XPO Logistics Announces First Quarter 2020 Results
Adjusted net income attributable to common shareholders, a non-GAAP financial measure, was
Adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA"), a non-GAAP financial measure, was
For the first three months of 2020, the company generated $180 million of cash flow from operations, compared with a cash usage of
CEO Comments
Jacobs continued, “Importantly, XPO has
Liquidity
As of
2020 Guidance
The company withdrew its full-year 2020 guidance on
First Quarter 2020 Results by Segment
- Transportation: The company's transportation segment generated revenue of $2.46 billion for the first quarter 2020, compared with
$2.66 billion for the same period in 2019. The decrease in revenue primarily reflects the negative impact of COVID-19 and the previously disclosed downsizing of business by the company’s largest customer.
Operating income for the transportation segment was$120 million for the first quarter 2020, compared with$128 million for the same period in 2019. The decrease in operating income is primarily related to the decrease in segment revenue and to higher transaction and integration expenses. Adjusted EBITDA for the segment was$253 million for the quarter, compared with$264 million for the same period in 2019.
In North American less-than-truckload (LTL), yield excluding fuel improved by 2.6% year-over-year for the first quarter 2020. The first quarter operating ratio for LTL was 85.8%. Adjusted operating ratio, a non-GAAP financial measure, was a first quarter record at 83.4%, an improvement of 420 basis points year-over-year. Excluding the gains from sales of real estate from both periods, LTL adjusted operating ratio improved by 320 basis points.
- Logistics: The company's logistics segment generated revenue of
$1.44 billion for the first quarter 2020, compared with$1.49 billion for the same period in 2019. The decrease in revenue primarily reflects the company’s elimination of certain low-margin business, the downsizing of business by the company’s largest customer, and the negative impact of COVID-19 inEurope .
Logistics segment operating income was$38 million for the first quarter 2020, compared with$46 million for the same period in 2019. The decrease in operating income is primarily related to the decrease in segment revenue, higher transaction and integration expenses, and higher depreciation and amortization expense. Adjusted EBITDA was$121 million for the quarter, compared with$113 million for the same period in 2019. The improvement in adjusted EBITDA primarily reflects the increasing benefit of the company’s technology initiatives, resulting in workforce productivity gains and pricing optimization.
- Corporate: Corporate expense was
$77 million for the first quarter 2020, compared with$42 million for the same period in 2019. The increase in corporate expense primarily reflects approximately$28 million of professional fees and employee retention costs associated with the company’s terminated review of strategic alternatives.
Share Repurchase Program
In the first quarter 2020, the company repurchased 1.7 million shares of XPO common stock at an average price per share of
New Sustainability Report
On
Conference Call
The company will hold a conference call on
About
Non-GAAP Financial Measures
As required by the rules of the
XPO’s non-GAAP financial measures for the three months ended
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 net income attributable to common shareholders and adjusted EPS include adjustments for transaction and integration costs, as well as restructuring costs. Transaction and integration adjustments are generally incremental costs that result from an actual or planned acquisition or divestiture and may include transaction costs, consulting fees, retention awards, and, in the case of acquisitions, 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 free cash flow is an important measure of our ability to repay maturing debt or fund other uses of capital that we believe will enhance stockholder value. We calculate free cash flow as adjusted net cash provided by operating activities, less payment for purchases of property and equipment plus proceeds from sale of property and equipment, with adjusted net cash provided by operating activities defined as net cash provided by operating activities plus cash collected on deferred purchase price receivables. We believe that EBITDA, 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 attributable to common shareholders and adjusted 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. We believe that net revenue improves the comparability of our operating results from period to period by removing the cost of transportation and services, in particular the cost of fuel, incurred in the reporting period as set out in the attached tables. We believe that adjusted operating income and adjusted operating ratio for our North American less-than-truckload business improve the comparability of our operating results from period to period by (i) removing the impact of certain restructuring costs and amortization expenses and (ii) including the impact of pension income incurred in the reporting period as set out in the attached tables. We believe that organic revenue is an important measure because it excludes the following items: foreign currency exchange rate fluctuations, fuel surcharges and revenue associated with our direct postal injection service in last mile.
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, including the company’s free cash flow generation for the coming year. 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. However, the absence of these words does not mean that the statements are not forward-looking. 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
Investor Contact
+1-203-413-4006
tavio.headley@xpo.com
Media Contact
+1-203-489-1586
erin.kurtz@xpo.com
Condensed Consolidated Statements of Income | |||||
(Unaudited) | |||||
(In millions, except per share data) | |||||
Three Months Ended | |||||
2020 | 2019 | ||||
Revenue | $ | 3,864 | $ | 4,120 | |
Operating expenses | |||||
Cost of transportation and services | 1,898 | 2,096 | |||
Direct operating expense | 1,360 | 1,406 | |||
Sales, general and administrative expense | 525 | 486 | |||
Total operating expenses | 3,783 | 3,988 | |||
Operating income | 81 | 132 | |||
Other expense (income) | (18) | (17) | |||
Foreign currency (gain) loss | (8) | 2 | |||
Debt extinguishment loss | - | 5 | |||
Interest expense | 72 | 71 | |||
Income before income tax provision | 35 | 71 | |||
Income tax provision | 10 | 19 | |||
Net income | 25 | 52 | |||
Net income attributable to noncontrolling interests | (2) | (5) | |||
Net income attributable to XPO | $ | 23 | $ | 47 | |
Net income attributable to common shareholders (1) | $ | 21 | $ | 43 | |
Basic earnings per share | $ | 0.23 | $ | 0.40 | |
Diluted earnings per share | $ | 0.20 | $ | 0.37 | |
Weighted-average common shares outstanding | |||||
Basic weighted-average common shares outstanding | 92 | 107 | |||
Diluted weighted-average common shares outstanding | 103 | 117 | |||
(1) Net income attributable to common shareholders reflects the following items: | |||||
Non-cash allocation of undistributed earnings | $ | 1 | $ | 3 | |
Preferred dividends | 1 | 1 |
Condensed Consolidated Balance Sheets | |||||
(Unaudited) | |||||
(In millions, except per share data) | |||||
2020 | 2019 | ||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 1,127 | $ | 377 | |
Accounts receivable, net of allowances of |
2,415 | 2,500 | |||
Other current assets | 464 | 465 | |||
Total current assets | 4,006 | 3,342 | |||
Property and equipment, net of |
2,632 | 2,704 | |||
Operating lease assets | 2,143 | 2,245 | |||
4,395 | 4,450 | ||||
Identifiable intangible assets, net of |
1,046 | 1,092 | |||
Other long-term assets | 340 | 295 | |||
Total long-term assets | 10,556 | 10,786 | |||
Total assets | $ | 14,562 | $ | 14,128 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
Current liabilities: | |||||
Accounts payable | $ | 1,057 | $ | 1,157 | |
Accrued expenses | 1,446 | 1,414 | |||
Short-term borrowings and current maturities of long-term debt | 260 | 84 | |||
Short-term operating lease liabilities | 456 | 468 | |||
Other current liabilities | 166 | 135 | |||
Total current liabilities | 3,385 | 3,258 | |||
Long-term debt | 5,766 | 5,182 | |||
Deferred tax liability | 505 | 495 | |||
Employee benefit obligations | 152 | 157 | |||
Long-term operating lease liabilities | 1,689 | 1,776 | |||
Other long-term liabilities | 337 | 364 | |||
Total long-term liabilities | 8,449 | 7,974 | |||
Stockholders’ equity: | |||||
Convertible perpetual preferred stock, |
|||||
shares issued and outstanding as of |
41 | 41 | |||
Common stock, |
|||||
outstanding as of |
- | - | |||
Additional paid-in capital | 1,943 | 2,061 | |||
Retained earnings | 804 | 786 | |||
Accumulated other comprehensive loss | (210) | (145) | |||
Total stockholders’ equity before noncontrolling interests | 2,578 | 2,743 | |||
Noncontrolling interests | 150 | 153 | |||
Total equity | 2,728 | 2,896 | |||
Total liabilities and equity | $ | 14,562 | $ | 14,128 |
Condensed Consolidated Statements of Cash Flows | ||||||
(Unaudited) | ||||||
(In millions) | ||||||
Three Months Ended | ||||||
2020 | 2019 | |||||
Operating activities | ||||||
Net income | $ | 25 | $ | 52 | ||
Adjustments to reconcile net income to net cash from operating activities | ||||||
Depreciation, amortization and net lease activity | 183 | 180 | ||||
Stock compensation expense | 18 | 13 | ||||
Accretion of debt | 4 | 5 | ||||
Deferred tax benefit | (2) | (5) | ||||
Debt extinguishment loss | - | 5 | ||||
Unrealized (gain) loss on foreign currency option and forward contracts | (4) | 2 | ||||
Gains on sales of property and equipment | (27) | (21) | ||||
Other | 5 | 13 | ||||
Changes in assets and liabilities: | ||||||
Accounts receivable | 44 | (246) | ||||
Other assets | (16) | (30) | ||||
Accounts payable | (69) | (57) | ||||
Accrued expenses and other liabilities | 19 | (7) | ||||
Net cash provided by (used in) operating activities | 180 | (96) | ||||
Investing activities | ||||||
Payment for purchases of property and equipment | (139) | (118) | ||||
Proceeds from sale of property and equipment | 54 | 47 | ||||
Cash collected on deferred purchase price receivable | - | 71 | ||||
Other | 6 | - | ||||
Net cash used in investing activities | (79) | - | ||||
Financing activities | ||||||
Proceeds from borrowings related to securitization program | 182 | - | ||||
Proceeds from issuance of debt | - | 1,751 | ||||
Proceeds from borrowings on ABL facility | 620 | 1,075 | ||||
Repayment of borrowings on ABL facility | (20) | (1,075) | ||||
Repayment of debt and finance leases | (25) | (534) | ||||
Payment for debt issuance costs | - | (24) | ||||
Repurchase of common stock | (114) | (1,227) | ||||
Change in bank overdrafts | 42 | 6 | ||||
Payment for tax withholdings for restricted shares | (16) | (2) | ||||
Other | (1) | 1 | ||||
Net cash provided by (used in) financing activities | 668 | (29) | ||||
Effect of exchange rates on cash, cash equivalents and restricted cash | (19) | - | ||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 750 | (125) | ||||
Cash, cash equivalents and restricted cash, beginning of period | 387 | 514 | ||||
Cash, cash equivalents and restricted cash, end of period | $ | 1,137 | $ | 389 |
Transportation | ||||||||||||
Summary Financial Table | ||||||||||||
(Unaudited) | ||||||||||||
(In millions) | ||||||||||||
Three Months Ended |
||||||||||||
2020 | 2019 | $ Variance | Change % | |||||||||
Revenue | $ | 2,459 | $ | 2,659 | $ | (200) | -7.5% | |||||
Cost of transportation and services | 1,732 | 1,911 | (179) | -9.4% | ||||||||
Net revenue (1) | 727 | 748 | (21) | -2.8% | ||||||||
Direct operating expense | 308 | 315 | (7) | -2.2% | ||||||||
Sales, general and administrative expense | ||||||||||||
Salaries and benefits | 165 | 173 | (8) | -4.6% | ||||||||
Other sales, general and administrative expense | 59 | 45 | 14 | 31.1% | ||||||||
Purchased services | 27 | 35 | (8) | -22.9% | ||||||||
Depreciation and amortization | 48 | 52 | (4) | -7.7% | ||||||||
Total sales, general and administrative expense | 299 | 305 | (6) | -2.0% | ||||||||
Operating income | $ | 120 | $ | 128 | $ | (8) | -6.3% | |||||
Other income (expense) (2) | 13 | 8 | 5 | 62.5% | ||||||||
Total depreciation and amortization | 110 | 116 | (6) | -5.2% | ||||||||
EBITDA (1) | $ | 243 | $ | 252 | $ | (9) | -3.6% | |||||
Transaction and integration costs | 7 | - | 7 | 100.0% | ||||||||
Restructuring costs | 3 | 12 | (9) | -75.0% | ||||||||
Adjusted EBITDA (1) (3) | $ | 253 | $ | 264 | $ | (11) | -4.2% | |||||
Adjusted EBITDA margin (1) (4) | 10.3% | 9.9% | ||||||||||
(1) See the “Non-GAAP Financial Measures” section of the Press Release. | ||||||||||||
(2) Other income (expense) consists of pension income and is included in Other expense (income) in the Condensed Consolidated Statements of Income. | ||||||||||||
(3) For purposes of the summary financial table, adjusted EBITDA is reconciled to operating income in the Condensed Consolidated Statements of Income. | ||||||||||||
(4) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Revenue. |
Transportation | |||||||
Key Data by Service Offering | |||||||
(Unaudited) | |||||||
(In millions) | |||||||
Three Months Ended |
|||||||
2020 | 2019 | ||||||
Revenue | |||||||
Freight Brokerage | $ | 586 | $ | 619 | |||
Less-Than-Truckload | 910 | 926 | |||||
Last Mile | 201 | 224 | |||||
83 | 124 | ||||||
1,780 | 1,893 | ||||||
Freight Brokerage and Truckload | 437 | 473 | |||||
Less-Than-Truckload | 225 | 253 | |||||
Total |
662 | 726 | |||||
Global Forwarding | 61 | 77 | |||||
Eliminations | (44) | (37) | |||||
Total Revenue | $ | 2,459 | $ | 2,659 | |||
Net Revenue | |||||||
Freight Brokerage | $ | 103 | $ | 127 | |||
Less-Than-Truckload | 371 | 348 | |||||
Last Mile | 70 | 67 | |||||
24 | 25 | ||||||
568 | 567 | ||||||
146 | 167 | ||||||
Global Forwarding | 13 | 14 | |||||
Total Net Revenue (1) | $ | 727 | $ | 748 | |||
Net Revenue % | |||||||
Freight Brokerage | 17.5% | 20.5% | |||||
Less-Than-Truckload | 40.8% | 37.5% | |||||
Last Mile | 35.0% | 30.0% | |||||
28.8% | 19.9% | ||||||
31.9% | 30.0% | ||||||
22.0% | 23.1% | ||||||
Global Forwarding | 22.9% | 18.6% | |||||
Overall Net Revenue % | 29.6% | 28.1% | |||||
Direct Operating Expense | |||||||
Freight Brokerage | $ | 23 | $ | 24 | |||
Less-Than-Truckload | 147 | 151 | |||||
Last Mile | 26 | 22 | |||||
15 | 15 | ||||||
211 | 212 | ||||||
95 | 100 | ||||||
Global Forwarding | 2 | 3 | |||||
Total Direct Operating Expense | $ | 308 | $ | 315 | |||
(1) See the “Non-GAAP Financial Measures” section of the Press Release. | |||||||
Less-Than-Truckload revenue is before intercompany eliminations and includes revenue from the Company's trailer manufacturing business. |
XPO Logistics North American Less-Than-Truckload | |||||||
Summary Data Table | |||||||
(Unaudited) | |||||||
Three Months Ended |
|||||||
2020 | 2019 | ||||||
Number of Working Days | 64.0 | 63.0 | |||||
Lbs. per Day (Thousands) | 68,212 | 72,864 | |||||
% Change in Lbs. per Day (1) | -6.4% | -2.0% | |||||
Shipments per Day | 48,603 | 50,749 | |||||
% Change in Shipments per Day (1) | -4.2% | -0.8% | |||||
Avg. Weight per Shipment (in pounds) | 1,403 | 1,436 | |||||
% Change in Weight per Shipment (1) | -2.3% | -1.2% | |||||
Gross Revenue per Shipment | $ | 297.03 | $ | 296.48 | |||
Gross Revenue per Hundred Weight (including fuel surcharges) | $ | 21.16 | $ | 20.65 | |||
Gross Revenue per Hundred Weight (excluding fuel surcharges) | $ | 18.34 | $ | 17.87 | |||
% Change in Gross Revenue per Hundred Weight (1) | |||||||
Including fuel surcharges | 2.5% | 2.8% | |||||
Excluding fuel surcharges | 2.6% | 3.0% | |||||
Average Length of Haul (in Miles) | 813.3 | 808.7 | |||||
Total Average Load Factor (2) | 23,859 | 22,674 | |||||
Average Age of Tractor |
5.15 | 5.42 | |||||
(1) Compared with the same quarter of the previous year. | |||||||
(2) Total Average Load Factor equals freight pound miles divided by total linehaul miles. |
XPO Logistics North American Less-Than-Truckload | ||||||||||
Adjusted Operating Ratio | ||||||||||
(Unaudited) | ||||||||||
(In millions) | ||||||||||
Three Months Ended |
||||||||||
2020 | 2019 | $ Variance | Change % | |||||||
Revenue (excluding fuel surcharge revenue) | $ | 775 | $ | 786 | $ | (11) | -1.4% | |||
Fuel surcharge revenue | 123 | 127 | (4) | -3.1% | ||||||
Revenue | 898 | 913 | (15) | -1.6% | ||||||
Salaries, wages and employee benefits | 437 | 445 | (8) | -1.8% | ||||||
Purchased transportation | 87 | 100 | (13) | -13.0% | ||||||
Fuel and fuel-related taxes | 57 | 70 | (13) | -18.6% | ||||||
Other operating expenses | 94 | 102 | (8) | -7.8% | ||||||
Depreciation and amortization | 56 | 58 | (2) | -3.4% | ||||||
Maintenance | 23 | 27 | (4) | -14.8% | ||||||
Rents and leases | 15 | 12 | 3 | 25.0% | ||||||
Purchased labor | 1 | 2 | (1) | -50.0% | ||||||
Operating income | 128 | 97 | 31 | 32.0% | ||||||
Operating ratio (1) | 85.8% | 89.4% | ||||||||
Transaction and integration costs | 2 | - | 2 | 100.0% | ||||||
Restructuring costs | - | 2 | (2) | -100.0% | ||||||
Amortization expense | 8 | 8 | - | 0.0% | ||||||
Other income (2) | 11 | 6 | 5 | 83.3% | ||||||
Adjusted operating income (3) | $ | 149 | $ | 113 | $ | 36 | 31.9% | |||
Adjusted operating ratio (3) (4) (5) | 83.4% | 87.6% | ||||||||
(1) Operating ratio is calculated as (1 - (Operating income divided by Revenue)). | ||||||||||
(2) Other income primarily consists of pension income and is included in Other expense (income) on the Condensed Consolidated Statement of Income. | ||||||||||
(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)). | ||||||||||
(5) Excluding the impact of gains on real estate sale-leaseback transactions from both periods, the adjusted operating ratio improved by 320 basis points from 89.7% in the first quarter of 2019 to 86.5% in the first quarter of 2020. |
Logistics | ||||||||||||
Summary Financial Table | ||||||||||||
(Unaudited) | ||||||||||||
(In millions) | ||||||||||||
Three Months Ended |
||||||||||||
2020 | 2019 | $ Variance | Change % | |||||||||
Revenue | $ | 1,437 | $ | 1,494 | $ | (57) | -3.8% | |||||
Cost of transportation and services | 198 | 215 | (17) | -7.9% | ||||||||
Net revenue (1) | 1,239 | 1,279 | (40) | -3.1% | ||||||||
Direct operating expense | 1,051 | 1,091 | (40) | -3.7% | ||||||||
Sales, general and administrative expense | ||||||||||||
Salaries and benefits | 87 | 82 | 5 | 6.1% | ||||||||
Other sales, general and administrative expense | 22 | 18 | 4 | 22.2% | ||||||||
Purchased services | 19 | 21 | (2) | -9.5% | ||||||||
Depreciation and amortization | 22 | 21 | 1 | 4.8% | ||||||||
Total sales, general and administrative expense | 150 | 142 | 8 | 5.6% | ||||||||
Operating income | $ | 38 | $ | 46 | $ | (8) | -17.4% | |||||
Other income (expense) (2) | 7 | 5 | 2 | 40.0% | ||||||||
Total depreciation and amortization | 69 | 61 | 8 | 13.1% | ||||||||
EBITDA (1) | $ | 114 | $ | 112 | $ | 2 | 1.8% | |||||
Transaction and integration costs | 7 | - | 7 | 100.0% | ||||||||
Restructuring costs | - | 1 | (1) | -100.0% | ||||||||
Adjusted EBITDA (1) (3) | $ | 121 | $ | 113 | $ | 8 | 7.1% | |||||
Adjusted EBITDA margin (1) (4) | 8.4% | 7.6% | ||||||||||
(1) See the “Non-GAAP Financial Measures” section of the Press Release. | ||||||||||||
(2) Other income (expense) consists of pension income and is included in Other expense (income) in the Condensed Consolidated Statements of Income. | ||||||||||||
(3) For purposes of the summary financial table, adjusted EBITDA is reconciled to operating income in the Condensed Consolidated Statements of Income. | ||||||||||||
(4) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Revenue. |
Logistics | |||||
Key Data by Geography | |||||
(Unaudited) | |||||
(In millions) | |||||
Three Months Ended |
|||||
2020 | 2019 | ||||
Revenue | |||||
$ | 572 | $ | 598 | ||
865 | 896 | ||||
Total Revenue | $ | 1,437 | $ | 1,494 | |
Net Revenue | |||||
$ | 553 | $ | 573 | ||
686 | 706 | ||||
Total Net Revenue (1) | $ | 1,239 | $ | 1,279 | |
Direct Operating Expense | |||||
$ | 500 | $ | 520 | ||
551 | 571 | ||||
Total Direct Operating Expense | $ | 1,051 | $ | 1,091 | |
Gross Margin | |||||
$ | 53 | $ | 53 | ||
135 | 135 | ||||
Total Gross Margin | $ | 188 | $ | 188 | |
Gross Margin % | |||||
9.2% | 8.7% | ||||
15.7% | 15.1% | ||||
Total Gross Margin % | 13.1% | 12.5% | |||
(1) See the “Non-GAAP Financial Measures” section of the Press Release. |
XPO Corporate | ||||||||||
Summary of Sales, General and Administrative Expense | ||||||||||
(Unaudited) | ||||||||||
(In millions) | ||||||||||
Three Months Ended |
||||||||||
2020 | 2019 | $ Variance | Change % | |||||||
Sales, general and administrative expense | ||||||||||
Salaries and benefits | $ | 36 | $ | 26 | $ | 10 | 38.5% | |||
Other sales, general and administrative expense | - | 3 | (3) | -100.0% | ||||||
Purchased services | 37 | 10 | 27 | 270.0% | ||||||
Depreciation and amortization | 4 | 3 | 1 | 33.3% | ||||||
Total sales, general and administrative expense | $ | 77 | $ | 42 | $ | 35 | 83.3% |
Intersegment Eliminations | ||||||||||||
Summary Financial Table | ||||||||||||
(Unaudited) | ||||||||||||
(In millions) | ||||||||||||
Three Months Ended |
||||||||||||
2020 | 2019 | $ Variance | Change % | |||||||||
Revenue | $ | (32) | $ | (33) | $ | 1 | -3.0% | |||||
Cost of transportation and services | (32) | (30) | (2) | 6.7% | ||||||||
Net revenue (1) | - | (3) | 3 | -100.0% | ||||||||
Direct operating expense | 1 | - | 1 | 100.0% | ||||||||
Sales, general and administrative expense | ||||||||||||
Salaries and benefits | - | (1) | 1 | -100.0% | ||||||||
Other sales, general and administrative expense | (1) | (2) | 1 | -50.0% | ||||||||
Purchased services | - | - | - | 0.0% | ||||||||
Depreciation and amortization | - | - | - | 0.0% | ||||||||
Total sales, general and administrative expense | (1) | (3) | 2 | -66.7% | ||||||||
Operating income | $ | - | $ | - | $ | - | - | |||||
Note: Intersegment Eliminations represent intercompany activity between the Company's reportable segments that is eliminated upon consolidation. The difference between operating income component line items in the Condensed Consolidated Statements of Income and the sum of the respective line items from the Transportation and Logistics Summary Financial Tables and Corporate Summary of Sales, General and Administrative Expense above represents intercompany eliminations between our reportable segments. The table above summarizes the intersegment eliminations by line item. | ||||||||||||
(1) See the “Non-GAAP Financial Measures” section of the Press Release. |
Reconciliation of Non-GAAP Measures | ||||||||||||
Consolidated Reconciliation of Net Income to Adjusted EBITDA | ||||||||||||
(Unaudited) | ||||||||||||
(In millions) | ||||||||||||
Three Months Ended |
||||||||||||
2020 | 2019 | $ Variance | Change % | |||||||||
Net income attributable to common shareholders | $ | 21 | $ | 43 | $ | (22) | -51.2% | |||||
Distributed and undistributed net income | 2 | 4 | (2) | -50.0% | ||||||||
Net income attributable to noncontrolling interests | 2 | 5 | (3) | -60.0% | ||||||||
Net income | 25 | 52 | (27) | -51.9% | ||||||||
Debt extinguishment loss | - | 5 | (5) | -100.0% | ||||||||
Interest expense | 72 | 71 | 1 | 1.4% | ||||||||
Income tax provision | 10 | 19 | (9) | -47.4% | ||||||||
Depreciation and amortization expense | 183 | 180 | 3 | 1.7% | ||||||||
Unrealized (gain) loss on foreign currency option and forward contracts | (4) | 2 | (6) | -300.0% | ||||||||
EBITDA (1) | $ | 286 | $ | 329 | $ | (43) | -13.1% | |||||
Transaction and integration costs | 44 | 1 | 43 | 4300.0% | ||||||||
Restructuring costs | 3 | 13 | (10) | -76.9% | ||||||||
Adjusted EBITDA (1) | $ | 333 | $ | 343 | $ | (10) | -2.9% | |||||
Revenue | $ | 3,864 | $ | 4,120 | $ | (256) | -6.2% | |||||
Adjusted EBITDA margin (1) (2) | 8.6% | 8.3% | ||||||||||
(1) See the “Non-GAAP Financial Measures” section of the Press Release. Adjusted EBITDA was prepared assuming 100% ownership of |
||||||||||||
(2) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Revenue. |
Reconciliation of Non-GAAP Measures | ||||||
Consolidated Reconciliation of GAAP Net Income and Net Income Per Share to Adjusted Net Income and Adjusted Net Income Per Share |
||||||
(Unaudited) | ||||||
(In millions, except per share data) | ||||||
Three Months Ended | ||||||
2020 | 2019 | |||||
GAAP net income attributable to common shareholders | $ | 21 | $ | 43 | ||
Debt extinguishment loss | - | 5 | ||||
Unrealized (gain) loss on foreign currency option and forward contracts | (4) | 2 | ||||
Impairment of customer relationship intangibles | - | 6 | ||||
Transaction and integration costs | 44 | 1 | ||||
Restructuring costs | 3 | 13 | ||||
Income tax associated with the adjustments above (1) | (12) | (8) | ||||
Impact of noncontrolling interests on above adjustments | - | (1) | ||||
Allocation of undistributed earnings | (3) | (2) | ||||
Adjusted net income attributable to common shareholders (2) | $ | 49 | $ | 59 | ||
Adjusted basic earnings per share (2) | $ | 0.53 | $ | 0.55 | ||
Adjusted diluted earnings per share (2) | $ | 0.47 | $ | 0.51 | ||
Weighted-average common shares outstanding | ||||||
Basic weighted-average common shares outstanding | 92 | 107 | ||||
Diluted weighted-average common shares outstanding | 103 | 117 | ||||
(1) This line item reflects the aggregate tax benefit (provision) of all non-tax related adjustments reflected in the table above. The detail by line item is as follows: | ||||||
Debt extinguishment loss | $ | - | $ | 1 | ||
Unrealized (gain) loss on foreign currency option and forward contracts | (1) | 1 | ||||
Impairment of customer relationship intangibles | - | 2 | ||||
Transaction and integration costs | 12 | - | ||||
Restructuring costs | 1 | 4 | ||||
$ | 12 | $ | 8 | |||
(2) See the “Non-GAAP Financial Measures” section of the Press Release. |
Reconciliation of Non-GAAP Measures | |||||
Reconciliation of Cash Flows from Operating Activities to Free Cash Flow | |||||
(Unaudited) | |||||
(In millions) | |||||
Three Months Ended | |||||
2020 | 2019 | ||||
Net cash provided by (used in) operating activities | $ | 180 | $ | (96) | |
Cash collected on deferred purchase price receivable | - | 71 | |||
Adjusted net cash provided by (used in) operating activities | 180 | (25) | |||
Payment for purchases of property and equipment | (139) | (118) | |||
Proceeds from sale of property and equipment | 54 | 47 | |||
Free Cash Flow (1) | $ | 95 | $ | (96) | |
(1) See the “Non-GAAP Financial Measures” section of the Press Release. |
Reconciliation of Non-GAAP Measures | |||||||
Reconciliation of GAAP Revenue to Organic Revenue | |||||||
(Unaudited) | |||||||
(In millions) | |||||||
Consolidated | |||||||
Three Months Ended |
|||||||
2020 | 2019 | ||||||
Revenue | $ | 3,864 | $ | 4,120 | |||
Fuel | (387) | (418) | |||||
Direct postal injection revenue | - | (40) | |||||
Foreign exchange rates | 41 | - | |||||
Organic Revenue | $ | 3,518 | $ | 3,662 | |||
Organic Revenue Growth (1) | -3.9% | ||||||
(1) Organic revenue growth is calculated as the relative change in year-over-year organic revenue, expressed as a percentage of 2019 organic revenue. See the “Non-GAAP Financial Measures” section of the Press Release. | |||||||
Source: XPO Logistics, Inc.