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Item 7.01. Regulation FD Disclosure.
In connection with meetings with institutional investors, XPO, Inc. (the “Company” or “XPO”) is furnishing hereto as Exhibit 99.1 additional unaudited condensed consolidated and adjusted financial data to assist investors in assessing XPO's historical performance on a basis that (i) excludes the spin-off of XPO's tech-enabled brokered transportation platform, the sale of XPO's North American intermodal operation, and the spin-off of XPO's logistics segment, (ii) reflects incremental corporate allocations of approximately $20 million per quarter from Corporate to the North American Less-Than-Truckload (“North American LTL”) segment, (iii) reflects changes in expense captions within operating income in the Consolidated Statements of Income (Loss) to reflect the nature of the expense (the natural expense classification is designed to increase transparency and improve comparability and has no impact on Consolidated Revenues, Total Operating Expense, and Operating Income), and (iv) conforms the North American LTL Summary Financial Table, the European Transportation Summary Financial Table and the Corporate Summary Financial Table to the Consolidated Statements of Income (Loss). Additionally, certain non-GAAP metrics for the Company’s North American LTL segment have been updated.
The information furnished pursuant to this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Exhibit Description | ||
| 99.1 | XPO Post-Spin Financial Data Presentation dated April 2023 | ||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: April 11, 2023 | XPO, INC. | |
| By: | /s/ Carl D. Anderson II | |
| Carl D. Anderson II | ||
| Chief Financial Officer | ||
Exhibit 99.1
©2023 XPO, INC. XPO Post - Spin Financial Data Presentation April 2023
©2023 XPO, INC. On November 1 , 2022 , XPO, Inc . (“XPO” or the “Company”) completed the spin - off of its tech - enabled brokered transportation platform as RXO, Inc . (the "RXO Separation") . Additionally, in March 2022 , XPO sold its North American intermodal operation (“Intermodal Sale”) and recorded a $ 430 million pre - tax gain on the sale, net of transaction costs and working capital adjustments, in 2022 . The Intermodal Sale together with the RXO Separation were part of a single plan of disposal . In addition to the RXO Separation and Intermodal Sale, on August 2 , 2021 , XPO completed the spin - off of its logistics segment as GXO Logistics, Inc . (the "GXO Separation," together with the RXO Separation and Intermodal Sale, the "Separations") . The historical results of operations and the financial positions of the RXO Separation, Intermodal Sale and GXO Separation are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented . The Intermodal Sale qualified to be accounted for as a discontinued operation after the RXO Separation because the Intermodal Sale and RXO Separation were part of one strategic plan of disposal . On November 1 , 2022 , XPO filed a Current Report on Form 8 - K (the “November Form 8 - K”), which included unaudited pro forma condensed consolidated statements of operations for the six months ended June 30 , 2022 , and for each of the years ended December 31 , 2021 , 2020 and 2019 to illustrate the estimated effects of the Separations . On December 1 , 2022 , XPO also filed a Current Report on Form 8 - K (the “December Form 8 - K”), which included additional unaudited pro forma condensed consolidated and adjusted financial data . In this presentation, XPO is providing additional unaudited condensed consolidated and adjusted financial data to assist investors in assessing XPO's historical performance on a basis that (i) excludes these Separations, (ii) reflects incremental corporate allocations of approximately $ 20 million per quarter from Corporate to our North American Less - Than - Truckload (“North American LTL”) segment, (iii) reflects changes in expense captions within operating income in the Consolidated Statements of Income (Loss) to reflect the nature of the expense (the natural expense classification is designed to increase transparency and improve comparability and has no impact on Revenues, Total Operating Expense, and Operating Income), and (iv) conforms the North American LTL Summary Financial Table, the European Transportation Summary Financial Table and the Corporate Summary Financial Table to the Consolidated Statements of Income (Loss) . Additionally, certain non - GAAP metrics for the Company’s North American LTL segment have been updated . This data should be read in conjunction with (i) the unaudited pro forma financial information included in both the November Form 8 - K and December Form 8 - K, which were prepared in accordance with Regulation S - X Article 11 , Pro Forma Financial Information, as amended, (ii) XPO’s Annual Report on Form 10 - K for the year ended December 31 , 2022 , and (iii) the reconciliations provided herein . This presentation has been prepared by XPO for illustrative and informational purposes . NON - GAAP FINANCIAL MEASURES As required by the rules of the Securities and Exchange Commission (“SEC”), we provide reconciliations of the non - GAAP financial measures contained in this presentation to the most directly comparable measure under GAAP, which reconciliations are set forth in the financial tables below . XPO’s non - GAAP financial measures used in this presentation include adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) on a consolidated basis and for Corporate ; adjusted EBITDA margin on a consolidated basis and for our North American LTL and European Transportation segments ; adjusted net income (loss) from continuing operations attributable to common shareholders and adjusted diluted earnings (loss) from continuing operations per share ("adjusted EPS") on a consolidated basis ; adjusted operating income (loss) for our North American LTL and European Transportation segments ; and adjusted operating ratio for our North American LTL segment . 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 . We believe that 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), goodwill impairment charge, 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 (loss) from continuing operations 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, including amortization of acquisition - related intangible assets, transaction and integration costs, restructuring costs, goodwill impairment and other adjustments as set out in the attached tables . We believe that adjusted operating income and adjusted operating ratio improve the comparability of our operating results from period to period by removing the impact of certain transaction and integration costs and restructuring costs, as well as amortization expenses and goodwill impairment as set out in the attached tables . 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 EBITDA margin, adjusted net income (loss) from continuing operations attributable to common shareholders and adjusted EPS include adjustments for transaction and integration costs, goodwill impairment, as well as restructuring costs and other adjustments as set forth in the financial tables below . Transaction and integration adjustments are generally incremental costs that result from an actual or planned acquisition, divestiture or spin - off and may include transaction costs, consulting fees, stock - based compensation, retention awards, and 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 ongoing performance . 1 Basis of Presentation and Disclaimers:
©2023 XPO, INC. • In the first quarter 2023, XPO made certain changes to its financial reporting to increase transparency and improve comparability. Prior periods are being recast to reflect these changes, summarized as follows: • Consolidated Statements of Income (Loss) : The expense captions within operating income have been changed to reflect the nature of the expense. The following depicts the ‘old basis’ and ‘new basis’. The Summary Financial Tables (P&Ls) for North American LTL, European Transportation, and Corporate have been similarly adjusted. The change to natural expense classification has no impact on Consolidated Revenues, Total Operating Expense, and Operating Income. • North American LTL : As previously disclosed, effective in the first quarter 2023, XPO began allocating incremental corporate costs to its North American LTL Segment. The North American LTL and Corporate Summary Financial Tables have been recast to reflect these incremental allocations, which approximate $80 million annually. 2 Summary of Financial Reporting Changes Historical Presentation ('Old Basis') New Presentation ('New Basis') Revenue Revenue Cost of transportation and services Salaries, wages, and employee benefits Direct operating expense Purchased transportation Sales, general and administrative expense Fuel, operating expenses and supplies Depreciation and amortization expense Operating taxes and licenses Goodwill impairment Insurance and claims Transaction and integration costs Gains on sales of property and equipment Restructuring costs Depreciation and amortization expense Operating income Goodwill impairment Transaction and integration costs Restructuring costs Operating income
©2023 XPO, INC. ©2023 XPO, INC. Table of Contents Slide 4: XPO, Inc. Consolidated Statements of Income (Loss) Slide 5: North American Less - Than - Truckload Segment Summary Financial Table Slide 6: North American Less - Than - Truckload Summary Data Table Slide 7: European Transportation Segment Summary Financial Table Slide 8: Corporate Summary Financial Table Slides 9 - 10: Consolidated Non - GAAP Reconciliations Slide 11: Appendix
©2023 XPO, INC. 4 Consolidated Income Statement Note: The table below reflects our historical Consolidated Statements of Income (Loss) as updated to reflect our new expense cap tions. Year Ended Year Ended Year Ended March June September December December March June September December December March June September December December 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 2022 2022 2022 2022 2022 Revenue 1,580$ 1,322$ 1,622$ 1,644$ 6,168$ 1,727$ 1,873$ 1,830$ 1,772$ 7,202$ 1,894$ 2,047$ 1,946$ 1,831$ 7,718$ Salaries, wages and employee benefits 659 601 656 671 2,587 705 727 729 705 2,866 725 752 739 729 2,945 Purchased transportation 410 315 420 435 1,580 455 495 496 488 1,934 510 525 480 449 1,964 Fuel, operating expenses and supplies 334 304 319 331 1,288 370 376 365 381 1,492 418 434 425 410 1,687 Operating taxes and licenses 16 16 15 13 60 15 14 14 13 56 16 13 15 14 58 Insurance and claims 35 51 54 39 179 43 42 44 45 174 56 48 41 38 183 Gains on sales of property and equipment (28) (11) (28) (23) (90) (23) (7) (6) (36) (72) (1) (1) (1) (57) (60) Depreciation and amortization expense 93 96 95 94 378 95 98 96 96 385 94 96 99 103 392 Goodwill impairment - - - - - - - - - - - - - 64 64 Transaction and integration costs 34 24 - 9 67 5 7 13 11 36 7 7 2 42 58 Restructuring costs 1 21 - - 22 1 1 14 3 19 6 2 7 35 50 Operating income (loss) 26 (95) 91 75 97 61 120 65 66 312 63 171 139 4 377 Other income (19) (8) (10) (10) (47) (17) (9) (19) (15) (60) (14) (13) (15) (13) (55) Debt extinguishment loss - - - - - 8 - 46 - 54 - 26 - 13 39 Interest expense 67 79 81 81 308 65 58 53 35 211 37 31 35 32 135 Income (loss) from continuing operations before income tax provision (benefit) (22) (166) 20 4 (164) 5 71 (15) 46 107 40 127 119 (28) 258 Income tax provision (benefit) (13) (58) 8 9 (54) - 14 (2) (1) 11 8 31 27 8 74 Income (loss) from continuing operations (9) (108) 12 (5) (110) 5 57 (13) 47 96 32 96 92 (36) 184 Income (loss) from discontinued operations, net of taxes 34 (26) 86 133 227 113 101 (44) 75 245 456 45 39 (58) 482 Net income (loss) 25 (134) 98 128 117 118 158 (57) 122 341 488 141 131 (94) 666 Net loss from continuing operations attributable to noncontrolling interests - 3 - - 3 - - - - - - - - - - Net income from discontinued operations attributable to noncontrolling interests (2) - (5) (3) (10) (3) (2) - - (5) - - - - - Net income (loss) attributable to XPO 23$ (131)$ 93$ 125$ 110$ 115$ 156$ (57)$ 122$ 336$ 488$ 141$ 131$ (94)$ 666$ Net income (loss) attributable to common shareholders (1) (2) Continuing operations (11)$ (106)$ 3$ (37)$ (138)$ 5$ 57$ (13)$ 47$ 96$ 32$ 96$ 92$ (36)$ 184$ Discontinued operations 32 (26) 81 130 217 110 99 (44) 75 240 456 45 39 (58) 482 Net income (loss) attributable to common shareholders 21$ (132)$ 84$ 93$ 79$ 115$ 156$ (57)$ 122$ 336$ 488$ 141$ 131$ (94)$ 666$ Basic earnings (loss) per share attributable to common shareholders (1) Continuing operations (0.12)$ (1.17)$ 0.03$ (0.40)$ (1.50)$ 0.04$ 0.51$ (0.11)$ 0.40$ 0.85$ 0.28$ 0.83$ 0.80$ (0.31)$ 1.60$ Discontinued operations 0.35 (0.28) 0.90 1.41 2.37 1.04 0.88 (0.39) 0.66 2.14 3.97 0.40 0.34 (0.50) 4.19 Basic earnings (loss) per share attributable to common shareholders 0.23$ (1.45)$ 0.93$ 1.01$ 0.87$ 1.08$ 1.39$ (0.50)$ 1.06$ 2.99$ 4.25$ 1.23$ 1.14$ (0.81)$ 5.79$ Diluted earnings (loss) per share attributable to common shareholders (1) Continuing operations (0.12)$ (1.17)$ 0.03$ (0.40)$ (1.50)$ 0.04$ 0.51$ (0.11)$ 0.40$ 0.83$ 0.28$ 0.83$ 0.79$ (0.31)$ 1.59$ Discontinued operations 0.35 (0.28) 0.80 1.41 2.37 0.98 0.87 (0.39) 0.65 2.10 3.94 0.39 0.34 (0.50) 4.17 Diluted earnings (loss) per share attributable to common shareholders 0.23$ (1.45)$ 0.83$ 1.01$ 0.87$ 1.02$ 1.38$ (0.50)$ 1.05$ 2.93$ 4.22$ 1.22$ 1.13$ (0.81)$ 5.76$ Weighted-average common shares outstanding Basic weighted-average common shares outstanding 92 91 91 92 92 106 112 115 115 112 115 115 115 115 115 Diluted weighted-average common shares outstanding 92 91 102 92 92 112 113 115 116 114 116 116 116 115 116 Cash paid for conversion of preferred stock (a) - - - 22 22 - - - - - - - - - - Non-cash allocation of undistributed earnings 1 - 9 9 6 - - - - - - - - - - Preferred dividends 1 1 - 1 3 - - - - - - - - - - (2) Net income (loss) from continuing operations attributable to common shareholders reflects the following items: (a) The cash paid for conversion of preferred stock in 2020 is in connection with the conversion of the Company's Series A Preferred Stock into the Company's common stock. XPO, Inc. Consolidated Statements of Income (Loss) (Unaudited) (In millions, except per share data) Three Months Ended Three Months EndedThree Months Ended (1) The sum of quarterly net income (loss) attributable to common shareholders and earnings (loss) per share attributable to common shareholders may not equal year-to-date amounts due to differences in the weighted-average number of shares outstanding during the respective periods and because losses are not allocated to the Series A Preferred Stock in calculating earnings per share.
©2023 XPO, INC. 5 North American Less - Than - Truckload Note: The table below reflects our new expense captions as well as the incremental corporate allocations of approximately $20 mi llion per quarter from Corporate to our North American Less - Than - Truckload segment. Year Ended Year Ended Year Ended March June SeptemberDecember December March June September December December March June September December December 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 2022 2022 2022 2022 2022 Revenue (excluding fuel surcharge revenue) 777$ 703$ 827$ 806$ 3,113$ 829$ 918$ 906$ 840$ 3,493$ 900$ 949$ 931$ 851$ 3,631$ Fuel surcharge revenue 123 92 108 110 433 135 164 167 166 632 207 291 274 242 1,014 Revenue 900 795 935 916 3,546 964 1,082 1,073 1,006 4,125 1,107 1,240 1,205 1,093 4,645 Salaries, wages and employee benefits 463 437 466 477 1,843 484 516 525 503 2,028 520 548 562 546 2,176 Purchased transportation 87 70 90 87 334 94 116 124 118 452 136 134 123 106 499 Fuel, operating expenses and supplies (1) 176 160 158 158 652 187 193 200 202 782 232 257 252 242 983 Operating taxes and licenses 14 13 11 10 48 11 11 11 11 44 13 11 13 11 48 Insurance and claims 22 28 31 25 106 24 27 30 32 113 35 32 31 25 123 Gains on sales of property and equipment (27) (10) (26) (14) (77) (17) (5) (4) (35) (61) - - - (54) (54) Depreciation and amortization 56 58 55 56 225 55 57 57 58 227 56 59 60 64 239 Transaction and integration costs 2 3 - - 5 - - 1 - 1 - 2 - 1 3 Restructuring costs - 5 - (1) 4 - - - - - 3 - 2 - 5 Operating income (2) 107 31 150 118 406 126 167 129 117 539 112 197 162 152 623 Operating ratio (3) 88.1% 96.1% 84.0% 87.1% 88.6% 86.9% 84.6% 88.0% 88.4% 86.9% 89.9% 84.1% 86.6% 86.1% 86.6% Other income 1 - - - 1 - - - - - - - 1 - 1 Amortization expense 8 9 8 9 34 8 9 9 8 34 8 9 9 8 34 Transaction and integration costs 2 3 - - 5 - - 1 - 1 - 2 - 1 3 Restructuring costs - 5 - (1) 4 - - - - - 3 - 2 - 5 Gains on real estate transactions (27) (10) (26) (14) (77) (17) (5) (5) (35) (62) - - - (55) (55) Adjusted operating income (7) 91$ 38$ 132$ 112$ 373$ 117$ 171$ 134$ 90$ 512$ 123$ 208$ 174$ 106$ 611$ Adjusted operating ratio (4) (7) 89.9% 95.2% 85.9% 87.8% 89.5% 87.9% 84.2% 87.5% 91.1% 87.6% 88.9% 83.2% 85.6% 90.3% 86.8% Depreciation expense 48 49 47 47 191 47 48 48 50 193 48 50 51 56 205 Pension income 11 11 11 10 43 14 14 15 15 58 15 15 14 15 59 Gains on real estate transactions 27 10 26 14 77 17 5 5 35 62 - - - 55 55 Other - - 1 (1) - - - 1 - 1 - 1 1 - 2 Adjusted EBITDA (5) 177$ 108$ 217$ 182$ 684$ 195$ 238$ 203$ 190$ 826$ 186$ 274$ 240$ 232$ 932$ Adjusted EBITDA Margin (6) 19.7% 13.6% 23.2% 19.9% 19.3% 20.2% 22.0% 18.9% 18.9% 20.0% 16.8% 22.1% 19.9% 21.2% 20.1% (1) Fuel, operating expenses and supplies includes fuel-related taxes. North American Less-Than-Truckload Segment Summary Financial Table (Unaudited) (In millions) Three Months Ended Three Months EndedThree Months Ended (5) Adjusted EBITDA is used by our chief operating decision maker to evaluate segment profit (loss) in accordance with ASC 280. (2) Operating income reflects an allocation of incremental Corporate costs of approximately $20 million per quarter. (3) Operating ratio is calculated as (1 - (operating income divided by revenue)). (4) Adjusted operating ratio is calculated as (1 - (adjusted operating income divided by revenue)); adjusted operating margin is the inverse of adjusted operating ratio. (7) See the “Non-GAAP Financial Measures” section. (6) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Revenue.
©2023 XPO, INC. 6 North American Less - Than - Truckload Year Ended Year Ended Year Ended March June SeptemberDecember December March June September December December March June September December December 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 2022 2022 2022 2022 2022 Pounds per day (thousands) 68,212 61,990 69,952 70,823 67,725 70,730 76,520 72,152 67,372 71,739 70,176 72,333 70,063 67,996 70,163 Shipments per day 48,603 45,600 50,953 50,375 48,875 49,788 53,130 50,637 47,910 50,392 48,366 50,274 49,744 48,622 49,257 Average weight per shipment (in pounds) 1,403 1,359 1,373 1,406 1,386 1,421 1,440 1,425 1,406 1,424 1,451 1,439 1,408 1,398 1,424 Revenue per shipment 288.60$ 273.73$ 286.16$ 295.44$ 286.19$ 306.77$ 320.49$ 330.44$ 343.49$ 324.94$ 356.95$ 388.10$ 378.26$ 368.27$ 373.10$ Gross revenue per hundredweight (including fuel surcharges) (1) 21.16$ 20.79$ 21.30$ 21.34$ 21.16$ 22.13$ 22.67$ 23.65$ 24.93$ 23.30$ 25.38$ 27.68$ 27.52$ 27.03$ 26.90$ Gross revenue per hundredweight (excluding fuel surcharges) (1) 18.34$ 18.45$ 18.90$ 18.82$ 18.63$ 19.11$ 19.29$ 20.02$ 20.90$ 19.80$ 20.76$ 21.34$ 21.43$ 21.19$ 21.18$ Average length of haul (in miles) 813.3 816.5 837.2 834.8 825.7 833.2 836.3 847.0 843.1 839.8 835.1 826.3 831.0 832.3 831.1 Total average load factor (2) 23,859 24,551 24,205 23,986 24,138 24,411 24,406 23,905 23,309 24,018 24,219 23,955 23,574 23,099 23,718 Average age of tractor fleet (years) 5.14 5.31 5.68 5.43 5.59 5.79 5.86 5.88 5.87 5.87 5.96 5.90 Number of working days 64.0 63.5 64.0 61.5 253.0 63.0 63.5 64.0 61.0 251.5 64.0 64.0 64.0 61.0 252.5 (2) Total average load factor equals freight pound miles divided by total linehaul miles. Note: Table excludes the Company's trailer manufacturing operations. North American Less-Than-Truckload Summary Data Table (Unaudited) Three Months Ended Three Months EndedThree Months Ended (1) Gross revenue per hundredweight excludes the adjustment required for financial statement purposes in accordance with the Company's revenue recognition policy.
©2023 XPO, INC. 7 European Transportation Note: The table below reflects our European Transportation segment historical summary financials as updated to reflect our ne w e xpense captions. Year Ended Year Ended Year Ended March June SeptemberDecember December March June September December December March June September December December 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 2022 2022 2022 2022 2022 Revenue 680$ 527$ 687$ 728$ 2,622$ 763$ 791$ 757$ 766$ 3,077$ 787$ 807$ 741$ 738$ 3,073$ Salaries, wages and employee benefits 167 146 167 185 665 187 184 177 182 730 185 185 167 180 717 Purchased transportation 323 245 330 348 1,246 361 379 372 370 1,482 374 391 357 343 1,465 Fuel, operating expenses and supplies (1) 151 123 144 152 570 167 163 153 159 642 174 166 159 161 660 Operating taxes and licenses 2 3 3 3 11 3 3 3 2 11 3 2 2 3 10 Insurance and claims 13 15 15 13 56 15 15 14 13 57 14 15 13 15 57 Gains on sales of property and equipment (1) (1) (2) (9) (13) (6) (2) (2) (1) (11) (1) (1) (1) (3) (6) Depreciation and amortization 30 31 33 34 128 34 36 35 35 140 33 32 31 32 128 Goodwill impairment - - - - - - - - - - - - - 64 64 Transaction and integration costs 2 5 - 1 8 1 2 3 8 14 2 1 2 1 6 Restructuring costs 1 9 - - 10 1 - 8 1 10 2 1 1 2 6 Operating income (loss) (8) (49) (3) 1 (59) - 11 (6) (3) 2 1 15 10 (60) (34) Other income (expense) - - - (7) (7) (4) (3) 2 (2) (7) - - (1) - (1) Amortization expense 5 5 6 6 22 6 5 6 5 22 5 5 5 5 20 Goodwill impairment - - - - - - - - - - - - - 64 64 Transaction and integration costs 2 5 - 1 8 1 2 3 8 14 2 1 2 1 6 Restructuring costs 1 9 - - 10 1 - 8 1 10 2 1 1 2 6 Adjusted operating income (loss) (4) -$ (30)$ 3$ 1$ (26)$ 4$ 15$ 13$ 9$ 41$ 10$ 22$ 17$ 12$ 61$ Depreciation expense 25 26 27 28 106 28 31 29 30 118 28 27 26 27 108 Other - - - 7 7 5 1 - - 6 - - - - - Adjusted EBITDA (2) 25$ (4)$ 30$ 36$ 87$ 37$ 47$ 42$ 39$ 165$ 38$ 49$ 43$ 39$ 169$ Adjusted EBITDA Margin (3) 3.6% -0.8% 4.4% 5.0% 3.3% 4.8% 6.0% 5.5% 5.2% 5.4% 4.9% 6.0% 5.9% 5.2% 5.5% (1) Fuel, operating expenses and supplies includes fuel-related taxes. (2) Adjusted EBITDA is used by our chief operating decision maker to evaluate segment profit (loss) in accordance with ASC 280. (3) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Revenue. (4) See the “Non-GAAP Financial Measures” section. Summary Financial Table (Unaudited) (In millions) Three Months Ended Three Months Ended Three Months Ended
©2023 XPO, INC. 8 Corporate Note: The table below reflects our Corporate historical summary financials as updated to reflect our new expense captions as well a s incremental corporate allocations of approximately $20 million per quarter from Corporate to our North American Less - Than - Truckload segment . Year Ended Year Ended Year Ended March June SeptemberDecember December March June September December December March June September December December 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 2022 2022 2022 2022 2022 Revenue -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Salaries, wages and employee benefits 29$ 18$ 23$ 9$ 79$ 34$ 27$ 27$ 20$ 108$ 20$ 19$ 10$ 3$ 52$ Fuel, operating expenses and supplies 7 21 17 21 66 16 20 12 20 68 12 11 14 7 44 Operating taxes and licenses - - 1 - 1 1 - - - 1 - - - - - Insurance and claims - 8 8 1 17 4 - - - 4 7 1 (3) (2) 3 Depreciation and amortization 7 7 7 4 25 6 5 4 3 18 5 5 8 7 25 Transaction and integration costs 30 16 - 8 54 4 5 9 3 21 5 4 - 40 49 Restructuring costs - 7 - 1 8 - 1 6 2 9 1 1 4 33 39 Operating loss (1) (73) (77) (56) (44) (250) (65) (58) (58) (48) (229) (50) (41) (33) (88) (212) Other income (expense) (2) 4 (2) (2) 1 1 1 (1) 1 1 2 (1) (3) - (1) (5) Depreciation and amortization 7 7 7 4 25 6 5 4 3 18 5 5 8 7 25 Transaction and integration costs 30 16 - 8 54 4 5 9 3 21 5 4 - 40 49 Restructuring costs - 7 - 1 8 - 1 6 2 9 1 1 4 33 39 Adjusted EBITDA (3) (32)$ (49)$ (51)$ (30)$ (162)$ (54)$ (48)$ (38)$ (39)$ (179)$ (40)$ (34)$ (21)$ (9)$ (104)$ (2) Other income (expense) consists of foreign currency gain (loss) and other income (expense). (3) See the “Non-GAAP Financial Measures” section. Corporate Summary Financial Table (Unaudited) (In millions) Three Months Ended Three Months Ended (1) Operating loss reflects an incremental allocation of Corporate costs to our North American Less-Than-Truckload segment of approximately $20 million per quarter. Three Months Ended
©2023 XPO, INC. 9 Consolidated Adjusted EBITDA
©2023 XPO, INC. 10 Consolidated Adjusted EPS
©2023 XPO, INC. Appendix Slide 12: Damages Claims Ratio
©2023 XPO, INC. 12 Damages Claims Ratio (as a % of LTL Revenue) Note: Based on claims payment data
