Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 02, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | XPO | |
Entity Registrant Name | XPO Logistics, Inc. | |
Entity Central Index Key | 1,166,003 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 117,828,171 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 291.4 | $ 373.4 |
Accounts receivable, net of allowances of $36.2 and $26.3, respectively | 2,481.9 | 2,313.3 |
Other current assets | 485 | 386.9 |
Total current assets | 3,258.3 | 3,073.6 |
Property and equipment, net of $846.6 and $589.9 in accumulated depreciation, respectively | 2,542.2 | 2,537.4 |
Goodwill | 4,466.7 | 4,325.8 |
Identifiable intangible assets, net of $469.7 and $377.1 in accumulated amortization, respectively | 1,490.7 | 1,534.7 |
Deferred tax asset | 3.1 | 2.7 |
Other long-term assets | 170.9 | 224.2 |
Total long-term assets | 8,673.6 | 8,624.8 |
Total assets | 11,931.9 | 11,698.4 |
Current liabilities: | ||
Accounts payable | 1,077.7 | 1,056.3 |
Accrued expenses | 1,395.5 | 1,382.1 |
Current maturities of long-term debt | 117 | 136.5 |
Other current liabilities | 143.5 | 156.7 |
Total current liabilities | 2,733.7 | 2,731.6 |
Long-term debt | 4,754.3 | 4,731.5 |
Deferred tax liability | 547 | 572.4 |
Employee benefit obligations | 227.6 | 251.4 |
Other long-term liabilities | 419.5 | 373.9 |
Total long-term liabilities | 5,948.4 | 5,929.2 |
Stockholders’ equity: | ||
Convertible perpetual preferred stock, $.001 par value; 10.0 shares authorized; .07 of Series A shares issued and outstanding at June 30, 2017 and December 31, 2016 | 41.2 | 41.6 |
Common stock, $.001 par value; 300.0 shares authorized; 112.5 and 111.1 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 0.1 | 0.1 |
Additional paid-in capital | 3,255.1 | 3,244.9 |
Accumulated deficit | (321.7) | (392.9) |
Accumulated other comprehensive loss | (94.5) | (193.7) |
Total stockholders' equity before noncontrolling interests | 2,880.2 | 2,700 |
Noncontrolling interests | 369.6 | 337.6 |
Total equity | 3,249.8 | 3,037.6 |
Total liabilities and equity | $ 11,931.9 | $ 11,698.4 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 36.2 | $ 26.3 |
Property and equipment, accumulated depreciation | 846.6 | 589.9 |
Identifiable intangible assets, accumulated amortization | $ 469.7 | $ 377.1 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 70,000 | 70,000 |
Preferred stock, shares outstanding (in shares) | 70,000 | 70,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 112,500,000 | 111,100,000 |
Common stock, shares outstanding (in shares) | 112,500,000 | 111,100,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenue | $ 3,760.3 | $ 3,683.3 | $ 7,299.8 | $ 7,229 |
Operating expenses | ||||
Cost of transportation and services | 1,969.6 | 1,973.3 | 3,856.9 | 3,918.4 |
Direct operating expense | 1,194.2 | 1,130.2 | 2,331.9 | 2,236.4 |
Sales, general and administrative expense | 411.5 | 409.5 | 812.4 | 841.5 |
Total operating expenses | 3,575.3 | 3,513 | 7,001.2 | 6,996.3 |
Operating income | 185 | 170.3 | 298.6 | 232.7 |
Other (income) expense | (2.6) | (4.4) | 0.7 | (5.6) |
Foreign currency loss (income) | 28.3 | (3.4) | 38.9 | 2.1 |
Debt extinguishment loss | 0 | 0 | 9 | 0 |
Interest expense | 74.3 | 94.7 | 149.9 | 187.8 |
Income before income tax provision | 85 | 83.4 | 100.1 | 48.4 |
Income tax provision | 27.8 | 33 | 18 | 17.3 |
Net income | 57.2 | 50.4 | 82.1 | 31.1 |
Net income attributable to noncontrolling interests | (5.3) | (3.8) | (8.9) | (7) |
Net income attributable to XPO | 51.9 | 46.6 | 73.2 | 24.1 |
Earnings per share data: | ||||
Net income (loss) attributable to common shareholders | $ 47.6 | $ 42.6 | $ 67.1 | $ 22 |
Basic earnings (loss) per share (in dollars per share) | $ 0.43 | $ 0.39 | $ 0.60 | $ 0.20 |
Diluted earnings (loss) per share (in dollars per share) | $ 0.38 | $ 0.35 | $ 0.54 | $ 0.19 |
Weighted-average common shares outstanding | ||||
Basic weighted-average common shares outstanding (in shares) | 111.8 | 110 | 111.6 | 109.8 |
Diluted weighted-average common shares outstanding (in shares) | 124.7 | 122.3 | 124.6 | 118.9 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income | $ 57.2 | $ 50.4 | $ 82.1 | $ 31.1 | |
Other comprehensive income (loss), net of tax | |||||
Foreign currency translation gain (loss) (1) | [1] | 133 | (85.6) | 165.6 | (33.5) |
Unrealized (loss) gain on financial assets/liabilities designated as hedging instruments, net of tax effect of $17.3, $(7.5), $18.8 and $7.2 | (39) | 21.8 | (40.5) | 3.4 | |
Defined benefit plans adjustments, net of tax effect of $0.0 for all periods | (0.6) | 0 | 0 | 0 | |
Other comprehensive income (loss) | 93.4 | (63.8) | 125.1 | (30.1) | |
Comprehensive income (loss) | 150.6 | (13.4) | 207.2 | 1 | |
Less: Comprehensive (income) loss attributable to noncontrolling interests | (25.8) | 6.8 | (34.9) | (5.1) | |
Comprehensive income (loss) attributable to XPO | $ 124.8 | $ (6.6) | $ 172.3 | $ (4.1) | |
[1] | There is no tax impact related to the foreign currency translation adjustments as the earnings are considered permanently reinvested. |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - Parenthetical - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation gain (loss), tax | $ 0 | $ 0 | $ 0 | $ 0 |
Unrealized gains (losses) on cash flow and net investment hedges, tax effect | 17.3 | (7.5) | 18.8 | 7.2 |
Change in defined benefit plans liability, tax effect | $ 0 | $ 0 | $ 0 | $ 0 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating activities | ||
Net income | $ 82.1 | $ 31.1 |
Adjustments to reconcile net income to net cash from operating activities | ||
Depreciation and amortization | 321.8 | 323.6 |
Stock compensation expense | 33.5 | 20.5 |
Accretion of debt | 9.7 | 8 |
Deferred tax (benefit) expense | (11) | 2.7 |
Loss on extinguishment of debt | 9 | 0 |
Unrealized loss (gain) on foreign currency option and forward contracts | 40.4 | (2.6) |
Other | 5.5 | 0.8 |
Changes in assets and liabilities: | ||
Accounts receivable | (112.5) | 5.5 |
Other assets | (31.7) | (52.8) |
Accounts payable | (11.6) | (78.4) |
Accrued expenses and other liabilities | (104.2) | 9.2 |
Cash flows provided by operating activities | 231 | 267.6 |
Investing activities | ||
Payment for purchases of property and equipment | (262) | (224) |
Proceeds from sale of assets | 42.2 | 35.6 |
Other | 0 | 8.3 |
Cash flows used by investing activities | (219.8) | (180.1) |
Financing activities | ||
Proceeds from borrowings on term loan facility | 523.5 | 0 |
Repayment of borrowings on term loan facility | (511.4) | 0 |
Proceeds from borrowings on ABL facility | 320 | 260 |
Repayment of borrowings on ABL facility | (350) | (160) |
Repayment of long-term debt and capital leases | (60.3) | (90) |
Payment for debt issuance costs | (8.9) | 0 |
Change in bank overdrafts | 3.4 | (10.9) |
Payment for tax withholdings for restricted shares | (14.2) | 0 |
Dividends paid | (1.7) | (1.5) |
Other | 1.1 | 2.2 |
Cash flows used by financing activities | (98.5) | (0.2) |
Effect of exchange rates on cash | 5.3 | 0.7 |
Net (decrease) increase in cash | (82) | 88 |
Cash and cash equivalents, beginning of period | 373.4 | 289.8 |
Cash and cash equivalents, end of period | 291.4 | 377.8 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 132.6 | 178.4 |
Cash paid for income taxes | $ 41.4 | $ 26.9 |
Organization, Description of Bu
Organization, Description of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Description of Business and Basis of Presentation | Organization, Description of Business and Basis of Presentation XPO Logistics, Inc. and its subsidiaries ("XPO" or the "Company") use an integrated network of people, technology and physical assets to help customers manage their goods more efficiently throughout their supply chains. The Company’s customers are multinational, national, mid-size and small enterprises, and include many of the most prominent companies in the world. XPO runs its business on a global basis, with two reportable segments: Transportation and Logistics. In the Transportation segment, the Company provides multiple services to facilitate the movement of raw materials, parts and finished goods. The Company accomplishes this by using its proprietary transportation technology, third-party carriers and Company-owned trucks and service centers. XPO’s transportation services include: freight brokerage, last mile, less-than-truckload ("LTL"), full truckload, and global forwarding services. Freight brokerage, last mile, and global forwarding are all non-asset or asset-light businesses. LTL and full truckload are asset-based. In the Logistics segment, referred to as supply chain, the Company provides a range of contract logistics services, including highly engineered and customized solutions, value-added warehousing and distribution, cold chain solutions and other inventory management solutions. Additionally, the Company performs e-commerce fulfillment, order personalization, warehousing, reverse logistics, storage, factory support, aftermarket support, manufacturing, distribution, packaging and labeling, as well as supply chain optimization services such as production flow management. For additional information relating to these segments, refer to Note 2 —Segment Reporting . The Company has prepared the accompanying unaudited condensed consolidated financial statements in accordance with the accounting policies described in its annual report on Form 10-K for the year ended December 31, 2016 (the "2016 Form 10-K") and the interim reporting requirements of Form 10-Q. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the 2016 Form 10-K. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of financial condition, operating results and cash flows for the interim periods presented have been made. Interim results of operations are not necessarily indicative of the results of the full year. Adoption of New Accounting Standards In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, Compensation - Stock Compensation (Topic 718): "Improvements to Employee Share-based Payment Accounting." This ASU involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the new standard, income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits should be classified along with other income tax cash flows as an operating activity. The Company adopted this standard in the fourth quarter of 2016, effective January 1, 2016. Accordingly, the provision for income taxes in the second quarter and first six months of 2017 included excess tax benefits of $0.8 million and $11.5 million , respectively, that reduced the income tax provision. For the second quarter and six months ended June 30, 2016, there was no material effect on the Company's condensed consolidated financial statements from the adoption of this ASU. In regards to forfeitures, the Company elected to account for forfeitures when they occur. Accounting Pronouncements Issued But Not Yet Effective In May 2014, the FASB issued ASU No. 2014-09, Revenue (Topic 606): "Revenue from Contracts with Customers." This new standard includes the required steps to achieve the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard will be effective for the Company's annual and interim periods beginning January 1, 2018, and permits the use of either the retrospective or cumulative effect transition method. The Company has determined it will use the modified retrospective transition method. The Company is currently evaluating the effects of this standard and has completed a "gap assessment," whereby it has compared its current revenue recognition practices to those required by the new standard. The main areas under consideration include the recognition of revenue using proportionate delivery within the Transportation segment and gross versus net revenue presentation. The Company does not currently expect that the adoption of the standard will have a material effect on its statement of operations, balance sheet or statement of cash flows. The Company expects to provide expanded revenue recognition disclosures based on the new qualitative and quantitative disclosure requirements of the standard upon adoption. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases, including operating leases. Under the new requirements, a lessee will recognize in the balance sheet a liability to make lease payments (the lease liability) and the right-of-use asset representing the right to the underlying asset for the lease term. For leases with a term of 12 months or less, the lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the effects ASU 2016-02 will have on its consolidated financial statements and related disclosures. As of December 31, 2016, the Company reported $2,144.3 million in operating lease obligations and will evaluate those contracts as well as other existing arrangements to determine if they qualify for lease accounting under the new standard. The Company does not plan to adopt the standard early. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): “Restricted Cash”. This ASU requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. The standard is effective for the Company's annual and interim periods beginning January 1, 2018 and requires retrospective adoption. The Company does not expect the adoption of this standard to have a material effect on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): "Simplifying the Accounting for Goodwill Impairment." Under the current guidance for assessing goodwill for impairment, an entity can first assess qualitative factors to determine whether a two-step goodwill impairment test is necessary (often referred to as "Step 0"). When an entity bypasses or fails Step 0, the two-step goodwill impairment test is performed. Step 1 compares a reporting unit’s fair value to its carrying amount to determine if there is a potential impairment. If the carrying amount exceeds fair value, Step 2 must be completed. Step 2 involves determining the implied fair value of goodwill and comparing it to the carrying amount of that goodwill to measure the impairment loss, if any. The revised guidance eliminates Step 2 of the current goodwill impairment test, which requires a hypothetical purchase price allocation to measure goodwill impairment. Under the new standard, a goodwill impairment loss will instead be measured at the amount by which a reporting unit's carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance requires prospective adoption and will be effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption of this guidance is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company will be adopting this guidance for the year ending December 31, 2017 and does not expect it to have a material effect on its consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." The ASU will change how employers that sponsor defined benefit pension and/or other postretirement benefit plans present the cost of the benefits in the statements of operations. This cost, commonly referred to as the "net periodic benefit cost," is comprised of several components that reflect different aspects of the arrangement with the employee, including the effect of the related funding. Currently, the Company aggregates the various components of the net periodic benefit cost (including interest cost and the expected return on plan assets) for presentation purposes and includes these costs within operating income (loss) in the condensed consolidated statements of operations. Under the new guidance, these costs will be presented below operating income (loss). This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period; however, early adoption is permitted. The Company will be adopting the standard for the year ending December 31, 2018. The adoption of the standard will have no impact on net income. In connection with the adoption of this new standard, prior periods will be recast to reflect the new presentation. The amount of net periodic benefit cost that will be reclassified below operating income for fiscal year 2016 will be approximately $25 million of income. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): "Scope of Modification Accounting." This ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Under the new standard, modification accounting applies unless all the following conditions are met: (i) the fair value of the modified award is the same as the fair value of the original award immediately before the modification, (ii) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the modification, and (iii) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification the original award immediately before the original award is modified. Generally speaking, modification accounting requires an entity to calculate and recognize the incremental fair value of the modified award as compensation cost on the date of modification (for a vested award) or over the remaining service period (for an unvested award). This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period; however, early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and does not plan to adopt the standard early. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company is organized into two reportable segments: Transportation and Logistics. Corporate and Eliminations constitute the remaining portions of the Company’s operating results required to be presented in order to reconcile the Company’s segment results to the condensed consolidated financial statements. The Company's chief executive officer, who is the chief operating decision maker ("CODM"), regularly reviews financial information at the reporting segment level in order to make decisions about resources to be allocated to the segments and to assess their performance. Segment results that are reported to the CODM include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Asset information by segment is not provided to the Company's CODM as the majority of the Company's assets are managed at the corporate level. The Company evaluates performance based on the various financial measures of the respective business segments. The following table identifies selected financial data for the three- and six- months ended June 30, 2017 and 2016 : (In millions) Transportation Logistics Corporate Eliminations Total Three Months Ended June 30, 2017 Revenue $ 2,405.2 $ 1,395.2 $ — $ (40.1 ) $ 3,760.3 Operating income (loss) 160.0 64.3 (39.3 ) — 185.0 Depreciation and amortization 111.4 51.5 1.5 — 164.4 Three Months Ended June 30, 2016 Revenue $ 2,418.9 1,332.0 $ — $ (67.6 ) $ 3,683.3 Operating income (loss) 153.2 51.1 (34.0 ) — 170.3 Depreciation and amortization 112.5 48.6 0.4 — 161.5 Six Months Ended June 30, 2017 Revenue $ 4,682.4 $ 2,695.3 $ — $ (77.9 ) $ 7,299.8 Operating income (loss) 260.8 111.5 (73.7 ) — 298.6 Depreciation and amortization 217.6 100.2 4.0 — 321.8 Six Months Ended June 30, 2016 Revenue $ 4,716.3 $ 2,592.7 $ — $ (80.0 ) $ 7,229.0 Operating income (loss) 228.6 83.0 (78.9 ) — 232.7 Depreciation and amortization 227.1 95.7 0.8 — 323.6 |
Restructuring Charges
Restructuring Charges | 6 Months Ended |
Jun. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges In conjunction with various acquisitions, the Company has initiated a facility rationalization and severance program to close facilities and reduce employment. These initiatives are intended to improve the Company's efficiency and profitability. The restructuring charges incurred during the six months ended June 30, 2017 , and included in the Company's condensed consolidated statement of operations as sales, general and administrative expense, direct operating expense, and cost of transportation and services, are summarized below. Six Months Ended June 30, 2017 (In millions) Reserve Balance at December 31, 2016 Charges Incurred Payments Foreign Exchange and Other Reserve Balance at June 30, 2017 Transportation Facilities $ 1.4 $ 0.3 $ (0.5 ) $ — $ 1.2 Severance 5.8 1.6 (3.2 ) 0.4 4.6 Total 7.2 1.9 (3.7 ) 0.4 5.8 Logistics Contract termination 0.7 0.3 (0.1 ) — 0.9 Facilities 0.5 — (0.3 ) — 0.2 Severance 16.1 2.4 (8.6 ) 0.8 10.7 Total 17.3 2.7 (9.0 ) 0.8 11.8 Corporate Contract termination 0.3 — (0.2 ) — 0.1 Severance 0.4 1.1 (1.1 ) — 0.4 Total 0.7 1.1 (1.3 ) — 0.5 Total $ 25.2 $ 5.7 $ (14.0 ) $ 1.2 $ 18.1 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company accounts for certain assets and liabilities at fair value, and categorizes each of its fair value measurements in one of the following three levels based on the lowest level input that is significant to the fair value measurement in its entirety: • Level 1 - Quoted prices for identical instruments in active markets; • Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets; and • Level 3 - Valuations based on inputs that are unobservable, generally utilizing pricing models or other valuation techniques that reflect management’s judgment and estimates. Assets and Liabilities Measured at Fair Value As of June 30, 2017 and December 31, 2016 , the Company's assets and liabilities measured at fair value include its derivative instruments and the liability related to its cash settled performance-based restricted stock units. Fair Value of Financial Instruments The carrying values of the following financial instruments approximated their fair values as of June 30, 2017 and December 31, 2016 : cash, cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses. Fair values approximate carrying values for these financial instruments since they are short-term in nature or are receivable or payable on demand. For information regarding the estimated fair value of the Company's derivative instruments and debt, refer to Note 5 —Derivative Instruments and Note 6 —Debt , respectively. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments In the normal course of business, the Company is exposed to certain risks arising from business operations and economic factors, including fluctuations in interest rates and foreign currencies. To manage the volatility related to these exposures, the Company uses derivative instruments. The objective of these derivative instruments is to reduce fluctuations in the Company’s earnings and cash flows associated with changes in foreign currency exchange rates and interest rates. These financial instruments are not used for trading or other speculative purposes. The Company has not historically incurred, and does not expect to incur in the future, any losses as a result of counterparty default. The Company's derivative portfolio is comprised of the following instruments as of June 30, 2017 and December 31, 2016 . June 30, 2017 Derivative Assets Derivative Liabilities (In millions) Fair Value Hierarchy Level Notional Amount Balance Sheet Caption Fair Value Balance Sheet Caption Fair Value Derivatives designated as hedges: Cross-currency swap agreements Level 2 $ 1,265.9 Other long-term assets $ — Other long-term liabilities $ (61.7 ) Cross-currency swap agreements Level 2 1.4 Other current assets 0.1 Other current liabilities — Interest rate swaps Level 2 114.1 Other current assets — Other current liabilities (1.2 ) Derivatives not designated as hedges: Foreign currency option and forward contracts Level 2 854.4 Other current assets 4.1 Other current liabilities (7.8 ) Foreign currency option and forward contracts Level 2 429.3 Other long-term assets 4.6 Other long-term liabilities (5.4 ) Total $ 8.8 $ (76.1 ) December 31, 2016 Derivative Assets Derivative Liabilities (In millions) Fair Value Hierarchy Level Notional Amount Balance Sheet Caption Fair Value Balance Sheet Caption Fair Value Derivatives designated as hedges: Cross-currency swap agreements Level 2 $ 730.9 Other long-term assets $ 11.9 Other long-term liabilities $ (6.9 ) Cross-currency swap agreements Level 2 3.3 Other current assets 0.1 Other current liabilities — Interest rate swaps Level 2 105.4 Other current assets — Other current liabilities (2.3 ) Derivatives not designated as hedges: Foreign currency option and forward contracts Level 2 552.2 Other current assets 18.8 Other current liabilities (1.0 ) Foreign currency option and forward contracts Level 2 742.6 Other long-term assets 26.7 Other long-term liabilities (5.8 ) Total $ 57.5 $ (16.0 ) The following table indicates the amount of pre-tax gains/(losses) that have been recognized in accumulated other comprehensive loss in the condensed consolidated balance sheets and gains/(losses) recognized in income before income tax provision in the condensed consolidated statements of operations for derivative and nonderivative instruments: Recognized in Accumulated Other Comprehensive Loss Recognized in Income Before Income Tax Provision (In millions) Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 Derivatives designated as hedges: Cross-currency swap agreements $ (58.2 ) $ 26.8 $ — $ — Interest rate swaps 0.6 1.4 — — Derivatives not designated as hedges: Interest rate swaps — — — 0.4 Foreign currency option and forward contracts — — (28.3 ) 5.2 Nonderivatives designated as hedges: Foreign currency denominated notes 5.0 1.0 — $ — Total $ (52.6 ) $ 29.2 $ (28.3 ) $ 5.6 Recognized in Accumulated Other Comprehensive Loss Recognized in Income Before Income Tax Provision (In millions) Six Months Ended June 30, 2017 Six Months Ended June 30, 2016 Six Months Ended June 30, 2017 Six Months Ended June 30, 2016 Derivatives designated as hedges: Cross-currency swap agreements $ (62.3 ) $ (6.0 ) $ — $ — Interest rate swaps 1.1 2.5 — — Derivatives not designated as hedges: Interest rate swaps — — — 0.6 Foreign currency option and forward contracts — — (38.5 ) 2.8 Nonderivatives designated as hedges: Foreign currency denominated notes 5.6 (0.7 ) — $ — Total $ (55.6 ) $ (4.2 ) $ (38.5 ) $ 3.4 Foreign Currency Option and Forward Contracts In order to mitigate the currency translation risk which results from converting the financial statements of the Company’s international operations, which primarily use the Euro ("EUR") and British Pound Sterling ("GBP") as their functional currency, the Company uses foreign currency option and forward contracts. The foreign currency contracts were not designated as qualifying hedging instruments as of June 30, 2017 . The contracts are not speculative; rather, they are used to manage the Company’s exposure to foreign currency exchange rate fluctuations. The contracts expire in 24 months or less. Gains or losses on the contracts are recorded in foreign currency (gain) loss in the condensed consolidated statements of operations. Cash flows related to the foreign currency contracts are included in operating activities on the condensed consolidated statements of cash flows. In May 2017, the Company entered into certain cross-currency swap agreements to manage the related foreign currency exchange risk by effectively converting the fixed-rate U.S. Dollar ("USD")-denominated senior notes due 2023 (see Note 6-Debt ), including the semi-annual interest payments, to fixed-rate, EUR-denominated debt. The risk management objective of these transactions is to manage foreign currency risk relating to net investments in subsidiaries denominated in foreign currencies and reduce the variability in the functional currency equivalent cash flows of the senior notes due 2023. During the term of the swap contracts, the Company will receive quarterly interest payments in March, June, September and December of each year from the counterparties based on USD fixed interest rates, and the Company will make quarterly interest payments in March, June, September and December of each year to the counterparties based on EUR fixed interest rates. At maturity, the Company will repay the original principal amount in EUR and receive the principal amount in USD. The Company has designated the cross-currency swap agreements as qualifying hedging instruments and is accounting for these as net investment hedges. The gains and losses resulting from fair value adjustments to the cross-currency swap agreements are recorded in accumulated other comprehensive income to the extent that the cross-currency swaps are effective in hedging the designated risk. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company's debt is comprised of the following: June 30, 2017 Fair Value (In millions) Principal Balance Carrying Value Level 1 Level 2 ABL facility $ — $ — $ — $ — Senior notes due 2023 535.0 527.5 561.8 — Senior notes due 2022 1,600.0 1,581.5 1,682.0 — Senior notes due 2021 570.6 564.5 602.0 — Senior notes due 2018 265.8 266.5 272.0 — Term loan facility 1,494.0 1,451.0 — 1,502.9 Senior debentures due 2034 300.0 201.8 301.4 — Convertible senior notes 38.4 37.8 150.9 — Euro private placement notes due 2020 13.7 14.7 — 14.1 Asset financing 105.5 105.5 105.5 — Capital leases for equipment 120.5 120.5 — 120.5 Total debt $ 5,043.5 $ 4,871.3 $ 3,675.6 $ 1,637.5 Current maturities of long-term debt $ 136.6 $ 117.0 Long-term debt $ 4,906.9 $ 4,754.3 December 31, 2016 Fair Value (In millions) Principal Balance Carrying Value Level 1 Level 2 ABL facility $ 30.0 $ 30.0 $ — $ 30.0 Senior notes due 2023 535.0 527.1 560.4 — Senior notes due 2022 1,600.0 1,579.9 1,689.4 — Senior notes due 2021 527.1 520.7 546.0 — Senior notes due 2018 265.8 267.1 274.0 — Term loan facility 1,481.9 1,439.2 — 1,507.1 Senior debentures due 2034 300.0 200.8 241.6 — Convertible senior notes 49.4 47.1 129.8 — Euro private placement notes due 2020 12.6 13.7 — 14.0 Asset financing 145.0 145.0 145.0 — Capital leases for equipment 97.4 97.4 — 97.4 Total debt $ 5,044.2 $ 4,868.0 $ 3,586.2 $ 1,648.5 Current maturities of long-term debt $ 138.9 $ 136.5 Long-term debt $ 4,905.3 $ 4,731.5 The Level 1 debt was valued using quoted prices in active markets. The Level 2 debt was valued using bid evaluation pricing models or quoted prices of securities with similar characteristics. The fair value of the asset financing arrangements approximates carrying value since the debt is primarily issued at a floating rate, may be prepaid any time at par without penalty, and the remaining life is short-term in nature. Refinancing of Existing Term Loan On March 10, 2017, the Company entered into a Refinancing Amendment (Amendment No. 2 to Credit Agreement) (the "Amendment"), by and among XPO, its subsidiaries signatory thereto, as guarantors, the lenders party thereto and Morgan Stanley Senior Funding, Inc., in its capacity as administrative agent (the "Administrative Agent"), amending that certain Senior Secured Term Loan Credit Agreement, dated as of October 30, 2015 (as amended, amended and restated, supplemented or otherwise modified, including by that certain Incremental and Refinancing Amendment (Amendment No. 1 to Credit Agreement), dated as of August 25, 2016, the "Term Loan Credit Agreement"). Pursuant to the Amendment, the outstanding $1,481.9 million principal amount of term loans under the Term Loan Credit Agreement (the "Existing Term Loans") were replaced with $1,494.0 million in aggregate principal amount of new term loans (the "New Term Loans") having substantially similar terms as the Existing Term Loans, other than with respect to the applicable interest rate and prepayment premiums in respect of certain voluntary prepayments. Proceeds from the New Term Loans were used primarily to refinance the Existing Term Loans and to pay interest, fees and expenses in connection therewith, and up to $1.5 million may be used for general corporate purposes. The interest rate margin applicable to the New Term Loans was reduced from 2.25% to 1.25% , in the case of base rate loans, and from 3.25% to 2.25% , in the case of LIBOR loans and the LIBOR floor was reduced from 1.0% to 0% . The interest rate on the New Term Loans was 3.41% at June 30, 2017 . The New Term Loans maturity date remains October 30, 2021. The refinancing resulted in a debt extinguishment charge of $9.0 million during the six months ended June 30, 2017. Convertible Senior Notes During the six months ended June 30, 2017, the Company issued an aggregate of 672,229 shares of the Company’s common stock to certain holders of the Convertible Senior Notes in connection with the conversion of $11.0 million aggregate principal amount of the Convertible Senior Notes. The conversions were allocated to long-term debt and equity in the amounts of $10.8 million and $11.1 million , respectively. A loss on conversion of $0.4 million was recorded as part of these transactions. Certain of these transactions represented induced conversions pursuant to which the Company paid the holder a market-based premium in cash. The negotiated market-based premiums, in addition to the difference between the current fair value and the book value of the Convertible Senior Notes, were reflected in interest expense. |
Legal and Regulatory Matters
Legal and Regulatory Matters | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal and Regulatory Matters | Legal and Regulatory Matters The Company is involved, and will continue to be involved, in numerous proceedings arising out of the conduct of its business. These proceedings may include, among other matters, claims for property damage or personal injury incurred in connection with the transportation of freight, claims regarding anti-competitive practices, and employment-related claims, including claims involving asserted breaches of employee restrictive covenants and tortious interference with contract. These proceedings also include numerous purported class action lawsuits, multi-plaintiff and individual lawsuits and state tax and other administrative proceedings that claim either that the Company’s owner operators or contract carriers should be treated as employees, rather than independent contractors, or that certain of the Company's drivers were not paid for all compensable time or were not provided with required meal or rest breaks. These lawsuits and proceedings may seek substantial monetary damages (including claims for unpaid wages, overtime, failure to provide meal and rest periods, unreimbursed business expenses and other items), injunctive relief, or both. The Company establishes accruals for specific legal proceedings when it is considered probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Accruals for loss contingencies are reviewed quarterly and adjusted as additional information becomes available. In connection with certain acquisitions of privately-held businesses, the Company has retained purchase price holdbacks or escrows to provide security for a negotiated duration with respect to damages incurred in connection with pre-acquisition claims and litigation matters. If a loss is not both probable and reasonably estimable, or if an exposure to loss exists in excess of the amount accrued therefor or the applicable purchase price holdback or escrow, the Company assesses whether there is at least a reasonable possibility that a loss, or additional loss, may have been incurred. If there is a reasonable possibility that a loss, or additional loss, may have been incurred, the Company discloses the estimate of the possible loss or range of loss if it is material and an estimate can be made, or states that such an estimate cannot be made. The evaluation as to whether a loss is reasonably possible or probable is based on the Company’s assessment, in conjunction with legal counsel, regarding the ultimate outcome of the matter. The Company believes that it has adequately accrued for, or has adequate purchase price holdbacks or escrows with respect to, the potential impact of loss contingencies that are probable and reasonably estimable. The Company does not believe that the ultimate resolution of any matters to which the Company is presently a party will have a material adverse effect on its results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s financial condition, results of operations or cash flows. Legal costs incurred related to these matters are expensed as incurred. The Company carries liability and excess umbrella insurance policies that it deems sufficient to cover potential legal claims arising in the normal course of conducting its operations as a transportation and logistics company. The liability and excess umbrella insurance policies generally do not cover the misclassification claims described in this Note. In the event the Company is required to satisfy a legal claim outside the scope of the coverage provided by insurance, the Company’s financial condition, results of operations or cash flows could be negatively impacted. Intermodal Drayage Classification Claims Certain of the Company’s intermodal drayage subsidiaries received notices from the California Labor Commissioner, Division of Labor Standards Enforcement (the "DLSE"), that a total of approximately 150 owner operators contracted with these subsidiaries filed claims in 2012 with the DLSE in which they assert that they should be classified as employees, rather than independent contractors. These claims seek reimbursement for the owner operators’ business expenses, including fuel, tractor maintenance and tractor lease payments. After a decision was rendered by a DLSE hearing officer in seven of these claims, in 2014, the Company appealed the decision to California Superior Court, San Diego, where a de novo trial was held on the merits of those claims. On July 17, 2015, the court issued a final statement of decision finding that the seven claimants were employees rather than independent contractors, and awarding an aggregate of $2.9 million plus post-judgment interest and attorneys’ fees to the claimants. The Company appealed this judgment, but cannot provide assurance that such appeal will be successful. Separate decisions were rendered in June 2015 by a DLSE hearing officer in claims involving five additional plaintiffs, resulting in an award for the plaintiffs in an aggregate amount of approximately $0.9 million , following which the Company appealed the decisions in the U.S. District Court for the Central District of California. On May 16, 2017, the Court issued judgment finding that the five claimants were employees rather than independent contractors, and awarding an aggregate of approximately $1.0 million plus post-judgment interest and attorneys’ fees to the claimants. The Company has appealed this judgment, but cannot provide assurance that such appeal will be successful. In addition, separate decisions were rendered in April 2017 by a DLSE hearing officer in claims involving four additional plaintiffs, resulting in an award for the plaintiffs in an aggregate amount of approximately $0.9 million , following which the Company appealed the decisions to the U.S. District Court for the Central District of California. The remaining DLSE claims (the "Pending DLSE Claims") have been transferred to California Superior Court in three separate actions involving approximately 200 claimants, including the approximately 150 claimants mentioned above. The Company believes that it has adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable relating to the claims referenced above. The Company is unable at this time to estimate the amount of the possible loss or range of loss, if any, in excess of its accrued liability that it may incur as a result of these claims given, among other reasons, that the number and identities of plaintiffs in these lawsuits are uncertain and the range of potential loss could be impacted substantially by future rulings by the courts involved, including on the merits of the claims. There are other putative class action litigation matters pending against the Company’s intermodal drayage subsidiaries in which the plaintiffs claim they should have been classified as employees, rather than independent contractors, and seek damages for alleged violations of various California wage and hour laws. The particular claims asserted vary from case to case, but the claims generally allege unpaid wages, unpaid overtime, or failure to provide meal and rest periods, and seek reimbursement of the contract carriers’ business expenses. However, these claims are all subject to arbitration provisions in the claimants’ independent contractor agreements, and class action certification is therefore unlikely. These cases include the following matters filed in the Superior Court for the State of California, Los Angeles District: M. Cortez v. Pacer filed in June 2016; and the following case filed in U.S. District Court for the Central District of California: I. Hernandez v. Pacer filed in May 2016. One of these cases, Cortez, has filed a California Private Attorneys General Act ("PAGA") claim, which is not subject to arbitration and therefore is subject to PAGA class action procedures. However, this matter is in the initial pleading stage and the court has not yet determined whether to certify the PAGA claim to proceed. The Company believes that it has adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable relating to these claims. The Company is unable at this time to estimate the amount of the possible loss or range of loss, if any, in excess of its accrued liability that it may incur as a result of these claims given, among other reasons, that the number and identities of plaintiffs in these lawsuits are uncertain and the range of potential loss could be impacted substantially by future rulings by the courts involved, including on the merits of the claims. Last Mile Logistics Classification Claims Certain of the Company’s last mile logistics subsidiaries are party to several putative class action litigations brought by independent contract carriers who contracted with these subsidiaries in which the contract carriers assert that they should be classified as employees, rather than independent contractors. The particular claims asserted vary from case to case, but the claims generally allege unpaid wages, unpaid overtime, or failure to provide meal and rest periods, and seek reimbursement of the contract carriers’ business expenses. Putative class actions against the Company’s subsidiaries are pending in California (Fernando Ruiz v. Affinity Logistics Corp., filed in May 2005 in the Federal District Court, Southern District of California - the Company has reached an agreement to settle this litigation, which is waiting for Court approval; Ron Carter, Juan Estrada, Jerry Green, Burl Malmgren, Bill McDonald and Joel Morales v. XPO Logistics, Inc., filed in March 2016 in the Federal District Court, Northern District of California; Ramon Garcia v. Macy’s and XPO Logistics Inc., filed in July 2016 in Superior Court of the State of California, Alameda County; and Kevin Kramer v. XPO Logistics Inc., filed in September 2016 in Superior Court of the State of California, Alameda County); New Jersey (Leonardo Alegre v. Atlantic Central Logistics, Simply Logistics, Inc., filed in March 2015 in the Federal District Court, New Jersey - the Company has reached an agreement to settle this litigation, which is waiting for Court approval); and Connecticut (Carlos Taveras v. XPO Last Mile, Inc., filed in November 2015 in the Federal District Court, Connecticut - the Company has reached an agreement to settle this litigation, which is waiting for Court approval). The Company believes that it has adequately accrued for the potential impact of loss contingencies relating to the foregoing claims that are probable and reasonably estimable. The Company is unable at this time to estimate the amount of the possible loss or range of loss, if any, in excess of its accrued liability that it may incur as a result of these claims given, among other reasons, that the number and identities of plaintiffs in these lawsuits are uncertain and the range of potential loss could be impacted substantially by future rulings by the courts involved, including on the merits of the claims. Last Mile TCPA Claims The Company is a party to a putative class action litigation ( Leung v. XPO Logistics, Inc. , filed in May 2015 in the U.S. District Court, Illinois) alleging violations of the Telephone Consumer Protection Act ("TCPA") related to an automated customer call system used by a last mile logistics business that the Company acquired. This matter is in the initial pleading stage and the court has not yet determined whether to certify the matter as a class action. The Company believes that it has adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable relating to this matter. The Company is unable at this time to estimate the amount of the possible loss or range of loss, if any, in excess of its accrued liability that it may incur as a result of this matter given, among other reasons, that the Company is vigorously defending the matter and believes that it has a number of meritorious legal defenses and that it remains uncertain what evidence of their claims and damages, if any, plaintiffs will be able to present. Less-Than-Truckload Meal Break Claims The Company’s LTL subsidiary is a party to several class action litigations alleging violations of the state of California's wage and hour laws with respect to its driver employees. Plaintiffs allege failure to provide drivers with required meal breaks and rest breaks. Plaintiffs seek to recover unspecified monetary damages, penalties, interest and attorneys’ fees. The primary case is Jose Alberto Fonseca Pina, et al. v. Con-way Freight Inc., et al. (the " Pina case"). The Pina case was initially filed in November 2009 in Monterey County Superior Court and was removed to the U.S. District Court of California, Northern District. The Company has reached an agreement to settle the Pina case, which has been tentatively approved by the court, and no interested parties have timely filed objections to the proposed settlement. The Company has accrued the full amount of the proposed settlement. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic and diluted earnings per share are computed using the two-class method, which is an earnings allocation method that determines earnings per share for common shares and participating securities. The participating securities consist of the Company's Series A Convertible Perpetual Preferred Stock. The undistributed earnings are allocated between common shares and participating securities as if all earnings had been distributed during the period. In periods of loss, no allocation is made to the preferred shares. Three Months Ended June 30, Six Months Ended June 30, (In millions, except per share data) 2017 2016 2017 2016 Basic earnings per common share Net income attributable to XPO $ 51.9 $ 46.6 $ 73.2 $ 24.1 Cumulative preferred dividends (0.7 ) (0.7 ) (1.4 ) (1.5 ) Non-cash allocation of undistributed earnings (3.6 ) (3.3 ) (4.7 ) (0.6 ) Net income allocable to common shares, basic $ 47.6 $ 42.6 $ 67.1 $ 22.0 Basic weighted-average common shares 111.8 110.0 111.6 109.8 Basic earnings per share $ 0.43 $ 0.39 $ 0.60 $ 0.20 Diluted earnings per common share Net income allocable to common shares, basic $ 47.6 $ 42.6 $ 67.1 $ 22.0 Interest from Convertible Senior Notes 0.3 0.3 0.7 — Net income allocable to common shares, diluted $ 47.9 $ 42.9 $ 67.8 $ 22.0 Basic weighted-average common shares 111.8 110.0 111.6 109.8 Dilutive effect of non-participating stock-based awards and Convertible Senior Notes 12.9 12.3 13.0 9.1 Diluted weighted-average common shares 124.7 122.3 124.6 118.9 Diluted earnings per share $ 0.38 $ 0.35 $ 0.54 $ 0.19 Potential common shares excluded 10.2 11.1 10.2 14.9 Certain shares were not included in the computation of diluted earnings per share because the effect was anti-dilutive. |
Subsequent Events (Notes)
Subsequent Events (Notes) | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In July 2017, the Company completed a registered underwritten offering of 11 million shares of its common stock at a public offering price of $60.50 per share, plus up to an additional 1.65 million shares of its common stock pursuant to an option granted to the underwriters to purchase additional shares of the Company’s common stock directly from the Company (the “Offering”). Of the 11 million shares of common stock, 5 million shares were offered directly by the Company and 6 million shares were offered in connection with forward sale agreements (the "Forward Sale Agreements") described below. The Offering closed on July 25, 2017. In connection with the Offering, the Company entered into separate Forward Sale Agreements with Morgan Stanley & Co. LLC and JPMorgan Chase Bank, National Association, London Branch (the "Forward Counterpa rties") pursuant to which the Company has agreed to sell, and each Forward Counterparty agreed to purchase, 3 million shares of the Company’s common stock (or 6 million shares of the Company common stock in the aggregate) subject to the terms and conditions of the Forward Sale Agreements, including the Company’s right to elect cash settlement or net share settlement. The initial forward price under each of the Forward Sale Agreements is $58.08 per share (which is the public offering price of our common stock, less the underwriting discount) and is subject to certain adjustments pursuant to the terms of the Forward Sale Agreements. Settlement of each of the Forward Sale Agreements is expected to occur no later than approximately one year after the closing of the Offering but may occur earlier at the option of the Company or, in certain circumstances described in the Forward Sale Agreements, at the option of the relevant Forward Counterparty. A Forward Counterparty’s decision to exercise its right to accelerate the Forward Sale Agreements entered into with it and to require the Company to settle the Forward Sale Agreements will be made irrespective of the Company’s interests, including the Company’s need for capital. The Company could be required to issue and deliver the Company’s common stock under the terms of the physical settlement provisions of the Forward Sale Agreements irrespective of the Company’s capital needs, which would result in dilution to the Company’s earnings per share and return on equity. The Forward Sales Agreements will be accounted for as equity instruments with subsequent changes in fair value not recognized as long as the contracts continue to be classified as equity. In addition, in connection with the Offering, the Company entered into Amendment No. 1 (the “Revolving Loan Credit Amendment”) to the Company’s Second Amended and Restated Revolving Loan Credit Agreement, dated as of October 30, 2015 (as previously amended, amended and restated, supplemented or otherwise modified, the “Existing Credit Agreement”), by and among the Company and certain subsidiaries signatory thereto, Morgan Stanley Senior Funding, Inc., as agent, and the Lenders party thereto, pursuant to which the Existing Credit Agreement was amended to permit certain transactions, including the transactions contemplated by the Forward Sale Agreements. The Company received proceeds of $290.4 million from the sale of 5 million shares of common stock in the Offering. The Company did not initially receive any proceeds from the sale of shares of its common stock by the Forward Counterparties pursuant to the Forward Sale Agreements. The Company expects to use the net proceeds of the shares issued and sold by the Company in the Offering and any net proceeds received upon the settlement of the Forward Sale Agreements for general corporate purposes, which may include strategic acquisitions and the repayment or refinancing of outstanding indebtedness. In July 2017, the Company issued a notice of redemption for all of its outstanding 7.25% senior notes due January 2018 (the “Notes”). The redemption will occur on August 25, 2017. The redemption price is equal to the sum of the present values of the remaining scheduled payments of principal and interest on the Notes (not including any interest accrued as of the date of the redemption), discounted to the redemption date on a semi-annual basis at a pre-defined treasury rate plus 50 basis points, plus accrued and unpaid interest on the Notes to the redemption date. The redemption will be funded using cash on hand at the date of the redemption. |
Organization, Description of 17
Organization, Description of Business and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Adoption of New Accounting Standards and Accounting Pronouncements Issued But Not Yet Effective | Adoption of New Accounting Standards In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, Compensation - Stock Compensation (Topic 718): "Improvements to Employee Share-based Payment Accounting." This ASU involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the new standard, income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits should be classified along with other income tax cash flows as an operating activity. The Company adopted this standard in the fourth quarter of 2016, effective January 1, 2016. Accordingly, the provision for income taxes in the second quarter and first six months of 2017 included excess tax benefits of $0.8 million and $11.5 million , respectively, that reduced the income tax provision. For the second quarter and six months ended June 30, 2016, there was no material effect on the Company's condensed consolidated financial statements from the adoption of this ASU. In regards to forfeitures, the Company elected to account for forfeitures when they occur. Accounting Pronouncements Issued But Not Yet Effective In May 2014, the FASB issued ASU No. 2014-09, Revenue (Topic 606): "Revenue from Contracts with Customers." This new standard includes the required steps to achieve the core principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard will be effective for the Company's annual and interim periods beginning January 1, 2018, and permits the use of either the retrospective or cumulative effect transition method. The Company has determined it will use the modified retrospective transition method. The Company is currently evaluating the effects of this standard and has completed a "gap assessment," whereby it has compared its current revenue recognition practices to those required by the new standard. The main areas under consideration include the recognition of revenue using proportionate delivery within the Transportation segment and gross versus net revenue presentation. The Company does not currently expect that the adoption of the standard will have a material effect on its statement of operations, balance sheet or statement of cash flows. The Company expects to provide expanded revenue recognition disclosures based on the new qualitative and quantitative disclosure requirements of the standard upon adoption. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases, including operating leases. Under the new requirements, a lessee will recognize in the balance sheet a liability to make lease payments (the lease liability) and the right-of-use asset representing the right to the underlying asset for the lease term. For leases with a term of 12 months or less, the lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the effects ASU 2016-02 will have on its consolidated financial statements and related disclosures. As of December 31, 2016, the Company reported $2,144.3 million in operating lease obligations and will evaluate those contracts as well as other existing arrangements to determine if they qualify for lease accounting under the new standard. The Company does not plan to adopt the standard early. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): “Restricted Cash”. This ASU requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. The standard is effective for the Company's annual and interim periods beginning January 1, 2018 and requires retrospective adoption. The Company does not expect the adoption of this standard to have a material effect on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): "Simplifying the Accounting for Goodwill Impairment." Under the current guidance for assessing goodwill for impairment, an entity can first assess qualitative factors to determine whether a two-step goodwill impairment test is necessary (often referred to as "Step 0"). When an entity bypasses or fails Step 0, the two-step goodwill impairment test is performed. Step 1 compares a reporting unit’s fair value to its carrying amount to determine if there is a potential impairment. If the carrying amount exceeds fair value, Step 2 must be completed. Step 2 involves determining the implied fair value of goodwill and comparing it to the carrying amount of that goodwill to measure the impairment loss, if any. The revised guidance eliminates Step 2 of the current goodwill impairment test, which requires a hypothetical purchase price allocation to measure goodwill impairment. Under the new standard, a goodwill impairment loss will instead be measured at the amount by which a reporting unit's carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance requires prospective adoption and will be effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption of this guidance is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company will be adopting this guidance for the year ending December 31, 2017 and does not expect it to have a material effect on its consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." The ASU will change how employers that sponsor defined benefit pension and/or other postretirement benefit plans present the cost of the benefits in the statements of operations. This cost, commonly referred to as the "net periodic benefit cost," is comprised of several components that reflect different aspects of the arrangement with the employee, including the effect of the related funding. Currently, the Company aggregates the various components of the net periodic benefit cost (including interest cost and the expected return on plan assets) for presentation purposes and includes these costs within operating income (loss) in the condensed consolidated statements of operations. Under the new guidance, these costs will be presented below operating income (loss). This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period; however, early adoption is permitted. The Company will be adopting the standard for the year ending December 31, 2018. The adoption of the standard will have no impact on net income. In connection with the adoption of this new standard, prior periods will be recast to reflect the new presentation. The amount of net periodic benefit cost that will be reclassified below operating income for fiscal year 2016 will be approximately $25 million of income. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): "Scope of Modification Accounting." This ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. Under the new standard, modification accounting applies unless all the following conditions are met: (i) the fair value of the modified award is the same as the fair value of the original award immediately before the modification, (ii) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the modification, and (iii) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification the original award immediately before the original award is modified. Generally speaking, modification accounting requires an entity to calculate and recognize the incremental fair value of the modified award as compensation cost on the date of modification (for a vested award) or over the remaining service period (for an unvested award). This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period; however, early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and does not plan to adopt the standard early. |
Segment Reporting | The Company is organized into two reportable segments: Transportation and Logistics. Corporate and Eliminations constitute the remaining portions of the Company’s operating results required to be presented in order to reconcile the Company’s segment results to the condensed consolidated financial statements. The Company's chief executive officer, who is the chief operating decision maker ("CODM"), regularly reviews financial information at the reporting segment level in order to make decisions about resources to be allocated to the segments and to assess their performance. Segment results that are reported to the CODM include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Asset information by segment is not provided to the Company's CODM as the majority of the Company's assets are managed at the corporate level. |
Fair Value Measurement | The Company accounts for certain assets and liabilities at fair value, and categorizes each of its fair value measurements in one of the following three levels based on the lowest level input that is significant to the fair value measurement in its entirety: • Level 1 - Quoted prices for identical instruments in active markets; • Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets; and • Level 3 - Valuations based on inputs that are unobservable, generally utilizing pricing models or other valuation techniques that reflect management’s judgment and estimates. |
Earnings (Loss) per Share | Basic and diluted earnings per share are computed using the two-class method, which is an earnings allocation method that determines earnings per share for common shares and participating securities. The participating securities consist of the Company's Series A Convertible Perpetual Preferred Stock. The undistributed earnings are allocated between common shares and participating securities as if all earnings had been distributed during the period. In periods of loss, no allocation is made to the preferred shares. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Selected Financial Data for Each of Operating Segments | The following table identifies selected financial data for the three- and six- months ended June 30, 2017 and 2016 : (In millions) Transportation Logistics Corporate Eliminations Total Three Months Ended June 30, 2017 Revenue $ 2,405.2 $ 1,395.2 $ — $ (40.1 ) $ 3,760.3 Operating income (loss) 160.0 64.3 (39.3 ) — 185.0 Depreciation and amortization 111.4 51.5 1.5 — 164.4 Three Months Ended June 30, 2016 Revenue $ 2,418.9 1,332.0 $ — $ (67.6 ) $ 3,683.3 Operating income (loss) 153.2 51.1 (34.0 ) — 170.3 Depreciation and amortization 112.5 48.6 0.4 — 161.5 Six Months Ended June 30, 2017 Revenue $ 4,682.4 $ 2,695.3 $ — $ (77.9 ) $ 7,299.8 Operating income (loss) 260.8 111.5 (73.7 ) — 298.6 Depreciation and amortization 217.6 100.2 4.0 — 321.8 Six Months Ended June 30, 2016 Revenue $ 4,716.3 $ 2,592.7 $ — $ (80.0 ) $ 7,229.0 Operating income (loss) 228.6 83.0 (78.9 ) — 232.7 Depreciation and amortization 227.1 95.7 0.8 — 323.6 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Summary of Restructuring Reserve | The restructuring charges incurred during the six months ended June 30, 2017 , and included in the Company's condensed consolidated statement of operations as sales, general and administrative expense, direct operating expense, and cost of transportation and services, are summarized below. Six Months Ended June 30, 2017 (In millions) Reserve Balance at December 31, 2016 Charges Incurred Payments Foreign Exchange and Other Reserve Balance at June 30, 2017 Transportation Facilities $ 1.4 $ 0.3 $ (0.5 ) $ — $ 1.2 Severance 5.8 1.6 (3.2 ) 0.4 4.6 Total 7.2 1.9 (3.7 ) 0.4 5.8 Logistics Contract termination 0.7 0.3 (0.1 ) — 0.9 Facilities 0.5 — (0.3 ) — 0.2 Severance 16.1 2.4 (8.6 ) 0.8 10.7 Total 17.3 2.7 (9.0 ) 0.8 11.8 Corporate Contract termination 0.3 — (0.2 ) — 0.1 Severance 0.4 1.1 (1.1 ) — 0.4 Total 0.7 1.1 (1.3 ) — 0.5 Total $ 25.2 $ 5.7 $ (14.0 ) $ 1.2 $ 18.1 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments Measured at Fair Value in Statement of Financial Position | The Company's derivative portfolio is comprised of the following instruments as of June 30, 2017 and December 31, 2016 . June 30, 2017 Derivative Assets Derivative Liabilities (In millions) Fair Value Hierarchy Level Notional Amount Balance Sheet Caption Fair Value Balance Sheet Caption Fair Value Derivatives designated as hedges: Cross-currency swap agreements Level 2 $ 1,265.9 Other long-term assets $ — Other long-term liabilities $ (61.7 ) Cross-currency swap agreements Level 2 1.4 Other current assets 0.1 Other current liabilities — Interest rate swaps Level 2 114.1 Other current assets — Other current liabilities (1.2 ) Derivatives not designated as hedges: Foreign currency option and forward contracts Level 2 854.4 Other current assets 4.1 Other current liabilities (7.8 ) Foreign currency option and forward contracts Level 2 429.3 Other long-term assets 4.6 Other long-term liabilities (5.4 ) Total $ 8.8 $ (76.1 ) December 31, 2016 Derivative Assets Derivative Liabilities (In millions) Fair Value Hierarchy Level Notional Amount Balance Sheet Caption Fair Value Balance Sheet Caption Fair Value Derivatives designated as hedges: Cross-currency swap agreements Level 2 $ 730.9 Other long-term assets $ 11.9 Other long-term liabilities $ (6.9 ) Cross-currency swap agreements Level 2 3.3 Other current assets 0.1 Other current liabilities — Interest rate swaps Level 2 105.4 Other current assets — Other current liabilities (2.3 ) Derivatives not designated as hedges: Foreign currency option and forward contracts Level 2 552.2 Other current assets 18.8 Other current liabilities (1.0 ) Foreign currency option and forward contracts Level 2 742.6 Other long-term assets 26.7 Other long-term liabilities (5.8 ) Total $ 57.5 $ (16.0 ) |
Schedule of Gains and Losses Recognized on the Balance Sheet for Derivative Instruments | The following table indicates the amount of pre-tax gains/(losses) that have been recognized in accumulated other comprehensive loss in the condensed consolidated balance sheets and gains/(losses) recognized in income before income tax provision in the condensed consolidated statements of operations for derivative and nonderivative instruments: Recognized in Accumulated Other Comprehensive Loss Recognized in Income Before Income Tax Provision (In millions) Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 Derivatives designated as hedges: Cross-currency swap agreements $ (58.2 ) $ 26.8 $ — $ — Interest rate swaps 0.6 1.4 — — Derivatives not designated as hedges: Interest rate swaps — — — 0.4 Foreign currency option and forward contracts — — (28.3 ) 5.2 Nonderivatives designated as hedges: Foreign currency denominated notes 5.0 1.0 — $ — Total $ (52.6 ) $ 29.2 $ (28.3 ) $ 5.6 Recognized in Accumulated Other Comprehensive Loss Recognized in Income Before Income Tax Provision (In millions) Six Months Ended June 30, 2017 Six Months Ended June 30, 2016 Six Months Ended June 30, 2017 Six Months Ended June 30, 2016 Derivatives designated as hedges: Cross-currency swap agreements $ (62.3 ) $ (6.0 ) $ — $ — Interest rate swaps 1.1 2.5 — — Derivatives not designated as hedges: Interest rate swaps — — — 0.6 Foreign currency option and forward contracts — — (38.5 ) 2.8 Nonderivatives designated as hedges: Foreign currency denominated notes 5.6 (0.7 ) — $ — Total $ (55.6 ) $ (4.2 ) $ (38.5 ) $ 3.4 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The Company's debt is comprised of the following: June 30, 2017 Fair Value (In millions) Principal Balance Carrying Value Level 1 Level 2 ABL facility $ — $ — $ — $ — Senior notes due 2023 535.0 527.5 561.8 — Senior notes due 2022 1,600.0 1,581.5 1,682.0 — Senior notes due 2021 570.6 564.5 602.0 — Senior notes due 2018 265.8 266.5 272.0 — Term loan facility 1,494.0 1,451.0 — 1,502.9 Senior debentures due 2034 300.0 201.8 301.4 — Convertible senior notes 38.4 37.8 150.9 — Euro private placement notes due 2020 13.7 14.7 — 14.1 Asset financing 105.5 105.5 105.5 — Capital leases for equipment 120.5 120.5 — 120.5 Total debt $ 5,043.5 $ 4,871.3 $ 3,675.6 $ 1,637.5 Current maturities of long-term debt $ 136.6 $ 117.0 Long-term debt $ 4,906.9 $ 4,754.3 December 31, 2016 Fair Value (In millions) Principal Balance Carrying Value Level 1 Level 2 ABL facility $ 30.0 $ 30.0 $ — $ 30.0 Senior notes due 2023 535.0 527.1 560.4 — Senior notes due 2022 1,600.0 1,579.9 1,689.4 — Senior notes due 2021 527.1 520.7 546.0 — Senior notes due 2018 265.8 267.1 274.0 — Term loan facility 1,481.9 1,439.2 — 1,507.1 Senior debentures due 2034 300.0 200.8 241.6 — Convertible senior notes 49.4 47.1 129.8 — Euro private placement notes due 2020 12.6 13.7 — 14.0 Asset financing 145.0 145.0 145.0 — Capital leases for equipment 97.4 97.4 — 97.4 Total debt $ 5,044.2 $ 4,868.0 $ 3,586.2 $ 1,648.5 Current maturities of long-term debt $ 138.9 $ 136.5 Long-term debt $ 4,905.3 $ 4,731.5 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended June 30, Six Months Ended June 30, (In millions, except per share data) 2017 2016 2017 2016 Basic earnings per common share Net income attributable to XPO $ 51.9 $ 46.6 $ 73.2 $ 24.1 Cumulative preferred dividends (0.7 ) (0.7 ) (1.4 ) (1.5 ) Non-cash allocation of undistributed earnings (3.6 ) (3.3 ) (4.7 ) (0.6 ) Net income allocable to common shares, basic $ 47.6 $ 42.6 $ 67.1 $ 22.0 Basic weighted-average common shares 111.8 110.0 111.6 109.8 Basic earnings per share $ 0.43 $ 0.39 $ 0.60 $ 0.20 Diluted earnings per common share Net income allocable to common shares, basic $ 47.6 $ 42.6 $ 67.1 $ 22.0 Interest from Convertible Senior Notes 0.3 0.3 0.7 — Net income allocable to common shares, diluted $ 47.9 $ 42.9 $ 67.8 $ 22.0 Basic weighted-average common shares 111.8 110.0 111.6 109.8 Dilutive effect of non-participating stock-based awards and Convertible Senior Notes 12.9 12.3 13.0 9.1 Diluted weighted-average common shares 124.7 122.3 124.6 118.9 Diluted earnings per share $ 0.38 $ 0.35 $ 0.54 $ 0.19 Potential common shares excluded 10.2 11.1 10.2 14.9 |
Organization, Description of 23
Organization, Description of Business and Basis of Presentation - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)segment | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Number of reportable segments (in segments) | segment | 2 | ||||
Share-based compensation, excess tax benefit | $ 0.8 | $ 11.5 | |||
Total minimum lease payments | $ 2,144.3 | ||||
Reclassification of net periodic benefit cost | $ (3,575.3) | $ (3,513) | $ (7,001.2) | $ (6,996.3) | |
Pro Forma | Accounting Standards Update 2017-07 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Reclassification of net periodic benefit cost | $ 25 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2017segment | |
Segment Reporting [Abstract] | |
Number of reportable segments (in segments) | 2 |
Segment Reporting - Selected Fi
Segment Reporting - Selected Financial Data for Each of Operating Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 3,760.3 | $ 3,683.3 | $ 7,299.8 | $ 7,229 |
Operating income (loss) | 185 | 170.3 | 298.6 | 232.7 |
Depreciation and amortization | 164.4 | 161.5 | 321.8 | 323.6 |
Operating Segments | Transportation | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,405.2 | 2,418.9 | 4,682.4 | 4,716.3 |
Operating income (loss) | 160 | 153.2 | 260.8 | 228.6 |
Depreciation and amortization | 111.4 | 112.5 | 217.6 | 227.1 |
Operating Segments | Logistics | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,395.2 | 1,332 | 2,695.3 | 2,592.7 |
Operating income (loss) | 64.3 | 51.1 | 111.5 | 83 |
Depreciation and amortization | 51.5 | 48.6 | 100.2 | 95.7 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Operating income (loss) | (39.3) | (34) | (73.7) | (78.9) |
Depreciation and amortization | 1.5 | 0.4 | 4 | 0.8 |
Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | (40.1) | (67.6) | (77.9) | (80) |
Operating income (loss) | 0 | 0 | 0 | 0 |
Depreciation and amortization | $ 0 | $ 0 | $ 0 | $ 0 |
Restructuring Charges - Summary
Restructuring Charges - Summary of Restructuring Reserve (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 25.2 |
Charges Incurred | 5.7 |
Payments | (14) |
Foreign Exchange and Other | 1.2 |
Ending balance | 18.1 |
Operating Segments | Transportation | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 7.2 |
Charges Incurred | 1.9 |
Payments | (3.7) |
Foreign Exchange and Other | 0.4 |
Ending balance | 5.8 |
Operating Segments | Transportation | Facilities | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 1.4 |
Charges Incurred | 0.3 |
Payments | (0.5) |
Foreign Exchange and Other | 0 |
Ending balance | 1.2 |
Operating Segments | Transportation | Severance | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 5.8 |
Charges Incurred | 1.6 |
Payments | (3.2) |
Foreign Exchange and Other | 0.4 |
Ending balance | 4.6 |
Operating Segments | Logistics | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 17.3 |
Charges Incurred | 2.7 |
Payments | (9) |
Foreign Exchange and Other | 0.8 |
Ending balance | 11.8 |
Operating Segments | Logistics | Facilities | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 0.5 |
Charges Incurred | 0 |
Payments | (0.3) |
Foreign Exchange and Other | 0 |
Ending balance | 0.2 |
Operating Segments | Logistics | Severance | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 16.1 |
Charges Incurred | 2.4 |
Payments | (8.6) |
Foreign Exchange and Other | 0.8 |
Ending balance | 10.7 |
Operating Segments | Logistics | Contract termination | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 0.7 |
Charges Incurred | 0.3 |
Payments | (0.1) |
Foreign Exchange and Other | 0 |
Ending balance | 0.9 |
Corporate | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 0.7 |
Charges Incurred | 1.1 |
Payments | (1.3) |
Foreign Exchange and Other | 0 |
Ending balance | 0.5 |
Corporate | Severance | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 0.4 |
Charges Incurred | 1.1 |
Payments | (1.1) |
Foreign Exchange and Other | 0 |
Ending balance | 0.4 |
Corporate | Contract termination | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | 0.3 |
Charges Incurred | 0 |
Payments | (0.2) |
Foreign Exchange and Other | 0 |
Ending balance | $ 0.1 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Derivative Instruments Measured at Fair Value in Statement of Financial Position (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | $ 8.8 | $ 57.5 |
Derivative Liabilities | (76.1) | (16) |
Level 2 | Derivatives designated as hedges: | Cross-currency swap agreements | Other Long Term Assets and Other Long Term Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 1,265.9 | 730.9 |
Level 2 | Derivatives designated as hedges: | Cross-currency swap agreements | Other long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 11.9 |
Level 2 | Derivatives designated as hedges: | Cross-currency swap agreements | Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (61.7) | (6.9) |
Level 2 | Derivatives designated as hedges: | Cross-currency swap agreements | Other Current Assets and Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 1.4 | 3.3 |
Level 2 | Derivatives designated as hedges: | Cross-currency swap agreements | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0.1 | 0.1 |
Level 2 | Derivatives designated as hedges: | Cross-currency swap agreements | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | 0 | 0 |
Level 2 | Derivatives designated as hedges: | Interest rate swaps | Other Current Assets and Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 114.1 | 105.4 |
Level 2 | Derivatives designated as hedges: | Interest rate swaps | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Level 2 | Derivatives designated as hedges: | Interest rate swaps | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (1.2) | (2.3) |
Level 2 | Derivatives not designated as hedges: | Foreign currency option and forward contracts | Other Long Term Assets and Other Long Term Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 429.3 | 742.6 |
Level 2 | Derivatives not designated as hedges: | Foreign currency option and forward contracts | Other long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 4.6 | 26.7 |
Level 2 | Derivatives not designated as hedges: | Foreign currency option and forward contracts | Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (5.4) | (5.8) |
Level 2 | Derivatives not designated as hedges: | Foreign currency option and forward contracts | Other Current Assets and Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 854.4 | 552.2 |
Level 2 | Derivatives not designated as hedges: | Foreign currency option and forward contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 4.1 | 18.8 |
Level 2 | Derivatives not designated as hedges: | Foreign currency option and forward contracts | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | $ (7.8) | $ (1) |
Derivative Instruments - Sche28
Derivative Instruments - Schedule of Gains and Losses Recognized on the Balance Sheet for Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Recognized in Accumulated Other Comprehensive Income (Loss) | $ (52.6) | $ 29.2 | $ (55.6) | $ (4.2) |
Recognized in Earnings | (28.3) | 5.6 | (38.5) | 3.4 |
Cross-currency swap agreements | Derivatives designated as hedges: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Recognized in Accumulated Other Comprehensive Income (Loss) | (58.2) | 26.8 | (62.3) | (6) |
Recognized in Earnings | 0 | 0 | 0 | 0 |
Interest rate swaps | Derivatives designated as hedges: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Recognized in Accumulated Other Comprehensive Income (Loss) | 0.6 | 1.4 | 1.1 | 2.5 |
Recognized in Earnings | 0 | 0 | 0 | 0 |
Interest rate swaps | Derivatives not designated as hedges: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Recognized in Accumulated Other Comprehensive Income (Loss) | 0 | 0 | 0 | 0 |
Recognized in Earnings | 0 | 0.4 | 0 | 0.6 |
Foreign currency option and forward contracts | Derivatives not designated as hedges: | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Recognized in Accumulated Other Comprehensive Income (Loss) | 0 | 0 | 0 | 0 |
Recognized in Earnings | (28.3) | 5.2 | (38.5) | 2.8 |
Foreign currency denominated notes | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Recognized in Accumulated Other Comprehensive Income (Loss) | 5 | 1 | 5.6 | (0.7) |
Recognized in Earnings | $ 0 | $ 0 | $ 0 | $ 0 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) | 6 Months Ended |
Jun. 30, 2017 | |
Maximum | Derivatives not designated as hedges: | Foreign currency option and forward contracts | |
Derivative [Line Items] | |
Derivative, term of contract | 24 months |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Total debt, Principal Balance | $ 5,043.5 | $ 5,044.2 |
Current maturities of long-term debt, Principal Balance | 136.6 | 138.9 |
Long-term debt, Principal Balance | 4,906.9 | 4,905.3 |
Current maturities of long-term debt, Carrying Value | 117 | 136.5 |
Convertible senior notes | ||
Debt Instrument [Line Items] | ||
Total debt, Principal Balance | 38.4 | 49.4 |
Capital leases for equipment | ||
Debt Instrument [Line Items] | ||
Total debt, Principal Balance | 120.5 | 97.4 |
Senior notes due 2023 | ||
Debt Instrument [Line Items] | ||
Total debt, Principal Balance | 535 | 535 |
Senior notes due 2022 | ||
Debt Instrument [Line Items] | ||
Total debt, Principal Balance | 1,600 | 1,600 |
Senior notes due 2021 | ||
Debt Instrument [Line Items] | ||
Total debt, Principal Balance | 570.6 | 527.1 |
Senior notes due 2018 | ||
Debt Instrument [Line Items] | ||
Total debt, Principal Balance | 265.8 | 265.8 |
Term loan facility | ||
Debt Instrument [Line Items] | ||
Total debt, Principal Balance | 1,494 | 1,481.9 |
Senior debentures due 2034 | ||
Debt Instrument [Line Items] | ||
Total debt, Principal Balance | 300 | 300 |
Euro private placement notes due 2020 | ||
Debt Instrument [Line Items] | ||
Total debt, Principal Balance | 13.7 | 12.6 |
Asset financing | ||
Debt Instrument [Line Items] | ||
Total debt, Principal Balance | 105.5 | 145 |
Level 1 | ||
Debt Instrument [Line Items] | ||
Total debt | 3,675.6 | 3,586.2 |
Level 1 | Convertible senior notes | ||
Debt Instrument [Line Items] | ||
Total debt | 150.9 | 129.8 |
Level 1 | Capital leases for equipment | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 0 |
Level 1 | Senior notes due 2023 | ||
Debt Instrument [Line Items] | ||
Total debt | 561.8 | 560.4 |
Level 1 | Senior notes due 2022 | ||
Debt Instrument [Line Items] | ||
Total debt | 1,682 | 1,689.4 |
Level 1 | Senior notes due 2021 | ||
Debt Instrument [Line Items] | ||
Total debt | 602 | 546 |
Level 1 | Senior notes due 2018 | ||
Debt Instrument [Line Items] | ||
Total debt | 272 | 274 |
Level 1 | Term loan facility | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 0 |
Level 1 | Senior debentures due 2034 | ||
Debt Instrument [Line Items] | ||
Total debt | 301.4 | 241.6 |
Level 1 | Euro private placement notes due 2020 | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 0 |
Level 1 | Asset financing | ||
Debt Instrument [Line Items] | ||
Total debt | 105.5 | 145 |
Level 2 | ||
Debt Instrument [Line Items] | ||
Total debt | 1,637.5 | 1,648.5 |
Level 2 | Convertible senior notes | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 0 |
Level 2 | Capital leases for equipment | ||
Debt Instrument [Line Items] | ||
Total debt | 120.5 | 97.4 |
Level 2 | Senior notes due 2023 | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 0 |
Level 2 | Senior notes due 2022 | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 0 |
Level 2 | Senior notes due 2021 | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 0 |
Level 2 | Senior notes due 2018 | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 0 |
Level 2 | Term loan facility | ||
Debt Instrument [Line Items] | ||
Total debt | 1,502.9 | 1,507.1 |
Level 2 | Senior debentures due 2034 | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 0 |
Level 2 | Euro private placement notes due 2020 | ||
Debt Instrument [Line Items] | ||
Total debt | 14.1 | 14 |
Level 2 | Asset financing | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 0 |
Carrying Value | ||
Debt Instrument [Line Items] | ||
Total debt | 4,871.3 | 4,868 |
Current maturities of long-term debt, Carrying Value | 117 | 136.5 |
Long-term debt, Carrying Value | 4,754.3 | 4,731.5 |
Carrying Value | Convertible senior notes | ||
Debt Instrument [Line Items] | ||
Total debt | 37.8 | 47.1 |
Carrying Value | Capital leases for equipment | ||
Debt Instrument [Line Items] | ||
Total debt | 120.5 | 97.4 |
Carrying Value | Senior notes due 2023 | ||
Debt Instrument [Line Items] | ||
Total debt | 527.5 | 527.1 |
Carrying Value | Senior notes due 2022 | ||
Debt Instrument [Line Items] | ||
Total debt | 1,581.5 | 1,579.9 |
Carrying Value | Senior notes due 2021 | ||
Debt Instrument [Line Items] | ||
Total debt | 564.5 | 520.7 |
Carrying Value | Senior notes due 2018 | ||
Debt Instrument [Line Items] | ||
Total debt | 266.5 | 267.1 |
Carrying Value | Term loan facility | ||
Debt Instrument [Line Items] | ||
Total debt | 1,451 | 1,439.2 |
Carrying Value | Senior debentures due 2034 | ||
Debt Instrument [Line Items] | ||
Total debt | 201.8 | 200.8 |
Carrying Value | Euro private placement notes due 2020 | ||
Debt Instrument [Line Items] | ||
Total debt | 14.7 | 13.7 |
Carrying Value | Asset financing | ||
Debt Instrument [Line Items] | ||
Total debt | 105.5 | 145 |
ABL facility | ||
Debt Instrument [Line Items] | ||
Total debt, Principal Balance | 0 | 30 |
ABL facility | Level 1 | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 0 |
ABL facility | Level 2 | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 30 |
ABL facility | Carrying Value | ||
Debt Instrument [Line Items] | ||
Total debt | $ 0 | $ 30 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | Mar. 10, 2017 | Oct. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||||||
Long-term debt | $ 5,043,500,000 | $ 5,043,500,000 | $ 5,044,200,000 | ||||
Loss on extinguishment of debt | 0 | $ 0 | $ 9,000,000 | $ 0 | |||
Number of shares issued in debt conversion (in shares) | 672,229 | ||||||
Value of shares converted | $ 11,000,000 | ||||||
Loss on conversion of debt | 400,000 | ||||||
Term loan facility | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt | $ 1,494,000,000 | $ 1,494,000,000 | $ 1,481,900,000 | ||||
Proceeds from new Term Loan for general corporate purposes | $ 1,500,000 | ||||||
Term loan facility | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.25% | 2.25% | |||||
Secured Debt | Term loan facility | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 3.41% | 3.41% | |||||
Morgan Stanley Senior Funding, Inc. | Secured Debt | Amendment No. 1 to Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt | $ 1,481,900,000 | ||||||
Morgan Stanley Senior Funding, Inc. | Secured Debt | Amendment No. 2 to Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt | $ 1,494,000,000 | ||||||
Loss on extinguishment of debt | $ 9,000,000 | ||||||
Maximum | Term loan facility | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.25% | 3.25% | |||||
Minimum | Term loan facility | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 0.00% | 1.00% | |||||
Long-term Debt | |||||||
Debt Instrument [Line Items] | |||||||
Value of shares converted | $ 10,800,000 | ||||||
Equity | |||||||
Debt Instrument [Line Items] | |||||||
Value of shares converted | $ 11,100,000 |
Legal and Regulatory Matters -
Legal and Regulatory Matters - Additional Information (Details) - California Labor Commission $ in Millions | May 16, 2017USD ($) | Jul. 17, 2015USD ($)claimant | Mar. 06, 2015class_actionclaimant | Apr. 30, 2017USD ($) | Jun. 30, 2015USD ($)claimant | Dec. 31, 2016operator | Dec. 31, 2014claimant | Dec. 31, 2012operator |
Loss Contingencies [Line Items] | ||||||||
Number of owner operators (in operators) | operator | 150 | 150 | ||||||
Number of claims heard by court (in claimants) | claimant | 7 | 200 | 5 | 7 | ||||
Amount claimed | $ 2.9 | $ 0.9 | ||||||
Settlement amount awarded to other party | $ 1 | $ 0.9 | ||||||
Number of class actions related to remaining claimants (in class actions) | class_action | 3 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Basic earnings per common share | ||||
Net income attributable to XPO | $ 51.9 | $ 46.6 | $ 73.2 | $ 24.1 |
Cumulative preferred dividends | (0.7) | (0.7) | (1.4) | (1.5) |
Non-cash allocation of undistributed earnings | (3.6) | (3.3) | (4.7) | (0.6) |
Net income allocable to common shares, basic | $ 47.6 | $ 42.6 | $ 67.1 | $ 22 |
Basic weighted-average common shares (in shares) | 111.8 | 110 | 111.6 | 109.8 |
Basic earnings (loss) per share (in dollars per share) | $ 0.43 | $ 0.39 | $ 0.60 | $ 0.20 |
Diluted earnings per common share | ||||
Net income allocable to common shares, basic | $ 47.6 | $ 42.6 | $ 67.1 | $ 22 |
Interest from Convertible Senior Notes | 0.3 | 0.3 | 0.7 | 0 |
Net income allocable to common shares, diluted | $ 47.9 | $ 42.9 | $ 67.8 | $ 22 |
Basic weighted-average common shares (in shares) | 111.8 | 110 | 111.6 | 109.8 |
Dilutive effect of non-participating stock-based awards and Convertible Senior Notes (in shares) | 12.9 | 12.3 | 13 | 9.1 |
Diluted weighted-average common shares (in shares) | 124.7 | 122.3 | 124.6 | 118.9 |
Diluted earnings (loss) per share (in dollars per share) | $ 0.38 | $ 0.35 | $ 0.54 | $ 0.19 |
Diluted potential common shares excluded (in shares) | 10.2 | 11.1 | 10.2 | 14.9 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 1 Months Ended | |
Jul. 31, 2017 | Jun. 30, 2017 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of shares issued in transaction (in shares) | 11,000 | |
Sale of stock, price per share (USD per share) | $ 60.50 | |
Period after stock offering in which forward sales agreements are expected to occur | 1 year | |
Option Granted To Underwriters | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of shares issued in transaction (in shares) | 1,650 | |
Offered Directly By The Company | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of shares issued in transaction (in shares) | 5,000 | |
Sale of stock, consideration received | $ 290.4 | |
Offered In Connection With Forward Sale Agreements | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of shares issued in transaction (in shares) | 6,000 | |
Sale of stock, price per share (USD per share) | $ 58.08 | |
Morgan Stanley & Co. LLC | Offered In Connection With Forward Sale Agreements | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of shares issued in transaction (in shares) | 3,000 | |
JPMorgan Chase Bank, National Association, London Branch | Offered In Connection With Forward Sale Agreements | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of shares issued in transaction (in shares) | 3,000 | |
Senior notes due 2018 | ||
Subsequent Event [Line Items] | ||
Stated interest rate | 7.25% |