10q10k10q10k.net

What changed in RXO, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of RXO, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+167 added−154 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-13)

Top changes in RXO, Inc.'s 2024 10-K

167 paragraphs added · 154 removed · 117 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

37 edited+9 added−6 removed52 unchanged
Biggest changeThe Separation was completed under a Separation and Distribution Agreement and various other agreements that govern aspects of the Company’s relationship with XPO, including, but not limited to, a Tax Matters Agreement (“TMA”), an Employee Matters Agreement (“EMA”), a Transition Services Agreement (“TSA”) and an Intellectual Property License Agreement (“IPLA”). 2 Table of Contents Relationship-Based Operating Structure Our truck brokerage business operates as an intermediary between shippers and carriers (truck and fleet owners), connecting truckload supply and demand.
Biggest changeThe Separation was completed under a Separation and Distribution Agreement and various other agreements that govern aspects of the Company’s relationship with XPO, including, but not limited to, a Tax Matters Agreement (“TMA”), an Employee Matters Agreement, a Transition Services Agreement and an Intellectual Property License Agreement. 2 Table of Contents The Coyote Acquisition On September 16, 2024 (the “acquisition date”), the Company acquired the technology-driven, asset-light based truckload freight brokerage services business, as well as certain assets used to conduct haulage, dedicated transport and warehousing services in the United Kingdom (collectively, “Coyote”), from United Parcel Service of America, Inc.
Management’s growth and optimization strategy is to: • Market our brokerage capabilities and value-added services to new and existing customers of all sizes, using a partnership approach that creates enduring relationships; • Leverage our positioning to increasingly capitalize on secular trends in demand, such as the increasing broker penetration of the for-hire truckload industry and the growing shipper preference for digital brokerage services; • Continue to recruit and retain talented customer and carrier sales representatives, and continuously improve their productivity with our state-of-the-art technology; • Continue to attract high-caliber independent carriers to provide third-party transportation services for our customers; and • Capitalize on our first-mover technology advantage to continue to gain share of the truck brokerage industry by optimizing brokerage processes and pricing for customers and carriers, and by enhancing the productivity of our operations.
Management’s growth and optimization strategy is to: • Market our brokerage capabilities and value-added services to new and existing customers of all sizes, using a partnership approach that creates enduring relationships; • Leverage our positioning to increasingly capitalize on secular trends in demand, such as the increasing broker penetration of the for-hire truckload industry and the growing shipper preference for digital brokerage services; • Continue to recruit and retain talented customer and carrier sales representatives, and continuously improve their productivity with our state-of-the-art technology; • Continue to attract and retain high-caliber independent carriers to provide third-party transportation services for our customers; and • Capitalize on our first-mover technology advantage to continue to gain share of the truck brokerage industry by optimizing brokerage processes and pricing for customers and carriers, and by enhancing the productivity of our operations.
Our Rewards RXO’s total rewards offering is designed to attract, retain, and drive our people. We provide competitive compensation and benefits from day one. Our comprehensive suite of health and well-being benefit programs supports the diverse needs of our employees and their families.
Our Rewards RXO’s total rewards offering is designed to attract, retain, and drive our people. We provide competitive compensation and benefits from day one. Our comprehensive suite of health and well-being benefit programs supports the various needs of our employees and their families.
Department of Homeland Security, also regulate aspects of our operations. In addition, our motor carriers that engage independent contractor owner-operators to provide transportation and delivery services are subject to the Federal Leasing Regulations, which are applicable to written agreements between the carriers and those owner-operators.
Department of Homeland Security, also regulate aspects of our operations. 5 Table of Contents In addition, our motor carriers that engage independent contractor owner-operators to provide transportation and delivery services are subject to the Federal Leasing Regulations, which are applicable to written agreements between the carriers and those owner-operators.
Robinson, Coyote, Echo, Expeditors, Forward Air, Flexport, J.B. Hunt, Landstar System, Total Quality Logistics, Transfix and Uber Freight. Due to the competitive nature of our industry, we strive to strengthen existing business relationships and forge new relationships.
Robinson, Echo Global Logistics, Expeditors, Forward Air, Flexport, J.B. Hunt, Landstar System, Total Quality Logistics, and Uber Freight. Due to the competitive nature of our industry, we strive to strengthen existing business relationships and forge new relationships.
We attract candidates from diverse talent sources and build our pipeline by offering rewarding and challenging career opportunities. We create exceptional employee training experiences that are innovative and collaborative, and we believe it starts by listening to our people. We garner feedback from our employees through many channels, including surveys, roundtables, town halls, and leadership forums.
We attract candidates from a variety of talent sources and build our pipeline by offering rewarding and challenging career opportunities. We create exceptional employee training experiences that are innovative and collaborative, and we believe it starts by listening to our people. We garner feedback from our employees through many channels, including surveys, roundtables, town halls, and leadership forums.
On this website, you can access, free of charge, our reports on Forms 10-K, 10-Q and 8-K, as well as specialized disclosure reports on Form SD, Proxy Statements on Schedule 14A and amendments to these materials. Materials are available online as soon as reasonably practicable after we electronically submit them to the SEC.
On this website, you can access, free of charge, our reports on Forms 10-K, 10-Q and 8-K, as well as Proxy Statements on Schedule 14A and amendments to these materials. Materials are available online as soon as reasonably practicable after we electronically submit them to the SEC.
Customs and Border Protection (the “CBP”) in each U.S. district where it performs services. All U.S. Customs brokers are required to maintain prescribed records and are subject to periodic audits by the CBP. In non-U.S. jurisdictions where we perform customs brokerage services, our operations are licensed, where necessary, by the appropriate governmental authorities.
Customs and Border Protection (the “CBP”). All U.S. Customs brokers are required to maintain prescribed records and are subject to periodic audits by the CBP. In non-U.S. jurisdictions where we perform customs brokerage services, our operations are licensed, where necessary, by the appropriate governmental authorities.
ITEM 1. BUSINESS Company Overview RXO, Inc. (“RXO”, the “Company” or “we”) is a brokered transportation platform defined by cutting-edge technology and an asset-light business model. The largest component is our core truck brokerage business. Our operations also include three asset-light, brokered transportation services, all of which complement our truck brokerage business: managed transportation, last mile and freight forwarding.
ITEM 1. BUSINESS Company Overview RXO, Inc. (“RXO”, the “Company” or “we”) is a brokered transportation platform defined by cutting-edge technology and an asset-light business model. The largest component is our core truck brokerage business. Our operations also include asset-light managed transportation and last mile services, which complement our truck brokerage business.
We expect to benefit from both overall industry growth in demand for truckload transportation, and a long runway for increased broker penetration of for-hire trucking. • Proprietary Technology: We believe we are strongly differentiated by our technology as a leading innovator of sophisticated brokerage solutions that enhance visibility, reliability, speed, accuracy and cost effectiveness, and by the fully automated transactional capabilities of our digital platform.
We expect to benefit from both overall industry growth in demand for truckload transportation, and a long runway for increased broker penetration of for-hire trucking. • Proprietary Technology: We believe our technology strongly differentiates us as a leading innovator of complex brokerage solutions that enhance visibility, reliability, speed, accuracy and cost effectiveness, and by the fully automated transactional capabilities of our digital platform.
Importantly, our digital brokerage platform creates ongoing value for RXO in four key areas: • Increases share and revenue generation by providing real-time visibility into available supply and demand for current and future time periods, leading to optimal transportation management; • Ensures competitive rates by engaging customers and carriers through user-friendly interfaces underpinned by cutting-edge pricing technology; • Optimizes for value and margin with dynamic pricing algorithms that use machine learning, and generates superior, real-time market intelligence harvested from load-matching data; and • Improves productivity by facilitating transactions through cost-efficient automated processes and messaging, increasing the productivity of RXO’s customer and carrier representatives, and enabling our business to manage more volume without a commensurate increase in expense. 4 Table of Contents Customers and Markets RXO provides services to customers ranging in size from small businesses to Fortune 100 companies and sector leaders.
Importantly, our digital brokerage platform creates ongoing value for RXO in four key areas: • Increases market share and revenue generation by providing real-time visibility into available supply and demand for current and future time periods, leading to optimal transportation management; 4 Table of Contents • Ensures competitive rates by engaging customers and carriers through user-friendly interfaces underpinned by cutting-edge pricing technology; • Optimizes for value and margin with dynamic pricing algorithms that use machine learning, and generates superior, real-time market intelligence harvested from load-matching data; and • Improves productivity by facilitating transactions through cost-efficient automated processes and messaging, increasing the productivity of RXO’s customer and carrier representatives, and enabling our business to manage more volume without a commensurate increase in expense.
The Separation On November 1, 2022, the Company completed its separation from XPO, Inc. (formerly known as XPO Logistics, Inc.) (“XPO”) (the “Spin-off” or “Separation”) and the Company's common stock began regular-way trading on the New York Stock Exchange under the ticker symbol “RXO.” RXO is a Delaware corporation, which was originally formed in May 2022.
(formerly known as XPO Logistics, Inc.) (“XPO”) (the “Spin-off” or the “Separation”) and the Company's common stock began regular-way trading on the New York Stock Exchange under the ticker symbol “RXO.” RXO is a Delaware corporation, which was originally formed in May 2022.
Our complementary services for managed transportation, last mile and freight forwarding also utilize our digital brokerage technology. Our managed transportation service provides asset-light solutions for shippers who outsource their freight transportation to gain reliability, visibility and cost savings. The service uses proprietary technology to enhance our revenue synergy, with cross-selling to truck brokerage, last mile and freight forwarding.
Our managed transportation service provides asset-light solutions for shippers who outsource their freight transportation to gain reliability, visibility and cost savings. The service uses proprietary technology to enhance our revenue synergy, with cross-selling to truck brokerage and last mile.
Our subsidiaries that offer air freight and expedited air charter transportation services are subject to regulation by the Transportation Security Administration (“TSA”) governing air cargo security for all loads, regardless of origin or destination. Some of our subsidiaries are regulated as “indirect air carriers” by the TSA.
Our subsidiaries that offer air freight and expedited air charter transportation services are subject to regulation by the Transportation Security Administration (“TSA”) governing air cargo security for all loads, regardless of origin or destination. One of our subsidiaries is regulated as an “indirect air carrier” by the TSA.
The diversification of our customer base minimizes concentration risk: in 2023, our top 20 customers in total and our top five customers in total accounted for approximately 38% and 21% of our revenue, respectively, with our largest customer accounting for approximately 9.5% of revenue.
The diversification of our customer base minimizes concentration risk: in 2024, our top 20 customers in total and our top five customers in total accounted for approximately 38% and 23% of our revenue, respectively, with our largest customer accounting for approximately 9.9% of revenue.
These executives have worked together for many years, creating value through operational excellence, data science and a people-centric culture. 3 Table of Contents Our Strategy Our strategy is designed to deliver value through our resources, including extensive carrier relationships, automated shipper-carrier interactions, end-to-end digital tracking and data analyses generated by our proprietary algorithms.
These executives have worked together for many years, creating value through operational excellence, data science and a people-centric culture. Our Strategy Our strategy is designed to deliver value through our extensive carrier relationships, excellent customer service, automated shipper-carrier interactions, end-to-end digital tracking and data analyses generated by our proprietary algorithms.
This risk is addressed in greater detail below. 5 Table of Contents Our motor carriers are also subject to various state regulations, including state operating authority requirements where intrastate motor carriage is regulated, emission-compliance standards such as those promulgated by the California Air Resources Board, and vehicle registration and licensing requirements in certain states and local jurisdictions where we operate.
Our motor carriers are also subject to various state regulations, including state operating authority requirements where intrastate motor carriage is regulated, emission-compliance standards such as those promulgated by the California Air Resources Board, and vehicle registration and licensing requirements in certain states and local jurisdictions where we operate.
In addition, we offer technology-enabled managed expedite services that automate transportation procurement for time-critical freight moved by road and air charter carriers. Our last mile offering is an asset-light service that facilitates consumer deliveries performed by highly qualified third-party contractors.
In addition, we offer technology-enabled managed expedite services that automate transportation procurement for time-critical freight moved by road and air charter carriers. We also offer freight forwarding services, including facilitation of ocean and air transportation, customs brokerage and additional domestic services. Our last mile offering is an asset-light service that facilitates consumer deliveries performed by highly qualified third-party contractors.
Information about our Executive Officers Our executive officers are as follows: Name Age Position Drew Wilkerson 40 Chief Executive Officer James Harris 61 Chief Financial Officer Jeff Firestone 53 Chief Legal Officer Drew Wilkerson is a transportation industry veteran with 17 years of experience in brokerage operations.
Information about our Executive Officers Our executive officers are as follows: Name Age Position Drew Wilkerson 41 Chief Executive Officer James Harris 62 Chief Financial Officer Jeff Firestone 54 Chief Legal Officer Drew Wilkerson is a transportation industry veteran with 18 years of experience in brokerage operations.
As more and more shippers outsource their road freight needs to brokers, they increasingly prefer brokers that have the digital capabilities we offer. • Long-Tenured, Blue-Chip Customer Relationships in Attractive Verticals: Our customer base includes numerous long-term relationships with market leaders and other world-class companies across a diversified array of customer verticals.
As more and more shippers outsource their shipping needs to brokers, we believe they increasingly prefer brokers that have a combination of excellent customer service, people and digital capabilities that we offer. • Long-Tenured, Blue-Chip Customer Relationships in Attractive Verticals: Our customer base includes numerous long-term relationships with market leaders and other world-class companies across a diverse array of customer verticals.
Our services are both highly responsive to customer needs and proactive in identifying potential improvements. Furthermore, we have instilled a culture that defines success as mutually beneficial results for our stockholders and other stakeholders.
We believe our services are both highly responsive to customer needs and allow us to be proactive in identifying potential improvements. Furthermore, our culture defines success as mutually beneficial results for our stockholders and other stakeholders.
We are the largest provider of outsourced last mile transportation for heavy goods in the United States, positioned within 125 miles of the vast majority of the U.S. population and serving a customer base of omnichannel and e-commerce retailers and direct-to-consumer manufacturers.
We are the largest provider of outsourced last mile transportation for heavy goods in the United States, positioned within 125 miles of the vast majority of the U.S. population and serving a customer base of omnichannel and e-commerce retailers and direct-to-consumer manufacturers. The Separation On November 1, 2022, the Company completed its separation from XPO, Inc.
We center our program efforts on professional development, competitive compensation, and dedicated loyalty to empowering a safe, inclusive, and purposeful experience for our team members and their families. Our People As of December 31, 2023, we operated with 8,432 team members - 6,051 full-time and part-time employees and 2,381 temporary workers.
We center our program efforts on professional development, competitive compensation, and dedicated loyalty to empowering a safe and purposeful experience for our team members and their families. Our People As of December 31, 2024, we operated with 9,873 team members 7,540 full-time and part-time employees and 2,333 temporary workers.
Also, separate from regulatory requirements, the use of independent contractors within the transportation industry continues to face legal changes from regulatory agencies and private litigants.
Also, separate from regulatory requirements, the use of independent contractors within the transportation industry continues to face legal changes from regulatory agencies and private litigants. This risk is addressed in greater detail below.
Risk Management and Insurance We maintain insurance for commercial automobile liability, commercial general liability, cargo legal liability, workers’ compensation and employers’ liability, umbrella and excess liability, cyber risk, and property coverage with coverage limits, deductibles and self-insured retention levels that we believe are reasonable given the varying historical frequency, severity and timing of claims. 7 Table of Contents Seasonality Our volumes are typically higher in the fourth quarter due to peak season demand for our services from our customers in consumer sectors.
Risk Management and Insurance We maintain insurance for commercial automobile liability, commercial general liability, cargo legal liability, workers’ compensation and employers’ liability, umbrella and excess liability, cyber risk, and property coverage 7 Table of Contents with coverage limits, deductibles and self-insured retention levels that we believe are reasonable given the varying historical frequency, severity and timing of claims.
He has served as chief financial officer of XPO’s North American transportation division from September 2022, until the Separation. Prior to XPO, he was CFO and treasurer of SPX Technologies from August 2020 to September 2022, and earlier held positions as CFO and then interim CEO of Elevate Textiles, Inc. from April 2019 to August 2020.
Prior to XPO, he was CFO and treasurer of SPX Technologies from August 2020 to September 2022, and earlier held positions as CFO and then interim CEO of Elevate Textiles, Inc. from April 2019 to August 2020.
Wilkerson held leadership positions in sales, operations, and customer and carrier relationship management with C.H. Robinson Worldwide. 9 Table of Contents James Harris is a career CFO with over 35 years of experience in B2B sectors, including two decades with public companies.
Wilkerson held leadership positions in sales, operations, and customer and carrier relationship management with C.H. Robinson Worldwide. 9 Table of Contents James Harris is a career CFO with over 36 years of experience in B2B sectors, including two decades with public companies. He served as chief financial officer of XPO’s North American transportation division from September 2022, until the Separation.
At RXO, we encourage our employees to bring their authentic selves to work and to welcome everyone, regardless of gender identity, sexual orientation, race, ethnicity, national origin, religion, life experience, veteran status, and disability.
At RXO, we encourage our employees to bring their authentic selves to work and to welcome everyone, regardless of gender identity, sexual orientation, race, ethnicity, national origin, religion, life experience, veteran status, and disability. With a focus on making transportation simpler and more effective for everyone, we continually strive to be an employer of choice.
We are also well established as a truckload broker of choice across diversified industry sectors, with a notable presence in the e-commerce and retail sectors.
We are also well established as a freight broker of choice across diversified industry sectors, with a notable presence in the e-commerce and retail sectors and believe that shippers look to do business with brokers of greater scale.
We provide our customers with highly efficient access to capacity through our digital brokerage technology. This proprietary platform is a major differentiator for our truck brokerage business, and together with our pricing technology, we believe it can unlock incremental profitable growth well beyond our current levels.
This proprietary platform is a major differentiator for our truck brokerage business, and together with our pricing technology, we believe it can unlock incremental profitable growth. Our complementary services for managed transportation and last mile also utilize our digital brokerage technology.
Federal Maritime Commission, which establishes the qualifications, regulations, licensing and bonding requirements for arranging international transportation to or from the United States as an OTI. 6 Table of Contents Other Regulations We are subject to a variety of other U.S. and foreign laws and regulations, including, but not limited to, the Foreign Corrupt Practices Act and other anti-bribery and anti-corruption statutes, and export and sanction laws.
Other Regulations We are subject to a variety of other U.S. and foreign laws and regulations, including, but not limited to, the Foreign Corrupt Practices Act and other anti-bribery and anti-corruption statutes, and export and sanction laws.
Notable factors driving volume growth in our business include our ability to access massive truckload capacity for shippers through our carrier relationships; our proprietary, cutting-edge technology; our strong management expertise; and favorable long-term industry tailwinds. As of December 31, 2023, we had approximately 115,000 carriers in our North American truck brokerage network, and access to more than 1.4 million trucks.
Notable factors that enable volume growth in our business include our ability to access massive truckload capacity for shippers through our carrier relationships; our proprietary, cutting-edge technology; our strong management expertise; and favorable long-term industry tailwinds. We provide our customers with highly efficient access to capacity through our digital brokerage technology.
A substantial portion of our international air freight business is transacted with other IATA members. Additionally, some of our subsidiaries are licensed as an Ocean Transportation Intermediary (“OTI”), since they operate as a non-vessel-operating common carrier, and/or as an Ocean Freight Forwarder licensed by the U.S.
Additionally, some of our subsidiaries are licensed as an Ocean Transportation Intermediary (“OTI”), since they operate as a non-vessel-operating common carrier, and/or as an Ocean Freight Forwarder licensed by the U.S. 6 Table of Contents Federal Maritime Commission, which establishes the qualifications, regulations, licensing and bonding requirements for arranging international transportation to or from the United States as an OTI.
Our tiered sales organization tailors its approach to each prospective customer based on size and profitability potential. • Asset-Light Model Generates High Returns and Substantial Free Cash Flow: We utilize an asset-light business model that gives us agility and generates strong free cash flow. • Experienced and Cohesive Leadership and Strong Company Values: Our business operations are led by highly experienced executives who are recognized as leading truck brokerage experts and technologists.
Our tiered sales organization tailors its approach to each prospective customer based on size and profitability potential. 3 Table of Contents • Asset-Light Model Generates High Returns and Substantial Free Cash Flow: Our asset-light model generates high returns with strong free cash flow characteristics.
Human Capital Management Overview At RXO, our values are the key to our unique culture and ability to deliver for everyone we serve. Led by our passion for technology and solutions, we have a pioneering spirit and entrepreneurial mindset that draws on an agile approach to move quickly and adapt easily.
Led by our passion for technology and solutions, we have a pioneering spirit and entrepreneurial mindset that draws on an agile approach to move quickly and adapt easily. Our success is grounded from a strong governance structure, code of ethics, good corporate citizenship, and commitment to employee engagement.
The demand for best-in-class performance to lead results shapes our approach to human capital management and ensures we provide an exceptional work environment for our employees. With a focus on making transportation simpler and more effective for everyone, we continually strive to be an employer of choice.
We equally pride ourselves in our ability to perform with excellence, celebrate our unique strengths, operate safely, and build strong relationships. The demand for best-in-class performance shapes our approach to human capital management and ensures we provide an exceptional work environment for our employees.
Of these employees, 45% were in hourly roles and 55% were in salaried positions. Approximately 38% of our employees are female.
Of these employees, 34% were in hourly roles and 66% were in salaried positions. Approximately 36% of our employees are female. Additionally, as of December 31, 2024, fewer than 20 of these employees were covered by a collective bargaining agreement.
Removed
Our freight forwarding service is a scalable, asset-light offering managed with advanced technology that facilitates ocean, road and air transportation and assists with customs brokerage. We are a U.S.-based freight forwarder with a global network of company-owned and partner-owned locations and coverage of key trade lanes that reach approximately 150 countries and territories.
Added
(“UPS”) and certain subsidiaries of UPS. We acquired Coyote for $1.038 billion in cash, subject to certain additional customary adjustments. The purchase price was subsequently increased by $10 million for working capital and other post-closing adjustments totaling $10 million, which was paid in the first quarter of 2025.
Removed
Our brokerage platform synergizes these operating strengths within a single digital freight marketplace. In the fourth quarter of 2023, approximately 97% of our truck brokerage transactions were created or covered digitally — and, as that percentage continues to grow, we are able to process more volume per head over time.
Added
Refer to Note 3 — Acquisition to the consolidated financial statements in this Annual Report on Form 10-K for disclosures regarding the Company’s acquisition of Coyote. Relationship-Based Operating Structure Our truck brokerage business operates as an intermediary between shippers and carriers (truck and fleet owners), connecting truckload supply and demand.
Removed
Our success is grounded from a strong governance structure, code of ethics, good corporate citizenship, and commitment to employee engagement. We equally pride ourselves in our ability to perform with excellence, celebrate our diverse strengths, operate safely, and build strong relationships.
Added
Our brokerage platform synergizes these operating strengths within a single digital freight marketplace.
Removed
RXO Workforce (1) Total # Total % Regular 6,051 72% Hourly 2,742 45% Salaried 3,309 55% Male 3,668 61% Female 2,313 38% Others/Undisclosed 70 1% Temporary 2,381 28% Total Workforce 8,432 100% (1) Gender representation includes regular employees who have self-identified.
Added
We have continued to invest in our cutting-edge technology, including artificial intelligence and machine learning, based on decades of high-quality internal data sets that include attributes that we believe are not available elsewhere.
Removed
Diversity, Equity and Inclusion (“DE&I”) We take pride in our commitment to fostering an inclusive workplace that encourages a diversity of backgrounds and perspectives at every level across the organization.
Added
Because we have invested significantly in our proprietary platform for more than a decade, we believe that we can leverage our historical invested capital to generate strong returns. • Experienced and Cohesive Leadership and Strong Company Values: Our business operations are led by highly experienced executives who are recognized as leading truck brokerage experts and technologists.
Removed
We value individuality and understand that a diversity of talents, identities, backgrounds and experiences is key to driving innovation and growth. 8 Table of Contents Our Talent Engagement We believe acquiring top talent and investing in the development of our people gives us a sustainable competitive advantage.
Added
Customers and Markets RXO provides services to customers ranging in size from small businesses to Fortune 100 companies and sector leaders.
Added
A substantial portion of our international air freight business is transacted with other IATA members.
Added
Seasonality Our volumes are typically higher in the fourth quarter due to peak season demand for our services from our customers in the consumer and transportation sectors. Human Capital Management Overview At RXO, our values are the key to our unique culture and ability to deliver for everyone we serve.
Added
RXO Workforce (1) Total # Total % Regular 7,540 76% Hourly 2,531 34% Salaried 5,009 66% Male 4,709 62% Female 2,748 36% Others/Undisclosed 83 1% Temporary 2,333 24% Total Workforce 9,873 100% (1) Gender representation includes regular employees who have self-identified. 8 Table of Contents Our Talent Engagement We believe acquiring top talent and investing in the development of our people gives us a sustainable competitive advantage.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

31 edited+17 added−13 removed141 unchanged
Biggest changeAny charges that we are required to record or the failure to achieve the intended financial results associated with divestitures of businesses or assets could have a material adverse effect on our business, financial condition or results of operations. 20 Table of Contents Risks Related to the Separation We have a limited operating history as a standalone, publicly traded company, and our historical financial information, prior to the Separation, is not necessarily representative of the results we would have achieved as a standalone, publicly traded company and may not be a reliable indicator of our future results.
Biggest changeRisks Related to the Separation We have a limited operating history as a standalone, publicly traded company, and our historical financial information, prior to the Separation, is not necessarily representative of the results we would have achieved as a standalone, publicly traded company and may not be a reliable indicator of our future results.
These provisions include: • the ability of our remaining directors to fill vacancies on our board of directors; • limitations on stockholders’ ability to call a special stockholder meeting or act by written consent; • rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings; • the right of our board of directors to issue preferred stock without stockholder approval; and 23 Table of Contents • a classified board of directors, with each class serving a staggered three-year term, which could have the effect of making the replacement of incumbent directors more time consuming and difficult.
These provisions include: • the ability of our remaining directors to fill vacancies on our board of directors; 23 Table of Contents • limitations on stockholders’ ability to call a special stockholder meeting or act by written consent; • rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings; • the right of our board of directors to issue preferred stock without stockholder approval; and • a classified board of directors, with each class serving a staggered three-year term, which could have the effect of making the replacement of incumbent directors more time consuming and difficult.
Successful unionization by our employees or organizing efforts could lead to business interruptions, work stoppages and the reduction of service levels due to work rules that could have an adverse effect on our customer relationships and our revenues, earnings, financial position and outlook. 14 Table of Contents Risks Related to Our Use of Technology Our business will be seriously harmed if we fail to develop, implement, maintain, upgrade, enhance, protect and integrate our information technology systems, including those systems of any businesses that we acquire.
Further successful unionization by our employees or organizing efforts could lead to business interruptions, work stoppages and the reduction of service levels due to work rules that could have an adverse effect on our customer relationships and our revenues, earnings, financial position and outlook. 14 Table of Contents Risks Related to Our Use of Technology Our business will be seriously harmed if we fail to develop, implement, maintain, upgrade, enhance, protect and integrate our information technology systems, including those systems of any businesses that we acquire.
For a discussion of our goodwill impairment testing, see “Critical Accounting Policies and Estimates—Evaluation of Goodwill” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Any acquisitions that we may complete in the future may be unsuccessful or result in other risks or developments that adversely affect our financial condition and results.
For a discussion of our goodwill impairment testing, see “Critical Accounting Policies and Estimates—Evaluation of Goodwill” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 19 Table of Contents Any acquisitions that we may complete in the future may be unsuccessful or result in other risks or developments that adversely affect our financial condition and results.
The sudden loss of one or more major customers could materially and adversely affect our operating results. 19 Table of Contents Damage to our reputation through unfavorable publicity or the actions of our employees or independent contractors could adversely affect our financial condition. Our success depends on our ability to consistently deliver operational excellence and strong customer service.
The sudden loss of one or more major customers could materially and adversely affect our operating results. Damage to our reputation through unfavorable publicity or the actions of our employees or independent contractors could adversely affect our financial condition. Our success depends on our ability to consistently deliver operational excellence and strong customer service.
Any such failure could result in harm to our reputation and have an ongoing adverse impact on our business, results of operations and financial condition, including after the underlying failures have been remedied.
Any such failure could result in harm to our reputation and have an ongoing adverse impact 15 Table of Contents on our business, results of operations and financial condition, including after the underlying failures have been remedied.
Risks Related to Our Common Stock Sales of shares of our common stock in connection with the Registration Rights Agreement, or the prospect of any such sales, could affect the market price of our common stock and could impair our ability to raise capital through future sales of equity securities.
Risks Related to Our Common Stock Sales of shares of our common stock in connection with registration rights granted to certain stockholders, or the prospect of any such sales, could affect the market price of our common stock and could impair our ability to raise capital through future sales of equity securities.
We may not successfully manage our growth. We have grown rapidly and substantially over prior years, including by expanding our internal resources, making acquisitions and entering into new markets, and we intend to continue to focus on rapid growth, including organic growth and potentially additional acquisitions.
We have grown rapidly and substantially over prior years, including by expanding our internal resources, making acquisitions and entering into new markets, and we intend to continue to focus on rapid growth, including organic growth and potentially additional acquisitions.
If we determine that our goodwill has become impaired, we may incur impairment charges, which would negatively impact our operating results. As of December 31, 2023, we had $630 million of goodwill on our Consolidated Balance Sheet. Goodwill represents the excess of cost over the fair value of net assets acquired in business combinations.
If we determine that our goodwill has become impaired, we may incur impairment charges, which would negatively impact our operating results. As of December 31, 2024, we had $1.1 billion of goodwill on our Consolidated Balance Sheet. Goodwill represents the excess of cost over the fair value of net assets acquired in business combinations.
We derive a significant portion of our total revenue from our largest customers. Our top five customers comprised approximately 21% of our consolidated total revenue for the year ended December 31, 2023. Our largest customer comprised approximately 9.5% of our consolidated total revenue for the year ended December 31, 2023.
We derive a significant portion of our total revenue from our largest customers. Our top five customers comprised approximately 23% of our consolidated total revenue for the year ended December 31, 2024. Our largest customer comprised approximately 9.9% of our consolidated total revenue for the year ended December 31, 2024.
Certain of our directors and employees may have actual or potential conflicts of interest because of their positions with or financial interests in XPO. Because of their current or former positions with XPO, certain of our executive officers and directors continue to own equity interests in XPO following the Separation. In addition, Mr.
Any such indemnity obligations could be material. Certain of our directors and employees may have actual or potential conflicts of interest because of their positions with or financial interests in XPO. Because of their current or former positions with XPO, certain of our executive officers and directors continue to own equity interests in XPO following the Separation. In addition, Mr.
In the event the IRS were to prevail with such a challenge, we, as well as XPO and XPO’s stockholders, could be subject to significant U.S. federal income tax liability. 21 Table of Contents If the Separation, together with certain related transactions, were to fail to qualify as a transaction that is tax-free for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code, in general, for U.S. federal income tax purposes, XPO would recognize taxable gain as if it had sold the RXO common stock in a taxable sale for its fair market value, and XPO stockholders who receive such RXO shares in the distribution would be subject to tax as if they had received a taxable distribution equal to the fair market value of such shares.
If the Separation, together with certain related transactions, were to fail to qualify as a transaction that is tax-free for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code, in general, for U.S. federal income tax purposes, XPO would recognize taxable gain as if it had sold the RXO common stock in a taxable sale for its fair market value, and XPO stockholders who receive such RXO shares in the distribution would be subject to tax as if they had received a taxable distribution equal to the fair market value of such shares.
We also rely on third parties and virtualized infrastructure to operate our information technology systems. Despite significant testing for risk management, external and internal risks, such as malware, insecure coding, “Acts of God,” data leakage and human error pose a direct threat to the stability or effectiveness of our information technology systems and operations.
Despite significant testing for risk management, external and internal risks, such as malware, insecure coding, “Acts of God,” data leakage and human error pose a direct threat to the stability or effectiveness of our information technology systems and operations.
If the Separation, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, we could be subject to significant tax liabilities, and, in certain circumstances, we could be required to indemnify XPO for material amounts of taxes and other related amounts pursuant to indemnification obligations under the TMA.
For these reasons, as well as the additional risks related to the Separation noted below, we may not achieve the expected benefits of the Separation. 21 Table of Contents If the Separation, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, we could be subject to significant tax liabilities, and, in certain circumstances, we could be required to indemnify XPO for material amounts of taxes and other related amounts pursuant to indemnification obligations under the TMA.
Our ability to issue debt or enter into other financing arrangements on acceptable terms could be adversely affected if there is a material decline in the demand for our services or in the financial health of our customers or suppliers or if there are other significantly unfavorable changes in economic conditions.
Our ability to issue debt or enter into other financing arrangements on acceptable terms could be adversely affected if there is a material decline in the demand for our services or in the financial health of our customers or suppliers or if there are other significantly unfavorable changes in economic conditions. 16 Table of Contents We incurred debt obligations that could adversely affect our business and profitability and our ability to meet other obligations.
Although we are not legally liable for loss or damage to our customers’ cargo, from time to time, claims may be asserted against us for cargo losses. 17 Table of Contents From time to time, we are involved in lawsuits and are subject to various claims that could result in significant expenditures and impact our operations.
Although we are not legally liable for loss or damage to our customers’ cargo while operating as a property freight broker, from time to time, claims may be asserted against us for cargo losses. From time to time, we are involved in lawsuits and are subject to various claims that could result in significant expenditures and impact our operations.
We are implementing various cost and revenue initiatives to further increase our profitability, including advanced pricing analytics and revenue management tools, our digital brokerage platform, our shared distribution network, cross-selling to strategic accounts, workforce productivity and further back-office optimization. If we are not able to successfully implement these cost and revenue initiatives, our future financial results may suffer.
We are implementing various cost and revenue initiatives to further increase our profitability, including advanced pricing analytics and revenue management tools, our digital brokerage platform, our shared distribution network, cross-selling to strategic accounts, workforce productivity and further back-office optimization.
Under the TMA, we generally are required to indemnify XPO for any taxes resulting from the Separation (and any related costs and other damages) to the extent such amounts resulted from: (i) an acquisition of all or certain portions of the equity securities or assets of RXO, whether by merger or otherwise (and regardless of whether we participated in or otherwise facilitated the acquisition), (ii) certain other actions or failures to act by RXO, or (iii) any breach of RXO’s covenants or undertakings contained in the Separation and Distribution Agreement and certain other agreements and documents.
In the event the relevant taxing authorities prevail with any challenge in respect of any relevant transaction, XPO, RXO and their subsidiaries could be subject to significant tax liabilities. 22 Table of Contents Under the TMA, we generally are required to indemnify XPO for any taxes resulting from the Separation (and any related costs and other damages) to the extent such amounts resulted from: (i) an acquisition of all or certain portions of the equity securities or assets of RXO, whether by merger or otherwise (and regardless of whether we participated in or otherwise facilitated the acquisition), (ii) certain other actions or failures to act by RXO, or (iii) any breach of RXO’s covenants or undertakings contained in the Separation and Distribution Agreement and certain other agreements and documents.
The efficient operation of our business depends on our information technology systems. We rely on our information technology systems to effectively manage our sales and marketing, financial, legal and compliance functions, engineering and product development tasks, research and development data, communications, order entry and fulfillment and other business processes.
We rely on our information technology systems to effectively manage our sales and marketing, financial, legal and compliance functions, engineering and product development tasks, research and development data, communications, order entry and fulfillment and other business processes. We also rely on third parties and virtualized infrastructure to operate our information technology systems.
As of December 31, 2023, we had $360 million of outstanding debt (excluding finance leases), constituting $355 million of our unsecured notes and $5 million outstanding under our unsecured, multi-currency revolving credit facility that matures in 2027 (the “Revolver”), in addition to $595 million of undrawn commitments under the Revolver. We may also incur additional indebtedness in the future.
As of December 31, 2024, we had $374 million of outstanding debt and finance leases, consisting primarily of $355 million of our unsecured notes, in addition to $600 million of undrawn commitments under the unsecured, multi-currency revolving credit facility that matures in 2029 (the “Revolver”). We may also incur additional indebtedness in the future.
Material increases in liability claims or workers’ compensation claims, or the unfavorable resolution of claims, or our failure to recover, in full or in part, under indemnity provisions could materially and adversely affect our operating results. In addition, significant increases in insurance costs or the inability to purchase insurance as a result of these claims could reduce our profitability.
Material increases in liability claims or workers’ compensation claims, or the unfavorable resolution of claims, or our failure to recover, in full or in part, under indemnity provisions could materially and adversely affect our operating results.
Our third-party carriers are subject to increasingly stringent laws protecting the environment, including transitional risks relating to climate change, which could directly or indirectly have a material adverse effect on our business.
In addition, significant increases in insurance costs or the inability to purchase insurance as a result of these claims could reduce our profitability. 17 Table of Contents Our third-party carriers are subject to increasingly stringent laws protecting the environment, including transitional risks relating to climate change, which could directly or indirectly have a material adverse effect on our business.
If any of the foregoing were to occur or to be perceived to occur, our reputation may suffer, our competitive position may be diminished, we could face lawsuits, regulatory investigation, fines, and potential liability and our financial results could be negatively impacted. 16 Table of Contents Risks Related to Our Credit and Liquidity Challenges in the commercial and credit environment may adversely affect our future access to capital on favorable terms.
If any of the foregoing were to occur or to be perceived to occur, our reputation may suffer, our competitive position may be diminished, we could face lawsuits, regulatory investigation, fines, and potential liability and our financial results could be negatively impacted.
If our customers experience plant slowdowns or closures because they are unable to negotiate labor contracts, our revenue and profitability could be negatively impacted. Labor unions sometimes attempt to organize our employees.
If our customers experience plant slowdowns or closures because they are unable to negotiate labor contracts, our revenue and profitability could be negatively impacted. We are subject to one collective bargaining agreement that covers fewer than 20 of our employees.
Any sales in connection with the Registration Rights Agreement, or the prospect of any such sales, could adversely impact the market price of our common stock.
Any sales in connection with the Registration Rights Agreement and such purchase agreements, or the prospect of any such sales, could adversely impact the market price of our common stock. Any stockholder’s percentage of ownership in RXO may be diluted in the future at any given time.
Failure to comply with applicable data protection regulations or other data protection standards may expose us to litigation, fines, sanctions or other penalties, which could harm our business, our reputation, results of operations and financial condition. 15 Table of Contents A failure of our information technology infrastructure, information systems, networks or processes may materially adversely affect our business.
Recently, regulatory and enforcement focus on data protection has heightened in the United States. Failure to comply with applicable data protection regulations or other data protection standards may expose us to litigation, fines, sanctions or other penalties, which could harm our business, our reputation, results of operations and financial condition.
Volatility in the world financial markets could increase borrowing costs or affect our ability to access the capital markets.
Risks Related to Our Credit and Liquidity Challenges in the commercial and credit environment may adversely affect our future access to capital on favorable terms. Volatility in the world financial markets could increase borrowing costs or affect our ability to access the capital markets.
If we are unable to attract and retain such individuals, we may be unable to maintain our current competitive position within the industry, meet our customers’ expectations or successfully expand and grow our business. 18 Table of Contents In addition to our permanent employees, our ability to meet customer demands and expectations, especially during periods of peak volume, is substantially dependent on our ability to recruit and retain qualified temporary workers.
If we are unable to attract and retain such individuals, we may be unable to maintain our current competitive position within the industry, meet our customers’ expectations or successfully expand and grow our business.
We have entered into a registration rights agreement (the “Registration Rights Agreement”) with Jacobs Private Equity, LLC (“JPE”), an affiliate of Brad Jacobs, our chairman. As of December 31, 2023, JPE beneficially owned 1.3 million shares of our common stock, which represents approximately 1.1% of our outstanding shares of common stock.
We have entered into a registration rights agreement (the “Registration Rights Agreement”) with Jacobs Private Equity, LLC (“JPE”), an affiliate of Brad Jacobs, our chairman, as well as purchase agreements with certain significant stockholders that have granted such stockholders certain registration rights.
Under the TMA, we are required to indemnify XPO for the resulting tax, and this indemnity obligation might discourage, delay or prevent a change of control that our stockholders may consider favorable. RXO’s amended and restated certificate of incorporation contains an exclusive forum provision that may discourage lawsuits against RXO and our directors and officers.
These provisions may also prevent or discourage attempts to remove and replace incumbent directors. RXO’s amended and restated certificate of incorporation contains an exclusive forum provision that may discourage lawsuits against RXO and our directors and officers.
In the event the relevant taxing authorities prevail with any challenge in respect of any relevant transaction, XPO, RXO and their subsidiaries could be subject to significant tax liabilities.
In the event the IRS were to prevail with such a challenge, we, as well as XPO and XPO’s stockholders, could be subject to significant U.S. federal income tax liability.
Removed
Recently, regulatory and enforcement focus on data protection has heightened in the United States.
Added
We have not experienced any work stoppages due to strikes by unionized workers, but we cannot make assurances that there will not be any work stoppages due to strikes or other job actions in the future. Labor unions may continue to attempt to organize our employees.
Removed
We incurred debt obligations that could adversely affect our business and profitability and our ability to meet other obligations.
Added
A failure of our information technology infrastructure, information systems, networks or processes may materially adversely affect our business. The efficient operation of our business depends on our information technology systems.
Removed
For these reasons, as well as the additional risks related to the Separation noted below, we may not achieve the expected benefits of the Separation.
Added
In addition to our permanent employees, our ability to meet customer demands and expectations, especially during periods of peak volume, is substantially dependent on our ability to recruit and retain qualified temporary workers.
Removed
Any such indemnity obligations could be material. We may not be able to engage in desirable capital-raising or strategic transactions following the Separation.
Added
If we are not able to successfully implement these cost and revenue initiatives, our future financial results may suffer. 18 Table of Contents We may not successfully manage our growth.
Removed
Under current U.S. federal income tax law, a spin-off that otherwise qualifies for tax-free treatment can be rendered taxable to the parent corporation and its stockholders as a result of certain post-spin-off transactions, including certain acquisitions of shares or assets of the spun-off corporation.
Added
Any charges that we are required to record or the failure to achieve the intended financial results associated with divestitures of businesses or assets could have a material adverse effect on our business, financial condition or results of operations.
Removed
For example, a spin-off may result in taxable gain to the parent corporation under Section 355(e) of the Code if it were later deemed to be part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, shares representing a 50 percent or greater interest (by vote or value) in the spun-off corporation.
Added
Risks Related to the Acquisition of Coyote We may be unable to integrate Coyote successfully and realize the anticipated benefits of the Coyote acquisition. On September 16, 2024, we completed the acquisition of Coyote for $1.038 billion in cash, subject to certain additional customary adjustments.
Removed
To preserve the U.S. federal income tax treatment of the Separation, and in addition to our indemnity obligation described above, the TMA restricts us, for the two-year period following the Separation, except in specific circumstances, from, among other things: (i) ceasing to actively conduct certain of our businesses; (ii) entering into certain transactions or series of transactions pursuant to which all or a portion of the shares of RXO stock would be acquired, whether by merger or otherwise; (iii) liquidating or merging or consolidating with any other person; (iv) issuing equity securities beyond certain thresholds; (v) repurchasing shares of RXO stock other than in certain open-market transactions; or (vi) taking or failing to take any other action that would jeopardize the expected U.S. federal income tax treatment of the Separation and certain related transactions.
Added
The successful integration of Coyote and operations into those of our own and our ability to realize the expected synergies and benefits of the transaction are subject to a number of risks and uncertainties, many of which are outside of our control.
Removed
Further, the TMA imposes similar restrictions on us and our subsidiaries during the two-year period following the Separation that are intended to prevent certain transactions undertaken as part of the internal reorganization from failing to qualify as transactions that are generally tax-free for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code or for applicable non-U.S. income tax purposes.
Added
We will also be required to devote significant management attention and resources to integrating business practices, cultures and operations of each business.
Removed
These restrictions may limit our ability to pursue certain equity issuances, strategic transactions, repurchases or other transactions that we may otherwise believe to be in the best interests of our stockholders or that might increase the value of our business.
Added
The risks and uncertainties relating to integrating the two businesses include, among other things: • the challenge of integrating complex organizations, systems, operating procedures, compliance programs, technology, networks and other assets of Coyote; • the difficulties harmonizing differences in the business cultures of our company and Coyote; • the difficulties of integrating Coyote's European business and operating it in a complex commercial and regulatory environment; • the inability to successfully integrate our respective businesses in a manner that permits us to achieve the cost savings, synergies and other anticipated benefits from the Coyote acquisition; • the inability to minimize the diversion of management attention from ongoing business concerns during the process of integrating Coyote into our businesses; • the inability to resolve potential conflicts that may arise relating to customer, supplier and other important relationships of our business and Coyote; • difficulties in retaining key management and other key employees; and • the challenge of managing the expanded operations of a significantly larger and more complex company and coordinating geographically separate organizations. 20 Table of Contents We incurred substantial expenses to consummate the Coyote acquisition but may not realize the anticipated cost synergies and other benefits.
Removed
Also, we may be responsible for liabilities arising from the failure of the 22 Table of Contents Separation, together with certain related transactions, to qualify for tax-free treatment and our indemnity obligations for such liabilities under the TMA, may discourage, delay or prevent certain third parties from acquiring RXO.
Added
In addition, even if we are able to integrate Coyote successfully, the anticipated benefits of the Coyote acquisition may not be realized fully, or at all, or may take longer to realize than expected.
Removed
In addition, in connection with a registration request under the Registration Rights Agreement for an underwritten offering, we may be required to agree to be restricted from selling or disposing any of our common stock or securities convertible into or exchangeable or exercisable for common stock for a period of 90 days (subject to certain exceptions and our ability to defer a registration request or suspend use of a registration statement under certain circumstances).
Added
Given the size and significance of the Coyote acquisition, we may encounter difficulties in the integration of the operations of Coyote and may fail to realize the full benefits and synergies of the Coyote acquisition, which could adversely impact our business, results of operation and financial condition. Coyote may have liabilities that are not known to us.
Removed
As a result, we may be restricted in our ability to raise capital through future sales of equity securities. Any stockholder’s percentage of ownership in RXO may be diluted in the future at any given time.
Added
Coyote may have liabilities that we failed, or were unable, to discover in the course of performing our due diligence investigations.
Removed
These provisions may also prevent or discourage attempts to remove and replace incumbent directors. In addition, an acquisition or further issuance of our common stock may trigger the application of Section 355(e) of the Code, causing the Separation to be taxable to XPO.
Added
We cannot assure you that the indemnification available to us under the purchase agreement in respect of the Coyote acquisition in connection with such agreement will be sufficient in amount, scope or duration to fully offset the possible liabilities associated with the business of Coyote or property that we assumed upon consummation of the Coyote acquisition.
Added
We may learn additional information about Coyote that materially adversely affects us, such as unknown or contingent liabilities and liabilities related to compliance with applicable laws. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations. Acquisition accounting adjustments could adversely affect our financial results.
Added
We account for the Coyote acquisition using the acquisition method of accounting. We allocate the total estimated purchase price to net tangible assets and amortizable intangible assets, and based on their fair values as of the acquisition date record the excess, if any, of the purchase price over those fair values as goodwill.
Added
Differences between preliminary estimates and the final acquisition accounting may occur, and these differences could have a material impact on the consolidated financial statements and the combined company’s future results of operations and financial position.
Added
As of December 31, 2024, JPE and the significant stockholders beneficially owned 21.6 million shares of our common stock with registration rights, which represents approximately 13.3% of our outstanding shares of common stock.

Item 2. Properties

Properties — owned and leased real estate

2 edited+1 added−0 removed0 unchanged
Biggest changeLocation Leased Facilities Owned Facilities Customer Facilities (1) Total North America 159 2 25 186 Asia 8 — — 8 Corporate 6 — — 6 Total 173 2 25 200 (1) Locations owned or leased by customers. We lease our current executive office located in Charlotte, North Carolina. We believe that our facilities are sufficient for our current needs.
Biggest changeLocation Leased Facilities Owned Facilities Customer Facilities (1) Total North America 154 2 21 177 Asia 8 — — 8 Europe 7 — — 7 Corporate 6 — — 6 Total 175 2 21 198 (1) Locations owned or leased by customers. We lease our current executive office located in Charlotte, North Carolina.
ITEM 2. PROPERTIES As of December 31, 2023, we operated 200 principal locations, primarily located in North America, including 25 locations owned or leased by our customers.
ITEM 2. PROPERTIES As of December 31, 2024, we operated 198 principal locations, primarily located in North America, including 21 locations owned or leased by our customers.
Added
We believe that our facilities are sufficient for our current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeITEM 3. LEGAL PROCEEDINGS Information with respect to certain legal proceedings is included in Note 1 5 — Commitments and Contingencies to our consolidated financial statements (included in Part II, Item 8 of this Annual Report) and is incorporated herein by reference.
Biggest changeITEM 3. LEGAL PROCEEDINGS Information with respect to certain legal proceedings is included in Note 1 7 — Commitments and Contingencies to our consolidated financial statements (included in Part II, Item 8 of this Annual Report) and is incorporated herein by reference.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed2 unchanged
Biggest changeThe stock performance assumes $100 was invested on November 1, 2022, in our common stock and each index, including reinvestment of dividends through December 31, 2023. 28 Table of Contents 11/1/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 RXO, Inc. $ 100.00 $ 90.24 $ 103.04 $ 118.94 $ 103.52 $ 122.04 Dow Jones Transportation Average 100.00 99.05 106.79 114.86 110.71 117.59 S&P SmallCap 600 100.00 96.39 98.43 101.28 95.86 109.77 Unregistered Sales of Equity Securities and Use of Proceeds None.
Biggest changeThe stock performance assumes $100 was invested on November 1, 2022, in our common stock and each index, including reinvestment of dividends through December 31, 2024. 28 Table of Contents 11/1/2022 12/31/2022 6/30/2023 12/31/2023 6/30/2024 12/31/2024 RXO, Inc. $ 100.00 $ 90.24 $ 118.94 $ 122.04 $ 137.20 $ 125.08 Dow Jones Transportation Average $ 100.00 $ 99.05 $ 114.86 $ 117.59 $ 114.01 $ 117.56 S&P SmallCap 600 $ 100.00 $ 96.39 $ 101.28 $ 109.77 $ 108.00 $ 117.26 Unregistered Sales of Equity Securities and Use of Proceeds None.
Stock Performance Graph The following graph sets forth the cumulative total stockholder return to RXO’s stockholders for the period beginning November 1, 2022, the date of the Separation, through December 31, 2023, as well as the corresponding returns on the Dow Jones Transportation Average and S&P SmallCap 600 index.
Stock Performance Graph The following graph sets forth the cumulative total stockholder return to RXO’s stockholders for the period beginning November 1, 2022, the date of the Separation, through December 31, 2024, as well as the corresponding returns on the Dow Jones Transportation Average and S&P SmallCap 600 index.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information On November 1, 2022, our common stock began regular-way trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “RXO.” As of February 8, 2024, there were approximately 97 registered holders of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information On November 1, 2022, our common stock began regular-way trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “RXO.” As of February 24, 2025, there were approximately 98 registered holders of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

41 edited+22 added−18 removed33 unchanged
Biggest changeRXO has one reportable segment. 32 Table of Contents Results of Operations Years Ended December 31, Percent of Revenue (Dollars in millions) 2023 2022 2021 2023 2022 2021 Revenue $ 3,927 $ 4,796 $ 4,689 100.0 % 100.0 % 100.0 % Cost of transportation and services (exclusive of depreciation and amortization) 2,967 3,624 3,681 75.6 % 75.6 % 78.5 % Direct operating expense (exclusive of depreciation and amortization) 235 226 192 6.0 % 4.7 % 4.1 % Sales, general and administrative expense 591 640 539 15.0 % 13.3 % 11.5 % Depreciation and amortization expense 67 86 81 1.7 % 1.8 % 1.7 % Transaction and integration costs 12 84 2 0.3 % 1.8 % — % Restructuring costs 16 13 2 0.4 % 0.3 % — % Operating income 39 123 192 1.0 % 2.6 % 4.1 % Other expense 3 — 1 0.1 % — % — % Interest expense, net 32 4 — 0.8 % 0.1 % — % Income before income taxes 4 119 191 0.1 % 2.5 % 4.1 % Income tax provision — 27 41 — % 0.6 % 0.9 % Net income $ 4 $ 92 $ 150 0.1 % 1.9 % 3.2 % Year Ended December 31, 2023 Compared with Year Ended December 31, 2022 Revenue for 2023 decreased by 18.1% to $3.9 billion, from $4.8 billion in 2022.
Biggest changeRXO has one reportable segment. 32 Table of Contents Results of Operations Years Ended December 31, Percent of Revenue (Dollars in millions) 2024 2023 2022 2024 2023 2022 Revenue $ 4,550 $ 3,927 $ 4,796 100.0 % 100.0 % 100.0 % Cost of transportation and services (exclusive of depreciation and amortization) 3,565 2,967 3,624 78.4 % 75.6 % 75.6 % Direct operating expense (exclusive of depreciation and amortization) 202 235 226 4.4 % 6.0 % 4.7 % Sales, general and administrative expense 666 591 640 14.6 % 15.0 % 13.3 % Depreciation and amortization expense 87 67 86 1.9 % 1.7 % 1.8 % Transaction and integration costs 53 12 84 1.2 % 0.3 % 1.8 % Restructuring costs 33 16 13 0.7 % 0.4 % 0.3 % Operating income (loss) (56) 39 123 (1.2) % 1.0 % 2.6 % Other expense 218 3 — 4.8 % 0.1 % — % Interest expense, net 30 32 4 0.7 % 0.8 % 0.1 % Income (loss) before income taxes (304) 4 119 (6.7) % 0.1 % 2.5 % Income tax provision (benefit) (14) — 27 (0.3) % — % 0.6 % Net income (loss) $ (290) $ 4 $ 92 (6.4) % 0.1 % 1.9 % Year Ended December 31, 2024 Compared with Year Ended December 31, 2023 Revenue increased by 15.9% to $4.6 billion in 2024, compared with $3.9 billion in 2023.
As of December 31, 2023, we had $355 million of the Notes outstanding with interest payable semiannually in cash in arrears on May 15 and November 15 of each year, beginning May 15, 2023. The Notes mature on November 15, 2027, unless earlier repurchased or redeemed, if applicable.
As of December 31, 2024, we had $355 million of the Notes outstanding with interest payable semiannually in cash in arrears on May 15 and November 15 of each year, beginning May 15, 2023. The Notes mature on November 15, 2027, unless earlier repurchased or redeemed, if applicable.
The primary uses of cash from financing activities in 2023 were (i) $104 million for debt and finance lease repayments, driven primarily by the payoff of the Term Loan and (ii) $14 million for payments of tax withholdings related to vesting of stock compensation awards.
The primary uses of cash from financing activities in 2023 were (i) $104 million for debt and finance lease repayments, driven primarily by the payoff of the $100 million term loan facility and (ii) $14 million for payments of tax withholdings related to vesting of stock compensation awards.
Liquidity and Capital Resources Overview Our ability to fund our operations and anticipated capital needs are reliant upon the generation of cash from operations, supplemented as necessary by utilization of our revolving credit facility.
Liquidity and Capital Resources Overview Our ability to fund our operations and anticipated capital needs are reliant upon the generation of cash from operations, supplemented as necessary by utilization of our revolving credit facilities.
In addition, we have obligations for agreements to purchase goods or services entered into in the ordinary course of business that are enforceable and legally binding. Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with GAAP.
In addition, we have obligations for agreements to purchase goods or services entered into in the ordinary course of business that are enforceable and legally binding. 36 Table of Contents Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with GAAP.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 are not included in this Annual Report and can be found in Part II, Item 7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operation s ” in our Annual Report on Form 10-K for the year ended December 31, 2022.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 are not included in this Annual Report and can be found in Part II, Item 7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” in our Annual Report on Form 10-K for the year ended December 31, 2023.
This section of this Annual Report generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
This section of this Annual Report generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Overview RXO, Inc. is a brokered transportation platform defined by cutting-edge technology and an asset-light business model. The largest component is our core truck brokerage business. Our operations also include three asset-light, brokered transportation services, all of which complement our truck brokerage business: managed transportation, last mile and freight forwarding.
Overview RXO, Inc. is a brokered transportation platform defined by cutting-edge technology and an asset-light business model. The largest component is our core truck brokerage business. Our operations also include asset-light managed transportation and last mile services, which complement our truck brokerage business.
Our complementary services for managed transportation, last mile and freight forwarding also utilize our digital brokerage technology. Our managed transportation service provides asset-light solutions for shippers who outsource their freight transportation to gain reliability, visibility and cost savings. The service uses proprietary technology to enhance our revenue synergy, with cross-selling to truck brokerage, last mile and freight forwarding.
Our managed transportation service provides asset-light solutions for shippers who outsource their freight transportation to gain reliability, visibility and cost savings. The service uses proprietary technology to enhance our revenue synergy, with cross-selling to truck brokerage and last mile.
New Accounting Standards Information related to new accounting standards is included in Note 2 — Basis of Presentation and Significant Accounting Policies . 37 Table of Contents
New Accounting Standards Information related to new accounting standards is included in Note 2 — Basis of Presentation and Significant Accounting Policies .
For the year ended December 31, 2023, our effective tax rate differs from the U.S. corporate income tax rate of 21% due to a tax benefit of $2 million from changes in reserves for uncertain tax positions.
Our effective tax rate for 2023 differs from the U.S. corporate income tax rate of 21% primarily due to a discrete tax benefit of $2 million from changes in reserves for uncertain tax positions.
In addition, we offer technology-enabled managed expedite services that automate transportation procurement for time-critical freight moved by road and air charter carriers. Our last mile offering is an asset-light service that facilitates consumer deliveries performed by highly qualified third-party contractors.
In addition, we offer technology-enabled managed expedite services that automate transportation procurement for time-critical freight moved by road and air charter carriers. We also offer freight forwarding services, including facilitation of ocean and air transportation, customs brokerage and additional domestic services. Our last mile offering is an asset-light service that facilitates consumer deliveries performed by highly qualified third-party contractors.
The majority of these allocated costs are recorded within Sales, general and administrative expense; Depreciation and amortization expense; Transaction and integration costs; and Restructuring costs in the Consolidated Statements of Operations.
The majority of these allocated costs are recorded within SG&A; Depreciation and amortization expense; Transaction and integration costs; and Restructuring costs in the Consolidated Statements of Operations.
The Separation was accomplished by the distribution of 100 percent of the outstanding common stock of RXO to XPO stockholders as of the close of business on October 20, 2022, the record date for the distribution.
The Separation On November 1, 2022, we completed the separation from XPO, which we refer to as the Separation. The Separation was accomplished by the distribution of 100 percent of the outstanding common stock of RXO to XPO stockholders as of the close of business on October 20, 2022, the record date for the distribution.
For the periods ended after the Separation, the Company will file a consolidated U.S. federal income tax return as well as certain state and local income tax returns. The Company's foreign tax returns are filed on a full-year basis. The Company’s consolidated financial statements include the accounts of RXO, Inc. and its majority-owned subsidiaries.
For the periods ended after the Separation, the Company will file a consolidated U.S. federal income tax return as well as certain state and local income tax returns. The Company’s consolidated financial statements include the accounts of RXO, Inc. and its majority-owned subsidiaries. The Company has eliminated intercompany accounts and transactions.
The level and the timing of the Company’s capital expenditures within these categories can vary as a result of a variety of factors outside of our control, such as the timing of new contracts and availability of labor and equipment.
Capital Expenditures Our 2024 capital expenditures include capital associated with strategic investments in technology, equipment and real estate. The level and the timing of the Company’s capital expenditures within these categories can vary as a result of a variety of factors outside of our control, such as the timing of new contracts and availability of labor and equipment.
We have identified below our accounting policies that we believe could potentially produce materially different results if we were to change underlying assumptions, estimates and/or judgments.
We have identified below our accounting policies that we believe could potentially produce materially different results if we were to change underlying assumptions, estimates and/or judgments. Although actual results may differ from estimated results, we believe the estimates are reasonable and appropriate.
We continually evaluate our liquidity requirements and capital structure 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. Capital Expenditures Our 2023 capital expenditures include capital associated with strategic investments in technology, equipment and real estate.
We continually evaluate our liquidity requirements and capital structure 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 and thereafter, for the foreseeable future.
This was offset by a 3.0 percentage point increase in truck brokerage cost of transportation and services as a percentage of revenue, as lower freight rates were not fully offset by corresponding reductions in cost of purchased transportation during the year.
The year-over-year increase as a percentage of revenue in 2024 was driven primarily by (i) a 1.6 percentage point increase in truck brokerage cost of transportation and services as a percentage of revenue, as lower freight rates were not fully offset by corresponding reductions in cost of purchased transportation, and (ii) a 0.5 percentage point increase in last mile cost of transportation and services as a percentage of revenue as a result of freight mix changes.
As of December 31, 2023, our outstanding discounted obligations under operating and finance leases were $199 million and $6 million, respectively. See Note 6 — Leases to the consolidated financial statements for additional information.
Contractual Obligations We lease certain facilities and equipment under non-cancellable operating and finance lease arrangements. As of December 31, 2024, our outstanding discounted obligations under operating and finance leases were $296 million and $4 million, respectively. See Note 8 — Leases to the consolidated financial statements for additional information.
For our 2023 goodwill assessment, we performed a quantitative analysis for our reporting units using a combination of income and market approaches. As of November 30, 2023 we completed our annual impairment tests for goodwill with all of our reporting units having fair values in excess of their carrying values, resulting in no impairment of goodwill.
As of November 30, 2024, we completed our annual impairment tests for goodwill with all of our reporting units having fair values in excess of their carrying values, resulting in no impairment of goodwill. 37 Table of Contents A quantitative goodwill impairment test, when performed, includes estimating the fair value of a reporting unit using an income approach and/or a market-based approach.
Any failure to comply with any material provision or covenant of these agreements could have a material adverse effect on our liquidity and operations.
Loan Covenants and Compliance As of December 31, 2024, we were in compliance with the covenants and other provisions of our debt agreements. Any failure to comply with any material provision or covenant of these agreements could have a material adverse effect on our liquidity and operations.
Impact of Inflation Economic inflation can have a negative impact on our operating costs, and any economic recession could depress activity levels and adversely affect our results of operations.
For further discussion of potential impacts of these macroeconomic effects on our business, refer to Item 1 A — Risk Factors . Impact of Inflation Economic inflation can have a negative impact on our operating costs, and any economic recession could depress activity levels and adversely affect our results of operations.
Debt and Financing Arrangements Revolving Credit Facility On October 18, 2022, we entered into a five-year unsecured, multi-currency revolving credit facility (the “Revolver”) with initial aggregate commitments of $500 million, of which $50 million is available for the issuance of letters of credit.
Debt and Financing Arrangements Revolving Credit Facilities On October 18, 2022, we entered into a five-year, $500 million, unsecured, multi-currency revolving credit facility (the “Revolver”) with $50 million available for the issuance of letters of credit. Loans under the Revolver bear interest at a fluctuating rate plus an applicable margin based on the Company's credit ratings.
Although actual results may differ from estimated results, we believe the estimates are reasonable and appropriate. 36 Table of Contents Evaluation of Goodwill We measure goodwill as the excess of consideration transferred over the fair value of net assets acquired in business combinations. We allocate goodwill to our reporting units for the purpose of impairment testing.
Unanticipated events and circumstances may occur which could affect the accuracy or validity of such assumptions, estimates or actual results. Evaluation of Goodwill We measure goodwill as the excess of consideration transferred over the fair value of net assets acquired in business combinations. We allocate goodwill to our reporting units for the purpose of impairment testing.
Cash Flow Activity Our cash flows from operating, investing and financing activities are summarized as follows: Years Ended December 31, (In millions) 2023 2022 $ Change % Change Net cash provided by operating activities $ 89 $ 310 $ (221) (71.3) % Net cash used in investing activities (66) (56) (10) (17.9) % Net cash used in financing activities (117) (183) 66 36.1 % Effect of exchange rates on cash, cash equivalents and restricted cash 1 (2) 3 150.0 % Net increase (decrease) in cash and cash equivalents $ (93) $ 69 $ (162) 234.8 % 35 Table of Contents Net cash provided by operating activities for 2023 decreased by $221 million compared with 2022.
Refer to Note 3 — Acquisition for additional information related to assets acquired and liabilities assumed. 35 Table of Contents Cash Flow Activity Our cash flows from operating, investing and financing activities are summarized as follows: Years Ended December 31, (In millions) 2024 2023 $ Change Net cash provided by (used in) operating activities $ (12) $ 89 $ (101) Net cash used in investing activities (1,064) (66) (998) Net cash provided by (used in) financing activities 1,108 (117) 1,225 Effect of exchange rates on cash, cash equivalents and restricted cash (2) 1 (3) Net increase (decrease) in cash, cash equivalents and restricted cash $ 30 $ (93) $ 123 Net cash used in operating activities for 2024 decreased by $101 million compared with 2023.
Sales, general and administrative expense (“SG&A”), including the allocated costs of XPO prior to the Separation, primarily consists of salaries and commissions for the sales function; salary and benefit costs for executive and certain administration functions; third-party professional fees; facility costs; bad debt expense; and legal costs.
Sales, general and administrative expense (“SG&A”), including the allocated costs of XPO prior to the Separation, primarily consists of salaries and commissions for the sales function; salary and benefit costs for executive and certain administration functions; third-party professional fees; facility costs; bad debt expense; and legal costs. 31 Table of Contents Prior to the Separation, the historical results of operations included allocations of XPO costs and expenses including XPO’s corporate function which incurred a variety of expenses including, but not limited to, information technology, human resources, accounting, sales and sales operations, procurement, executive services, legal, corporate finance and communications.
We provide our customers with highly efficient access to capacity through our digital brokerage technology. This proprietary platform is a major differentiator for our truck brokerage business, and together with our pricing technology, we believe it can unlock incremental profitable growth well beyond our current levels.
This proprietary platform is a major differentiator for our truck brokerage business, and together with our pricing technology, we believe it can unlock incremental profitable growth. Our complementary services for managed transportation and last mile also utilize our digital brokerage technology.
Direct operating expense (exclusive of depreciation and amortization) of $235 million in 2023 increased $9 million, or 4.0%, from $226 million in 2022. As a percentage of revenue, direct operating expense (exclusive of depreciation and amortization) increased to 6.0% in 2023 compared to 4.7% in 2022 due to deleverage on lower revenue.
Direct operating expense (exclusive of depreciation and amortization) of $202 million in 2024 decreased $33 million, or 14.0%, compared with $235 million in 2023. As a percentage of revenue, direct operating expense (exclusive of depreciation and amortization) decreased to 4.4% in 2024 compared to 6.0% in 2023 due to cost reduction initiatives.
RXO is permitted to redeem some or all of the Notes prior to their maturity at redemption prices described in the indenture governing the Notes. The Notes were issued at a price of 98.962% of par. Loan Covenants and Compliance As of December 31, 2023, we were in compliance with the covenants and other provisions of our debt agreements.
RXO is permitted to redeem some or all of the Notes prior to their maturity at redemption prices described in the indenture governing the Notes. The Notes were issued at a price of 98.962% of par. Refer to Note 10 — Debt to the consolidated financial statements for additional information.
As of December 31, 2023, we had $5 million outstanding under the Revolver, with interest payable monthly or quarterly, depending on RXO’s upfront election. Borrowings under the Revolver are payable, at our option, at any time prior to or at maturity on October 18, 2027. See Note 8 — Debt to the consolidated financial statements for additional information.
As of December 31, 2024, we had no amounts outstanding under the Revolver. Interest on any outstanding borrowings is payable monthly or quarterly, depending on RXO’s upfront election. Borrowings under the Revolver are payable, at our option, at any time prior to or at maturity on September 16, 2029.
Notable factors driving volume growth in our business include our ability to access massive truckload capacity for shippers through our carrier relationships; our proprietary, cutting-edge technology; our strong management expertise; and favorable long-term industry tailwinds. As of December 31, 2023, we had approximately 115,000 carriers in our North American truck brokerage network, and access to more than 1.4 million trucks.
Notable factors that enable volume growth in our business include our ability to access massive truckload capacity for shippers through our carrier relationships; our proprietary, cutting-edge technology; our strong management expertise; and favorable long-term industry tailwinds. We provide our customers with highly efficient access to capacity through our digital brokerage technology.
The year-over-year decrease was driven primarily by a $571 million decrease in revenue generated from our truck brokerage business, as a result of a 28% reduction in revenue per load, which was impacted by a combination of transportation market rates, fuel prices, length of haul and freight mix. The decline was partially offset by a 12% increase in load volume.
This was partially offset by (i) a $125 million decrease in legacy RXO truck brokerage revenue, driven primarily by a 7% decrease in revenue per load, which was impacted by a combination of fuel prices, freight mix and transportation market rates, partially offset by a 1% increase in legacy RXO load volume and (ii) a $90 million decrease in revenue in our managed transportation business, driven primarily by a decrease in ocean and expedite air rates and volume.
On November 2, 2023, the Company repaid all of the outstanding obligations in respect of the $100 million principal amount, interest and fees under the Term Loan and terminated the Term Loan. Notes On October 25, 2022, we completed an offering of $355 million in aggregate principal amount of unsecured notes (the “Notes” or the “7.50% Notes due 2027”).
This facility has a one-year term and we had $14 million outstanding as of December 31, 2024 classified as short-term debt. Notes On October 25, 2022, we completed an offering of $355 million in aggregate principal amount of unsecured notes (the “Notes” or the “7.50% Notes due 2027”).
Additionally, revenue generated from our freight forwarding business decreased by $171 million, driven primarily by a decrease in ocean rates and volume. Cost of transportation and services (exclusive of depreciation and amortization) in 2023 was $3.0 billion, or 75.6% of revenue, compared with $3.6 billion, or 75.6% of revenue in 2022.
Cost of transportation and services (exclusive of depreciation and amortization) in 2024 was $3.6 billion, or 78.4% of revenue, compared with $3.0 billion, or 75.6% of revenue in 2023.
Investing activities used $66 million of cash in 2023 compared with $56 million of cash used in 2022. The primary use of cash in both periods was to purchase property and equipment. Financing activities used $117 million of cash in 2023 compared with using $183 million of cash in 2022.
Investing activities used $1,064 million of cash in 2024 compared with $66 million of cash used in 2023. The primary uses of cash in 2024 were (i) $1,019 million for the acquisition of Coyote, net of cash acquired, and (ii) $45 million to purchase property and equipment. The primary use of cash in 2023 was to purchase property and equipment.
XPO stockholders received one share of RXO common stock for every share of XPO common stock held at the close of business on the record date. On November 1, 2022, RXO became a standalone publicly-traded company. Notable External Conditions As a leading provider of freight transportation services, our business can be impacted to varying degrees by factors beyond our control.
XPO stockholders received one share of RXO common stock for every share of XPO common stock held at the close of business on the record date. On November 1, 2022, RXO became a standalone publicly-traded company. 30 Table of Contents The Coyote Acquisition On the acquisition date, the Company acquired Coyote from UPS and certain subsidiaries of UPS.
Financial Condition The following table summarizes our asset and liability balances as of December 31, 2023 and 2022: December 31, (In millions) 2023 2022 $ Change % Change Total current assets $ 796 $ 1,029 $ (233) (22.6) % Total long-term assets 1,029 1,002 27 2.7 % Total current liabilities 682 823 (141) (17.1) % Total long-term liabilities 549 621 (72) (11.6) % Total assets decreased by $206 million from December 31, 2022 to December 31, 2023, driven primarily by a $157 million decrease in accounts receivable as a result of a decrease in revenue due to decreased rates and a $93 million decrease in cash and cash equivalents as a result of the payoff of the Term Loan, partially offset by a $36 million increase in operating lease assets.
Financial Condition The following table summarizes our asset and liability balances as of December 31, 2024 and 2023: December 31, (In millions) 2024 2023 $ Change % Change Total current assets $ 1,339 $ 796 $ 543 68.2 % Total long-term assets 2,075 1,029 1,046 101.7 % Total current liabilities 1,065 682 383 56.2 % Total long-term liabilities 737 549 188 34.2 % Total assets and liabilities increased from December 31, 2023 to December 31, 2024, primarily due to the acquisition of Coyote.
On November 2, 2023, the Company exercised a feature to increase the total commitments under its Revolver from $500 million to $600 million. 34 Table of Contents Term Loan Facilities On October 18, 2022, we entered into a five-year $100 million unsecured term loan facility (the “Term Loan”).
There were no amounts outstanding under the Revolver as of December 31, 2024. On November 2, 2023, the Company exercised a feature to increase the total commitments under its Revolver from $500 million to $600 million. 34 Table of Contents The Revolver requires the Company to maintain a minimum interest coverage ratio of not less than 3.00:1.00.
The decrease in cash provided by operating activities reflects the impact of an $88 million decrease in net income between periods and changes in working capital. The change in working capital was driven primarily by the balance sheet impact of decreased revenues and cost of third party transportation between periods.
The decrease in cash provided by operating activities was due primarily to the decrease in net income between periods and changes in working capital. The $294 million decrease in net income was driven primarily by higher non-cash adjustments including a $216 million deemed non-pro rata distribution and increased depreciation and amortization expense related to the Coyote acquisition.
The year-over-year reduction was driven by (i) a decrease in intangible asset amortization expense as a result of a customer relationship intangible asset being fully amortized in December 2022 and (ii) a decrease in depreciation for our allocated share of XPO’s corporate overhead. 33 Table of Contents Transaction and integration costs in 2023 and 2022 were $12 million and $84 million, respectively, and primarily comprised spin-off related costs.
Transaction and integration costs for 2024 included $49 million as a result of the Coyote acquisition. Transaction and integration costs for 2023 primarily comprised spin-off related costs. 33 Table of Contents Restructuring costs in 2024 and 2023 were $33 million and $16 million, respectively, and primarily comprised severance and operating lease impairment costs.
Removed
Our freight forwarding service is a scalable, asset-light offering managed with advanced technology that facilitates ocean, road and air transportation and assists with customs brokerage.
Added
We acquired Coyote for $1.038 billion in cash, subject to certain additional customary adjustments. The purchase price was subsequently increased by $10 million for working capital and other post-closing adjustments totaling $10 million, which was paid in the first quarter of 2025.
Removed
We are a U.S.-based freight forwarder with a global network of company-owned and partner-owned locations and coverage of key trade lanes that reach approximately 150 countries and territories. 30 Table of Contents The Separation On November 1, 2022, we completed the separation from XPO, which we refer to as the Separation.
Added
Refer to Note 3 — Acquisition to the consolidated financial statements in this Annual Report on Form 10-K for disclosures regarding the Company’s acquisition of Coyote. Notable External Conditions As a leading provider of freight transportation services, our business can be impacted to varying degrees by factors beyond our control.
Removed
The COVID-19 pandemic may continue to impact overall economic activity, customer sectors served by our industry, supply chains and labor markets. We cannot predict how long these dynamics will last, or whether any future resurgences will adversely affect our results of operations.
Added
The impact of macroeconomic conditions, including but not limited to, prolonged inflation, higher interest rates and capital costs, exchange rate volatility, increased shipping costs, labor disputes, reduced discretionary consuming spending, increased tariffs and international conflicts, could negatively impact our financial results. We continue to monitor the evolving macroeconomic environment and the impact to our business.
Removed
Prior to the Separation, the Company’s historical assets and liabilities presented were wholly owned by XPO and were reflected on a historical cost basis.
Added
The year-over-year increase in revenue was driven primarily by a $796 million increase in revenue as a result of the Coyote acquisition in our truck brokerage business.
Removed
In connection with the Separation, the Company’s assets and liabilities were transferred to the Company on a carry-over basis. 31 Table of Contents Prior to the Separation, the historical results of operations included allocations of XPO costs and expenses including XPO’s corporate function which incurred a variety of expenses including, but not limited to, information technology, human resources, accounting, sales and sales operations, procurement, executive services, legal, corporate finance and communications.
Added
SG&A of $666 million in 2024 increased $75 million, or 12.7%, from $591 million in 2023, primarily due to the Coyote acquisition. As a percentage of revenue, SG&A decreased to 14.6% in 2024 compared with 15.0% in 2023 driven primarily by cost savings from restructuring actions executed in 2024.
Removed
The Company has eliminated intercompany accounts and transactions.
Added
Depreciation and amortization expense in 2024 was $87 million, compared with $67 million in 2023. Depreciation and amortization expense for 2024 included $19 million as a result of the Coyote acquisition. Transaction and integration costs in 2024 and 2023 were $53 million and $12 million, respectively.
Removed
In 2023, we experienced (i) lower transportation costs as a percentage of revenue in last mile and (ii) an improvement in mix in our freight forwarding business.
Added
Other expense in 2024 includes a one-time charge of $216 million representing a deemed non-pro rata distribution in connection with the private placement common stock issuance completed in August 2024, based on the difference between the issuance price and the closing market price of common stock on August 12, 2024, the effective date of the private placement.
Removed
SG&A of $591 million in 2023 decreased $49 million, or 7.7%, from $640 million in 2022. As a percentage of revenue, SG&A increased to 15.0% in 2023 compared to 13.3% in 2022 due to higher compensation-related costs of 1.5 percentage points reflecting deleverage on lower revenue and incremental corporate costs of operating RXO as a standalone public company.
Added
Our effective income tax rates were 4.6% and (13.0)% for 2024 and 2023, respectively. Our effective tax rate for 2024 differs from the U.S. corporate income tax rate of 21% primarily due to the effect of large non-deductible tax items associated with the Coyote acquisition and related common stock issuances.
Removed
This was partially offset by cost savings from restructuring actions executed in 2023, which primarily comprised employee severance. We anticipate the restructuring actions will result in cumulative annualized net cost savings of approximately $32 million. Depreciation and amortization expense in 2023 was $67 million, compared with $86 million in 2022.
Added
On August 8, 2024, the Company and lenders entered into an amendment, which, following the completion of the Coyote acquisition on September 16, 2024, increased the Company’s maximum consolidated leverage ratio to not greater than 4.50:1.00.
Removed
Restructuring costs in 2023 and 2022 were $16 million and $13 million, respectively, and primarily comprised severance costs. Interest expense primarily consists of interest related to indebtedness for money borrowed and finance lease obligations.
Added
This amendment also extended the Revolver maturity date to September 16, 2029, subject to a springing earlier maturity date based on outstanding borrowings under the Company’s existing notes. Refer to Note 10 — Debt to the consolidated financial statements for additional information. We also have a non-U.S. revolving credit facility with a maximum commitment of approximately $14 million.
Removed
The increase in interest expense in 2023 as compared to 2022 is primarily due to a full year of interest incurred in 2023 on borrowings made in connection with the Separation in the fourth quarter of 2022. Our effective income tax rates were (13.0)% and 22.6% in 2023 and 2022, respectively.
Added
Equity Offering During 2024, the Company completed both a private placement and public offering of its common stock. Total proceeds from these offerings, net of related issuance costs, of approximately $1.1 billion were used to fund the acquisition of Coyote on September 16, 2024.
Removed
The change in our effective income tax rate for the year ended December 31, 2023 compared to the year ended December 31, 2022 was driven primarily by a tax benefit of $2 million realized in 2023 from changes in reserves for uncertain tax positions.
Added
Refer to Note 1 3 — Stockholders ' Equity to the consolidated financial statements for additional information.
Removed
For the year ended December 31, 2022, our effective tax rate differs from the U.S. corporate income tax rate of 21% due to state income taxes within the United States, partially offset by a tax benefit of $3 million from provision to return and other deferred tax adjustments.
Added
Financing activities provided $1,108 million of cash in 2024 compared with using $117 million of cash in 2023. The primary source of cash from financing activities in 2024 was $1,095 million in net proceeds from the issuance of common stock.
Removed
Loans under the Revolver bear interest at a fluctuating rate plus an applicable margin calculated based on the Company's credit ratings. There was $5 million outstanding under the Revolver as of December 31, 2023.
Added
We also have a non-U.S. revolving credit facility with a maximum commitment of approximately $14 million. This facility has a one-year term and we had $14 million outstanding as of December 31, 2024 classified as short-term debt. See Note 10 — Debt to the consolidated financial statements for additional information.
Removed
Total liabilities decreased by $213 million from December 31, 2022 to December 31, 2023, driven primarily by a decrease in third party transportation costs due to decreased rates and a $95 million decrease in long-term debt as a result of the payoff of the Term Loan.
Added
Business Combinations We apply the acquisition method of accounting with respect to the identifiable assets and liabilities of a business combination and record the assets acquired and liabilities assumed at their estimated fair values as of the acquisition date.
Removed
The primary use of cash from financing activities in 2022 was $621 million in net transfers to XPO in connection with the Separation. The primary source of cash from financing activities in 2022 was the issuance of long-term debt of $451 million, offset by payment of debt issuance costs of $9 million.
Added
The excess of the cost of the acquired business and the fair value of the assets acquired and liabilities assumed is recognized as goodwill.
Removed
Net proceeds from the issuance of the Notes and the incurrence of the Term Loan, together with cash on RXO's balance sheet, were used to fund a net cash distribution of $604 million from RXO to XPO, in the fourth quarter of 2022. Contractual Obligations We lease certain facilities and equipment under non-cancellable operating lease arrangements.
Added
During the measurement period, which is up to one year from the acquisition date, we may adjust provisional amounts that were recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date.
Removed
A quantitative goodwill impairment test, when performed, includes estimating the fair value of a reporting unit using an income approach and/or a market-based approach.
Added
Determining the fair value of assets acquired and liabilities assumed requires our management to make significant estimates and assumptions for intangible assets, contract obligations assumed, and pre-acquisition contingencies, where applicable.
Added
Although we believe the assumptions and estimates we have made in the past are reasonable and appropriate, they are based, in part, on historical experience and information obtained from the management of the acquired companies and are inherently uncertain.
Added
The assistance of an independent third-party valuation firm was used to determine the estimated fair values and useful lives of finite-lived intangible assets including customer relationships and trademarks. Valuation methods used were based on income-based approaches including the excess earnings method and relief-from-royalty method for customer relationships and trademarks, respectively.
Added
Critical estimates and assumptions used in valuing certain acquired intangible assets include projected revenues, projected expenses, customer retention rate, contributory asset charges, and discount rate for the customer relationships; and projected revenues, trademark phase-out projection, trademark royalty rate, and discount rate for the trademarks.

… 1 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+1 added−0 removed3 unchanged
Biggest changeAdditionally, a portion of our net assets and income are in non-U.S. dollar currencies and, as such, we are exposed to currency risk from potential changes in the functional currency values of our foreign currency denominated assets, liabilities and cash flows. We believe that this foreign currency exchange rate risk will not have a material impact on our financial results.
Biggest changeAdditionally, a portion of our net assets and income are in non-U.S. dollar currencies and, as such, we are exposed to currency risk from potential changes in the functional currency values of our foreign currency denominated assets, liabilities and cash flows.
A 1% increase or decrease in interest rates on variable-rate debt outstanding as of December 31, 2023 would not have a material impact on our annual interest expense.
A 1% increase or decrease in the interest rate on borrowings under variable-rate debt would not have a material impact on our annual interest expense.
Added
We believe that this foreign currency exchange rate risk will not have a material impact on our financial results. 38 Table of Contents

Other RXO 10-K year-over-year comparisons