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

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Paragraph-level year-over-year comparison of XPO, 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.

+287 added−365 removedSource: 10-K (2025-02-07) vs 10-K (2024-02-08)

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

287 paragraphs added · 365 removed · 251 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

83 edited+13 added−19 removed33 unchanged
Biggest changeOur motor carrier subsidiaries and the third-party motor carriers we contract with in the U.S. must comply with the safety and fitness regulations of the DOT, including those related to, without limitation, controlled substances and alcohol, hours-of-service compliance, vehicle maintenance, hazardous materials compliance, driver fitness, unsafe driving, and minimum insurance requirements, as well as the Compliance Safety Accountability (“CSA”) program, which uses a Safety Measurement 8 System (“SMS”) to rank motor carriers on seven categories of safety-related data, known as Behavioral Analysis and Safety Improvement Categories (“BASICs”).
Biggest changeLike all motor carriers, XPO must participate in the FMCSA’s Compliance Safety Accountability (“CSA”) program, which uses a Safety Measurement System (“SMS”) to rank motor carriers on seven categories of safety-related data, known as Behavioral Analysis and Safety Improvement Categories (“BASICs”), including those related to, without limitation, controlled substances and alcohol, hours-of-service compliance, vehicle maintenance, hazardous materials compliance, driver fitness, accidents or crashes, and unsafe driving.
In the U.S., examples include: • Pregnancy Care Policy: Guarantees up to 80 hours of paid prenatal leave and certain automatic accommodations, plus consideration of more significant accommodations while preserving existing wage rates. • Family Bonding Policy: Provides an additional six weeks of 100% paid time off for the primary caregiver of a newborn or newly adopted child, and two weeks of 100% paid time off for a secondary caregiver. 12 • Tuition Reimbursement: Provides for up to $5,250 of annual reimbursement for continuing education, academic discounts in more than 80 fields of online study and tuition-free commercial driver training. • Additional Benefits: Includes virtual preventive health care, pelvic health management, physical therapy services and diabetes management services at no cost to employees, as well as supplemental insurance, short-term loans and a personalized Total Rewards Statement.
In the U.S., examples include: • Pregnancy Care Policy: Guarantees up to 80 hours of paid prenatal leave and certain automatic accommodations, plus consideration of more significant accommodations while preserving existing wage rates. • Family Bonding Policy: Provides up to an additional six weeks of 100% paid time off for the primary caregiver of a newborn or newly adopted child, and two weeks of 100% paid time off for a secondary caregiver. • Tuition Reimbursement: Provides for up to $5,250 of annual reimbursement for continuing education, academic discounts in more than 80 fields of online study and tuition-free commercial driver training. 12 • Additional Benefits: Includes virtual preventive health care, pelvic health management, physical therapy services and diabetes management services at no cost to employees, as well as supplemental insurance, short-term loans and a personalized Total Rewards Statement.
It is not possible to reliably predict whether our historical revenue and profitability trends will continue to occur in future periods. 9 Human Capital Management As a people-driven company with a strong customer service culture, our ability to be an employer of choice and a business partner of choice are intertwined.
It is not possible to reliably predict whether our historical revenue and profitability trends will continue to occur in future periods. Human Capital Management As a people-driven company with a strong customer service culture, our ability to be an employer of choice and a business partner of choice are intertwined.
XPO, XPO Smart, XPO Connect, and Your Freight First, among others, are trademarks and service marks for which registrations, or applications for registration, are on file, as applicable with the United States Patent and Trademark Office.
XPO, XPO Smart, and Your Freight First, among others, are trademarks and service marks for which registrations, or applications for registration, are on file, as applicable with the United States Patent and Trademark Office.
In our open enrollment period for 2024 benefit plans, we introduced new options for virtual physical therapy and “physicals on the go,” and enhanced our employee assistance programs specifically for mental health. Employee Engagement and Development XPO executive leadership regularly solicits feedback from employees to gauge our progress, assess satisfaction and encourage constructive suggestions.
In our open enrollment period for 2025 benefit plans, we introduced new options for virtual physical therapy and “physicals on the go,” and enhanced our employee assistance programs specifically for mental health. Employee Engagement and Development XPO executive leadership regularly solicits feedback from employees to gauge our progress, assess satisfaction and encourage constructive suggestions.
Community Outreach XPO continues to support organizations that reflect the interests of our employees and the communities where we operate. In 2023, our company served as official transportation partner for the Susan G. Komen 3-Day Walks to end breast cancer, and partnered with Truckers Against Trafficking to educate our employees about human trafficking.
Community Outreach XPO continues to support organizations that reflect the interests of our employees and the communities where we operate. In 2024, our company served as the official transportation partner for the Susan G. Komen 3-Day Walks to end breast cancer, and partnered with Truckers Against Trafficking to educate our employees about human trafficking.
Our platform provides an efficient way for candidates to learn about XPO at their convenience and explore positions that match their interests and abilities. This is a more stress-free entry into the recruitment process for job candidates, and improves both the onboarding experience and retention rates for new hires. 11 Grow at XPO.
Our platform provides an efficient way for candidates to learn about XPO at their convenience and explore positions that match 11 their interests and abilities. This is a more stress-free entry into the recruitment process for job candidates, and improves both the onboarding experience and retention rates for new hires. XPO Accelerate.
Our services are both highly responsive to customer goals, such as mitigating environmental impacts over time, and proactive in identifying potential improvements. Most important, we have instilled a culture that defines success as mutually beneficial results for our company and our customers.
Our services are both highly responsive to customer goals, such as mitigating environmental impacts over time, and proactive in identifying potential improvements. We have instilled a culture that defines success as mutually beneficial results for our company and our customers.
In addition to our annual merit and hourly pay increases that broadly cover our employee population in North America, approximately 1,000 eligible LTL employees at over 35 locations received additional wage increases throughout 2023.
In addition to our annual merit and hourly pay increases that broadly cover our employee population in North America, approximately 1,000 eligible LTL employees at over 35 locations received additional wage increases throughout 2024.
In 2023, we partnered with Partnership for Your Success to attract military veterans, and worked with Women in Trucking to engage more women in transportation industry careers. Interactive Hiring. Our integrated approach to talent development begins with our robust digital recruitment platform, which includes online job previews and pre-employment assessments for key positions.
In 2024, for example, we partnered with Partnership for Your Success to attract military veterans, and worked with Women in Trucking to engage more women in transportation industry careers. Interactive Hiring. Our integrated approach to talent development begins with our robust digital recruitment platform, which includes online job previews and pre-employment assessments for key positions.
Our Strategy XPO’s strategy is to help customers move goods efficiently through their supply chains by using our transportation capacity, organizational strengths and proprietary technology. We deliver value in the form of technological innovations, process efficiencies, cost efficiencies and reliable outcomes.
Our Strategy Our strategy is to help customers move goods efficiently through their supply chains by using our transportation capacity, organizational strengths and proprietary technology. We deliver value in the form of network resources, technological innovations, process and cost efficiencies and reliable outcomes.
For the full year 2023, our customer-focused organization of truck drivers, service center teams and sales professionals worked together to move approximately 18 billion pounds of freight through our network to its destinations. 4 Importantly, our LTL business historically has generated a high return on invested capital and robust free cash flow.
For the full year 2024, our customer-focused organization of truck drivers, service center teams and sales professionals worked together to move approximately 18 billion pounds of freight through our network. 4 Importantly, our LTL business historically has generated a high return on invested capital and robust free cash flow.
These regulations impact us directly and also indirectly when they regulate third-party transportation providers we arrange and/or contract with to transport freight for our customers. Regulations Affecting Motor Carriers and Transportation Brokers. In the U.S., our subsidiaries that operate as motor carriers and freight transportation brokers are licensed by the Federal Motor Carrier Safety Administration (“FMCSA”) of the U.S.
These regulations impact us directly and indirectly because they regulate third-party transportation providers with which we arrange and/or contract to transport freight for our customers. Regulations Affecting Motor Carriers and Transportation Brokers. In the U.S., our subsidiaries that operate as motor carriers and freight transportation brokers are licensed by the Federal Motor Carrier Safety Administration (“FMCSA”) of the U.S.
We provide approximately 31,000 shippers in North America with critical geographic density and day-definite domestic and cross-border services to approximately 99% of U.S. zip codes, as well as Mexico, Canada and the Caribbean. Our capacity and reach give us the ability to manage large freight volumes efficiently and balance our network to leverage fixed costs.
We provide approximately 36,000 shippers with critical geographic density and day-definite domestic services to approximately 99% of U.S. zip codes, as well as cross-border services to Mexico, Canada and the Caribbean. Our capacity and reach give us the ability to manage large freight volumes efficiently and balance our network to leverage fixed costs.
We may be responsible for the cleanup of any spill or other incident involving hazardous materials caused by our business. In the past, we have been responsible for the cost to clean up diesel fuel spills caused by traffic accidents or other events, and none of these incidents materially affected our business or operations.
We may be responsible for the cleanup of a spill or other incident involving hazardous materials caused by our business. In the past, we have been responsible for the cost to clean up diesel fuel spills caused by traffic accidents or other events for which we are legally responsible, and none of these incidents materially affected our business or operations.
Further, across our North American and European operations, our ongoing investments in growth expanded our total permanent workforce by 1.4% year-over-year with a net 401 new permanent employees. Comprehensive Benefits. We offer an extensive suite of benefits to support the health and well-being of our employees and their families, often reflecting responsiveness to employee feedback.
Further, across our North American and European operations, our ongoing investments in growth expanded our total permanent workforce by 0.2% year-over-year with a net 95 new permanent employees. Comprehensive Benefits. We offer an extensive suite of benefits to support the health and well-being of our employees and their families, often reflecting responsiveness to employee feedback.
Additionally, we have environmentally-sound fleet initiatives ranging from government-approved mega-trucks in Spain, which can 6 transport more freight with fewer trips, to fully electric vehicles for certain “last mile” home deliveries. We are also testing the use of duo-trailer vehicles that have the potential to reduce CO2 emissions, compared with using traditional trucks for the same freight.
Additionally, we have environmentally-sound fleet initiatives ranging from government-approved mega-trucks in Spain, which can transport more freight with fewer trips, to fully electric vehicles for certain “last mile” and “regional” (220 miles range) deliveries. We are also testing the use of duo-trailer vehicles that have the potential to reduce CO2 emissions, compared with using traditional trucks for the same freight.
This supports our ongoing investments in our people, network capacity and proprietary technology. We manage the business to specific objectives, such as high customer service scores for on-time delivery and damage-free freight, the optimal sourcing of linehaul transportation, and the expansion of our service center footprint in strategic markets with long-term demand.
This supports our ongoing investments in people, network capacity and proprietary technology. We manage the business to specific objectives, such as on-time delivery and damage-free transport of customer freight, the optimal sourcing of linehaul transportation, and the strategic expansion of our footprint in markets with long-term demand.
We also offer employees tuition reimbursement of up to $5,000 for any approved non-XPO driver training school. In 2023, we graduated nearly 800 students from our LTL driver training locations. Maintenance Training. Well-maintained tractors and trailers are an essential component of both safety and customer service in LTL transportation.
We also offer employees tuition reimbursement of up to $5,000 for any approved non-XPO driver training school. In 2024, we graduated over 650 students from our LTL driver training locations. Maintenance Training. Well-maintained tractors and trailers are an essential component of both safety and customer service in LTL transportation.
Mario Harik has served as XPO’s chief executive officer since November 2022, after previously leading the Company’s North American less-than-truckload segment as president from October 2021 to October 2022. Additionally, he served as XPO’s chief information officer from November 2011 to October 2022 and XPO’s chief customer officer from February 2021 to January 2022. Mr.
Mario Harik has served as XPO’s chief executive officer and a director since November 2022, after previously leading the Company’s North American LTL segment as president from October 2021 to October 2022. Additionally, he served as XPO’s chief information officer from November 2011 to October 2022 and XPO’s chief customer officer from February 2021 to January 2022. Mr.
David Bates joined XPO as chief operating officer in April 2023. He previously served as senior vice president – operations at Old Dominion Freight Line, Inc. from November 2011 to April 2023. From July 2007 to November 2011, Mr. Bates served as a regional vice president, and from December 1995 to July 2007 as a manager, at Old Dominion.
David Bates has served as XPO’s chief operating officer since April 2023. He previously served as senior vice president – operations at Old Dominion Freight Line, Inc. from November 2011 to April 2023. From July 2007 to November 2011, Mr. Bates served as a regional vice president, and from December 1995 to July 2007 as a manager, at Old Dominion.
We are also subject to a variety of vehicle registration and licensing requirements in certain states and local jurisdictions where we operate, as are the third-party transportation providers with which we contract. In foreign jurisdictions where we operate, our operations are regulated by the appropriate governmental authorities.
We are also subject to a variety of vehicle registration and licensing requirements in certain states and local jurisdictions where we operate, as are the third-party transportation providers with which we contract. In foreign jurisdictions where we operate, our operations are regulated by the appropriate governmental authorities. Other federal and state agencies, such as the U.S.
As of December 31, 2023, we had approximately 38,000 employees and 596 locations in 17 countries serving approximately 52,000 customers. Our company has two reportable segments: North American Less-Than-Truckload (“LTL”), the largest component of our business, and European Transportation.
As of December 31, 2024, we had approximately 38,000 employees serving approximately 55,000 customers through 614 locations in 17 countries. Our company has two reportable segments: North American Less-Than-Truckload (“LTL”), the largest component of our business, and European Transportation.
We serve an extensive base of customers within the consumer, trade and industrial markets, including many sector leaders that have long-tenured relationships with us. Our range of freight services in Europe encompasses dedicated truckload, LTL, truck brokerage, managed transportation, last mile, freight forwarding and, increasingly, multimodal solutions, such as road-rail and road-short sea combinations that we tailor to customer needs.
We serve an extensive base of customers in the consumer, trade and industrial markets, including many sector leaders that have long-tenured relationships with us. Our range of freight services in Europe encompasses dedicated truckload, LTL, full truckload brokerage, managed transportation, last mile, freight forwarding, warehousing and, increasingly, multimodal solutions customized for our customers, such as road-rail and road-short sea combinations.
Prior to joining Old Dominion, Mr. Bates served in supervisory roles with Carolina Freight Carriers and YRC Freight. Mr. Bates received his Bachelor's degree in Business Management from Junita College. Wendy Cassity joined XPO in March 2023 as chief legal officer and corporate secretary.
Prior to joining Old Dominion, Mr. Bates served in supervisory roles with Carolina Freight Carriers and YRC Freight. Mr. Bates received his Bachelor's degree in Business Management from Juniata College. Wendy Cassity has served as XPO’s chief legal officer and corporate secretary since March 2023.
In our total workforce, the absolute number of females in managerial positions grew by 20% cumulatively from 2021 to 2023; the absolute number of ethnically or racially diverse employees in managerial positions grew by 20% cumulatively in the same period.
In our total workforce, the absolute number of females in managerial positions grew by 28% cumulatively from 2021 to 2024; the absolute number of ethnically or racially diverse employees in managerial positions grew by 26% cumulatively in the same period.
XPO maintains a strong “ready now” pipeline of future leaders for our operations through a comprehensive, 14-week, blended learning approach. Our Field Management Training program graduated over 60 supervisors in 2023, of which more than two-thirds were ethnically or racially diverse, or female. Frontline Leadership Training.
XPO maintains a strong “ready now” pipeline of future leaders for our operations through a comprehensive, 14-week, blended learning approach. Our Field Management Training program graduated 68 supervisors in 2024, of which more than 40% were ethnically or racially diverse, or female. Frontline Leadership Training.
Information about our Executive Officers The following information relates to each of our executive officers: Name Age Position Brad Jacobs 67 Executive Chairman of the Board Mario Harik 43 Chief Executive Officer Kyle Wismans 40 Chief Financial Officer David Bates 58 Chief Operating Officer Wendy Cassity 48 Chief Legal Officer and Corporate Secretary Brad Jacobs has served as XPO’s executive chairman since November 2022, and served as the Company’s chairman and chief executive officer from September 2011 through October 2022.
Information about our Executive Officers The following information relates to each of our executive officers: Name Age Position Brad Jacobs 68 Executive Chairman of the Board Mario Harik 44 Chief Executive Officer Kyle Wismans 41 Chief Financial Officer David Bates 59 Chief Operating Officer Wendy Cassity 49 Chief Legal Officer and Corporate Secretary Brad Jacobs has served as XPO’s executive chairman since November 2022, and served as the Company’s chairman and chief executive officer from September 2011 through October 2022.
Employee Base Profile Based on December 31, 2023 data, XPO has locations in 17 countries, with approximately 23,300 employees in North America, 14,300 employees in Europe and 400 employees in Asia, supplemented by approximately 2,900 temporary workers. By geography, approximately 61% of our global employees are based in North America, 38% in Europe and 1% in Asia.
Employee Base Profile Based on December 31, 2024 data, XPO has locations in 17 countries, with approximately 23,100 employees in North America, 14,500 employees in Europe and 400 employees in Asia, supplemented by approximately 3,000 temporary workers. By geography, approximately 61% of our global employees are based in North America, 38% in Europe and 1% in Asia.
Transportation Fleet Our ongoing fleet initiatives companywide include modernizing our tractors and trailers; deploying cleaner fuels where practical, such as natural gas, biodiesel, biogas and electricity; expanding our use of data and analytics to improve the efficiency of routing, loading and handling freight; and exploring the commercial viability of alternative vehicles that have a lower environmental impact.
Transportation Fleet Our ongoing fleet initiatives companywide include modernizing our tractors and trailers; deploying cleaner fuels where practical, such as natural gas, biodiesel, biogas, hydrotreated vegetable oil and electricity; expanding our use of data and analytics to improve the efficiency of routing, loading and handling freight; and exploring the commercial viability of alternative fuel vehicles.
Electric vehicles show promise in commercial transport applications as an alternative to diesel, particularly in urban areas. Our fleet experts are working with manufacturers of larger electric trucks, and we have completed two pilot programs to advance our understanding of the commercial viability of these vehicles.
Electric vehicles show promise in commercial transport applications as an alternative to diesel, particularly in urban areas. Our fleet experts are working with manufacturers of larger electric trucks, and we have completed pilot programs to advance our understanding of the commercial viability of these vehicles. In the U.S., we purchased nine all-electric trucks for use in our operations in California.
Globally, the combined revenue from our top five customers in 2023 accounted for approximately 7% of revenue, with our largest customer accounting for less than 2% of revenue. In North American LTL, the combined revenue from our top five customers accounted for approximately 8% of segment revenue in 2023, with our largest customer accounting for less than 3% of revenue.
Globally, in 2024, our top five customers combined accounted for approximately 7% of revenue, with the largest customer accounting for less than 3% of revenue. In our North American LTL segment, in 2024, our top five customers combined accounted for approximately 10% of revenue, with the largest customer accounting for less than 4% of revenue.
By job description, approximately 65% of our employees work as drivers and dockworkers, 23% as operations and facility workers, and the remainder in support roles and other positions. In North America, approximately 85% of our employees have hourly roles and 15% have salaried positions.
By job description, approximately 64% of our employees work as drivers and dockworkers, 24% as operations and facility workers, and the remainder in support roles and other positions. In North America, approximately 86% of our employees have hourly roles and 14% have salaried positions.
North American LTL Segment LTL in North America is a bedrock industry providing a critical service to the economy, with favorable pricing dynamics and an established competitive landscape. XPO is one of the largest LTL networks in North America, with approximately 8% share of the U.S. market, estimated to be $59 billion in 2022.
North American LTL Segment LTL in North America is a bedrock industry providing a critical service to the economy, with secular growth drivers, a favorable pricing environment and an established competitive landscape. XPO is one of the largest LTL networks in North America, with approximately 9% share of the U.S. market, estimated to be $52 billion in 2023.
By gender, approximately 14% of our global employees are women — this increases to 37% when excluding drivers, dockworkers and technicians. In North America, 52% of our professional management positions are held by women, representing an increase of 2.9% from 2022.
By gender, approximately 14% of our global employees are women — this increases to 37% when excluding drivers, dockworkers and technicians. In North America, 50% of our professional management positions are held by women, representing a decrease of 2.0% from 2023.
Risk Management and Insurance We maintain insurance for commercial automobile and trucker’s 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.
Risk Management and Insurance We maintain insurance for commercial automobile and trucker’s 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. 9 Seasonality Our revenue and profitability in the first and fourth quarters of the calendar year are typically lower than in the second and third quarters.
For many of our customers, the transportation needs of their business account for a significant portion of their CO2 footprint. Our technology can coordinate the movement of customer goods in ways that are greener, safer, more efficient and more cost-effective.
For many of our customers, the transportation needs of their business account for a significant portion of their value chain emissions. Our technology can coordinate the movement of customer goods in ways that are more efficient.
In late 2021, we launched our LTL 2.0 growth plan in North America to focus on four pillars of value creation: provide best-in-class customer service, invest in adding capacity and enhancing our network for the long term, accelerate yield growth, and drive cost efficiencies.
Our comprehensive growth plan in North America focuses on four levers of value creation: provide best-in-class customer service; invest in adding capacity and enhancing our network for the long term; accelerate yield growth; and drive cost efficiencies.
We made considerable progress with these initiatives in 2022 and again in 2023, and we see significant potential for further improvements with all four pillars of our plan: • Provide best-in-class service . We are committed to building a premium service organization by aligning employee incentives and accountability with tangible quality-of-service results for our customers.
We have made considerable progress in each of these areas since launching our growth plan in the fourth quarter of 2021, and we see significant potential for further improvements: • Provide best-in-class service . We are committed to building a premium service organization by aligning employee incentives and accountability with tangible quality-of-service results for customers.
Launched in September 2022, XPO Accelerate prepares high-potential service center, sales and support staff leaders to be “ready now” successors for director-level roles. This program helps retain and promote promising leadership talent by building relevant strategic skills. XPO Field Management Training .
Launched in September 2022, XPO Accelerate provides high-potential leaders in service center, sales and support staff roles with the critical skills necessary to take on more senior leadership roles. This program helps retain and promote promising leadership talent by building relevant strategic skills. XPO Field Management Training .
Harik has led numerous technological developments for global transportation and logistics operations, built comprehensive technology organizations and consulted to Fortune 100 companies.
Harik has served as a director of QXO, Inc. since June 2024. Mr. Harik has led numerous technological developments for global transportation and logistics operations, built comprehensive technology organizations and consulted to Fortune 100 companies.
Jacobs led two other public companies: United Rentals, Inc., which he founded in 1997, and United Waste Systems, Inc., which he founded in 1989. He served as chairman of United Rentals from 1997 to 2007, and as chief executive officer from 1997 to 2003. He served as chairman and chief executive officer of United Waste Systems from 1989 to 1997.
He served as chairman of United Rentals from 1997 to 2007, and as chief executive officer from 1997 to 2003. He served as chairman and chief executive officer of United Waste Systems from 1989 to 1997.
Facilities Our expertise in the circular economy helps us to continually improve the eco-profile of our facilities. We have ongoing initiatives underway to install LED lighting in our buildings, reuse pallets, right-size packaging and incorporate other environmentally friendly practices in our operations. We also reduce waste by recycling or reusing materials where feasible.
We have ongoing initiatives underway to install LED lighting in our buildings, right-size packaging and incorporate other environmentally friendly practices in our operations. We also reduce waste by recycling or reusing materials where feasible, including recycling 86% of the materials in trailers at the end of their life.
Our learning and development platform, XPO University, delivers approximately 25,000 online and in-person learning and assessment programs in areas such as onboarding, management training and professional skills development. XPO University supports approximately 38,000 employees in North America and Europe, and tracks their progress. In 2023, more than a million training hours were completed by our employees worldwide.
Our learning and development platform, XPO University, delivers approximately 21,000 online and in-person learning and assessment programs to our employees in North America and Europe in areas such as onboarding, management training, technology, compliance and safety and professional skills development. In 2024, 420,000 training hours were completed by our employees worldwide.
Our service improvements and, to a lesser extent, the expansion of both our accessorial services and local customer base, accelerated yield growth throughout the year, driving full year growth of 4.9%, compared with 2022. • Drive cost efficiencies . We aim to improve cost efficiency by optimizing our purchased transportation, variable costs and overhead.
Our full-year yield growth of 7.8%, compared with 2023, was primarily driven by our service improvements and, to a lesser extent, by our expansion of accessorial services and revenue growth generated from local customers. 7 • Drive cost efficiencies . We aim to improve cost efficiency by optimizing our purchased transportation, variable costs and overhead.
In 2022, we announced a landmark achievement by a driver on our team — our first driver to reach four million accident-free miles, which is the highest driver safety record in XPO’s history. In addition to physical well-being, we consider emotional well-being to be an important part of workplace safety.
Since the inception of Road to Zero in 2022, we have had four drivers reach four million accident-free miles during their career, which is the highest driver safety record in XPO’s history. In addition to physical well-being, we consider emotional well-being to be an important part of workplace safety.
Ethnically or racially diverse employees earned 34% of managerial promotions in 2023, up significantly from 9% in 2022, and held 17% of executive leadership positions (vice president and above), 28% of professional management roles and 31% of operational management roles. XPO is committed to being transparent about the composition of our workforce.
Ethnically or racially diverse employees earned 35% of managerial promotions in 2024, up from 34% in 2023, and held 20% of executive leadership positions (vice president and above), 28% of professional management roles and 31% of operational management roles.
As part of Road to Zero, we track accident-free miles and recognize XPO drivers who have achieved million-mile safety milestones. As of December 31, 2023, more than 2,475 of our LTL drivers have achieved a safety designation of at least one million accident-free miles, with 194 of these drivers meeting this threshold in 2023.
As of December 31, 2024, more than 2,500 of our LTL drivers have achieved a safety designation of at least one million accident-free miles, with 246 of these drivers meeting this threshold in 2024.
Since implementing our LTL 2.0 growth plan in the fourth quarter of 2021, we have added 551 net new doors to our network through organic expansion. In December 2023, we completed the acquisition of 28 service centers previously operated by Yellow Corporation (the “Yellow Asset Acquisition”), representing approximately 2,900 doors.
Since implementing our growth plan in the fourth quarter of 2021, we have added more than 2,000 net new doors to our network — this includes the acquisition of 28 service centers previously operated by Yellow Corporation (the “Yellow Asset Acquisition”), completed in December 2023. As of December 31, 2024, we had opened 23 of these acquired locations.
This includes 20% of U.S. employees who self-identified as Black or African American, which is eight percentage points higher than the U.S. population, based on the most recent census data. Additionally, we continued to expand our pipeline of women and ethnically or racially diverse employees at the middle and senior management levels (manager or supervisor and above).
This includes 20% of U.S. employees who self-identified as Black or African American, which is seven percentage points higher than the U.S. population, based on the most recent census data.
Our customers span every major industry, giving us a presence in verticals that are bedrocks of the economy, such as industrial and manufacturing, retail and e-commerce, food and beverage, and consumer goods.
Customers and Markets We provide freight transportation services to approximately 55,000 customers ranging in size from small, entrepreneurial businesses to Fortune 500 companies. Our customers span every major industry, giving us a presence in verticals that are fundamental to the economy, such as industrial and manufacturing, retail and e-commerce, food and beverage, and consumer goods.
Mr. Jacobs led the spin-offs of GXO Logistics, Inc. and RXO, Inc. from XPO as separate public companies and has served as non-executive chairman of GXO and RXO from August 2021 and November 2022, respectively. Additionally, he is the managing member of Jacobs Private Equity, LLC. Prior to XPO, Mr.
Mr. Jacobs led the spin-offs of GXO and RXO from XPO as separate public companies and has served as non-executive chairman of GXO and RXO from August 2021 and November 2022, respectively. Also, since June 2024, Mr. Jacobs has served as chairman and chief executive officer of QXO, Inc., a publicly traded company.
Our in-house trailer manufacturing and driver schools are examples of self-reliant capabilities that are competitively advantageous to us, particularly when industry conditions make it difficult to source equipment or drivers. Specific to our technology, we believe that we have a large opportunity to drive further growth and profitability in our LTL network through innovation.
Additionally, we have continued to advance a host of initiatives that are specific to XPO and largely independent of the macroeconomic environment. Our in-house trailer manufacturing facility and truck driver schools are self-reliant capabilities that are competitively advantageous for us, particularly when industry conditions make it difficult to source equipment or drivers.
Our revenue is derived primarily from the United States and Europe — in 2023, we generated approximately 59% of our revenue in the U.S., 17% in France, 12% in the U.K. and 11% in the rest of Europe. The diversification of our customer base minimizes concentration risk.
In 2024, we generated approximately 60% of our revenue in North America, almost entirely in the U.S., 16% in France, 13% in the U.K. and 11% in the rest of Europe. The diversification of our customer base minimizes concentration risk.
Throughout 2023, we continued to make substantial investments in direct employee communications, conducting both quarterly and annual engagement surveys and holding approximately 8,000 roundtable discussions and safety and engagement committee meetings across our North American LTL network.
Throughout 2024, we continued to make substantial investments in direct employee communications, conducting quarterly engagement surveys and holding over 7,000 roundtable discussions and safety and engagement committee meetings across our North American LTL network. The employee feedback we receive is often instrumental in driving new initiatives that strengthen our culture of respect, appreciation and opportunity.
XPO was named a 2023 “Top Company for Women to Work for in Transportation” by the Women in Trucking Association, a 2024 “Top 25 Veteran Employer” by military.com, and one of “America’s Best Large Employers” by Forbes for the third time. Additionally, we foster career development at all levels to recruit and retain high-caliber employees.
XPO was named a 2024 “Top Company for Women to Work for in Transportation – Elite 30” by the Women in Trucking Association, a 2024 “4 Star Employer” by VETS Index, and a “2025 Military Friendly Employer – Gold Ranking” by Viqtory. Additionally, we foster career development at all levels to recruit and retain high-caliber employees.
In 2023, we improved our damage claims ratio to 0.3% in the fourth quarter, from 1.2% at the launch of LTL 2.0, and we improved our full year on-time performance by 8% year-over-year.
In the fourth quarter of 2024, we delivered a damage claims ratio of 0.2%, representing a major improvement from 1.2% in the fourth quarter of 2021, and we improved our 2024 on-time performance from 2023.
We are continuing to make steady progress on being an employer of choice for employees of all races and backgrounds. In 2023, 56% of our newly hired U.S. employees self-identified as ethnically or racially diverse, representing a 1.4% increase from 2022, and approximately 43% of our total U.S. employee population was ethnically or racially diverse.
In 2024, 52% of our newly hired U.S. employees self-identified as ethnically or racially diverse, representing a 4% decrease from 2023, and approximately 43% of our total U.S. employee population was ethnically or racially diverse.
In the fourth quarter of 2023, we lowered our cost for third-party purchased 7 transportation by reducing the number of outsourced linehaul miles as a percentage of total linehaul miles to 19.6%, compared with 22.7% at the start of LTL 2.0, and by negotiating lower contract rates for the miles we outsourced.
These cost savings were driven by reducing the number of outsourced linehaul miles as a percentage of total linehaul miles to 14.7% for the full year 2024, compared with 23.6% in 2021 at the start of our growth plan, and by negotiating lower contract rates for the miles we outsourced.
We may become subject to new or more restrictive regulations relating to emissions, drivers’ hours-of-service, onboard reporting of operations, cargo security and other matters affecting safety or operating methods.
Environmental Protection Agency (“EPA”), the U.S. Food and Drug Administration (“FDA”), the U.S. Department of Homeland Security (“DHS”) and the California Air Resources Board (“CARB”), also regulate our equipment and operations. We may become subject to new or more restrictive regulations relating to emissions, drivers’ hours-of-service, onboard reporting of operations, cargo security and other regulations affecting safety or operating methods.
As of December 31, 2023, none of our employees were represented by a union in the U.S. and 85% of our employees in Europe were covered by a collective bargaining or similar agreement, consistent with our December 31, 2022 position.
We have publicly disclosed our 2024 EEO-1 report on our website, and expect to publish our 2025 EEO-1 report in the second quarter of this year. 10 As of December 31, 2024, none of our employees were represented by a union in North America and 85% of our employees in Europe were covered by a collective bargaining or similar agreement, consistent with our December 31, 2023 position.
XPO Smart® is our proprietary suite of intelligent tools and analytics that self-adjusts site by site to drive productivity across our LTL service center operations. Our software incorporates dynamic data science, predictive analytics and machine learning to aid our managers in workflow decision-making. We use XPO Smart® to improve our labor in a safe, disciplined and cost-effective manner.
Our software incorporates dynamic data science, predictive analytics and machine learning to aid our managers in workflow decision-making. We use XPO Smart® to improve our labor in a safe, disciplined and cost-effective manner. The “XPO” trademark, service mark, and trade name are essential to our business and critical to our success.
Our industry is evolving, and customers want to de-risk their supply chains by forming relationships with reliable service providers that have invested in innovation. We have built a highly scalable ecosystem on the cloud that deploys our software consistently across our operating footprint.
Proprietary Technology and Intellectual Property One of the ways in which we deliver superior service to our customers is by empowering our employees with technology. Our industry is evolving, and customers want to de-risk their supply chains by forming relationships with reliable service providers that have invested in innovation.
On December 20, 2023, we acquired 28 LTL service centers in the U.S. previously operated by Yellow Corporation. Under the transaction, we purchased 26 of the service centers and assumed existing leases for the other two locations. This is a strategic acquisition of assets that aligns with our commitment to invest in expanding our LTL network capacity.
In December 2023, we completed the Yellow Asset Acquisition, in line with our commitment to expand capacity in key freight markets and operate the network more efficiently. In connection with this transaction, we purchased 26 LTL service centers previously operated by Yellow Corporation and assumed existing leases for two additional locations.
Our Board of Directors has previously authorized the divestiture of our European business. There can be no assurance that the divestiture will occur, or of the terms or timing of a transaction. Proprietary Technology and Intellectual Property One of the ways in which we deliver superior service to our customers is by empowering our employees with technology.
The previously announced authorization by our Board of Directors to divest our European business remains in effect. There can be no assurance that the divestiture will occur, or of the terms or timing of a transaction.
We developed our Road to Zero program to decrease occupational injuries and illnesses through education, mentoring, communication and on-the-job training that instills awareness and reduces risk. These same priorities are emphasized when we train new commercial driver candidates at our inhouse, LTL driver training schools nationwide, where veteran XPO driver-instructors reinforce our safety culture.
These same priorities are emphasized when we train new commercial driver candidates at our inhouse, LTL driver training schools nationwide, where veteran XPO driver-instructors reinforce our safety culture. As part of Road to Zero, we track accident-free miles and recognize XPO drivers who have achieved million-mile safety milestones.
In our North American LTL business, the caliber of our technology is mission-critical to our success; it optimizes linehaul, pickup-and-delivery and pricing — the main components of the service we provide. An LTL 5 network of our scale has hundreds of thousands of activities underway at any given time, all managed on our technology.
We have built a highly scalable ecosystem on the cloud that deploys our software consistently across our operating footprint. In our North American LTL business, the caliber of our technology is mission-critical to our success; it optimizes pricing, linehaul, pickup-and-delivery and dock operations — the main components of the service we provide.
We support our team with ongoing investments in employee training programs, state-of-the-art equipment and technological enhancements to elevate service quality and productivity. • Invest in network capacity for the long-term . We are expanding our linehaul fleet with fuel-efficient tractors and in-house trailer manufacturing and adding new doors in capacity-constrained markets.
Our ongoing investments in employee training programs, state-of-the-art equipment and technological enhancements support our team in continuously improving service quality and productivity. • Invest in network capacity and enhancements for the long-term . The targeted investments we make enable us to onboard more freight and position our network for the future, while further enhancing service and fluidity.
Additionally, we believe that many of our customers historically ship less freight in the first quarter, due in part to lower post-holiday demand for their products.
The productivity of our transportation fleet historically decreases during the winter season, as it does for the industry in general, because inclement weather impedes operations. Additionally, we believe that many of our customers experience lower post-holiday demand for their products, contributing to the historical decrease in industry freight shipments in the first quarter.
Our proprietary bypass models make recommendations to enhance trailer utilization, assimilating massive amounts of data and taking volume, density, and freight dimensions into account. We use our real-time visualization tools to reduce costs with pickups and deliveries and developed a robust pricing platform for contractual account management and automated, dynamic pricing for local accounts.
We use our real-time visualization tools to reduce costs with pickups and deliveries and developed a robust pricing platform for contractual account management and automated, dynamic pricing for local accounts. XPO Smart® is our proprietary suite of intelligent tools and analytics that self-adjusts site by site to drive productivity across our LTL service center operations.
Some of our key priorities in this regard are to optimize the utilization of truck and trailer capacity, invest in modern, fuel-efficient fleet, streamline local and linehaul freight flows and train our drivers in eco-friendly techniques.
Some of our key priorities in this regard are optimizing the utilization of truck and trailer capacity; streamlining local and linehaul freight flows; and, as described further below, investing in a modern, fuel-efficient fleet. In the course of our business, customers, shareholders and other stakeholders ask us to disclose our emissions data and sustainability strategies and outcomes.
In 2024, we intend to purchase approximately 2,000 new LTL tractors for our North American LTL network. In Europe, our diesel road fleet is over 97% compliant with Euro 6 standards, and we have a natural gas-powered fleet of more than 230 trucks serving customers in France, the U.K., Spain and Portugal.
We continue to calibrate our vehicles to improve fuel efficiency by implementing improvements such as equipping our trucks with aero packages that reduce drag and improve miles per gallon, and utilizing SmartWay-approved low-resistance tires. 6 In Europe, our diesel road fleet is over 98% compliant with Euro 6 standards, and we have a natural gas-powered fleet of more than 180 trucks serving customers in France, the U.K., Spain and Portugal.
The employee feedback we receive is often instrumental in driving new initiatives that strengthen our culture of respect, appreciation and opportunity. 10 Health and Safety The physical and emotional safety of our employees is paramount, and we have numerous protocols in place to ensure a safe work environment.
Health and Safety The physical and emotional safety of our employees is paramount, and we have numerous protocols in place to ensure a safe work environment. We developed our Road to Zero program to decrease occupational injuries and illnesses through education, mentoring, communication and on-the-job training that instills awareness and reduces risk.
We believe that we have positioned XPO to benefit from secular trends in the retail and industrial economies, such as the shipper trend toward outsourcing freight transportation in all parts of the cycle, and the trend in some sectors toward more frequent shipments of freight volumes that are smaller than a full truckload, and that our ongoing expansion of capacity will facilitate the onboarding of significantly more freight when market conditions improve.
Furthermore, we believe that we are in a strong position to benefit from secular industrial and retail trends in all parts of the cycle, such as the trend toward shippers increasingly outsourcing freight transportation, the shift toward more frequent LTL shipments versus full truckload freight in some sectors, and an increase in the nearshoring of manufacturing activity to North America. 8 Regulation Our operations are regulated by various governmental agencies in the U.S. and in other countries where we conduct business.
In the U.S., we have placed an order for six all-electric trucks to deploy in California, and we announced an agreement to purchase more than 100 all-electric trucks in France supported by the ongoing installation of more than 80 electric charging stations at our facilities.
In Europe we have more than 75 all-electric trucks currently deployed and have committed to order more than 275 additional all-electric trucks in 2025 supported by the existing and ongoing installation of more than 350 electric charging stations at our facilities. Facilities Our expertise in the circular economy helps us to continually improve the efficiency of our facilities.
XPO’s Freight Leadership Certification is part of a robust onboarding process for newly hired frontline leaders. The program equips employees with fundamental skills to succeed in our operations, and offers weekly live, instructor-led training sessions to reinforce those skills. Freight operations supervisors who complete all sessions and achieve certification have an 83% retention rate. LTL Driver Training Schools.
XPO’s Freight Leadership Certification and Freight Operations Onboarding webinars support newly hired frontline leaders as they transition into their roles. The programs equip employees with fundamental skills to succeed in freight operations, including online learning and weekly instructor-led webinars. LTL Driver Training Schools.
Since the launch of LTL 2.0, we have added more than 11,000 trailers — including over 6,400 in 2023 — as well as more than 2,400 tractors and 551 net new doors through organic expansion. Our average tractor age at year-end 2023 was 5.0 years, compared with 5.9 years at year-end 2022.
In 2024, approximately two-thirds of our capital expenditures were deployed to increase the capacity of our fleet — we added more than 4,400 trailers and 2,300 tractors, including sleeper cab trucks for linehaul insourcing. Our average tractor age at year-end 2024 was 4.1 years, compared with 5.9 years at year-end 2022.
Our ability to continually invest in the business is a compelling competitive strength of XPO, because we can increasingly provide our customers with the reliable capacity, technological solutions and problem-solving expertise they value. Regulation Our operations are regulated and licensed by various governmental agencies in the U.S. and in other countries where we conduct business.
Due to the competitive nature of our marketplaces, we place equal importance on strengthening existing customer relationships and forging new relationships. Our ability to continually invest in the business is a compelling competitive strength of XPO — it ensures that we deliver what our customers value: reliable capacity, technological solutions and problem-solving expertise.
In 2023, we moved approximately 18 billion pounds of freight 803 million miles, including moving linehaul freight an average of 2.6 million miles a day. With intelligent route-building, we can reduce empty miles in our linehaul network, improve load factor and mitigate cargo damage.
An LTL network of our scale has hundreds of thousands of activities underway at any given time, all 5 managed on our technology. In 2024, we moved approximately 18 billion pounds of freight 815 million miles, including moving linehaul freight an average of 2.6 million miles a day.
COVID-19 created supply chain challenges that temporarily disrupted the retirement of older LTL tractors industrywide. Now, new equipment is more readily available, and we will continue to invest in tractors with 15-liter engines and automatic transmissions that improve reliability and fuel economy, while lowering emissions and extending engine life.
We continue to invest in tractors with 15-liter engines and automatic transmissions that improve reliability and fuel economy, while lowering emissions and extending engine life. In 2023, we bolstered our North American fleet with the addition of over 1,400 new tractors, reducing our average tractor age to 5.0 years at year-end from 5.9 years at the end of 2022.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFurther, the delay or failure to implement information system upgrades and new systems effectively could disrupt our business, distract management’s focus and attention from our business operations, and increase our implementation and operating costs, any of which could negatively impact our operations and operating results. 21 Also, due to recent advances in technology and well-known efforts on the part of computer hackers and cyber-terrorists to breach data security of companies, we face risks associated with potential failure to adequately protect critical corporate, customer and employee data, which, if released, could adversely impact our customer and employee relationships, our reputation, and even violate privacy laws.
Biggest changeAlso, due to recent advances in technology and well-known efforts on the part of computer hackers and cyber-terrorists to breach the data security of companies, we face risks associated with the potential failure to adequately protect critical corporate, customer and employee data, which, if released, could adversely impact our customer and employee relationships, our reputation, and even violate privacy laws.
We may also incur ongoing costs and 17 retain certain liabilities that were previously allocated to entities that are sold or otherwise divested. Those costs may exceed our estimates or could diminish the benefits we expect to realize. Further, a sale or other divestiture of one or more of our business units may subject us to litigation.
We may also incur ongoing costs and retain certain liabilities that were previously allocated to entities that are sold or otherwise divested. Those costs may exceed our estimates or could diminish the benefits we expect to realize. 17 Further, a sale or other divestiture of one or more of our business units may subject us to litigation.
Claims against us may exceed the amount of insurance coverage that we have or may not be covered by insurance at all. Businesses that we acquire also increase our exposure to litigation.
Claims against us may exceed the amount of insurance coverage that we have or may not be covered by insurance at all. Businesses that we acquire may also increase our exposure to litigation.
In addition, we are subject to regulations and requirements promulgated by the DOT, EPA, FMCSA, DHS, CBP, Canada Border Services Agency and various other international, domestic, state and local agencies and port authorities. Certain of our businesses engage in the transportation of hazardous materials, the movement, handling and accidental discharge of which are highly regulated.
In addition, we are subject to regulations and requirements promulgated by the DOT, EPA, 25 FMCSA, DHS, CBP, Canada Border Services Agency and various other international, domestic, state and local agencies and port authorities. Certain of our businesses engage in the transportation of hazardous materials, the movement, handling and accidental discharge of which are highly regulated.
Refer to Item 7A, “Quantitative and Qualitative Disclosures about Market Risk” for 22 the impact on interest expense of a hypothetical 1% increase in the interest rate. Interest rates are highly sensitive to many factors, including governmental monetary policies, domestic and international economic and political conditions and other factors beyond our control.
Refer to Item 7A, “Quantitative and Qualitative Disclosures about Market Risk” for the impact on interest expense of a hypothetical 1% increase in the interest rate. Interest rates are highly sensitive to many factors, including governmental monetary policies, domestic and international economic and political conditions and other factors beyond our control.
The nature of our business exposes us to the potential for various types of claims and litigation, including matters related to commercial disputes, labor and employment, workers’ compensation, personal injury, cargo and other property damage, environmental liability, insurance coverage, securities and other matters, including with respect to claims asserted under various other theories of agency or employer liability.
The nature of our business exposes us to the potential for various types of claims and litigation, including matters related to commercial disputes, labor and employment, workers’ compensation, personal injury, cargo and other property damage, product liability, environmental liability, insurance coverage, securities and other matters, including with respect to claims asserted under various other theories of agency or employer liability.
Thus, our failure to obtain, maintain or enforce our intellectual property rights could have a material adverse effect on our business, financial condition and results of operations. 18 We rely on a combination of intellectual property rights, including patents, copyrights, trademarks, domain names, trade secrets, intellectual property licenses and other contractual rights, to protect our intellectual property and technology.
Thus, our failure to obtain, maintain or enforce our intellectual property rights could have a material adverse effect on our business, financial condition and results of operations. We rely on a combination of intellectual property rights, including patents, copyrights, trademarks, domain names, trade secrets, intellectual property licenses and other contractual rights, to protect our intellectual property and technology.
A significant increase in interest rates could have an adverse effect on our financial position and results of operations. Risks related to Third-Party Relationships We depend on third parties in the operation of our business. Our European business heavily relies on subcontracting and we use a large number of temporary employees in these operations.
A significant increase in interest rates could have an adverse effect on our financial position and results of operations. 22 Risks related to Third-Party Relationships We depend on third parties in the operation of our business. Our European business heavily relies on subcontracting and we use a large number of temporary employees in these operations.
Any of the aforementioned factors could lead to 26 a significant increase in the expense of these plans and a deterioration in the solvency of these plans, which could significantly increase our contribution requirements. As a result, we are unable to predict the effect on our financial statements associated with our defined benefit pension plans and our postretirement medical plan.
Any of the aforementioned factors could lead to a significant increase in the expense of these plans and a deterioration in the solvency of these plans, which could significantly increase our contribution requirements. As a result, we are unable to predict the effect on our financial statements associated with our defined benefit pension plans and our postretirement medical plan.
We also may not discover the occurrence of any of the events described above for a significant period of time after the event occurs. These risks, as well as the number and frequency of cybersecurity events globally, may also be heightened during times of geopolitical tension or instability between countries.
We also may not discover the occurrence of any of the events described above for a significant period of time after the event occurs. These risks, as well as the number and frequency of 20 cybersecurity events globally, may also be heightened during times of geopolitical tension or instability between countries.
Material increases in the frequency or severity of vehicular accidents, 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 with third-party transportation providers, could materially and adversely affect our operating results.
Material increases in the frequency or severity of vehicular accidents, liability claims or workers’ compensation claims, or the unfavorable resolution of claims, or our failure to recover, in full or in part, under subrogation or indemnity provisions with third-party transportation providers, could materially and adversely affect our operating results.
Our technology development process may be subject to cost overruns or delays in obtaining the expected results, which may result in disruptions to our operations. 20 A significant breach of our information security systems, networks or processes could materially adversely affect our business.
Our technology development process may be subject to cost overruns or delays in obtaining the expected results, which may result in disruptions to our operations. A significant breach of our information security systems, networks or processes could materially adversely affect our business.
Our failure to maintain the required licenses, or to comply with applicable regulations, could have a material adverse impact on our business and results of operations. See the “Regulation” section under Item 1, “Business” for more information.
Our failure to obtain or maintain the required licenses, or to comply with applicable regulations, could have a material adverse impact on our business and results of operations. See the “Regulation” section under Item 1, “Business” for more information.
In 2021, the EPA announced a series of regulations to be implemented to decrease emissions from new heavy-duty vehicles and, in 2022, finalized new stringent emission standards to reduce nitrogen oxides and establish new standards for greenhouse gas emissions from heavy-duty engines.
In 2021, the EPA announced a series of regulations to be implemented to decrease emissions from new heavy-duty vehicles and, in 2022 and 2024, finalized new stringent emission standards to reduce nitrogen oxides and establish new standards for greenhouse gas emissions from heavy-duty engines.
We have undertaken a company-specific action plan to enhance network operating efficiencies and drive growth in our North American LTL business, including by, among other actions, growing yield by providing best-in-class customer service and enhancing business mix, expanding our tractor fleet, increasing production capacity of our trailer manufacturing facility, investing in the door count in our network of service center facilities, and driving cost efficiencies through, among other actions, insourcing linehaul from third-party transportation providers and improving productivity.
We have undertaken a company-specific action plan to enhance network operating efficiencies and drive growth in our North American LTL business, including by, among other actions, growing yield by providing best-in-class customer service and enhancing business mix, expanding our tractor fleet, managing the production capacity of our trailer manufacturing facility, investing in the door count in our network of service center facilities, and driving cost efficiencies through, among other actions, insourcing linehaul from third-party transportation providers and improving productivity.
Further debt financing may involve restrictive covenants and could reduce our profitability. We currently have investment grade credit ratings for our secured debt, however, we may not be able to maintain these ratings or obtain investment grade credit ratings for our unsecured debt or corporate ratings.
Further debt financing may involve restrictive covenants and could reduce our profitability. We currently have investment grade credit ratings for our secured debt, however, we may not be able to maintain these ratings or obtain investment grade credit ratings for our unsecured debt.
This inherent difficulty, along with legal expenses, incurred but not reported claims, and other uncertainties can cause unfavorable differences between actual self-insurance costs and our reserve estimates.
This 24 inherent difficulty, along with legal expenses, incurred but not reported claims, and other uncertainties can cause unfavorable differences between actual self-insurance costs and our reserve estimates.
At December 31, 2023, we had $1.5 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 assess potential impairment of our goodwill annually, or more frequently if an event or circumstance indicates an impairment loss may have been incurred.
At December 31, 2024, we had approximately $1.5 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 assess potential impairment of our goodwill annually, or more frequently if an event or circumstance indicates an impairment loss may have been incurred.
Any of these factors, individually or combined with one or more factors, or other unforeseen factors or other impacts of climate change, could affect the Company and have an effect on our business, operations, or financial condition. Our reputation could be harmed if we fail to satisfy evolving stakeholder expectations regarding environmental, social and governance matters.
Any of these factors, individually or combined with one or more factors, or other unforeseen factors or other impacts of climate change, could affect the Company and have an adverse effect on our business, operations, or financial condition. 19 Our reputation could be harmed if we fail to satisfy evolving stakeholder expectations regarding environmental and social matters.
Additionally, a shortage of drivers could result in the underutilization of our truck fleet, lost revenue, increased costs for purchased transportation or increased costs for driver recruitment. If we are unable to retain our key employees, our business, results of operations and financial position could be adversely affected.
Additionally, a shortage of drivers could result in the underutilization of our truck fleet, lost revenue, increased costs for purchased transportation or increased costs for driver recruitment. If we are unable to attract and retain management talent and key employees, our business, results of operations and financial position could be adversely affected.
In addition, in recent years, investor advocacy groups and certain institutional investors have placed increasing importance on ESG matters. If, as a result of their assessment of our ESG practices, certain investors are unsatisfied with our actions, they may reconsider their investment in our company.
In addition, in recent years, investor advocacy groups and certain institutional investors have placed increasing importance on environmental and social matters. If, as a result of their assessment of our environmental and social practices, certain investors are unsatisfied with our actions, they may reconsider their investment in our company.
We are implementing various cost and revenue initiatives to further increase our profitability, including advanced pricing analytics and revenue management tools, cross-selling to strategic accounts, LTL process improvements, workforce productivity, European margin expansion, global procurement and further back-office optimization.
We are implementing various cost and revenue initiatives to further increase our profitability, including advanced pricing analytics and revenue management tools, LTL process improvements, workforce productivity, European margin expansion, global procurement and further back-office optimization.
Our operating results could be adversely affected if any of the following were to occur: (i) the number or the severity of claims increases; (ii) we are required to accrue or pay additional amounts because claims prove to be more severe than our original assessment; or (iii) claims exceed our coverage amounts.
Our operating results could be adversely affected if any of the following were to occur: (i) the number or the severity of claims increases; (ii) we are required to accrue or pay additional amounts because claims as they develop prove to be more severe than our initial assessment; or (iii) claims exceed our coverage.
Our LTL services in North America and Europe and our full truckload services in Europe are conducted primarily with employee drivers. Our industry is currently experiencing and may, in the future, experience intense competition for qualified drivers in the transportation industry due to a shortage of drivers.
Our LTL services in North America and Europe and our full truckload services in Europe are conducted primarily with employee drivers. Our industry may experience intense competition for qualified drivers in the transportation industry due to a shortage of drivers.
If the current industry-wide shortage of qualified drivers continues, our global LTL operations and our European truckload operation could experience difficulty in attracting and retaining enough qualified drivers to fully satisfy customer demand.
If an industry-wide shortage of qualified drivers occurs, our global LTL operations and our European truckload operation could experience difficulty in attracting and retaining enough qualified drivers to fully satisfy customer demand.
In particular, it is difficult to predict which, 27 and in what form, FMCSA regulations may be modified or enforced, and what impact these regulations may have on motor carrier operations.
In particular, it is difficult to predict which, and in what form, EPA, CARB and FMCSA regulations may be modified or enforced, and what impact these regulations may have on motor carrier and less-than-truckload operations.
Our business in the past has been, and in the future could be, adversely affected by strikes and labor negotiations at seaports, labor disputes between railroads and their union employees, or by a work stoppage at one or more railroads or local trucking companies servicing rail or port terminals.
Our business may be materially adversely affected by labor disputes. Our business could be adversely affected by strikes and labor negotiations at seaports, labor disputes between railroads and their union employees, or by a work stoppage at one or more railroads or local trucking companies servicing rail or port terminals.
Furthermore, political conditions may increase the level of intensity of regulations that impact our business, may require changes to our operating practices, may influence demand for our services, or may require us to incur significant additional costs, any of which could negatively impact our business.
Furthermore, political conditions at the federal, state, or local levels may alter the regulations that impact our business, may require changes to our operating practices, may influence demand for our services, or may require us to incur significant additional costs, any of which could negatively impact our business.
Strikes and work stoppages also could occur at our own 23 facilities. Port shutdowns and similar disruptions to major points in national or international transportation networks, most of which are beyond our control, could result in terminal embargoes, disrupt equipment and freight flows, depress volumes and revenues, increase costs and have other negative effects on our operations and financial results.
Port shutdowns and similar disruptions to major points in national or international transportation networks, most of which are beyond our control, could result in terminal embargoes, disrupt equipment and freight flows, depress volumes and revenues, increase costs and have other negative effects on our operations and financial results. 23 Labor disputes involving our customers could affect our operations.
Whether internally developed or purchased, it is possible that users of these technologies could be claimed to infringe upon or violate the intellectual property rights of third parties.
We use both internally developed and purchased technologies in conducting our business. Whether internally developed or purchased, it is possible that users of these technologies could be claimed to infringe upon or violate the intellectual property rights of third parties.
If we fail to manage this transition successfully, we could experience significant delays or difficulty in the achievement of our strategic objectives and our business, financial condition and results of operations could be materially and adversely harmed.
If we fail to attract and retain management talent and key employees or fail to manage integration of new management talent or key employees successfully, we could experience significant delays or difficulty in the achievement of our strategic objectives and our business, financial condition and results of operations could be materially and adversely harmed.
Companies across all industries are facing scrutiny from stakeholders related to ESG matters, including practices and disclosures related to environmental stewardship; social responsibility; diversity, equity and inclusion; and workplace rights. If we are unable to meet stakeholder expectations and industry standards, or if we are perceived to have not responded appropriately, our reputation could be negatively impacted.
Companies across all industries have faced scrutiny from stakeholders related to environmental and social matters, including practices and disclosures related to carbon emissions and diversity, equity and inclusion. If we are unable to meet stakeholder expectations, or if we are perceived to have not responded appropriately, our reputation could be negatively impacted or we could be the target of litigation.
We are exposed to currency exchange rate fluctuations because a significant proportion of our assets, liabilities and earnings are denominated in foreign currencies. We present our financial statements in U.S. dollars, but we have a significant proportion of our net assets and income in non-U.S. dollar currencies, primarily the euro and British pound sterling.
We present our financial statements in U.S. dollars, but we have a significant proportion of our net assets and income in non-U.S. dollar currencies, primarily the euro and British pound sterling.
In addition, significant increases in insurance costs or the inability to purchase insurance as a result of these claims could reduce our profitability. Under some agreements, we maintain the inventory of our customers, some of which may be significant in value. Our failure to properly handle and safeguard such inventory exposes us to potential claims and expenses.
In addition, significant increases in insurance costs or the inability to purchase insurance as a result of these claims and industry-wide factors affecting insurance availability and cost could reduce our profitability. Under some agreements, we maintain the inventory of our customers, some of which may be significant in value.
If union efforts are successful, these efforts may impact costs and efficiencies at the specific locations where representation is elected and have an adverse effect on our results of operations, cash flows and business.
We cannot predict with certainty whether further organizing efforts may result in the unionization of any additional locations in the U.S. If union efforts are successful, these efforts may impact costs and efficiencies at the specific locations where representation is elected and have an adverse effect on our results of operations, cash flows and business.
We may face difficulty in attracting, retaining and compensating key talent for a number of reasons, including competitive market conditions and the need to align the vision of a new executive team with our Board of Directors’ vision for our company. Replacing departing executives or directors can involve organizational disruption and uncertainty.
We may face difficulty in attracting, retaining and compensating key talent for a number of reasons, including competitive market conditions. Replacing departing executives, directors or other key personnel can involve organizational disruption and uncertainty.
Our failure to comply with anti-corruption laws and regulations could result in monetary fines and penalties, criminal sanctions against us, our officers, or our employees, restrictions on the conduct of our business, and reputational harm.
Our failure to comply with anti-corruption laws and regulations could result in monetary fines and penalties, criminal sanctions against us, our officers, or our employees, restrictions on the conduct of our business, and reputational harm. 26 We may be unable to achieve some or all of the benefits that we expect to achieve from the spin-offs of GXO or RXO.
Labor disputes involving our customers could affect our operations. If our customers experience plant slowdowns or closures because they are unable to negotiate labor contracts, our revenue and profitability could be negatively impacted. Our European business activities require a large amount of labor, which represents one of our most significant costs.
If our customers experience plant slowdowns or closures because they are unable to negotiate labor contracts, our revenue and profitability could be negatively impacted. Our European business activities require a large amount of labor, which represents one of our most significant costs. It is essential that we maintain good relations with employees, trade unions and other staff representative institutions.
Our estimated liability for self-retained insurance claims reflects certain actuarial assumptions and judgments, which are subject to a degree of variability. We reserve for anticipated losses and expenses and periodically evaluate and adjust our claims reserves to reflect our experience. Estimating the number and severity of claims, as well as related judgment or settlement amounts, is inherently difficult.
We reserve for anticipated losses and expenses and periodically evaluate and adjust our claims reserves to reflect our experience. Estimating the number and severity of claims, as well as related potential judgment or settlement amounts, is inherently difficult.
These efforts could lead to additional costs on the Company now or in the future, including increased fuel and other capital or operational costs, compliance costs, or additional legal requirements on the Company.
In the U.S., various approaches are being proposed or adopted at the federal, state, and local government levels. These efforts could lead to additional compliance costs or operational disruption now or in the future, including increased fuel and other capital or operational costs or additional legal requirements on the Company.
It is essential that we maintain good relations with employees, trade unions and other staff representative institutions. A deteriorating economic environment may result in tensions in industrial relations, which may lead to industrial action within our European operations; this could have a direct impact on our business operations.
A deteriorating economic environment may result in tensions in industrial relations, which may lead to industrial action within our European operations; this could have a direct impact on our business operations.
Recently, regulatory and enforcement focus on data protection has heightened in the United States and abroad, particularly in the EU. Failure to comply with applicable U.S. or foreign data protection regulations or other data protection standards may expose us to litigation, fines, sanctions or other penalties, which could harm our business, reputation, results of operations and financial condition.
Failure to comply with applicable U.S. or foreign data protection regulations or other data protection standards may expose us to litigation, fines, sanctions or other penalties, which could harm our business, reputation, results of operations and financial condition. 21 Risks related to Our Credit and Liquidity Our indebtedness could adversely affect our financial condition.
In addition to the potential for additional GHG regulation or incentives, enhanced corporate, public, and stakeholder awareness of climate change could affect the Company's reputation or customer demand such as customers requesting more fuel-efficient transportation or increased transparency to carbon emissions in their supply chains. Climate change concerns and GHG regulatory efforts could also affect the Company's customers themselves.
In addition to the potential for additional GHG regulation or incentives, enhanced corporate, public, and stakeholder attention to fuel-efficiency and emissions transparency could impact the Company’s reputation or require the Company to provide additional GHG related disclosures. Climate change concerns and GHG regulatory efforts could also affect the Company's customers themselves.
Issues related to the intellectual property rights on which our business depends, whether related to our failure to enforce our own rights or infringement claims brought by others, could have a material adverse effect on our business, financial condition and results of operations. We use both internally developed and purchased technologies in conducting our business.
For a discussion of our goodwill impairment testing, see “Critical Accounting Policies and Estimates - Evaluation of Goodwill” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Issues related to the intellectual property rights on which our business depends, whether related to our failure to enforce our own rights or infringement claims brought by others, could have a material adverse effect on our business, financial condition and results of operations.
In the event the IRS were to prevail with such challenge, XPO and XPO stockholders could be subject to significant U.S. federal income tax liability. 25 Risks related to Litigation and Regulations We are involved in multiple lawsuits and are subject to various claims that could result in significant expenditures and impact our operations.
Risks related to Litigation and Regulations We are involved in multiple lawsuits and are subject to various claims that could result in significant expenditures and impact our operations.
Qualified individuals are in high demand, and we may incur significant costs to attract them, particularly at the executive level.
Our success is dependent upon our ability to attract and retain qualified management in a highly competitive environment and the experience and leadership of our key employees. Qualified individuals are in high demand, and we may incur significant costs to attract them, particularly at the executive level.
The occurrence or consequences of any of these factors may restrict our ability to operate in the affected region or decrease the profitability of our operations in that region. In addition, as we expand our business in foreign countries, we will be exposed to increased risk of loss from foreign currency fluctuations and exchange controls.
The occurrence or consequences of any of these factors may restrict our ability to operate in the affected region or decrease the profitability of our operations in that region.
At least some of our operations are constantly at risk of extreme adverse weather conditions. 19 Any unusual or prolonged adverse weather patterns in our areas of operations or markets, whether due to climate change or otherwise, can temporarily impact freight volumes and increase our costs.
Any unusual or prolonged adverse weather patterns in our areas of operations or markets, whether due to climate change or otherwise, can temporarily impact freight volumes and increase our costs. Also, concerns relating to climate change have led to a range of local, state, federal, and international regulatory and policy efforts to seek to address greenhouse gas (“GHG”) emissions.
An increase in the number or severity of self-insured claims or an increase in insurance premiums could have an adverse effect on us. We use a combination of self-insurance programs and purchased insurance to provide for the costs of employee medical, vehicular collision and accident, cargo loss and damage, property damage, and workers’ compensation claims.
We use a combination of self-insurance programs and purchased insurance to provide for the costs of employee medical, vehicular collision and accident, cargo loss and damage, property damage, and workers’ compensation claims. Our estimated liability for self-retained insurance claims reflects certain actuarial assumptions and judgments, which are subject to a degree of variability and uncertainty.
As of December 31, 2023, our employees had voted against union representation in 19 of the 28 union elections held since 2014. In May 2020, LTL technicians at our Gary Hammond, IN shop ratified a contract negotiated between XPO and the Machinists union.
As of December 31, 2024, our employees had voted against union representation in 19 of the 28 union elections held since 2014. As of December 31, 2024, none of our employees were represented by a union in North America, consistent with our December 31, 2023 position.
While CARB’s Advanced Clean Truck regulation and proposed Advanced Clean Fleets regulation may permit companies to seek exemptions or relief, there are no assurances that relief from either regulation will be obtained. At this point, there are virtually no zero-emissions vehicles widely available that are suitable replacements for current technology used in less-than-truckload operations.
In December 2021, CARB adopted its Advanced Clean Truck regulation requiring manufacturers to sell zero-emission trucks as an increasing percentage of their annual California sales. At this point, there are virtually no zero-emissions vehicles widely available that are suitable replacements for current technology used in less-than-truckload operations.
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For a discussion of our goodwill impairment testing, see “Critical Accounting Policies and Estimates - Evaluation of Goodwill” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We have recently experienced changes in management and our future success will depend in part on our ability to manage these transitions successfully.
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In addition, as we expand our business in foreign countries, we will be exposed to increased risk of loss from foreign currency fluctuations and exchange controls. 18 We are exposed to currency exchange rate fluctuations because a significant proportion of our assets, liabilities and earnings are denominated in foreign currencies.
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We have experienced recent changes in management, including our chief executive officer, chief financial officer, chief operating officer, and a number of our other executive and non-executive officers. Changes in management have the potential to disrupt our business, and any such disruption could adversely affect our operations, growth, financial condition and results of operations.
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Our activities in the southern United States are particularly susceptible to the occurrence of hurricanes and tropical storms and, depending on where any particular hurricane or tropical storm makes landfall, our properties and operations could experience significant damage and disruptions. At least some of our operations are constantly at risk of extreme adverse weather conditions.
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Further, new members of management may have different perspectives on our operations and opportunities for our business, which may cause us to reduce or change the emphasis on the vision for our company. Our success is dependent upon our ability to attract and retain qualified management in a highly competitive environment.
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We operate a robust information security program that includes: access control tools; detection and response tools; security awareness, penetration testing, vulnerability management, and incident response programs; data encryption; formal risk management, including 3rd party risk management; and cyber insurance.
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Also, concerns relating to climate change have led to a range of local, state, federal, and international regulatory and policy efforts to seek to address greenhouse gas (“GHG”) emissions. In the U.S., various approaches are being proposed or adopted at the federal, state, and local government levels.
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Further, the delay or failure to implement information system upgrades and new systems effectively could disrupt our business, distract management’s focus and attention from our business operations, and increase our implementation and operating costs, any of which could negatively impact our operations and operating results.
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As the nature, scope and complexity of ESG reporting, diligence and disclosure requirements expand, including the SEC’s recently proposed disclosure requirements regarding, among other matters, GHG emissions, we may have to undertake additional costs to control, assess and report on ESG metrics.
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Recently, regulatory and enforcement focus on data protection has heightened in the United States and abroad, particularly in the EU.
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Any failure or perceived failure, whether or not valid, to pursue or fulfill our ESG expectations or to satisfy various ESG reporting standards within the timelines we announce, or at all, could increase the risk of litigation.
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Strikes and work stoppages also could occur at our own facilities.
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Risks related to Our Credit and Liquidity Our indebtedness could adversely affect our financial condition.
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Our failure to properly handle and safeguard such inventory, or damages occurring as a result of acts of God, exposes us to potential claims and expenses. An increase in the number or severity of self-insured claims or an increase in insurance premiums could have an adverse effect on us.
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Our success will continue to depend upon the experience and leadership of our key employees.
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In the event the IRS were to prevail with such challenge, XPO and XPO stockholders could be subject to significant U.S. federal income tax liability.
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In that regard, the loss of the services of any of our key personnel could have a material adverse effect on our financial condition, results of operations and liquidity if we are unable to secure replacement personnel who have sufficient experience in our industry and in the management of our business.
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The competition for these employees is intense and the labor market is tight. The loss of key personnel, the inability to attract, timely hire and retain key employees with critical technical skills, or unforeseen difficulties associated with the transition of key employees, could negatively impact our business. Our business may be materially adversely affected by labor disputes.
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In November 2021, the Gary Hammond facility lease expired and XPO closed that shop and the contract was therefore rendered null and void. In July 2021, LTL drivers and dockworkers at our Miami, FL service center and drivers at our Trenton, NJ service center ratified contracts negotiated between XPO and the Teamsters.
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Less than a year later, in April 2022, the Teamsters disclaimed interest in the Trenton, NJ service center and no longer represent our employees in Trenton. In June 2023, Miami employees submitted a decertification petition and voted to remove the Teamsters union.
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In 2019, a majority of employees at our LTL service centers in Laredo, TX and Aurora, IL, voted to decertify the Teamsters as the employees’ representative. In December 2020, a majority of employees at our LTL service center in Cinnaminson, NJ also voted to decertify the Teamsters as their bargaining representative.
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Since August 2021, the Teamsters disclaimed interest in five of our LTL locations, including Bakersfield, CA, Los Angeles, CA, Trenton, NJ, Albany, NY and most recently, King of Prussia, PA.
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Since 2014, the Teamsters have withdrawn seven petitions seeking elections on behalf of LTL employees prior to the election being held, and the Machinists withdrew one petition for an LTL election on behalf of a small group of shop employees.
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Today, none of the Company’s employees in the U.S. are represented by a union or subject to a collective bargaining agreement.
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In January 2022, LTL employees at our Trenton, NJ service center filed a deauthorization petition with the National Labor Relations Board seeking to withdraw the authority of the Teamsters to require union employees to pay union dues to retain their XPO jobs.
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The employees voted to remove the requirement that they pay dues and then, in April 2022, the Teamsters disclaimed interest in representing employees in Trenton, NJ . The White House Task Force on Worker Organizing and Empowerment released a report on February 7, 2022, with numerous pro-labor recommendations regarding, among others, federal government support of union organizing efforts.
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There can be no assurance that increased government regulation and enforcement in this area will not increase our costs or have an adverse effect on our results of operations, cash flows and business. 24 We cannot predict with certainty whether further organizing efforts may result in the unionization of any additional locations in the U.S.
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Risks related to the Spin-Offs We may be unable to achieve some or all of the benefits that we expect to achieve from the spin-offs of GXO or RXO and may be required to indemnify GXO or RXO for certain liabilities.
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Pursuant to the separation and distribution agreements and certain other agreements between XPO and GXO and XPO and RXO, each party agrees to indemnify the other for certain liabilities, in each case for uncapped amounts.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe information security team continuously reviews our information security systems for unauthorized system access, cybersecurity incidents, and unusual traffic on our systems and meets regularly to identify, assess, and manage cybersecurity threats, including those posed by third-party service providers who provide services to our business.
Biggest changeThe information security leadership team meets regularly to ensure our processes to identify, assess, and manage cybersecurity threats, including those posed by third-party service providers who provide services to our business, are effective and current.
We also actively engage with key consultants, auditors, industry participants, and intelligence and law enforcement communities as part of our continuing efforts to evaluate and enhance the effectiveness of our information security program. Our program is regularly evaluated by internal and external experts, with the results of those reviews reported to senior management and the Board of Directors.
We also actively engage with key consultants, industry participants, and intelligence and law enforcement communities as part of our continuing efforts to evaluate and enhance the effectiveness of our information security program. Our program is regularly evaluated by internal and external experts, with the results of those reviews reported to senior management and the Board of Directors.
ITEM 1C. CYBERSECURITY XPO employs a robust system of information technology and information security controls and measures to assess, identify, and mange risks from cybersecurity threats which we consider to be critically important to maintaining our business and ensuring our business continuity.
ITEM 1C. CYBERSECURITY XPO employs a robust system of information technology and information security controls and measures to assess, identify, and manage risks from cybersecurity threats which we consider to be critically important to maintaining our business and ensuring our business continuity.
Our CISO meets regularly with his team as well as other key personnel to share information about potential cybersecurity events and monitor, prevent, and detect potential cybersecurity incidents and develop reports for our senior management.
Our CIO meets regularly with his team as well as other key personnel to share information about potential cybersecurity events and monitor, prevent, and detect potential cybersecurity incidents and develop reports for our senior management.
For an additional discussion of certain risks associated with cybersecurity see Item 1A, “Risk Factors” above. 29
For an additional discussion of certain risks associated with cybersecurity see Item 1A, “Risk Factors” above. 28
As part of our information security program, our CISO and his team integrate our information security measures into our overall risk management processes to identify, evaluate, and quantify risks based on available information and classify the severity of potential cybersecurity incidents.
As part of our information security program, our CIO and his team integrate our information security measures into our overall risk management processes to identify, evaluate, and quantify risks based on internal and external available information and classify the severity of potential cybersecurity incidents.
The CISO, who reports directly to our Chief Information Officer, provides periodic reports to our Board of Directors, as well as our Chief Executive Officer, Chief Information Officer, and other members of our senior management as appropriate.
The information security team provides periodic reports to our CIO, Board of Directors, as well as our Chief Executive Officer and other members of our senior management as appropriate.
XPO employs technical measures to protect against cybersecurity attacks that align with functions identified in the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework.
XPO employs technical measures to protect against cybersecurity attacks that align with functions identified in the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework. The information security team continuously reviews our information security systems for unauthorized system access, cybersecurity incidents, indicators of compromise, and unusual traffic on our systems.
Our information security program is managed by a dedicated Chief Information Security Officer (“CISO”), whose team is responsible for leading enterprise-wide cybersecurity strategy, policy, standards, architecture, threat detection, and incident response processes. Our CISO has a background in cybersecurity and risk management, including assessing, designing, building and operating security platforms.
Our information security program is overseen by our Chief Information Officer (“CIO”), whose team is responsible for leading enterprise-wide cybersecurity strategy, policy, standards, architecture, threat prevention, threat detection, and incident response processes.
He has over 10 years of information technology and information security experience having successfully built and led security programs on areas relating to cybersecurity, risk management, identity and access, data protection, product and software security, cyber engineering, cyber defense, automation, and compliance initiatives.
Our CIO has over 15 years of information technology and information security experience and he and his team have experience in cybersecurity and risk management, including assessing, designing, building and operating security platforms, identity and access, data protection, product and software security, cyber engineering, cyber defense, automation and compliance initiatives.

Item 2. Properties

Properties — owned and leased real estate

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Biggest change(2) Includes 26 owned facilities and 2 leased facilities acquired in December 2023 in connection with the Yellow Asset Acquisition. We lease our current executive office located in Greenwich, Connecticut, as well as various office facilities in the U.S., France, the U.K. and India to support our global executive and shared-services functions.
Biggest changeWe lease our current executive office located in Greenwich, Connecticut, as well as various office facilities in the U.S., France, the U.K. and India to support our global executive and shared-services functions. We believe that our facilities are sufficient for our current needs.
ITEM 2. PROPERTIES As of December 31, 2023, we had approximately 596 locations, primarily in North America and Europe. These facilities are located in all 48 contiguous U.S. states, as well as globally.
ITEM 2. PROPERTIES As of December 31, 2024, we had approximately 614 locations, primarily in North America and Europe. These facilities are located in all 48 contiguous U.S. states, as well as globally.
Segment Leased Facilities Owned Facilities Customer Facilities (1) Total North American LTL (2) 231 140 — 371 European Transportation 202 13 4 219 Corporate 6 — — 6 Total 439 153 4 596 (1) Includes locations owned or leased by customers.
Segment Leased Facilities Owned Facilities Customer Facilities (1) Total North American LTL 225 144 — 369 European Transportation 218 17 4 239 Corporate 6 — — 6 Total 449 161 4 614 (1) Includes locations owned or leased by customers.
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We believe that our facilities are sufficient for our current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS Information with respect to certain legal proceedings is included in Note 18—Commitments and Contingencies to our Consolidated Financial Statements and as a Litigation matter in our Consolidated Statements of Income (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 18—Commitments and Contingencies to our Consolidated Financial Statements (included in Part II, Item 8 of this Annual Report) and is incorporated herein by reference. For an additional discussion of certain risks associated with legal proceedings, see Item 1A, “Risk Factors” above.
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For an additional discussion of certain risks associated with legal proceedings, see Item 1A, “Risk Factors” above.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe have never paid, and have no immediate plans to pay, cash dividends on our common stock. Stock Performance Graph The graph below compares the cumulative five-year total return of holders of our common stock with the cumulative performance of the Dow Jones Transportation Average index, the S&P 400 MidCap index and the S&P Transportation Select Industry index.
Biggest changeWe have never paid, and have no immediate plans to pay, cash dividends on our common stock. Stock Performance Graph The graph below compares the cumulative five-year total return of holders of our common stock with the cumulative performance of the S&P Transportation Select Industry index and the S&P 400 MidCap index, of which we are a component.
The graph assumes that the value of the investment in our common stock and each index was $100 on December 31, 2018 and that all dividends and other distributions, including the effect of spin-offs, were reinvested.
The graph assumes that the value of the investment in our common stock and each index was $100 on December 31, 2019 and that all dividends and other distributions, including the effect of Spin-offs, were reinvested.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol XPO. As of February 1, 2024, there were approximately 70 registered holders of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol XPO. As of January 31, 2025, there were approximately 57 registered holders of our common stock.
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The comparisons in the graph below are based on historical data and not indicative of, or intended to forecast, future performance of our common stock. 30 The graph in our 2022 Annual Report on Form 10-K included a comparison of our common stock with the Dow Jones Transportation Average index and the S&P 400 MidCap index.
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The comparisons in the graph below are based on historical data and not indicative of, or intended to forecast, future performance of our common stock. 29 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 XPO, Inc. $ 100.00 $ 149.56 $ 170.14 $ 116.05 $ 305.34 $ 457.19 S&P Transportation Select Industry $ 100.00 $ 112.07 $ 150.64 $ 108.44 $ 136.32 $ 143.20 S&P 400 MidCap $ 100.00 $ 113.66 $ 141.80 $ 123.28 $ 143.54 $ 163.54 Unregistered Sales of Equity Securities and Use of Proceeds None.
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Going forward, our performance graphs will use the S&P Transportation Select Industry index rather than the Dow Jones Transportation Average index.
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We believe that the S&P Transportation Select Industry is a more appropriate index as our outstanding performance-based restricted stock units (“PRSUs”) generally measure our performance compared to this index, of which we are a component. 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 XPO, Inc. $ 100.00 $ 139.73 $ 208.98 $ 237.73 $ 162.15 $ 426.64 Dow Jones Transportation Average $ 100.00 $ 120.83 $ 140.80 $ 187.56 $ 154.62 $ 186.46 S&P 400 MidCap $ 100.00 $ 126.20 $ 143.44 $ 178.95 $ 155.58 $ 181.15 S&P Transportation Select Industry $ 100.00 $ 122.05 $ 136.78 $ 183.86 $ 132.35 $ 166.38 Unregistered Sales of Equity Securities and Use of Proceeds None.

Item 7. Management's Discussion & Analysis

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

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Biggest changeConsolidated Summary Financial Results Years Ended December 31, Percent of Revenue (Dollars in millions) 2023 2022 2021 2023 2022 2021 Revenue $ 7,744 $ 7,718 $ 7,202 Salaries, wages and employee benefits 3,159 2,945 2,866 40.8 % 38.2 % 39.8 % Purchased transportation 1,760 1,964 1,934 22.7 % 25.4 % 26.9 % Fuel, operating expenses and supplies 1,623 1,687 1,492 21.0 % 21.9 % 20.7 % Operating taxes and licenses 60 58 56 0.8 % 0.8 % 0.8 % Insurance and claims 167 183 174 2.2 % 2.4 % 2.4 % Gains on sales of property and equipment (5) (60) (72) (0.1) % (0.8) % (1.0) % Depreciation and amortization expense 432 392 385 5.6 % 5.1 % 5.3 % Goodwill impairment — 64 — — % 0.8 % — % Litigation matter 8 — — 0.1 % — % — % Transaction and integration costs 58 58 36 0.7 % 0.8 % 0.5 % Restructuring costs 44 50 19 0.6 % 0.6 % 0.3 % Operating income 438 377 312 5.7 % 4.9 % 4.3 % Other income (15) (55) (60) (0.2) % (0.7) % (0.8) % Debt extinguishment loss 25 39 54 0.3 % 0.5 % 0.7 % Interest expense 168 135 211 2.2 % 1.7 % 2.9 % Income from continuing operations before income tax provision 260 258 107 3.4 % 3.3 % 1.5 % Income tax provision 68 74 11 0.9 % 1.0 % 0.2 % Income from continuing operations 192 184 96 2.5 % 2.4 % 1.3 % Income (loss) from discontinued operations, net of taxes (3) 482 245 — % 6.2 % 3.4 % Net income $ 189 $ 666 $ 341 2.4 % 8.6 % 4.7 % Year Ended December 31, 2023 Compared with Year Ended December 31, 2022 Our consolidated revenue for 2023 increased by 0.3% to $7.7 billion, compared with 2022.
Biggest changeConsolidated Summary Financial Results Years Ended December 31, Percent of Revenue (Dollars in millions) 2024 2023 2024 2023 Revenue $ 8,072 $ 7,744 Salaries, wages and employee benefits 3,377 3,159 41.8 % 40.8 % Purchased transportation 1,701 1,760 21.1 % 22.7 % Fuel, operating expenses and supplies 1,589 1,623 19.7 % 21.0 % Operating taxes and licenses 80 60 1.0 % 0.8 % Insurance and claims 134 167 1.7 % 2.2 % Gains on sales of property and equipment (40) (5) (0.5) % (0.1) % Depreciation and amortization expense 490 432 6.1 % 5.6 % Goodwill impairment — — — % — % Litigation matter — 8 — % 0.1 % Transaction and integration costs 53 58 0.7 % 0.7 % Restructuring costs 27 44 0.3 % 0.6 % Operating income 660 438 8.2 % 5.7 % Other income (37) (15) (0.5) % (0.2) % Debt extinguishment loss — 25 — % 0.3 % Interest expense 223 168 2.8 % 2.2 % Income from continuing operations before income tax provision 473 260 5.9 % 3.4 % Income tax provision 86 68 1.1 % 0.9 % Income from continuing operations 387 192 4.8 % 2.5 % Income (loss) from discontinued operations, net of taxes — (3) — % — % Net income $ 387 $ 189 4.8 % 2.4 % Year Ended December 31, 2024 Compared with Year Ended December 31, 2023 Our consolidated revenue for 2024 increased by 4.2% to $8.1 billion, compared with 2023.
We evaluate the recoverability of these future tax deductions and credits by assessing all available evidence, including the reversal of deferred tax liabilities, carrybacks available, and historical and projected pre-tax profits generated by our operations. Valuation allowances are established when, in management’s judgment, it is more likely than not that our deferred tax assets will not be realized.
We evaluate the recoverability of these future tax deductions and credits by assessing all available evidence, including the reversal of deferred tax liabilities, carrybacks available, and historical and projected pre-tax profits generated by our operations. Valuation allowances are established when, in management’s judgment, it is more likely than not that our deferred tax assets will not be 42 realized.
For further information on our finance lease maturities, see Note 8—Leases to our Consolidated Financial Statements. 43 Defined Benefit Pension Plans We sponsor both funded and unfunded defined benefit plans for some employees in the U.S. Historically, we have realized income, rather than expense, from these plans.
For further information on our finance lease maturities, see Note 8—Leases to our Consolidated Financial Statements. Defined Benefit Pension Plans We sponsor both funded and unfunded defined benefit plans for some employees in the U.S. Historically, we have realized income, rather than expense, from these plans.
In assessing the need for a valuation allowance, management weighs the available positive and negative evidence, including limitations on the use of tax losses and other carryforwards due to changes in ownership, 46 historic information, and projections of future sources of taxable income that include and exclude future reversals of taxable temporary differences.
In assessing the need for a valuation allowance, management weighs the available positive and negative evidence, including limitations on the use of tax losses and other carryforwards due to changes in ownership, historic information, and projections of future sources of taxable income that include and exclude future reversals of taxable temporary differences.
However, in the fourth quarter of 2022 and in connection with the RXO spin-off, we performed additional impairment tests 45 because the number of our reporting units increased from three to five to reflect our new internal organization.
However, in the fourth quarter of 2022 and in connection with the RXO spin-off, we performed additional impairment tests because the number of our reporting units increased from three to five to reflect our new internal organization.
As of December 31, 2023, we had $3.3 billion total outstanding principal amount of debt, excluding finance leases. We have no significant debt maturities until 2028. Interest on our ABL and Term Loan facilities is variable, while interest on our senior notes is at fixed rates.
As of December 31, 2024, we had $3.3 billion total outstanding principal amount of debt, excluding finance leases. We have no significant debt maturities until 2028. Interest on our ABL and Term Loan facilities is variable, while interest on our senior notes is at fixed rates.
We are not obligated to repurchase any specific number of shares and may suspend or discontinue the program at any time. There were no share repurchases in 2023, 2022 or 2021. Our remaining share repurchase authorization as of December 31, 2023 is $503 million.
We are not obligated to repurchase any specific number of shares and may suspend or discontinue the program at any time. There were no share repurchases in 2024, 2023 or 2022. Our remaining share repurchase authorization as of December 31, 2024 is $503 million.
An increase or decrease of 25 basis points in the expected return on plan assets would increase or decrease our 2023 pre-tax pension income by approximately $4 million. Actuarial Gains and Losses Changes in the discount rate and/or differences between the expected and actual rate of return on plan assets results in unrecognized actuarial gains or losses.
An increase or decrease of 25 basis points in the expected return on plan assets would increase or decrease our 2024 pre-tax pension income by approximately $4 million. Actuarial Gains and Losses Changes in the discount rate and/or differences between the expected and actual rate of return on plan assets results in unrecognized actuarial gains or losses.
Loan Covenants and Compliance As of December 31, 2023, 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.
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.
Based on the qualitative assessments performed, we concluded that it was not more-likely-than-not that the fair value of each of our reporting units was less than their carrying amounts and, therefore, further quantitative analysis was not performed, and we did not recognize any goodwill impairment.
Based on the qualitative assessments performed, we concluded that it was not more-likely-than-not that the fair value of these reporting units was less than their carrying amounts and, therefore, further quantitative analysis was not performed, and we did not recognize any goodwill impairment.
We generated aggregate income from our plans of $18 million in 2023, $60 million in 2022 and $61 million in 2021. The plans have been generating income due to their funded status and because they do not allow for new plan participants or additional benefit accruals. Defined benefit pension plan amounts are calculated using various actuarial assumptions and methodologies.
We generated aggregate income from our plans of $25 million in 2024, $18 million in 2023 and $60 million in 2022. The plans have been generating income due to their funded status and because they do not allow for new plan participants or additional benefit accruals. 39 Defined benefit pension plan amounts are calculated using various actuarial assumptions and methodologies.
However, based on the number of claims and the length of time from incurrence of the claims to ultimate settlement, the use of any estimation method is sensitive to the assumptions and factors described above along with other external factors.
However, because of the number of claims and the length of time from incurrence of the claims to ultimate settlement, the use of any estimation method is sensitive to the assumptions and factors described above along with other external factors.
For the year ended December 31, 2023, our effective tax rate was impacted by $15 million from non-deductible compensation partially offset by $9 million of discrete tax benefits, the largest of which was a $4 million benefit from changes in reserves for uncertain tax positions.
For 2023, our effective tax rate was impacted by $15 million from non-deductible compensation partially offset by $9 million of discrete tax benefits, the largest of which was a $4 million benefit from changes in reserves for uncertain tax positions.
These notes were issued at par. 40 In the same period, we used net proceeds from the Incremental Term Loans and the Senior Notes due 2032, together with cash on hand, to finance the Yellow Asset Acquisition, to repay in full the $112 million aggregate principal amount outstanding of our Senior Notes due 2025, and to pay related fees, expenses and accrued interest.
In the same period, we used net proceeds from the Incremental Term Loans and the Senior Notes due 2032, together with cash on hand, to finance the Yellow Asset Acquisition, to repay in full the $112 million aggregate principal amount outstanding of our Senior Notes due 2025, and to pay related fees, expenses and accrued interest.
Additionally, as of December 31, 2023, we have $290 million of finance lease and related interest payment obligations, of which $71 million is due within the next twelve months. For further information on our debt facilities and maturities, see Note 12—Debt to our Consolidated Financial Statements.
Additionally, as of December 31, 2024, we have $256 million of finance lease and related interest payment obligations, of which $59 million is due within the next twelve months. For further information on our debt facilities and maturities, see Note 12—Debt to our Consolidated Financial Statements.
A quantitative test was performed for each of these four new reporting units using a combination of income and market approaches and we recorded an aggregate impairment charge of $64 million related to two of these new reporting units.
A quantitative test was performed for each of these four new reporting units using a combination of income and market approaches and we recorded an aggregate impairment charge of $64 million in the fourth quarter of 2022 related to two of these new reporting units.
Our CODM evaluates segment profit (loss) based on adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), which we define as income from continuing operations before debt extinguishment loss, interest expense, income tax, depreciation and amortization expense, goodwill impairment charges, litigation matters, transaction and integration costs, restructuring costs and other adjustments.
For our North American LTL and European Transportation segments, our CODM evaluates segment profit (loss) based on adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), which we define as income from continuing operations before debt extinguishment loss, interest expense, income tax provision, depreciation and amortization expense, goodwill impairment charges, litigation matters, transaction and integration costs, restructuring costs and other adjustments.
Future interest payments associated with our debt total $1.4 billion at December 31, 2023, with $213 million payable within 12 months, and are estimated based on the principal amount of debt and applicable interest rates as of December 31, 2023.
Future interest payments associated with our debt total $1.2 billion at December 31, 2024, with $219 million payable within 12 months, and are estimated based on the principal amount of debt and applicable interest rates as of December 31, 2024.
Liquidity and Capital Resources Our cash and cash equivalents balance was $412 million as of December 31, 2023, compared to $460 million as of December 31, 2022.
Liquidity and Capital Resources Our cash and cash equivalents balance was $246 million as of December 31, 2024, compared to $412 million as of December 31, 2023.
The maximum amount of net cash proceeds available at any one time under our securitization program, inclusive of any unsecured borrowings, is €200 million (approximately $221 million as of December 31, 2023). As of December 31, 2023, €1 million (approximately $1 million) was available under the program.
The maximum amount of net cash proceeds available at any one time under our securitization program, inclusive of any unsecured borrowings, is €200 million (approximately $207 million as of December 31, 2024). As of December 31, 2024, the maximum amount available under the program was utilized.
Restructuring costs in 2023 were $44 million, compared with $50 million in 2022. We engage in restructuring actions as part of our ongoing efforts to best use our resources and infrastructure, including actions in connection with spin-offs and divestment activities. For more information, see Note 6—Restructuring Charges to our Consolidated Financial Statements. Other income primarily consists of pension income.
Restructuring costs in 2024 were $27 million, compared with $44 million in 2023. We engage in restructuring actions as part of our ongoing efforts to best use our resources and infrastructure, including actions in connection with spin-offs and divestment activities. For more information, see Note 6—Restructuring Charges to our Consolidated Financial Statements.
Material changes in these assumptions, estimates and/or judgments have the potential to materially alter our results of operations. 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 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.
Segment Adjusted EBITDA reflects an allocation of corporate costs.
Segment adjusted EBITDA includes an allocation of corporate costs.
For our defined benefit pension plans, accumulated unrecognized actuarial losses were $174 million as of December 31, 2023.
For our defined benefit pension plans, accumulated unrecognized actuarial losses were $195 million as of December 31, 2024.
We evaluate the revenue performance of our LTL business using several commonly used metrics, including volume (weight per day in pounds) and yield, which is a commonly used measure of LTL pricing trends. We measure yield using gross revenue per hundredweight, excluding fuel surcharges.
The decrease in fuel surcharge revenue was primarily driven by lower diesel prices. We evaluate the revenue performance of our LTL business using several commonly used metrics, including volume (weight per day in pounds) and yield, which is a commonly used measure of LTL pricing trends. We measure yield using gross revenue per hundredweight, excluding fuel surcharges.
We also sell trade accounts receivable under a securitization program for our European transportation business. We use trade receivables securitization and factoring programs to help manage our cash flows and offset the impact of extended payment terms for some of our customers. For more information, see Note 2 —Basis of Presentation and Significant Accounting Policies to our Consolidated Financial Statements.
We use trade receivables securitization and factoring programs to help manage our cash flows and offset the impact of extended payment terms for some of our customers. For more information, see Note 2 —Basis of Presentation and Significant Accounting Policies to our Consolidated Financial Statements.
Impacts of Notable External Conditions As a leading provider of freight transportation services, our business can be impacted to varying degrees by factors beyond our control. The overall freight environment continues to be recessionary, in large part due to underlying trends in supply and demand.
Impacts of Notable External Conditions As a leading provider of freight transportation services, our business can be impacted to varying degrees by factors beyond our control. The overall freight environment continues to be recessionary, due to a mix of macroeconomic pressures on supply and demand.
Other examples of macroeconomic factors that can affect our results are a rise in interest rates, which increased our cost of capital in 2023, and economic inflation, which, while lessening in the U.S., may still have a negative impact on certain of our operating costs, such as salaries, wages and employee benefits, fuel and purchased transportation. 32 We mitigate these impacts with mechanisms in our customer contracts, including fuel surcharge clauses and general rate increases.
Examples of macroeconomic factors that can affect our results are volatility in interest rates and economic inflation, which may have a negative impact on certain of our operating costs, such as salaries, wages and employee benefits, fuel, purchased transportation and insurance. We mitigate these impacts with mechanisms in our customer contracts, including fuel surcharge clauses and general rate increases.
The pre-tax gain on the sale was $430 million, net of transaction costs and working capital adjustments, and was included in Income from discontinued operations, net of taxes, for the year ended December 31, 2022.
We completed the sale of our intermodal operation for cash proceeds of approximately $705 million, net of cash disposed. The pre-tax gain on the sale was $430 million, net of transaction costs and working capital adjustments, and was included in Income from discontinued operations, net of taxes, for the year ended December 31, 2022.
For the year ended December 31, 2023, our expected return on plan assets was $92 million, compared to the actual return on plan assets of $124 million.
For the year ended December 31, 2024, our expected return on plan assets was $98 million, compared to the actual return on plan assets of $17 million.
The interest rate for both tranches was 7.36% as of December 31, 2023. Senior Notes In December 2023, we completed the private placement of $585 million aggregate principal amount of senior notes due 2032 (the “Senior Notes due 2032”), which mature on February 1, 2032 and bear interest at a rate of 7.125% per annum.
The weighted average interest rate of our term loans was approximately 6.53% as of December 31, 2024. Senior Notes In December 2023, we completed the private placement of $585 million aggregate principal amount of senior notes due 2032 (the “Senior Notes due 2032”), which mature on February 1, 2032 and bear interest at a rate of 7.125% per annum.
We used cash during this period primarily to: (i) purchase property and equipment of $1.5 billion; (ii) repay our Existing Term Loan Facility for $2.0 billion and (iii) redeem our Senior Notes due 2025 for $114 million.
We used cash during this period primarily to: (i) purchase property and equipment of $1.5 billion; (ii) repay our Existing Term Loan Facility for $2.0 billion and (iii) redeem our Senior Notes due 2025 for $114 million. Cash flows from operating activities from continuing operations for 2024 increased by $114 million compared with 2023.
For our 2023 annual goodwill assessment, we performed a step-zero qualitative analysis for our five reporting units.
For our 2024 annual goodwill assessment, we performed a step-zero qualitative analysis for two of our reporting units.
Additionally, under a credit agreement, we have a $200 million uncommitted secured evergreen letter of credit facility, under which we have issued $139 million in aggregate face amount of letters of credit as of December 31, 2023.
Additionally, under a credit agreement, we have a $200 million uncommitted secured evergreen letter of credit facility, under which we have issued $137 million in aggregate face amount of letters of credit as of December 31, 2024. As of December 31, 2024, we had approximately $757 million of total liquidity.
The discount rates used in determining the net periodic benefit costs and benefit obligations are as follows: Qualified Plans Non-Qualified Plans 2023 2022 2023 2022 Discount rate - net periodic benefit costs 5.36 % 2.43 % 5.26% - 5.33% 1.70% - 2.23% Discount rate - benefit obligations 5.15 % 5.42 % 4.98% - 5.12% 5.29% - 5.42% An increase or decrease of 25 basis points in the discount rate would decrease or increase our 2023 pre-tax pension income by approximately $1 million.
The discount rates used in determining the net periodic benefit costs and benefit obligations are as follows: Qualified Plans Non-Qualified Plans 2024 2023 2024 2023 Discount rate - net periodic benefit costs 5.08 % 5.36 % 5.02% - 5.05% 5.26% - 5.33% Discount rate - benefit obligations 5.63 % 5.15 % 5.21% - 5.55% 4.98% - 5.12% An increase or decrease of 25 basis points in the discount rate would increase or decrease our 2024 pre-tax pension income by less than $1 million.
In May 2023, we completed private placements of $830 million aggregate principal amount of senior secured notes due 2028 (the “Senior Secured Notes due 2028”) and $450 million aggregate principal amount of senior notes due 2031 (the “Senior Notes due 2031”).
We recorded a debt extinguishment loss of $2 million due to this redemption. 37 In May 2023, we completed private placements of $830 million aggregate principal amount of senior secured notes due 2028 (the “Senior Secured Notes due 2028”) and $450 million aggregate principal amount of senior notes due 2031 (the “Senior Notes due 2031”).
The Incremental Term Loans are a new tranche of loans under the Term Loan Credit Agreement, having substantially similar terms as the New Term Loan Facility, except with respect to maturity date, issue price, prepayment premiums in connection with certain voluntary prepayments and certain other provisions.
The Incremental Term Loans were issued under the Term Loan Credit Agreement, having substantially similar terms as the New Term Loan Facility, except with respect to maturity date, issue price, prepayment premiums in connection with certain voluntary prepayments and certain other provisions. The Incremental Term Loans were issued at par and will mature on February 1, 2031.
Funding In determining the amount and timing of pension contributions, we consider our cash position, the funded status as measured by the Pension Protection Act of 2006 and generally accepted accounting principles, and the tax deductibility of contributions, among other factors.
We estimate that the defined benefit pension plans will contribute annual pre-tax income in 2025 of approximately $6 million. Funding In determining the amount and timing of pension contributions, we consider our cash position, the funded status as measured by the Pension Protection Act of 2006 and generally accepted accounting principles, and the tax deductibility of contributions, among other factors.
Adjusted EBITDA was $163 million, or 5.3% of revenue in 2023, compared with $169 million, or 5.5% of revenue, in 2022. The decrease in Adjusted EBITDA was primarily driven by the decrease in revenue after taking into effect the impact of foreign currency movement, described above, higher salaries, wages and employee benefits, and higher lease and facility costs.
The increase in revenue compared to 2023, after taking into effect the impact of foreign currency movement, primarily reflects higher yield. Adjusted EBITDA was $158 million in 2024, compared with $163 million in 2023. The decrease in adjusted EBITDA was primarily driven by higher purchased transportation, salaries, wages and employee benefits and lease and facility costs.
In the month of January 2024, weight per day decreased 1.1%, as compared with January 2023, attributable to a year-over-year decrease of 2.5% in weight per shipment and an increase of 1.4% in shipments per day. Adjusted EBITDA was $864 million, or 18.5% of revenue, in 2023, compared with $932 million, or 20.1% of revenue, in 2022.
In the month of January 2025, weight per day decreased 8.5%, as compared with January 2024, attributable to a year-over-year decrease of 6.0% in shipments per day and a decrease of 2.7% in weight per shipment. Adjusted EBITDA was $1,115 million in 2024, compared with $864 million in 2023.
Regarding the war between Russia and Ukraine and the unrest in the Middle East, we have no direct exposure to those geographies. We cannot predict how global supply chain activities or the economy at large may be impacted by prolonged disruptions in these regions, or sanctions imposed, or whether future conflicts, if any, may adversely affect our results of operations.
Regarding the war between Russia and Ukraine and the unrest in the Middle East, we have no direct exposure to these geographies. 31 We cannot predict how future macroeconomic conditions, supply chain constraints or global conflicts, if any, may adversely affect our results of operations.
The portion of the unrecognized actuarial gain/loss that exceeds 10% of the greater of the projected benefit obligation or the fair value of plan assets at the beginning of the year is 44 amortized and recognized as income/expense over the estimated average remaining life expectancy of plan participants.
The portion of the unrecognized actuarial gain/loss that exceeds 10% of the greater of the projected benefit obligation or the fair value of plan assets at the beginning of the year is amortized and recognized as income/expense over the estimated average remaining life expectancy of plan participants. 40 Effect on Results The effects of the defined benefit pension plans on our results consist primarily of the net effect of the interest cost on plan obligations and the expected return on plan assets.
We expect to continue to expand our business by investing in capacity for the long-term, gaining profitable market share and aligning price with the value we provide to customers.
Importantly, we see growth potential ahead in our major markets, and we intend to continue expanding the business by investing in capacity for the long-term, gaining profitable market share, and aligning price with the value we provide.
Sources and Uses of Cash Our cash flows from operating, investing and financing activities from continuing operations, as reflected on our Consolidated Statements of Cash Flows, are summarized as follows: Years Ended December 31, (In millions) 2023 2022 2021 Net cash provided by operating activities from continuing operations $ 694 $ 824 $ 490 Net cash used in investing activities from continuing operations (1,502) (404) (141) Net cash provided by (used in) financing activities from continuing operations 761 (861) (1,933) During 2023, we: (i) generated cash from operating activities from continuing operations of $694 million and (ii) received net proceeds of $3.0 billion from the issuance of debt.
Sources and Uses of Cash Our cash flows from operating, investing and financing activities from continuing operations, as reflected on our Consolidated Statements of Cash Flows, are summarized as follows: Years Ended December 31, (In millions) 2024 2023 Net cash provided by operating activities from continuing operations $ 808 $ 694 Net cash used in investing activities from continuing operations (702) (1,502) Net cash provided by (used in) financing activities from continuing operations (226) 761 During 2024, we: (i) generated cash from operating activities from continuing operations of $808 million and (ii) generated proceeds from sales of property and equipment of $75 million.
The redemption price for the Senior Notes due 2025 was 101.563% of the principal amount plus accrued and unpaid interest. We recorded a debt extinguishment loss of $2 million due to this redemption.
The redemption price for the Senior Notes due 2025 was 101.563% of the principal amount plus accrued and unpaid interest.
Transaction and integration costs for 2023 are primarily comprised of stock-based compensation and retention awards for certain employees related to strategic initiatives. Transaction and integration costs for 2022 are primarily comprised of stock-based compensation and third-party professional fees related to strategic initiatives. We expect stock-based compensation costs related to our previously announced strategic initiatives to conclude in 2024.
Transaction and integration costs for 2024 and 2023 are primarily comprised of stock-based compensation for certain employees related to strategic initiatives, as well as retention awards for certain employees related to strategic initiatives in 2023. Stock-based compensation costs related to our previously announced strategic initiatives concluded in the fourth quarter of 2024.
We anticipate gross capital expenditures to be between $700 million and $800 million in 2024, funded by cash on hand and available liquidity. Financing activities from continuing operations generated $761 million of cash in 2023 compared with $861 million of cash used in 2022 and $1.9 billion of cash used in 2021.
We anticipate gross capital expenditures to be between $600 million and $700 million in 2025, including the four new service centers referenced above, funded by cash on hand and available liquidity. Financing activities from continuing operations used $226 million of cash in 2024 compared with $761 million of cash generated in 2023.
Additionally, cash paid for interest was $108 million lower in 2022 compared to 2021. As of December 31, 2023, we had $874 million of operating lease and related interest payment obligations, of which $152 million is due within the next twelve months. Additionally, we had operating leases that have not yet commenced with future undiscounted lease payments of $72 million.
As of December 31, 2024, we had $893 million of operating lease and related interest payment obligations, of which $160 million is due within the next twelve months. Additionally, we had operating leases that have not yet commenced with future undiscounted lease payments of $45 million.
As of December 31, 2023, we have $508 million available to draw under our ABL Facility, based on a borrowing base of $508 million and outstanding letters of credit of less than $1 million.
As of December 31, 2024, we have $511 million available to draw under our ABL Facility, based on a borrowing base of $512 million and outstanding letters of credit of less than $1 million. Commitments under our ABL Facility are $600 million and the maturity date is April 30, 2026.
The actual annualized return on plan assets for 2023 was approximately 10%, which was above the expected return on asset assumption for the year due to positive returns in the long duration fixed income market environment, which represented 90% of the portfolio, along with positive performance from the domestic and international equity markets.
The actual annualized return on plan assets for 2024 was approximately 1%, which was below the expected return on asset assumption for the year due to negative performance in the long duration fixed income market environment, which represented 90% of the portfolio.
A summary of our significant accounting policies is contained in Note 2—Basis of Presentation and Significant Accounting Policies to our Consolidated Financial Statements. The methods, assumptions, and estimates that we use in applying our accounting policies may require us to apply judgments regarding matters that are inherently uncertain and may change based on changing circumstances or changes in our analysis.
The methods, assumptions, and estimates that we use in applying our accounting policies may require us to apply judgments regarding matters that are inherently uncertain and may change based on changing circumstances or changes in our analysis. Material changes in these assumptions, estimates and/or judgments have the potential to materially alter our results of operations.
The increase reflects the dynamics in the North American LTL industry described in the segment results below, partially offset by a decline in fuel surcharge revenue. Foreign currency movement increased revenue by approximately 0.8 percentage points in 2023.
The increase reflects growth in both of our reportable segments, partially offset by a decline in fuel surcharge revenue in our North American LTL segment. Foreign currency movement increased revenue by approximately 0.5 percentage points in 2024.
These items were partially offset by higher revenue, excluding fuel surcharge revenue, driven by the pricing and volume dynamics explained above, lower purchased transportation, lower fuel costs, and lower damage claims.
Excluding these gains, the increase in adjusted EBITDA reflected higher revenue, excluding fuel surcharge revenue, driven by the pricing and volume dynamics explained above, and lower purchased transportation, damage claims, fuel costs, maintenance costs, and bad debt expense. These items were partially offset by lower fuel surcharge revenue and higher salaries, wages and employee benefits and vehicular insurance costs.
See Note 4—Segment Reporting and Geographic Information for further information and a reconciliation of Adjusted EBITDA to Income from continuing operations. 36 North American Less-Than-Truckload Segment Years Ended December 31, Percent of Revenue (Dollars in millions) 2023 2022 2021 2023 2022 2021 Revenue $ 4,671 $ 4,645 $ 4,125 Adjusted EBITDA 864 932 826 18.5 % 20.1 % 20.0 % Depreciation and amortization expense 291 239 227 6.2 % 5.1 % 5.5 % Year Ended December 31, 2023 Compared with Year Ended December 31, 2022 Revenue in our North American LTL segment increased 0.6% to $4.7 billion in 2023, compared with $4.6 billion in 2022.
See Note 4—Segment Reporting and Geographic Information for further information and a reconciliation of adjusted EBITDA to Income from continuing operations. 34 North American Less-Than-Truckload Segment Years Ended December 31, Percent of Revenue (Dollars in millions) 2024 2023 2024 2023 Revenue $ 4,899 $ 4,671 Adjusted EBITDA (1) 1,115 864 22.8 % 18.5 % Depreciation and amortization expense 346 291 7.1 % 6.2 % (1) Percent of Revenue is calculated using the underlying unrounded amounts.
Subsequent to the exchange, there are no shares of Preferred Stock or warrants outstanding. 41 Share Repurchases In February 2019, our Board of Directors authorized repurchases of up to $1.5 billion of our common stock.
Share Repurchases In February 2019, our Board of Directors authorized repurchases of up to $1.5 billion of our common stock.
For more information, see critical accounting policies and estimates below. Litigation matter was $8 million in 2023, with no comparable expense in 2022. See Note 18—Commitments and Contingencies to our Consolidated Financial Statements for further information. Transaction and integration costs in 2023 and 2022 were $58 million.
See Note 18—Commitments and Contingencies to our Consolidated Financial Statements for further information. Transaction and integration costs in 2024 were $53 million, compared with $58 million in 2023.
We contributed $5 million in both 2023 and 2022 to the non-qualified plans and we estimate that we will contribute $5 million in 2024. For additional information, see Note 13—Employee Benefit Plans to our Consolidated Financial Statements. Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles.
We made benefit payments of $5 million in both 2024 and 2023 under the non-qualified plans and we estimate that we will make benefit payments of $5 million in 2025. For additional information, see Note 13—Employee Benefit Plans to our Consolidated Financial Statements.
Term Loan Facility In 2015, we entered into a Term Loan Credit Agreement that provided for a single borrowing of $1.6 billion, which was subsequently amended to increase the principal balance to $2.0 billion and to extend the maturity date to February 2025 (the “Existing Term Loan Facility”).
The program expires in July 2026. 36 Information related to the trade receivables sold was as follows: Years Ended December 31, (In millions) 2024 2023 Securitization programs Receivables sold in period $ 1,762 $ 1,815 Cash consideration 1,762 1,815 Factoring programs Receivables sold in period 79 103 Cash consideration 78 103 Term Loan Facility In 2015, we entered into a Term Loan Credit Agreement that provided for a single borrowing of $1.6 billion, which was subsequently amended to increase the principal balance to $2.0 billion and to extend the maturity date to February 2025 (the “Existing Term Loan Facility”).
Similarly, for our 2022 annual goodwill assessment performed as of August 31, we performed a step-zero qualitative analysis for each of the three reporting units that existed at that time and reached the same conclusion.
Based on the qualitative assessments performed, we concluded that it was not more-likely-than-not that the fair value of each of our reporting units was less than their carrying amounts and, therefore, further quantitative analysis was not performed, and we did not recognize any goodwill impairment. 41 Similarly, for our 2022 annual goodwill assessment performed as of August 31, we performed a step-zero qualitative analysis for each of the three reporting units that existed at that time and reached the same conclusion.
Our consolidated income from continuing operations before income taxes in 2023 was $260 million, compared with $258 million in 2022. The increase was primarily driven by higher operating income and lower debt extinguishment loss, partially offset by lower pension income and higher interest expense.
The increase was primarily driven by higher operating income partially offset by higher interest expense. With respect to our U.S. operations, income from continuing operations before income taxes was 33 income of $486 million in 2024, compared with income of $286 million in 2023.
Fuel, operating expenses and supplies includes the cost of fuel purchased for use in our vehicles as well as related taxes, maintenance and lease costs for our equipment, including tractors and trailers, costs related to operating our owned and leased facilities, bad debt expense, third-party professional fees, information technology expenses and supplies expense.
The year-over-year decrease as a percentage of revenue primarily reflects the insourcing of a greater proportion of linehaul from third-party transportation providers and, to a lesser extent, lower rates paid to third-party providers for purchased transportation miles in our North American LTL segment, partially offset by higher purchased transportation in our European Transportation segment. 32 Fuel, operating expenses and supplies includes the cost of fuel purchased for use in our vehicles as well as related taxes, maintenance and lease costs for our equipment, including tractors and trailers, costs related to operating our owned and leased facilities, bad debt expense, third-party professional fees, information technology expenses and supplies expense.
Interest is payable semi-annually in cash in arrears, commencing August 1, 2024.
Interest is payable semi-annually in cash in arrears, and commenced August 1, 2024. These notes were issued at par.
We believe that our existing liquidity and sources of capital are sufficient to support our operations over the next 12 months. Trade Receivables Securitization and Factoring Programs We sell certain of our trade accounts receivable on a non-recourse basis to third-party financial institutions under factoring agreements.
Trade Receivables Securitization and Factoring Programs We sell certain of our trade accounts receivable on a non-recourse basis to third-party financial institutions under factoring agreements. We also sell trade accounts receivable under a securitization program for our European transportation business.
Fuel, operating expenses and supplies was $1.6 billion in 2023, or 21.0% of revenue, compared with $1.7 billion, or 21.9% of revenue, in 2022. The year-over-year decrease primarily reflects lower fuel costs. Operating taxes and licenses includes tax expenses related to our vehicles and our owned and leased facilities as well as license expenses to operate our vehicles.
Fuel, operating expenses and supplies was $1.59 billion in 2024, or 19.7% of revenue, compared with $1.62 billion, or 21.0% of revenue, in 2023. The year-over-year decrease as a percentage of revenue primarily reflects lower fuel costs due to lower diesel prices.
The year-over-year decrease reflects lower expense due to improved operating performance related to damaged shipments. Gains on sales of property and equipment in 2023 was $5 million, compared with $60 million in 2022. The year-over-year decrease reflects $55 million in gains on real estate transactions in our North American LTL segment in 2022 and no comparable gains in 2023.
Gains on sales of property and equipment in 2024 was $40 million, compared with $5 million in 2023. The year-over-year increase primarily reflects $34 million in gains on real estate transactions in our North American LTL segment in 2024 from a planned service center relocation with no comparable gains in 2023.
The debt extinguishment loss in 2023 related primarily to the refinancing of our Term Loan Facility in the second quarter of 2023, and to a much lesser extent, the redemption of our outstanding 6.25% senior notes due 2025 (“Senior Notes due 2025”) in the fourth quarter of 2023.
The debt extinguishment loss in 2023 related to the refinancing of our Existing Term Loan Facility (as defined below) and the redemption of our outstanding 6.25% senior notes due 2025 (“Senior Notes due 2025”). Interest expense for 2024 increased 32.7% to $223 million, from $168 million in 2023.
Investing activities from continuing operations used $1,502 million of cash in 2023 compared with $404 million used in 2022 and $141 million used in 2021. During 2023, we used $1,533 million of cash to purchase property and equipment, including $878 million related to the Yellow Asset Acquisition, and received $29 million from sales of property and equipment.
In January 2025, the proceeds from this sale were used to purchase four new service centers that were previously leased. During 2023, we used $1,533 million of cash to purchase property and equipment, including $878 million related to the Yellow Asset Acquisition, and received $29 million of cash from sales of property and equipment.
Our company has two reportable segments: North American Less-Than-Truckload (“LTL”), the largest component of our business, and European Transportation. Our North American LTL segment includes the results of our trailer manufacturing operations. In the first quarter of 2023, we made certain changes to our financial reporting to increase transparency and improve comparability.
Our company has two reportable segments: North American Less-Than-Truckload (“LTL”), the largest component of our business, and European Transportation. Our North American LTL segment includes the results of our trailer manufacturing operation. Within the tables presented, certain amounts may not add due to the use of rounded numbers.
The decrease was primarily due to higher salaries, wages and employee benefits, lower gains on real estate transactions, higher depreciation and amortization, lower pension income and higher interest expense, partially offset by higher revenue, lower purchased transportation and lower fuel costs.
The increase was primarily due to higher revenue, lower purchased transportation and higher gains on real estate transactions, partially offset by higher salaries, wages and employee benefits, depreciation and amortization and interest expense. With respect to our non-U.S. operations, loss from continuing operations before income taxes was $13 million in 2024, compared with a loss of $26 million in 2023.
Purchased transportation in 2023 was $1.8 billion, or 22.7% of revenue, compared with $2.0 billion, or 25.4% of revenue, in 2022. The year-over-year decrease as a percentage of revenue primarily reflects lower rates paid to third-party providers for purchased transportation miles and the insourcing of a greater proportion of linehaul from third-party transportation providers.
Salaries, wages and employee benefits in 2024 was $3.4 billion, or 41.8% of revenue, compared with $3.2 billion, or 40.8% of revenue, in 2023. The year-over-year increase as a percentage of revenue primarily reflects the impact of inflation on our cost base and the insourcing of a greater proportion of linehaul from third-party transportation providers.
These operating leases will commence at various times beginning in 2024 through 2025 with initial lease terms of 4.5 years to 15 years. For further information on our operating leases and their maturities, see Note 8—Leases to our Consolidated Financial Statements.
These operating leases will commence in 2025 with initial lease terms of 3 years to 12 years. For further information on our operating leases and their maturities, see Note 8—Leases to our Consolidated Financial Statements. As of December 31, 2024, we have approximately $79 million of purchase commitments, of which approximately $40 million is due within the next twelve months.
(“GXO”) in November 2022 and August 2021, respectively; and the sale of our North American intermodal operation in March 2022. On December 20, 2023, we acquired 28 LTL service centers in the U.S. previously operated by Yellow Corporation. Under the transaction, we purchased 26 of the service centers and assumed existing leases for the other two locations.
(“GXO”) in August 2021, and the sale of our North American intermodal operation in March 2022. In December 2023, we completed the Yellow Asset Acquisition, purchasing 26 LTL service centers and assuming existing leases for two additional locations. The previously announced authorization by our Board of Directors to divest our European business remains in effect.
Strategic Developments 2023 was the first full year that XPO operated solely as an asset-based LTL service provider in North America, following the completion of three key parts of our strategic plan, as previously announced: the spin-offs of RXO, Inc. (“RXO”) and GXO Logistics, Inc.
Strategic Developments XPO has operated solely as an asset-based LTL service provider in North America since November 2022, when we completed the spin-off of RXO, Inc. (“RXO”). This followed the completion of two additional components of our strategic plan: the spin-off of GXO Logistics, Inc.
The historical results of operations and financial positions of RXO, GXO and our intermodal operation are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented. We completed the sale of our intermodal operation for cash proceeds of approximately $705 million, net of cash disposed.
There can be no assurance that the divestiture will occur, or of the terms or timing of a transaction. The historical results of operations and financial positions of RXO and our intermodal operation are presented as discontinued operations during the periods presented and, as such, have been excluded from both continuing operations and segment results.
Operating taxes and licenses in 2023 was $60 million, compared with $58 million in 2022. Insurance and claims includes costs related to vehicular and cargo claims for both purchased insurance and self-insurance programs. Insurance and claims in 2023 was $167 million, compared with $183 million in 2022.
Insurance and claims includes costs related to vehicular and cargo claims for both purchased insurance and self-insurance programs. Insurance and claims in 2024 was $134 million, compared with $167 million in 2023. The year-over-year decrease reflects lower expense due to improved damage frequency, partially offset by higher vehicular insurance costs.
The following table summarizes our key revenue metrics: Years Ended December 31, 2023 2022 Change % Pounds per day (thousands) 70,196 70,163 — % Shipments per day 51,322 49,257 4.2 % Average weight per shipment (in pounds) 1,368 1,424 (3.9) % Gross revenue per hundredweight, excluding fuel surcharges $ 22.21 $ 21.18 4.9 % The year-over-year increase in revenue for 2023, excluding fuel surcharge revenue, reflects higher gross revenue per hundredweight, primarily related to our improvements in service quality and the benefit of numerous pricing initiatives.
The following table summarizes our key revenue metrics: Years Ended December 31, 2024 2023 Change % Pounds per day (thousands) 69,606 70,196 (0.8) % Shipments per day 51,508 51,322 0.4 % Average weight per shipment (in pounds) 1,351 1,368 (1.2) % Gross revenue per hundredweight, excluding fuel surcharges $ 23.94 $ 22.21 7.8 % Percentages presented are calculated using the underlying unrounded amounts.
Adjusted EBITDA included gains from real estate transactions of $55 million for the year ended December 31, 2022 with no comparable gains in 2023. Excluding these gains, the small decrease in Adjusted EBITDA reflected lower fuel surcharge revenue, higher salaries, wages and employee benefits, and, to a lesser extent, lower pension income.
Adjusted EBITDA included gains from real estate transactions of $34 million for the year ended December 31, 2024 with no comparable gains in 2023.
These items were partially offset by: (i) lower gains on sales of property and equipment of $55 million in 2023 and (ii) higher non-cash depreciation, amortization and net lease activity of $40 million in 2023, that are both also added back in the determination of operating cash flows, and (iii) lower cash paid for taxes of $53 million in 2023.
These items were partially offset by: (i) the impact of operating assets and liabilities utilizing $194 million of cash in 2024, compared with utilizing $99 million in 2023 and (ii) higher gains on sales of property and equipment of $35 million in 2024 compared with 2023, that is subtracted in the determination of operating cash flows.
Depreciation and amortization expense in 2023 was $432 million, compared with $392 million in 2022. The year-over-year increase reflects the impact of capital investments, in particular tractors and trailers. There was no goodwill impairment loss in 2023, compared with a $64 million impairment loss in 2022, which related to our European Transportation reporting units.
Depreciation and amortization expense in 2024 was $490 million, compared with $432 million in 2023. The year-over-year increase reflects the impact of capital investments, in particular tractors and trailers, as well as service centers acquired in the Yellow Asset Acquisition. Litigation matter was $8 million in 2023, with no comparable expense in 2024.
Depreciation and amortization expense increased in 2023 compared with 2022 due to the impact of capital investments, in particular tractors and trailers. 37 Year Ended December 31, 2022 Compared with Year Ended December 31, 2021 Revenue in our North American LTL segment increased 12.6% to $4.6 billion in 2022, compared with $4.1 billion in 2021.
Year Ended December 31, 2024 Compared with Year Ended December 31, 2023 Revenue in our North American LTL segment increased 4.9% to $4.9 billion in 2024, compared with $4.7 billion in 2023. Revenue included fuel surcharge revenue of $785 million and $857 million, respectively, for the years ended December 31, 2024 and 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2023, a uniform 10% strengthening in the value of the USD relative to the EUR would have resulted in an increase in net assets of $7 million.
Biggest changeAs of December 31, 2024, a uniform 10% strengthening in the value of the USD relative to the EUR would have resulted in an increase in net assets of $7 million, including the impacts from cross currency swaps.
Assuming our ABL Facility was fully drawn throughout 2023, a hypothetical 1% increase in the interest rate would have increased our annual interest expense by $6 million. Fixed Rate Debt. As of December 31, 2023, we had $2.2 billion of fair value of indebtedness (excluding finance leases and asset financings) that bears interest at fixed rates.
Assuming our ABL Facility was fully drawn throughout 2024, a hypothetical 1% increase in the interest rate would have increased our annual interest expense by $6 million. Fixed Rate Debt. As of December 31, 2024, we had $2.2 billion of fair value of indebtedness (excluding finance leases and asset financings) that bears interest at fixed rates.
Interest Rate Risk We have exposure to changes in interest rates on our debt, as follows: Term Loan Facility . As of December 31, 2023, we had an aggregate principal amount outstanding of $1.1 billion on our Term Loan Facility. The interest rate fluctuates based on SOFR or a Base Rate, as defined in the agreement, plus an applicable margin.
Interest Rate Risk We have exposure to changes in interest rates on our debt, as follows: Term Loan Facility . As of December 31, 2024, we had an aggregate principal amount outstanding of $1.1 billion on our Term Loan Facility. The interest rate fluctuates based on SOFR or a Base Rate, as defined in the agreement, plus an applicable margin.
The sensitivity analysis of the impact of changes in foreign currency exchange rates does not factor in a potential change in sales levels or local currency prices. 47 Commodity Price Risk We are exposed to price fluctuations for diesel fuel purchased for use in our vehicles.
The sensitivity analysis of the impact of changes in foreign currency exchange rates does not factor in a potential change in sales levels or local currency prices. 43 Commodity Price Risk We are exposed to price fluctuations for diesel fuel purchased for use in our vehicles.
As of December 31, 2023, a uniform 10% strengthening in the value of the USD relative to the GBP would have resulted in a decrease in net assets of $34 million. These theoretical calculations assume that an instantaneous, parallel shift in exchange rates occurs, which is not consistent with our actual experience in foreign currency transactions.
As of December 31, 2024, a uniform 10% strengthening in the value of the USD relative to the GBP would have resulted in a decrease in net assets of $33 million. These theoretical calculations assume that an instantaneous, parallel shift in exchange rates occurs, which is not consistent with our actual experience in foreign currency transactions.
Assuming an annual average cash balance of $412 million, a hypothetical 1% increase in the interest rate would reduce our net interest expense by $4 million. Foreign Currency Exchange Risk A proportion of our net assets and income are in non-U.S. dollar (“USD”) currencies, primarily the euro (“EUR”) and British pound sterling (“GBP”).
Assuming an annual average cash balance of $246 million, a hypothetical 1% increase in the interest rate would reduce our net interest expense by $2 million. Foreign Currency Exchange Risk A proportion of our net assets and income are in non-U.S. dollar (“USD”) currencies, primarily the euro (“EUR”) and British pound sterling (“GBP”).
A 1% decrease in market interest rates as of December 31, 2023 would increase the fair value of our fixed-rate indebtedness by approximately 4%. For additional information concerning our debt, see Note 12—Debt to our Consolidated Financial Statements.
A 1% decrease in market interest rates as of December 31, 2024 would increase the fair value of our fixed-rate indebtedness by approximately 3%. For additional information concerning our debt, see Note 12—Debt to our Consolidated Financial Statements.
We also have exposure to changes in interest rates as a result of our cash balances, which totaled $412 million as of December 31, 2023 and generally earn interest income that approximates the federal funds rate.
We also have exposure to changes in interest rates as a result of our cash balances, which totaled $246 million as of December 31, 2024 and generally earn interest income that approximates the federal funds rate.
During the year ended December 31, 2023, diesel prices fluctuated by as much as 19% in France, 21% in the United Kingdom, and 23% in the United States. We include fuel surcharge programs or other cost-recovery mechanisms in many of our customer contracts to mitigate the effect of any fuel price increases over base amounts established in the contract.
During the year ended December 31, 2024, diesel prices fluctuated by as much as 14% in France, 13% in the United Kingdom, and 11% in the United States. We include fuel surcharge programs or other cost-recovery mechanisms in many of our customer contracts to mitigate the effect of any fuel price increases over base amounts established in the contract.
See the applicable discussion under Item 1A, “Risk Factors.” 48
See the applicable discussion under Item 1A, “Risk Factors.” 44

Other XPO 10-K year-over-year comparisons