Debt | Debt The following table summarizes the primary terms for components of debt: December 31, 2017 December 31, 2016 (In millions) Principal Balance Carrying Value Principal Balance Carrying Value ABL Facility $ 100.0 $ 100.0 $ 30.0 $ 30.0 Term loan facility 1,494.0 1,455.6 1,481.9 1,439.2 6.125% Senior Notes due 2023 535.0 528.0 535.0 527.1 6.50% Senior Notes due 2022 1,600.0 1,583.0 1,600.0 1,579.9 5.75% Senior Notes due 2021 — — 527.1 520.7 7.25% Senior Notes due 2018 — — 265.8 267.1 6.70% Senior Debentures due 2034 300.0 202.8 300.0 200.8 4.50% Convertible senior notes — — 49.4 47.1 4.00% Euro private placement notes due 2020 14.4 15.3 12.6 13.7 European Trade Securitization Program 302.6 298.6 — — Asset financing 90.0 90.0 145.0 145.0 Capital leases for equipment 247.9 247.9 97.4 97.4 Total debt 4,683.9 4,521.2 5,044.2 4,868.0 Current maturities of long-term debt 103.7 103.7 138.9 136.5 Long-term debt $ 4,580.2 $ 4,417.5 $ 4,905.3 $ 4,731.5 The fair value of the debt at December 31, 2017 was $4,816.1 million , of which $2,647.4 million was classified as Level 1 and $2,168.7 million was classified as Level 2 in the fair value hierarchy. The fair value of the debt at December 31, 2016 was $5,234.7 million , of which $3,586.2 million was classified as Level 1 and $1,648.5 million was classified as Level 2. 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. The following table outlines the Company’s principal payment obligations on debt (excluding capital leases) for the next five years: (In millions) 2018 2019 2020 2021 2022 Thereafter Principal payments on debt $ 61.0 $ 22.7 $ 420.9 $ 1,494.6 $ 1,600.6 $ 836.2 ABL Facility In October 2015, the Company entered into the Second Amended and Restated Revolving Loan Credit Agreement (the “ABL Facility”) among XPO and certain of XPO’s U.S. and Canadian wholly owned subsidiaries (which include the U.S. subsidiaries of the former Con-way), as borrowers, the other credit parties from time to time party thereto, the lenders party thereto and Morgan Stanley Senior Funding, Inc. (“MSSF”), as agent for such lenders. The ABL Facility replaced XPO’s then existing Amended Credit Agreement, and, among other things, (i) increased the commitments under the ABL Facility to $1.0 billion , (ii) permitted the acquisition of Con-way, and the transactions relating thereto, (iii) reduced the margin on loans under the ABL Facility by 0.25% from that contained in the then existing Amended Credit Agreement and (iv) matures on October 30, 2020. Up to $350 million of the ABL Facility is available for issuance of letters of credit, and up to $50 million of the ABL Facility is available for swing line loans. Total unamortized debt issuance costs related to the ABL Facility classified in other long-term assets at December 31, 2017 and 2016 were $6.2 million and $8.1 million , respectively. Availability on the ABL Facility is equal to the borrowing base less advances and outstanding letters of credit. The borrowing base includes a fixed percentage of (i) eligible U.S. and Canadian accounts receivable plus (ii) any eligible U.S. and Canadian rolling stock and equipment. At December 31, 2017 , the Company had a borrowing base of $1.0 billion and availability under the ABL Facility of $655.4 million at December 31, 2017 after considering outstanding letters of credit on the ABL Facility of $244.6 million . XPO may from time to time increase base availability under the ABL Facility up to $1.0 billion less any then outstanding letters of credit by including into the borrowing additional rolling stock and equipment. A maximum of 20% of the borrowing base can be attributable to the equipment and rolling stock in the aggregate. As of December 31, 2017 , the Company was in compliance with the ABL Facility’s financial covenants. The ABL Facility is secured on a first lien basis by the assets of the credit parties which constitute ABL Facility priority collateral and on a second lien basis by certain other assets. ABL Facility priority collateral consists primarily of U.S. and Canadian accounts receivable as well as any U.S. and Canadian rolling stock and equipment included by XPO in the borrowing base. The Company’s borrowings under the ABL Facility will bear interest at a rate equal to the London Interbank Offered Rate (“LIBOR”) or a Base Rate, as defined in the agreement, plus an applicable margin of 1.50% to 2.00% , in the case of LIBOR loans, and 0.50% to 1.00% , in the case of Base Rate loans. The interest rate on outstanding borrowings at December 31, 2017 was 2.97% . The ABL Facility contains representations and warranties, affirmative and negative covenants and events of default customary for agreements of this nature. Among other things, the covenants in the ABL Facility limit the Company’s ability to, with certain exceptions: incur indebtedness; grant liens; engage in certain mergers, consolidations, acquisitions and dispositions; make certain investments and restricted payments; and enter into certain transactions with affiliates. In certain circumstances, such as if availability is below certain thresholds, the ABL Facility also requires the Company to maintain a Fixed Charge Coverage Ratio (as defined in the ABL Facility) of not less than 1.00 . As of December 31, 2017 , the Company is in compliance with this financial covenant. If an event of default under the ABL Facility shall occur and be continuing, the commitments thereunder may be terminated and the principal amount outstanding thereunder, together with all accrued unpaid interest and other amounts owed thereunder, may be declared immediately due and payable. Certain subsidiaries acquired by the Company in the future may be excluded from the restrictions contained in certain of the foregoing covenants. Term Loan Facility In October 2015, XPO entered into a Senior Secured Term Loan Credit Agreement (the “Term Loan Credit Agreement”) that provided for a single borrowing of $1.6 billion . The Term Loan Credit Agreement was issued at an original issue discount of $32.0 million . In March 2017, the Company entered into a Refinancing Amendment (Amendment No. 2 to Credit Agreement) (the “ Second Amendment ”), by and among XPO, its subsidiaries signatory thereto, as guarantors, the lenders party thereto and MSSF , 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) (the “ First Amendment ”), dated as of August 25, 2016, the “Term Loan Credit Agreement”). Pursuant to the Second 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 “ Current 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 Current Term Loans were used primarily to refinance the Existing Term Loans and to pay interest, fees and expenses in connection therewith. The interest rate margin applicable to the Current 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 Current Term Loans was 3.60% at December 31, 2017 . The Current Term Loans maturity date remains October 30, 2021. The refinancing resulted in a debt extinguishment charge of $8.3 million during the twelve months ended December 31, 2017 . In August 2016, the Company entered into the First Amendment , pursuant to which the outstanding $1,592.0 million principal amount of term loans under the Term Loan Credit Agreement (the “ Old Term Loans ”) were replaced with a like aggregate principal amount of new term loans (the “ New Term Loans ”) having substantially similar terms as the Old Term Loans , other than with respect to the applicable interest rate and prepayment premiums in respect of certain voluntary prepayments. Of the $1,592.0 million of term loans which were refinanced, $1,197.2 million were exchanged and represent a non-cash financing activity. The interest rate margin applicable to the New Term Loans was reduced from 3.50% to 2.25% , in the case of base rate loans, and from 4.50% to 3.25% , in the case of LIBOR loans. The interest rate at December 31, 2016 was 4.25% . Debt extinguishment costs related to various lenders exiting the syndicate were $18.0 million . In addition, pursuant to the First Amendment , the Company borrowed an additional $400.0 million of Incremental Term B-1 Loans (the “Incremental Term B-1 Loans”) and an additional $50.0 million of Incremental Term B-2 Loans (the “Incremental Term B-2 Loans”). The New Term Loans, Incremental Term B-1 Loans and Incremental Term B-2 Loans have identical terms, other than with respect to original issue discount, and will mature on October 30, 2021. On November 3, 2016, the Company used the proceeds from sale of the North American Truckload operations to repurchase $555.0 million of Term Loan debt at par. The repurchase of debt resulted in a non-cash debt extinguishment charge of $16.5 million in the fourth quarter of 2016 . Commencing with the fiscal year ending December 31, 2016, the Company must prepay an aggregate principal amount of the Term Loan Facility equal to (a) 50% of Excess Cash Flow, as defined in the agreement, if any, for the most recent fiscal year ended minus (b) the sum of (i) all voluntary prepayments of loans during such fiscal year and (ii) all voluntary prepayments of loans under the ABL Facility or any other revolving credit facilities during such fiscal year to the extent accompanied by a corresponding permanent reduction in the commitments under the credit agreement or any other revolving credit facilities in the case of each of the immediately preceding clauses (i) and (ii), to the extent such prepayments are funded with internally generated cash flow, as defined in the agreement; provided, further, that (x) the Excess Cash Flow percentage shall be 25% if the Consolidated Secured Net Leverage Ratio of Borrower, as defined in the agreement, for the fiscal year was less than or equal to 3.00 : 1.00 and greater than 2.50 : 1.00 and (y) the Excess Cash Flow percentage shall be 0% if the Consolidated Secured Net Leverage Ratio of Borrower for the fiscal year was less than or equal to 2.50 : 1.00 . The remaining principal is due at maturity. As of December 31, 2017 , the Company’s Consolidated Secured Net Leverage Ratio was less than 2.50 : 1.00 ; therefore, no excess cash payment was required. Senior Notes In December 2017, the Company redeemed all of its outstanding senior notes due June 2021 (the “2021 Notes”) that were originally issued in 2015. The redemption price for the 2021 Notes was 102.875% of the principal amount of the 2021 Notes, plus accrued and unpaid interest to, but excluding, the date of redemption. The redemption was funded using cash on hand at the date of the redemption. The loss on debt extinguishment was $22.4 million . In August 2017, the Company redeemed all of its outstanding 7.25% senior notes due January 2018 (the “2018 Notes”). The 2018 Notes has been assumed in connection with the Company’s acquisition on Con-way. The redemption price for the 2018 Notes was 102.168% of the principal amount of the Notes, plus accrued and unpaid interest to, but excluding, the date of redemption. The redemption was funded using cash on hand at the date of the redemption. The loss on debt extinguishment was approximately $5.3 million . In September 2016, XPO redeemed all of its outstanding 7.875% Senior Notes due 2019. The redemption price for the Senior Notes due 2019 was 103.938% of the principal amount of the Senior Notes due 2019, plus accrued and unpaid interest to, but excluding, the date of redemption. Debt extinguishment costs were $35.2 million . In August 2016, the Company completed a private placement of $535.0 million aggregate principal amount of 6.125% senior notes due September 1, 2023 (“Senior Notes due 2023”). In June 2015, the Company completed a private placement of $1,600.0 million aggregate principal amount of 6.50% Senior Notes due 2022 . The Senior Notes bear interest payable semiannually, in cash in arrears. The Senior Notes due 2023 mature on September 1, 2023. The Senior Notes due 2022 mature on June 15, 2022. The Senior Notes are guaranteed by each of the Company’s direct and indirect wholly-owned restricted subsidiaries (other than certain excluded subsidiaries) that are obligors under, or guarantee obligations under, the Company’s ABL Facility (or certain replacements thereof) or guarantee certain capital markets indebtedness of the Company or any guarantor of the Senior Notes. The Senior Notes and the guarantees thereof are unsecured, unsubordinated indebtedness of the Company and the guarantors. Among other things, the covenants of the Senior Notes limit the Company’s ability to, with certain exceptions: incur indebtedness or issue disqualified stock; grant liens; pay dividends or make distributions in respect of capital stock; make certain investments or other restricted payments; prepay or repurchase subordinated debt; sell or transfer assets; engage in certain mergers, consolidations, acquisitions and dispositions; and enter into certain transactions with affiliates. Senior Debentures In conjunction with the Company’s acquisition of Con-way, the Company assumed Con-way’s 6.70% Senior Debentures due 2034 (the “Senior Debentures”) with an aggregate principal amount of $300.0 million . The Senior Debentures bear interest payable semiannually, in cash in arrears, and mature on May 1, 2034. In accordance with ASC 805 “Business Combinations,” the Senior Debentures were recorded at fair value on the Con-way acquisition date, resulting in a fair value discount of $101.3 million on October 30, 2015. Including amortization of the fair value adjustment, interest expense on the Senior Debentures is recognized at an annual effective interest rate of 10.96% . Convertible Senior Notes The Convertible Senior Notes bore interest payable semi-annually, in cash in arrears, and matured on October 1, 2017. During the year ended December 31, 2017 , the Company issued an aggregate of approximately 3.0 million shares of the Company’s common stock to certain holders of the Convertible Senior Notes in connection with the conversion of the Convertible Senior Notes. The Convertible Senior Notes and shares of common stock underlying the Convertible Senior Notes were registered pursuant to a registration statement on Form S-3. The conversions were allocated to long-term debt and equity in the amounts of $49.0 million and $49.5 million , respectively. A loss on conversion of $0.5 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. Euro Private Placement Notes The Euro Private Placement Notes due 2020 have €12.0 million EUR-denominated aggregate principal amount outstanding as of December 31, 2017 . The Euro Private Placement Notes due 2020 bear interest payable annually, in cash in arrears, and mature on December 20, 2020. The Euro Private Placement Notes are subject to leverage ratio and indebtedness ratio financial covenants, as defined in the agreements. ND is required to maintain a leverage ratio of less than or equal to 4.50 and an indebtedness ratio of less than or equal to 2.00 as of each semi-annual testing date. As of December 31, 2017 , the latest semi-annual testing date, ND is in compliance with the financial covenants . Asset Financing The asset financing arrangements are unsecured and are used to purchase trucks in Europe. The financing arrangements are denominated in USD, EUR, GBP and Romanian New Lei, with primarily floating interest rates. As of December 31, 2017 , interest rates on asset financing range from 0.67% to 4.97% , with a weighted average interest rate of 1.23% , and initial terms range from three years to ten years. European Trade Securitization Program In October 2017, XPO Logistics Europe SA (“XPO Logistics Europe”), in which the Company holds an 86.25% controlling interest, entered into a European trade receivables securitization program for an aggregate maximum amount of €270 million (approximately $324 million as of December 31, 2017 ) for a term of three years co-arranged by Crédit Agricole and HSBC. Under the terms of the program, XPO Logistics Europe, or one of its wholly-owned subsidiaries in the United Kingdom or France, sells trade receivables to XPO Collections Designated Activity Company Limited (“XCDAL”), a wholly-owned bankruptcy remote special purpose entity of XPO Logistics Europe. The receivables are funded by senior variable funding notes denominated in the same currency as the corresponding receivables. XCDAL is considered a variable interest entity and is consolidated by XPO Logistics Europe based on its control of the entity’s activities. The receivable balances under this program is reported as accounts receivable on the Company’s consolidated balance sheet and the obligation to return the cash it receives is included in the Company’s long-term debt. At December 31, 2017 , the remaining borrowing capacity was €17.7 million (approximately $21.2 million ) and the weighted-average interest rate was 1.06% . In the first quarter of 2018, the aggregate maximum amount under the program was increased to €350 million (approximately $420 million ). The receivables securitization program provides additional liquidity to fund XPO Logistics Europe’s operations. Borrowings under the program will bear interest at lenders’ cost of funds plus a margin of 1.05% . The receivables securitization program contains representations and warranties, affirmative and negative covenants, termination events, events of default, indemnities and other obligations on the part of XPO Logistics Europe, certain of its subsidiaries, and XCDAL which are customary for transactions of this nature. |