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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 June 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
_______________________________________________________
https://cdn.kscope.io/f9b4533a8e1d2e0ee6d5ed3500eb7501-xpo-20220630_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 August 2, 2022, there were 115,039,684 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 June 30, 2022
Table of Contents
 
Page No.


Table of Contents
Part I—Financial Information
Item 1. Financial Statements.
XPO Logistics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
June 30,December 31,
(In millions, except per share data)20222021
ASSETS
Current assets
Cash and cash equivalents$436 $260 
Accounts receivable, net of allowances of $47 and $47, respectively
2,190 2,105 
Other current assets271 286 
Current assets of discontinued operations19 26 
Total current assets2,916 2,677 
Long-term assets
Property and equipment, net of $1,823 and $1,828 in accumulated depreciation, respectively
1,799 1,808 
Operating lease assets832 908 
Goodwill2,284 2,479 
Identifiable intangible assets, net of $589 and $612 in accumulated amortization, respectively
522 580 
Other long-term assets287 255 
Total long-term assets5,724 6,030 
Total assets$8,640 $8,707 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable$1,153 $1,110 
Accrued expenses1,106 1,107 
Short-term borrowings and current maturities of long-term debt55 58 
Short-term operating lease liabilities142 170 
Other current liabilities159 69 
Current liabilities of discontinued operations19 24 
Total current liabilities2,634 2,538 
Long-term liabilities
Long-term debt2,857 3,514 
Deferred tax liability325 316 
Employee benefit obligations118 122 
Long-term operating lease liabilities689 752 
Other long-term liabilities310 327 
Total long-term liabilities4,299 5,031 
Stockholders’ equity
Common stock, $0.001 par value; 300 shares authorized; 115 shares issued and outstanding as of
June 30, 2022 and December 31, 2021
  
Additional paid-in capital1,187 1,179 
Retained earnings672 43 
Accumulated other comprehensive loss(152)(84)
Total equity1,707 1,138 
Total liabilities and equity$8,640 $8,707 
See accompanying notes to condensed consolidated financial statements.

1

Table of Contents
XPO Logistics, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(In millions, except per share data)2022202120222021
Revenue$3,232 $3,186 $6,705 $6,175 
Cost of transportation and services (exclusive of
depreciation and amortization)
2,153 2,186 4,590 4,239 
Direct operating expense (exclusive of depreciation
and amortization)
365 358 750 692 
Sales, general and administrative expense324 324 668 662 
Depreciation and amortization expense115 120 231 239 
(Gain) loss on sale of business16  (434) 
Transaction and integration costs25 6 35 11 
Restructuring costs4 1 10 2 
Operating income230 191 855 330 
Other income(15)(10)(29)(26)
Debt extinguishment loss26  26 8 
Interest expense31 58 68 123 
Income from continuing operations before income tax
provision
188 143 790 225 
Income tax provision47 30 160 49 
Income from continuing operations141 113 630 176 
Income (loss) from discontinued operations, net of taxes 45 (1)100 
Net income141 158 629 276 
Net income from discontinued operations attributable
to noncontrolling interests
 (2) (5)
Net income attributable to XPO$141 $156 $629 $271 
Net income (loss) attributable to common shareholders
Continuing operations$141 $113 $630 $176 
Discontinued operations 43 (1)95 
Net income attributable to common shareholders $141 $156 $629 $271 
Earnings (loss) per share data
Basic earnings per share from continuing operations$1.23 $1.01 $5.49 $1.61 
Basic earnings (loss) per share from discontinued
operations
 0.38 (0.01)0.87 
Basic earnings per share attributable to common
shareholders
$1.23 $1.39 $5.48 $2.48 
Diluted earnings per share from continuing operations$1.22 $1.00 $5.45 $1.56 
Diluted earnings (loss) per share from discontinued
operations
 0.38 (0.01)0.84 
Diluted earnings per share attributable to common
shareholders
$1.22 $1.38 $5.44 $2.40 
Weighted-average common shares outstanding
Basic weighted-average common shares outstanding115 112 115 109 
Diluted weighted-average common shares outstanding116 113 116 113 
See accompanying notes to condensed consolidated financial statements.

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XPO Logistics, Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(In millions)2022202120222021
Net income$141 $158 $629 $276 
Other comprehensive income (loss), net of tax
Foreign currency translation gain (loss), net of tax effect of $(9), $3, $(11) and $(3)
$(46)$15 $(72)$(27)
Unrealized gain on financial assets/liabilities designated as hedging
instruments, net of tax effect of $(1), $, $(1) and $
3  4  
Other comprehensive income (loss)(43)15 (68)(27)
Comprehensive income$98 $173 $561 $249 
Less: Comprehensive income attributable to noncontrolling interests 5  3 
Comprehensive income attributable to XPO$98 $168 $561 $246 
See accompanying notes to condensed consolidated financial statements.

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XPO Logistics, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended June 30,
(In millions)20222021
Cash flows from operating activities of continuing operations
Net income$629 $276 
Income (loss) from discontinued operations, net of taxes(1)100 
Income from continuing operations 630 176 
Adjustments to reconcile income from continuing operations to net cash from
operating activities
Depreciation, amortization and net lease activity231 239 
Stock compensation expense18 13 
Accretion of debt8 10 
Deferred tax expense6 10 
Debt extinguishment loss26 8 
Gain on sale of business(434) 
Gains on sales of property and equipment(2)(30)
Other17 11 
Changes in assets and liabilities
Accounts receivable(382)(223)
Other assets57 (45)
Accounts payable203 19 
Accrued expenses and other liabilities21 120 
Net cash provided by operating activities from continuing operations399 308 
Cash flows from investing activities of continuing operations
Proceeds from sale of business705  
Payment for purchases of property and equipment(267)(135)
Proceeds from sale of property and equipment7 60 
Proceeds from settlement of cross currency swaps19  
Net cash provided by (used in) investing activities from continuing operations464 (75)
Cash flows from financing activities of continuing operations
Repayment of borrowings related to securitization program (24)
Repurchase of debt(651)(1,200)
Proceeds from borrowings on ABL facility275  
Repayment of borrowings on ABL facility(275)(200)
Repayment of debt and finance leases(32)(43)
Payment for debt issuance costs (5)
Change in bank overdrafts25  
Payment for tax withholdings for restricted shares(13)(22)
Other(2)5 
Net cash used in financing activities from continuing operations(673)(1,489)
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Six Months Ended June 30,
(In millions)20222021
Cash flows from discontinued operations
Operating activities of discontinued operations(3)231 
Investing activities of discontinued operations (70)
Financing activities of discontinued operations  (159)
Net cash provided by (used in) discontinued operations (3)2 
Effect of exchange rates on cash, cash equivalents and restricted cash(14)1 
Net increase (decrease) in cash, cash equivalents and restricted cash173 (1,253)
Cash, cash equivalents and restricted cash, beginning of period273 2,065 
Cash, cash equivalents and restricted cash, end of period446 812 
Less: Cash, cash equivalents and restricted cash of discontinued operations, end of
period
 318 
Cash, cash equivalents and restricted cash of continued operations, end of period$446 $494 
Supplemental disclosure of cash flow information
Leased assets obtained in exchange for new operating lease liabilities$114 $111 
Leased assets obtained in exchange for new finance lease liabilities10 31 
Cash paid for interest73 133 
Cash paid for income taxes74 43 
See accompanying notes to condensed consolidated financial statements.

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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 March 31, 2022 $ 114,982 $ $1,176 $531 $(109)$1,598 $ $1,598 
Net income— — — — — 141 — 141 — 141 
Other comprehensive loss— — — — — — (43)(43)— (43)
Exercise and vesting of stock compensation awards
— — 51 — — — — — — — 
Tax withholdings related to vesting of stock compensation awards
— — — — (1)— — (1)— (1)
Stock compensation expense
— — — — 10 — — 10 — 10 
Other
— — — — 2 — — 2 — 2 
Balance as of June 30, 2022 $ 115,033 $ $1,187 $672 $(152)$1,707 $ $1,707 
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— — — — — 629 — 629 — 629 
Other comprehensive loss— — — — — — (68)(68)— (68)
Exercise and vesting of stock compensation awards
— — 296 — — — — — — — 
Tax withholdings related to vesting of stock compensation awards
— — — — (13)— — (13)— (13)
Stock compensation expense
— — — — 18 — — 18 — 18 
Other
— — — — 3 — — 3 — 3 
Balance as of June 30, 2022 $ 115,033 $ $1,187 $672 $(152)$1,707 $ $1,707 

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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 EarningsAccumulated Other
Comprehensive Loss
Total XPO Stockholders' EquityNon-controlling InterestsTotal Equity
Balance as of March 31, 2021 $ 111,676 $ $1,988 $983 $(195)$2,776 $138 $2,914 
Net income— — — — — 156 — 156 2 158 
Other comprehensive income— — — — — — 12 12 3 15 
Exercise and vesting of stock compensation awards
— — 44 — — — — — — — 
Tax withholdings related to vesting of stock compensation awards
— — — — (1)— — (1)— (1)
Conversion of preferred stock to common stock— — 6 — — — — — — — 
Purchase of noncontrolling interests— — — — (34)— — (34)(100)(134)
Dividend declared
— — — — — — — — (3)(3)
Stock compensation expense
— — — — 15 — — 15 — 15 
Other
— — — — 3 — — 3 — 3 
Balance as of June 30, 2021 $ 111,726 $ $1,971 $1,139 $(183)$2,927 $40 $2,967 
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, 20201 $1 102,052 $ $1,998 $868 $(158)$2,709 $140 $2,849 
Net income— — — — — 271 — 271 5 276 
Other comprehensive loss— — — — — — (25)(25)(2)(27)
Exercise and vesting of stock compensation awards
— — 314 — — — — — — — 
Tax withholdings related to vesting of stock compensation awards
— — — — (22)— — (22)— (22)
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
— — — — 25 — — 25 — 25 
Other— — — — 3 — — 3 — 3 
Balance as of June 30, 2021 $ 111,726 $ $1,971 $1,139 $(183)$2,927 $40 $2,967 

See accompanying notes to condensed consolidated financial statements.
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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, primarily by providing less-than-truckload (“LTL”) and truck brokerage services. See Note 4—Segment Reporting for additional information on our operations.
2022 Planned RXO Spin-Off
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 in North America as a publicly traded company. In addition, the Board of Directors authorized two divestitures: our North American intermodal operation, which we sold in March 2022, and the divestiture of our European business. For further information on the sale of our intermodal operation, see Note 3—Divestiture.
The spin-off to XPO shareholders, if completed as planned, will result in two independent, publicly traded companies. The spin-off company will be RXO, Inc. (“RXO”) and will be comprised of our asset-light core truck brokerage business and complementary brokered services for managed transportation, last mile logistics and global forwarding. The remaining company, XPO, will be a pure-play provider of asset-based LTL service in North America. The planned spin-off transaction, which is intended to be tax-free to XPO and our shareholders for U.S. federal income tax purposes, will result in XPO shareholders owning stock in both XPO and RXO. In connection with the transaction, it is anticipated that a portion of XPO’s outstanding debt will be repaid using proceeds from debt incurred by RXO.
We currently expect to complete the RXO spin-off transaction in the fourth quarter of 2022, subject to various conditions, including the effectiveness of a Form 10 registration statement, receipt of a tax opinion from counsel, the refinancing of XPO’s debt on terms satisfactory to our Board of Directors, and final approval by the Board of Directors, among other requirements.
There can be no assurance that any strategic transaction will occur, or if one or more do occur, of the terms or timing.
2021 Spin-Off of the Logistics Segment
On August 2, 2021, we completed the spin-off of our logistics segment as GXO Logistics, Inc. (“GXO”). The historical results of our logistics segment are presented as discontinued operations in our Condensed Consolidated Financial Statements. For information on our discontinued operations, see Note 2—Discontinued Operations.
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 six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.
We have recast prior period amounts to conform to the current period’s presentation.

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Restricted Cash
As of June 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 $210 million as of June 30, 2022). As of June 30, 2022, less than €1 million (less than $1 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 0.78% as of June 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 six months ended June 30, 2022 and 2021.
Information related to the trade receivables sold was as follows:
Three Months Ended June 30,Six Months Ended June 30,
(In millions)2022
2021 (1)
2022
2021 (1)
Securitization programs
Receivables sold in period
$458 $408 $905 $755 
Cash consideration
458 408 905 755 
Factoring programs
Receivables sold in period
33 13 60 29 
Cash consideration
33 13 60 29 
(1)    Information for the three and six months ended June 30, 2021 exclude the logistics segment.
Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The levels of inputs used to measure fair value are:
Level 1—Quoted prices for identical instruments in active markets;
Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets; and
Level 3—Valuations based on inputs that are unobservable, generally utilizing pricing models or other valuation techniques that reflect management’s judgment and estimates.
We base our fair value estimates on market assumptions and available information. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and current maturities of long-term debt approximated their fair values as of June 30, 2022 and December 31, 2021 due to their short-term nature and/or being receivable or payable on demand. The Level 1 cash equivalents include money market funds valued using quoted prices in active markets and a cash deposit for the securitization program. Our derivative instruments are classified as Level 2 and are valued using inputs other than quoted prices, such as foreign exchange rates and yield curves. For information on the fair value hierarchy of our derivative instruments, see Note 7—Derivative Instruments; and for further information on financial liabilities, see Note 8—Debt.

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The fair value hierarchy of cash equivalents was as follows:
(In millions)Carrying ValueFair ValueLevel 1
June 30, 2022$377 $377 $