance costs ( 1 ) ( 3 ) Repurchase of common stock ( 100 ) ( 10 ) Change in bank overdrafts 26 22 Payment for tax withholdings for restricted shares ( 88 ) ( 48 ) Other 3 2 Net cash used in financing activities ( 300 ) ( 74 ) Effect of exchange rates on cash, cash equivalents and restricted cash 1 2 Net decrease in cash, cash equivalents and restricted cash ( 16 ) ( 65 ) Cash, cash equivalents and restricted cash, beginning of period 330 298 Cash, cash equivalents and restricted cash, end of period $ 314 $ 233 Supplemental disclosure of cash flow information Leased assets obtained in exchange for new operating lease liabilities $ 120 $ 100 Leased assets obtained in exchange for new finance lease liabilities 22 26 Cash paid for interest 109 117 Cash paid for income taxes, net of refunds 9 31 Amounts may not add due to rounding. See accompanying notes to condensed consolidated financial statements. 4 Table of Contents XPO, Inc. Condensed Consolidated Statements of Changes in Equity (Unaudited) Common Stock (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, 2026 117,408 $ — $ 1,055 $ 989 $ ( 194 ) $ 1,851 Net income — — — 162 — 162 Other comprehensive income (loss) — — — — — — Exercise and vesting of stock compensation awards 15 — — — — — Tax withholdings related to vesting of stock compensation awards — — — — — — Retirement of common stock ( 341 ) — ( 70 ) — — ( 70 ) Stock compensation expense — — 17 — — 17 Other — — 2 — — 2 Balance as of June 30, 2026 117,083 $ — $ 1,005 $ 1,151 $ ( 194 ) $ 1,962 Common Stock (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, 2025 116,954 $ — $ 1,160 $ 888 $ ( 187 ) $ 1,861 Net income — — — 263 — 263 Other comprehensive income (loss) — — — — ( 7 ) ( 7 ) Exercise and vesting of stock compensation awards 626 — — — — — Tax withholdings related to vesting of stock compensation awards — — ( 88 ) — — ( 88 ) Retirement of common stock ( 497 ) — ( 100 ) — — ( 100 ) Stock compensation expense — — 30 — — 30 Other — — 2 — — 2 Balance as of June 30, 2026 117,083 $ — $ 1,005 $ 1,151 $ ( 194 ) $ 1,962 5 Table of Contents Common Stock (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, 2025 117,788 $ — $ 1,227 $ 641 $ ( 228 ) $ 1,640 Net income — — — 106 — 106 Other comprehensive income (loss) — — — — 29 29 Exercise and vesting of stock compensation awards 40 — — — — — Tax withholdings related to vesting of stock compensation awards — — ( 2 ) — — ( 2 ) Retirement of common stock ( 83 ) — ( 10 ) — — ( 10 ) Stock compensation expense — — 16 — — 16 Other — — 2 — — 2 Balance as of June 30, 2025 117,745 $ — $ 1,233 $ 747 $ ( 199 ) $ 1,781 Common Stock (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 Net income — — — 175 — 175 Other comprehensive income (loss) — — — — 46 46 Exercise and vesting of stock compensation awards 654 — — — — — Tax withholdings related to vesting of stock compensation awards — — ( 64 ) — — ( 64 ) Retirement of common stock ( 83 ) — ( 10 ) — — ( 10 ) Stock compensation expense — — 31 — — 31 Other — — 2 — — 2 Balance as of June 30, 2025 117,745 $ — $ 1,233 $ 747 $ ( 199 ) $ 1,781 Amounts may not add due to rounding. See accompanying notes to condensed consolidated financial statements. 6 Table of Contents XPO, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Description of Business and Basis of Presentation Nature of Operations XPO, Inc., together with its subsidiaries (“XPO,” “we” or the “Company”), is a leading provider of freight transportation services. We use our proprietary technology to move goods efficiently through our customers’ supply chains in North America and Europe. See Note 2—Segment Reporting for additional information on our operations. Basis of Presentation We prepared our Condensed Consolidated Financial Statements in accordance with U.S. generally accepted accounting principles (“GAAP”) and on the same basis as the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). The interim reporting requirements of Form 10-Q allow certain information and note disclosures normally included in annual consolidated financial statements to be condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the 2025 Form 10-K. 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 six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. 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 June 30, 2026 and December 31, 2025, our restricted cash included in Other long-term assets on our Condensed Consolidated Balance Sheets was $ 16 million and $ 20 million, respectively. Trade Receivables Securitization and Factoring Programs In our European Transportation business, we sell certain of our trade accounts receivable under securitization and factoring programs. 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 $ 228 million as of June 30, 2026). As of June 30, 2026, the maximum amount available under the program was utilized. The weighted average interest rate was 3.69 % as of June 30, 2026. In January 2026, the program was amended to extend the maturity date through March 2029. 7 Table of Contents Information related to the trade receivables sold was as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Securitization programs Receivables sold in period $ 462 $ 495 $ 944 $ 920 Cash consideration 462 495 944 920 Factoring programs Receivables sold in period 23 14 43 37 Cash consideration 22 13 41 35 Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The levels of inputs used to measure fair value are: • Level 1—Quoted prices for identical instruments in active markets; • Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets; and • Level 3—Valuations based on inputs that are unobservable, generally utilizing pricing models or other valuation techniques that reflect management’s judgment and estimates. 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, 2026 and December 31, 2025 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 cash deposited for the securitization program. The fair value hierarchy of cash equivalents was as follows: (In millions) Carrying Value Fair Value Level 1 June 30, 2026 $ 270 $ 270 $ 270 December 31, 2025 285 285 285 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 May 2026, the Financial Accounting Standards Board (“FASB”) issued ASU 2026-02, “Environmental Credits and Environmental Credit Obligations (Topic 818).” This ASU establishes recognition, measurement, presentation and disclosure requirements for (i) environmental credits and (ii) compliance obligations that may be settled by using environmental credits and is effective for annual and interim periods beginning in 2028. Early adoption is permitted. We are currently evaluating the impact of the new standard. In December 2025, the FASB issued ASU 2025-10, “Government Grants (Topic 832) – Accounting for Government Grants Received by Business Entities.” This ASU provides recognition, measurement and presentation guidance for government grants received by business entities and is effective for annual and interim periods beginning in 2029. Early adoption is permitted. We are currently evaluating the impact of the new standard. 8 Table of Contents In September 2025, the FASB issued ASU 2025-06, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40).” The ASU updates the guidance on accounting for internal-use software costs by (i) removing all references to software development stages, and (ii) requiring that an entity capitalize software costs when both management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. This ASU is effective for annual and interim periods beginning in 2028. Early adoption is permitted. We are currently evaluating the impact of the new standard. 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. 2. Segment Reporting We are organized into two reportable segments: 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. 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. We offer dedicated truckload, LTL, full truckload brokerage, warehousing, managed transportation, last mile, freight forwarding, and multimodal solutions. 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”) is our chairman and 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 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. 9 Table of Contents The following tables present revenue and significant segment expenses that are included within adjusted EBITDA: Three Months Ended June 30, 2026 (In millions) North American LTL European Transportation Corporate (1) Total Revenue $ 1,428 $ 927 $ — $ 2,355 Salaries, wages and employee benefits 689 235 4 929 Purchased transportation 40 424 — 464 Fuel, operating expenses and supplies 275 201 — 476 Operating taxes and licenses 17 5 — 22 Insurance and claims 25 15 — 40 (Gains) losses on sales of property and equipment ( 4 ) ( 2 ) — ( 7 ) Pension (income) expense ( 4 ) — — ( 4 ) Adjusted EBITDA $ 390 $ 48 $ ( 4 ) $ 434 Three Months Ended June 30, 2025 (In millions) North American LTL European Transportation Corporate (1) Total Revenue $ 1,240 $ 841 $ — $ 2,080 Salaries, wages and employee benefits 643 224 4 871 Purchased transportation 32 394 — 426 Fuel, operating expenses and supplies 222 163 — 384 Operating taxes and licenses 17 4 — 21 Insurance and claims 25 15 — 40 (Gains) losses on sales of property and equipment 2 ( 3 ) — ( 1 ) Pension (income) expense ( 2 ) — — ( 1 ) Adjusted EBITDA $ 300 $ 44 $ ( 4 ) $ 340 Six Months Ended June 30, 2026 (In millions) North American LTL European Transportation Corporate (1) Total Revenue $ 2,657 $ 1,794 $ — $ 4,451 Salaries, wages and employee benefits 1,331 470 8 1,809 Purchased transportation 70 817 — 887 Fuel, operating expenses and supplies 511 388 — 899 Operating taxes and licenses 33 10 — 43 Insurance and claims 43 32 — 75 (Gains) losses on sales of property and equipment ( 3 ) ( 5 ) — ( 8 ) Pension (income) expense ( 7 ) — — ( 7 ) Adjusted EBITDA $ 680 $ 81 $ ( 8 ) $ 753 Six Months Ended June 30, 2025 (In millions) North American LTL European Transportation Corporate (1) Total Revenue $ 2,412 $ 1,622 $ — $ 4,034 Salaries, wages and employee benefits 1,259 436 8 1,703 Purchased transportation 69 757 — 826 Fuel, operating expenses and supplies 454 324 — 777 Operating taxes and licenses 33 7 — 40 Insurance and claims 49 26 — 75 (Gains) losses on sales of property and equipment 2 ( 5 ) — ( 3 ) Pension (income) expense ( 3 ) — — ( 3 ) Adjusted EBITDA $ 550 $ 76 $ ( 8 ) $ 618 (1) Primarily represents unallocated corporate costs. 10 Table of Contents The following table presents adjusted EBITDA by segment and provides a reconciliation to consolidated net income: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Adjusted EBITDA North American LTL $ 390 $ 300 $ 680 $ 550 European Transportation 48 44 81 76 Corporate ( 4 ) ( 4 ) ( 8 ) ( 8 ) Total Adjusted EBITDA 434 340 753 618 Less: Debt extinguishment loss 5 — 5 5 Interest expense 51 56 104 112 Income tax provision 56 37 79 59 Depreciation and amortization expense 134 131 265 254 Pre-Con-way acquisition environmental matter 1 — 1 — Legal matters (1) — ( 2 ) — ( 13 ) Transaction and integration costs 2 3 4 6 Restructuring costs 22 8 31 20 Net Income $ 162 $ 106 $ 263 $ 175 (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 June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Depreciation and amortization expense North American LTL $ 100 $ 96 $ 197 $ 185 European Transportation 33 34 66 67 Corporate 1 1 2 2 Total $ 134 $ 131 $ 265 $ 254 As of June 30, 2026 and December 31, 2025, we held long-lived tangible assets outside of the U.S., including right of use assets, of $ 843 million and $ 844 million, respectively. 11 Table of Contents 3. Revenue Recognition Our revenue disaggregated by geographic area based on sales office location was as follows: Three Months Ended June 30, 2026 (In millions) North American LTL European Transportation Total Revenue United States $ 1,398 $ — $ 1,398 North America (excluding United States) 30 — 30 France — 364 364 United Kingdom — 327 327 Europe (excluding France and United Kingdom) — 235 235 Total $ 1,428 $ 927 $ 2,355 Three Months Ended June 30, 2025 (In millions) North American LTL European Transportation Total Revenue United States $ 1,212 $ — $ 1,212 North America (excluding United States) 27 — 27 France — 336 336 United Kingdom — 281 281 Europe (excluding France and United Kingdom) — 224 224 Total $ 1,240 $ 841 $ 2,080 Six Months Ended June 30, 2026 (In millions) North American LTL European Transportation Total Revenue United States $ 2,600 $ — $ 2,600 North America (excluding United States) 57 — 57 France — 706 706 United Kingdom — 632 632 Europe (excluding France and United Kingdom) — 456 456 Total $ 2,657 $ 1,794 $ 4,451 Six Months Ended June 30, 2025 (In millions) North American LTL European Transportation Total Revenue United States $ 2,358 $ — $ 2,358 North America (excluding United States) 54 — 54 France — 650 650 United Kingdom — 539 539 Europe (excluding France and United Kingdom) — 433 433 Total $ 2,412 $ 1,622 $ 4,034 12 Table of Contents 4. Restructuring Charges We engage in restructuring actions as part of our ongoing efforts to best use our resources and infrastructure. These actions primarily relate to business optimization initiatives and generally include severance and facility-related costs, including impairment of lease assets, as well as contract termination costs, and are intended to improve our efficiency and profitability. Our restructuring-related activity was as follows: Six Months Ended June 30, 2026 (In millions) Reserve Balance as of December 31, 2025 Charges Incurred Payments Reserve Balance as of June 30, 2026 Severance North American LTL $ 1 $ — $ ( 1 ) $ — European Transportation 3 21 ( 15 ) 9 Corporate 7 3 ( 8 ) 2 Total $ 11 $ 24 $ ( 23 ) $ 11 In addition to the severance charges noted in the table above, we recorded restructuring-related charges in our European Transportation segment, North American LTL segment and Corporate of $ 6 million, $ 1 million and $ 1 million, respectively, during the first six months of 2026, which are primarily facility-related costs. We expect that the majority of the cash outlays related to the severance charges incurred in the first six months of 2026 will be completed within 12 months. 5. Derivative Instruments In the normal course of business, we are exposed to risks arising from business operations and economic factors, including fluctuations in interest rates and foreign currencies. We use derivative instruments to manage the volatility related to these exposures. The objective of these derivative instruments is to reduce fluctuations in our earnings and cash flows associated with changes in foreign currency exchange rates and interest rates. These financial instruments are not used for trading or other speculative purposes. Historically, we have not incurred, and do not expect to incur in the future, any losses as a result of counterparty default. The fair value of our derivative instruments and the related notional amounts were as follows: June 30, 2026 Derivative Assets Derivative Liabilities (In millions) Notional Amount Balance Sheet Caption Fair Value Balance Sheet Caption Fair Value Derivatives designated as hedges Cross-currency swap agreements $ 249 Other current assets $ — Other current liabilities $ ( 26 ) Cross-currency swap agreements 404 Other long-term assets — Other long-term liabilities ( 31 ) Interest rate swaps 550 Other current assets — Other current liabilities — Total $ — $ ( 57 ) 13 Table of Contents December 31, 2025 Derivative Assets Derivative Liabilities (In millions) Notional Amount Balance Sheet Caption Fair Value Balance Sheet Caption Fair Value Derivatives designated as hedges Cross-currency swap agreements $ 284 Other current assets $ — Other current liabilities $ ( 32 ) Cross-currency swap agreements 369 Other long-term assets — Other long-term liabilities ( 44 ) Interest rate swaps 550 Other current assets — Other current liabilities ( 2 ) Total $ — $ ( 78 ) The derivatives are classified as Level 2 within the fair value hierarchy. The derivatives are valued using inputs other than quoted prices, such as foreign exchange rates and yield curves. 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 June 30, (In millions) 2026 2025 2026 2025 Derivatives designated as cash flow hedges Interest rate swaps $ 1 $ — $ — $ — Derivatives designated as net investment hedges Cross-currency swap agreements 5 ( 59 ) 2 3 Total $ 5 $ ( 59 ) $ 2 $ 3 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) Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Derivatives designated as cash flow hedges Interest rate swaps $ 2 $ ( 1 ) $ — $ — Derivatives designated as net investment hedges Cross-currency swap agreements 17 ( 84 ) 5 5 Total $ 19 $ ( 85 ) $ 5 $ 5 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 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 rates. At maturity, we will repay the original principal amount in EUR and receive the principal amount in USD. These agreements expire at various dates through 2028. 14 Table of Contents We designated these cross-currency swaps as qualifying hedging instruments and account for them as net investment hedges. We apply the simplified method of assessing the effectiveness of our net investment hedging relationships. Under this method, for each reporting period, the change in the fair value of the cross-currency swaps is initially recognized in Accumulated other comprehensive income (loss) (“AOCI”). 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 on our Condensed Consolidated Statements of Cash Flows. In March 2026, we paid approximately $ 3 million related to cross-currency swaps that were partially settled during the period. The fair value adjustments related to these swaps remain in AOCI and partially offset foreign currency translation adjustment losses on our net investments in foreign subsidiaries. The payments were included in Cash flows from investing activities on our Condensed Consolidated Statements of Cash Flows. Interest Rate Hedging We execute short-term interest rate swaps to mitigate variability in forecasted interest payments on our term loan facilities. The interest rate swaps convert floating-rate interest payments into fixed rate interest payments. We designated the interest rate swaps as qualifying hedging instruments and account for these derivatives as cash flow hedges. Our outstanding interest rate swaps mature in the fourth 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 on our Condensed Consolidated Statements of Cash Flows. 6. Debt June 30, 2026 December 31, 2025 (In millions) Principal Balance Carrying Value Principal Balance Carrying Value Term loan A facility $ 500 $ 499 $ — $ — Term loan B facility 385 383 985 978 6.25 % senior secured notes due 2028 830 826 830 825 7.125 % senior notes due 2031 450 446 450 446 7.125 % senior notes due 2032 585 578 585 577 6.70 % senior debentures due 2034 300 233 300 230 Finance leases and other debt 242 242 257 257 Total debt 3,292 3,206 3,407 3,313 Short-term borrowings and current maturities of long-term debt 159 159 60 60 Long-term debt $ 3,133 $ 3,047 $ 3,347 $ 3,253 The fair value of our debt and classification in the fair value hierarchy was as follows: (In millions) Fair Value Level 1 Level 2 June 30, 2026 $ 3,345 $ 2,217 $ 1,128 December 31, 2025 3,499 2,254 1,246 We valued Level 1 debt using quoted prices in active markets and Level 2 debt using bid evaluation pricing models. 15 Table of Contents 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 June 30, 2026, we have approximately $ 600 million available to draw under our Revolving Credit Facility, after considering outstanding letters of credit of less than $ 1 million. As of June 30, 2026, we were in compliance with the Revolving Credit Facility’s financial covenants. Letters of Credit Facility As of June 30, 2026, we have $ 131 million in aggregate face amount of letters of credit outstanding under our $ 200 million uncommitted secured evergreen letter of credit facility. Term Loan A Facility In May 2026, we entered into a Senior Secured Term Loan A Credit Agreement (the “Term Loan A Credit Agreement”). The agreement provides for a senior secured term loan A facility in an initial aggregate amount of $ 500 million, maturing on May 29, 2029 (the “Term Loan A Facility”). Proceeds from the Term Loan A Facility were drawn in full on the closing date and, together with the proceeds from the 2026 Term Loan B Facility, defined below, were used to repay borrowings under the existing term loan B credit agreement. The Term Loan A Facility bears interest at a rate per annum equal to, at the Company’s option, either alternate base rate (“ABR”) or Term Secured Overnight Financing Rate (“SOFR”) plus (i) in the case of ABR loans, 0.25 % or, (ii) in the case of Term SOFR loans, 1.25 %, which, on or after September 30, 2026, shall be reduced by 0.125 % upon achievement of a leverage ratio defined in the Term Loan A Credit Agreement. In the third year of the facility, the Term Loan A Facility is subject to amortization of principal, payable in quarterly installments, equal to 5 % of the original principal amount per annum, which may be reduced by prepayments. Subject to customary exceptions, the Term Loan A Facility includes customary prepayment requirements, representations and warranties, events of default, reporting and other affirmative and negative covenants, including limitations on indebtedness, liens, investments, dividends, repayments of junior financings and asset sales, and is secured by a lien on substantially all of our assets and the assets of our guarantors. Certain covenants under the Term Loan A Credit Agreement will terminate or be amended, and all guarantees and liens securing the facility will be released, upon the Company’s achievement of investment grade ratings from at least two rating agencies. As of June 30, 2026, we were in compliance with the Term Loan A Facility’s financial covenants. The interest rate on our Term Loan A Facility was approximately 4.87 % as of June 30, 2026. Term Loan B Facility In May 2026, we amended our Senior Secured Term Loan Credit Agreement (“Amended Term Loan B Credit Agreement”). Pursuant to the amendment, the lenders provided the Company a new tranche of Term B-4 loans in an initial aggregate principal amount of $ 385 million, maturing on February 1, 2031 (the “2026 Term Loan B Facility”). The proceeds from the 2026 Term Loan B Facility, together with the proceeds from the Term Loan A Facility, were used to repay $ 885 million of outstanding principal, representing all outstanding indebtedness under our existing term loan B credit agreement. During the first half of 2026, prior to the refinancing, we used cash on hand to repay $ 100 million of outstanding principal under the existing term loan B credit agreement. We recorded a debt extinguishment loss of $ 5 million during the six months ended June 30, 2026, primarily related to the refinancing, and a debt extinguishment loss of $ 5 million during the six months ended June 30, 2025 related to the refinancing of our term loans in February 2025. 16 Table of Contents The 2026 Term Loan B Facility bears interest at a rate per annum equal to, at the Company’s option, either ABR or Term SOFR plus (i) in the case of ABR loans, 0.50 % or, (ii) in the case of Term SOFR loans, 1.50 %, which, after November 29, 2026, shall be reduced by 0.125 % upon achievement of a leverage ratio defined in the Amended Term Loan B Credit Agreement. The 2026 Term Loan B Facility includes customary prepayment requirements, representations and warranties, events of default, reporting and other affirmative and negative covenants, including limitations on indebtedness, liens, investments, dividends, repayments of junior financings and asset sales, subject to customary exceptions. In July 2026, we used cash on hand to repay $ 100 million of outstanding principal under the 2026 Term Loan B Facility, which was classified within Short-term borrowings and current maturities of long-term debt as of June 30, 2026. The debt extinguishment loss recorded in connection with the repayment was not material. Including the July repayment, we used cash on hand to repay $ 200 million of outstanding principal under our term loans on a cumulative basis year to date. The interest rate on our 2026 Term Loan B Facility was approximately 5.12 % as of June 30, 2026. 7. Stockholders ’ Equity Share Repurchases In March 2025, our Board of Directors authorized repurchases of up to $ 750 million of our common stock. The 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. We retire common shares that we repurchase upon settlement. The 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 this program at any time. This plan replaced our previous share repurchase plan, authorized in February 2019. In the second quarter of 2026, we repurchased 341 thousand shares of common stock with an aggregate value of $ 70 million at an average price of $ 205.22 per share. In the first six months of 2026, we repurchased 497 thousand shares of common stock with an aggregate value of $ 100 million at an average price of $ 201.13 per share. The share repurchases were funded by cash on hand. In the second quarter and first six months of 2025, we repurchased 83 thousand shares of common stock with an aggregate value of $ 10 million at an average price of $ 120.41 per share. As of June 30, 2026, our remaining share repurchase authorization was $ 525 million, reflecting $ 225 million of cumulative repurchases to date under the program. 8. Earnings per Share The computations of basic and diluted earnings per share were as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions, except per share data) 2026 2025 2026 2025 Net income $ 162 $ 106 $ 263 $ 175 Basic weighted-average common shares 117 118 117 118 Dilutive effect of stock-based awards 1 2 1 2 Diluted weighted-average common shares 118 119 119 119 Basic earnings per share $ 1.38 $ 0.90 $ 2.24 $ 1.49 Diluted earnings per share $ 1.36 $ 0.89 $ 2.22 $ 1.47 17 Table of Contents 9. Commitments and Contingencies 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, 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. 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. 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 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. We do not believe that the ultimate resolution of any matters to which we are presently a party will have a material adverse effect on our results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on our financial condition, results of operations or cash flows. Legal costs incurred related to these matters are expensed as incurred. We carry liability and excess umbrella insurance policies that we deem sufficient to cover potential legal claims arising in the normal course of conducting our operations as a transportation company. In the event we are required to satisfy a legal claim outside the scope of the coverage provided by insurance, our financial condition, results of operations or cash flows could be negatively impacted. Insurance Contribution Litigation We have been engaged in litigation in a case captioned Allianz Global Risks US Ins. Co. v. ACE Property & Casualty Ins. Co., et al., Multnomah County Circuit Court (Case No. 1204-04552) since we acquired Con-way in 2015. In April 2012, prior to the acquisition, Allianz Global Risks US Ins. Co. (“Allianz”) filed suit against eighteen insurance companies seeking contribution on environmental and product liability claims that Allianz agreed to defend and indemnify on behalf of its insured, Daimler Trucks North America (“DTNA”). These claims involved truck and part manufacturing plants of Freightliner, a former subsidiary of Con-way, which Con-way sold to DTNA in 1981. The defendants had insured Freightliner’s assets and Con-way and Freightliner had self-insured under fronting agreements with three of the defendant insurers, ACE, Westport, and General. Under those agreements, Con-way agreed to indemnify the fronting carriers for damages assessed under the fronting policies. Con-way’s captive insurer, Centron, was also a named defendant. In connection with the acquisition of Con-way, we became responsible for any potential liability of Con-way related to this matter. 18 Table of Contents After a seven-week jury trial in 2014, the jury found that Con-way and the fronting insurers never intended that the fronting insurers defend or indemnify any claims against Freightliner. In June 2015, Allianz appealed to the Oregon Court of Appeals. In May 2019, the Oregon Court of Appeals upheld the jury verdict. In September 2019, Allianz appealed to the Oregon Supreme Court. In March 2021, the Oregon Supreme Court reversed the jury verdict, holding that it was an error to allow the jury to decide how the parties intended the fronting policies to operate, and also holding that the trial court improperly instructed the jury concerning application of certain policy pollution exclusions. In July 2021, the matter was remanded to the trial court for further proceedings consistent with the Oregon Supreme Court’s decision. In June 2023, the trial court decided the parties’ cross-motions for summary judgment and determined that the fronting policies do provide coverage for the environmental and product liability claims. The pollution exclusion and allocation issues remained open. The trial on the pollution exclusion issue took place in October 2024, where the jury issued a favorable verdict, finding that the pollution exclusion applied to the General policy over several years for which Allianz seeks contribution. The trial addressing legal and factual issues relating to the allocation of defense and indemnity costs among the applicable insurance policies took place during the first half of 2025 and final hearings on allocation and potential application of prejudgment interest took place in October 2025 and early February 2026, respectively. A hearing on the final judgment occurred in May 2026, and the court entered its final judgment. In the third quarter of 2025, in anticipation of a final judgment, we revised our estimate for our share of the liability associated with this matter and recognized a charge of approximately $ 35 million, which included an allocation of defense and indemnity costs already incurred by Allianz as well as an estimate of future allocated defense and indemnity costs. The final judgment entered was in alignment with the amount accrued and the expected allocation of defense and indemnity costs already incurred by Allianz. The final judgment is now subject to appeal by Allianz as well as multiple defendants, with Notice of Appeal submitted in June 2026. No appellate schedule, including briefing schedule, has yet been established, nor have the portions of the final judgment which are subject to the appeals been identified. This matter is solely related to a legacy Con-way truck manufacturing business and is unrelated to our current Less-than-Truckload operations. 19 Table of Contents