XPO Inc
For the period ended Jun 30, 2024. Filed Aug 1, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 1, 2024
XPO$176.95+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-03.
0001166003-24-000066
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001166003-24-000073
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 69 previous paragraphs and 79 current paragraphs.
28 unchanged; 37 reworded; 14 added; 4 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
NM - Not meaningful.
Current report
Debt extinguishment loss was $23 million for the second quarter and first six months of 2023, which related to the refinancing of our Term Loan Facility in the second quarter of 2023. There was no debt extinguishment loss for the second quarter and first six months of 2024.
Current report
We expect the legal entity reorganization to generate a net refund of approximately $45 million, primarily in 2025.
Current report
(1) Percent of Revenue is calculated using the underlying unrounded amounts.
Current report
Percentages presented are calculated using the underlying unrounded amounts.
Current report
Adjusted EBITDA was $297 million, or 23.3% of revenue, for the second quarter of 2024, compared with $208 million, or 18.3% of revenue, for the same quarter in 2023. Adjusted EBITDA was $551 million, or 22.1% of revenue, for the first six months of 2024, compared with $390 million, or 17.3% of revenue, for the same period in 2023. The increase in Adjusted EBITDA as a percentage of revenue in both the second quarter and first six months of 2024 reflects lower purchased transportation, damage claims, fuel costs, maintenance costs and bad debt expense as a percentage of revenue.
Current report
(1) Percent of Revenue is calculated using the underlying unrounded amounts.
Current report
Adjusted EBITDA was $49 million, or 6.1% of revenue, for the second quarter of 2024, compared with $46 million, or 6.0% of revenue, for the same quarter in 2023. Adjusted EBITDA was $87 million, or 5.4% of revenue, for the first six months of 2024, compared with $83 million, or 5.3% of revenue, for the same period in 2023. The change in Adjusted EBITDA as a percentage of revenue in both the second quarter and the first six months of 2024 primarily reflects lower fuel costs offset by higher salaries, wages and employee benefits as a percentage of revenue.
Current report
In 2015, we entered into a Term Loan Credit Agreement that provided for a single borrowing of $1.6 billion, which was subsequently amended to increase the principal balance to $2.0 billion and to extend the maturity date to February 2025 (the “Existing Term Loan Facility”).
Current report
In the second quarter of 2023, we amended the Term Loan Credit Agreement to obtain $700 million of new term loans (the “New Term Loan Facility”) having substantially similar terms as the Existing Term Loan Facility, except with respect to maturity date, issue price, interest rate, prepayment premiums in connection with certain voluntary prepayments and certain other provisions. The New Term Loan Facility was issued at 99.5% of the face amount and will mature in May 2028.
Current report
In the same period, we used net proceeds from the New Term Loan Facility, the Senior Secured Notes due 2028 (as defined below) and the Senior Notes due 2031 (as defined below), together with cash on hand, to repay $2.0 billion of outstanding principal under the Existing Term Loan Facility and to pay related fees, expenses and accrued interest. We recorded a debt extinguishment loss of $23 million in the second quarter 2023 due to this repayment.
Current report
In the fourth quarter of 2023, we entered into an incremental amendment to the Term Loan Credit Agreement to obtain $400 million of incremental term loans (the “Incremental Term Loans”). The Incremental Term Loans are a new tranche of loans under the Term Loan Credit Agreement and will mature in February 2031.
Current report
Senior Notes Due 2028 and 2031
Current report
In the second quarter of 2023, we completed private placements of $830 million aggregate principal amount of senior secured notes due 2028 (the “Senior Secured Notes due 2028”) and $450 million aggregate principal amount of senior notes due 2031 (the “Senior Notes due 2031”). The Senior Secured Notes due 2028 mature in June 2028 and bear interest at a rate of 6.25% per annum. The Senior Notes due 2031 mature in June 2031 and bear interest at a rate of 7.125% per annum. Interest is payable semi-annually in cash in arrears and commenced December 1, 2023. These notes were issued at par and were used to repay our Existing Term Loan Facility as described above.
Removed paragraphs (4)
Previous report
Importantly, our technology also helps our company meet its environmental goals and can help our customers meet their own goals. For a detailed discussion of our philosophy relating to innovation and environmental matters, refer to “Business” in our 2023 Form 10-K.
Previous report
In the month of April 2024 weight per day increased 3.1%, as compared with April 2023, attributable to a year-over-year increase of 4.7% in shipments per day and a decrease of 1.5% in weight per shipment. These April 2024 operating metrics are preliminary and actual results may vary.
Previous report
Adjusted EBITDA was $255 million, or 20.9% of revenue, for the first quarter of 2024, compared with $182 million, or 16.3% of revenue, for the same period in 2023. The increase in Adjusted EBITDA as a percentage of revenue reflects higher revenue, excluding fuel surcharge revenue, driven by the pricing and volume dynamics explained above, lower purchased transportation, lower bad debt expense, and lower damage claims. These items were partially offset by higher salaries, wages and employee benefits and lower fuel surcharge revenue.
Previous report
Adjusted EBITDA was $38 million, or 4.8% of revenue, for the first quarter of 2024, compared with $37 million, or 4.7% of revenue, for the same period in 2023.
Reworded paragraphs (37)
Previous wording
XPO, Inc., together with its subsidiaries (“XPO,” “we” or the “Company”), is a leading provider of freight transportation services, with company-specific avenues for value creation. We use our proprietary technology to move goods efficiently through our customers’ supply chains in North America and Europe. As of March 31, 2024, we had approximately 39,000 employees and 610 locations in 17 countries serving approximately 52,000 customers.
Current wording
XPO, Inc., together with its subsidiaries (“XPO,” “we” or the “Company”), is a leading provider of freight transportation services, with company-specific avenues for value creation. We use our proprietary technology to move goods efficiently through our customers’ supply chains in North America and Europe. As of June 30, 2024, we had approximately 38,000 employees and 615 locations in 17 countries serving approximately 53,000 customers.
Previous wording
Within the tables presented, certain amounts may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying numbers in millions.
Current wording
Within the tables presented, certain amounts may not add due to the use of rounded numbers. Unless otherwise indicated, percentages presented are calculated from the underlying numbers in millions.
Previous wording
We provide approximately 33,000 shippers in North America with critical geographic density and day-definite domestic and cross-border services to approximately 99% of U.S. zip codes, as well as Mexico, Canada and the Caribbean. Our capacity and reach give us the ability to manage large freight volumes efficiently and balance our network to leverage fixed costs. For the trailing 12 months ended March 31, 2024, our customer-focused organization of truck drivers, service center teams and sales professionals worked together to move approximately 18 billion pounds of freight through our network to its destinations.
Current wording
We provide approximately 34,000 shippers in North America with critical geographic density and day-definite domestic and cross-border services to approximately 99% of U.S. zip codes, as well as Mexico, Canada and the Caribbean. Our capacity and reach give us the ability to manage large freight volumes efficiently and balance our network to leverage fixed costs. For the trailing 12 months ended June 30, 2024, our customer-focused organization of truck drivers, service center teams and sales professionals worked together to move approximately 18 billion pounds of freight through our network to its destinations.
Previous wording
Importantly, our LTL business historically has generated a high return on invested capital and robust free cash flow. This supports our ongoing investments in our people, network capacity and proprietary technology. We manage the business to specific objectives, such as high customer service scores for on-time delivery and damage-free freight, the optimal sourcing of linehaul transportation, and the expansion of our service center footprint in strategic markets with long-term demand. Since implementing our LTL 2.0 growth plan in the fourth quarter of 2021, we have added over 4,000 tractors and 12,300 trailers.
Current wording
Importantly, our LTL business historically has generated a high return on invested capital and robust free cash flow. This supports our ongoing investments in our people, network capacity and proprietary technology. We manage the business to specific objectives, such as high customer service scores for on-time delivery and damage-free freight, the optimal sourcing of linehaul transportation, and the expansion of our service center footprint in strategic markets with long-term demand. Since implementing our LTL 2.0 growth plan in the fourth quarter of 2021, we have added over 4,300 tractors and 13,600 trailers.
Previous wording
In 2023, we produced over 6,400 trailers at our in-house trailer manufacturing facility, surpassing our goal of more than 6,000 trailers. Our in-house trailer manufacturing is an example of a self-reliant capability that is competitively advantageous to us, particularly when industry conditions make it difficult to source equipment.
Current wording
In 2023, we produced over 6,400 trailers at our in-house trailer manufacturing facility, surpassing our goal of more than 6,000 trailers, and for the six months ended June 30, 2024, we produced over 2,600 trailers. Our in-house trailer manufacturing is an example of a self-reliant capability that is competitively advantageous to us, particularly when industry conditions make it difficult to source equipment.
Previous wording
In December 2023, we completed the acquisition of 28 service centers previously operated by Yellow Corporation (the “Yellow Asset Acquisition”), representing approximately 2,900 doors. We expect the net increase in service centers and doors to be less than the gross number purchased as we look for opportunities to rationalize our existing footprint. This strategic acquisition of assets aligns with our commitment to invest in expanding our LTL network capacity.
Current wording
In December 2023, we completed the acquisition of 28 service centers previously operated by Yellow Corporation (the “Yellow Asset Acquisition”), representing approximately 2,900 doors. We expect the net increase in doors to be approximately two-thirds of the gross number purchased as we look for opportunities to rationalize our existing footprint. This strategic acquisition of assets aligns with our commitment to invest in expanding our LTL network capacity.
Previous wording
Our range of freight services in Europe encompasses dedicated truckload, LTL, truck brokerage, managed transportation, last mile, freight forwarding and, increasingly, multimodal solutions, such as road-rail and road-short sea combinations that we tailor to customer needs. Our operators use our proprietary technology to manage these services within our digital ecosystem in Europe.
Current wording
Our range of freight services in Europe encompasses dedicated truckload, LTL, truck brokerage, managed transportation, last mile, freight forwarding, warehousing and, increasingly, multimodal solutions, such as road-rail and road-short sea combinations that we tailor to customer needs. Our operators use our proprietary technology to manage these services within our digital ecosystem in Europe.
Previous wording
We have built a highly scalable ecosystem on the cloud that deploys our software consistently across our operating footprint. In our North American LTL business, the caliber of our technology is mission-critical to our success; it optimizes linehaul, pickup-and-delivery and pricing — the main components of the service we provide. An LTL network of our scale has hundreds of thousands of activities underway at any given time, all managed on our technology. For the trailing 12 months ended March 31, 2024, we moved approximately 18 billion pounds of freight 813 million miles, including moving linehaul freight an average of 2.6 million miles a day.
Current wording
We have built a highly scalable ecosystem on the cloud that deploys our software consistently across our operating footprint. In our North American LTL business, the caliber of our technology is mission-critical to our success; it optimizes linehaul, pickup-and-delivery and pricing — the main components of the service we provide. An LTL network of our scale has hundreds of thousands of activities underway at any given time, all managed on our technology. For the trailing 12 months ended June 30, 2024, we moved approximately 18 billion pounds of freight 823 million miles, including moving linehaul freight an average of 2.7 million miles a day.
Previous wording
Three Months Ended March 31, 2024 Compared with Three Months Ended March 31, 2023
Current wording
Three and Six Months Ended June 30, 2024 Compared with Three and Six Months Ended June 30, 2023
Previous wording
Our consolidated revenue for the first quarter of 2024 increased 5.8% to $2.0 billion, compared with the same period in 2023. The increase in revenue in the first quarter of 2024 compared to the same period in 2023 primarily reflects growth in our North American LTL segment. Foreign currency movement increased revenue by approximately 1.0 percentage point in the first quarter of 2024.
Current wording
Our consolidated revenue for the second quarter of 2024 increased 8.5% to $2.1 billion, compared with the same quarter in 2023. Our consolidated revenue for the first six months of 2024 increased 7.1% to $4.1 billion, compared with the same period in 2023. The increase in both periods primarily reflects growth in our North American LTL segment and, to a lesser extent, growth in our European Transportation segment. Foreign currency movement did not impact revenue in the second quarter of 2024 and increased revenue by approximately 0.5 percentage points in the first six months of 2024.
Previous wording
Salaries, wages and employee benefits includes compensation-related costs for our employees, including salaries, wages, incentive compensation, healthcare-related costs and payroll taxes, and covers drivers and dockworkers, operations and facility workers and employees in support roles and other positions. Salaries, wages and employee benefits for the first quarter of 2024 was $834 million, or 41.3% of revenue, compared with $762 million, or 40.0% of revenue, for the same period in 2023. The year-over-year increase as a percentage of revenue primarily reflects the impact of inflation on our cost base, the insourcing of a greater proportion of linehaul from third-party transportation providers, and higher incentive compensation related to our operating performance. The increase in salaries, wages and employee benefits also reflects higher volumes in both of our segments.
Current wording
Salaries, wages and employee benefits includes compensation-related costs for our employees, including salaries, wages, incentive compensation, healthcare-related costs and payroll taxes, and covers drivers and dockworkers, operations and facility workers and employees in support roles and other positions. Salaries, wages and employee benefits for the second quarter of 2024 was $854 million, or 41.1% of revenue, compared with $783 million, or 40.8% of revenue, for the same quarter in 2023. Salaries, wages and employee benefits for the first six months of 2024 was $1.7 billion, or 41.2% of revenue, compared with $1.5 billion, or 40.4% of revenue, for the same period in 2023. The year-over-year increase as a percentage of revenue in both periods primarily reflects the impact of inflation on our cost base, the insourcing of a greater proportion of linehaul from third-party transportation providers, and higher incentive compensation related to our operating performance. The increase in salaries, wages and employee benefits also reflects higher volumes in both of our segments.
Previous wording
Purchased transportation includes costs of procuring third-party freight transportation. Purchased transportation for the first quarter of 2024 was $438 million, or 21.7% of revenue, compared with $457 million, or 24.0% of revenue, for the same period in 2023. The year-over-year decrease as a percentage of revenue primarily reflects the insourcing of a greater proportion of linehaul from third-party transportation providers and lower rates paid to third-party providers for purchased transportation miles.
Current wording
Purchased transportation includes costs of procuring third-party freight transportation. Purchased transportation for the second quarter of 2024 was $436 million, or 21.0% of revenue, compared with $444 million, or 23.2% of revenue, for the same quarter in 2023. Purchased transportation for the first six months of 2024 was $874 million, or 21.3% of revenue, compared with $901 million, or 23.6% of revenue, for the same period in 2023. The year-over-year decrease as a percentage of revenue in both periods primarily reflects the insourcing of a greater proportion of linehaul from third-party transportation providers and, to a lesser extent, lower rates paid to third-party providers for purchased transportation miles in our North American LTL segment.
Previous wording
Fuel, operating expenses and supplies includes the cost of fuel purchased for use in our vehicles as well as related taxes, maintenance and lease costs for our equipment, including tractors and trailers, costs related to operating our owned and leased facilities, bad debt expense, third-party professional fees, information technology expenses and supplies expense. Fuel, operating expenses and supplies for the first quarter of 2024 was $413 million, or 20.5% of revenue, compared with $427 million, or 22.4% of revenue, for the same period in 2023. The year-over-year decrease primarily reflects lower fuel costs and lower bad debt expense.
Current wording
Fuel, operating expenses and supplies includes the cost of fuel purchased for use in our vehicles as well as related taxes, maintenance and lease costs for our equipment, including tractors and trailers, costs related to operating our owned and leased facilities, bad debt expense, third-party professional fees, information technology expenses and supplies expense. Fuel, operating expenses and supplies for the second quarter of 2024 was $402 million, or 19.3% of revenue, compared with $390 million, or 20.3% of revenue, for the same quarter in 2023. Fuel, operating expenses and supplies for the first six months of 2024 was $814 million, or 19.9% of revenue, compared with $817 million, or 21.4% of revenue, for the same period in 2023. The year-over-year decrease as a percentage of revenue in both periods primarily reflects lower fuel costs, maintenance costs and bad debt expense as a percentage of revenue.
Previous wording
Operating taxes and licenses includes tax expenses related to our vehicles and our owned and leased facilities as well as license expenses to operate our vehicles. Operating taxes and licenses for the first quarter of 2024 was $19 million, compared with $15 million for the same period in 2023. The year-over-year increase primarily reflects property taxes on newly acquired service centers and lower tax incentives in Illinois.
Current wording
Operating taxes and licenses includes tax expenses related to our vehicles and our owned and leased facilities as well as license expenses to operate our vehicles. Operating taxes and licenses for the second quarter of 2024 was $21 million, compared with $15 million for the same quarter in 2023. Operating taxes and licenses for the first six months of 2024 was $40 million, compared with $30 million for the same period in 2023. The year-over-year increase in both periods primarily reflects property taxes on newly acquired service centers and lower tax incentives in Illinois.
Previous wording
Insurance and claims includes costs related to vehicular and cargo claims for both purchased insurance and self-insurance programs. Insurance and claims for the first quarter of 2024 was $38 million, compared with $44 million for the same period in 2023. The year-over-year decrease reflects lower expense due to improved operating performance related to damaged shipments, partially offset by higher vehicular claims.
Current wording
Insurance and claims includes costs related to vehicular and cargo claims for both purchased insurance and self-insurance programs. Insurance and claims for the second quarter of 2024 was $33 million, compared with $46 million for the same quarter in 2023. Insurance and claims for the first six months of 2024 was $71 million, compared with $90 million for the same period in 2023. The year-over-year decrease in both periods reflects lower expense due to improved damage frequency.
Previous wording
Gains on sales of property and equipment for the first quarter of 2024 was $2 million, compared with $3 million for the same period in 2023.
Current wording
Gains on sales of property and equipment for the second quarter of 2024 was $4 million, compared with $2 million for the same quarter in 2023. Gains on sales of property and equipment for both the first six months of 2024 and 2023 was $5 million. The increase in the second quarter of 2024 is consistent with our lifecycle management approach for fleet in Europe.
Previous wording
Depreciation and amortization expense for the first quarter of 2024 was $117 million, compared with $101 million for the same period in 2023. The year-over-year increase reflects the impact of capital investments, in particular tractors and trailers.
Current wording
Depreciation and amortization expense for the second quarter of 2024 was $122 million, compared with $107 million for the same quarter in 2023. Depreciation and amortization expense for the first six months of 2024 was $239 million, compared with $208 million for the same period in 2023. The year-over-year increase in both periods reflects the impact of capital investments, in particular tractors and trailers.
Previous wording
Transaction and integration costs for the first quarter of 2024 were $14 million, compared with $22 million for the same period in 2023. Transaction and integration costs for the first quarter of 2024 and 2023 are primarily comprised of stock-based compensation for certain employees related to strategic initiatives. We expect stock-based compensation costs related to our previously announced strategic initiatives to conclude in 2024.
Current wording
Transaction and integration costs for the second quarter of 2024 were $12 million, compared with $17 million for the same quarter in 2023. Transaction and integration costs for the first six months of 2024 were $26 million, compared with $39 million for the same period in 2023. Transaction and integration costs for both periods of 2024 and 2023 are primarily comprised of stock-based compensation for certain employees related to strategic initiatives, while the 2023 periods also include retention awards for certain employees. We expect stock-based compensation costs related to our previously announced strategic initiatives to conclude in 2024.
Previous wording
Restructuring costs for the first quarter of 2024 were $8 million, compared with $24 million for the same period in 2023. We engage in restructuring actions as part of our ongoing efforts to best use our resources and infrastructure. For more information, see Note 4—Restructuring Charges to our Condensed Consolidated Financial Statements.
Current wording
Restructuring costs for the second quarter of 2024 were $6 million, compared with $10 million for the same quarter in 2023. Restructuring costs for the first six months of 2024 were $14 million, compared with $34 million for the same period in 2023. We engage in restructuring actions as part of our ongoing efforts to best use our resources and infrastructure. For more information, see Note 4—Restructuring Charges to our Condensed Consolidated Financial Statements.
Previous wording
Other income for the first quarter of 2024 was $10 million, compared with $5 million for the same period in 2023. The year-over-year increase reflects $3 million in investment income and a $2 million increase in net periodic pension income.
Current wording
Other income for the second quarter of 2024 was $6 million, compared with $3 million for the same quarter in 2023. Other income for the first six months of 2024 was $16 million, compared with $8 million for the same period in 2023. The year-over-year increase in both periods primarily reflects an increase in net periodic pension income, as well as $3 million in investment income in the first six months of 2024.
Previous wording
Interest expense increased to $58 million for the first quarter of 2024, compared with $42 million for the same period of 2023. The increase is primarily due to the debt issuance in the fourth quarter of 2023 to finance the Yellow Asset Acquisition and higher prevailing interest rates in 2024.
Current wording
Interest expense increased to $56 million for the second quarter of 2024, compared with $43 million for the same quarter in 2023. Interest expense increased to $114 million for the first six months of 2024, compared with $85 million for the same period in 2023. The increase in both periods is primarily due to the debt issuance in the fourth quarter of 2023 to finance the Yellow Asset Acquisition and higher prevailing interest rates in 2024.
Previous wording
Our effective income tax rates were 25.2% and 18.3% for the first quarter of 2024 and 2023, respectively. The effective tax rates for the first quarter of 2024 and 2023 were based on forecasted full-year effective tax rates, adjusted for discrete items that occurred within the periods presented. The increase in our effective income tax rate for the first quarter of 2024 compared to the same period in 2023 was primarily driven by higher pre-tax book income which reduced the impact of discrete tax items. In the first quarter of 2024, the effective tax rate was impacted by losses for which no tax benefit can be recognized and forecasted non-deductible executive compensation expense, partially offset by a discrete tax benefit of $5 million from stock-based compensation. In the first quarter of 2023, the effective tax rate was impacted by $2 million of discrete tax benefits from revaluing deferred state taxes, partially offset by forecasted non-deductible executive compensation expense.
Current wording
Our effective income tax rates were (2.0)% and 28.8% for the second quarter of 2024 and 2023, respectively, and 8.3% and 25.4% for the first six months of 2024 and 2023, respectively. The effective income tax rates for the second quarter and six-month periods of 2024 and 2023 were based on forecasted full-year effective income tax rates, adjusted for discrete items that occurred within the periods presented. The year-over-year decrease in our effective income tax rates in both periods was primarily driven by a one-time tax benefit of $41 million associated with a legal entity reorganization in our European Transportation business that occurred in the second quarter of 2024 and a reduced impact from forecasted non-deductible executive compensation expense as a result of higher pre-tax income in 2024 compared to the same periods in 2023, partially offset by the impact of losses for which no tax benefit can be recognized.
Previous wording
Our chief operating decision maker (“CODM”) regularly reviews financial information at the operating segment level to allocate resources to the segments and to assess their performance. Our CODM evaluates segment profit (loss) based on adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), which we define as income from continuing operations before interest expense, income tax, depreciation and amortization expense, transaction and integration costs, restructuring costs and other adjustments. Segment Adjusted EBITDA includes an allocation of corporate costs. See Note 2—Segment Reporting to our Condensed Consolidated Financial Statements for further information and a reconciliation of Adjusted EBITDA to Income from continuing operations.
Current wording
Our chief operating decision maker (“CODM”) regularly reviews financial information at the operating segment level to allocate resources to the segments and to assess their performance. Our CODM evaluates segment profit (loss) based on adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), which we define as income from continuing operations before debt extinguishment loss, interest expense, income tax provision (benefit), depreciation and amortization expense, transaction and integration costs, restructuring costs and other adjustments. Segment Adjusted EBITDA includes an allocation of corporate costs. See Note 2—Segment Reporting to our Condensed Consolidated Financial Statements for further information and a reconciliation of Adjusted EBITDA to Income from continuing operations.
Previous wording
Revenue in our North American LTL segment increased 9.0% to $1.2 billion for the first quarter of 2024, compared with $1.1 billion for the same period in 2023. Revenue included fuel surcharge revenue of $210 million and $217 million, respectively, for the first quarters of 2024 and 2023. The decrease in fuel surcharge revenue was primarily driven by lower diesel prices.
Current wording
Revenue in our North American LTL segment increased 12.0% to $1.3 billion for the second quarter of 2024, compared with $1.1 billion for the same quarter in 2023. Revenue increased 10.5% to $2.5 billion for the first six months of 2024, compared with $2.3 billion for the same period in 2023. Revenue included fuel surcharge revenue of $208 million and $196 million, respectively, for the second quarters of 2024 and 2023, and $418 million and $413 million, respectively, for the first six months of 2024 and 2023.
Previous wording
The year-over-year increase in revenue, excluding fuel surcharge revenue, in the first quarter of 2024 reflects higher volume and gross revenue per hundredweight, primarily related to our improvements in service quality and investments in capacity. The increase in volume per day for the first quarter of 2024 reflects higher shipments per day, partially offset by lower average weight per shipment. The increase in yield in the first quarter of 2024 reflects the benefit of numerous pricing initiatives.
Current wording
The year-over-year increase in revenue, excluding fuel surcharge revenue, for both the second quarter and first six months of 2024 reflects higher gross revenue per hundredweight and volume, primarily related to our improvements in service quality. The increase in yield for both the second quarter and first six months 2024 reflects the benefit of numerous pricing initiatives. The increase in volume per day for both the second quarter and first six months of 2024 reflects higher shipments per day, partially offset by lower average weight per shipment.
Previous wording
Depreciation and amortization expense increased to $82 million in the first quarter of 2024 compared with $68 million for the same period in 2023. The increase was due to the impact of capital investments, in particular tractors and trailers.
Current wording
Depreciation and amortization expense increased to $86 million in the second quarter of 2024 compared with $71 million for the same quarter in 2023. Depreciation and amortization expense increased to $168 million in the first six months of 2024 compared with $139 million for the same period in 2023. The increase in both the second quarter and first six months of 2024 was due to the impact of capital investments, in particular tractors and trailers.
Previous wording
Revenue in our European Transportation segment increased 1.3% to $797 million for the first quarter of 2024, compared with $787 million for the same period in 2023. Foreign currency movement increased revenue by approximately 2.5 percentage points in the first quarter of 2024. Revenue was essentially flat during the first quarter of 2024, compared to the same period in 2023, after taking into effect the impact of foreign currency movement.
Current wording
Revenue in our European Transportation segment increased 3.5% to $808 million for the second quarter of 2024, compared with $781 million for the same quarter in 2023. Revenue increased 2.4% to $1.61 billion for the first six months of 2024, compared with $1.57 billion for the same period in 2023. Foreign currency movement did not impact revenue in the second quarter of 2024 and increased revenue by approximately 1.2 percentage points in the first six months of 2024. The increase in revenue during both periods in 2024, compared to the same periods in 2023, after taking into effect the impact of foreign currency movement, primarily reflects higher yield and volume.
Previous wording
Our cash and cash equivalents balance was $229 million as of March 31, 2024, compared to $412 million as of December 31, 2023. Our principal existing sources of cash are: (i) cash generated from operations; (ii) borrowings available under our Second Amended and Restated Revolving Loan Credit Agreement, as amended (the “ABL Facility”); and (iii) proceeds from the issuance of other debt. As of March 31, 2024, we have $564 million available to draw under our ABL Facility, based on a borrowing base of $565 million and outstanding letters of credit of less than $1 million. Additionally, we have a $200 million uncommitted secured evergreen letter of credit facility, under which we had issued $138 million in aggregate face amount of letters of credit as of March 31, 2024.
Current wording
Our cash and cash equivalents balance was $250 million as of June 30, 2024, compared to $412 million as of December 31, 2023. Our principal existing sources of cash are: (i) cash generated from operations; (ii) borrowings available under our Second Amended and Restated Revolving Loan Credit Agreement, as amended (the “ABL Facility”); and (iii) proceeds from the issuance of other debt. As of June 30, 2024, we have $586 million available to draw under our ABL Facility, based on a borrowing base of $587 million and outstanding letters of credit of less than $1 million. Additionally, we have a $200 million uncommitted secured evergreen letter of credit facility, under which we had issued $137 million in aggregate face amount of letters of credit as of June 30, 2024.
Previous wording
As of March 31, 2024, we had approximately $793 million of total liquidity. We continually evaluate our liquidity requirements in light of our operating needs, growth initiatives and capital resources. We believe that our existing liquidity and sources of capital are sufficient to support our operations over the next 12 months.
Current wording
As of June 30, 2024, we had approximately $836 million of total liquidity. We continually evaluate our liquidity requirements in light of our operating needs, growth initiatives and capital resources. We believe that our existing liquidity and sources of capital are sufficient to support our operations over the next 12 months.
Previous wording
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 $216 million as of March 31, 2024). As of March 31, 2024, the maximum amount available under the program was utilized. Under the securitization program, we service the receivables we sell on behalf of the purchasers. The program expires in July 2026.
Current wording
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 $214 million as of June 30, 2024). As of June 30, 2024, €6 million (approximately $6 million) was available under the program. Under the securitization program, we service the receivables we sell on behalf of the purchasers. The program expires in July 2026.
Previous wording
The applicable interest rate for the two tranches of the term loan facility approximated 7.32% as of March 31, 2024.
Current wording
The applicable interest rate for the two tranches of the term loan facility approximated 7.34% as of June 30, 2024.
Previous wording
During the three months ended March 31, 2024, we generated cash from operating activities from continuing operations of $145 million. We used cash during the period primarily to: (i) purchase property and equipment of $306 million; (ii) make payments on debt and finance leases of $21 million; and (iii) make payments of $15 million related to tax withholding obligations in connection with the vesting of restricted shares.
Current wording
During the six months ended June 30, 2024, we generated cash from operating activities from continuing operations of $355 million. We used cash during the period primarily to: (i) purchase property and equipment of $496 million; (ii) make payments on debt and finance leases of $39 million; and (iii) make payments of $17 million related to tax withholding obligations in connection with the vesting of restricted shares.
Previous wording
During the three months ended March 31, 2023, we generated cash from operating activities from continuing operations of $76 million. We used cash during this period primarily to: (i) purchase property and equipment of $224 million; (ii) make payments on debt and finance leases of $16 million; and (iii) make payments of $12 million related to tax withholding obligations in connection with the vesting of restricted shares.
Current wording
During the six months ended June 30, 2023, we: (i) generated cash from operating activities from continuing operations of $207 million; and (ii) received net proceeds of $2.0 billion from the issuance of debt. We used cash during this period primarily to: (i) purchase property and equipment of $355 million; and (ii) repurchase our Existing Term Loan Facility for $2.0 billion.
Previous wording
Cash flows from operating activities from continuing operations for the three months ended March 31, 2024 increased by $69 million, compared with the same period in 2023. The increase primarily reflects: (i) higher income from continuing operations of $50 million and (ii) the impact of operating assets and liabilities utilizing $68 million of cash in the first three months of 2024, compared with utilizing $79 million during the same period in 2023.
Current wording
Cash flows from operating activities from continuing operations for the six months ended June 30, 2024 increased by $148 million, compared with the same period in 2023. The increase primarily reflects: (i) higher income from continuing operations of $169 million; (ii) higher non-cash depreciation and amortization of $31 million, that is added back in the determination of operating cash flows and (iii) higher non-cash deferred tax expense of $31 million, that is also added back in the determination of operating cash flows. These items were partially offset by the impact of operating assets and liabilities utilizing $175 million of cash in the first six months of 2024, compared with utilizing $125 million during the same period in 2023.
Previous wording
Investing activities from continuing operations used $299 million of cash in the three months ended March 31, 2024 and $216 million of cash in the three months ended March 31, 2023. During the three months ended March 31, 2024, we used $306 million to purchase property and equipment, as compared to a $224 million usage of cash in the same period in 2023. The increase reflects our continued investment to support our long-term growth targets.
Current wording
Investing activities from continuing operations used $483 million of cash in the six months ended June 30, 2024 and $342 million of cash in the six months ended June 30, 2023. During the six months ended June 30, 2024, we used $496 million to purchase property and equipment, as compared to a $355 million usage of cash in the same period in 2023. The increase reflects our continued investment to support our long-term growth targets.
Previous wording
Financing activities from continuing operations used $29 million of cash in the three months ended March 31, 2024 and $10 million of cash in the three months ended March 31, 2023. The primary uses of cash from financing activities in each of the first three months of 2024 and 2023 were $21 million and $16 million, respectively, used to repay borrowings, primarily related to finance lease obligations, and $15 million and $12 million, respectively, to make payments for tax withholdings on restricted shares. The primary source of cash from financing activities during the first three months of 2024 was $11 million of proceeds from bank overdrafts, as compared to $19 million in the same period of 2023.
Current wording
Financing activities from continuing operations used $35 million of cash in the six months ended June 30, 2024 and $36 million of cash in the six months ended June 30, 2023. The primary use of cash from financing activities during the first six months of 2024 was $39 million used to repay borrowings, primarily related to finance lease obligations, and $17 million to make payments for tax withholdings on restricted shares. The primary uses of cash from financing activities during the first six months of 2023 was $2.0 billion used to repay our Existing Term Loan Facility. The primary source of cash from financing activities during the first six months of 2024 was $27 million of proceeds from bank overdrafts. The primary source of cash from financing activities during the first six months of 2023 was $2.0 billion of net proceeds from the issuance of debt.
Previous wording
There were no material changes to our December 31, 2023 contractual obligations during the three months ended March 31, 2024. We anticipate full year gross capital expenditures to be between $700 million and $800 million in 2024, funded by cash on hand and available liquidity.
Current wording
There were no material changes to our December 31, 2023 contractual obligations during the six months ended June 30, 2024. We anticipate full year gross capital expenditures to be between $700 million and $800 million in 2024, funded by cash on hand, cash generated from operations and available liquidity. This includes capital expenditures to integrate the service centers acquired in the Yellow Asset Acquisition into our network.