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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
Form 10-Q
___________________________________________
(Mark One)
| | | | | |
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2022
or
| | | | | |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from____________to____________
Commission File Number: 001-32172
_______________________________________________________
XPO Logistics, Inc.
(Exact name of registrant as specified in its charter)
_______________________________________________________
| | | | | | | | | | | |
Delaware | | 03-0450326 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
Five American Lane | | |
Greenwich, | CT | | 06831 |
(Address of principal executive offices) | | (Zip Code) |
(855) 976-6951
(Registrant’s telephone number, including area code)
______________________________________________________________________________________________________________
N/A
______________________________________________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
Common stock, par value $0.001 per share | | XPO | | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | | | | | | | |
Large accelerated filer | | ☒ | | Accelerated filer | | ☐ |
| | | | | | |
Non-accelerated filer | | ☐ | | Smaller reporting company | | ☐ |
| | | | | | |
| | | | Emerging growth company | | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 26, 2022, there were 115,162,555 shares of the registrant’s common stock, par value $0.001 per share, outstanding.
XPO Logistics, Inc.
Quarterly Report on Form 10-Q
For the Quarterly Period Ended September 30, 2022
Table of Contents
Part I—Financial Information
Item 1. Financial Statements.
XPO Logistics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
| | | | | | | | | | | | | | |
| | September 30, | | December 31, |
(In millions, except per share data) | | 2022 | | 2021 |
ASSETS | | | | |
Current assets | | | | |
Cash and cash equivalents | | $ | 544 | | | $ | 260 | |
Accounts receivable, net of allowances of $51 and $47, respectively | | 2,013 | | | 2,105 | |
Other current assets | | 257 | | | 286 | |
Current assets of discontinued operations | | 17 | | | 26 | |
Total current assets | | 2,831 | | | 2,677 | |
Long-term assets | | | | |
Property and equipment, net of $1,848 and $1,828 in accumulated depreciation, respectively | | 1,828 | | | 1,808 | |
Operating lease assets | | 816 | | | 908 | |
Goodwill | | 2,229 | | | 2,479 | |
Identifiable intangible assets, net of $598 and $612 in accumulated amortization, respectively | | 496 | | | 580 | |
Other long-term assets | | 303 | | | 255 | |
| | | | |
Total long-term assets | | 5,672 | | | 6,030 | |
Total assets | | $ | 8,503 | | | $ | 8,707 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | |
Current liabilities | | | | |
Accounts payable | | $ | 1,022 | | | $ | 1,110 | |
Accrued expenses | | 1,087 | | | 1,107 | |
Short-term borrowings and current maturities of long-term debt | | 60 | | | 58 | |
Short-term operating lease liabilities | | 145 | | | 170 | |
Other current liabilities | | 111 | | | 69 | |
Current liabilities of discontinued operations | | 17 | | | 24 | |
Total current liabilities | | 2,442 | | | 2,538 | |
Long-term liabilities | | | | |
Long-term debt | | 2,848 | | | 3,514 | |
Deferred tax liability | | 334 | | | 316 | |
Employee benefit obligations | | 116 | | | 122 | |
Long-term operating lease liabilities | | 671 | | | 752 | |
Other long-term liabilities | | 306 | | | 327 | |
| | | | |
Total long-term liabilities | | 4,275 | | | 5,031 | |
Stockholders’ equity | | | | |
| | | | |
Common stock, $0.001 par value; 300 shares authorized; 115 shares issued and outstanding as of September 30, 2022 and December 31, 2021 | | — | | | — | |
Additional paid-in capital | | 1,195 | | | 1,179 | |
Retained earnings | | 803 | | | 43 | |
Accumulated other comprehensive loss | | (212) | | | (84) | |
| | | | |
| | | | |
Total equity | | 1,786 | | | 1,138 | |
Total liabilities and equity | | $ | 8,503 | | | $ | 8,707 | |
See accompanying notes to condensed consolidated financial statements.
XPO Logistics, Inc.
Condensed Consolidated Statements of Income (Loss)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
(In millions, except per share data) | | 2022 | | 2021 | | 2022 | | 2021 |
Revenue | | $ | 3,042 | | | $ | 3,270 | | | $ | 9,747 | | | $ | 9,445 | |
Cost of transportation and services (exclusive of depreciation and amortization) | | 2,044 | | | 2,306 | | | 6,634 | | | 6,545 | |
Direct operating expense (exclusive of depreciation and amortization) | | 363 | | | 366 | | | 1,113 | | | 1,058 | |
Sales, general and administrative expense | | 298 | | | 339 | | | 966 | | | 1,001 | |
Depreciation and amortization expense | | 118 | | | 118 | | | 349 | | | 357 | |
Gain on sale of business | | — | | | — | | | (434) | | | — | |
Transaction and integration costs | | 25 | | | 15 | | | 60 | | | 26 | |
Restructuring costs | | 9 | | | 14 | | | 19 | | | 16 | |
Operating income | | 185 | | | 112 | | | 1,040 | | | 442 | |
Other income | | (15) | | | (19) | | | (44) | | | (45) | |
Debt extinguishment loss | | — | | | 46 | | | 26 | | | 54 | |
Interest expense | | 35 | | | 53 | | | 103 | | | 176 | |
Income from continuing operations before income tax provision | | 165 | | | 32 | | | 955 | | | 257 | |
Income tax provision | | 34 | | | 11 | | | 194 | | | 60 | |
Income from continuing operations | | 131 | | | 21 | | | 761 | | | 197 | |
Income (loss) from discontinued operations, net of taxes | | — | | | (78) | | | (1) | | | 22 | |
Net income (loss) | | 131 | | | (57) | | | 760 | | | 219 | |
| | | | | | | | |
Net income from discontinued operations attributable to noncontrolling interests | | — | | | — | | | — | | | (5) | |
Net income (loss) attributable to XPO | | $ | 131 | | | $ | (57) | | | $ | 760 | | | $ | 214 | |
| | | | | | | | |
Net income (loss) attributable to common shareholders | | | | | | | | |
Continuing operations | | $ | 131 | | | $ | 21 | | | $ | 761 | | | $ | 197 | |
Discontinued operations | | — | | | (78) | | | (1) | | | 17 | |
Net income (loss) attributable to common shareholders | | $ | 131 | | | $ | (57) | | | $ | 760 | | | $ | 214 | |
| | | | | | | | |
Earnings (loss) per share data | | | | | | | | |
Basic earnings per share from continuing operations | | $ | 1.14 | | | $ | 0.19 | | | $ | 6.62 | | | $ | 1.78 | |
Basic earnings (loss) per share from discontinued operations | | — | | | (0.69) | | | (0.01) | | | 0.15 | |
Basic earnings (loss) per share attributable to common shareholders | | $ | 1.14 | | | $ | (0.50) | | | $ | 6.61 | | | $ | 1.93 | |
Diluted earnings per share from continuing operations | | $ | 1.13 | | | $ | 0.19 | | | $ | 6.58 | | | $ | 1.73 | |
Diluted earnings (loss) per share from discontinued operations | | — | | | (0.68) | | | (0.01) | | | 0.14 | |
Diluted earnings (loss) per share attributable to common shareholders | | $ | 1.13 | | | $ | (0.49) | | | $ | 6.57 | | | $ | 1.87 | |
| | | | | | | | |
Weighted-average common shares outstanding | | | | | | | | |
Basic weighted-average common shares outstanding | | 115 | | | 115 | | | 115 | | | 111 | |
Diluted weighted-average common shares outstanding | | 116 | | | 116 | | | 116 | | | 114 | |
See accompanying notes to condensed consolidated financial statements.
XPO Logistics, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
(In millions) | | 2022 | | 2021 | | 2022 | | 2021 |
Net income (loss) | | $ | 131 | | | $ | (57) | | | $ | 760 | | | $ | 219 | |
| | | | | | | | |
Other comprehensive loss, net of tax | | | | | | | | |
Foreign currency translation loss, net of tax effect of $(7), $7, $(18) and $4 | | $ | (60) | | | $ | (47) | | | $ | (132) | | | $ | (74) | |
Unrealized gain (loss) on financial assets/liabilities designated as hedging instruments, net of tax effect of $—, $1, $(1) and $1 | | — | | | (3) | | | 4 | | | (3) | |
Defined benefit plans adjustments, net of tax effect of $—, $(9), $— and $(9) | | — | | | 28 | | | — | | | 28 | |
Other comprehensive loss | | (60) | | | (22) | | | (128) | | | (49) | |
Comprehensive income (loss) | | $ | 71 | | | $ | (79) | | | $ | 632 | | | $ | 170 | |
Less: Comprehensive income attributable to noncontrolling interests | | — | | | — | | | — | | | 3 | |
Comprehensive income (loss) attributable to XPO | | $ | 71 | | | $ | (79) | | | $ | 632 | | | $ | 167 | |
See accompanying notes to condensed consolidated financial statements.
XPO Logistics, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited) | | | | | | | | | | | | | | |
| | Nine Months Ended September 30, |
(In millions) | | 2022 | | 2021 |
Cash flows from operating activities of continuing operations | | | | |
Net income | | $ | 760 | | | $ | 219 | |
Income (loss) from discontinued operations, net of taxes | | (1) | | | 22 | |
Income from continuing operations | | 761 | | | 197 | |
Adjustments to reconcile income from continuing operations to net cash from operating activities | | | | |
Depreciation, amortization and net lease activity | | 349 | | | 357 | |
Stock compensation expense | | 26 | | | 29 | |
Accretion of debt | | 12 | | | 15 | |
Deferred tax expense | | 10 | | | 5 | |
Debt extinguishment loss | | 26 | | | 54 | |
Gain on sale of business | | (434) | | | — | |
Gains on sales of property and equipment | | (4) | | | (36) | |
Other | | 29 | | | 5 | |
Changes in assets and liabilities | | | | |
Accounts receivable | | (245) | | | (371) | |
Other assets | | 30 | | | (1) | |
Accounts payable | | 76 | | | 133 | |
Accrued expenses and other liabilities | | 28 | | | 171 | |
Net cash provided by operating activities from continuing operations | | 664 | | | 558 | |
Cash flows from investing activities of continuing operations | | | | |
Proceeds from sale of business | | 705 | | | — | |
Payment for purchases of property and equipment | | (394) | | | (212) | |
Proceeds from sale of property and equipment | | 11 | | | 72 | |
Proceeds from settlement of cross currency swaps | | 29 | | | — | |
Other | | — | | | (3) | |
Net cash provided by (used in) investing activities from continuing operations | | 351 | | | (143) | |
Cash flows from financing activities of continuing operations | | | | |
| | | | |
Repayment of borrowings related to securitization program | | — | | | (24) | |
Repurchase of debt | | (651) | | | (2,769) | |
Proceeds from borrowings on ABL facility | | 275 | | | — | |
Repayment of borrowings on ABL facility | | (275) | | | (200) | |
Repayment of debt and finance leases | | (47) | | | (63) | |
Payment for debt issuance costs | | — | | | (5) | |
| | | | |
Issuance of common stock | | — | | | 384 | |
Change in bank overdrafts | | 6 | | | 33 | |
Payment for tax withholdings for restricted shares | | (13) | | | (25) | |
Distribution from GXO | | — | | | 794 | |
Other | | (1) | | | (5) | |
Net cash used in financing activities from continuing operations | | (706) | | | (1,880) | |
| | | | |
| | | | | | | | | | | | | | |
| | Nine Months Ended September 30, |
(In millions) | | 2022 | | 2021 |
Cash flows from discontinued operations | | | | |
Operating activities of discontinued operations | | (5) | | | 68 | |
Investing activities of discontinued operations | | 2 | | | (95) | |
Financing activities of discontinued operations | | — | | | (302) | |
Net cash used in discontinued operations | | (3) | | | (329) | |
Effect of exchange rates on cash, cash equivalents and restricted cash | | (25) | | | (7) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | | 281 | | | (1,801) | |
Cash, cash equivalents and restricted cash, beginning of period | | 273 | | | 2,065 | |
Cash, cash equivalents and restricted cash, end of period | | 554 | | | 264 | |
Less: Cash, cash equivalents and restricted cash of discontinued operations, end of period | | — | | | — | |
Cash, cash equivalents and restricted cash of continued operations, end of period | | $ | 554 | | | $ | 264 | |
Supplemental disclosure of cash flow information | | | | |
| | | | |
Leased assets obtained in exchange for new operating lease liabilities | | $ | 165 | | | $ | 140 | |
Leased assets obtained in exchange for new finance lease liabilities | | 19 | | | 54 | |
Cash paid for interest | | 94 | | | 195 | |
Cash paid for income taxes | | 131 | | | 74 | |
See accompanying notes to condensed consolidated financial statements.
XPO Logistics, Inc.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Series A Preferred Stock | | Common Stock | | | | | | | | | | | | |
(Shares in thousands, dollars in millions) | | Shares | | Amount | | Shares | | Amount | | Additional Paid-In Capital | | Retained Earnings | | Accumulated Other Comprehensive Loss | | Total XPO Stockholders' Equity | | Non-controlling Interests | | Total Equity |
Balance as of June 30, 2022 | | — | | | $ | — | | | 115,033 | | | $ | — | | | $ | 1,187 | | | $ | 672 | | | $ | (152) | | | $ | 1,707 | | | $ | — | | | $ | 1,707 | |
Net income | | — | | | — | | | — | | | — | | | — | | | 131 | | | — | | | 131 | | | — | | | 131 | |
Other comprehensive loss | | — | | | — | | | — | | | — | | | — | | | — | | | (60) | | | (60) | | | — | | | (60) | |
| | | | | | | | | | | | | | | | | | | | |
Exercise and vesting of stock compensation awards | | — | | | — | | | 19 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Stock compensation expense | | — | | | — | | | — | | | — | | | 8 | | | — | | | — | | | 8 | | | — | | | 8 | |
| | | | | | | | | | | | | | | | | | | | |
Balance as of September 30, 2022 | | — | | | $ | — | | | 115,052 | | | $ | — | | | $ | 1,195 | | | $ | 803 | | | $ | (212) | | | $ | 1,786 | | | $ | — | | | $ | 1,786 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Series A Preferred Stock | | Common Stock | | | | | | | | | | | | |
(Shares in thousands, dollars in millions) | | Shares | | Amount | | Shares | | Amount | | Additional Paid-In Capital | | Retained Earnings | | Accumulated Other Comprehensive Loss | | Total XPO Stockholders' Equity | | Non-controlling Interests | | Total Equity |
Balance as of December 31, 2021 | | — | | | $ | — | | | 114,737 | | | $ | — | | | $ | 1,179 | | | $ | 43 | | | $ | (84) | | | $ | 1,138 | | | $ | — | | | $ | 1,138 | |
Net income | | — | | | — | | | — | | | — | | | — | | | 760 | | | — | | | 760 | | | — | | | 760 | |
Other comprehensive loss | | — | | | — | | | — | | | — | | | — | | | — | | | (128) | | | (128) | | | — | | | (128) | |
| | | | | | | | | | | | | | | | | | | | |
Exercise and vesting of stock compensation awards | | — | | | — | | | 315 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Tax withholdings related to vesting of stock compensation awards | | — | | | — | | | — | | | — | | | (13) | | | — | | | — | | | (13) | | | — | | | (13) | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Stock compensation expense | | — | | | — | | | — | | | — | | | 26 | | | — | | | — | | | 26 | | | — | | | 26 | |
Other | | — | | | — | | | — | | | — | | | 3 | | | — | | | — | | | 3 | | | — | | | 3 | |
Balance as of September 30, 2022 | | — | | | $ | — | | | 115,052 | | | $ | — | | | $ | 1,195 | | | $ | 803 | | | $ | (212) | | | $ | 1,786 | | | $ | — | | | $ | 1,786 | |
XPO Logistics, Inc.
Condensed Consolidated Statements of Changes in Equity (continued)
(Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Series A Preferred Stock | | Common Stock | | | | | | | | | | | | |
(Shares in thousands, dollars in millions) | | Shares | | Amount | | Shares | | Amount | | Additional Paid-In Capital | | Retained Earnings (Accumulated Deficit) | | Accumulated Other Comprehensive Loss | | Total XPO Stockholders' Equity | | Non-controlling Interests | | Total Equity |
Balance as of June 30, 2021 | | — | | | $ | — | | | 111,726 | | | $ | — | | | $ | 1,971 | | | $ | 1,139 | | | $ | (183) | | | $ | 2,927 | | | $ | 40 | | | $ | 2,967 | |
Net loss | | — | | | — | | | — | | | — | | | — | | | (57) | | | — | | | (57) | | | — | | | (57) | |
Other comprehensive loss | | — | | | — | | | — | | | — | | | — | | | — | | | (22) | | | (22) | | | — | | | (22) | |
Spin-off of GXO | | — | | | — | | | — | | | — | | | (1,199) | | | (1,161) | | | 126 | | | (2,234) | | | (40) | | | (2,274) | |
Exercise and vesting of stock compensation awards | | — | | | — | | | 72 | | | — | | | 2 | | | — | | | — | | | 2 | | | — | | | 2 | |
Tax withholdings related to vesting of stock compensation awards | | — | | | — | | | — | | | — | | | (3) | | | — | | | — | | | (3) | | | — | | | (3) | |
Issuance of common stock | | — | | | — | | | 2,875 | | | — | | | 384 | | | — | | | — | | | 384 | | | — | | | 384 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Stock compensation expense | | — | | | — | | | — | | | — | | | 19 | | | — | | | — | | | 19 | | | — | | | 19 | |
| | | | | | | | | | | | | | | | | | | | |
Balance as of September 30, 2021 | | — | | | $ | — | | | 114,673 | | | $ | — | | | $ | 1,174 | | | $ | (79) | | | $ | (79) | | | $ | 1,016 | | | $ | — | | | $ | 1,016 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Series A Preferred Stock | | Common Stock | | | | | | | | | | | | |
(Shares in thousands, dollars in millions) | | Shares | | Amount | | Shares | | Amount | | Additional Paid-In Capital | | Retained Earnings (Accumulated Deficit) | | Accumulated Other Comprehensive Loss | | Total XPO Stockholders' Equity | | Non-controlling Interests | | Total Equity |
Balance as of December 31, 2020 | | 1 | | | $ | 1 | | | 102,052 | | | $ | — | | | $ | 1,998 | | | $ | 868 | | | $ | (158) | | | $ | 2,709 | | | $ | 140 | | | $ | 2,849 | |
Net income | | — | | | — | | | — | | | — | | | — | | | 214 | | | — | | | 214 | | | 5 | | | 219 | |
Other comprehensive loss | | — | | | — | | | — | | | — | | | — | | | — | | | (47) | | | (47) | | | (2) | | | (49) | |
Spin-off of GXO | | — | | | — | | | — | | | — | | | (1,199) | | | (1,161) | | | 126 | | | (2,234) | | | (40) | | | (2,274) | |
Exercise and vesting of stock compensation awards | | — | | | — | | | 386 | | | — | | | 2 | | | — | | | — | | | 2 | | | — | | | 2 | |
Tax withholdings related to vesting of stock compensation awards | | — | | | — | | | — | | | — | | | (25) | | | — | | | — | | | (25) | | | — | | | (25) | |
Issuance of common stock | | — | | | — | | | 2,875 | | | — | | | 384 | | | — | | | — | | | 384 | | | — | | | 384 | |
Conversion of preferred stock to common stock | | (1) | | | (1) | | | 145 | | | — | | | 1 | | | — | | | — | | | — | | | — | | | — | |
Purchase of noncontrolling interests | | — | | | — | | | — | | | — | | | (34) | | | — | | | — | | | (34) | | | (100) | | | (134) | |
Dividend declared | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (3) | | | (3) | |
Exercise of warrants | | — | | | — | | | 9,215 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Stock compensation expense | | — | | | — | | | — | | | — | | | 44 | | | — | | | — | | | 44 | | | — | | | 44 | |
Other | | — | | | — | | | — | | | — | | | 3 | | | — | | | — | | | 3 | | | — | | | 3 | |
Balance as of September 30, 2021 | | — | | | $ | — | | | 114,673 | | | $ | — | | | $ | 1,174 | | | $ | (79) | | | $ | (79) | | | $ | 1,016 | | | $ | — | | | $ | 1,016 | |
See accompanying notes to condensed consolidated financial statements.
XPO Logistics, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Organization, Description of Business and Basis of Presentation
XPO Logistics, Inc., together with its subsidiaries (“XPO” or “we”), is a leading provider of freight transportation services. We use our proprietary technology to move goods efficiently through our customers’ supply chains; in North America, we achieved this primarily by providing less-than-truckload (“LTL”) and truck brokerage services. See Note 4—Segment Reporting for additional information on our operations.
2022 Strategic Plan
On March 8, 2022, we announced that our Board of Directors approved a strategic plan to pursue the spin-off of our tech-enabled brokered transportation platform as a publicly traded company, which we completed in November 2022. In addition, our Board of Directors authorized the planned divestitures of our North American intermodal operation, which we sold in March 2022, and our European business, which we intend to divest. For further information on the sale of intermodal, see Note 3—Divestiture. There can be no assurance that the divestiture of our European business will occur, or of the terms or timing of a transaction.
RXO Spin-Off
We completed the spin-off of our tech-enabled brokered transportation platform on November 1, 2022, which created a new public company, RXO, Inc. (“RXO”), comprised of our former services for truck brokerage, managed transportation, last mile and freight forwarding. The transaction is intended to be tax-free to XPO and our shareholders for U.S. federal income tax purposes. The spin-off was accomplished by the distribution of 100% of the outstanding common stock of RXO to XPO shareholders, creating a new, independent public company that began trading under the symbol “RXO” on the New York Stock Exchange. XPO shareholders received one share of RXO common stock for every share of XPO common stock held at the close of business on October 20, 2022, the record date for the distribution. XPO does not beneficially own any shares of RXO’s common stock following the spin-off. The historical results of operations and the financial position of RXO are included in the condensed consolidated financial statements in this Form 10-Q. The RXO businesses will not be consolidated in our reporting from November 1, 2022 forward, and such businesses will be reflected as discontinued operations in all periods prior to the spin-off.
In connection with the spin-off, we have entered into a separation and distribution agreement as well as various other agreements with RXO that provide a framework for the relationships between the parties going forward, including, among others, an employee matters agreement, a tax matters agreement, an intellectual property license agreement and a transition services agreement, through which XPO will provide certain services to RXO.
Basis of Presentation
We prepared our Condensed Consolidated Financial Statements in accordance with U.S. generally accepted accounting principles (“GAAP”) and on the same basis as the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”). The interim reporting requirements of Form 10-Q allow certain information and note disclosures normally included in annual consolidated financial statements to be condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the 2021 Form 10-K.
The Condensed Consolidated Financial Statements are not audited but reflect all adjustments that are of a normal recurring nature and are necessary for a fair presentation of the financial condition, operating results and cash flows for the interim periods presented. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.
Restricted Cash
As of September 30, 2022 and December 31, 2021, our restricted cash included in Other long-term assets on our Condensed Consolidated Balance Sheets was $10 million.
Trade Receivables Securitization and Factoring Programs
We sell certain of our trade accounts receivable on a non-recourse basis to third-party financial institutions under factoring agreements. We also sell trade accounts receivable under our securitization program. We use trade receivables securitization and factoring programs to help manage our cash flows and offset the impact of extended payment terms for some of our customers.
The maximum amount of net cash proceeds available at any one time under our securitization program, inclusive of any unsecured borrowings, is €200 million (approximately $196 million as of September 30, 2022). As of September 30, 2022, €6 million (approximately $6 million) was available under the program, subject to having sufficient receivables available to sell and with consideration to amounts previously sold. The weighted average interest rate was 1.16% as of September 30, 2022. Charges for commitment fees, which are based on a percentage of available amounts, and charges for administrative fees were not material to our results of operations for the three and nine months ended September 30, 2022 and 2021.
Information related to the trade receivables sold was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
(In millions) | | 2022 | | 2021 | | 2022 | | 2021 |
Securitization programs | | | | | | | | |
Receivables sold in period | | $ | |