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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-20220930_g1.jpg
XPO Logistics, Inc.
(Exact name of registrant as specified in its charter)
_______________________________________________________
Delaware03-0450326
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
Five American Lane
Greenwich,CT06831
(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 classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.001 per shareXPONew 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 filerAccelerated filer
Non-accelerated filerSmaller 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
 
Page No.


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)20222021
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 assets257 286 
Current assets of discontinued operations17 26 
Total current assets2,831 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 assets816 908 
Goodwill2,229 2,479 
Identifiable intangible assets, net of $598 and $612 in accumulated amortization, respectively
496 580 
Other long-term assets303 255 
Total long-term assets5,672 6,030 
Total assets$8,503 $8,707 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable$1,022 $1,110 
Accrued expenses1,087 1,107 
Short-term borrowings and current maturities of long-term debt60 58 
Short-term operating lease liabilities145 170 
Other current liabilities111 69 
Current liabilities of discontinued operations17 24 
Total current liabilities2,442 2,538 
Long-term liabilities
Long-term debt2,848 3,514 
Deferred tax liability334 316 
Employee benefit obligations116 122 
Long-term operating lease liabilities671 752 
Other long-term liabilities306 327 
Total long-term liabilities4,275 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 capital1,195 1,179 
Retained earnings803 43 
Accumulated other comprehensive loss(212)(84)
Total equity1,786 1,138 
Total liabilities and equity$8,503 $8,707 
See accompanying notes to condensed consolidated financial statements.

1

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)2022202120222021
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 expense298 339 966 1,001 
Depreciation and amortization expense118 118 349 357 
Gain on sale of business  (434) 
Transaction and integration costs25 15 60 26 
Restructuring costs9 14 19 16 
Operating income185 112 1,040 442 
Other income(15)(19)(44)(45)
Debt extinguishment loss 46 26 54 
Interest expense35 53 103 176 
Income from continuing operations before income tax
provision
165 32 955 257 
Income tax provision34 11 194 60 
Income from continuing operations131 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 outstanding115 115 115 111 
Diluted weighted-average common shares outstanding116 116 116 114 
See accompanying notes to condensed consolidated financial statements.

2

XPO Logistics, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2022202120222021
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.

3

XPO Logistics, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended September 30,
(In millions)20222021
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 activity349 357 
Stock compensation expense26 29 
Accretion of debt12 15 
Deferred tax expense10 5 
Debt extinguishment loss26 54 
Gain on sale of business(434) 
Gains on sales of property and equipment(4)(36)
Other29 5 
Changes in assets and liabilities
Accounts receivable(245)(371)
Other assets30 (1)
Accounts payable76 133 
Accrued expenses and other liabilities28 171 
Net cash provided by operating activities from continuing operations664 558 
Cash flows from investing activities of continuing operations
Proceeds from sale of business705  
Payment for purchases of property and equipment(394)(212)
Proceeds from sale of property and equipment11 72 
Proceeds from settlement of cross currency swaps29  
Other (3)
Net cash provided by (used in) investing activities from continuing operations351 (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 facility275  
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 overdrafts6 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)
4

Nine Months Ended September 30,
(In millions)20222021
Cash flows from discontinued operations
Operating activities of discontinued operations(5)68 
Investing activities of discontinued operations2 (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 cash281 (1,801)
Cash, cash equivalents and restricted cash, beginning of period273 2,065 
Cash, cash equivalents and restricted cash, end of period554 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 liabilities19 54 
Cash paid for interest94 195 
Cash paid for income taxes131 74 
See accompanying notes to condensed consolidated financial statements.

5

XPO Logistics, Inc.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Series A Preferred StockCommon Stock 
(Shares in thousands, dollars in millions)SharesAmountSharesAmountAdditional Paid-In CapitalRetained EarningsAccumulated Other
Comprehensive Loss
Total XPO Stockholders' EquityNon-controlling InterestsTotal 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 StockCommon Stock 
(Shares in thousands, dollars in millions)SharesAmountSharesAmountAdditional Paid-In CapitalRetained EarningsAccumulated Other
Comprehensive Loss
Total XPO Stockholders' EquityNon-controlling InterestsTotal 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 

6

XPO Logistics, Inc.
Condensed Consolidated Statements of Changes in Equity (continued)
(Unaudited)
Series A Preferred StockCommon Stock
(Shares in thousands, dollars in millions)SharesAmountSharesAmountAdditional Paid-In CapitalRetained Earnings (Accumulated Deficit)Accumulated Other
Comprehensive Loss
Total XPO Stockholders' EquityNon-controlling InterestsTotal 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 StockCommon Stock
(Shares in thousands, dollars in millions)SharesAmountSharesAmountAdditional Paid-In CapitalRetained Earnings (Accumulated Deficit)Accumulated Other
Comprehensive Loss
Total XPO Stockholders' EquityNon-controlling InterestsTotal Equity
Balance as of December 31, 20201 $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.
7

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.

8

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)2022202120222021
Securitization programs
Receivables sold in period
$