Core Viewpoint - XPO reported strong financial performance for the quarter ended June 2024, with revenue and earnings exceeding expectations, indicating positive growth trends in its operations [1][12]. Financial Performance - Revenue for the quarter was $2.08 billion, reflecting an 8.5% increase year-over-year and a surprise of +0.18% over the Zacks Consensus Estimate [1]. - Earnings per share (EPS) reached $1.12, compared to $0.71 in the same quarter last year, resulting in an EPS surprise of +10.89% against the consensus estimate of $1.01 [1]. Key Metrics - Shipments per day were reported at 53,519, slightly above the estimated 53,416 [3]. - Gross revenue per hundredweight (including fuel surcharges) was $28.04, marginally below the estimate of $28.10 [3]. - Gross revenue per hundredweight (excluding fuel surcharges) was $23.56, compared to the estimate of $23.68 [4]. - Average weight per shipment was 1,358 lbs, exceeding the estimated 1,354.16 lbs [5]. - Pounds per day totaled 72.66 million, surpassing the estimate of 72.37 million [6]. - Adjusted operating ratio was 83.2%, slightly better than the average estimate of 83.3% [7]. - Operating ratio stood at 84.1%, significantly better than the estimated 87% [8]. Segment Performance - Revenue from the European Transportation Segment was $808 million, exceeding the average estimate of $801.43 million and showing a year-over-year increase of +3.5% [9]. - Revenue from the North American Less-Than-Truckload Segment was $1.27 billion, matching the estimate and reflecting a +12% change compared to the previous year [10]. - Adjusted EBITDA for the Corporate segment was -$3 million, better than the estimated -$4.90 million [11]. - Adjusted EBITDA for the European Transportation Segment was $49 million, surpassing the average estimate of $44.46 million [11]. Stock Performance - XPO shares have returned +7.3% over the past month, outperforming the Zacks S&P 500 composite's +1.1% change [12].

GREENWICH, Conn., Aug. 01, 2024 (GLOBE NEWSWIRE) -- XPO (NYSE: XPO) today announced its financial results for the second quarter 2024. The company reported diluted earnings from continuing operations per share of $1.25, compared with $0.27 for the same period in 2023, and adjusted diluted earnings from continuing operations per share of $1.12, compared with $0.71 for the same period in 2023. Second Quarter 2024 Summary Results | --- | --- | --- | --- | --- | --- | --- | --- | |------------------------------ ...

Before a company reveals its earnings, it is vital to take into account any changes in earnings projections. These revisions play a pivotal role in predicting the possible reactions of investors toward the stock. Multiple empirical studies have consistently shown a strong association between trends in earnings estimates and the short-term price movements of a stock. Analysts' assessment points toward 'Gross revenue per hundredweight (excluding fuel surcharges)' reaching $23.68. Compared to the present estim ...

Core Points - The National Truck Driving Championships (NTDC) is a prestigious event organized by the American Trucking Associations, emphasizing safety and excellence in the freight industry [1][7] - XPO has announced its finalists for the 2024 NTDC, showcasing drivers from 16 states who have qualified through state championships and maintained accident-free records for at least one year [2][7] Company Overview - XPO is a leading provider of freight transportation in North America, focusing on asset-based less-than-truckload (LTL) services, moving 18 billion pounds of freight annually [11] - The company operates approximately 610 locations and employs 39,000 individuals across North America and Europe, with its headquarters located in Greenwich, Connecticut [11] Finalists and Achievements - Notable finalists include Rich Sweeney from Massachusetts, a previous national Grand Champion, and Ina Daly from Arizona, the first woman to win the national title, returning for her 17th finals [3][8] - Four of XPO's finalists have been named Grand Champions in their respective state competitions, demonstrating exceptional skill across various vehicle classes [9][10]

The annual NTDC, hosted by the American Trucking Associations, is a contest of precision driving skills and industry knowledge. Known as the "Super Bowl of Safety," NTDC celebrates the nation's most accomplished drivers while underscoring the importance of safety in the freight industry. XPO's 2024 NTDC Finalists: Rich Sweeney (Massachusetts): 2019 national Grand Champion Rich Sweeney returns for his 15th appearance at the NTDC, where he will compete in the tank truck class. Wilbert Vano (New Jersey): Wilbe ...

Core Viewpoint - XPO, Inc. will hold its second quarter conference call on August 1, 2024, at 8:30 a.m. Eastern Time, with results released earlier that morning [1]. Group 1: Conference Call Details - The conference call will be accessible via a toll-free number for US/Canada and an international dial-in option, with a passcode provided for access [2][4]. - A replay of the conference call will be available until August 31, 2024, allowing stakeholders to review the discussion [2]. Group 2: Company Overview - XPO, Inc. is a leader in asset-based less-than-truckload (LTL) freight transportation in North America, moving 18 billion pounds of freight annually [4]. - The company serves approximately 52,000 customers and operates 610 locations with a workforce of 39,000 employees across North America and Europe [4].

Financial Data and Key Metrics Changes - Revenue increased by 6% year-over-year to $2 billion, with adjusted EBITDA rising by 37% to $288 million [3][20] - Adjusted diluted EPS was up 45% year-over-year at $0.81 [3][27] - Adjusted EBITDA margin improved by 320 basis points to 14.2% [24] Business Line Data and Key Metrics Changes - LTL segment revenue grew by 9% year-over-year, with adjusted EBITDA increasing by 40% to $255 million [20][26] - LTL revenue, excluding fuel, was up 12% year-over-year [21] - European segment revenue increased by 1%, with adjusted EBITDA up 3% to $38 million [20][26] Market Data and Key Metrics Changes - In Europe, revenue and adjusted EBITDA increased, with the strongest growth in France (mid-teens) and the UK (high-single-digits) [18][104] - The overall freight market remains soft, but the company is gaining market share through service improvements [50][78] Company Strategy and Development Direction - The company is focused on its LTL 2.0 plan, which emphasizes world-class service, network investment, yield growth, and cost efficiency [4][7][11] - Significant investments in fleet expansion, with over 12,000 trailers and 4,000 tractors added since the launch of LTL 2.0 [7][9] - The company aims to reduce third-party linehaul miles significantly by 2027, enhancing both cost efficiency and service quality [54] Management's Comments on Operating Environment and Future Outlook - Management noted that while the freight market is soft, they expect to outperform due to service improvements and pricing strategies [78] - The company anticipates continued yield growth and margin improvement, with expectations for a strong second quarter [44][68] - Management remains optimistic about the long-term potential of the LTL business, aiming for significant margin improvements beyond initial targets [96] Other Important Information - The company ended the quarter with $229 million in cash and $793 million in total liquidity [28] - The corporate net expense was reduced by 44% year-over-year, reflecting ongoing cost rationalization efforts [25] Q&A Session Summary Question: Pricing momentum and order book repricing - Management indicated that they achieved high-single-digit growth in contract renewals and expect to renegotiate the remaining contracts effectively [41] Question: Local sales growth and demand environment - Local sales have seen a 10% year-over-year increase, with a 25% increase in local sales force headcount [46][47] - The overall demand environment remains stable but soft, with expectations for gradual improvement [50] Question: Cost management and linehaul in-sourcing - The company has reduced third-party transportation costs by 21% year-over-year and aims to cut outsourced miles significantly by 2027 [15][54] Question: Competition and freight market sensitivity - Management acknowledged that while they are not immune to market fluctuations, their service improvements and pricing strategies position them well to gain market share [78][84] Question: European business performance - The European segment has shown strong performance, with the highest EBITDA since the pandemic, driven by good pricing and a robust sales pipeline [104]

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)

Financial Performance - XPO reported first quarter 2024 revenue of $2.02 billion, a 5.8% increase from $1.91 billion in the same period of 2023[8] - Adjusted EBITDA for the first quarter 2024 was $288 million, up 37.1% from $210 million in the first quarter of 2023[11] - Diluted earnings from continuing operations per share increased to $0.56, compared to $0.15 for the same period in 2023, reflecting a 273.3% increase[9] - Net income from continuing operations was $67 million for the first quarter, compared to $17 million for the same period in 2023, marking a 294.1% increase[9] - Operating income surged to $138 million, reflecting a 137.9% increase compared to $58 million in the same period last year[27] - Net income reached $67 million, a significant increase of 378.6% from $14 million in Q1 2023[27] - Basic earnings per share for continuing operations improved to $0.58, up from $0.15 in the prior year[27] - Adjusted net income from continuing operations rose to $97 million in Q1 2024, up from $65 million in Q1 2023[49] - Adjusted diluted earnings from continuing operations per share increased to $0.81, compared to $0.56 in the previous year[49] Segment Performance - North American Less-Than-Truckload (LTL) segment revenue grew to $1.22 billion, a 9.0% increase from $1.12 billion in the first quarter of 2023[12] - Adjusted operating income for the North American LTL segment was $175 million, a 49.6% increase from $117 million in the same period last year[12] - The company achieved a 390-basis-point improvement in adjusted operating ratio to 85.7% in the North American LTL segment[12] - Revenue from the North American Less-Than-Truckload segment increased to $1,221 million, a 9.0% increase from $1,120 million in Q1 2023[33] - Adjusted EBITDA for the North American Less-Than-Truckload segment was $255 million, a 40.1% increase from $182 million in the same quarter last year[33] - The European Transportation segment generated revenue of $797 million, a 1.3% increase from $787 million in the first quarter of 2023[14] - Revenue for the three months ended March 31, 2024, was $797 million, a 1.3% increase from $787 million in 2023[40] Cash Flow and Assets - Cash flow from operating activities for the first quarter was $145 million, with cash and cash equivalents at $229 million at the end of the quarter[11] - Cash provided by operating activities from continuing operations was $145 million, compared to $76 million in Q1 2023[31] - Total assets as of March 31, 2024, were $7,603 million, up from $7,492 million at the end of 2023[29] - Long-term debt remained stable at $3,323 million, slightly down from $3,335 million at the end of 2023[29] Operational Metrics - Average weight per shipment decreased to 1,376 pounds, down 1.9% from 1,403 pounds in Q1 2023[37] - Adjusted EBITDA for the same period was $38 million, reflecting a 2.7% increase from $37 million in 2023, with an adjusted EBITDA margin of 4.8%[40] Costs and Expenses - Salaries, wages, and employee benefits increased by 5.9% to $215 million in Q1 2024 from $203 million in Q1 2023[40] - Restructuring costs rose to $8 million in Q1 2024, a 14.3% increase from $7 million in Q1 2023[40] - Transaction and integration costs decreased by 38.1% to $13 million in Q1 2024 from $21 million in Q1 2023[43] Corporate Segment - Revenue for the corporate segment remained unchanged at $0 million, with an operating loss of $(23) million, a 45.2% improvement from $(42) million in the previous year[43] - Operating loss for the three months ended March 31, 2024, was $(4) million, a 33.3% increase in loss compared to $(3) million in 2023[40] Strategic Initiatives - The company plans to continue executing its LTL 2.0 plan to unlock further potential in its operations[6]

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].