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What changed in XPO, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of XPO, Inc.'s 2024 and 2025 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 2025 report.

+285 added−311 removedSource: 10-K (2026-02-05) vs 10-K (2025-02-07)

Top changes in XPO, Inc.'s 2025 10-K

285 paragraphs added · 311 removed · 236 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

73 edited+13 added−18 removed38 unchanged
Biggest changeInformation 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.
Biggest changeOn the safety front, our employees take pride in XPO being the official transport partner for the Tour de France competition for over 45 years. 12 Information about our Executive Officers The following information relates to each of our executive officers: Name Age Position Mario Harik 45 Chairman and Chief Executive Officer Kyle Wismans 42 Chief Financial Officer David Bates 60 Chief Operating Officer Wendy Cassity 50 Chief Legal Officer and Corporate Secretary Mario Harik has served as XPO’s chief executive officer and a director since November 2022 and as chairman of the board since the beginning of January 2026.
Like 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.
Like 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 8 limitation, controlled substances and alcohol, hours-of-service compliance, vehicle maintenance, hazardous materials compliance, driver fitness, accidents or crashes, and unsafe driving.
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.
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 “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.
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.
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.
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.
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 10 risk.
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.
Transportation Fleet Our ongoing fleet initiatives companywide include modernizing our tractors and trailers; deploying cleaner fuels where practical, such as natural gas, biodiesel, renewable diesel, 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.
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.
XPO was named a 2025 “Top Company for Women to Work for in Transportation – Elite 30” by the Women in Trucking Association, a 2025 “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.
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.
Community Outreach XPO continues to support organizations that reflect the interests of our employees and the communities where we operate. In 2025, 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 career development infrastructure includes the following areas of focus, among others: Recruitment. We use an array of channels and recruiting partnerships to attract qualified job candidates. Our goal is to identify candidates who have the skills our customers need, or the desire to learn those skills.
Our career development infrastructure includes the following areas of focus, among others: Recruitment. We use an array of channels and recruiting partnerships to attract qualified job candidates. Our goal is to identify candidates who have the skills our customers need, or the desire to learn those skills. Interactive Hiring.
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.
These same priorities are emphasized when we train new commercial driver candidates at our in-house, 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 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.
In the U.S., examples include: • Pregnancy Care Policy: Guarantees up to 80 hours of paid prenatal medical 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 up to $5,250 of annual reimbursement for continuing education, academic discounts in a wide variety of 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 testing supplies at no cost to enrolled employees, as well as supplemental insurance, short-term loans and a personalized Total Rewards Statement.
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.
Throughout 2025, we continued to make substantial investments in direct employee communications, conducting quarterly engagement surveys and holding over 9,000 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.
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.
This includes 20% of U.S. employees who self-identified as Black or African American, which is over six percentage points higher than the U.S. population, based on the most recent census data.
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.
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 91% compliant with Euro 6 standards, and we have a natural gas-powered fleet of 280 trucks serving customers in France, the U.K., Spain and Portugal.
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.
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 has one of the largest LTL networks in North America, with approximately 9% share of the U.S. market, estimated to be $53 billion in 2024.
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.
We also offer employees tuition reimbursement of up to 11 $5,000 for any approved non-XPO driver training school. In 2025, we graduated over 400 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.
ITEM 1. BUSINESS Company Overview XPO, Inc., together with its subsidiaries, is a leading provider of freight transportation services, with company-specific avenues for value creation. We use our proprietary technology to move goods efficiently through our customers’ supply chains in North America and Europe.
ITEM 1. BUSINESS Company Overview XPO, Inc., together with its subsidiaries, is a leading provider of freight transportation services, with company-specific avenues for value creation. We use our proprietary technology to move goods efficiently through supply chains for approximately 55,000 customers in North America and Europe.
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.
In Europe, we have more than 150 all-electric trucks currently deployed 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.
Our competitors in North America include local, regional and national LTL carriers that offer the same services we provide, such as Old Dominion Freight Line and Saia. Our competitors in Europe vary based on the types of services provided; for example, LTL transportation versus dedicated or brokered full truckload transportation or multimodal solutions.
Our competitors in North America include local, regional and national LTL carriers that offer the same services we provide, such as Old Dominion Freight Line and Saia. Our competitors in Europe vary based on type of service; for example, the competitive landscape for LTL transportation differs from that of dedicated or brokered full truckload transportation or multimodal solutions.
Competition We operate in highly competitive marketplaces where customers can choose from among many different transportation providers with distinct value propositions. We compete on quality and reliability of service, scope and scale of operations, technological capabilities, expertise and price.
Competition We operate in highly competitive marketplaces where customers can choose from among many different transportation providers with distinct value propositions. We compete on quality and reliability of service, scope and scale of operations, expertise, price, and our technological capabilities, which are growing in importance as a differentiator.
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 learning and development platform, XPO University, delivers over 22,000 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 2025, over 380,000 training hours were completed by our employees worldwide.
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.
Globally, in 2025, our top five customers combined accounted for approximately 8% of revenue, with the largest customer accounting for less than 3% of revenue. In our North American LTL segment, in 2025, our top five customers combined accounted for less than 11% of revenue, with the largest customer accounting for approximately 4% of revenue.
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 addition to our annual merit and hourly pay increases that broadly cover our employee population in North America, over 1,000 eligible LTL employees at over 225 locations received additional wage increases throughout 2025. Comprehensive Benefits.
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.
Employee Base Profile Based on December 31, 2025 data, XPO has locations in 17 countries, with approximately 22,500 employees in North America, 14,400 employees in Europe and 400 employees in Asia, supplemented by approximately 3,000 temporary workers. By geography, approximately 60% of our global employees are based in North America, 39% in Europe and 1% in Asia.
We are proud of our sustainability efforts and initiatives, and note that in 2024, our European business was awarded the prestigious EcoVadis Gold Medal for its Corporate Social Responsibility strategy and performance.
We are proud of our sustainability efforts and initiatives, and note that in 2025, our European business was awarded the prestigious EcoVadis Gold Medal for the second year in a row for Corporate Social Responsibility strategy and performance.
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.
Our full-year yield growth of 6.0%, compared with 2024, 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. • Drive cost efficiencies. We aim to achieve continuous improvements in cost efficiency by optimizing our variable costs, overhead and use of purchased transportation.
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.
This program helps retain and promote promising leadership talent by building relevant strategic skills. Frontline Leadership Training. 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.
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.
In 2025, we generated approximately 59% of revenue in North America, derived almost entirely from the U.S., 16% in France, 14% in the U.K. and 11% in the rest of Europe. The diversification of our customer base minimizes concentration risk.
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.
By job description, approximately 63% of our employees work as drivers and dockworkers, 25% 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.
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.
Electric vehicles show promise in commercial transport applications in Europe as an alternative to diesel, particularly in urban and regional 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.
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.
He previously led 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. Harik has served as a director of QXO, Inc. since June 2024. Mr.
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.
As of December 31, 2025, we had approximately 37,000 employees and 592 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.
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.
The “XPO” trademark, service mark, and trade name are essential to our business and critical to our success. 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.
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.
As of December 31, 2025, approximately 2,550 of our LTL drivers have achieved a safety designation of at least one million accident-free miles, with 211 of these drivers meeting this threshold in 2025.
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.
Additionally, we invest in advancing a host of XPO-specific initiatives that are largely independent of the macroeconomic environment. Our trailer manufacturing facility and commercial truck driver schools are self-reliant competitive advantages for our company, particularly when industry conditions make it difficult to source equipment or drivers.
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.
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.
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.
In our total workforce, the absolute number of females in managerial positions grew by approximately 5% cumulatively from 2022 to 2025; the absolute number of ethnically or racially diverse employees in managerial positions grew by 9% cumulatively in the same period.
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 use our proprietary technology to manage these services efficiently within our digital ecosystem in Europe. The previously announced authorization by our Board of Directors to divest the European business remains in effect. There can be no assurance that the divestiture will occur, or of the terms or timing of a transaction.
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.
By gender, approximately 15% of our global employees are women — this increases to 33% when excluding drivers, dockworkers and technicians. In North America, 50% of our professional management positions are held by women.
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.
Recently, we introduced new options for virtual physical therapy and virtual primary care 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.
Department of Transportation (“DOT”). Our motor carrier subsidiaries and the third-party motor carriers we contract with in the U.S. must comply with the safety and operations regulations of the DOT.
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. Department of Transportation (“DOT”). Our motor carrier subsidiaries and the third-party motor carriers we contract with in the U.S. must comply with the safety and operations regulations of the DOT.
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.
We believe that we are in a strong position to create value from all levels of demand for LTL services, and 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.
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.
Harik has led numerous technological developments for global transportation and logistics operations, built comprehensive technology organizations and consulted to Fortune 100 companies.
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 2025, approximately 60% of our newly hired U.S. employees self-identified as ethnically or racially diverse and approximately 45% of our total U.S. employee population was ethnically or racially diverse.
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.
Regulation Our operations are regulated by various governmental agencies in the U.S. and in other countries where we conduct business. 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.
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.
Ethnically or racially diverse employees earned 32% of managerial promotions in 2025 and held 16% of executive leadership positions (vice president and above), 29% of professional management roles and 33% of operational management roles.
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.
As of December 31, 2025, 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, 2024 position.
European Transportation Segment XPO has a unique pan-European transportation platform with leading positions in key geographies: We are the #1 full truckload broker and the #1 pallet network (LTL) provider in France; the #1 full truckload broker and the #1 LTL provider in Iberia (Spain and Portugal); and a top-tier dedicated truckload provider in the U.K., where we also have the largest single-owner LTL network.
We are the #1 full truckload broker and the #1 pallet network (LTL) provider in France; the #1 full truckload broker and the #1 LTL provider in Iberia (Spain and Portugal); and, in the U.K., we are a market leader in warehousing, a top-tier dedicated truckload provider and have the largest single-owner LTL network.
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.
Our extensive customer base includes many sector leaders that have long-tenured relationships with us. Our full range of freight services in Europe encompasses dedicated truckload, LTL, full truckload brokerage, warehousing, managed transportation, last mile delivery, freight forwarding and, increasingly, multimodal solutions designed for specific customer needs.
Cassity was in private practice as a corporate transactional attorney at McDermott Will & Emery, LLP and Cravath Swaine & Moore, LLP in their New York offices. Ms. Cassity holds a B.A. from the University of Arizona in English and History and received her J.D. from Columbia Law School. Available Information Our corporate website is www.xpo.com .
Cassity holds a B.A. from the University of Arizona in English and History and received her J.D. from Columbia Law School. 13 Available Information Our corporate website is www.xpo.com .
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.
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 to deliver superior outcomes at scale.
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.
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 2025, we purchased over 1,200 tractors in North America, reducing our average tractor age to approximately 3.7 years.
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.
Additionally, we believe that many of our customers experience a post-holiday decline in demand for their products, contributing to the historical decrease in industry freight shipments in the first quarter.
Harik holds a master’s degree in engineering – information technology from Massachusetts Institute of Technology, and a degree in engineering – computer and communications from the American University of Beirut, Lebanon. 13 Kyle Wismans has served as XPO’s chief financial officer since August 2023, after being promoted from our senior vice president of revenue management and finance, a position he held from February 2023 to August 2023.
Kyle Wismans has served as XPO’s chief financial officer since August 2023, after being promoted from our senior vice president of revenue management and finance, a position he held from February 2023 to August 2023. Additionally, he served as XPO’s senior vice president, financial planning and analysis from September 2019 to February 2023. Mr.
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.
Our customers span every major industry, giving us valuable strongholds in verticals that are fundamental to the economy, such as industrial and manufacturing, retail and e-commerce, food and beverage, and consumer goods.
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.
In 2025, approximately 60% of our capital expenditures were deployed to acquire more than 3,600 trailers and 1,200 tractors, increasing the capacity of our fleet. Our average tractor age at year-end 2025 was 3.7 years, compared with 5.9 years at year-end 2022.
We are intently focused on customer service excellence as our most powerful lever to grow yield, which we measure as gross revenue per hundredweight, excluding fuel surcharges.
Since the launch of our growth plan in late 2021, we have added more than 19,100 trailers and 6,000 tractors to our fleet. • Accelerate yield growth . We are intently focused on customer service excellence as our most powerful lever to grow yield, which we measure as gross revenue per hundredweight, excluding fuel surcharges.
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.
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.
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.
Our network serves approximately 37,000 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. We operate the business to high service standards for on-time delivery and damage-free transport, while 4 balancing our network to leverage our fixed costs.
Additionally, he served as XPO’s senior vice president, financial planning and analysis from September 2019 to February 2023. Mr. Wismans has played a vital role in the implementation of our LTL growth strategy, as well as our spin-offs of GXO and RXO.
Wismans has played a vital role in the implementation of our LTL growth strategy, as well as our spin-offs of GXO and RXO. Mr. Wismans has served as a director of GXO Logistics, Inc. since May 2025.
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 committed to building a premium customer service organization by aligning employee incentives and accountability with tangible quality-of-service results. In 2025, we improved on-time performance in every quarter versus 2024 and delivered a damage claims ratio of 0.3%, representing a major improvement from 1.2% in the fourth quarter of 2021.
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.
Due to the competitive nature of our marketplaces, we place equal importance on strengthening existing customer relationships and forging new relationships. Our ability to make ongoing investments in the business is one of the most compelling competitive strengths of XPO.
For the full year 2024, we lowered our cost of third-party purchased transportation by over 32% compared with 2023.
For the full year 2025, we lowered our cost of third-party purchased transportation by over 50% compared with 2024 and reduced outsourced linehaul miles as a percentage of total linehaul miles to 5.1% in the fourth quarter.
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.
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.
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 .
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. 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.
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.
For the full year 2025, we moved approximately 16 billion pounds of freight through our network with a customer-focused organization of truck drivers, service center teams and sales professionals, facilitated by our proprietary technology.
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.
We see AI playing a major role in how we operate, price our services, compete, and create value over the long term. 5 An LTL network of our scale has hundreds of thousands of activities underway at any given time, all managed on our technology.
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.
Our proprietary optimization models analyze massive amounts of data including volume, capacity, and dimensions and generate instructions to maximize trailer utilization, reduce cost, and enhance service. We use our real-time visualization tools to drive efficiencies with pickups and deliveries and developed a robust pricing platform for contractual account management.
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 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 platform provides an efficient way for candidates to learn about XPO at their convenience and explore positions that match their interests and abilities.
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.
We achieve this across the company by providing services that are both highly responsive to customer goals, such as mitigating environmental impacts over time, and proactive in identifying targets for improvement. In North America, our comprehensive LTL growth plan focuses on four levers of value creation that underpin the interests of our shareholders and customers: • Provide best-in-class service.
We supported homeless shelters by donating more than 64,000 pairs of socks, donated more than $115,000 worth of schools supplies to local kids across our network, and sponsored Pat’s Run to support the Pat Tillman Foundation. On the safety front, our employees take pride in XPO being the official transport partner for the Tour de France competition for 44 years.
We supported homeless shelters by donating more than 80,000 pairs of socks, sponsored Pat’s Run to support the Pat Tillman Foundation, and moved 5 loads of wreaths for Wreaths Across America to be placed on graves of U.S. veterans.
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.
We have made considerable progress in each of these areas since launching our growth plan in the fourth quarter of 2021, and we believe we are still in the early stage of realizing our plan’s full potential. Customers and Markets We provide freight transportation services to approximately 55,000 customers ranging in size from small, entrepreneurial businesses to Fortune 500 companies.
Since the launch of our growth plan in late 2021, we have added more than 15,500 trailers and 4,700 tractors to our fleet and added more than 2,000 net new doors to our network. • Accelerate yield growth .
For example, since implementing our growth plan in the fourth quarter of 2021, we have added more than 2,000 net new doors to our network, expanding our presence in high-growth markets while improving our operating ratio. We have created a strategic growth opportunity by building more than 30% excess door capacity into our network.
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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.
Added
In 2025, we developed new linehaul models that use artificial intelligence (AI) to improve the efficiency of our freight flows, piloted routing innovations for pickup-and-delivery operations and continued to improve productivity with real-time labor analytics at the service center level. Our proprietary developments in intelligent automation and AI-enabled decision-making are directly enhancing profitability.
Removed
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.
Added
Our LTL business historically has generated a high return on invested capital and robust free cash flow, funding our ongoing investments in people, capacity and technology.
Removed
In 2024, we produced over 4,400 trailers and continued to invest in training commercial drivers at our 130 XPO driver schools. Specific to our technology, we believe that we have a large opportunity to drive further growth and profitability in our LTL network through innovation. For more information, see “Proprietary Technology and Intellectual Property” below.
Added
This positions us to capture profitable market share gains and drive higher incremental margins when market conditions improve. LTL industry capacity is currently constrained below pre-pandemic levels in North America, and we believe that our combination of capacity and technology puts us in a unique position to respond quickly to rebounds in demand when the freight recession eases.
Removed
Our operators use our proprietary technology to manage these services within our digital ecosystem in Europe. 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”).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

60 edited+7 added−18 removed113 unchanged
Biggest changeOur European trade receivables securitization program (the “Receivables Securitization Program”) provides for an interest rate at lenders’ cost of funds plus an applicable margin. Our financial position may be affected by fluctuations in interest rates since the ABL Facility, Term Loan Facility and Receivables Securitization Program are subject to floating interest rates.
Biggest changeOur financial position may be affected by fluctuations in interest rates since the Revolving Credit Facility, Term Loan Facility and Receivables Securitization Program are subject to floating interest rates. 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.
The diversification of our revenues, costs and cash flows will diminish as a result of a sale or other divestiture of our European business, and our ability to fund capital expenditures, investments and service our debt may be diminished.
The diversification of our revenues, costs and cash flows will diminish as a result of a sale or other divestiture of our European business, and our ability to fund capital expenditures and investments and service our debt may be diminished.
Without investment grade credit ratings, we incur increased interest expense and borrowing costs and may have reduced access to financial markets to obtain additional debt financing or refinance our existing debt, potentially adversely affecting our financial condition and results of operations.
Without investment grade credit ratings, we may incur increased interest expense and borrowing costs and may have reduced access to financial markets to obtain additional debt financing or refinance our existing debt, potentially adversely affecting our financial condition and results of operations.
Any further changes in U.S. or international trade policy could trigger additional retaliatory actions by affected countries, resulting in “trade wars” and further increased costs for goods transported globally, which may reduce customer demand for these products if the parties having to pay those tariffs increase their prices, or in trading partners limiting their trade with countries that impose anti-trade measures.
Further changes in U.S. or international trade policy could trigger additional retaliatory actions by affected countries, resulting in “trade wars” and further increased costs for goods transported globally, which may reduce customer demand for these products if the parties having to pay those tariffs increase their prices, or in trading partners limiting their trade with countries that impose anti-trade measures.
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.
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, if a downturn in our customers’ business causes a reduction in the volume of freight shipped by those customers, our operating results could be adversely affected; • Some of our customers may experience financial distress, file for bankruptcy protection, go out of business, or suffer disruptions in their business and may be unable to pay us.
In addition, if a downturn in our customers’ businesses causes a reduction in the volume of freight shipped by those customers, our operating results could be adversely affected; • Some of our customers may experience financial distress, file for bankruptcy protection, go out of business, or suffer disruptions in their business and may be unable to pay us.
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.
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. Further, a sale or other divestiture of one or more of our business units may subject us to litigation.
During periods of increased competition in the labor market for drivers, our LTL and full truckload operations may be required to increase driver compensation and benefits in the future to attract and retain a sufficient number of qualified drivers or face difficulty meeting customer demand, all of which could adversely affect our profitability.
During periods of increased competition in the labor market for drivers, our LTL and full truckload operations may be required to increase driver compensation and benefits in the future to attract and retain a sufficient number of qualified drivers or face difficulty meeting customer demand, all of which could 22 adversely affect our profitability.
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.
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 23 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.
If higher costs are incurred by us as a result of future changes in regulations, or by third-party transportation providers who pass increased costs on to us, this could adversely affect our results of operations to the extent we are unable to obtain a corresponding increase in price from our customers.
If higher costs are incurred by us as a result of future changes in 25 regulations, or by third-party transportation providers who pass increased costs on to us, this could adversely affect our results of operations to the extent we are unable to obtain a corresponding increase in price from our customers.
There can be no assurance that a sale or other divestiture of our European business will occur, or the terms or timing of a potential transaction. If we determine that our goodwill has become impaired, we may incur impairment charges, which would negatively impact our operating results.
There can be no assurance that a sale or other divestiture of our European business will occur, or the terms or timing of a potential transaction. 17 If we determine that our goodwill has become impaired, we may incur impairment charges, which would negatively impact our operating results.
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.
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.
Accordingly, our ultimate results may differ from our estimates, which could result in losses over our reserved amounts. We periodically evaluate our level of insurance coverage and adjust insurance levels based on targeted risk tolerance and premium expense.
Accordingly, our ultimate results may differ from our initial estimates, which could result in losses over our reserved amounts. We periodically evaluate our level of insurance coverage and adjust insurance levels based on targeted risk tolerance and premium expense.
In addition, if we fail to hire and retain qualified personnel to implement, protect and maintain our information technology systems, or if we fail to enhance our systems to meet our customers’ needs, our results of operations could be seriously harmed.
In addition, if we fail to hire and retain qualified personnel to implement, protect and maintain our information technology systems, or 19 if we fail to enhance our systems to meet our customers’ needs, our results of operations could be seriously harmed.
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.
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.
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.
At December 31, 2025, 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 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.
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. Our reputation could be harmed if we fail to satisfy evolving stakeholder expectations regarding environmental matters.
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.
We reserve for anticipated losses and expenses and periodically evaluate and adjust our claims reserves to reflect our experience and exposure expectation. Estimating the number and severity of claims, as well as related potential judgment or settlement amounts, is inherently difficult.
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.
As of December 31, 2025, our employees had voted against union representation in 19 of the 28 union elections held since 2014. As of December 31, 2025, none of our employees were represented by a union in North America, consistent with our December 31, 2024 position.
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.
We use a combination of self-insurance programs and purchased insurance to provide for the costs of employee medical, vehicular collision and accident (including personal injury), 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.
In addition, we have other expenses that are primarily variable but are fixed for a period of time, as well as certain significant fixed expenses; we may be unable to adequately adjust these expenses to match a rapid change in demand; 15 • The U.S. government has made significant changes in U.S. trade policy and has taken certain actions that have negatively impacted U.S. trade, including imposing tariffs on certain goods imported into the U.S.
In addition, we have other expenses that are primarily variable but are fixed for a period of time, as well as certain significant fixed expenses; we may be unable to adequately adjust these expenses to match a rapid change in demand; • The U.S. government has made significant changes in U.S. trade policy and has taken certain actions that have negatively impacted U.S. trade, including imposing tariffs on certain goods imported into the U.S. 15 Foreign governments, including the European Union (“EU”), have imposed tariffs on certain goods imported from the U.S.
Bribery Act, Sapin II and other anti-corruption laws and regulations prohibit corrupt payments by our employees, vendors, or agents. While we have implemented policies, training, and internal controls designed to reduce the risk of corrupt payments, our employees, vendors, or agents may violate our policies and controls.
Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act, Sapin II and other anti-corruption laws and regulations prohibit corrupt payments by our employees, vendors, or agents. While we have implemented policies, training, and internal controls designed to reduce the risk of corrupt payments, our employees, vendors, or agents may violate our policies and controls.
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.
In particular, it is difficult to predict which, and in what form, emissions regulations may be modified or enforced, and what impact these regulations may have on motor carrier and less-than-truckload operations.
Impairment may result from significant changes in the manner or use of the acquired assets, in connection with the sale, spin off or other divestiture of a business unit, negative industry or economic trends and/or significant underperformance relative to historic or projected operating results.
Impairment may result from significant changes in the manner or use of the acquired assets, in connection with the sale, spin off or other divestiture of a business unit, a change in reporting units in connection with a reorganization of our reporting structure, negative industry or economic trends and/or significant underperformance relative to historic or projected operating results.
While we have dedicated significant resources to security and privacy and to incident response capabilities, our response processes may not be adequate, may fail to accurately assess the severity of an incident, may not be sufficient to prevent or limit harm, or may fail to sufficiently remediate an incident in a timely fashion, any of which could harm our business, reputation, results of operations and financial condition.
While we have dedicated significant resources to security and privacy and to incident response capabilities, our response processes may not be adequate, may fail to accurately assess the severity of an incident, may not be sufficient to prevent or limit harm, or may fail to sufficiently remediate an incident in a timely fashion, any of which could harm our business, reputation, results of operations and financial condition. 20 A failure of our information technology infrastructure may materially adversely affect our business.
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.
Companies across all industries have faced scrutiny from stakeholders related to environmental matters, including practices and disclosures related to GHGs. 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.
In addition, some customers may not pay us as quickly as they have in the past, causing our working capital needs to increase; • A significant number of our transportation providers may go out of business and we may be unable to secure sufficient equipment capacity or services to meet our commitments to our customers; • A pandemic or other public health epidemic poses the risk that we or our employees, customers, suppliers, manufacturers and other commercial partners may be prevented from conducting business activities for an indefinite period of time, including due to the spread of the disease or shutdowns requested or mandated by governmental authorities; • We may not be able to appropriately adjust our expenses to rapid changes in market demand.
In addition, some customers may not pay us as quickly as they have in the past, causing our working capital needs to increase; • A pandemic or other public health epidemic poses the risk that we or our employees, customers, suppliers, manufacturers and other commercial partners may be prevented from conducting business activities for an indefinite period of time, including due to the spread of the disease or shutdowns requested or mandated by governmental authorities; • We may not be able to appropriately adjust our expenses to rapid changes in market demand.
Specifically, we may be exposed to the risk that temporary employees may not perform their assignments in a satisfactory manner or may not comply with our safety rules in an appropriate manner, whether as a result of their lack of experience or otherwise.
Moreover, we cannot guarantee that temporary employees are as well-trained as our other employees. Specifically, we may be exposed to the risk that temporary employees may not perform their assignments in a satisfactory manner or may not comply with our safety rules in an appropriate manner, whether as a result of their lack of experience or otherwise.
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.
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. Many of these initiatives involve the use of AI technology.
Increased competition may lead to a reduction in revenues, reduced profit margins, or a loss of market share, any one of which could harm our business.
Competition in the transportation services industry is intense. Increased competition may lead to a reduction in revenues, reduced profit margins, or a loss of market share, any one of which could harm our business.
Despite significant testing, external and internal risks, such as malware, insecure coding, “Acts of God,” data leakage and human error, pose a direct threat to the stability and effectiveness of our information technology systems and operations.
We also rely on third parties and virtualized infrastructure to operate our information technology systems. Despite significant testing, external and internal risks, such as malware, insecure coding, “Acts of God,” data leakage and human error, pose a direct threat to the stability and effectiveness of our information technology systems and operations.
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.
Strikes and work stoppages also could occur at our own 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.
We rely on our information technology systems to effectively manage our order entry and fulfillment, communications, labor management, sales and marketing, financial, legal and compliance functions, engineering and product development tasks, research and development data, and other business processes. We also rely on third parties and virtualized infrastructure to operate our information technology systems.
The efficient operation of our business depends on our information technology systems. We rely on our information technology systems to effectively manage our order entry and fulfillment, communications, labor management, sales and marketing, financial, legal and compliance functions, engineering and product development tasks, research and development data, and other business processes.
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.
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.
While we intend for our acquisitions to enhance our competitiveness and profitability, we cannot be certain that our past or future acquisitions will be accretive to earnings or otherwise meet our operational or strategic expectations.
Further, we cannot be certain that our past or future acquisitions will be accretive to earnings or otherwise meet our operational or strategic expectations.
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 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.
The U.S. and other export controls may restrict us from exporting specific products or arranging transportation or other services to or for the benefit of certain entities in specified countries. Global developments such as the ongoing conflict in Ukraine may result in new and evolving sanctions and trade restrictions.
The U.S. and other export controls may restrict us from exporting specific products or arranging transportation or other services to or for the benefit of certain entities in specified countries.
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.
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.
Non-compliance with trade compliance laws, policies, sanctions, and other regulatory requirements could result in reputational harm, operational delays, monetary fines and penalties, loss of revenues, increased costs, loss of export privileges, and criminal sanctions. The U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K.
Global developments such as the ongoing conflict in Ukraine may result in new and evolving sanctions and trade restrictions. Non-compliance with trade compliance laws, policies, sanctions, and other regulatory requirements could result in reputational harm, operational delays, monetary fines and penalties, loss of revenues, increased costs, loss of export privileges, and criminal sanctions. The U.S.
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.
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.
As a result, we are exposed to various risks related to managing our subcontractors, such as the risk that they do not fulfill their assignments in a satisfactory manner or within the specified deadlines. Moreover, we cannot guarantee that temporary employees are as well-trained as our other employees.
Our European business heavily relies on subcontracting and we use a large number of temporary employees in these operations. As a result, we are exposed to various risks related to managing our subcontractors, such as the risk that they do not fulfill their assignments in a satisfactory manner or within the specified deadlines.
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.
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.
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.
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.
The transition to utilizing zero-emission vehicles could have a material adverse effect on our financial condition, results of operations, and cash flows or may require us to incur significant additional costs, any of which could negatively impact our business.
If emission compliant vehicles are not available or not commercially viable for the less-than-truckload market, we may be required to modify or curtail our operations in applicable jurisdictions which could have a material adverse effect on our financial condition, results of operations, and cash flows or may require us to incur significant additional costs, any of which could negatively impact our business.
We may in the future be required to raise capital through public or private financing or other arrangements in order to pursue our growth strategy or operate our businesses. Such financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could harm our business and/or our ability to execute our strategy.
We may in the future be required to raise capital through public or private financing or other arrangements in order to pursue our growth strategy or operate our businesses.
The Second Amended and Restated Revolving Loan Credit Agreement, as amended (the “ABL Facility”), and the senior secured term loan credit agreement, as amended (the “Term Loan Facility”), provide for an interest rate based on the Secured Overnight Offering Rate (“SOFR”) or a Base Rate, as defined in the agreements, plus an applicable margin.
The Revolving Credit Agreement, as amended (the “Revolving Credit Facility”) provides for an interest rate based on the Secured Overnight Financing Rate (“SOFR”), the Canadian Overnight Repo Rate (“CORRA”) or a Base Rate, as defined in the agreement, plus an applicable margin.
Changes in income tax regulations for U.S. and multinational companies may increase our tax liability. We are subject to income taxes in the United States and many foreign jurisdictions.
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. 24 Changes in income tax regulations for U.S. and multinational companies may increase our tax liability. We are subject to income taxes in the United States and many foreign jurisdictions.
The OECD has recommended changes to numerous long-standing international tax principles through its base erosion and profit shifting (“BEPS”) project, and many jurisdictions have begun codifying those recommendations into law.
The OECD has recommended changes to numerous long-standing international tax principles through its base erosion and profit shifting (“BEPS”) project, and many jurisdictions have begun codifying those recommendations into law. During 2023, the OECD issued administrative guidance for the Pillar Two Global Anti-Base Erosion rules (“Pillar Two”), which generally imposes a 15% global minimum tax on multinational companies.
Our systems and the systems maintained by our third-party providers have been subject to attempts to gain unauthorized access, breaches, and other system disruptions, and these and similar incidents could happen again.
The rapid evolution and increased availability of artificial intelligence may intensify cybersecurity risks by making cyber-attacks more sophisticated and cybersecurity incidents more difficult to detect, contain, and mitigate. Our systems and the systems maintained by our third-party providers have been subject to attempts to gain unauthorized access, breaches, and other system disruptions, and these and similar incidents could happen again.
INDUSTRY RISK Risks related to Our Markets and Competition We operate in a highly competitive industry and, if we are unable to adequately address factors that may adversely affect our revenue and costs, our business could suffer. Competition in the transportation services industry is intense.
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. 26 INDUSTRY RISK Risks related to Our Markets and Competition We operate in a highly competitive industry and, if we are unable to adequately address factors that may adversely affect our revenue and costs, our business could suffer.
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.
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.
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.
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.
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.
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. 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.
However, these mechanisms may not fully capture an increase in fuel price. Furthermore, market pressures may limit our ability to assess fuel surcharges in the future. The extent to which we are able to recover increases in fuel costs may be impacted by the amount of empty or out-of-route truck miles or engine idling time.
However, these mechanisms may not fully capture an increase in fuel price. Furthermore, market pressures may limit our ability to assess fuel surcharges in the future.
If we are not able to successfully implement these cost and revenue initiatives, our future financial results may suffer. 16 Our past acquisitions, as well as any acquisitions that we may complete in the future, may be unsuccessful or result in other risks or developments that adversely affect our financial condition and results.
If we are not able to successfully implement these cost and revenue initiatives, our future financial results may suffer. 16 We may not successfully manage our growth.
Decreases in fuel prices reduce the cost of transportation services and accordingly, will reduce our revenues and may reduce margins for certain lines of business.
The extent to which we are able to recover increases in fuel costs may be impacted by the amount of empty or out-of-route truck miles or engine idling time. 18 Decreases in fuel prices reduce the cost of transportation services and accordingly, will reduce our revenues and may reduce margins for certain lines of business.
We process and maintain certain information that is confidential, proprietary, personal, or otherwise sensitive, including financial and confidential business information.
We process and maintain certain information that is confidential, proprietary, personal, or otherwise sensitive, including financial and confidential business information. In the past, foreign state-sponsored cyber threat actors have targeted networks belonging to critical infrastructure organizations globally, including transportation and logistics infrastructure networks.
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.
Governments around the world are proposing and adopting laws and regulations regarding GHGs which 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. Climate change concerns and GHG regulatory efforts could also affect the Company's customers themselves.
Our overseas operations are subject to various operational and financial risks that could adversely affect our business.
Risks related to Our Credit and Liquidity Our indebtedness could adversely affect our financial condition.
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.
State and federal governmental agencies have announced regulations to be implemented to decrease emissions from new heavy-duty vehicles and establish new standards for greenhouse gas emissions from heavy-duty engines. 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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To date, several governments, including the European Union (“EU”), have imposed tariffs on certain goods imported from the U.S. These actions may contribute to weakness in the global economy that could adversely affect our results of operations.
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These actions may contribute to weakness in the global economy that could adversely affect our results of operations. A decline or disruption in general domestic and global economic conditions that affects demand for the commodities and products we transport could reduce revenues or have other adverse effects on the Company's cost structure and profitability.
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We are unable to predict all of the risks that could arise as a result of our acquisitions. In December 2023, we completed our acquisition of 28 service centers, including the assumption of certain leases, of Yellow Corporation (the “Yellow Service Centers”).
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While many of our locations have emergency response plans to address extreme weather conditions, 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.
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The ultimate success of the acquisition of the Yellow Service Centers will depend on, among other things, the ability to integrate the Yellow Service Centers into our LTL network in a manner that supports our North American LTL business and facilitates growth opportunities.
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In addition, the adoption of new and rapid changes in technology, such as the rise in artificial intelligence applications, may impact the transportation and logistics industry. If we do not appropriately adapt our operations to these new technologies as quickly or effectively as our competitors, the Company's business could be adversely affected.
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It is possible that the integration process could result in the loss of customers, the disruption of ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues and delays, potential environmental liabilities and higher than expected integration costs. We may not successfully manage our growth.
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Such financing may not be available on acceptable terms, or 21 at all, and our failure to raise capital when needed could harm our business and/or our ability to execute our strategy. Further debt financing may involve restrictive covenants and could reduce our profitability.
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The services we provide outside the U.S. are subject to risks resulting from changes in tariffs, trade restrictions, trade agreements, tax policies, difficulties in managing or overseeing foreign operations and external agents, different liability standards, issues related to compliance with data protection laws, competition laws, and intellectual property laws of countries that do not protect our rights relating to our intellectual property, including our proprietary information systems, to the same extent as do U.S. laws.
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The Senior Secured Term Loan Credit Agreement, as amended (the “Term Loan Facility”), provides for an interest rate based on SOFR or a Base Rate, as defined in the agreement, plus an applicable margin. Our European trade receivables securitization program (the “Receivables Securitization Program”) provides for an interest rate at lenders’ cost of funds plus an applicable margin.
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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.
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Many Pillar Two rules were effective for fiscal years beginning on January 1, 2024, with other aspects effective from 2025. On July 4, 2025, the One Big Beautiful Bill Act (P.L. 119-21) was signed into law. The legislation has multiple effective dates, with certain provisions effective in 2025 and others effective through 2027.
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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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An imposition of tariffs on imports or other changes to U.S. trade policy could cause demand for shipping from international markets to decrease, and if the declines are significant enough, it could have a material adverse effect on our results of operations, financial condition, and liquidity.
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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.
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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.
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A failure of our information technology infrastructure may materially adversely affect our business. The efficient operation of our business depends on our information technology systems.
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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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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.
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Strikes and work stoppages also could occur at our own facilities.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur 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.
Biggest changeOur CISO has more than a decade of executive leadership experience with blue chip companies in the areas of information technology, cybersecurity, risk management and compliance across multiple industries. He and his team have experience assessing, designing, building and operating security platforms, identity and access, data protection, product and software security, cyber engineering, cyber defense, automation and compliance initiatives.
The 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.
The 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 27 provide services to our business, are effective and current.
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.
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 internal and external available information and classify the severity of potential cybersecurity incidents.
For an additional discussion of certain risks associated with cybersecurity see Item 1A, “Risk Factors” above. 28
For an additional discussion of certain risks associated with cybersecurity see Item 1A, “Risk Factors” above.
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.
Our information security program is overseen by our Chief Information Security Officer (“CISO”), whose team is responsible for leading enterprise-wide cybersecurity strategy, policy, standards, architecture, threat prevention, threat detection, and incident response processes.
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.
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.
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.
The information security team provides periodic reports to our Chief Information Officer, Board of Directors, Chief Executive Officer and other members of our senior management as appropriate.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSegment 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.
Biggest changeSegment Leased Facilities Owned Facilities Customer Facilities (1) Total North American LTL 206 150 — 356 European Transportation 212 14 4 230 Corporate 6 — — 6 Total 424 164 4 592 (1) Includes locations owned or leased by customers.
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. We believe that our facilities are sufficient for our current needs.
We lease our current executive offices located in Greenwich, Connecticut and Boston, Massachusetts, 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, 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.
ITEM 2. PROPERTIES As of December 31, 2025, we had 592 locations, primarily in North America and Europe. These facilities are located in all 48 contiguous U.S. states, as well as globally.

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 (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.
Biggest changeITEM 3. LEGAL PROCEEDINGS Information with respect to certain legal proceedings is included in Note 17—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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 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.
Biggest changeITEM 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 30, 2026, there were approximately 49 registered holders of our common stock.
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.
The graph assumes that the value of the investment in our common stock and each index was $100 on December 31, 2020 and that all dividends and other distributions, including the effect of Spin-offs, were reinvested.
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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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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. 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 XPO, Inc. $ 100.00 $ 113.76 $ 77.59 $ 204.16 $ 305.69 $ 316.78 S&P Transportation Select Industry $ 100.00 $ 134.42 $ 96.77 $ 121.64 $ 127.78 $ 136.28 S&P 400 MidCap $ 100.00 $ 124.76 $ 108.47 $ 126.29 $ 143.88 $ 154.68 29 Issuer Purchases of Equity Securities The following table summarizes our purchases of our common stock for the quarter ended December 31, 2025: (In millions, except share and per share data) Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) October 1, 2025 - October 31, 2025 — $ — — $ 690 November 1, 2025 - November 30, 2025 393,355 134.15 393,355 637 December 1, 2025 - December 31, 2025 89,998 135.86 89,998 625 Total 483,353 $ 134.47 483,353 $ 625 (1) Based on trade date.
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(2) On March 27, 2025, we announced that our Board of Directors authorized repurchases of up to $750 million of our common stock. The program has no expiration date and may be utilized over time, with no obligation to repurchase any specific number of shares. We may suspend or discontinue the program at any time.
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For further details, refer to Note 13—Stockholders’ Equity to our Consolidated Financial Statements.

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) 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.
Biggest changeWe cannot predict how future macroeconomic conditions, supply chain constraints or conflicts may adversely affect our results of operations. 31 Consolidated Summary Financial Results Years Ended December 31, Percent of Revenue (Dollars in millions) 2025 2024 2025 2024 Revenue $ 8,157 $ 8,072 Salaries, wages and employee benefits 3,424 3,377 42.0 % 41.8 % Purchased transportation 1,662 1,701 20.4 % 21.1 % Fuel, operating expenses and supplies 1,571 1,589 19.3 % 19.7 % Operating taxes and licenses 83 80 1.0 % 1.0 % Insurance and claims 167 134 2.0 % 1.7 % Gains on sales of property and equipment (17) (40) (0.2) % (0.5) % Depreciation and amortization expense 521 490 6.4 % 6.1 % Pre-Con-way acquisition environmental matter 35 — 0.4 % — % Legal matters (13) — (0.2) % — % Transaction and integration costs 8 53 0.1 % 0.7 % Restructuring costs 59 27 0.7 % 0.3 % Operating income 656 660 8.0 % 8.2 % Other income (6) (37) (0.1) % (0.5) % Debt extinguishment loss 6 — 0.1 % — % Interest expense 219 223 2.7 % 2.8 % Income before income tax provision 437 473 5.4 % 5.9 % Income tax provision 121 86 1.5 % 1.1 % Net income $ 316 $ 387 3.9 % 4.8 % Year Ended December 31, 2025 Compared with Year Ended December 31, 2024 Our consolidated revenue for 2025 increased by 1.1% to $8.2 billion, compared with 2024.
During 2024, we used $789 million of cash to purchase property and equipment and received $75 million from sales of property and equipment, including $47 million related to the sale of a service center in our North American LTL segment in December 2024 from a planned service center relocation.
During 2024, we used $789 million of cash to purchase property and equipment and received $75 million of cash from sales of property and equipment, including $47 million related to the sale of a service center in our North American LTL segment in December 2024 from a planned service center relocation.
Differences in actual experience or changes in assumptions could materially impact our obligation and future expense or income. Discount Rate In determining the appropriate discount rate, we are assisted by actuaries who utilize a yield-curve model based on a universe of high-grade corporate bonds (rated AA or better by Moody’s, S&P or Fitch rating services).
Differences in actual experience or changes in assumptions could materially impact our obligation and future expense or income. 38 Discount Rate In determining the appropriate discount rate, we are assisted by actuaries who utilize a yield-curve model based on a universe of high-grade corporate bonds (rated AA or better by Moody’s, S&P or Fitch rating services).
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.
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.
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.
The decrease in fuel surcharge revenue was primarily driven by lower diesel prices and lower volume. We evaluate the revenue performance of our LTL business using several commonly used metrics, including tonnage (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.
Self-Insurance Accruals We use a combination of self-insurance programs and purchased insurance to provide for the costs of medical, casualty, liability, vehicular, cargo, workers’ compensation, cyber risk and property claims. We periodically evaluate our level of insurance coverage and adjust our insurance levels based on risk tolerance and premium expense.
Self-Insurance Accruals We use a combination of self-insurance programs and purchased insurance to provide for the costs of medical, casualty, liability, vehicular, cargo, workers’ compensation, cyber risk and property claims. We periodically evaluate our level of insurance coverage and adjust our insurance levels based on risk tolerance, premium expense, and insurance availability.
Inherent in our preparation of cash flow projections are assumptions and estimates derived from a review of our operating results, business plans, expected growth rates, cost of capital and tax rates. Our forecasts also reflect expectations concerning future economic conditions, interest rates and other market data.
Inherent in our preparation of cash flow projections are assumptions and estimates derived from a review of 40 our operating results, business plans, expected growth rates, cost of capital and tax rates. Our forecasts also reflect expectations concerning future economic conditions, interest rates and other market data.
The market approach of determining fair value is based on comparable market multiples for companies engaged in similar businesses, as well as recent transactions within our industry. We believe this approach, which utilizes multiple valuation techniques, yields the most appropriate evidence of fair value.
The market approach of determining fair value is generally based on comparable market multiples for companies engaged in similar businesses, as well as recent transactions within our industry. We believe this approach, which utilizes multiple valuation techniques, yields the most appropriate evidence of fair value.
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.
Importantly, we see significant growth potential ahead in our major markets, and we intend to continue expanding our business by investing in capacity for the long-term, gaining profitable market share and aligning price with the value we provide.
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.
For further information on our finance lease maturities, see Note 7—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.
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 —Significant Accounting Policies to our Consolidated Financial Statements.
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.
Loan Covenants and Compliance As of December 31, 2025, 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.
Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles. A summary of our significant accounting policies is contained in Note 2—Basis of Presentation and Significant Accounting Policies 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. A summary of our significant accounting policies is contained in Note 2—Significant Accounting Policies to our Consolidated Financial Statements.
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.
We generated aggregate income from our plans of $6 million in 2025, $25 million in 2024 and $18 million in 2023. 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.
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.
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, legal matters, transaction and integration costs, restructuring costs and other adjustments.
Impacts on yield can include weight per shipment and length of haul, among other factors, while impacts on volume can include shipments per day and weight per shipment.
Impacts on yield can include weight per shipment and length of haul, among other factors, while impacts on tonnage can include shipments per day and weight per shipment.
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.
An increase or decrease of 25 basis points in the expected return on plan assets would increase or decrease our 2025 pre-tax pension income by approximately $3 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.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview XPO is a leading provider of freight transportation services, with company-specific avenues for value creation. We use our proprietary technology to move goods efficiently through our customers’ supply chains in North America and Europe.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview XPO is a leading provider of freight transportation services, with company-specific avenues for value creation. We use our proprietary technology to move goods efficiently through supply chains for approximately 55,000 customers in North America and Europe.
Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for a discussion of our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for a discussion of our financial condition and results of operations for full year 2024, compared with full year 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 $207 million as of December 31, 2024). As of December 31, 2024, the maximum amount available under the program was utilized.
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 $235 million as of December 31, 2025). As of December 31, 2025, the maximum amount available under the program was utilized.
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.
We made benefit payments of $5 million in both 2025 and 2024 under the non-qualified plans and we estimate that we will make benefit payments of $5 million in 2026. 39 For additional information, see Note 12—Employee Benefit Plans 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.
Additionally, as of December 31, 2025, we have $294 million of finance lease and related interest payment obligations, of which $62 million is due within the next twelve months. For further information on our debt facilities and maturities, see Note 11—Debt 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.
These operating leases will commence in 2026 with initial lease terms of 4 years to 15 years. For further information on our operating leases and their maturities, see Note 7—Leases to our Consolidated Financial Statements. As of December 31, 2025, we have approximately $75 million of purchase commitments, of which approximately $40 million is due within the next twelve months.
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.
The discount rates used in determining the net periodic benefit costs and benefit obligations are as follows: Qualified Plans Non-Qualified Plans 2025 2024 2025 2024 Discount rate - net periodic benefit costs 5.33 % 5.08 % 4.99% - 5.25% 5.02% - 5.05% Discount rate - benefit obligations 5.40 % 5.63 % 4.60% - 5.20% 5.21% - 5.55% An increase or decrease of 25 basis points in the discount rate would increase or decrease our 2025 pre-tax pension income by less than $1 million.
Our share repurchase authorization permits us to purchase shares in both the open market and in private transactions, with the timing and number of shares dependent on a variety of factors, including price, general business conditions, market conditions, alternative investment opportunities and funding considerations.
The repurchase authorization permits us to purchase shares in both the open market and in private transactions, with the timing and number of shares dependent on a variety of factors, including price, general business and market conditions, alternative investment opportunities and funding considerations. We retire common shares that we repurchase upon settlement.
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.
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) 2025 2024 Net cash provided by operating activities from continuing operations 986 808 Net cash used in investing activities from continuing operations (616) (702) Net cash provided by (used in) financing activities from continuing operations (339) (226) During 2025, we: (i) generated cash from operating activities from continuing operations of $986 million and (ii) generated proceeds from sales of property and equipment of $41 million.
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.
As of December 31, 2025, we had $3.2 billion total outstanding principal amount of debt, excluding finance leases. We have no significant debt maturities until 2028. Interest on our Revolving Credit Facility and the Refinancing Term Loan Facilities is variable, while interest on our senior notes is at fixed rates.
For our defined benefit pension plans, accumulated unrecognized actuarial losses were $195 million as of December 31, 2024.
For our defined benefit pension plans, accumulated unrecognized actuarial losses were $167 million as of December 31, 2025.
The year-over-year increase in revenue for 2024, excluding fuel surcharge revenue, reflects higher yield, primarily related to our improvements in service quality and the benefit of numerous pricing initiatives, partially offset by slightly lower volume. The decrease in volume per day reflects lower average weight per shipment partially offset by higher shipments per day.
The year-over-year decrease in revenue for 2025, excluding fuel surcharge revenue, reflects lower tonnage, almost entirely offset by higher yield, primarily related to our improvements in service quality and the benefit of numerous pricing initiatives. The decrease in tonnage per day reflects lower shipments per day and lower average weight per shipment.
For our 2024 annual goodwill assessment, we performed a step-zero qualitative analysis for two of our reporting units.
For our 2025 annual goodwill assessment, we performed a step-zero qualitative analysis for four of our reporting units.
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.
Future interest payments associated with our debt total $947 million at December 31, 2025, with $202 million payable within 12 months, and are estimated based on the principal amount of debt and applicable interest rates as of December 31, 2025.
New Accounting Standards Information related to new accounting standards is included in Note 2—Basis of Presentation and Significant Accounting Policies.
New Accounting Standards Information related to new accounting standards is included in Note 2—Significant Accounting Policies.
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.
Year Ended December 31, 2025 Compared with Year Ended December 31, 2024 Revenue in our North American LTL segment decreased 1.4% to $4.8 billion in 2025, compared with $4.9 billion in 2024. Revenue included fuel surcharge revenue of $731 million and $785 million, respectively, for the years ended December 31, 2025 and 2024.
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.
The following table summarizes our key revenue metrics: 34 Years Ended December 31, 2025 2024 Change % Pounds per day (thousands) 65,268 69,606 (6.2) % Shipments per day 49,420 51,508 (4.1) % Average weight per shipment (in pounds) 1,321 1,351 (2.3) % Gross revenue per hundredweight, excluding fuel surcharges $ 25.39 $ 23.94 6.0 % Percentages presented are calculated using the underlying unrounded amounts.
We used cash during this period primarily to: (i) purchase property and equipment of $789 million; (ii) make payments of $129 million related to tax withholding obligations in connection with the vesting of restricted shares and (iii) make payments on debt and finance leases of $82 million. 38 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.
We used cash during this period primarily to: (i) purchase property and equipment of $789 million; (ii) make payments of $129 million related to tax withholding obligations in connection with the vesting of restricted shares; and (iii) make payments on debt and finance leases of $82 million.
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.
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.
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.
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.
Purchased transportation includes costs of procuring third-party freight transportation. Purchased transportation in 2024 was $1.7 billion, or 21.1% of revenue, compared with $1.8 billion, or 22.7% of revenue, in 2023.
Purchased transportation includes costs of procuring third-party freight transportation. Purchased transportation in 2025 was $1.66 billion, or 20.4% of revenue, compared with $1.70 billion, or 21.1% of revenue, in 2024.
Year Ended December 31, 2024 Compared with Year Ended December 31, 2023 Revenue in our European Transportation segment increased 3.3% to $3.2 billion in 2024, compared with $3.1 billion in 2023. Foreign currency movement increased revenue by approximately 1.3 percentage points in 2024.
Year Ended December 31, 2025 Compared with Year Ended December 31, 2024 Revenue in our European Transportation segment increased 4.8% to $3.3 billion in 2025, compared with $3.2 billion in 2024. Foreign currency movement increased revenue by approximately 3.6 percentage points in 2025. Adjusted EBITDA was $147 million in 2025, compared with $158 million in 2024.
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.
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.
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.
These items were partially offset by lower net income of $71 million. As of December 31, 2025, we had $941 million of operating lease and related interest payment obligations, of which $204 million is due within the next twelve months. Additionally, we had operating leases that have not yet commenced with future undiscounted lease payments of $75 million.
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.
Salaries, wages and employee benefits in 2025 was $3.42 billion, or 42.0% of revenue, compared with $3.38 billion, or 41.8% of revenue, in 2024. The year-over-year increase as a percentage of revenue primarily reflects higher costs due to the insourcing of a greater proportion of linehaul from third-party transportation providers in our North American LTL segment and wage inflation.
Adjusted EBITDA included gains from real estate transactions of $34 million for the year ended December 31, 2024 with no comparable gains in 2023.
Adjusted EBITDA was $1.14 billion in 2025, compared with $1.12 billion in 2024. Adjusted EBITDA included gains from real estate transactions of $15 million for the year ended December 31, 2025 and $34 million in 2024.
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.
With respect to our non-U.S. operations, loss before income tax provision was $19 million in 2025, compared 33 with a loss of $13 million in 2024. The increase in the loss is primarily due to higher purchased transportation, salaries, wages and employee benefits, and restructuring costs, partially offset by higher revenue and a gain on legal matters in 2025.
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.
Insurance and claims includes costs related to vehicular and cargo claims for both purchased insurance and self-insurance programs. Insurance and claims in 2025 was $167 million, compared with $134 million in 2024. The year-over-year increase primarily reflects higher vehicular insurance costs in our North American LTL segment.
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.
North American Less-Than-Truckload Segment Years Ended December 31, Percent of Revenue (Dollars in millions) 2025 2024 2025 2024 Revenue $ 4,832 $ 4,899 Adjusted EBITDA (1) 1,142 1,115 23.6 % 22.8 % Depreciation and amortization expense 381 346 7.9 % 7.1 % (1) Percent of Revenue is calculated using the underlying unrounded amounts.
Operating taxes and licenses includes tax expenses related to our vehicles and our owned and leased facilities as well as license expenses to operate our vehicles. Operating taxes and licenses in 2024 was $80 million, compared with $60 million in 2023. The year-over-year increase primarily reflects property taxes on service centers acquired in the Yellow Asset Acquisition.
The year-over-year decrease as a percentage of revenue primarily reflects lower fuel costs. 32 Operating taxes and licenses includes tax expenses related to our vehicles and our owned and leased facilities as well as license expenses to operate our vehicles. Operating taxes and licenses in 2025 was $83 million, compared with $80 million in 2024.
Investing activities from continuing operations used $702 million of cash in 2024 compared with $1,502 million used in 2023.
Financing activities from continuing operations used $339 million of cash in 2025 compared with $226 million of cash used in 2024.
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.
Gains on sales of property and equipment in 2025 was $17 million, compared with $40 million in 2024. The year-over-year decrease primarily reflects lower gains on real estate transactions in our North American LTL segment in 2025 compared with 2024. Depreciation and amortization expense in 2025 was $521 million, compared with $490 million in 2024.
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.
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.
Other income primarily consists of pension income for both 2024 and 2023, while 2024 also includes investment income. Other income for 2024 was $37 million, compared with $15 million in 2023.
For more information, see Note 5—Restructuring Charges to our Consolidated Financial Statements. Other income primarily consists of pension income for both 2025 and 2024, while 2024 also includes investment income. Other income for 2025 was $6 million, compared with $37 million in 2024.
Depreciation and amortization expense increased to $346 million in 2024 compared with $291 million in 2023 due to the impact of capital investments, in particular tractors and trailers, as well as service centers acquired in the Yellow Asset Acquisition. 35 European Transportation Segment Years Ended December 31, Percent of Revenue (Dollars in millions) 2024 2023 2024 2023 Revenue $ 3,173 $ 3,073 Adjusted EBITDA (1) 158 163 5.0 % 5.3 % Depreciation and amortization expense 140 136 4.4 % 4.4 % (1) Percent of Revenue is calculated using the underlying unrounded amounts.
European Transportation Segment Years Ended December 31, Percent of Revenue (Dollars in millions) 2025 2024 2025 2024 Revenue $ 3,324 $ 3,173 Adjusted EBITDA (1) 147 158 4.4 % 5.0 % Depreciation and amortization expense 136 140 4.1 % 4.4 % (1) Percent of Revenue is calculated using the underlying unrounded amounts.
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.
Additionally, we have a $200 million uncommitted secured evergreen letter of credit facility, under which we have issued $133 million in aggregate face amount of letters of credit as of December 31, 2025. 35 In February 2025, we terminated our Second Amended and Restated Revolving Credit Agreement, as amended, and entered into a Revolving Credit Agreement (the “Revolving Credit Agreement”).
The decrease in our effective income tax rate for 2024 compared to 2023 was primarily driven by a one-time tax benefit of $41 million associated with the legal entity reorganization in our European Transportation business and a reduced impact from non-deductible executive compensation expense as a result of higher pre-tax income in 2024 compared to 2023, partially offset by the impact of losses for which no tax benefit can be recognized.
The increase in our effective income tax rate for 2025 compared to 2024 was primarily driven by a one-time tax benefit of $41 million associated with the legal entity reorganization in our European Transportation business that occurred in the second quarter of 2024, partially offset by $6 million in U.S. foreign tax credits recognized in 2025.
Our principal existing sources of cash are (i) cash generated from operations; (ii) borrowings available under our Second Amended and Restated Revolving Loan Credit Agreement, as amended (the “ABL Facility”); and (iii) proceeds from the issuance of other debt.
Liquidity and Capital Resources Our cash and cash equivalents balance was $310 million as of December 31, 2025, compared to $246 million as of December 31, 2024. Our principal existing sources of cash are (i) cash generated from operations; (ii) borrowings available under our Revolving Credit Facility (as defined below); and (iii) proceeds from the issuance of other debt.
Under the securitization program, we service the receivables we sell on behalf of the purchasers.
Under the securitization program, we service the receivables we sell on behalf of the purchasers. In January 2026, the program was amended to extend the maturity date through March 2029.
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.
The increase in 2025 compared with 2024 reflects: (i) the impact of operating assets and liabilities utilizing $45 million of cash in 2025, compared with utilizing $194 million in 2024; (ii) higher deferred tax expense of $42 million, that is added back in the determination of operating cash flows; (iii) higher non-cash depreciation and 37 amortization of $31 million, that is added back in the determination of operating cash flows; and (iv) lower gains on sales of property and equipment of $23 million, that is subtracted in the determination of operating cash flows.
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.
In January 2025, the proceeds from this sale were used to purchase four new service centers that were previously leased. We anticipate gross capital expenditures to be between $500 million and $600 million in 2026, funded by cash on hand and available liquidity.
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.
Excluding these gains, the increase in adjusted EBITDA reflected higher yield, lower purchased transportation, productivity improvements and lower maintenance costs, partially offset by lower tonnage, lower fuel surcharge revenue, wage inflation, higher vehicular insurance costs and lower pension income.
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”).
Information related to the trade receivables sold was as follows: Years Ended December 31, (In millions) 2025 2024 Securitization programs Receivables sold in period $ 1,881 $ 1,762 Cash consideration 1,881 1,762 Factoring programs Receivables sold in period 70 79 Cash consideration 67 78 Term Loan Facility In February 2025, we amended our Senior Secured Term Loan Credit Agreement.
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.
As of December 31, 2025, we have $600 million available to draw under our Revolving Credit Facility, after considering outstanding letters of credit of less than $1 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.
For the year ended December 31, 2025, our expected return on plan assets was $77 million, compared to the actual return on plan assets of $130 million. The actual annualized return on plan assets for 2025 was approximately 10%, which was above the expected return on asset assumption for the year due to strong equity and fixed income market returns.
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.
The decrease in adjusted EBITDA was primarily driven by higher purchased transportation and salaries, wages and employee benefits, partially offset by higher revenue. Depreciation and amortization expense decreased to $136 million in 2025 compared with $140 million in 2024.
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.
Fuel, operating expenses and supplies was $1.57 billion in 2025, or 19.3% of revenue, compared with $1.59 billion, or 19.7% of revenue, in 2024.
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.
With respect to our U.S. operations, income before income tax provision was $456 million in 2025, compared with income of $486 million in 2024.
We expect the legal entity reorganization in our European Transportation business to generate a net cash refund of approximately $45 million, to be received primarily in 2025. Segment Financial Results Our CODM regularly reviews financial information at the operating segment level to allocate resources to the segments and to assess their performance.
As previously disclosed, we expected the legal entity reorganization in our European Transportation business to generate a net cash refund of approximately $45 million. In 2024, we made tax payments of $7 million and in 2025 we received a cash refund of $49 million. We expect to receive the remaining $3 million cash refund in 2026.
In the same period, we used net proceeds from the New Term Loan Facility, the Senior Secured Notes due 2028 and the Senior Notes due 2031, as described below, together with cash on hand, to repay $2.0 billion of outstanding principal under the Existing Term Loan Facility, which was scheduled to mature in 2025, and to pay related fees, expenses and accrued interest.
In the second half of 2025, we used cash on hand to repay $115 million of outstanding principal under the Refinancing Term Loan B-2 Facility, which was scheduled to mature in 2028.
The increase is primarily due to the debt issuance in the fourth quarter of 2023 to finance the Yellow Asset Acquisition. We anticipate interest expense to be between $220 million and $230 million in 2025. Our consolidated income from continuing operations before income taxes in 2024 was $473 million, compared with $260 million in 2023.
We anticipate interest expense to be between $205 million and $215 million in 2026. Our consolidated income before income tax provision in 2025 was $437 million, compared with $473 million in 2024. The decrease was primarily driven by lower other income and operating income.
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.
For 2025, our effective tax rate was impacted by $12 million from non-deductible compensation and $12 million from losses for which no tax benefit can be recognized partially offset by $6 million in U.S. foreign tax credits.
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.
The year-over-year increase reflects the impact of capital investments in property, tractors and trailers in our North American LTL segment. Pre-Con-way acquisition environmental matter for 2025 was a charge of $35 million, with no comparable charges in 2024.
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.
The new share repurchase program has no expiration date and may be utilized over time, with no obligation to repurchase any specific number of shares. We may suspend or discontinue this program at any time. This plan replaced our previous share repurchase plan, authorized in February 2019.
Share Repurchases In February 2019, our Board of Directors authorized repurchases of up to $1.5 billion of our common stock.
The weighted average interest rate of our term loans was approximately 5.4% as of December 31, 2025. Share Repurchases In March 2025, our Board of Directors authorized repurchases of up to $750 million of our common stock.
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.
We engage in restructuring actions as part of our ongoing efforts to best use our resources and infrastructure. In 2025, restructuring costs primarily reflect share-based compensation in Corporate, and severance and related charges incurred in connection with headcount reduction initiatives in our European Transportation segment. In 2024, restructuring costs primarily related to headcount reduction initiatives in our European Transportation segment.
We recorded a debt extinguishment loss of $23 million in 2023 due to this repayment. In December 2023, we entered into an incremental amendment to the Term Loan Credit Agreement to obtain $400 million of incremental term loans (the “Incremental Term Loans”).
The proceeds of the Refinancing Term Loan Facilities were used to refinance our existing term loans. We recorded a debt extinguishment loss of $5 million in the first quarter of 2025 due to this refinancing.
The year-over-year increase reflects $13 million of investment income in 2024 in Corporate on a past investment in a private company that was sold during the year, compared with no investment income in 2023, as well as an increase in net periodic pension income in 2024. Debt extinguishment loss was $0 million in 2024, compared with $25 million in 2023.
The year-over-year decrease reflects a $19 million decline in pension income and a $13 million decline in investment income related to the sale of a past investment in a private company in 2024. Debt extinguishment loss was $6 million in 2025, which related to the refinancing of our term loan facility in the first quarter of 2025.
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.
Transaction and integration costs in 2025 were $8 million, compared with $53 million in 2024. The year-over-year decrease primarily relates to no further stock-based compensation costs in the current year for certain employees related to strategic initiatives. Restructuring costs in 2025 were $59 million, compared with $27 million in 2024.
Segment adjusted EBITDA includes an allocation of corporate costs.
Segment adjusted EBITDA includes an allocation of corporate costs. See Note 3—Segment Reporting and Geographic Information for further information and a reconciliation of adjusted EBITDA to Income from continuing operations.
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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.
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Examples of factors that may affect our results include elevated interest rates; economic inflation, which may have a negative effect on certain of our operating costs, such as salaries, wages and employee benefits, fuel and insurance; uncertainty regarding the impacts of tariffs imposed, revoked or reciprocated between the U.S. and its trading partners, including impacts on import costs, export competitiveness and end-market demand for our customers’ products; and the ongoing reluctance of some shippers to route goods through areas unsettled by conflict.
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(“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.

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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 changeFor our North American LTL business, pricing agreements with customers include a fuel surcharge that is typically indexed to fuel prices published weekly by the U.S. Department of Energy. The extent to which we are able to recover increases in fuel costs may also be impacted by the amount of empty or out-of-route truck miles or engine idling time.
Biggest changeWe 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. For our North American LTL business, pricing agreements with customers include a fuel surcharge that is typically indexed to fuel prices published weekly by the U.S. Department of Energy.
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.
As of December 31, 2025, a uniform 10% strengthening in the value of the USD relative to the GBP would have resulted in a decrease in net assets of $36 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 $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”).
Assuming an annual average cash balance of $310 million, a hypothetical 1% increase in the interest rate would reduce our net interest expense by $3 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 average annual aggregate principal amount outstanding of $1.1 billion, a hypothetical 1% increase in the interest rate would have increased our annual interest expense by $11 million. Additionally, we utilize short-term interest rate swaps to mitigate variability in forecasted interest payments on our Term Loan Facility.
Assuming an average annual aggregate principal amount outstanding of $985 million, a hypothetical 1% increase in the interest rate would have increased our annual interest expense by $10 million. Additionally, we utilize short-term interest rate swaps to mitigate variability in forecasted interest payments on our Term Loan Facility.
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.
We also have exposure to changes in interest rates as a result of our cash balances, which totaled $310 million as of December 31, 2025 and generally earn interest income that approximates the federal funds rate.
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.
Assuming our Revolving Credit Facility was fully drawn throughout 2025, 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, 2025, we had $2.3 billion of fair value of indebtedness (excluding finance leases and asset financings) that bears interest at fixed rates.
As 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.
As of December 31, 2025, a uniform 10% strengthening in the value of the USD relative to the EUR would have resulted in an increase in net assets of $12 million, including the impacts from cross currency swaps.
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.
A 1% decrease in market interest rates as of December 31, 2025 would increase the fair value of our fixed-rate indebtedness by approximately 2%. For additional information concerning our debt, see Note 11—Debt to our Consolidated Financial Statements.
The interest rate swaps convert floating-rate interest payments into fixed rate interest payments. ABL Facility . The interest rates on our ABL Facility fluctuate based on SOFR or a Base Rate, as defined in the agreement, plus an applicable margin.
The interest rate swaps convert floating-rate interest payments into fixed rate interest payments. Revolving Credit Facility . The interest rates on our Revolving Credit Facility fluctuate based on SOFR, the Canadian Overnight Repo Rate (“CORRA”) or a Base Rate, as defined in the agreement, plus an applicable margin.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our market risk disclosures involve forward-looking statements. Actual results could differ materially from those projected in such forward-looking statements. We are exposed to market risk related to changes in interest rates, foreign currency exchange rates and commodity price risk.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our market risk disclosures involve forward-looking statements. Actual results could differ materially from those projected in such forward-looking statements.
Fluctuations in exchange rates also affect the volume of sales or the foreign currency sales price as competitors’ services become more or less attractive.
Fluctuations in exchange rates also affect the volume of sales or the foreign currency sales price as competitors’ services become more or less attractive. 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.
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.
As of December 31, 2025, we had an aggregate principal amount outstanding of $985 million on our Term Loan Facility. The interest rate fluctuates based on the Secured Overnight Financing Rate (“SOFR”) or a Base Rate, as defined in the agreement, plus an applicable margin.
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.
Commodity Price Risk We are exposed to price fluctuations for diesel fuel purchased for use in our vehicles. During the year ended December 31, 2025, diesel prices fluctuated by as much as 14% in France, 32% in the United Kingdom, and 11% in the United States.
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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.
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We are exposed to market risk related to changes in interest rates, foreign currency exchange rates and commodity price risk. 41 Interest Rate Risk We have exposure to changes in interest rates on our debt, as follows: Term Loan Facility .
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See the applicable discussion under Item 1A, “Risk Factors.” 44
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The extent to which we are able to recover increases in fuel costs may also be impacted by the amount of empty or out-of-route truck miles or engine idling time. See the applicable discussion under Item 1A, “Risk Factors.” 42

Other XPO 10-K year-over-year comparisons