XPO Inc.

07/31/2025 | Press release | Distributed by Public on 07/31/2025 14:15

Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q and other written reports and oral statements we make from time to time contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," "objective," "projection," "forecast," "goal," "guidance," "outlook," "effort," "target," "trajectory" or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual future results, levels of activity, performance or achievements to be materially different from our expected future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to a material difference include those discussed below and the risks discussed in the Company's other filings with the Securities and Exchange Commission (the "SEC"). All forward-looking statements set forth in this Quarterly Report on Form 10-Q are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The following discussion should be read in conjunction with the Company's unaudited Condensed Consolidated Financial Statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q, and with the audited consolidated financial statements and related notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Form 10-K"). Forward-looking statements set forth in this Quarterly Report on Form 10-Q speak only as of the date hereof, and we do not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, except to the extent required by law.
Executive Summary
XPO, Inc., together with its subsidiaries ("XPO," "we" or the "Company"), 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. As of June 30, 2025, we had approximately 38,000 employees serving approximately 55,000 customers through 608 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. Our North American LTL segment includes the results of our trailer manufacturing operation.
Within the tables presented, certain amounts may not add due to the use of rounded numbers. Unless otherwise indicated, percentages presented are calculated from the underlying numbers in millions.
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 $53 billion in 2024.
We provide 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. Our capacity and reach give us the ability to manage large freight volumes efficiently and balance our network to leverage fixed costs. For the trailing 12 months ended June 30, 2025, our customer-focused organization of truck
drivers, service center teams and sales professionals worked together to move approximately 17 billion pounds of freight through our network.
Importantly, our LTL business historically has generated a high return on invested capital and robust free cash flow. 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. 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 service centers previously operated by Yellow Corporation (the "Yellow Asset Acquisition"), completed in December 2023. As of June 30, 2025, we had opened the majority of these acquired locations.
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. In 2024, we produced over 4,400 trailers and continued to invest in training commercial drivers at our 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 "Technology" below.
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 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, warehousing, managed transportation, last mile, freight forwarding and, increasingly, multimodal solutions customized for our customers, such as road-rail and road-short sea combinations. Our operators use our proprietary technology to manage these services within our digital ecosystem in Europe.
Technology
One of the ways in which we deliver superior service to our customers is by empowering our employees with technology. Our industry is evolving, and customers want to de-risk their supply chains by forming relationships with reliable service providers that have invested in innovation.
We have built a highly scalable ecosystem on the cloud that deploys our software consistently across our operating footprint. In our North American LTL business, the caliber of our technology is mission-critical to our success; it optimizes pricing, linehaul, labor planning, pickup-and-delivery and dock operations - the main components of the service we provide. We have been investing in proprietary artificial intelligence ("AI") technology and have identified a number of high-impact applications where intelligent automation and better decision-making can directly enhance profitability. We see artificial intelligence playing a major role in how we operate, compete, and create value over the long term.
An LTL network of our scale has hundreds of thousands of activities underway at any given time, all managed on our technology. For the trailing 12 months ended June 30, 2025, we moved approximately 17 billion pounds of freight 785 million miles, including moving linehaul freight an average of 2.5 million miles a day.
With intelligent route-building, we can reduce empty miles in our linehaul network and improve load factor. 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.
Consolidated Summary Financial Table
Three Months Ended June 30, Percent of Revenue Change Six Months Ended June 30, Percent of Revenue Change
(Dollars in millions)
2025
2024
2025 2024 2025 vs. 2024
2025
2024
2025 2024 2025 vs. 2024
Revenue $ 2,080 $ 2,079 100.0 % 100.0 % - % $ 4,034 $ 4,097 100.0 % 100.0 % (1.5) %
Salaries, wages and employee
benefits
871 854 41.9 % 41.1 % 2.0 % 1,703 1,688 42.2 % 41.2 % 0.9 %
Purchased transportation 426 436 20.5 % 21.0 % (2.3) % 826 874 20.5 % 21.3 % (5.5) %
Fuel, operating expenses and
supplies
384 402 18.5 % 19.3 % (4.5) % 777 814 19.3 % 19.9 % (4.5) %
Operating taxes and licenses 21 21 1.0 % 1.0 % - % 40 40 1.0 % 1.0 % - %
Insurance and claims 40 33 1.9 % 1.6 % 21.2 % 75 71 1.9 % 1.7 % 5.6 %
Gains on sales of property and
equipment
(1) (4) - % (0.2) % (75.0) % (3) (5) (0.1) % (0.1) % (40.0) %
Depreciation and amortization
expense
131 122 6.3 % 5.9 % 7.4 % 254 239 6.3 % 5.8 % 6.3 %
Legal matter (2) - (0.1) % - % NM (13) - (0.3) % - % NM
Transaction and integration costs 3 12 0.1 % 0.6 % (75.0) % 6 26 0.1 % 0.6 % (76.9) %
Restructuring costs 8 6 0.4 % 0.3 % 33.3 % 20 14 0.5 % 0.3 % 42.9 %
Operating income 198 197 9.5 % 9.5 % 0.5 % 349 335 8.7 % 8.2 % 4.2 %
Other income (2) (6) (0.1) % (0.3) % (66.7) % (3) (16) (0.1) % (0.4) % (81.3) %
Debt extinguishment loss - - - % - % - % 5 - 0.1 % - % NM
Interest expense 56 56 2.7 % 2.7 % - % 112 114 2.8 % 2.8 % (1.8) %
Income before income tax
provision (benefit)
143 147 6.9 % 7.1 % (2.7) % 234 237 5.8 % 5.8 % (1.3) %
Income tax provision (benefit) 37 (3) 1.8 % (0.1) % NM 59 20 1.5 % 0.5 % 195.0 %
Net income $ 106 $ 150 5.1 % 7.2 % (29.3) % $ 175 $ 217 4.3 % 5.3 % (19.4) %
NM - Not meaningful.
Three and Six Months Ended June 30, 2025 Compared with Three and Six Months Ended June 30, 2024
Our consolidated revenue for the second quarter of 2025 remained flat at $2.1 billion, compared with the same quarter in 2024. Our consolidated revenue for the first six months of 2025 decreased 1.5% to $4.0 billion, compared with the same period in 2024. Foreign currency movement increased revenue by approximately 2.0 percentage points in the second quarter of 2025 and by approximately 0.3 percentage points in the first six months of 2025. After taking into effect the impact of foreign currency movements, the decrease in revenue in both periods primarily relates to our North American LTL segment, driven by lower fuel surcharge revenue and lower shipments per day and average weight per shipment.
Salaries, wages and employee benefits includes compensation-related costs for our employees, including salaries, wages, incentive compensation, healthcare-related costs and payroll taxes, and covers drivers and dockworkers, operations and facility workers and employees in support roles and other positions. Salaries, wages and employee benefits for the second quarter of 2025 was $871 million, or 41.9% of revenue, compared with $854 million, or 41.1% of revenue, for the same quarter in 2024. Salaries, wages and employee benefits for the first six months of 2025 was $1.70 billion, or 42.2% of revenue, compared with $1.69 billion, or 41.2% of revenue, for the same period in 2024. The year-over-year increase as a percentage of revenue in both periods primarily reflects the insourcing of a greater proportion of linehaul from third-party transportation providers in our North American LTL segment and wage inflation, partially offset by savings from restructuring actions.
Purchased transportation includes costs of procuring third-party freight transportation. Purchased transportation for the second quarter of 2025 was $426 million, or 20.5% of revenue, compared with $436 million, or 21.0% of revenue, for the same quarter in 2024. Purchased transportation for the first six months of 2025 was $826 million, or 20.5% of revenue, compared with $874 million, or 21.3% of revenue, for the same period in 2024. The year-over-year decrease as a percentage of revenue in both periods primarily reflects the insourcing of a greater proportion of linehaul from third-party transportation providers in our North American LTL segment, partially offset by higher purchased transportation in our European Transportation segment.
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 for the second quarter of 2025 was $384 million, or 18.5% of revenue, compared with $402 million, or 19.3% of revenue, for the same quarter in 2024. Fuel, operating expenses and supplies for the first six months of 2025 was $777 million, or 19.3% of revenue, compared with $814 million, or 19.9% of revenue, for the same period in 2024. The year-over-year decrease as a percentage of revenue in both periods primarily reflects lower fuel and maintenance costs.
Operating taxes and licenses includes tax expenses related to our vehicles and our owned and leased facilities as well as license expenses to operate our vehicles. Operating taxes and licenses for the second quarter of 2025 was $21 million, compared with $21 million for the same quarter in 2024. Operating taxes and licenses for the first six months of 2025 was $40 million, compared with $40 million for the same period in 2024.
Insurance and claims includes costs related to vehicular and cargo claims for both purchased insurance and self-insurance programs. Insurance and claims for the second quarter of 2025 was $40 million, compared with $33 million for the same quarter in 2024. Insurance and claims for the for the first six months of 2025 was $75 million, compared with $71 million for the same period in 2024. The year-over-year increase in both periods primarily reflects higher vehicular insurance costs in our North American LTL segment.
Gains on sales of property and equipment for the second quarter of 2025 was $1 million, compared with $4 million for the same quarter in 2024. Gains on sales of property and equipment for the first six months of 2025 was $3 million, compared with $5 million for the same period in 2024.
Depreciation and amortization expense for the second quarter of 2025 was $131 million, compared with $122 million for the same quarter in 2024. Depreciation and amortization expense for the first six months of 2025 was $254 million, compared with $239 million for the same period in 2024. The year-over-year increase in both periods reflects the impact of capital investments in property, tractors and trailers.
Legal matter for the second quarter of 2025 and the first six months of 2025 was a gain of $2 million and $13 million, respectively. There were no comparable gains in 2024. The gains recognized in 2025 reflect the settlement of claims against certain truck manufacturers related to purchases by our European Transportation segment covering periods prior to our acquisition of Norbert Dentressangle SA in 2015.
Transaction and integration costs for the second quarter of 2025 were $3 million, compared with $12 million for the same quarter in 2024. Transaction and integration costs for the first six months of 2025 were $6 million, compared with $26 million for the same period in 2024. The year-over-year decrease in both periods primarily relates to no further stock-based compensation costs in the current year for certain employees related to strategic initiatives.
Restructuring costs for the second quarter of 2025 were $8 million, compared with $6 million for the same quarter in 2024. Restructuring costs for the first six months of 2025 were $20 million, compared with $14 million for the same period in 2024. We engage in restructuring actions as part of our ongoing efforts to best use our resources and infrastructure. For more information, see Note 4-Restructuring Charges to our Condensed Consolidated Financial Statements.
Other income for the second quarter of 2025 was $2 million, compared with $6 million for the same quarter in 2024. Other income for the first six months of 2025 was $3 million, compared with $16 million for the same period in 2024. The year-over-year decrease in both periods primarily reflects a decrease in net periodic pension income, as well as a $3 million decrease in investment income in the first six months of 2025 compared to the same period in 2024.
Debt extinguishment loss was $5 million for the first six months of 2025, which related to the refinancing of our term loan facility in the first quarter of 2025. There was no debt extinguishment loss in the second quarter of 2025 or in the first six months of 2024.
Interest expense remained flat at $56 million for the second quarter of 2025, compared with the same quarter in 2024. Interest expense decreased to $112 million for the first six months of 2025, compared with $114 million for the same period in 2024. The decrease in the first six months of 2025 is primarily due to lower interest rates on our variable rate debt, partially offset by lower interest income.
Our effective income tax rates were 25.9% and (2.0)% for the second quarters of 2025 and 2024, respectively, and 25.3% and 8.3% for the first six months of 2025 and 2024, respectively. The effective income tax rates for the second quarter and six-month periods of 2025 and 2024 were based on forecasted full-year effective income tax rates, adjusted for discrete items that occurred within the periods presented. The year-over-year increase in our effective income tax rates in both periods was primarily driven by a one-time tax benefit of $41 million associated with a legal entity reorganization in our European Transportation business that occurred in the second quarter of 2024, partially offset by a decrease in forecasted non-deductible executive compensation in 2025.
As previously disclosed, we expect the legal entity reorganization in our European Transportation business to generate an aggregate net cash refund of approximately $45 million. In 2024, we made payments of $7 million, and in July 2025 we received a cash refund of approximately $49 million. We expect to receive the remaining $3 million cash refund in the second half of 2025 or early 2026.
On July 4, 2025, the One Big Beautiful Bill Act was signed into law. The legislation includes modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions including 100% bonus depreciation for qualified property placed in service after January 19, 2025, immediate expensing of domestic research and experimental costs, and business interest expense limitations. We are evaluating the full effects of the legislation on our financial statements, but we anticipate cash tax savings with an immaterial impact on our effective tax rate.
Segment Financial Results
Our chief operating decision maker ("CODM") regularly reviews financial information at the operating segment level to allocate resources to the segments and to assess their performance. 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 before debt extinguishment loss, interest expense, income tax provision (benefit), depreciation and amortization expense, legal matters, transaction and integration costs, restructuring costs and other adjustments. Segment adjusted EBITDA includes an allocation of corporate costs. See Note 2-Segment Reporting to our Condensed Consolidated Financial Statements for further information and a reconciliation of adjusted EBITDA to Net income.
North American Less-Than-Truckload Segment
Three Months Ended June 30, Percent of Revenue Change Six Months Ended June 30, Percent of Revenue Change
(Dollars in millions) 2025 2024 2025 2024 2025 vs. 2024 2025 2024 2025 2024 2025 vs. 2024
Revenue $ 1,240 $ 1,272 100.0 % 100.0 % (2.5) % $ 2,412 $ 2,493 100.0 % 100.0 % (3.2) %
Adjusted EBITDA (1)
300 297 24.2 % 23.3 % 1.0 % 550 551 22.8 % 22.1 % (0.2) %
Depreciation and amortization 96 86 7.7 % 6.8 % 11.6 % 185 168 7.7 % 6.7 % 10.1 %
(1) Percent of Revenue is calculated using the underlying unrounded amounts.
Revenue in our North American LTL segment decreased 2.5% to $1.2 billion for the second quarter of 2025, compared with $1.3 billion for the same quarter in 2024. Revenue decreased 3.2% to $2.4 billion for the first six months of 2025, compared with $2.5 billion for the same period in 2024. Revenue included fuel surcharge revenue of $183 million and $208 million, respectively, for the second quarters of 2025 and 2024, and $361 million and $418
million, respectively, for the first six months of 2025 and 2024. The decrease in fuel surcharge revenue for both periods 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 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. 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. The following table summarizes our key revenue metrics:
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 Change % 2025 2024 Change %
Pounds per day (thousands) 67,813 72,658 (6.7) % 66,625 71,687 (7.1) %
Shipments per day 50,782 53,519 (5.1) % 49,596 52,460 (5.5) %
Average weight per shipment (in pounds) 1,335 1,358 (1.6) % 1,343 1,367 (1.7) %
Gross revenue per hundredweight, excluding
fuel surcharges
$ 24.99 $ 23.56 6.1 % $ 24.86 $ 23.35 6.5 %
Percentages presented are calculated using the underlying unrounded amounts.
The year-over-year decrease in revenue, excluding fuel surcharge revenue, for both the second quarter and first six months of 2025 reflects lower shipments per day and lower average weight per shipment. These items were partially offset by higher yield, primarily related to our improvements in service quality and the benefit of numerous pricing initiatives.
Adjusted EBITDA was $300 million for the second quarter of 2025, compared with $297 million for the same quarter in 2024. Adjusted EBITDA was $550 million for the first six months of 2025, compared with $551 million for the same period in 2024. The increase in adjusted EBITDA in the second quarter of 2025 reflects higher yield and lower purchased transportation and fuel cost, partially offset by lower fuel surcharge revenue and volume, wage inflation, higher vehicular insurance costs and lower pension income. The decrease in adjusted EBITDA for the first six months of 2025 reflects lower fuel surcharge revenue and volume, wage inflation, higher vehicular insurance and lower pension income, partially offset by higher yield and lower purchased transportation and fuel cost.
Depreciation and amortization expense increased to $96 million in the second quarter of 2025 compared with $86 million for the same quarter in 2024. Depreciation and amortization expense increased to $185 million in the first six months of 2025 compared with $168 million for the same period in 2024. The increase in both the second quarter and first six months of 2025 was due to the impact of capital investments in property, tractors and trailers.
European Transportation Segment
Three Months Ended June 30, Percent of Revenue Change Six Months Ended June 30, Percent of Revenue Change
(Dollars in millions) 2025 2024 2025 2024 2025 vs. 2024 2025 2024 2025 2024 2025 vs. 2024
Revenue $ 841 $ 808 100.0 % 100.0 % 4.1 % $ 1,622 $ 1,605 100.0 % 100.0 % 1.1 %
Adjusted EBITDA (1)
44 49 5.2 % 6.1 % (10.2) % 76 87 4.7 % 5.4 % (12.6) %
Depreciation and amortization 34 35 4.0 % 4.3 % (2.9) % 67 70 4.1 % 4.4 % (4.3) %
(1) Percent of Revenue is calculated using the underlying unrounded amounts.
Revenue in our European Transportation segment increased 4.1% to $841 million for the second quarter of 2025, compared with $808 million for the same quarter in 2024. Revenue increased 1.1% to $1.62 billion for the first six months of 2025, compared with $1.61 billion for the same period in 2024. Foreign currency movement increased revenue by approximately 5.0 percentage points in the second quarter of 2025 and by approximately 0.8 percentage points in the first six months of 2025. The decrease in revenue for the second quarter of 2025, compared to the same quarter in 2024, after taking into effect the impact of foreign currency movement, primarily reflects lower volume.
Revenue for the first six months of 2025, compared to the same period in 2024, after taking into effect the impact of foreign currency movement, was flat.
Adjusted EBITDA was $44 million for the second quarter of 2025, compared with $49 million for the same quarter in 2024. Adjusted EBITDA was $76 million for the first six months of 2025, compared with $87 million for the same period in 2024. The decrease in adjusted EBITDA in both the second quarter and the first six months of 2025 primarily reflects lower volume, as well as higher purchased transportation and salaries wages and employee benefits, partially offset by lower fuel costs.
Depreciation and amortization expense decreased to $34 million in the second quarter of 2025 compared with $35 million for the same quarter in 2024. Depreciation and amortization expense decreased to $67 million in the first six months of 2025 compared with $70 million for the same period in 2024.
Liquidity and Capital Resources
Our cash and cash equivalents balance was $225 million as of June 30, 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. As of June 30, 2025, we have $599 million available to draw under our Revolving Credit Facility, after considering outstanding letters of credit of less than $1 million. Additionally, we have a $200 million uncommitted secured evergreen letter of credit facility, under which we had issued $133 million in aggregate face amount of letters of credit as of June 30, 2025.
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 Revolving Credit Agreement provides for revolving credit commitments in an aggregate amount of $600 million (the "Revolving Credit Facility"). See Note 6-Debt to our Condensed Consolidated Financial Statements for further information.
As of June 30, 2025, we had approximately $824 million of total liquidity. We continually evaluate our liquidity requirements in light of our operating needs, growth initiatives and capital resources. We believe that our existing liquidity and sources of capital are sufficient to support our operations over the next 12 months.
Trade Receivables Securitization and Factoring Programs
We sell certain of our trade accounts receivable on a non-recourse basis to third-party financial institutions under factoring agreements. We also sell trade accounts receivable under a securitization program for our European transportation business. 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 1-Organization, Description of Business and Basis of Presentation to our Condensed Consolidated Financial Statements.
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 $236 million as of June 30, 2025). As of June 30, 2025, €1 million (approximately $2 million) was available under the program. Under the securitization program, we service the receivables we sell on behalf of the purchasers. The program expires in July 2026.
Term Loan Facility
In February 2025, we amended our Senior Secured Term Loan Credit Agreement. Pursuant to the amendment, the lenders provided the company (a) a term loan B facility in an aggregate principal amount of $700 million, maturing on May 24, 2028 (the "Refinancing Term Loan B-2 Facility"), and (b) a term loan B facility in an aggregate principal amount of $400 million, maturing on February 1, 2031 (the "Refinancing Term Loan B-3 Facility" and together with the Refinancing Term Loan B-2 Facility, the "Refinancing Term Loan Facilities"). 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 Refinancing Term Loan Facilities bear interest at a rate per annum equal to, at the Company's option, either alternate base rate ("ABR") or Term Secured Overnight Financing Rate ("SOFR") plus (i) in the case of ABR Loans, 0.75% or, (ii) in the case of Term SOFR Loans, 1.75%, which, in each case after September 30, 2025, shall be reduced by 0.25% upon the achievement of a Consolidated First Lien Net Leverage Ratio (as defined in the Amended Term Loan Credit Agreement) of less than or equal to 1.21 to 1.00. The Refinancing Term Loan Facilities are secured by a lien on substantially all of our assets and the assets of our guarantors, with certain exceptions.
The Amended Term Loan Credit Agreement contains customary mandatory prepayment requirements, representations and warranties, events of default, reporting and other affirmative covenants and negative covenants, including limitations on indebtedness, liens, investments, dividends, repayments of junior financings and asset sales, in each case subject to a number of important exceptions and qualifications.
The weighted average interest rate of our term loans was approximately 6.08% as of June 30, 2025.
Share Repurchases
In March 2025, our Board of Directors authorized repurchases of up to $750 million of our common stock. 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. 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.
In the second quarter of 2025, we repurchased and retired 0.1 million shares of common stock with an aggregate value of $10 million at an average price of $120.41 per share. The share repurchases were funded by cash on hand. As of June 30, 2025, our remaining share repurchase authorization was $740 million.
Loan Covenants and Compliance
As of June 30, 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.
Sources and Uses of Cash
Six Months Ended June 30,
(In millions) 2025 2024
Net cash provided by operating activities $ 389 $ 355
Net cash used in investing activities (382) (483)
Net cash used in financing activities (74) (35)
During the six months ended June 30, 2025, we generated cash from operating activities of $389 million. We used cash during the period primarily to: (i) purchase property and equipment of $395 million; (ii) make net payments of $48 million related to tax withholding obligations in connection with the vesting of restricted shares; and (iii) make payments on debt and finance leases of $36 million.
During the six months ended June 30, 2024, we generated cash from operating activities of $355 million. We used cash during this period primarily to: (i) purchase property and equipment of $496 million; (ii) make payments on debt and finance leases of $39 million; and (iii) make payments of $17 million related to tax withholding obligations in connection with the vesting of restricted shares.
Cash flows from operating activities for the six months ended June 30, 2025 increased by $34 million, compared with the same period in 2024. The increase primarily reflects the impact of operating assets and liabilities utilizing $94 million of cash in the first six months of 2025, compared with utilizing $175 million during the same period in 2024, which was partially offset by lower net income of $42 million.
Investing activities used $382 million of cash in the six months ended June 30, 2025 and $483 million of cash in the six months ended June 30, 2024. During the six months ended June 30, 2025, we used $395 million to purchase property and equipment, as compared to a $496 million usage of cash in the same period in 2024. The decrease is due to planned reductions in capital expenditures in 2025 compared to 2024.
Financing activities used $74 million of cash in the six months ended June 30, 2025 and $35 million of cash in the six months ended June 30, 2024. The primary uses of cash from financing activities during the first six months of 2025 were $48 million to make net payments for tax withholdings on restricted shares, primarily during the first quarter of 2025, and $36 million used to repay borrowings, primarily related to finance lease obligations. The primary uses of cash from financing activities during the first six months of 2024 were $39 million used to repay borrowings, primarily related to finance lease obligations, and $17 million to make payments for tax withholdings on restricted shares. The primary source of cash from financing activities during the first six months of 2025 was $22 million of proceeds from bank overdrafts, as compared to $27 million in the same period of 2024.
In July 2025, we used cash on hand to repay $50 million of outstanding principal under the Refinancing Term Loan B-2 Facility, which was scheduled to mature in 2028.
There were no material changes to our December 31, 2024 contractual obligations during the six months ended June 30, 2025. We anticipate full year gross capital expenditures to be between $600 million and $700 million in 2025, funded by cash on hand, cash generated from operations and available liquidity.
New Accounting Standards
Information related to new accounting standards is included in Note 1-Organization, Description of Business and Basis of Presentation to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
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