Restructuring costs primarily relate to severance costs associated with business optimization initiatives. Transaction and integration adjustments are generally incremental costs that result from an actual or planned acquisition, divestiture or spin-off and may include transaction costs, consulting fees, retention awards, and internal salaries and wages (to the extent the individuals are assigned full-time to integration and transformation activities) and certain costs related to integrating and converging IT systems. These non-GAAP financial measures should only be used as supplemental measures of our operating performance.Īdjusted EBITDA includes adjustments for transaction and integration costs as well as restructuring costs. Other companies may calculate these non-GAAP financial measures differently, and therefore our measures may not be comparable to similarly titled measures of other companies. We believe that the above adjusted financial measures facilitate analysis of the ongoing business operations of RXO because they exclude items that may not be reflective of, or are unrelated to, RXO's business' core operating performance, and may assist investors with comparisons to prior periods and assessing trends in our underlying businesses. This document contains the following non-GAAP financial measures for RXO: adjusted earnings before interest, taxes, depreciation and amortization, as further adjusted in connection with the contemplated spin-off transaction ("adjusted EBITDA") for the sixth months ended Jand 2021, and the years ended December 31, 2021, 20 public company pro forma adjusted EBITDA for the twelve months ended June 30, 2022, the six months ended Jand 2021 and the years ended December 31, 2021, 20 return on invested capital ("ROIC") for the twelve months ended Decemfree cash flow and adjusted free cash flow for the twelve months ended Jnet leverage and net debt and net capital expenditures and net capital expenditures as a percentage of revenue for the years ended Decemand 2020 and the twelve months ended June 30, 2022. Other income primarily consists of pension income.Įxcludes general corporate overhead costs and other amounts which were historically allocated to the divested entities. Represents intercompany transactions between XPO and the divested entities which will no longer be eliminated in consolidation subsequent to the divestitures. XPO historical financial data were derived from XPO's financial statements for the period presented.įinancial data for the Intermodal and RXO spin-off operations were derived from XPO's underlying financial records for the period presented and are not presented on a carve-out basis. The planned spin-off of RXO is expected to include XPO's truck brokerage business, as well as managed transportation, last mile and freight forwarding operations. The remaining company will consist of XPO's less-than-truckload transportation business in North America, European transportation business and corporate entity. Reconciliation of Revenue and Adjusted Ebitda Attributable to the Remaining CompanyĪdjusted revenue attributable to the remaining companyĪdjusted operating income attributable to the remaining companyĪdjusted EBITDA attributable to the remaining company (6) The following table reconciles XPO's revenue and operating income attributable to the remaining company after the planned spin-off of RXO (1) and the divestiture of XPO's North American intermodal operation for the trailing twelve months ended June 30, 2022, the six-month periods ended Jand 2021, and twelve months ended December 31, 2021, to adjusted EBITDA for the same periods. ![]() ![]() Invested capital is calculated as total assets excluding cash, goodwill and intangible assets less total liabilities excluding net deferred tax and operating lease liabilities.Īverage invested capital is calculated as the average of invested capital as of Decemand 2020. ROIC is calculated as net operating profit after taxes divided by average invested capital, excluding goodwill and intangibles. Operating lease interest is calculated as period end operating lease assets multiplied by the Company's incremental borrowing rate, net of tax. ![]() Operating assets (excluding goodwill and intangibles)Ĭash taxes is calculated as the ratio of RXO's public company pro forma adjusted EBITDA to XPO adjusted EBITDA, multiplied by XPO's cash paid for taxes. Public company pro forma adjusted EBITDA less net capital expendituresĪllocated corporate expense per RXO Form 10 combined financial statements excludes the impact of adjusted items and allocated income tax, depreciation and amortization from XPO Corporate.Įstimated incremental costs of operating RXO as a standalone public company. Reversal of allocated corporate expense (1) and other
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