XPO (NYSE: XPO) today announced its financial
results for the third quarter 2023, reflecting a solid performance
in a soft industry environment for freight transportation. The
company reported diluted earnings from continuing operations
per share of $0.72 and adjusted diluted earnings from continuing
operations per share of $0.88.
Third Quarter 2023 Summary Results |
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Three months ended September 30, |
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Revenue |
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Operating Income (Loss) |
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Adjusted EBITDA(1) |
(in millions) |
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2023 |
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2022 |
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2023 |
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2022 |
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2023 |
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2022 |
North American Less-Than-Truckload Segment |
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$ |
1,228 |
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$ |
1,205 |
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$ |
161 |
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$ |
162 |
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$ |
241 |
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$ |
240 |
European Transportation Segment |
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752 |
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741 |
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8 |
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10 |
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44 |
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43 |
Corporate |
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- |
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- |
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(15) |
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(33) |
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(7) |
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(21) |
Total |
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$ |
1,980 |
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$ |
1,946 |
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$ |
154 |
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$ |
139 |
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$ |
278 |
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$ |
262 |
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Three months ended September 30, |
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Net Income(2) |
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Diluted EPS(3) |
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Adjusted Diluted EPS(1)(3) |
(in millions, except for per-share data) |
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2023 |
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2022 |
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2023 |
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2022 |
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2023 |
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2022 |
Total |
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$ |
86 |
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$ |
92 |
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$ |
0.72 |
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$ |
0.79 |
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$ |
0.88 |
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$ |
0.95 |
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(1) Reconciliations of adjusted EBITDA and adjusted diluted
EPS are provided in the attached financial tables |
(2) Net income from continuing operations attributable to
common shareholders |
(3) Diluted earnings from continuing operations per share |
Mario Harik, chief executive officer of XPO, said, “Our third
quarter results exceeded expectations, with solid growth in revenue
and profitability, and strong forward momentum. We delivered
year-over-year revenue growth of 2%, and adjusted EBITDA growth of
6%, with 50 basis points of adjusted EBITDA margin
expansion.
“In North American LTL, we’re improving every aspect of the
business that impacts customer service and value creation. Our
third quarter adjusted operating ratio of 86.2% improved
sequentially by 140 basis points, and outpaced seasonality by 370
basis points. This was driven by gains in volume, pricing and labor
productivity. Our damage claims ratio was a company-best 0.4% — a
significant improvement from 1.2% two years ago, when we launched
our LTL 2.0 plan.
“We also captured more share in the quarter, as customers
responded to our focus on service and investments in capacity. Our
yield growth, excluding fuel, accelerated to 6.4%, reflecting the
benefit of numerous pricing initiatives underway. We expect to
further accelerate yield growth in the fourth quarter.”
Harik continued “It’s exciting to take large steps forward
across the business as we execute our plan. We’re making excellent
progress, and I’m confident that we’re still in the early innings
of realizing XPO’s full potential.”
Third Quarter Highlights
For the third quarter 2023, revenue was $1.98
billion, compared to $1.95 billion for the same period in 2022. The
year-over-year increase in revenue was due primarily to higher
tonnage per day and yield, excluding fuel, in the North American
LTL segment, partially offset by lower fuel surcharge revenue.
Net income from continuing operations attributable
to common shareholders was $86 million for the third quarter 2023,
compared with $92 million for the same period in 2022. Operating
income was $154 million for the third quarter, compared with $139
million for the same period in 2022. Diluted earnings from
continuing operations per share was $0.72 for the third quarter,
compared with $0.79 for the same period in 2022.
Adjusted net income from continuing operations
attributable to common shareholders, a non-GAAP financial measure,
was $105 million for the third quarter, compared with $110 million
for the same period in 2022. Adjusted diluted earnings from
continuing operations per share (“adjusted diluted EPS”), a
non-GAAP financial measure, was $0.88 for the third quarter,
compared with $0.95 for the same period in 2022.
Adjusted earnings before interest, taxes,
depreciation and amortization (“adjusted EBITDA”), a non-GAAP
financial measure, was $278 million for the third quarter, compared
with $262 million for the same period in 2022.
The company generated $236 million of cash flow
from operating activities in the third quarter, and ended the
quarter with $355 million of cash and cash equivalents on hand,
after $133 million of net capital expenditures.
Reconciliations of non-GAAP financial measures in
this press release are provided in the attached financial
tables. Seasonality is compared to the same period for the
past five years excluding 2020.
Results by Business Segment
-
North American Less-Than-Truckload (LTL): The segment
generated revenue of $1.23 billion for the third quarter
2023, compared with $1.21 billion for the same period in 2022. On a
year-over-year basis, shipments per day increased 7.8%, tonnage per
day increased 3.1%, and yield, excluding fuel, increased 6.4%.
Including fuel, yield increased 0.8%.Operating income was $161
million for the third quarter 2023, compared with $162 million for
the same period in 2022. Adjusted operating ratio, a non-GAAP
financial measure, was 86.2%, compared with 85.6% a year ago,
reflecting a sequential improvement of 140 basis points, compared
with the second quarter in 2023.Adjusted EBITDA for the third
quarter 2023 was $241 million, compared with $240 million for
the same period in 2022. The year-over-year increase in
adjusted EBITDA was due primarily to higher tonnage per day and
yield, excluding fuel, partially offset by lower fuel surcharge
revenue and pension income.
-
European Transportation: The segment generated revenue of $752
million for the third quarter 2023, compared with $741 million for
the same period in 2022.Operating income was $8 million for
the third quarter 2023, compared with $10 million for the same
period in 2022. Adjusted EBITDA was $44 million for the third
quarter 2023, compared with $43 million for the same period in
2022.
Conference Call
The company will hold a conference call on Monday,
October 30, 2023, 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 November 29, 2023. 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 13741540.
About XPO
XPO, Inc. (NYSE: XPO) is one of the largest
providers of asset-based less-than-truckload (LTL) transportation
in North America, with proprietary technology that moves goods
efficiently through its network. Together with its business
in Europe, XPO serves approximately 50,000 customers with
563 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, X, LinkedIn, Instagram and YouTube.
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; adjusted EBITDA margin on a consolidated
basis; adjusted net income from continuing operations attributable
to common shareholders; adjusted diluted earnings from continuing
operations per share (“adjusted diluted EPS”); adjusted operating
income for our North American Less-Than-Truckload and European
Transportation segments; and adjusted operating ratio for our
North American Less-Than-Truckload segment.
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 diluted 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, stock-based compensation, retention awards,
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 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),
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 diluted 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 adjusted operating income and
adjusted operating ratio improve the comparability of our operating
results from period to period by removing the impact of certain
transaction and integration costs and restructuring costs, as well
as amortization expenses as set out in the attached tables.
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. 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. 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 the risks
discussed in our filings with the SEC, and the following: the
effects of business, economic, political, legal, and regulatory
impacts or conflicts upon our operations; supply chain disruptions,
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; 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; 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 or other divestiture; fluctuations in currency exchange rates;
fuel price and fuel surcharge changes; the expected benefits of the
spin-offs of GXO Logistics, Inc. and RXO, Inc. on the size and
business diversity of our company; 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; litigation; risks associated with our self-insured
claims; governmental or political actions; 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
except to the extent required by law.
Investor ContactBrian Scasserra+1
617-607-6429brian.scasserra@xpo.com
Media ContactKarina Frayter+1
203-484-8303karina.frayter@xpo.com
XPO, Inc. |
Condensed Consolidated Statements of Income |
(Unaudited) |
(In millions, except per share data) |
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Three Months Ended |
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Nine Months Ended |
|
September 30, |
|
September 30, |
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|
2023 |
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|
2022 |
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Change % |
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2023 |
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2022 |
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Change % |
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Revenue |
$ |
1,980 |
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$ |
1,946 |
|
1.7% |
|
$ |
5,804 |
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$ |
5,887 |
|
-1.4% |
Salaries, wages and employee benefits |
|
809 |
|
|
739 |
|
9.5% |
|
|
2,354 |
|
|
2,216 |
|
6.2% |
Purchased transportation |
|
437 |
|
|
480 |
|
-9.0% |
|
|
1,338 |
|
|
1,515 |
|
-11.7% |
Fuel, operating expenses and supplies |
|
406 |
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|
425 |
|
-4.5% |
|
|
1,223 |
|
|
1,277 |
|
-4.2% |
Operating taxes and licenses |
|
15 |
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|
15 |
|
0.0% |
|
|
45 |
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|
44 |
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2.3% |
Insurance and claims |
|
39 |
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|
41 |
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-4.9% |
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|
129 |
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|
145 |
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-11.0% |
(Gains) losses on sales of property and equipment |
|
1 |
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(1) |
|
-200.0% |
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(4) |
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(3) |
|
33.3% |
Depreciation and amortization expense |
|
110 |
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|
99 |
|
11.1% |
|
|
318 |
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|
289 |
|
10.0% |
Transaction and integration costs |
|
8 |
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2 |
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300.0% |
|
|
47 |
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|
16 |
|
193.8% |
Restructuring costs |
|
1 |
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|
7 |
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-85.7% |
|
|
35 |
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|
15 |
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133.3% |
Operating income |
|
154 |
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|
139 |
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10.8% |
|
|
319 |
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|
373 |
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-14.5% |
Other income |
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(4) |
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(15) |
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-73.3% |
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(12) |
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(42) |
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-71.4% |
Debt extinguishment loss |
|
- |
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- |
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0.0% |
|
|
23 |
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|
26 |
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-11.5% |
Interest expense |
|
41 |
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|
35 |
|
17.1% |
|
|
126 |
|
|
103 |
|
22.3% |
Income from continuing operations before income tax
provision |
|
117 |
|
|
119 |
|
-1.7% |
|
|
182 |
|
|
286 |
|
-36.4% |
Income tax provision |
|
31 |
|
|
27 |
|
14.8% |
|
|
48 |
|
|
66 |
|
-27.3% |
Income from continuing operations |
|
86 |
|
|
92 |
|
-6.5% |
|
|
134 |
|
|
220 |
|
-39.1% |
Income (loss) from discontinued operations, net of taxes |
|
(2) |
|
|
39 |
|
-105.1% |
|
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(3) |
|
|
540 |
|
-100.6% |
Net income attributable to XPO |
$ |
84 |
|
$ |
131 |
|
-35.9% |
|
$ |
131 |
|
$ |
760 |
|
-82.8% |
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|
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Net income (loss) attributable to common
shareholders |
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Continuing operations |
$ |
86 |
|
$ |
92 |
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|
$ |
134 |
|
$ |
220 |
|
|
Discontinued operations |
|
(2) |
|
|
39 |
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(3) |
|
|
540 |
|
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Net income attributable to common shareholders |
$ |
84 |
|
$ |
131 |
|
|
|
$ |
131 |
|
$ |
760 |
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Basic earnings (loss) per share attributable to common
shareholders (1) |
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|
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Continuing operations |
$ |
0.74 |
|
$ |
0.80 |
|
|
|
$ |
1.16 |
|
$ |
1.92 |
|
|
Discontinued operations |
|
(0.01) |
|
|
0.34 |
|
|
|
|
(0.02) |
|
|
4.69 |
|
|
Basic earnings per share attributable to common shareholders |
$ |
0.73 |
|
$ |
1.14 |
|
|
|
$ |
1.14 |
|
$ |
6.61 |
|
|
Diluted earnings (loss) per share attributable to common
shareholders (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
0.72 |
|
$ |
0.79 |
|
|
|
$ |
1.14 |
|
$ |
1.91 |
|
|
Discontinued operations |
|
(0.01) |
|
|
0.34 |
|
|
|
|
(0.02) |
|
|
4.66 |
|
|
Diluted earnings per share attributable to common shareholders |
$ |
0.71 |
|
$ |
1.13 |
|
|
|
$ |
1.12 |
|
$ |
6.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding |
|
|
|
|
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|
|
Basic weighted-average common shares outstanding |
|
116 |
|
|
115 |
|
|
|
|
116 |
|
|
115 |
|
|
Diluted weighted-average common shares outstanding |
|
119 |
|
|
116 |
|
|
|
|
118 |
|
|
116 |
|
|
|
|
|
|
|
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|
|
|
|
|
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|
(1) The sum of quarterly earnings 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, Inc. |
Condensed Consolidated Balance Sheets |
(Unaudited) |
(In millions, except per share data) |
|
|
|
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|
September 30, |
|
December 31, |
|
2023 |
|
2022 |
ASSETS |
|
|
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|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
355 |
|
$ |
460 |
Accounts receivable, net of allowances of $45 and $43,
respectively |
|
1,059 |
|
|
954 |
Other current assets |
|
199 |
|
|
199 |
Current assets of discontinued operations |
|
- |
|
|
17 |
Total current assets |
|
1,613 |
|
|
1,630 |
Long-term assets |
|
|
|
|
|
Property and equipment, net of $1,767 and $1,679 in accumulated
depreciation, respectively |
|
2,072 |
|
|
1,832 |
Operating lease assets |
|
695 |
|
|
719 |
Goodwill |
|
1,465 |
|
|
1,472 |
Identifiable intangible assets, net of $431 and $392 in accumulated
amortization, respectively |
|
366 |
|
|
407 |
Other long-term assets |
|
217 |
|
|
209 |
Total long-term assets |
|
4,815 |
|
|
4,639 |
Total assets |
$ |
6,428 |
|
$ |
6,269 |
|
|
|
|
|
|
|
|
|
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|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable |
$ |
473 |
|
$ |
521 |
Accrued expenses |
|
827 |
|
|
774 |
Short-term borrowings and current maturities of long-term debt |
|
66 |
|
|
59 |
Short-term operating lease liabilities |
|
111 |
|
|
107 |
Other current liabilities |
|
45 |
|
|
30 |
Current liabilities of discontinued operations |
|
- |
|
|
16 |
Total current liabilities |
|
1,522 |
|
|
1,507 |
Long-term liabilities |
|
|
|
|
|
Long-term debt |
|
2,447 |
|
|
2,473 |
Deferred tax liability |
|
326 |
|
|
319 |
Employee benefit obligations |
|
90 |
|
|
93 |
Long-term operating lease liabilities |
|
584 |
|
|
606 |
Other long-term liabilities |
|
262 |
|
|
259 |
Total long-term liabilities |
|
3,709 |
|
|
3,750 |
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
Common stock, $0.001 par value; 300 shares authorized; 116 and 115
shares issued and |
|
|
|
|
|
outstanding as of September 30, 2023 and December 31, 2022,
respectively |
|
- |
|
|
- |
Additional paid-in capital |
|
1,284 |
|
|
1,238 |
Retained earnings (accumulated deficit) |
|
127 |
|
|
(4) |
Accumulated other comprehensive loss |
|
(214) |
|
|
(222) |
Total equity |
|
1,197 |
|
|
1,012 |
Total liabilities and equity |
$ |
6,428 |
|
$ |
6,269 |
XPO, Inc. |
Condensed Consolidated Statements of Cash
Flows |
(Unaudited) |
(In millions) |
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
September 30, |
|
|
|
2023 |
|
|
2022 |
Cash flows from operating activities of continuing
operations |
|
|
|
|
|
Net income |
$ |
131 |
|
$ |
760 |
Income (loss) from discontinued operations, net of taxes |
|
(3) |
|
|
540 |
Income from continuing operations |
|
134 |
|
|
220 |
Adjustments to reconcile income from continuing operations
to net cash from operating activities |
|
|
|
|
|
|
Depreciation, amortization and net lease activity |
|
318 |
|
|
289 |
|
Stock compensation expense |
|
58 |
|
|
21 |
|
Accretion of debt |
|
8 |
|
|
12 |
|
Deferred tax expense |
|
16 |
|
|
30 |
|
Gains on sales of property and equipment |
|
(4) |
|
|
(3) |
|
Other |
|
46 |
|
|
46 |
Changes in assets and liabilities |
|
|
|
|
|
|
Accounts receivable |
|
(141) |
|
|
(199) |
|
Other assets |
|
(24) |
|
|
72 |
|
Accounts payable |
|
(38) |
|
|
13 |
|
Accrued expenses and other liabilities |
|
70 |
|
|
127 |
Net cash provided by operating activities from continuing
operations |
|
443 |
|
|
628 |
Cash flows from investing activities of continuing
operations |
|
|
|
|
|
|
Payment for purchases of property and equipment |
|
(494) |
|
|
(354) |
|
Proceeds from sale of property and equipment |
|
19 |
|
|
10 |
|
Proceeds from settlement of cross currency swaps |
|
2 |
|
|
29 |
Net cash used in investing activities from continuing
operations |
|
(473) |
|
|
(315) |
Cash flows from financing activities of continuing
operations |
|
|
|
|
|
|
Proceeds from issuance of debt |
|
1,977 |
|
|
- |
|
Repurchase of debt |
|
(2,003) |
|
|
(651) |
|
Proceeds from borrowings on ABL facility |
|
- |
|
|
275 |
|
Repayment of borrowings on ABL facility |
|
- |
|
|
(275) |
|
Repayment of debt and finance leases |
|
(50) |
|
|
(46) |
|
Payment for debt issuance costs |
|
(15) |
|
|
- |
|
Change in bank overdrafts |
|
30 |
|
|
5 |
|
Payment for tax withholdings for restricted shares |
|
(12) |
|
|
(13) |
|
Other |
|
1 |
|
|
(1) |
Net cash used in financing activities from continuing
operations |
|
(72) |
|
|
(706) |
Cash flows from discontinued operations |
|
|
|
|
|
|
Operating activities of discontinued operations |
|
(11) |
|
|
31 |
|
Investing activities of discontinued operations |
|
2 |
|
|
668 |
Net cash provided by (used in) discontinued
operations |
|
(9) |
|
|
699 |
Effect of exchange rates on cash, cash equivalents and restricted
cash |
|
2 |
|
|
(25) |
Net increase (decrease) in cash, cash equivalents and
restricted cash |
|
(109) |
|
|
281 |
Cash, cash equivalents and restricted cash, beginning of
period |
|
470 |
|
|
273 |
Cash, cash equivalents and restricted cash, end of
period |
|
361 |
|
|
554 |
Less: Cash, cash equivalents and restricted cash of
discontinued operations, end of period |
|
- |
|
|
187 |
Cash, cash equivalents and restricted cash of continuing
operations, end of period |
$ |
361 |
|
$ |
367 |
North American Less-Than-Truckload Segment |
Summary Financial Table |
(Unaudited) |
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2023 |
|
2022 |
|
Change % |
|
2023 |
|
2022 |
|
Change % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (excluding fuel surcharge revenue) |
$ |
1,005 |
|
$ |
931 |
|
7.9% |
|
$ |
2,848 |
|
$ |
2,780 |
|
2.4% |
Fuel surcharge revenue |
|
223 |
|
|
274 |
|
-18.6% |
|
|
636 |
|
|
772 |
|
-17.6% |
Revenue |
|
1,228 |
|
|
1,205 |
|
1.9% |
|
|
3,484 |
|
|
3,552 |
|
-1.9% |
Salaries, wages and employee benefits |
|
616 |
|
|
562 |
|
9.6% |
|
|
1,744 |
|
|
1,630 |
|
7.0% |
Purchased transportation |
|
97 |
|
|
123 |
|
-21.1% |
|
|
283 |
|
|
393 |
|
-28.0% |
Fuel, operating expenses and supplies (1) |
|
244 |
|
|
252 |
|
-3.2% |
|
|
718 |
|
|
741 |
|
-3.1% |
Operating taxes and licenses |
|
11 |
|
|
13 |
|
-15.4% |
|
|
35 |
|
|
37 |
|
-5.4% |
Insurance and claims |
|
20 |
|
|
31 |
|
-35.5% |
|
|
81 |
|
|
98 |
|
-17.3% |
(Gains) losses on sales of property and equipment |
|
4 |
|
|
- |
|
100.0% |
|
|
6 |
|
|
- |
|
100.0% |
Depreciation and amortization |
|
75 |
|
|
60 |
|
25.0% |
|
|
214 |
|
|
175 |
|
22.3% |
Transaction and integration costs |
|
- |
|
|
- |
|
0.0% |
|
|
- |
|
|
2 |
|
-100.0% |
Restructuring costs |
|
- |
|
|
2 |
|
-100.0% |
|
|
10 |
|
|
5 |
|
100.0% |
Operating income |
|
161 |
|
|
162 |
|
-0.6% |
|
|
393 |
|
|
471 |
|
-16.6% |
Operating ratio (2) |
|
86.8% |
|
|
86.6% |
|
|
|
|
88.7% |
|
|
86.7% |
|
|
Other income |
|
- |
|
|
1 |
|
|
|
|
- |
|
|
1 |
|
|
Amortization expense |
|
9 |
|
|
9 |
|
|
|
|
26 |
|
|
26 |
|
|
Transaction and integration costs |
|
- |
|
|
- |
|
|
|
|
- |
|
|
2 |
|
|
Restructuring costs |
|
- |
|
|
2 |
|
|
|
|
10 |
|
|
5 |
|
|
Gains on real estate transactions |
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
Adjusted operating income (3) |
$ |
170 |
|
$ |
174 |
|
-2.3% |
|
$ |
429 |
|
$ |
505 |
|
-15.0% |
Adjusted operating ratio (3) (4) |
|
86.2% |
|
|
85.6% |
|
|
|
|
87.7% |
|
|
85.8% |
|
|
Depreciation expense |
|
66 |
|
|
51 |
|
|
|
|
188 |
|
|
149 |
|
|
Pension income |
|
5 |
|
|
14 |
|
|
|
|
13 |
|
|
44 |
|
|
Gains on real estate transactions |
|
- |
|
|
- |
|
|
|
|
- |
|
|
- |
|
|
Other |
|
- |
|
|
1 |
|
|
|
|
1 |
|
|
2 |
|
|
Adjusted EBITDA (5) |
$ |
241 |
|
$ |
240 |
|
0.4% |
|
$ |
631 |
|
$ |
700 |
|
-9.9% |
Adjusted EBITDA margin (6) |
|
19.6% |
|
|
19.9% |
|
|
|
|
18.1% |
|
|
19.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Fuel, operating expenses and supplies includes
fuel-related taxes. |
(2) Operating ratio is calculated as (1 - (Operating income
divided by Revenue)). |
(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. |
North American Less-Than-Truckload |
Summary Data Table |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2023 |
|
2022 |
|
Change % |
|
2023 |
|
2022 |
|
Change % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pounds per day (thousands) |
|
72,257 |
|
|
70,063 |
|
3.1% |
|
|
70,465 |
|
|
70,854 |
|
-0.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shipments per day |
|
53,637 |
|
|
49,744 |
|
7.8% |
|
|
51,303 |
|
|
49,459 |
|
3.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average weight per shipment (in pounds) |
|
1,347 |
|
|
1,408 |
|
-4.3% |
|
|
1,374 |
|
|
1,433 |
|
-4.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue per shipment |
$ |
366.36 |
|
$ |
378.26 |
|
-3.1% |
|
$ |
357.20 |
|
$ |
374.61 |
|
-4.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross revenue per hundredweight (including fuel
surcharges) (1) |
$ |
27.74 |
|
$ |
27.52 |
|
0.8% |
|
$ |
26.59 |
|
$ |
26.86 |
|
-1.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross revenue per hundredweight (excluding fuel
surcharges) (1) |
$ |
22.81 |
|
$ |
21.43 |
|
6.4% |
|
$ |
21.84 |
|
$ |
21.18 |
|
3.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average length of haul (in miles) |
|
850.0 |
|
|
831.0 |
|
|
|
|
839.4 |
|
|
830.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total average load factor (2) |
|
22,683 |
|
|
23,574 |
|
-3.8% |
|
|
22,862 |
|
|
23,914 |
|
-4.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average age of tractor fleet (years) |
|
5.2 |
|
|
6.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of working days |
|
62.5 |
|
|
64.0 |
|
|
|
|
190.0 |
|
|
191.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Gross revenue per hundredweight excludes the adjustment
required for financial statement purposes in accordance with the
company's revenue recognition policy. |
(2) Total average load factor equals freight pound miles
divided by total linehaul miles. |
Note: Table excludes the company's trailer manufacturing
operations. |
European Transportation Segment |
Summary Financial Table |
(Unaudited) |
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2023 |
|
2022 |
|
Change % |
|
2023 |
|
2022 |
|
Change % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
752 |
|
$ |
741 |
|
1.5% |
|
$ |
2,320 |
|
$ |
2,335 |
|
-0.6% |
Salaries, wages and employee benefits |
|
189 |
|
|
167 |
|
13.2% |
|
|
595 |
|
|
537 |
|
10.8% |
Purchased transportation |
|
340 |
|
|
357 |
|
-4.8% |
|
|
1,055 |
|
|
1,122 |
|
-6.0% |
Fuel, operating expenses and supplies (1) |
|
162 |
|
|
159 |
|
1.9% |
|
|
499 |
|
|
499 |
|
0.0% |
Operating taxes and licenses |
|
4 |
|
|
2 |
|
100.0% |
|
|
10 |
|
|
7 |
|
42.9% |
Insurance and claims |
|
15 |
|
|
13 |
|
15.4% |
|
|
43 |
|
|
42 |
|
2.4% |
Gains on sales of property and equipment |
|
(3) |
|
|
(1) |
|
200.0% |
|
|
(10) |
|
|
(3) |
|
233.3% |
Depreciation and amortization |
|
35 |
|
|
31 |
|
12.9% |
|
|
100 |
|
|
96 |
|
4.2% |
Transaction and integration costs |
|
1 |
|
|
2 |
|
-50.0% |
|
|
2 |
|
|
5 |
|
-60.0% |
Restructuring costs |
|
1 |
|
|
1 |
|
0.0% |
|
|
9 |
|
|
4 |
|
125.0% |
Operating income |
$ |
8 |
|
$ |
10 |
|
-20.0% |
|
$ |
17 |
|
$ |
26 |
|
-34.6% |
Other expense |
|
(1) |
|
|
(1) |
|
|
|
|
(1) |
|
|
(1) |
|
|
Amortization expense |
|
6 |
|
|
5 |
|
|
|
|
16 |
|
|
15 |
|
|
Transaction and integration costs |
|
1 |
|
|
2 |
|
|
|
|
2 |
|
|
5 |
|
|
Restructuring costs |
|
1 |
|
|
1 |
|
|
|
|
9 |
|
|
4 |
|
|
Adjusted operating income (2) |
$ |
15 |
|
$ |
17 |
|
-11.8% |
|
$ |
43 |
|
$ |
49 |
|
-12.2% |
Depreciation expense |
|
29 |
|
|
26 |
|
|
|
|
84 |
|
|
81 |
|
|
Adjusted EBITDA (3) |
|
44 |
|
|
43 |
|
2.3% |
|
|
127 |
|
|
130 |
|
-2.3% |
Adjusted EBITDA margin (4) |
|
5.8% |
|
|
5.9% |
|
|
|
|
5.5% |
|
|
5.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Fuel, operating expenses and supplies includes
fuel-related taxes. |
(2) See the “Non-GAAP Financial Measures” section of the press
release. |
(3) Adjusted EBITDA is used by our chief operating decision
maker to evaluate segment profit (loss) in accordance with ASC
280. |
(4) Adjusted EBITDA margin is calculated as Adjusted EBITDA
divided by Revenue. |
Corporate |
Summary Financial Table |
(Unaudited) |
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2023 |
|
2022 |
|
Change % |
|
2023 |
|
2022 |
|
Change % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
- |
|
$ |
- |
|
0.0% |
|
$ |
- |
|
$ |
- |
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and employee benefits |
|
4 |
|
|
10 |
|
-60.0% |
|
|
15 |
|
|
49 |
|
-69.4% |
Fuel, operating expenses and supplies |
|
- |
|
|
14 |
|
-100.0% |
|
|
6 |
|
|
37 |
|
-83.8% |
Operating taxes and licenses |
|
- |
|
|
- |
|
0.0% |
|
|
- |
|
|
- |
|
0.0% |
Insurance and claims |
|
4 |
|
|
(3) |
|
-233.3% |
|
|
5 |
|
|
5 |
|
0.0% |
Depreciation and amortization |
|
- |
|
|
8 |
|
-100.0% |
|
|
4 |
|
|
18 |
|
-77.8% |
Transaction and integration costs |
|
7 |
|
|
- |
|
100.0% |
|
|
45 |
|
|
9 |
|
400.0% |
Restructuring costs |
|
- |
|
|
4 |
|
-100.0% |
|
|
16 |
|
|
6 |
|
166.7% |
Operating loss |
$ |
(15) |
|
$ |
(33) |
|
-54.5% |
|
$ |
(91) |
|
$ |
(124) |
|
-26.6% |
Other income (expense) (1) |
|
1 |
|
|
- |
|
|
|
|
- |
|
|
(4) |
|
|
Depreciation and amortization |
|
- |
|
|
8 |
|
|
|
|
4 |
|
|
18 |
|
|
Transaction and integration costs |
|
7 |
|
|
- |
|
|
|
|
45 |
|
|
9 |
|
|
Restructuring costs |
|
- |
|
|
4 |
|
|
|
|
16 |
|
|
6 |
|
|
Adjusted EBITDA (2) |
$ |
(7) |
|
$ |
(21) |
|
-66.7% |
|
$ |
(26) |
|
$ |
(95) |
|
-72.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Other income (expense) consists of foreign currency gain
(loss) and other income (expense). |
(2) See the “Non-GAAP Financial Measures” section of the press
release. |
XPO, Inc. |
Reconciliation of Non-GAAP Measures |
(Unaudited) |
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2023 |
|
2022 |
|
Change % |
|
2023 |
|
2022 |
|
Change % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income from Continuing Operations to
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations attributable to common
shareholders |
$ |
86 |
|
$ |
92 |
|
-6.5% |
|
$ |
134 |
|
$ |
220 |
|
-39.1% |
Debt extinguishment loss |
|
- |
|
|
- |
|
|
|
|
23 |
|
|
26 |
|
|
Interest expense |
|
41 |
|
|
35 |
|
|
|
|
126 |
|
|
103 |
|
|
Income tax provision |
|
31 |
|
|
27 |
|
|
|
|
48 |
|
|
66 |
|
|
Depreciation and amortization expense |
|
110 |
|
|
99 |
|
|
|
|
318 |
|
|
289 |
|
|
Transaction and integration costs |
|
8 |
|
|
2 |
|
|
|
|
47 |
|
|
16 |
|
|
Restructuring costs |
|
1 |
|
|
7 |
|
|
|
|
35 |
|
|
15 |
|
|
Other |
|
1 |
|
|
- |
|
|
|
|
1 |
|
|
- |
|
|
Adjusted EBITDA (1) |
$ |
278 |
|
$ |
262 |
|
6.1% |
|
$ |
732 |
|
$ |
735 |
|
-0.4% |
Revenue |
$ |
1,980 |
|
$ |
1,946 |
|
1.7% |
|
$ |
5,804 |
|
$ |
5,887 |
|
-1.4% |
Adjusted EBITDA margin (1) (2) |
|
14.0% |
|
|
13.5% |
|
|
|
|
12.6% |
|
|
12.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See the “Non-GAAP Financial Measures” section of the press
release. |
(2) Adjusted EBITDA margin is calculated as Adjusted EBITDA
divided by Revenue. |
XPO, Inc. |
Reconciliation of Non-GAAP Measures (cont.) |
(Unaudited) |
(In millions, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30 |
|
September 30 |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
$ |
86 |
|
$ |
92 |
|
$ |
134 |
|
$ |
220 |
|
Debt extinguishment loss |
|
- |
|
|
- |
|
|
23 |
|
|
26 |
|
Amortization of acquisition-related intangible assets |
|
15 |
|
|
13 |
|
|
42 |
|
|
40 |
|
Transaction and integration costs |
|
8 |
|
|
2 |
|
|
47 |
|
|
16 |
|
Restructuring costs |
|
1 |
|
|
7 |
|
|
35 |
|
|
15 |
|
Income tax associated with the adjustments above (1) |
|
(5) |
|
|
(4) |
|
|
(28) |
|
|
(22) |
Adjusted net income from continuing operations attributable
to |
|
|
|
|
|
|
|
|
|
|
|
|
common shareholders (2) |
$ |
105 |
|
$ |
110 |
|
$ |
253 |
|
$ |
295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings from continuing operations per
share (2) |
$ |
0.88 |
|
$ |
0.95 |
|
$ |
2.15 |
|
$ |
2.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average common shares outstanding |
|
119 |
|
|
116 |
|
|
118 |
|
|
116 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This line item reflects the aggregate tax benefit of all
non-tax related adjustments reflected in the table above. The
detail by line item is as follows: |
|
Debt extinguishment loss |
$ |
- |
|
$ |
- |
|
$ |
5 |
|
$ |
6 |
|
Amortization of acquisition-related intangible assets |
|
4 |
|
|
3 |
|
|
10 |
|
|
9 |
|
Transaction and integration costs |
|
- |
|
|
1 |
|
|
5 |
|
|
4 |
|
Restructuring costs |
|
1 |
|
|
- |
|
|
8 |
|
|
3 |
|
|
$ |
5 |
|
$ |
4 |
|
$ |
28 |
|
$ |
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The income tax rate applied to reconciling items is based on the
GAAP annual effective tax rate, excluding discrete items,
non-deductible compensation, and contribution- and margin-based
taxes. |
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) See the "Non-GAAP Financial Measures" section of the press
release. |
North American Less-Than-Truckload Segment |
Summary Financial Table vs Prior Quarter |
(Unaudited) |
(In millions) |
|
|
|
|
|
|
|
Three Months Ended |
|
September 30, |
|
June 30, |
|
2023 |
|
2023 |
|
|
|
|
|
|
Revenue (excluding fuel surcharge revenue) |
$ |
1,005 |
|
$ |
940 |
Fuel surcharge revenue |
|
223 |
|
|
196 |
Revenue |
|
1,228 |
|
|
1,136 |
Salaries, wages and employee benefits |
|
616 |
|
|
573 |
Purchased transportation |
|
97 |
|
|
87 |
Fuel, operating expenses and supplies (1) |
|
244 |
|
|
226 |
Operating taxes and licenses |
|
11 |
|
|
12 |
Insurance and claims |
|
20 |
|
|
33 |
(Gains) losses on sales of property and equipment |
|
4 |
|
|
1 |
Depreciation and amortization |
|
75 |
|
|
71 |
Transaction and integration costs |
|
- |
|
|
- |
Restructuring costs |
|
- |
|
|
4 |
Operating income |
|
161 |
|
|
129 |
Operating ratio (2) |
|
86.8% |
|
|
88.7% |
Amortization expense |
|
9 |
|
|
9 |
Transaction and integration costs |
|
- |
|
|
- |
Restructuring costs |
|
- |
|
|
4 |
Gains on real estate transactions |
|
- |
|
|
- |
Adjusted operating income (3) |
$ |
170 |
|
$ |
142 |
Adjusted operating ratio (3) (4) |
|
86.2% |
|
|
87.6% |
Depreciation expense |
|
66 |
|
|
62 |
Pension income |
|
5 |
|
|
4 |
Gains on real estate transactions |
|
- |
|
|
- |
Adjusted EBITDA (5) |
$ |
241 |
|
$ |
208 |
|
|
|
|
|
|
(1) Fuel, operating expenses and supplies includes
fuel-related taxes. |
(2) Operating ratio is calculated as (1 - (Operating income
divided by Revenue)). |
(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. |
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