On September 16, 2024 (the “acquisition date”), the Company acquired the technology-driven, asset-light based truckload freight brokerage services business, as well as certain assets used to conduct haulage, dedicated transport and warehousing services in the United Kingdom (collectively, “Coyote”) from United Parcel Service of America, Inc. (“UPS”) and certain subsidiaries of UPS (the “Transaction”). We acquired Coyote for $1.038 billion in cash, subject to certain additional customary adjustments. We believe the acquisition of Coyote enhances our competitive position with greater scale, a broader array of service offerings and strengths in a more diverse set of end markets.

The Transaction was accounted for under the acquisition method of accounting. The purchase price was preliminarily allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date. The condensed consolidated financial statements as of and for the three and nine months ended September 30, 2024 include the financial results of Coyote from the acquisition date.

The Company incurred acquisition-related costs of $21 million and $26 million for the three and nine months ended September 30, 2024, respectively, which are included in Transaction and integration costs in the condensed consolidated statements of operations.

The following table summarizes the preliminary allocation of consideration to Coyote’s identifiable tangible and intangible assets acquired and liabilities assumed by the Company at the acquisition date.


(In millions)
Cash and cash equivalents	$	19
Accounts receivable	398
Other current assets	35
Property and equipment	60
Intangible assets	509
Operating lease assets	89
Other long-term assets	16
Total assets	$	1,126

Accounts payable	$	(208)
Accrued expenses	(50)
Short-term operating lease liabilities	(18)

Deferred tax liabilities	(115)
Long-term operating lease liabilities	(71)
Other long-term liabilities	(23)
Total liabilities	$	(485)

Net assets acquired	$	641
Purchase price	$	1,038
Goodwill recorded	$	397

The purchase price exceeded the estimated fair value of the net assets acquired, and, as such, the excess was allocated to goodwill. Goodwill will not be amortized but instead will be reviewed for impairment at least annually, absent any indicators of impairment. Goodwill is attributable to synergies expected to be achieved from the combined operations of the Company and Coyote and the assembled workforce. Goodwill recognized in the Transaction is not expected to be deductible for tax purposes.

The fair values of the assets acquired and liabilities assumed are considered preliminary and subject to adjustment as additional information is obtained and reviewed. The final allocation of the purchase price may differ from the preliminary allocation based on completion of the valuation. The Company expects to finalize the purchase price allocation within the measurement period, which will not exceed one year from the acquisition date.

Coyote’s results of operations are included in the condensed consolidated statements of operations from the acquisition date. The revenue and pre-tax loss included in the condensed consolidated statements of operations for the Coyote acquisition subsequent to the acquisition date was $105 million and $2 million, respectively, for the three and nine months ended September 30, 2024.

The following unaudited pro forma financial information presents the Company’s results of operations as if the Coyote acquisition occurred on January 1, 2023. The unaudited pro forma information includes adjustments for intangible assets acquired and elimination of historical intercompany transactions between RXO and Coyote. The pro forma results for the nine months ended September 30, 2023 includes a non-recurring charge of $216 million related to the deemed non-pro rata distribution. The unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the acquisition been completed as of January 1, 2023 or of the results of our future operations of the combined business.


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Revenue	$	1,574	$	1,711	$	4,723	$	5,308
Loss before income taxes	(32)		(4)		(68)		(211)