Part I—Financial Information [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents XPO, Inc.'s unaudited condensed consolidated financial statements for the quarter ended March 31, 2024, including balance sheets, income statements, comprehensive income, cash flows, and changes in equity, along with detailed notes explaining accounting policies, segment performance, debt, derivatives, and commitments [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (March 31, 2024 vs. December 31, 2023) | (In millions) | March 31, 2024 | December 31, 2023 | | :--------------------------------------- | :------------- | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $229 | $412 | | Accounts receivable, net | 1,077 | 973 | | Total current assets | 1,528 | 1,593 | | Property and equipment, net | 3,257 | 3,075 | | Goodwill | 1,484 | 1,498 | | Total assets | $7,603 | $7,492 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Accounts payable | $570 | $532 | | Total current liabilities | 1,622 | 1,590 | | Long-term debt | 3,323 | 3,335 | | Total liabilities | 6,271 | 6,226 | | Total equity | 1,332 | 1,266 | | Total liabilities and equity | $7,603 | $7,492 | - Total assets increased by **$111 million** from December 31, 2023, to March 31, 2024, reaching **$7,603 million** [8](index=8&type=chunk) - Total equity increased by **$66 million** to **$1,332 million** [8](index=8&type=chunk) [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Condensed Consolidated Statements of Income (Three Months Ended March 31, 2024 vs. 2023) | (In millions, except per share data) | 2024 | 2023 | | :----------------------------------- | :--- | :--- | | Revenue | $2,018 | $1,907 | | Operating income | 138 | 58 | | Income from continuing operations before income tax provision | 90 | 21 | | Income tax provision | 23 | 4 | | Income from continuing operations | 67 | 17 | | Net income | $67 | $14 | | Basic earnings per share | $0.58 | $0.13 | | Diluted earnings per share | $0.56 | $0.13 | - Net income significantly increased to **$67 million** in Q1 2024 from **$14 million** in Q1 2023, driven by a substantial rise in operating income from **$58 million** to **$138 million** [11](index=11&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Condensed Consolidated Statements of Comprehensive Income (Three Months Ended March 31, 2024 vs. 2023) | (In millions) | 2024 | 2023 | | :------------------------------------------------------------------------------------------------ | :--- | :--- | | Net income | $67 | $14 | | Other comprehensive income (loss), net of tax | (5) | 15 | | Comprehensive income | $62 | $29 | - Comprehensive income more than doubled to **$62 million** in Q1 2024 from **$29 million** in Q1 2023, despite a shift from other comprehensive income to a loss [15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (Three Months Ended March 31, 2024 vs. 2023) | (In millions) | 2024 | 2023 | | :---------------------------------------------------- | :--- | :--- | | Net cash provided by operating activities from continuing operations | $145 | $76 | | Net cash used in investing activities from continuing operations | (299) | (216) | | Net cash used in financing activities from continuing operations | (29) | (10) | | Net decrease in cash, cash equivalents and restricted cash | (183) | (155) | | Cash, cash equivalents and restricted cash, end of period | $235 | $315 | - Net cash provided by operating activities from continuing operations increased by **$69 million** year-over-year to **$145 million** [19](index=19&type=chunk)[115](index=115&type=chunk) - Net cash used in investing activities increased to **$299 million**, primarily due to higher capital expenditures [19](index=19&type=chunk)[116](index=116&type=chunk) [Condensed Consolidated Statements of Changes in Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Condensed Consolidated Statements of Changes in Equity (March 31, 2024 vs. December 31, 2023) | (Shares in thousands, dollars in millions) | Balance as of Dec 31, 2023 | Net Income | Other Comprehensive Loss | Exercise/Vesting of Stock Awards | Tax Withholdings | Stock Comp. Expense | Balance as of Mar 31, 2024 | | :--------------------------------------- | :------------------------- | :--------- | :----------------------- | :------------------------------- | :--------------- | :------------------ | :------------------------- | | Total Equity | $1,266 | $67 | $(5) | $0 | $(15) | $19 | $1,332 | - Total equity increased by **$66 million** from **$1,266 million** at December 31, 2023, to **$1,332 million** at March 31, 2024, primarily driven by net income and stock compensation expense, partially offset by other comprehensive loss and tax withholdings [23](index=23&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Organization, Description of Business and Basis of Presentation](index=9&type=section&id=1.%20Organization,%20Description%20of%20Business%20and%20Basis%20of%20Presentation) XPO, Inc. is a freight transportation services provider in North America and Europe, utilizing proprietary technology, and is evaluating the divestiture of its European business - XPO acquired **28 LTL service centers** in the U.S. from Yellow Corporation in December 2023 to expand its LTL network capacity [27](index=27&type=chunk) - The Board of Directors has authorized the divestiture of the European business, though terms and timing are uncertain [28](index=28&type=chunk) - The company uses trade receivables securitization and factoring programs to manage cash flows, with the European securitization program fully utilized at **$216 million** as of March 31, 2024 [33](index=33&type=chunk)[34](index=34&type=chunk) [Note 2. Segment Reporting](index=11&type=section&id=2.%20Segment%20Reporting) XPO operates in two reportable segments: North American Less-Than-Truckload (LTL) and European Transportation, with performance assessed by Adjusted EBITDA - XPO's two reportable segments are North American LTL and European Transportation [40](index=40&type=chunk) Segment Revenue and Adjusted EBITDA (Three Months Ended March 31, 2024 vs. 2023) | (in millions) | 2024 Revenue | 2023 Revenue | 2024 Adj. EBITDA | 2023 Adj. EBITDA | | :-------------------- | :----------- | :----------- | :--------------- | :--------------- | | North American LTL | $1,221 | $1,120 | $255 | $182 | | European Transportation | $797 | $787 | $38 | $37 | | Corporate | N/A | N/A | $(5) | $(9) | | Total | $2,018 | $1,907 | $288 | $210 | - North American LTL Adjusted EBITDA increased by **40.1%** to **$255 million**, while European Transportation Adjusted EBITDA increased by **2.7%** to **$38 million** [44](index=44&type=chunk) [Note 3. Revenue Recognition](index=13&type=section&id=3.%20Revenue%20Recognition) Revenue is disaggregated by geographic area based on sales office location, showing contributions from various North American and European regions Disaggregated Revenue by Geographic Area (Three Months Ended March 31, 2024 vs. 2023) | (In millions) | 2024 Total Revenue | 2023 Total Revenue | | :-------------------------------- | :----------------- | :----------------- | | United States | $1,194 | $1,097 | | North America (excluding United States) | $27 | $23 | | France | $334 | $340 | | United Kingdom | $243 | $224 | | Europe (excluding France and United Kingdom) | $220 | $223 | | Total | $2,018 | $1,907 | [Note 4. Restructuring Charges](index=13&type=section&id=4.%20Restructuring%20Charges) The company incurs restructuring charges, primarily severance and facility-related costs, to improve efficiency, with **$8 million** incurred in Q1 2024 Restructuring-Related Activity (Three Months Ended March 31, 2024) | (In millions) | Reserve Balance as of Dec 31, 2023 | Charges Incurred | Payments | Reserve Balance as of Mar 31, 2024 | | :-------------------- | :--------------------------------- | :--------------- | :------- | :--------------------------------- | | Severance | | | | | | North American LTL | $2 | $0 | $(1) | $1 | | European Transportation | $1 | $8 | $(4) | $5 | | Corporate | $8 | $0 | $(3) | $5 | | Total | $11 | $8 | $(8) | $11 | - Total restructuring charges incurred in Q1 2024 were **$8 million**, primarily for European Transportation severance [48](index=48&type=chunk) [Note 5. Derivative Instruments](index=14&type=section&id=5.%20Derivative%20Instruments) XPO uses derivative instruments, including cross-currency and interest rate swaps, to manage exposure to interest rate and foreign currency fluctuations, not for speculative purposes - The company uses cross-currency swap agreements to manage foreign currency exchange risk for USD-denominated debt, effectively converting it to EUR-denominated debt [52](index=52&type=chunk) - Interest rate swaps are used to mitigate variability in forecasted interest payments on the Senior Secured Term Loan Credit Agreement, converting floating rates to fixed rates [55](index=55&type=chunk) Effect of Derivative Instruments on Income (Three Months Ended March 31, 2024 vs. 2023) | (In millions) | Gain (Loss) in OCI (2024) | Gain (Loss) in OCI (2023) | Gain in Income (2024) | Gain in Income (2023) | | :------------------------------------------------------------------------------------------------ | :------------------------ | :------------------------ | :-------------------- | :-------------------- | | Interest rate swaps (cash flow hedges) | $2 | $1 | $0 | $0 | | Cross-currency swap agreements (net investment hedges) | $13 | $(10) | $3 | $2 | | Total | $15 | $(9) | $3 | $2 | [Note 6. Debt](index=15&type=section&id=6.%20Debt) XPO's total debt was **$3,386 million** as of March 31, 2024, with **$564 million** available under its ABL Facility and a term loan interest rate of approximately **7.32%** Debt Overview (March 31, 2024 vs. December 31, 2023) | (In millions) | March 31, 2024 Carrying Value | December 31, 2023 Carrying Value | | :-------------------------------- | :------------------------------ | :------------------------------- | | Term loan facility | $1,088 | $1,087 | | 6.25% senior secured notes due 2028 | $822 | $822 | | 7.125% senior notes due 2031 | $445 | $445 | | 7.125% senior notes due 2032 | $575 | $575 | | 6.70% senior debentures due 2034 | $222 | $221 | | Finance leases, asset financing and other | $234 | $254 | | Total debt | $3,386 | $3,404 | | Short-term borrowings and current maturities | $63 | $69 | | Long-term debt | $3,323 | $3,335 | - As of March 31, 2024, XPO had **$564 million** available under its ABL Facility and **$138 million** issued under its **$200 million** Letters of Credit Facility [59](index=59&type=chunk)[60](index=60&type=chunk) - The applicable interest rate for the term loan facility was approximately **7.32%** as of March 31, 2024 [61](index=61&type=chunk) [Note 7. Earnings (Loss) per Share](index=16&type=section&id=7.%20Earnings%20(Loss)%20per%20Share) Basic and diluted earnings per share from continuing operations significantly increased in Q1 2024 compared to Q1 2023, reflecting higher net income Earnings (Loss) per Share Data (Three Months Ended March 31, 2024 vs. 2023) | (In millions, except per share data) | 2024 | 2023 | | :----------------------------------- | :--- | :--- | | Net income from continuing operations | $67 | $17 | | Basic weighted-average common shares | 116 | 116 | | Diluted weighted-average common shares | 120 | 116 | | Basic earnings from continuing operations per share | $0.58 | $0.15 | | Diluted earnings from continuing operations per share | $0.56 | $0.15 | - Basic EPS from continuing operations rose from **$0.15** in Q1 2023 to **$0.58** in Q1 2024, and diluted EPS from continuing operations increased from **$0.15** to **$0.56** [62](index=62&type=chunk) [Note 8. Commitments and Contingencies](index=17&type=section&id=8.%20Commitments%20and%20Contingencies) XPO is involved in various legal proceedings, accrues for probable losses, and resolved a California environmental matter for **$7.9 million** in April 2024 - The company accrues for specific legal proceedings when a loss is probable and reasonably estimable, and does not believe current matters will have a material adverse effect [64](index=64&type=chunk)[65](index=65&type=chunk) - A California environmental matter, previously accrued for, was resolved for **$7.9 million** in April 2024 [68](index=68&type=chunk) - An insurance contribution litigation case, Allianz Global Risks US Ins. Co. v. ACE Property & Casualty Ins. Co., et al., is ongoing with trials scheduled for pollution exclusion in Fall 2024 and allocation of defense costs in early 2025 [67](index=67&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on XPO's financial condition and operational results for Q1 2024, highlighting revenue growth, improved operating income, and strategic investments in LTL capacity and technology [Executive Summary](index=19&type=section&id=Executive%20Summary) - XPO is a leading freight transportation services provider in North America and Europe, with approximately **39,000 employees** and **610 locations** in **17 countries** serving **52,000 customers** as of March 31, 2024 [71](index=71&type=chunk) - The North American LTL segment holds approximately **9%** of the estimated **$52 billion** U.S. market [73](index=73&type=chunk) - The company acquired **28 LTL service centers** from Yellow Corporation in December 2023 to expand its LTL network capacity [77](index=77&type=chunk) - XPO's European Transportation segment holds leading positions in France (full truckload broker, pallet network) and Iberia (full truckload broker, LTL provider), and is a top-tier dedicated truckload provider in the U.K [80](index=80&type=chunk) - Proprietary cloud-based technology optimizes LTL operations, including linehaul, pickup-and-delivery, and pricing, managing hundreds of thousands of activities daily [83](index=83&type=chunk)[84](index=84&type=chunk) [Consolidated Summary Financial Table](index=21&type=section&id=Consolidated%20Summary%20Financial%20Table) Consolidated Financial Performance (Three Months Ended March 31, 2024 vs. 2023) | (Dollars in millions) | 2024 | 2023 | Change % | | :------------------------------------------------ | :--- | :--- | :------- | | Revenue | $2,018 | $1,907 | 5.8 % | | Salaries, wages and employee benefits | $834 | $762 | 9.4 % | | Purchased transportation | $438 | $457 | (4.2)% | | Fuel, operating expenses and supplies | $413 | $427 | (3.3)% | | Operating income | $138 | $58 | 137.9 % | | Interest expense | $58 | $42 | 38.1 % | | Income from continuing operations before income tax provision | $90 | $21 | 328.6 % | | Income tax provision | $23 | $4 | 475.0 % | | Income from continuing operations | $67 | $17 | 294.1 % | | Net income | $67 | $14 | 378.6 % | - Consolidated revenue increased by **5.8%** to **$2.0 billion**, primarily driven by growth in the North American LTL segment and a **1.0 percentage point** increase from foreign currency movement [87](index=87&type=chunk) - Operating income surged by **137.9%** to **$138 million**, and net income increased by **378.6%** to **$67 million**, reflecting improved operational efficiency and lower restructuring costs [86](index=86&type=chunk)[95](index=95&type=chunk) [Segment Financial Results](index=23&type=section&id=Segment%20Financial%20Results) North American LTL Segment Performance (Three Months Ended March 31, 2024 vs. 2023) | (Dollars in millions) | 2024 | 2023 | Change % | | :-------------------- | :--- | :--- | :------- | | Revenue | $1,221 | $1,120 | 9.0 % | | Adjusted EBITDA | $255 | $182 | 40.1 % | | Depreciation and amortization | $82 | $68 | 20.6 % | North American LTL Key Revenue Metrics (Three Months Ended March 31, 2024 vs. 2023) | Metric | 2024 | 2023 | Change % | | :------------------------------------------ | :------- | :------- | :------- | | Pounds per day (thousands) | 70,709 | 68,889 | 2.6 % | | Shipments per day | 51,392 | 49,107 | 4.7 % | | Average weight per shipment (in pounds) | 1,376 | 1,403 | (1.9)% | | Gross revenue per hundredweight (excl. fuel surcharges) | $23.13 | $21.06 | 9.8 % | - North American LTL revenue increased **9.0%** to **$1.2 billion**, driven by higher volume (shipments per day up **4.7%**) and a **9.8%** increase in gross revenue per hundredweight, excluding fuel surcharges [100](index=100&type=chunk)[101](index=101&type=chunk) - North American LTL Adjusted EBITDA increased **40.1%** to **$255 million**, with its margin expanding to **20.9%** of revenue, reflecting improved pricing, volume, lower purchased transportation costs, and reduced damage claims [103](index=103&type=chunk) European Transportation Segment Performance (Three Months Ended March 31, 2024 vs. 2023) | (Dollars in millions) | 2024 | 2023 | Change % | | :-------------------- | :--- | :--- | :------- | | Revenue | $797 | $787 | 1.3 % | | Adjusted EBITDA | $38 | $37 | 2.7 % | | Depreciation and amortization | $34 | $32 | 6.3 % | - European Transportation revenue increased **1.3%** to **$797 million**, with foreign currency movement contributing approximately **2.5 percentage points** to this increase [105](index=105&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) - Cash and cash equivalents decreased to **$229 million** as of March 31, 2024, from **$412 million** at December 31, 2023 [107](index=107&type=chunk) - Total liquidity was approximately **$793 million** as of March 31, 2024, including **$564 million** available under the ABL Facility [107](index=107&type=chunk)[108](index=108&type=chunk) - Net cash provided by operating activities from continuing operations increased by **$69 million** to **$145 million** in Q1 2024 [113](index=113&type=chunk)[115](index=115&type=chunk) - Cash used in investing activities from continuing operations increased to **$299 million** in Q1 2024, primarily due to **$306 million** in property and equipment purchases, reflecting continued investment for long-term growth [113](index=113&type=chunk)[116](index=116&type=chunk) - Anticipated full-year gross capital expenditures for 2024 are between **$700 million** and **$800 million**, to be funded by cash on hand and available liquidity [118](index=118&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) XPO is exposed to market risks from changes in interest rates, foreign currency exchange rates, and commodity prices, with no material changes reported in Q1 2024 - The company is exposed to market risk related to changes in interest rates, foreign currency exchange rates, and commodity prices [120](index=120&type=chunk) - No material changes to quantitative and qualitative disclosures about market risk occurred during Q1 2024 compared to the 2023 Form 10-K [120](index=120&type=chunk) [Item 4. Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that XPO's disclosure controls and procedures were effective as of March 31, 2024, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2024 [121](index=121&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2024 [122](index=122&type=chunk) Part II—Other Information [Item 1. Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is consistent with the Company's 2023 Annual Report on Form 10-K and Note 8 of the current report - Legal proceedings information is consistent with the 2023 Form 10-K and Note 8 of this report [123](index=123&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) There are no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 - No material changes to risk factors were reported compared to the 2023 Form 10-K [124](index=124&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds occurred [125](index=125&type=chunk) [Item 3. Defaults Upon Senior Securities](index=26&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - No defaults upon senior securities were reported [126](index=126&type=chunk) [Item 4. Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Mine Safety Disclosures are not applicable [127](index=127&type=chunk) [Item 5. Other Information](index=26&type=section&id=Item%205.%20Other%20Information) There is no other information to report under this item - No other information was reported [128](index=128&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including bylaws, restricted stock unit award agreements, certifications from executive officers, and XBRL-related documents - Exhibits include the 4th Amended and Restated Bylaws, various Restricted Stock Unit Award Agreements, and certifications from the Principal Executive Officer and Principal Financial Officer [130](index=130&type=chunk) [Signatures](index=28&type=section&id=Signatures) The report is duly signed on behalf of XPO, Inc. by its Chief Executive Officer, Mario Harik, and Chief Financial Officer, Kyle Wismans, as of May 3, 2024 - The report was signed by Mario Harik, CEO, and Kyle Wismans, CFO, on May 3, 2024 [132](index=132&type=chunk)

Exhibit 99.1 XPO Reports First Quarter 2024 Results GREENWICH, Conn. – May 3, 2024 – XPO (NYSE: XPO) today announced its financial results for the first quarter 2024. The company reported diluted earnings from continuing operations per share of $0.56, compared with $0.15 for the same period in 2023, and adjusted diluted earnings from continuing operations per share of $0.81, compared with $0.56 for the same period in 2023. First Quarter 2024 Summary Results | Three months ended March 31, | Revenue | | | | | ...

Company Operations - XPO operates approximately 596 locations in 17 countries, serving around 52,000 customers with a workforce of about 38,000 employees[16]. - The company has approximately 23,300 employees in North America, 14,300 in Europe, and 400 in Asia, with 61% of global employees based in North America[63]. - The company operates approximately 596 locations globally, with 439 leased and 153 owned facilities[181]. Financial Performance - Consolidated revenue for 2023 increased by 0.3% to $7.744 billion compared to 2022, with foreign currency movement contributing approximately 0.8 percentage points to revenue growth[202]. - Operating income for 2023 was $438 million, representing 5.7% of revenue, an increase from 4.9% in 2022[201]. - Salaries, wages, and employee benefits in 2023 amounted to $3.159 billion, representing 40.8% of revenue, up from 38.2% in 2022, primarily due to inflation and increased incentive compensation[203]. - Purchased transportation costs were $1.760 billion, or 22.7% of revenue, down from 25.4% in 2022, reflecting lower rates paid to third-party providers[204]. - Fuel, operating expenses, and supplies totaled $1.623 billion, or 21.0% of revenue, compared to 21.9% in 2022, mainly due to lower fuel costs[205]. - Insurance and claims in 2023 amounted to $167 million, a decrease from $183 million in 2022, reflecting improved operating performance related to damaged shipments[207]. - Gains on sales of property and equipment in 2023 were $5 million, down from $60 million in 2022, due to a lack of comparable gains in 2023[208]. - Depreciation and amortization expense increased to $432 million in 2023 from $392 million in 2022, driven by capital investments in tractors and trailers[208]. - There was no goodwill impairment loss in 2023, compared to a $64 million loss in 2022 related to European Transportation reporting units[209]. - Restructuring costs decreased to $44 million in 2023 from $50 million in 2022, as part of ongoing resource optimization efforts[211]. - Other income for 2023 was $15 million, down from $55 million in 2022, primarily due to lower net periodic pension income[212]. - Debt extinguishment loss was $25 million in 2023, compared to $39 million in 2022, mainly related to refinancing activities[213]. - Interest expense increased by 24.4% to $168 million in 2023 from $135 million in 2022, primarily due to higher prevailing interest rates[214]. - The company anticipates interest expense to be between $240 million and $260 million in 2024[215]. Market Position and Strategy - The North American LTL segment holds an 8% market share in a $59 billion industry, moving approximately 18 billion pounds of freight in 2023[18][19]. - The company added 551 net new doors to its LTL network since launching the LTL 2.0 growth plan in Q4 2021, and completed the acquisition of 28 service centers from Yellow Corporation in December 2023[20][26]. - The company plans to purchase approximately 2,000 new LTL tractors for its North American network in 2024[38]. - The ongoing freight recession in 2023 has impacted industry volumes, but XPO is positioned to benefit from trends toward outsourcing and smaller freight shipments[51]. - The company has experienced significant growth, focusing on organic growth through new customer wins and increased business with existing customers, as well as additional acquisitions[104]. - The company’s action plan to enhance network efficiencies in its North American LTL business includes expanding the tractor fleet and increasing production capacity at its trailer manufacturing facility[98]. Employee and Workforce Development - The company graduated nearly 800 students from its LTL driver training locations in 2023, providing tuition-free training and pay while training[82]. - Employee satisfaction scores reached their highest historical levels in 2023, with an engagement survey participation rate of over 80%[75]. - The total permanent workforce expanded by 1.4% year-over-year, with a net increase of 401 new permanent employees[85]. - The company offers up to 80 hours of paid prenatal leave and six weeks of 100% paid time off for primary caregivers of newborns in the U.S.[86]. - As of December 31, 2023, 14% of global employees are women, increasing to 37% when excluding drivers, dockworkers, and technicians[65]. - In 2023, 56% of newly hired U.S. employees self-identified as ethnically or racially diverse, representing a 1.4% increase from 2022[66]. Risks and Challenges - Economic recessions and fluctuations in freight volumes in North America and Europe could materially impact the company’s business[96]. - The company’s profitability may be adversely affected if investments in equipment and service centers do not align with customer demand[99]. - The company may divest its European business, which could adversely affect its operations, cash flows, and stock price[106]. - A potential divestiture would result in a smaller, less diversified company, concentrating solely on North American LTL, increasing vulnerability to U.S. market conditions[107]. - The company faces risks related to intellectual property rights, which could lead to increased costs or legal prohibitions if infringed[115]. - The company is exposed to currency exchange rate fluctuations, particularly with significant assets and earnings in euros and British pounds[118]. - Fuel expenses are a major cost for LTL operations, and fluctuations in fuel prices could materially impact revenues and profitability[120]. - Seasonal weather conditions historically decrease fleet productivity, impacting operations and costs[122]. - Cybersecurity threats pose significant risks, with potential service interruptions and reputational harm if breaches occur[129]. - The company faces risks related to its information technology infrastructure, which could adversely affect operations and financial condition due to potential failures and delays[132]. - Outstanding indebtedness may limit the company's ability to fund future capital expenditures and acquisitions, potentially harming financial flexibility and competitive position[134]. - The company may struggle to generate sufficient cash flows to meet debt obligations, which could lead to material adverse effects on financial position and operations[135]. - Interest rate fluctuations could negatively impact financial results, as the company has floating rate credit facilities tied to the Secured Overnight Financing Rate (SOFR)[138]. - A shortage of qualified drivers in the transportation industry could lead to increased compensation costs and underutilization of the truck fleet, adversely impacting profitability[141]. - The company has faced labor disputes and negotiations that could disrupt operations and negatively affect revenues and financial results[143]. - The spin-offs of GXO and RXO may not yield the expected benefits, and indemnification obligations could significantly impact the company's financial condition[155]. - The company may face increased costs and operational impacts if future organizing efforts by labor organizations are successful[154]. - XPO and its stockholders may face significant tax liabilities if the spin-offs of GXO and RXO do not qualify for tax-free treatment under U.S. federal income tax laws[158]. - The company is involved in multiple lawsuits that could result in significant expenditures and impact operations, with potential claims exceeding insurance coverage[160]. - An increase in self-insured claims or insurance premiums could adversely affect the company's operating results[161]. - Changes in income tax regulations may increase the company's effective tax rate and reduce cash flows from operating activities[165]. - The company is subject to stringent emissions-control regulations that could require significant operational changes and incur additional costs[168]. - Future laws and regulations may impose higher costs or require changes to operating practices, negatively impacting demand for services[170]. - The company faces intense competition in the transportation services industry, which could lead to reduced revenues and profit margins[174]. Governance and Compliance - The company maintains a robust governance structure and a Code of Business Ethics to ensure compliance with various regulations[62]. - The company employs a robust cybersecurity program managed by a dedicated Chief Information Security Officer to mitigate risks from cybersecurity threats[176]. - The information security team continuously reviews systems for unauthorized access and manages cybersecurity threats posed by third-party service providers[177].

XPO Investor Overview Q4 2023 February 2024 This document 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 our full year 2024 expectations of gross capex, interest expense, pension income, adjusted effective tax rate, and diluted share count, and future financial targets of North American LTL revenue CAGR, adjusted EBITDA CAGR, adjusted operatin ...

Financial Performance - Consolidated revenue for Q3 2023 increased by 1.7% to $1.98 billion compared to Q3 2022, while revenue for the first nine months of 2023 decreased by 1.4% to $5.8 billion compared to the same period in 2022 [104]. - Operating income for Q3 2023 was $154 million, a 10.8% increase from $139 million in Q3 2022 [103]. - Net income for Q3 2023 was $84 million, a decrease of 35.9% from $131 million in Q3 2022 [103]. - Revenue for the North American LTL segment increased 1.9% to $1.23 billion in Q3 2023, while it decreased 1.9% to $3.48 billion for the first nine months of 2023 [122]. - Revenue in the European Transportation segment increased by 1.5% to $752 million for Q3 2023, compared to $741 million in Q3 2022 [129]. - Revenue for the first nine months of 2023 decreased by 0.6% to $2.32 billion, down from $2.34 billion in the same period of 2022 [129]. - Adjusted EBITDA for Q3 2023 was $241 million, or 19.6% of revenue, compared to $240 million, or 19.9% of revenue in Q3 2022 [126]. - Adjusted EBITDA for Q3 2023 was $44 million, or 5.8% of revenue, compared to $43 million, or 5.9% of revenue in Q3 2022 [130]. Operational Metrics - For the trailing 12 months ended September 30, 2023, the company delivered approximately 18 billion pounds of freight [93]. - The company aims to add 900 net new doors to its terminal footprint by the first half of 2024, having already added 531 net new doors since implementing the LTL 2.0 growth plan [94]. - The in-house trailer manufacturing facility produced 4,705 trailers in 2022, with a goal to exceed 6,000 trailers in 2023 [95]. - The average weight per shipment decreased to 1,347 pounds in Q3 2023, down 4.3% from 1,408 pounds in Q3 2022 [123]. Employee and Operational Costs - Salaries, wages, and employee benefits for Q3 2023 were $809 million, or 40.9% of revenue, up from $739 million, or 38.0% of revenue in Q3 2022 [106]. - Purchased transportation costs for Q3 2023 were $437 million, or 22.1% of revenue, down from $480 million, or 24.7% of revenue in Q3 2022 [107]. - Fuel, operating expenses, and supplies for Q3 2023 were $406 million, or 20.5% of revenue, compared to $425 million, or 21.8% of revenue in Q3 2022 [108]. - Interest expense increased to $41 million in Q3 2023 from $35 million in Q3 2022, primarily due to higher prevailing interest rates [116]. - Depreciation and amortization expense for Q3 2023 was $110 million, up from $99 million in Q3 2022 [111]. - Restructuring costs for Q3 2023 were $1 million, down from $7 million in Q3 2022 [113]. - Other income for Q3 2023 was $4 million, down from $15 million in Q3 2022, reflecting lower net periodic pension income [114]. Liquidity and Capital Expenditures - Total liquidity as of September 30, 2023, was approximately $944 million, down from $1.06 billion as of December 31, 2022 [132]. - Cash generated from operating activities for the first nine months of 2023 was $443 million, a decrease of $185 million compared to $628 million in the same period of 2022 [144]. - Cash used in investing activities increased to $473 million in the first nine months of 2023, compared to $315 million in the same period of 2022 [147]. - The company had $2.4 billion total outstanding principal amount of debt as of September 30, 2023, with $112 million maturing in 2025 [149]. - Future interest payments associated with the company's debt are estimated to aggregate approximately $1.0 billion [149]. - The company anticipates full-year gross capital expenditures to be between $675 million and $725 million in 2023 [150]. - A hypothetical 1% increase in interest rates would increase annual interest expense by $7 million based on the $700 million outstanding on the term loan facility [152]. Market Position - The North American Less-Than-Truckload (LTL) segment holds approximately 8% market share of the $59 billion U.S. market as of December 31, 2022 [91]. - The proprietary technology used by the company optimizes linehaul, pickup-and-delivery, and pricing, which are critical for managing its extensive LTL network [99].

Financial Data and Key Metrics Changes - The company reported revenue of $2 billion for Q3 2023, a 2% increase year-over-year and a 3% sequential increase from Q2 2023 [31] - Adjusted EBITDA improved to $278 million, reflecting a 6% year-over-year increase [7][35] - Adjusted diluted EPS was $0.88, higher than expected, although down 7% from the previous year [8][40] - Net income from continuing operations was $86 million, with diluted EPS of $0.72, compared to $92 million and $0.79 a year ago [38] Business Segment Data and Key Metrics Changes - In the LTL segment, revenue increased by 2% year-over-year and 8% sequentially, with adjusted EBITDA growing to $241 million [31][37] - The European Transportation segment saw adjusted EBITDA increase to $44 million for the quarter [37] - The claims ratio for damages improved to 0.4%, down from 0.7% in the prior quarter and significantly better than the 1.2% at the launch of LTL 2.0 [9][12] Market Data and Key Metrics Changes - The company experienced a 7.8% year-over-year increase in shipment count, driven by a 13% growth in the local sales channel [43] - Yield, excluding fuel, grew by 6.4% year-over-year, indicating strong pricing trends [47] - The average tractor age decreased from 5.9 years at the end of 2022 to 5.2 years, reflecting ongoing investments in fleet modernization [14] Company Strategy and Development Direction - The company is focused on four pillars of its LTL 2.0 strategy: customer service, network investment, yield growth, and cost efficiency [7][18][22] - More than two-thirds of the 2023 CapEx is allocated to increasing fleet capacity, with a target of 8% to 12% of revenue for CapEx allocation through 2027 [17] - The company aims to be the best-in-class LTL service provider, with ongoing investments in service improvements and technology [12][28] Management's Comments on Operating Environment and Future Outlook - Management noted a soft market for freight transportation but expressed confidence in the company's ability to capture market share and improve service levels [7][26] - There is optimism regarding demand recovery in 2024, although the macroeconomic environment remains uncertain [71] - The company expects to outperform typical seasonality in Q4, with anticipated yield growth in the high single-digit range [54][55] Other Important Information - The company ended the quarter with $355 million in cash and $944 million in total liquidity [40] - The company is targeting a reduction in third-party linehaul miles to at least 50% by 2027 compared to 2021 levels [24] Q&A Session Summary Question: Operating ratio and fourth-quarter outlook - Management expects Q4 tonnage to be up low single digits year-over-year, with yield growth expected to accelerate [54][55] Question: Pricing sustainability and accessorial revenue - Contract renewal pricing is currently up 9%, and management anticipates this to be sustainable in the near term [58][60] Question: Impact of lower claims on pricing - Improved service and lower claims ratios are expected to lead to higher pricing, with a goal of reaching a 0.1% claims ratio over time [61] Question: Yellow service centers and capacity - Management views the Yellow service centers as an opportunity to accelerate capacity growth, with expectations of a gradual return to LTL operations [64][65] Question: Yield improvement and local customer base - The most significant impact on yield in Q3 came from service improvements, with local sales channel shipments increasing by 13% year-over-year [68] Question: Freight market trends - The underlying demand environment has been soft but is showing signs of slight improvement, with more customers expressing optimism for demand recovery in 2024 [70][71]

(Mark One) UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Washington, D.C. 20549 ___________________________________________ Form 10-Q ___________________________________________ For the transition period from____________to____________ Commission File Number: 001-32172 ___________ ...

Financial Data and Key Metrics Changes - Company-wide revenue for Q2 2023 was $1.9 billion, down 6% year-over-year but up 1% sequentially from Q1 2023 [20] - Adjusted EBITDA was $244 million, a decrease of 16% year-over-year, with an adjusted EBITDA margin of 12.7%, down 140 basis points year-over-year [23] - Net income from continuing operations was $31 million, translating to diluted earnings per share of $0.27, compared to $96 million and $0.83 per diluted share a year ago [25] - Adjusted EPS for the quarter was $0.71, down 38% from the previous year [26] Business Line Data and Key Metrics Changes - In the North American LTL segment, revenue decreased by 8% year-over-year, while adjusted EBITDA was $208 million, down 24% from a year ago [20][24] - LTL salaries, wages, and benefits increased by 4.6% year-over-year, primarily due to wage increases [20] - Purchased transportation expense decreased by 35% year-over-year, reflecting a shift towards insourcing more linehaul miles [21] Market Data and Key Metrics Changes - Organic revenue in the European Transportation segment was largely unchanged despite a soft operating environment, with strong pricing trends observed [15] - The UK and Central Europe markets outperformed the overall European segment, with pricing higher than the same period last year [35] Company Strategy and Development Direction - The company is focused on its LTL 2.0 plan, which includes four pillars: enhancing customer service, investing in network capacity, accelerating yield growth, and driving cost efficiencies [7][10][12][13] - Capital expenditures are expected to be between 8% to 12% of revenue, with potential to exceed the high end of this range in the near term due to increased capacity needs [10][42] - The company aims to achieve at least 600 basis points of adjusted operating ratio improvement through 2027 [16] Management's Comments on Operating Environment and Future Outlook - Management noted a soft operating environment but highlighted improvements in service metrics and customer satisfaction [7][8] - The company expects yield growth to accelerate in Q3 2023, with a baseline forecast of 3% year-over-year growth [53] - Management remains optimistic about the potential for pricing improvements and market share gains following recent industry disruptions [56][70] Other Important Information - The company completed the refinancing of its $2 billion term loan, improving its weighted average maturity timeline to approximately six years [28] - The transition to a new CFO is expected to be seamless, with the incoming CFO having significant experience in the industry [17] Q&A Session Summary Question: Impact of July volumes post-Yellow - Management reported a 4.2% year-over-year increase in tonnage and an 8.8% increase in shipment count for July, indicating strong performance despite typical seasonal trends [39] Question: Current shipment count and margin handling - Shipment counts increased by high single digits towards the end of July, with management confident in handling the increased volume without significant margin pressure [45][46] Question: Pricing and yield growth expectations - Management anticipates yield growth to accelerate in Q3, with a focus on maintaining service quality while selectively onboarding new freight [60][66] Question: Capacity management and market dynamics - The company currently operates with approximately 20% excess capacity, which is expected to decrease as volumes increase, but management aims to maintain a long-term target of 20% to 25% excess capacity [99] Question: European business strategy - The company has paused the sale of its European business, focusing instead on strengthening its North American LTL operations while still performing well in Europe [87][96]

XPO Investor Overview Q2 2023 August 2023 This document 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 our full year 2023 expectations of gross capex, interest expense, pension income, effective tax rate, and diluted share count, and future financial targets of North American LTL revenue CAGR, adjusted EBITDA CAGR, adjusted operating ratio imp ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________ Form 10-Q ___________________________________________ (Exact name of registrant as specified in its charter) _______________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE AC ...