XPO (NYSE: XPO) today announced its financial results for the
third quarter 2022.
Revenue was $3.04 billion for the third quarter, compared with
$3.27 billion for the same period in 2021. Excluding third quarter
2021 revenue from the company’s intermodal operation, which was
sold in March 2022, third quarter 2022 revenue increased
year-over-year by 3%.
Net income from continuing operations attributable to common
shareholders was $131 million for the third quarter, compared with
$21 million for the same period in 2021. Operating income was $185
million for the third quarter, compared with $112 million for the
same period in 2021. Diluted earnings from continuing operations
per share was $1.13 for the third quarter, compared with $0.19 for
the same period in 2021.
Adjusted net income from continuing operations attributable to
common shareholders, a non-GAAP financial measure, increased to
$168 million for the third quarter, compared with $109 million for
the same period in 2021. Adjusted diluted earnings from continuing
operations per share, a non-GAAP financial measure, was $1.45 for
the third quarter, compared with $0.94 for the same period in
2021.
Adjusted earnings before interest, taxes, depreciation and
amortization (“adjusted EBITDA”), a non-GAAP financial measure,
increased to $352 million for the third quarter, compared with $307
million for the same period in 2021.
For the third quarter 2022, the company generated $265 million
of cash flow from operating activities and $142 million of free
cash flow, a non-GAAP financial measure.
Reconciliations of non-GAAP financial measures used in this
release are provided in the attached financial tables.
2022 Less-Than-Truckload (LTL) Financial
Targets
For the full year 2022, for the North American LTL business, the
company reaffirmed the following targets, both previously
announced:
- At least $1 billion of full year adjusted EBITDA, including
gains on sales of real estate of up to $50 million in the fourth
quarter; and
- Year-over-year improvement of 50 to 100 basis points in
adjusted operating ratio for the full year, including at least 120
basis points of improvement in the fourth quarter, excluding gains
on sales of real estate.
CEO Comments
Brad Jacobs, chairman and chief executive officer of XPO, said,
“Our record results in the third quarter demonstrate how strongly
our North American businesses are positioned for growth as
standalone companies. Both LTL and truck brokerage outperformed on
key metrics leading into tomorrow’s spin-off, and will thrive under
the leadership of Mario Harik as CEO of XPO, and Drew Wilkerson as
CEO of RXO.“Our plan for LTL 2.0 is showing tangible results. We
reported third quarter LTL records for revenue and adjusted EBITDA.
Our year-over-year tonnage accelerated every month through the
quarter and inflected positive in September, with more improvement
in October. Importantly, our third quarter tonnage trend
outperformed typical seasonality, bucking industry trends. “Our
truck brokerage business achieved a gross profit margin of 19% in
the third quarter, with gross profit dollars up dramatically
year-over-year by 31%. We grew volume by 9%, decisively outpacing
the industry.”Jacobs continued, “I thank our shareholders for their
long-standing support of the company we began building in 2011 and
the new public companies we’ve created. XPO was the seventh
best-performing stock of the last decade on the Fortune 500, and
I’m proud that our evolution into XPO, RXO and GXO is serving the
best interests of our shareholders.”
Results by Business Segment
Third Quarter 2022 Summary Segment Results |
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Three
months ended September 30, |
|
Revenue |
|
Operating Income (Loss) |
|
Adjusted EBITDA(1) |
(in
millions) |
|
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2022 |
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2021 |
|
|
2022 |
|
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2021 |
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2022 |
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2021 |
North American
Less-Than-Truckload Segment |
|
$ |
1,204 |
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$ |
1,071 |
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$ |
182 |
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$ |
149 |
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$ |
258 |
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$ |
222 |
Brokerage and
Other Services Segment |
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1,921 |
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2,261 |
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62 |
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58 |
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|
123 |
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|
131 |
Corporate and
Intersegment Eliminations |
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(83) |
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(62) |
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(59) |
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(95) |
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(29) |
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|
(46) |
Total(3) |
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$ |
3,042 |
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$ |
3,270 |
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$ |
185 |
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$ |
112 |
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$ |
352 |
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$ |
307 |
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Nine
months ended September 30, |
|
Revenue |
|
Operating Income (Loss) |
|
Adjusted EBITDA(1) |
(in
millions) |
|
|
2022 |
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2021 |
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2022(2) |
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2021 |
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2022 |
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2021 |
North American
Less-Than-Truckload Segment |
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$ |
3,548 |
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$ |
3,114 |
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$ |
530 |
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$ |
481 |
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$ |
757 |
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$ |
694 |
Brokerage and
Other Services Segment |
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6,420 |
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6,493 |
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|
255 |
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189 |
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|
439 |
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|
386 |
Corporate and
Intersegment Eliminations |
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(221) |
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(162) |
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255 |
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(228) |
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(118) |
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(164) |
Total(3) |
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$ |
9,747 |
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$ |
9,445 |
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$ |
1,040 |
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$ |
442 |
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$ |
1,078 |
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$ |
916 |
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(1) Reconciliations of adjusted EBITDA are provided in the attached
financial tables |
(2) Corporate operating income includes a $434 million gain for the
nine months ended September 30, 2022 related to the sale of the
intermodal operation |
(3) See the Non-GAAP Financial Measures section in this
release |
- North American
Less-Than-Truckload (LTL): The segment generated revenue
of $1.2 billion for the third quarter 2022, compared with
$1.1 billion for the same period in 2021. The year-over-year growth
in revenue primarily reflects an increase in yield. Operating
income for the segment was $182 million for the third quarter 2022,
compared with $149 million for the same period in 2021. Adjusted
EBITDA for the third quarter 2022, which had no gains on real
estate sales, was $258 million; compared with adjusted EBITDA for
the third quarter 2021 of $222 million, which included
approximately $5 million in gains on real estate sales. Excluding
real estate sales in both periods, LTL adjusted EBITDA grew by 19%.
Third quarter 2022 operating ratio was 85.0%. Adjusted operating
ratio, excluding gains on real estate sales, improved 160 basis
points year-over-year to 82.8%.
- Brokerage and Other Services: Revenue for the segment was $1.92
billion for the third quarter 2022, compared with $2.26 billion for
the same period in 2021. The decrease in revenue was due primarily
to the sale of the North American intermodal operation in March
2022, which impacted revenue by $309 million (including
intercompany transactions). Operating income for the segment
was $62 million for the third quarter 2022, compared with $58
million for the same period in 2021. Adjusted EBITDA was $123
million for the third quarter 2022, compared with $131 million for
the same period in 2021. The year-over-year decrease in adjusted
EBITDA was due primarily to the sale of the intermodal
operation.Truck brokerage revenue in North America decreased 2% to
$686 million for the third quarter 2022, compared with $700 million
for the same period in 2021. The decrease in revenue was primarily
driven by lower truckload pricing in the spot market, partially
offset by a year-over-year increase in North American truck
brokerage volume, facilitated by the company’s digital brokerage
platform.
- Corporate: Corporate expense was $59 million for the third
quarter 2022, compared with $95 million for the same period in
2021. Corporate adjusted EBITDA was an expense of $29 million for
the third quarter 2022, compared with $46 million for the same
period in 2021.
Liquidity and Deleveraging
As of September 30, 2022, the company had $1.54 billion of total
liquidity, including $544 million of cash and cash equivalents and
approximately $1 billion of available borrowing capacity. The net
leverage ratio as of September 30, 2022 was 1.7x, down from 1.8x as
of June 30, 2022, and within the company’s target range of 1.0x –
2.0x.
Net leverage ratio is calculated as net debt of $2.36 billion,
divided by adjusted EBITDA of $1.40 billion for the trailing 12
months ended September 30, 2022.
Conference Call
The company will hold a conference call on Monday, October 31,
2022, at 8:30 a.m. Eastern Time. Participants can call toll-free
(from US/Canada) 1-877-269-7756; international callers dial
+1-201-689-7817. A live webcast of the conference will be available
on the investor relations area of the company’s website,
xpo.com/investors. The conference will be archived until December
1, 2022. To access the replay by phone, call toll-free (from
US/Canada) 1-877-660-6853; international callers dial
+1-201-612-7415. Use participant passcode 13733483.
About XPO
XPO (NYSE: XPO) is a leading provider of freight transportation
services, primarily less-than-truckload (LTL) and truck brokerage.
XPO uses its proprietary technology, including its digital freight
marketplace, to move goods efficiently through supply chains.
Following the planned spin-off of the RXO brokered transportation
platform on November 1, 2022, XPO’s sole business in North America
will be one of the largest providers of asset-based LTL
transportation, and together with its business in Europe, XPO will
serve approximately 43,000 shippers with 564 locations and
38,000 employees. The company is headquartered in Greenwich,
Conn., USA. Visit xpo.com for more information, and connect with
XPO on Facebook, Twitter, LinkedIn, Instagram and YouTube.
About the RXO spin-offXPO intends to spin off its tech-enabled
brokered transportation platform in North America as an independent
publicly traded company (NYSE: RXO) on November 1, 2022. RXO’s
best-in-class brokerage offering will provide customers with access
to massive truckload capacity, cutting-edge technology and
complementary brokered services for managed transportation, last
mile and freight forwarding. Visit rxo.com for more
information.
Non-GAAP Financial Measures
As required by the rules of the Securities and Exchange
Commission (“SEC”), we provide reconciliations of the non-GAAP
financial measures contained in this press release to the most
directly comparable measure under GAAP, which are set forth in the
financial tables attached to this press release.
XPO’s non-GAAP financial measures in this press release include:
adjusted earnings before interest, taxes, depreciation and
amortization (“adjusted EBITDA”) on a consolidated basis and for
corporate and intersegment eliminations; adjusted EBITDA margin on
a consolidated basis; adjusted net income from continuing
operations attributable to common shareholders and adjusted diluted
earnings from continuing operations per share (“adjusted EPS”);
margin (revenue less cost of transportation and services (exclusive
of depreciation and amortization)) and margin as a percentage of
revenue (margin % of revenue) by service offering; free cash flows;
adjusted operating income (including and excluding gains on real
estate transactions) for our North American less-than-truckload
segment; adjusted operating ratio (including and excluding gains on
real estate transactions) for our North American
less-than-truckload segment; adjusted EBITDA excluding gains on
real estate transactions for our North American less-than-truckload
segment; net leverage and net debt. We also refer to (i) margin as
gross profit dollars and (ii) margin as a percentage of revenue
(margin % of revenue) as gross profit margin in this release.
We believe that the above adjusted financial measures facilitate
analysis of our ongoing business operations because they exclude
items that may not be reflective of, or are unrelated to, XPO and
its business segments’ core operating performance, and may assist
investors with comparisons to prior periods and assessing trends in
our underlying businesses. Other companies may calculate these
non-GAAP financial measures differently, and therefore our measures
may not be comparable to similarly titled measures of other
companies. These non-GAAP financial measures should only be used as
supplemental measures of our operating performance.
Adjusted EBITDA, adjusted EBITDA margin, adjusted net income
from continuing operations attributable to common shareholders and
adjusted EPS include adjustments for transaction and integration
costs, as well as restructuring costs and other adjustments as set
forth in the attached tables. Transaction and integration
adjustments are generally incremental costs that result from an
actual or planned acquisition, divestiture or spin-off and may
include transaction costs, consulting fees, retention awards, and
internal salaries and wages (to the extent the individuals are
assigned full-time to integration and transformation activities)
and certain costs related to integrating and converging IT systems.
Restructuring costs primarily relate to severance costs associated
with business optimization initiatives. Management uses these
non-GAAP financial measures in making financial, operating and
planning decisions and evaluating XPO’s and each business segment’s
ongoing performance.
We believe that free cash flow is an important measure of our
ability to repay maturing debt or fund other uses of capital that
we believe will enhance stockholder value. We calculate free cash
flow as net cash provided by operating activities from continuing
operations, less payment for purchases of property and equipment
plus proceeds from sale of property and equipment. We believe that
adjusted EBITDA and adjusted EBITDA margin improve comparability
from period to period by removing the impact of our capital
structure (interest and financing expenses), asset base
(depreciation and amortization), litigation settlements, tax
impacts and other adjustments as set out in the attached tables
that management has determined are not reflective of core operating
activities and thereby assist investors with assessing trends in
our underlying businesses. We believe that adjusted net income from
continuing operations attributable to common shareholders and
adjusted EPS improve the comparability of our operating results
from period to period by removing the impact of certain costs and
gains that management has determined are not reflective of our core
operating activities, including amortization of acquisition-related
intangible assets, transaction and integration costs, restructuring
costs and other adjustments as set out in the attached tables. We
believe that margin (revenue less cost of transportation and
services (exclusive of depreciation and amortization)) and margin
as a percentage of revenue (margin % of revenue) improve the
comparability of our operating results from period to period by
removing the cost of transportation and services, in particular the
cost of fuel, incurred in the reporting period as set out in the
attached tables. We believe that adjusted operating income and
adjusted operating ratio improve the comparability of our operating
results from period to period by (i) removing the impact of certain
transaction and integration costs and restructuring costs, as well
as amortization expenses and (ii) including the impact of pension
income incurred in the reporting period as set out in the attached
tables. We believe that net leverage and net debt are important
measures of our overall liquidity position and are calculated by
removing cash and cash equivalents from our reported total debt and
reporting net debt as a ratio of our trailing twelve-month reported
adjusted EBITDA.
With respect to our financial targets for full year 2022 and
fourth quarter 2022 North American LTL adjusted operating ratio, a
reconciliation of these non-GAAP measures to the corresponding GAAP
measures is not available without unreasonable effort due to
the variability and complexity of the reconciling items described
above that we exclude from these non-GAAP target measures. The
variability of these items may have a significant impact on our
future GAAP financial results and, as a result, we are unable to
prepare the forward-looking statement of income and statement of
cash flows prepared in accordance with GAAP that would be required
to produce such a reconciliation.
Forward-looking Statements
This release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934,
as amended, including statements relating to the planned
spin-off of our tech-enabled brokered services platform, the
expected timing and anticipated benefits of the spin-off; our 2022
financial target of at least $1 billion of adjusted EBITDA in the
North American LTL segment, including gains on sales of real estate
of up to $50 million in the fourth quarter 2022; and our 2022
financial target of year-over-year improvement of 50 to 100 basis
points in North American LTL adjusted operating ratio, including at
least 120 basis points of improvement in fourth quarter 2022
(excluding gains on sales of real estate). All statements other
than statements of historical fact are, or may be deemed to be,
forward-looking statements. In some cases, forward-looking
statements can be identified by the use of forward-looking terms
such as “anticipate,” “estimate,” “believe,” “continue,” “could,”
“intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,”
“expect,” “objective,” “projection,” “forecast,” “goal,”
“guidance,” “outlook,” “effort,” “target,” “trajectory” or the
negative of these terms or other comparable terms. However, the
absence of these words does not mean that the statements are not
forward-looking. These forward-looking statements are based on
certain assumptions and analyses made by us in light of our
experience and our perception of historical trends, current
conditions and expected future developments, as well as other
factors we believe are appropriate in the circumstances.
These forward-looking statements are subject to known and
unknown risks, uncertainties and assumptions that may cause actual
results, levels of activity, performance or achievements to
be materially different from any future results, levels of
activity, performance or achievements expressed or implied by such
forward-looking statements. Factors that might cause or contribute
to a material difference include our ability to effect the spin-off
of our tech-enabled brokered services platform and meet the related
conditions of the spin-off, our ability to complete the
divestiture of our European business, the expected timing of the
completion of these transactions and the terms of the transactions,
our ability to achieve the expected benefits of the transactions,
our ability to retain and attract key personnel for the separate
businesses, the risks discussed in our filings with the SEC, and
the following: economic conditions generally; the severity,
magnitude, duration and aftereffects of the COVID-19 pandemic,
including supply chain disruptions due to plant and port shutdowns
and transportation delays, the global shortage of certain
components such as semiconductor chips, strains on production or
extraction of raw materials, cost inflation and labor and equipment
shortages, which may lower levels of service, including the
timeliness, productivity and quality of service, and government
responses to these factors; our ability to align our investments in
capital assets, including equipment, service centers, and
warehouses and other network facilities, to our customers’ demands;
our ability to implement our cost and revenue initiatives; the
effectiveness of our action plan, and other management actions, to
improve our North American LTL business; our ability to benefit
from a sale, spin-off or other divestiture of one or more business
units, and the impact of anticipated material compensation and
other expenses, including expenses related to the acceleration of
equity awards, to be incurred in connection with a substantial
disposition; our ability to successfully integrate and realize
anticipated synergies, cost savings and profit improvement
opportunities with respect to acquired companies; goodwill
impairment, including in connection with a business unit sale,
spin-off or other divestiture; matters related to our intellectual
property rights; fluctuations in currency exchange rates; fuel
price and fuel surcharge changes; natural disasters, terrorist
attacks, wars or similar incidents, including the conflict between
Russia and Ukraine and increased tensions between Taiwan and China;
risks and uncertainties regarding the expected benefits of a future
spin-off of a business unit, the impact of a future spin-off of a
business unit on the size and business diversity of our company;
the ability of the spin-off of a business unit to qualify for
tax-free treatment for U.S. federal income tax purposes; our
ability to develop and implement suitable information technology
systems and prevent failures in or breaches of such systems; our
indebtedness; our ability to raise debt and equity capital;
fluctuations in fixed and floating interest rates; our ability to
maintain positive relationships with our network of third-party
transportation providers; our ability to attract and retain
qualified drivers; labor matters, including potential labor
disputes between railroads and their union employees and our
ability to manage our subcontractors, and risks associated with
labor disputes at our customers and efforts by labor organizations
to organize our employees and independent contractors; litigation,
including litigation related to alleged misclassification of
independent contractors and securities class actions; risks
associated with our self-insured claims; risks associated with
defined benefit plans for our current and former employees; the
impact of potential sales of common stock by our chairman;
governmental regulation, including trade compliance laws, as well
as changes in international trade policies, sanctions and tax
regimes; governmental or political actions, including the United
Kingdom’s exit from the European Union; and competition and pricing
pressures.
All forward-looking statements set forth in this release are
qualified by these cautionary statements and there can be no
assurance that the actual results or developments anticipated by us
will be realized or, even if substantially realized, that they
will have the expected consequences to or effects on us or our
business or operations. Forward-looking statements set forth in
this release speak only as of the date hereof, and we do not
undertake any obligation to update forward-looking statements to
reflect subsequent events or circumstances, changes in expectations
or the occurrence of unanticipated events, except to the extent
required by law.
Where required by law, no binding decision will be made with
respect to the divestiture of the European business other than in
compliance with applicable employee information and consultation
requirements.
Investor ContactsTavio
Headley+1-203-413-4006tavio.headley@xpo.com
Kevin Sterling+ 1 804-441-6179kevin.sterling@rxo.com
Media ContactsKarina
Frayter+1-203-484-8303karina.frayter@xpo.com
Nina Reinhardt+1-980-408-1594nina.reinhardt@rxo.com
XPO Logistics, Inc. |
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Condensed Consolidated Statements of Income
(Loss) |
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|
(Unaudited) |
|
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(In millions, except per share data) |
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Three Months Ended |
|
Nine Months Ended |
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|
September 30, |
|
September 30, |
|
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
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|
|
|
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|
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|
|
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|
|
Revenue
(1) |
$ |
3,042 |
|
$ |
3,270 |
|
$ |
9,747 |
|
$ |
9,445 |
|
|
Cost of transportation and services (exclusive of depreciation and
amortization) |
|
2,044 |
|
|
2,306 |
|
|
6,634 |
|
|
6,545 |
|
|
Direct operating expense (exclusive of depreciation and
amortization) |
|
363 |
|
|
366 |
|
|
1,113 |
|
|
1,058 |
|
|
Sales, general and administrative expense (2) |
|
298 |
|
|
339 |
|
|
966 |
|
|
1,001 |
|
|
Depreciation and amortization expense |
|
118 |
|
|
118 |
|
|
349 |
|
|
357 |
|
|
Gain on sale of business |
|
- |
|
|
- |
|
|
(434) |
|
|
- |
|
|
Transaction and integration costs |
|
25 |
|
|
15 |
|
|
60 |
|
|
26 |
|
|
Restructuring costs |
|
9 |
|
|
14 |
|
|
19 |
|
|
16 |
|
|
Operating income |
|
185 |
|
|
112 |
|
|
1,040 |
|
|
442 |
|
|
Other income |
|
(15) |
|
|
(19) |
|
|
(44) |
|
|
(45) |
|
|
Debt extinguishment loss |
|
- |
|
|
46 |
|
|
26 |
|
|
54 |
|
|
Interest expense |
|
35 |
|
|
53 |
|
|
103 |
|
|
176 |
|
|
Income
from continuing operations before income tax
provision |
|
165 |
|
|
32 |
|
|
955 |
|
|
257 |
|
|
Income tax provision |
|
34 |
|
|
11 |
|
|
194 |
|
|
60 |
|
|
Income
from continuing operations |
|
131 |
|
|
21 |
|
|
761 |
|
|
197 |
|
|
Income (loss) from discontinued operations, net of taxes |
|
- |
|
|
(78) |
|
|
(1) |
|
|
22 |
|
|
Net
income (loss) |
|
131 |
|
|
(57) |
|
|
760 |
|
|
219 |
|
|
Net income from discontinued operations attributable to
noncontrolling interests |
|
- |
|
|
- |
|
|
- |
|
|
(5) |
|
|
Net
income (loss) attributable to XPO |
$ |
131 |
|
$ |
(57) |
|
$ |
760 |
|
$ |
214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) attributable to common shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
131 |
|
$ |
21 |
|
$ |
761 |
|
$ |
197 |
|
|
Discontinued operations |
|
- |
|
|
(78) |
|
|
(1) |
|
|
17 |
|
|
Net income (loss) attributable to common shareholders |
$ |
131 |
|
$ |
(57) |
|
$ |
760 |
|
$ |
214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings (loss) per share attributable to common shareholders
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
1.14 |
|
$ |
0.19 |
|
$ |
6.62 |
|
$ |
1.78 |
|
|
Discontinued operations |
|
- |
|
|
(0.69) |
|
|
(0.01) |
|
|
0.15 |
|
|
Basic earnings (loss) per share attributable to common
shareholders |
$ |
1.14 |
|
$ |
(0.50) |
|
$ |
6.61 |
|
$ |
1.93 |
|
|
Diluted
earnings (loss) per share attributable to common shareholders
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
1.13 |
|
$ |
0.19 |
|
$ |
6.58 |
|
$ |
1.73 |
|
|
Discontinued operations |
|
- |
|
|
(0.68) |
|
|
(0.01) |
|
|
0.14 |
|
|
Diluted earnings (loss) per share attributable to common
shareholders |
$ |
1.13 |
|
$ |
(0.49) |
|
$ |
6.57 |
|
$ |
1.87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted-average common shares outstanding |
|
115 |
|
|
115 |
|
|
115 |
|
|
111 |
|
|
Diluted weighted-average common shares outstanding |
|
116 |
|
|
116 |
|
|
116 |
|
|
114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Revenue for the three months ended September 30, 2021 included
approximately $309 million (including intercompany transactions)
attributable to the Company's intermodal business, which the
Company sold in March 2022. |
|
|
(2)
Sales, general and administrative expenses includes $29 million
related to litigation settlements for the three and nine months
ended September 30, 2021. |
|
|
(3) The sum of quarterly
earnings (loss) per share may not equal year-to-date amounts due to
differences in the weighted-average number of shares outstanding
during the respective periods. |
|
|
|
|
XPO Logistics, Inc. |
Condensed Consolidated Balance Sheets |
(Unaudited) |
(In millions, except per share data) |
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
2022 |
|
2021 |
ASSETS |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
544 |
|
$ |
260 |
Accounts receivable, net of allowances of $51 and $47,
respectively |
|
2,013 |
|
|
2,105 |
Other current assets |
|
257 |
|
|
286 |
Current assets of discontinued operations |
|
17 |
|
|
26 |
Total current assets |
|
2,831 |
|
|
2,677 |
Long-term assets |
|
|
|
|
|
Property and equipment, net of $1,848 and $1,828 in accumulated
depreciation, respectively |
|
1,828 |
|
|
1,808 |
Operating lease assets |
|
816 |
|
|
908 |
Goodwill |
|
2,229 |
|
|
2,479 |
Identifiable intangible assets, net of $598 and $612 in accumulated
amortization, respectively |
|
496 |
|
|
580 |
Other long-term assets |
|
303 |
|
|
255 |
Total long-term assets |
|
5,672 |
|
|
6,030 |
Total assets |
$ |
8,503 |
|
$ |
8,707 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable |
$ |
1,022 |
|
$ |
1,110 |
Accrued expenses |
|
1,087 |
|
|
1,107 |
Short-term borrowings and current maturities of long-term debt |
|
60 |
|
|
58 |
Short-term operating lease liabilities |
|
145 |
|
|
170 |
Other current liabilities |
|
111 |
|
|
69 |
Current liabilities of discontinued operations |
|
17 |
|
|
24 |
Total current liabilities |
|
2,442 |
|
|
2,538 |
Long-term liabilities |
|
|
|
|
|
Long-term debt |
|
2,848 |
|
|
3,514 |
Deferred tax liability |
|
334 |
|
|
316 |
Employee benefit obligations |
|
116 |
|
|
122 |
Long-term operating lease liabilities |
|
671 |
|
|
752 |
Other long-term liabilities |
|
306 |
|
|
327 |
Total long-term liabilities |
|
4,275 |
|
|
5,031 |
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
Common stock, $0.001 par value; 300 shares authorized; 115 issued
and outstanding |
|
|
|
|
|
as of September 30, 2022 and December 31, 2021 |
|
- |
|
|
- |
Additional paid-in capital |
|
1,195 |
|
|
1,179 |
Retained earnings |
|
803 |
|
|
43 |
Accumulated other comprehensive loss |
|
(212) |
|
|
(84) |
Total equity |
|
1,786 |
|
|
1,138 |
Total liabilities and equity |
$ |
8,503 |
|
$ |
8,707 |
XPO Logistics, Inc. |
Condensed Consolidated Statements of Cash
Flows |
(Unaudited) |
(In millions) |
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
September 30, |
|
|
|
2022 |
|
|
2021 |
Cash flows from operating activities of continuing
operations |
|
|
|
|
|
Net income |
$ |
760 |
|
$ |
219 |
Income (loss) from discontinued operations, net of taxes |
|
(1) |
|
|
22 |
Income from continuing operations |
|
761 |
|
|
197 |
Adjustments to reconcile income from continuing operations
to net cash from operating activities |
|
|
|
|
|
|
Depreciation,
amortization and net lease activity |
|
349 |
|
|
357 |
|
Stock
compensation expense |
|
26 |
|
|
29 |
|
Accretion of
debt |
|
12 |
|
|
15 |
|
Deferred tax
expense |
|
10 |
|
|
5 |
|
Debt
extinguishment loss |
|
26 |
|
|
54 |
|
Gain on sale of
business |
|
(434) |
|
|
- |
|
Gains on sales
of property and equipment |
|
(4) |
|
|
(36) |
|
Other |
|
29 |
|
|
5 |
Changes in assets and liabilities |
|
|
|
|
|
|
Accounts
receivable |
|
(245) |
|
|
(371) |
|
Other
assets |
|
30 |
|
|
(1) |
|
Accounts
payable |
|
76 |
|
|
133 |
|
Accrued
expenses and other liabilities |
|
28 |
|
|
171 |
Net cash provided by operating activities from continuing
operations |
|
664 |
|
|
558 |
Cash flows from investing activities of continuing
operations |
|
|
|
|
|
|
Proceeds from
sale of business |
|
705 |
|
|
- |
|
Payment for
purchases of property and equipment |
|
(394) |
|
|
(212) |
|
Proceeds from
sale of property and equipment |
|
11 |
|
|
72 |
|
Proceeds from
settlement of cross currency swaps |
|
29 |
|
|
- |
|
Other |
|
- |
|
|
(3) |
Net cash provided by (used in) investing activities from
continuing operations |
|
351 |
|
|
(143) |
Cash flows from financing activities of continuing
operations |
|
|
|
|
|
|
Repayment of
borrowings related to securitization program |
|
- |
|
|
(24) |
|
Repurchase of
debt |
|
(651) |
|
|
(2,769) |
|
Proceeds from
borrowings on ABL facility |
|
275 |
|
|
- |
|
Repayment of
borrowings on ABL facility |
|
(275) |
|
|
(200) |
|
Repayment of
debt and finance leases |
|
(47) |
|
|
(63) |
|
Payment for
debt issuance costs |
|
- |
|
|
(5) |
|
Issuance of
common stock |
|
- |
|
|
384 |
|
Change in bank
overdrafts |
|
6 |
|
|
33 |
|
Payment for tax
withholdings for restricted shares |
|
(13) |
|
|
(25) |
|
Distribution
from GXO |
|
- |
|
|
794 |
|
Other |
|
(1) |
|
|
(5) |
Net cash used in financing activities from continuing
operations |
|
(706) |
|
|
(1,880) |
Cash flows from discontinued operations |
|
|
|
|
|
|
Operating
activities of discontinued operations |
|
(5) |
|
|
68 |
|
Investing
activities of discontinued operations |
|
2 |
|
|
(95) |
|
Financing
activities of discontinued operations |
|
- |
|
|
(302) |
Net cash used in discontinued operations |
|
(3) |
|
|
(329) |
Effect of exchange rates on cash, cash equivalents and restricted
cash |
|
(25) |
|
|
(7) |
Net increase (decrease) in cash, cash equivalents and
restricted cash |
|
281 |
|
|
(1,801) |
Cash, cash equivalents and restricted cash, beginning of
period |
|
273 |
|
|
2,065 |
Cash, cash equivalents and restricted cash, end of
period |
|
554 |
|
|
264 |
Less: Cash, cash equivalents and restricted cash of
discontinued operations, end of period |
|
- |
|
|
- |
Cash, cash equivalents and restricted cash of continuing
operations, end of period |
$ |
554 |
|
$ |
264 |
North American Less-Than-Truckload Segment |
|
|
Summary Financial Table |
|
|
(Unaudited) |
|
|
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2022 |
|
2021 |
|
Change % |
|
2022 |
|
2021 |
|
Change % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (excluding fuel surcharge revenue) |
$ |
931 |
|
$ |
904 |
|
3.0% |
|
$ |
2,777 |
|
$ |
2,648 |
|
4.9% |
|
|
Fuel surcharge revenue |
|
273 |
|
|
167 |
|
63.5% |
|
|
771 |
|
|
466 |
|
65.5% |
|
|
Revenue |
|
1,204 |
|
|
1,071 |
|
12.4% |
|
|
3,548 |
|
|
3,114 |
|
13.9% |
|
|
Salaries, wages and employee benefits |
|
538 |
|
|
495 |
|
8.7% |
|
|
1,557 |
|
|
1,434 |
|
8.6% |
|
|
Purchased transportation |
|
123 |
|
|
124 |
|
-0.8% |
|
|
393 |
|
|
334 |
|
17.7% |
|
|
Fuel and fuel-related taxes |
|
105 |
|
|
73 |
|
43.8% |
|
|
320 |
|
|
207 |
|
54.6% |
|
|
Other operating expenses |
|
171 |
|
|
151 |
|
13.2% |
|
|
498 |
|
|
430 |
|
15.8% |
|
|
Depreciation and amortization |
|
60 |
|
|
57 |
|
5.3% |
|
|
175 |
|
|
169 |
|
3.6% |
|
|
Rents and leases |
|
23 |
|
|
21 |
|
9.5% |
|
|
68 |
|
|
58 |
|
17.2% |
|
|
Transaction and integration costs |
|
- |
|
|
1 |
|
-100.0% |
|
|
2 |
|
|
1 |
|
100.0% |
|
|
Restructuring costs |
|
2 |
|
|
- |
|
NM |
|
|
5 |
|
|
- |
|
NM |
|
|
Operating
income |
|
182 |
|
|
149 |
|
22.1% |
|
|
530 |
|
|
481 |
|
10.2% |
|
|
Operating
ratio (1) |
|
85.0% |
|
|
86.1% |
|
|
|
|
85.1% |
|
|
84.6% |
|
|
|
|
Other income (2) |
|
15 |
|
|
15 |
|
|
|
|
45 |
|
|
43 |
|
|
|
|
Amortization expense |
|
8 |
|
|
8 |
|
|
|
|
25 |
|
|
25 |
|
|
|
|
Transaction and integration costs |
|
- |
|
|
1 |
|
|
|
|
2 |
|
|
1 |
|
|
|
|
Restructuring costs |
|
2 |
|
|
- |
|
|
|
|
5 |
|
|
- |
|
|
|
|
Adjusted
operating income (3) |
$ |
207 |
|
$ |
173 |
|
19.7% |
|
$ |
607 |
|
$ |
550 |
|
10.4% |
|
|
Adjusted
operating ratio (3) (4) |
|
82.8% |
|
|
83.9% |
|
|
|
|
82.9% |
|
|
82.3% |
|
|
|
|
Depreciation
expense |
|
52 |
|
|
49 |
|
6.1% |
|
|
150 |
|
|
144 |
|
4.2% |
|
|
Other |
|
(1) |
|
|
- |
|
NM |
|
|
- |
|
|
- |
|
NM |
|
|
Adjusted
EBITDA (5) |
$ |
258 |
|
$ |
222 |
|
16.2% |
|
$ |
757 |
|
$ |
694 |
|
9.1% |
|
|
Adjusted
EBITDA margin (6) |
|
21.5% |
|
|
20.8% |
|
|
|
|
21.3% |
|
|
22.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains on real estate transactions |
|
- |
|
|
(5) |
|
|
|
|
- |
|
|
(27) |
|
|
|
|
Adjusted
EBITDA, excluding gains on real estate transactions
(3) |
|
258 |
|
|
217 |
|
18.9% |
|
$ |
757 |
|
$ |
667 |
|
13.5% |
|
|
Adjusted
operating income, excluding gains on real estate transactions
(3) |
$ |
207 |
|
$ |
168 |
|
23.2% |
|
$ |
607 |
|
$ |
523 |
|
16.1% |
|
|
Adjusted
operating ratio, excluding gains on real estate transactions (3)
(4) |
|
82.8% |
|
|
84.4% |
|
|
|
|
82.9% |
|
|
83.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM - Not meaningful. |
|
|
(1)
Operating ratio is calculated as (1 - (Operating income divided by
Revenue)). |
|
|
(2)
Other income primarily consists of pension income. |
|
|
(3)
See the “Non-GAAP Financial Measures” section of the press
release. |
|
|
(4)
Adjusted operating ratio is calculated as (1 - (Adjusted operating
income divided by Revenue)); adjusted operating margin is the
inverse of adjusted operating ratio |
|
|
(5)
Adjusted EBITDA is used by our chief operating decision maker to
evaluate segment profit (loss) in accordance with ASC 280. |
|
|
(6)
Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by
Revenue. |
|
|
Note: Effective in the
first quarter 2023, the Company expects making the following
changes: (i) adjusted operating income to exclude pension income
and (ii) both adjusted EBITDA and adjusted operating income to
reflect an allocation of an additional $80 million of annual
corporate costs. |
|
|
|
|
North American Less-Than-Truckload Segment |
Summary Data Table |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
Change % |
|
2022 |
|
2021 |
|
Change % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds per day
(thousands) |
|
70,063 |
|
|
72,152 |
|
-2.9% |
|
|
70,854 |
|
|
73,138 |
|
-3.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shipments per
day |
|
49,744 |
|
|
50,637 |
|
-1.8% |
|
|
49,459 |
|
|
51,187 |
|
-3.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average weight
per shipment (in pounds) |
|
1,408 |
|
|
1,425 |
|
-1.2% |
|
|
1,433 |
|
|
1,429 |
|
0.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross revenue
per shipment |
$ |
387.65 |
|
$ |
336.95 |
|
15.0% |
|
$ |
384.85 |
|
$ |
326.08 |
|
18.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross revenue
per hundredweight (including fuel surcharges) |
$ |
27.52 |
|
$ |
23.65 |
|
16.4% |
|
$ |
26.86 |
|
$ |
22.82 |
|
17.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross revenue
per hundredweight (excluding fuel surcharges) |
$ |
21.43 |
|
$ |
20.02 |
|
7.0% |
|
$ |
21.18 |
|
$ |
19.47 |
|
8.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average length
of haul (in miles) |
|
831.0 |
|
|
847.0 |
|
|
|
|
830.7 |
|
|
838.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average
load factor (1) |
|
23,574 |
|
|
23,905 |
|
-1.4% |
|
|
23,914 |
|
|
24,237 |
|
-1.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average age of
tractor fleet (years) |
|
5.96 |
|
|
5.86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
working days |
|
64.0 |
|
|
64.0 |
|
|
|
|
191.5 |
|
|
190.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Total average load factor equals freight pound miles divided by
total linehaul miles. |
Brokerage and Other Services Segment |
Summary Financial Table |
(Unaudited) |
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
Change % |
|
2022 |
|
2021 |
|
Change % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
(1) |
$ |
1,921 |
|
$ |
2,261 |
|
-15.0% |
|
$ |
6,420 |
|
$ |
6,493 |
|
-1.1% |
Cost of transportation and services |
|
1,449 |
|
|
1,762 |
|
-17.8% |
|
|
4,836 |
|
|
4,983 |
|
-3.0% |
Direct operating expense |
|
155 |
|
|
175 |
|
-11.4% |
|
|
510 |
|
|
531 |
|
-4.0% |
Sales, general and administrative expense |
|
196 |
|
|
193 |
|
1.6% |
|
|
637 |
|
|
593 |
|
7.4% |
Depreciation and amortization |
|
54 |
|
|
60 |
|
-10.0% |
|
|
168 |
|
|
180 |
|
-6.7% |
Transaction and integration costs |
|
3 |
|
|
5 |
|
-40.0% |
|
|
6 |
|
|
8 |
|
-25.0% |
Restructuring costs |
|
2 |
|
|
8 |
|
-75.0% |
|
|
8 |
|
|
9 |
|
-11.1% |
Operating income |
$ |
62 |
|
$ |
58 |
|
6.9% |
|
$ |
255 |
|
$ |
189 |
|
34.9% |
Other income |
|
2 |
|
|
- |
|
|
|
|
2 |
|
|
- |
|
|
Depreciation and amortization |
|
54 |
|
|
60 |
|
|
|
|
168 |
|
|
180 |
|
|
Transaction and integration costs |
|
3 |
|
|
5 |
|
|
|
|
6 |
|
|
8 |
|
|
Restructuring costs |
|
2 |
|
|
8 |
|
|
|
|
8 |
|
|
9 |
|
|
Adjusted EBITDA (1)(2) |
$ |
123 |
|
$ |
131 |
|
-6.1% |
|
$ |
439 |
|
$ |
386 |
|
13.7% |
Adjusted EBITDA margin (3) |
|
6.4% |
|
|
5.8% |
|
|
|
|
6.8% |
|
|
5.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The three and nine months ended September 30, 2021 include the
results of operations of the Company's intermodal business, which
the Company sold in March 2022. The revenue (including intercompany
transactions) and adjusted EBITDA attributable to intermodal for
the three months ended September 30, 2021 were approximately $309
million and $20 million, respectively. The revenue (including
intercompany transactions) and adjusted EBITDA attributable to
intermodal for the period from April 1, 2021 through September 30,
2021 were approximately $575 million and $31 million,
respectively. |
(2) Adjusted EBITDA is used by our chief operating decision maker
to evaluate segment profit (loss) in accordance with ASC 280. |
(3) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided
by Revenue. |
XPO Logistics, Inc. |
Key Data by Service Offering |
(Unaudited) |
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
|
|
|
|
|
|
|
|
|
Less-Than-Truckload |
$ |
1,250 |
|
$ |
1,091 |
|
$ |
3,658 |
|
$ |
3,165 |
Truck Brokerage |
|
686 |
|
|
700 |
|
|
2,265 |
|
|
1,903 |
Last Mile |
|
264 |
|
|
250 |
|
|
784 |
|
|
765 |
Other Brokerage (1) |
|
186 |
|
|
547 |
|
|
936 |
|
|
1,486 |
Total North America |
|
2,386 |
|
|
2,588 |
|
|
7,643 |
|
|
7,319 |
Europe |
|
741 |
|
|
757 |
|
|
2,335 |
|
|
2,311 |
Eliminations |
|
(85) |
|
|
(75) |
|
|
(231) |
|
|
(185) |
Total
Revenue |
$ |
3,042 |
|
$ |
3,270 |
|
$ |
9,747 |
|
$ |
9,445 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Transportation and Services (exclusive of depreciation and
amortization) |
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
|
|
|
|
|
|
|
|
|
Less-Than-Truckload |
$ |
715 |
|
$ |
622 |
|
$ |
2,109 |
|
$ |
1,764 |
Truck Brokerage |
|
556 |
|
|
601 |
|
|
1,844 |
|
|
1,604 |
Last Mile |
|
191 |
|
|
176 |
|
|
554 |
|
|
516 |
Other Brokerage (1) |
|
109 |
|
|
416 |
|
|
611 |
|
|
1,136 |
Total North America |
|
1,571 |
|
|
1,815 |
|
|
5,118 |
|
|
5,020 |
Europe |
|
558 |
|
|
566 |
|
|
1,747 |
|
|
1,710 |
Eliminations |
|
(85) |
|
|
(75) |
|
|
(231) |
|
|
(185) |
Total
Cost of Transportation and Services (exclusive of depreciation and
amortization) |
$ |
2,044 |
|
$ |
2,306 |
|
$ |
6,634 |
|
$ |
6,545 |
|
|
|
|
|
|
|
|
|
|
|
|
Margin
(2) (4) |
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
|
|
|
|
|
|
|
|
|
Less-Than-Truckload |
$ |
535 |
|
$ |
469 |
|
$ |
1,549 |
|
$ |
1,401 |
Truck Brokerage |
|
130 |
|
|
99 |
|
|
421 |
|
|
299 |
Last Mile |
|
73 |
|
|
74 |
|
|
230 |
|
|
249 |
Other Brokerage (1) |
|
77 |
|
|
131 |
|
|
325 |
|
|
350 |
Total North America |
|
815 |
|
|
773 |
|
|
2,525 |
|
|
2,299 |
Europe |
|
183 |
|
|
191 |
|
|
588 |
|
|
601 |
Total
Margin |
$ |
998 |
|
$ |
964 |
|
$ |
3,113 |
|
$ |
2,900 |
|
|
|
|
|
|
|
|
|
|
|
|
Margin
% of Revenue (3)(4) |
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
|
|
|
|
|
|
|
|
|
Less-Than-Truckload |
|
42.8% |
|
|
42.9% |
|
|
42.3% |
|
|
44.2% |
Truck Brokerage |
|
19.0% |
|
|
14.1% |
|
|
18.6% |
|
|
15.7% |
Last Mile |
|
27.9% |
|
|
29.7% |
|
|
29.4% |
|
|
32.6% |
Other Brokerage (1) |
|
41.1% |
|
|
23.9% |
|
|
34.7% |
|
|
23.6% |
Total North America |
|
34.2% |
|
|
29.8% |
|
|
33.0% |
|
|
31.4% |
Europe |
|
24.7% |
|
|
25.2% |
|
|
25.2% |
|
|
26.0% |
Overall Margin % of Revenue |
|
32.8% |
|
|
29.5% |
|
|
31.9% |
|
|
30.7% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Other brokerage includes expedite, freight forwarding and
managed transportation services, and intermodal through its date of
sale in March 2022. Freight forwarding includes operations
conducted outside of North America but managed by our North
American entities. |
(2) Margin is calculated as Revenue less cost of transportation and
services (exclusive of depreciation and amortization). We also
refer to this measure as gross profit dollars. |
(3) We also refer to margin % of revenue as gross profit
margin. |
(4) See the “Non-GAAP Financial Measures” section of the press
release. |
|
Less-Than-Truckload revenue is before intercompany eliminations and
includes revenue from the Company’s trailer manufacturing
business. |
Corporate and Intersegment Eliminations |
Summary Financial Table |
(Unaudited) |
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
Change % |
|
2022 |
|
2021 |
|
Change % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales,
general and administrative expense (1) |
$ |
28 |
|
$ |
79 |
|
-64.6% |
|
$ |
115 |
|
$ |
196 |
|
-41.3% |
Depreciation and amortization |
|
4 |
|
|
1 |
|
300.0% |
|
|
6 |
|
|
8 |
|
-25.0% |
Gain on sale of business |
|
- |
|
|
- |
|
NM |
|
|
(434) |
|
|
- |
|
NM |
Transaction and integration costs |
|
22 |
|
|
9 |
|
144.4% |
|
|
52 |
|
|
17 |
|
205.9% |
Restructuring costs |
|
5 |
|
|
6 |
|
-16.7% |
|
|
6 |
|
|
7 |
|
-14.3% |
Operating income (loss) (2) |
$ |
(59) |
|
$ |
(95) |
|
-37.9% |
|
$ |
255 |
|
$ |
(228) |
|
NM |
Other income (expense) (3) |
|
(1) |
|
|
4 |
|
|
|
|
(3) |
|
|
3 |
|
|
Depreciation and amortization |
|
4 |
|
|
1 |
|
|
|
|
6 |
|
|
8 |
|
|
Gain on sale of business |
|
- |
|
|
- |
|
|
|
|
(434) |
|
|
- |
|
|
Litigation settlements |
|
- |
|
|
29 |
|
|
|
|
- |
|
|
29 |
|
|
Transaction and integration costs |
|
22 |
|
|
9 |
|
|
|
|
52 |
|
|
17 |
|
|
Restructuring costs |
|
5 |
|
|
6 |
|
|
|
|
6 |
|
|
7 |
|
|
Adjusted EBITDA (4) |
$ |
(29) |
|
$ |
(46) |
|
-37.0% |
|
$ |
(118) |
|
$ |
(164) |
|
-28.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM - Not meaningful. |
(1) Sales, general and administrative expenses includes $29 million
related to litigation settlements for the three and nine months
ended September 30, 2021. |
(2) Corporate operating loss, excluding the gain on the sale of the
intermodal operation, was $179 million for the nine months ended
September 30, 2022. |
(3) Other income (expense) consists of foreign currency gain (loss)
and other income (expense). |
(4) See the “Non-GAAP Financial Measures” section of the press
release. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment eliminations represent intercompany activity between
the Company’s reportable segments that is eliminated upon
consolidation. The following table summarizes the intersegment
eliminations by line item. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
|
September 30, |
|
|
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|
|
Revenue |
$ |
(83) |
|
$ |
(62) |
|
|
|
$ |
(221) |
|
$ |
(162) |
|
|
Cost of transportation and services |
|
(83) |
|
|
(62) |
|
|
|
|
(221) |
|
|
(162) |
|
|
(exclusive of depreciation and amortization) |
|
|
|
|
|
|
|
|
|
|
|
XPO Logistics, Inc. |
Reconciliation of Non-GAAP Measures |
(Unaudited) |
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
Change % |
|
2022 |
|
2021 |
|
Change % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income from Continuing Operations to
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
from continuing operations attributable to common shareholders |
$ |
131 |
|
$ |
21 |
|
523.8% |
|
$ |
761 |
|
$ |
197 |
|
286.3% |
Debt
extinguishment loss |
|
- |
|
|
46 |
|
|
|
|
26 |
|
|
54 |
|
|
Interest
expense |
|
35 |
|
|
53 |
|
|
|
|
103 |
|
|
176 |
|
|
Income tax
provision |
|
34 |
|
|
11 |
|
|
|
|
194 |
|
|
60 |
|
|
Depreciation
and amortization expense |
|
118 |
|
|
118 |
|
|
|
|
349 |
|
|
357 |
|
|
Unrealized
loss on foreign currency option and forward contracts |
|
- |
|
|
- |
|
|
|
|
- |
|
|
1 |
|
|
Gain on sale
of business |
|
- |
|
|
- |
|
|
|
|
(434) |
|
|
- |
|
|
Litigation
settlements |
|
- |
|
|
29 |
|
|
|
|
- |
|
|
29 |
|
|
Transaction
and integration costs |
|
25 |
|
|
15 |
|
|
|
|
60 |
|
|
26 |
|
|
Restructuring
costs |
|
9 |
|
|
14 |
|
|
|
|
19 |
|
|
16 |
|
|
Adjusted EBITDA (1) (2) |
$ |
352 |
|
$ |
307 |
|
14.7% |
|
$ |
1,078 |
|
$ |
916 |
|
17.7% |
Revenue
(2) |
$ |
3,042 |
|
$ |
3,270 |
|
-7.0% |
|
$ |
9,747 |
|
$ |
9,445 |
|
3.2% |
Adjusted EBITDA margin (1) (3) |
|
11.6% |
|
|
9.4% |
|
|
|
|
11.1% |
|
|
9.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See the “Non-GAAP Financial Measures” section of the press
release. |
(2) The three and nine months ended September 30, 2021 include the
results of operations of the Company's intermodal business, which
the Company sold in March 2022. The revenue (including intercompany
transactions) and adjusted EBITDA attributable to intermodal for
the three months ended September 30, 2021 were approximately $309
million and $20 million, respectively. The revenue (including
intercompany transactions) and adjusted EBITDA attributable to
intermodal for the period from April 1, 2021 through September 30,
2021 were approximately $575 million and $31 million,
respectively. |
(3) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided
by Revenue. |
XPO Logistics, Inc. |
Reconciliation of Non-GAAP Measures (cont.) |
(Unaudited) |
(In millions, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income from Continuing Operations and
Diluted Earnings Per Share from Continuing Operations to Adjusted
Net Income from Continuing Operations and Adjusted Earnings Per
Share from Continuing Operations |
|
|
|
|
|
|
|
|
|
|
|
Net
income from continuing operations attributable to common
shareholders |
$ |
131 |
|
$ |
21 |
|
$ |
761 |
|
$ |
197 |
|
Debt
extinguishment loss |
|
- |
|
|
46 |
|
|
26 |
|
|
54 |
|
Unrealized
loss on foreign currency option and forward contracts |
|
- |
|
|
- |
|
|
- |
|
|
1 |
|
Amortization
of acquisition-related intangible assets |
|
19 |
|
|
22 |
|
|
58 |
|
|
65 |
|
Gain on sale
of business |
|
- |
|
|
- |
|
|
(434) |
|
|
- |
|
ABL amendment
cost |
|
- |
|
|
1 |
|
|
- |
|
|
1 |
|
Litigation
settlements |
|
- |
|
|
29 |
|
|
- |
|
|
29 |
|
Transaction
and integration costs |
|
25 |
|
|
15 |
|
|
60 |
|
|
26 |
|
Restructuring
costs |
|
9 |
|
|
14 |
|
|
19 |
|
|
16 |
|
Income tax
associated with the adjustments above (1) |
|
(16) |
|
|
(35) |
|
|
32 |
|
|
(49) |
|
Discrete and
other tax-related adjustments (2) |
|
- |
|
|
(4) |
|
|
- |
|
|
(4) |
Adjusted net income from continuing operations attributable
to |
|
|
|
|
|
|
|
|
|
|
|
|
common
shareholders (3) |
$ |
168 |
|
$ |
109 |
|
$ |
522 |
|
$ |
336 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings from continuing operations per
share (3) |
$ |
1.45 |
|
$ |
0.94 |
|
$ |
4.51 |
|
$ |
2.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted-average common shares outstanding |
|
116 |
|
|
116 |
|
|
116 |
|
|
114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This line item reflects the aggregate tax (expense) benefit of
all non-tax related adjustments reflected in the table above. The
detail by line item is as follows: |
|
Debt extinguishment loss |
$ |
- |
|
$ |
12 |
|
$ |
6 |
|
$ |
14 |
|
Amortization of acquisition-related intangible assets |
|
4 |
|
|
6 |
|
|
14 |
|
|
16 |
|
Gain on sale of business |
|
3 |
|
|
- |
|
|
(71) |
|
|
- |
|
Litigation settlements |
|
- |
|
|
8 |
|
|
- |
|
|
8 |
|
Transaction and integration costs |
|
6 |
|
|
4 |
|
|
14 |
|
|
6 |
|
Restructuring costs |
|
3 |
|
|
5 |
|
|
5 |
|
|
5 |
|
|
$ |
16 |
|
$ |
35 |
|
$ |
(32) |
|
$ |
49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The income tax rate applied to reconciling items excluding the gain
on sale of business is based on the GAAP annual effective tax rate,
excluding discrete items and contribution- and margin-based taxes.
The income tax rate applied to the gain on the sale of business
represents the actual tax expense impact which is considered a
discrete item. |
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Discrete tax items reflect a tax benefit related to a tax
planning initiative that resulted in the recognition of a long-term
capital loss offset by tax expense due to valuation allowances that
were recognized as a result of the spin-off of our logistics
business. |
(3) See the "Non-GAAP Financial Measures" section of the press
release. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Reconciliation of Cash Flows from Operating Activities of
Continuing Operations to Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
Net
cash provided by operating activities from continuing
operations |
$ |
265 |
|
$ |
250 |
|
$ |
664 |
|
$ |
558 |
|
Payment for
purchases of property and equipment |
|
(127) |
|
|
(77) |
|
|
(394) |
|
|
(212) |
|
Proceeds from
sale of property and equipment |
|
4 |
|
|
12 |
|
|
11 |
|
|
72 |
Free Cash Flow (1)(2) |
$ |
142 |
|
$ |
185 |
|
$ |
281 |
|
$ |
418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The third quarter of 2022 includes $53 million of cash outflows
related to transaction costs. |
(2) See the "Non-GAAP Financial Measures" section of the press
release. |
XPO Logistics, Inc. |
Other Reconciliations |
(Unaudited) |
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
|
|
|
|
|
|
|
|
|
2022 |
|
2022 |
|
|
|
|
|
|
|
|
|
Reconciliation of Net Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt |
$ |
2,908 |
|
$ |
2,912 |
|
|
|
|
|
|
|
|
|
Less: Cash and
cash equivalents |
|
544 |
|
|
436 |
|
|
|
|
|
|
|
|
|
Net debt
(1) |
$ |
2,364 |
|
$ |
2,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trailing Twelve Months Ended |
|
Trailing Twelve Months Ended |
|
|
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
|
|
|
|
|
|
|
|
|
2022 |
|
2022 |
|
|
|
|
|
|
|
|
|
Reconciliation of Net Leverage |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt |
$ |
2,364 |
|
$ |
2,476 |
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
$ |
1,401 |
|
$ |
1,356 |
|
|
|
|
|
|
|
|
|
Net leverage
(1) |
|
1.7x |
|
|
1.8x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trailing Twelve Months Ended |
|
Nine Months Ended |
|
Trailing Twelve Months Ended |
|
Six Months Ended |
|
Twelve Months Ended |
|
Nine Months Ended |
|
Six Months Ended |
|
September 30,(2) |
|
September 30, |
|
June 30,(3) |
|
June 30, |
|
December 31, |
|
September 30, |
|
June 30, |
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
2021 |
|
2021 |
|
2021 |
Reconciliation of Net Income from Continuing Operations to
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to common shareholders |
$ |
887 |
|
$ |
761 |
|
$ |
777 |
|
$ |
630 |
|
$ |
323 |
|
$ |
197 |
|
$ |
176 |
Debt
extinguishment loss |
|
26 |
|
|
26 |
|
|
72 |
|
|
26 |
|
|
54 |
|
|
54 |
|
|
8 |
Interest
expense |
|
138 |
|
|
103 |
|
|
156 |
|
|
68 |
|
|
211 |
|
|
176 |
|
|
123 |
Income tax
provision |
|
221 |
|
|
194 |
|
|
198 |
|
|
160 |
|
|
87 |
|
|
60 |
|
|
49 |
Depreciation
and amortization expense |
|
468 |
|
|
349 |
|
|
468 |
|
|
231 |
|
|
476 |
|
|
357 |
|
|
239 |
Unrealized loss
on foreign currency option and forward contracts |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
1 |
|
|
1 |
|
|
1 |
Gain on sale of
business |
|
(434) |
|
|
(434) |
|
|
(434) |
|
|
(434) |
|
|
- |
|
|
- |
|
|
- |
Litigation
settlements |
|
2 |
|
|
- |
|
|
31 |
|
|
- |
|
|
31 |
|
|
29 |
|
|
- |
Transaction and
integration costs |
|
71 |
|
|
60 |
|
|
61 |
|
|
35 |
|
|
37 |
|
|
26 |
|
|
11 |
Restructuring
costs |
|
22 |
|
|
19 |
|
|
27 |
|
|
10 |
|
|
19 |
|
|
16 |
|
|
2 |
Adjusted EBITDA (1) |
$ |
1,401 |
|
$ |
1,078 |
|
$ |
1,356 |
|
$ |
726 |
|
$ |
1,239 |
|
$ |
916 |
|
$ |
609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
See the “Non-GAAP Financial Measures” section of the press
release. |
(2)
Trailing twelve months ended September 30, 2022 is calculated as
the nine months ended September 30, 2022 plus the twelve months
ended December 31, 2021 less the nine months ended September 30,
2021. |
(3)
Trailing twelve months ended June 30, 2022 is calculated as the six
months ended June 30, 2022 plus the twelve months ended December
31, 2021 less the six months ended June 30, 2021. |
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