XPO, Inc 10-Q for FY2022 Q1

XPO, Inc. (XPO)

10-Q 2022-05-10 For: 2022-03-31

Added on April 09, 2026

About this 10-Q

XPO, Inc filed this 10-Q on May 10, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $3.47B; up 16.2% from $2.99B a year earlier
Net income: $488M; up 324.3% from net income of $115M a year earlier
Diluted EPS: $4.22; up 313.7% from $1.02 a year earlier

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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)


			Page No.
Part I—Financial Information
Item 1. Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets			1
Condensed Consolidated Statements of Income			2
Condensed Consolidated Statements of Comprehensive Income			3
Condensed Consolidated Statements of Cash Flows			4
Condensed Consolidated Statements of Changes in Equity			6
Notes to Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			19
Item 3. Quantitative and Qualitative Disclosures About Market Risk			27
Item 4. Controls and Procedures			27
Part II—Other Information
Item 1. Legal Proceedings			27
Item 1A. Risk Factors			27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			28
Item 3. Defaults Upon Senior Securities			28
Item 4. Mine Safety Disclosures			28
Item 5. Other Information			28
Item 6. Exhibits			29
Signatures			30


	March 31,		December 31,
(In millions, except per share data)	2022		2021
ASSETS
Current assets
Cash and cash equivalents	$	1,004	$	260
Accounts receivable, net of allowances of $47 and $47, respectively	2,248		2,105
Other current assets	279		286
Current assets of discontinued operations	24		26
Total current assets	3,555		2,677
Long-term assets
Property and equipment, net of $1,790 and $1,828 in accumulated depreciation, respectively	1,796		1,808
Operating lease assets	821		908
Goodwill	2,332		2,479
Identifiable intangible assets, net of $578 and $612 in accumulated amortization, respectively	548		580
Other long-term assets	268		255

Total long-term assets	5,765		6,030
Total assets	$	9,320	$	8,707
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	1,330	$	1,110
Accrued expenses	1,084		1,107
Short-term borrowings and current maturities of long-term debt	682		58
Short-term operating lease liabilities	134		170
Other current liabilities	178		69
Current liabilities of discontinued operations	24		24
Total current liabilities	3,432		2,538
Long-term liabilities
Long-term debt	2,877		3,514
Deferred tax liability	300		316
Employee benefit obligations	120		122
Long-term operating lease liabilities	682		752
Other long-term liabilities	311		327

Total long-term liabilities	4,290		5,031
Stockholders’ equity

Common stock, $0.001 par value; 300 shares authorized; 115 shares issued and outstanding as of March 31, 2022 and December 31, 2021	—		—
Additional paid-in capital	1,176		1,179
Retained earnings	531		43
Accumulated other comprehensive loss	(109)		(84)


Total equity	1,598		1,138
Total liabilities and equity	$	9,320	$	8,707


	Three Months Ended March 31,
(In millions, except per share data)		2022		2021
Revenue		$	3,473	$	2,989
Cost of transportation and services (exclusive of depreciation and amortization)		2,437		2,053
Direct operating expense (exclusive of depreciation and amortization)		385		334
Sales, general and administrative expense		344		338
Depreciation and amortization expense		116		119
Gain on sale of business		(450)		—
Transaction and integration costs		10		5
Restructuring costs		6		1
Operating income		625		139
Other income		(14)		(16)
Debt extinguishment loss		—		8
Interest expense		37		65
Income from continuing operations before income tax provision		602		82
Income tax provision		113		19
Income from continuing operations		489		63
Income (loss) from discontinued operations, net of taxes		(1)		55
Net income		488		118

Net income from discontinued operations attributable to noncontrolling interests		—		(3)
Net income attributable to XPO		$	488	$	115

Net income (loss) attributable to common shareholders
Continuing operations		$	489	$	63
Discontinued operations		(1)		52
Net income attributable to common shareholders		$	488	$	115

Earnings (loss) per share data
Basic earnings per share from continuing operations		$	4.26	$	0.59
Basic earnings (loss) per share from discontinued operations		(0.01)		0.49
Basic earnings per share attributable to common shareholders		$	4.25	$	1.08
Diluted earnings per share from continuing operations		$	4.23	$	0.56
Diluted earnings (loss) per share from discontinued operations		(0.01)		0.46
Diluted earnings per share attributable to common shareholders		$	4.22	$	1.02

Weighted-average common shares outstanding
Basic weighted-average common shares outstanding		115		106
Diluted weighted-average common shares outstanding		116		112


	Three Months Ended March 31,
(In millions)		2022		2021
Net income		$	488	$	118

Other comprehensive loss, net of tax
Foreign currency translation loss, net of tax effect of $(2) and $(6)		$	(26)	$	(42)
Unrealized gain on financial assets/liabilities designated as hedging instruments, net of tax effect of $— and $—		1		—

Other comprehensive loss		(25)		(42)
Comprehensive income		$	463	$	76
Less: Comprehensive loss attributable to noncontrolling interests		—		(2)
Comprehensive income attributable to XPO		$	463	$	78


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	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	—	—		—	—		—		488		—		488		—		488
Other comprehensive loss	—	—		—	—		—		—		(25)		(25)		—		(25)

Exercise and vesting of stock compensation awards	—	—		245	—		—		—		—		—		—		—
Tax withholdings related to vesting of stock compensation awards	—	—		—	—		(12)		—		—		(12)		—		(12)





Stock compensation expense	—	—		—	—		8		—		—		8		—		8
Other	—	—		—	—		1		—		—		1		—		1
Balance as of March 31, 2022	—	$	—	114,982	$	—	$	1,176	$	531	$	(109)	$	1,598	$	—	$	1,598


(In millions)	Carrying Value		Fair Value		Level 1
March 31, 2022	$	931	$	931	$	931
December 31, 2021	181		181		181


	Three Months Ended March 31, 2022
(In millions)	North American LTL		Brokerage and Other Services		Eliminations		Total
Revenue
United States	$	1,082	$	1,519	$	(64)	$	2,537
North America (excluding United States)	23		101		—		124
France	—		352		—		352
United Kingdom	—		225		—		225
Europe (excluding France and United Kingdom)	—		210		—		210
Other	—		25		—		25
Total	$	1,105	$	2,432	$	(64)	$	3,473


	Three Months Ended March 31, 2021
(In millions)	North American LTL		Brokerage and Other Services		Eliminations		Total
Revenue
United States	$	940	$	1,221	$	(44)	$	2,117
North America (excluding United States)	22		69		—		91
France	—		342		—		342
United Kingdom	—		209		—		209
Europe (excluding France and United Kingdom)	—		213		—		213
Other	—		17		—		17
Total	$	962	$	2,071	$	(44)	$	2,989


			Three Months Ended March 31, 2022
(In millions)	Reserve Balance as of December 31, 2021		Charges Incurred		Payments		Reserve Balance as of March 31, 2022
Severance

Brokerage and Other Services	$	6	$	2	$	(3)	$	5
Corporate	7		1		(2)		6
Total severance	13		3		(5)		11
Facilities

Brokerage and Other Services	2		—		—		2
Total facilities	2		—		—		2
Contract termination
North American LTL	—		3		(3)		—
Total contract termination	—		3		(3)		—
Total	$	15	$	6	$	(8)	$	13


	Three Months Ended March 31,	Percent of Revenue				Change
(Dollars in millions)		2022		2021		2022		2021		2022 vs. 2021
Revenue		$	3,473	$	2,989	100.0	%	100.0	%	16.2	%
Cost of transportation and services (exclusive of depreciation and amortization)		2,437		2,053		70.2	%	68.7	%	18.7	%
Direct operating expense (exclusive of depreciation and amortization)		385		334		11.1	%	11.2	%	15.3	%
Sales, general and administrative expense		344		338		9.9	%	11.3	%	1.8	%
Depreciation and amortization expense		116		119		3.3	%	4.0	%	(2.5)	%
Gain on sale of business		(450)		—		(13.0)	%	—	%	NM
Transaction and integration costs		10		5		0.3	%	0.2	%	100.0	%
Restructuring costs		6		1		0.2	%	—	%	500.0	%
Operating income		625		139		18.0	%	4.7	%	349.6	%
Other income		(14)		(16)		(0.4)	%	(0.5)	%	(12.5)	%
Debt extinguishment loss		—		8		—	%	0.3	%	(100.0)	%
Interest expense		37		65		1.1	%	2.2	%	(43.1)	%
Income from continuing operations before income tax provision		602		82		17.3	%	2.7	%	634.1	%
Income tax provision		113		19		3.3	%	0.6	%	494.7	%
Income from continuing operations		489		63		14.1	%	2.1	%	676.2	%
Income from discontinued operations, net of taxes		(1)		55		—	%	1.8	%	NM
Net income		$	488	$	118	14.1	%	3.9	%	313.6	%


Exhibit Number						Description

10.1+*						Form of Performance-Based Restricted Stock Unit Award Agreement (2016 Omnibus Incentive Compensation Plan)

10.2+*						Form of Performance-Based Restricted Stock Unit Award Agreement (2016 Omnibus Incentive Compensation Plan)

31.1 *						Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022.

31.2 *						Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022.

32.1 **						Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022.

32.2 **						Certification of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022.

101.INS *						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH *						XBRL Taxonomy Extension Schema.

101.CAL *						XBRL Taxonomy Extension Calculation Linkbase.

101.DEF *						XBRL Taxonomy Extension Definition Linkbase.

101.LAB *						XBRL Taxonomy Extension Label Linkbase.

101.PRE *						XBRL Taxonomy Extension Presentation Linkbase.

104 *						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).


*						Filed herewith.
**						Furnished herewith.
+						This exhibit is a management contract or compensatory plan or arrangement.


	Three Months Ended March 31,
(In millions)		2022		2021 (1)
Securitization programs
Receivables sold in period		$	447	$	347
Cash consideration		447		347

Factoring programs
Receivables sold in period		27		16
Cash consideration		27		16


	Three Months Ended March 31,
		2022		2021		Change %
Pounds per day (thousands)		70,176		70,730		(0.8)	%









Gross revenue per hundredweight, excluding fuel surcharges		$	20.76	$	19.11	8.7	%


			XPO LOGISTICS, INC.

By:			/s/ Brad Jacobs
			Brad Jacobs
			Chief Executive Officer
			(Principal Executive Officer)

By:			/s/ Ravi Tulsyan
			Ravi Tulsyan
			Chief Financial Officer
			(Principal Financial Officer)