Related Party Transactions

9 Months Ended

Sep. 30, 2022

Transactions between the Company and XPO, and other non-RXO subsidiaries of XPO, are deemed related-party transactions. Related-party transactions are comprised of the following: (i) those that have been effectively settled or are expected to be settled for cash, and (ii) those which have historically not been settled and which have been or are expected to be forgiven by either party. For those that have been or are expected to be cash settled, we have recorded related-party receivables (assets) or payables (liabilities) in the Condensed Combined Balance Sheets as of September 30, 2022 and December 31, 2021. For those that have been or are expected to be forgiven, the amounts have been recorded as an adjustment of XPO Investment in the Condensed Combined Balance Sheets as of September 30, 2022 and December 31, 2021.

Allocation of General Corporate Expenses

The Condensed Combined Statements of Operations include expenses for certain centralized functions and other programs provided and/or administered by XPO that are charged directly to the Company. In addition, for purposes of preparing these Condensed Combined Financial Statements, a portion of XPO’s total corporate expenses have been allocated to the Company. See Note 2 —Basis of Presentation for a discussion of the methodology used to allocate such costs for purposes of preparing these Condensed Combined Financial Statements.

Costs included in our Condensed Combined Statements of Operations for our allocated share of XPO’s corporate overhead are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2022		2021		2022		2021
Sales, general and administrative expense	$	11	$	15	$	47	$	43
Depreciation and amortization expense	3		4		8		7
Transaction and integration costs	20		—		41		1
Restructuring costs	5		—		5		—
Total	$	39	$	19	$	101	$	51

Transactions with XPO and its non-RXO Subsidiaries

Revenue and costs generated from related parties were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2022		2021		2022		2021
Revenue	$	26	$	42	$	101	$	116
Cost of transportation and services (exclusive of depreciation and amortization)	15		22		47		61

Balances with XPO and its non-RXO Subsidiaries

Assets and liabilities on the Condensed Combined Balance Sheets include the following related-party amounts that are expected to be cash settled:


	September 30,		December 31,
(In millions)	2022		2021
Amounts due from XPO and its affiliates
Trade receivables(1)	$	5	$	10
Amounts due to XPO and its affiliates
Trade payables(2)	6		6

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(1)Represents trade receivables generated from revenue with XPO.

(2)Represents trade payables due to XPO.