01—Abstract
Summary
Summary of the 10-K filed February 16, 2022. Cited figures are marked; the original filing is the authoritative source.
XPO Logistics, Inc. reported 2021 revenue of $12.8 billiona, up from $10.2 billion in 2020, with growth in both its North American less-than-truckload (LTL) and truck brokerage businesses.
Operating income rose to $616 millionb from $228 million, and net income attributable to XPO was $336 million, compared with $110 million in 2020. The company completed the spin-off of its Logistics segment as GXO Logistics, Inc. on August 2, 2021, which is presented as discontinued operations, so the figures above reflect continuing operations. The company's two reportable segments are North American LTL, with 2021 revenue of $4.1 billion and adjusted EBITDA of $904 million, and Brokerage and Other Services, with revenue of $8.9 billion and adjusted EBITDA of $547 million.
Management highlighted a pricing-driven action plan for LTL, expansion of its driver base and terminal network, and continued investment in its XPO Connect digital brokerage platform. Cash and cash equivalents fell to $260 millionc from $1.7 billion as the company redeemed $2.8 billion of senior notes, and long-term debt was $3.5 billion at year-end.
Key risks disclosed include freight-volume cyclicality, driver shortages and rising driver compensation, the ongoing legal challenge to the classification of independent contractors, pending union organizing efforts, and a securities class action that is now on appeal. The company stated it has never paid cash dividends on its common stock.
02—Key points
Key Highlights
- Revenue rose 25.6% to $12.8 billion in 2021, and operating income increased to $616 million from $228 million in 2020.
- Net income attributable to XPO was $336 million in 2021, compared with $110 million in 2020; diluted EPS from continuing operations was $2.82.
- The Logistics segment was spun off as GXO Logistics on August 2, 2021, and is reported as discontinued operations; XPO received a $794 million cash distribution from GXO.
- North American LTL revenue was $4.1 billion with adjusted EBITDA of $904 million (21.9% of revenue); Brokerage and Other Services revenue was $8.9 billion with adjusted EBITDA of $547 million.
- Cash and cash equivalents declined to $260 million from $1.7 billion, after $2.8 billion was used to redeem senior notes; total debt principal was $3.7 billion, and the company had $995 million available under its ABL facility.
- Operating cash flow from continuing operations was $656 million in 2021, up from $388 million in 2020.
- The company's management said it relies on a fleet and technology strategy, including XPO Connect, under which 70% of North American brokerage orders in Q4 2021 were created or covered digitally.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 16, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $7.20B$6.17B | +16.8% |
| SG&A Expenses | $756.00M$746.00M | +1.3% |
| Operating Income | $312.00M$97.00M | +221.6% |
| Interest Expense | $211.00M$308.00M | −31.5% |
| Net Income | $336.00M$110.00M | +205.5% |
| EPS (Basic) | $2.99$0.87 | +243.7% |
| EPS (Diluted) | $2.93$0.87 | +236.8% |
| Shares Outstanding (Basic) | 112.00M92.00M | +21.7% |
| Shares Outstanding (Diluted) | 114.00M92.00M | +23.9% |
05—Questions
Frequently Asked Questions
How did XPO's financial performance change in 2021?
Revenue increased 25.6% to $12.8 billion, driven by growth in LTL and truck brokerage. Operating income rose to $616 million from $228 million, and income from continuing operations was $323 million, compared with a loss of $13 million in 2020. Higher third-party transportation and fuel costs partly offset the revenue gains.
What happened to the Logistics segment?
On August 2, 2021, XPO completed the spin-off of its Logistics segment through the distribution of 100% of GXO Logistics, Inc. common stock to XPO stockholders, at one GXO share for each XPO share held on July 23, 2021. The Logistics results are presented as discontinued operations, and XPO does not own any GXO shares after the spin-off.
What are the main risks to the business?
The filing cites cyclical freight demand, driver shortages and rising driver compensation, and the possibility that independent contractors are reclassified as employees. It also notes pending union organizing efforts, a securities class action whose dismissal is under appeal, and exposure to foreign currency fluctuations, primarily the euro and British pound.
How is XPO's debt position at year-end 2021?
Total debt principal, excluding finance leases, was $3.5 billion as of December 31, 2021, and total debt including finance leases was $3.7 billion. Long-term debt on the balance sheet was $3.5 billion. The company redeemed $2.8 billion of senior notes in 2021 and stated that it has no significant debt maturities until 2025.
Does XPO pay dividends?
No. The filing states that XPO has never paid, and has no immediate plans to pay, cash dividends on its common stock. Its common stock trades on the New York Stock Exchange under the symbol XPO, with approximately 115 registered holders as of February 11, 2022.
06—Continue