Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 26, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-32172 | |
Entity Registrant Name | XPO Logistics, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 03-0450326 | |
Entity Address, Address Line One | Five American Lane | |
Entity Address, City or Town | Greenwich, | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06831 | |
City Area Code | 855 | |
Local Phone Number | 976-6951 | |
Title of 12(b) Security | Common stock, par value $0.001 per share | |
Trading Symbol | XPO | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Small Business Entity | false | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 115,162,555 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001166003 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 544 | $ 260 |
Accounts receivable, net of allowances of $51 and $47, respectively | 2,013 | 2,105 |
Other current assets | 257 | 286 |
Current assets of discontinued operations | 17 | 26 |
Total current assets | 2,831 | 2,677 |
Long-term assets | ||
Property and equipment, net of $1,848 and $1,828 in accumulated depreciation, respectively | 1,828 | 1,808 |
Operating lease assets | 816 | 908 |
Goodwill | 2,229 | 2,479 |
Identifiable intangible assets, net of $598 and $612 in accumulated amortization, respectively | 496 | 580 |
Other long-term assets | 303 | 255 |
Total long-term assets | 5,672 | 6,030 |
Total assets | 8,503 | 8,707 |
Current liabilities | ||
Accounts payable | 1,022 | 1,110 |
Accrued expenses | 1,087 | 1,107 |
Short-term borrowings and current maturities of long-term debt | 60 | 58 |
Short-term operating lease liabilities | 145 | 170 |
Other current liabilities | 111 | 69 |
Current liabilities of discontinued operations | 17 | 24 |
Total current liabilities | 2,442 | 2,538 |
Long-term debt | 2,848 | 3,514 |
Deferred tax liability | 334 | 316 |
Employee benefit obligations | 116 | 122 |
Long-term operating lease liabilities | 671 | 752 |
Other long-term liabilities | 306 | 327 |
Total long-term liabilities | 4,275 | 5,031 |
Stockholders’ equity | ||
Common stock, $0.001 par value; 300 shares authorized; 115 shares issued and outstanding as of September 30, 2022 and December 31, 2021 | 0 | 0 |
Additional paid-in capital | 1,195 | 1,179 |
Retained earnings | 803 | 43 |
Accumulated other comprehensive loss | (212) | (84) |
Total equity | 1,786 | 1,138 |
Total liabilities and equity | $ 8,503 | $ 8,707 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 51 | $ 47 |
Property and equipment, accumulated depreciation | 1,848 | 1,828 |
Identifiable intangible assets, accumulated amortization | $ 598 | $ 612 |
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) | 115,000,000 | 115,000,000 |
Common stock, shares outstanding (in shares) | 115,000,000 | 115,000,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Loss) (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 3,042 | $ 3,270 | $ 9,747 | $ 9,445 |
Cost of transportation and services (exclusive of depreciation and amortization) | 2,044 | 2,306 | 6,634 | 6,545 |
Direct operating expense (exclusive of depreciation and amortization) | 363 | 366 | 1,113 | 1,058 |
Sales, general and administrative expense | 298 | 339 | 966 | 1,001 |
Depreciation and amortization expense | 118 | 118 | 349 | 357 |
Gain on sale of business | 0 | 0 | (434) | 0 |
Transaction and integration costs | 25 | 15 | 60 | 26 |
Restructuring costs | 9 | 14 | 19 | 16 |
Operating income | 185 | 112 | 1,040 | 442 |
Other income | (15) | (19) | (44) | (45) |
Debt extinguishment loss | 0 | 46 | 26 | 54 |
Interest expense | 35 | 53 | 103 | 176 |
Income from continuing operations before income tax provision | 165 | 32 | 955 | 257 |
Income tax provision | 34 | 11 | 194 | 60 |
Income from continuing operations | 131 | 21 | 761 | 197 |
Income (loss) from discontinued operations, net of taxes | 0 | (78) | (1) | 22 |
Net income (loss) | 131 | (57) | 760 | 219 |
Net income from discontinued operations attributable to noncontrolling interests | 0 | 0 | 0 | (5) |
Net income (loss) attributable to XPO | 131 | (57) | 760 | 214 |
Net income (loss) attributable to common shareholders | ||||
Continuing operations, basic | 131 | 21 | 761 | 197 |
Discontinued operations, basic | 0 | (78) | (1) | 17 |
Net income (loss) attributable to common shareholders , basic | 131 | (57) | 760 | 214 |
Continuing operations, diluted | 131 | 21 | 761 | 197 |
Discontinued operations, diluted | 0 | (78) | (1) | 17 |
Net income (loss) attributable to common shareholders , diluted | $ 131 | $ (57) | $ 760 | $ 214 |
Earnings (loss) per share data | ||||
Basic earnings per share from continuing operations (in dollars per share) | $ 1.14 | $ 0.19 | $ 6.62 | $ 1.78 |
Basic earnings (loss) per share from discontinued operations (in dollars per share) | 0 | (0.69) | (0.01) | 0.15 |
Basic earnings (loss) per share attributable to common shareholders (in dollars per share) | 1.14 | (0.50) | 6.61 | 1.93 |
Diluted earnings per share from continuing operations (in dollars per share) | 1.13 | 0.19 | 6.58 | 1.73 |
Diluted earnings (loss) per share from discontinued operations (in dollars per share) | 0 | (0.68) | (0.01) | 0.14 |
Diluted earnings (loss) per share attributable to common shareholders (in dollars per share) | $ 1.13 | $ (0.49) | $ 6.57 | $ 1.87 |
Weighted-average common shares outstanding | ||||
Basic weighted-average common shares outstanding (in shares) | 115 | 115 | 115 | 111 |
Diluted weighted-average common shares (in shares) | 116 | 116 | 116 | 114 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 131 | $ (57) | $ 760 | $ 219 |
Other comprehensive loss, net of tax | ||||
Foreign currency translation loss, net of tax effect of $(7), $7, $(18) and $4 | (60) | (47) | (132) | (74) |
Unrealized gain (loss) on financial assets/liabilities designated as hedging instruments, net of tax effect of $—, $1, $(1) and $1 | 0 | (3) | 4 | (3) |
Defined benefit plans adjustments, net of tax effect of $—, $(9), $— and $(9) | 0 | 28 | 0 | 28 |
Other comprehensive loss | (60) | (22) | (128) | (49) |
Comprehensive income (loss) | 71 | (79) | 632 | 170 |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 0 | 0 | 3 |
Comprehensive income (loss) attributable to XPO | $ 71 | $ (79) | $ 632 | $ 167 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation loss, tax | $ (7) | $ 7 | $ (18) | $ 4 |
Unrealized gain (loss) on financial assets/liabilities designated as hedging instruments, net of tax effect | 0 | 1 | (1) | 1 |
Defined benefit plans adjustment, tax | $ 0 | $ (9) | $ 0 | $ (9) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities of continuing operations | ||
Net income (loss) | $ 760 | $ 219 |
Income (loss) from discontinued operations, net of taxes | (1) | 22 |
Income from continuing operations | 761 | 197 |
Adjustments to reconcile income from continuing operations to net cash from operating activities | ||
Depreciation, amortization and net lease activity | 349 | 357 |
Stock compensation expense | 26 | 29 |
Accretion of debt | 12 | 15 |
Deferred tax expense | 10 | 5 |
Debt extinguishment loss | 26 | 54 |
Gain on sale of business | (434) | 0 |
Gains on sales of property and equipment | (4) | (36) |
Other | 29 | 5 |
Changes in assets and liabilities | ||
Accounts receivable | (245) | (371) |
Other assets | 30 | (1) |
Accounts payable | 76 | 133 |
Accrued expenses and other liabilities | 28 | 171 |
Net cash provided by operating activities from continuing operations | 664 | 558 |
Cash flows from investing activities of continuing operations | ||
Proceeds from sale of business | 705 | 0 |
Payment for purchases of property and equipment | (394) | (212) |
Proceeds from sale of property and equipment | 11 | 72 |
Proceeds from settlement of cross currency swaps | 29 | 0 |
Other | 0 | (3) |
Net cash provided by (used in) investing activities from continuing operations | 351 | (143) |
Cash flows from financing activities of continuing operations | ||
Repayment of borrowings related to securitization program | 0 | (24) |
Repurchase of debt | (651) | (2,769) |
Proceeds from borrowings on ABL facility | 275 | 0 |
Repayment of borrowings on ABL facility | (275) | (200) |
Repayment of debt and finance leases | (47) | (63) |
Payment for debt issuance costs | 0 | (5) |
Issuance of common stock | 0 | 384 |
Change in bank overdrafts | 6 | 33 |
Payment for tax withholdings for restricted shares | (13) | (25) |
Distribution from GXO | 0 | 794 |
Other | (1) | (5) |
Net cash used in financing activities from continuing operations | (706) | (1,880) |
Cash flows from discontinued operations | ||
Operating activities of discontinued operations | (5) | 68 |
Investing activities of discontinued operations | 2 | (95) |
Financing activities of discontinued operations | 0 | (302) |
Net cash used in discontinued operations | (3) | (329) |
Effect of exchange rates on cash, cash equivalents and restricted cash | (25) | (7) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 281 | (1,801) |
Cash, cash equivalents and restricted cash, beginning of period | 273 | 2,065 |
Cash, cash equivalents and restricted cash, end of period | 554 | 264 |
Less: Cash, cash equivalents and restricted cash of discontinued operations, end of period | 0 | 0 |
Cash, cash equivalents and restricted cash of continued operations, end of period | 554 | 264 |
Supplemental disclosure of cash flow information | ||
Leased assets obtained in exchange for new operating lease liabilities | 165 | 140 |
Leased assets obtained in exchange for new finance lease liabilities | 19 | 54 |
Cash paid for interest | 94 | 195 |
Cash paid for income taxes | $ 131 | $ 74 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) shares in Thousands, $ in Millions | Total | Total XPO Stockholders' Equity | Series A Preferred Stock Series A Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Non-controlling Interests |
Balance at beginning of period (in shares) at Dec. 31, 2020 | 1 | 102,052 | ||||||
Balance at beginning of period at Dec. 31, 2020 | $ 2,849 | $ 2,709 | $ 1 | $ 0 | $ 1,998 | $ 868 | $ (158) | $ 140 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 219 | 214 | 214 | 5 | ||||
Other comprehensive loss | (49) | (47) | (47) | (2) | ||||
Spin-off of GXO | (2,274) | (2,234) | (1,199) | (1,161) | 126 | (40) | ||
Exercise and vesting of stock compensation awards (in shares) | 386 | |||||||
Exercise and vesting of stock compensation awards | 2 | 2 | 2 | |||||
Tax withholdings related to vesting of stock compensation awards | (25) | (25) | (25) | |||||
Issuance of common stock (in shares) | 2,875 | |||||||
Issuance of common stock | 384 | 384 | 384 | |||||
Conversion of preferred stock to common stock (in shares) | 1 | 145 | ||||||
Conversion of preferred stock to common stock | 0 | $ (1) | 1 | |||||
Purchase of noncontrolling interests | (134) | (34) | (34) | (100) | ||||
Dividend declared | (3) | (3) | ||||||
Exercise of warrants (in shares) | 9,215 | |||||||
Stock compensation expense | 44 | 44 | 44 | |||||
Other | 3 | 3 | 3 | |||||
Balance at end of period (in shares) at Sep. 30, 2021 | 0 | 114,673 | ||||||
Balance at end of period at Sep. 30, 2021 | 1,016 | 1,016 | $ 0 | $ 0 | 1,174 | (79) | (79) | 0 |
Balance at beginning of period (in shares) at Jun. 30, 2021 | 0 | 111,726 | ||||||
Balance at beginning of period at Jun. 30, 2021 | 2,967 | 2,927 | $ 0 | $ 0 | 1,971 | 1,139 | (183) | 40 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | (57) | (57) | (57) | 0 | ||||
Other comprehensive loss | (22) | (22) | (22) | 0 | ||||
Spin-off of GXO | (2,274) | (2,234) | (1,199) | (1,161) | 126 | (40) | ||
Exercise and vesting of stock compensation awards (in shares) | 72 | |||||||
Exercise and vesting of stock compensation awards | 2 | 2 | 2 | |||||
Tax withholdings related to vesting of stock compensation awards | (3) | (3) | (3) | |||||
Issuance of common stock (in shares) | 2,875 | |||||||
Issuance of common stock | 384 | 384 | 384 | |||||
Stock compensation expense | 19 | 19 | 19 | |||||
Balance at end of period (in shares) at Sep. 30, 2021 | 0 | 114,673 | ||||||
Balance at end of period at Sep. 30, 2021 | 1,016 | 1,016 | $ 0 | $ 0 | 1,174 | (79) | (79) | 0 |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 0 | 114,737 | ||||||
Balance at beginning of period at Dec. 31, 2021 | 1,138 | 1,138 | $ 0 | $ 0 | 1,179 | 43 | (84) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 760 | 760 | 760 | |||||
Other comprehensive loss | (128) | (128) | (128) | |||||
Exercise and vesting of stock compensation awards (in shares) | 315 | |||||||
Tax withholdings related to vesting of stock compensation awards | (13) | (13) | (13) | |||||
Stock compensation expense | 26 | 26 | 26 | |||||
Other | 3 | 3 | 3 | |||||
Balance at end of period (in shares) at Sep. 30, 2022 | 0 | 115,052 | ||||||
Balance at end of period at Sep. 30, 2022 | 1,786 | 1,786 | $ 0 | $ 0 | 1,195 | 803 | (212) | 0 |
Balance at beginning of period (in shares) at Jun. 30, 2022 | 0 | 115,033 | ||||||
Balance at beginning of period at Jun. 30, 2022 | 1,707 | 1,707 | $ 0 | $ 0 | 1,187 | 672 | (152) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 131 | 131 | 131 | |||||
Other comprehensive loss | (60) | (60) | (60) | |||||
Exercise and vesting of stock compensation awards (in shares) | 19 | |||||||
Stock compensation expense | 8 | 8 | 8 | |||||
Balance at end of period (in shares) at Sep. 30, 2022 | 0 | 115,052 | ||||||
Balance at end of period at Sep. 30, 2022 | $ 1,786 | $ 1,786 | $ 0 | $ 0 | $ 1,195 | $ 803 | $ (212) | $ 0 |
Organization, Description of Bu
Organization, Description of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
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., together with its subsidiaries (“XPO” or “we”), is a leading provider of freight transportation services. We use our proprietary technology to move goods efficiently through our customers’ supply chains; in North America, we achieved this primarily by providing less-than-truckload (“LTL”) and truck brokerage services. See Note 4—Segment Reporting for additional information on our operations. 2022 Strategic Plan On March 8, 2022, we announced that our Board of Directors approved a strategic plan to pursue the spin-off of our tech-enabled brokered transportation platform as a publicly traded company, which we completed in November 2022. In addition, our Board of Directors authorized the planned divestitures of our North American intermodal operation, which we sold in March 2022, and our European business, which we intend to divest. For further information on the sale of intermodal, see Note 3—Divestiture. There can be no assurance that the divestiture of our European business will occur, or of the terms or timing of a transaction. RXO Spin-Off We completed the spin-off of our tech-enabled brokered transportation platform on November 1, 2022, which created a new public company, RXO, Inc. (“RXO”), comprised of our former services for truck brokerage, managed transportation, last mile and freight forwarding. The transaction is intended to be tax-free to XPO and our shareholders for U.S. federal income tax purposes. The spin-off was accomplished by the distribution of 100% of the outstanding common stock of RXO to XPO shareholders, creating a new, independent public company that began trading under the symbol “RXO” on the New York Stock Exchange. XPO shareholders received one share of RXO common stock for every share of XPO common stock held at the close of business on October 20, 2022, the record date for the distribution. XPO does not beneficially own any shares of RXO’s common stock following the spin-off. The historical results of operations and the financial position of RXO are included in the condensed consolidated financial statements in this Form 10-Q. The RXO businesses will not be consolidated in our reporting from November 1, 2022 forward, and such businesses will be reflected as discontinued operations in all periods prior to the spin-off. In connection with the spin-off, we have entered into a separation and distribution agreement as well as various other agreements with RXO that provide a framework for the relationships between the parties going forward, including, among others, an employee matters agreement, a tax matters agreement, an intellectual property license agreement and a transition services agreement, through which XPO will provide certain services to RXO. Basis of Presentation We prepared our Condensed Consolidated Financial Statements in accordance with U.S. generally accepted accounting principles (“GAAP”) and on the same basis as the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”). The interim reporting requirements of Form 10-Q allow certain information and note disclosures normally included in annual consolidated financial statements to be condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the 2021 Form 10-K. The Condensed Consolidated Financial Statements are not audited but reflect all adjustments that are of a normal recurring nature and are necessary for a fair presentation of the financial condition, operating results and cash flows for the interim periods presented. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. Restricted Cash As of September 30, 2022 and December 31, 2021, our restricted cash included in Other long-term assets on our Condensed Consolidated Balance Sheets was $10 million. Trade Receivables Securitization and Factoring Programs We sell certain of our trade accounts receivable on a non-recourse basis to third-party financial institutions under factoring agreements. We also sell trade accounts receivable under our securitization program. We use trade receivables securitization and factoring programs to help manage our cash flows and offset the impact of extended payment terms for some of our customers. The maximum amount of net cash proceeds available at any one time under our securitization program, inclusive of any unsecured borrowings, is €200 million (approximately $196 million as of September 30, 2022). As of September 30, 2022, €6 million (approximately $6 million) was available under the program, subject to having sufficient receivables available to sell and with consideration to amounts previously sold. The weighted average interest rate was 1.16% as of September 30, 2022. Charges for commitment fees, which are based on a percentage of available amounts, and charges for administrative fees were not material to our results of operations for the three and nine months ended September 30, 2022 and 2021. Information related to the trade receivables sold was as follows: Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2022 2021 2022 2021 Securitization programs Receivables sold in period $ 418 $ 504 $ 1,323 $ 1,259 Cash consideration 418 504 1,323 1,259 Factoring programs Receivables sold in period 42 17 102 46 Cash consideration 42 17 102 46 Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The levels of inputs used to measure fair value are: • 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. We base our fair value estimates on market assumptions and available information. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and current maturities of long-term debt approximated their fair values as of September 30, 2022 and December 31, 2021 due to their short-term nature and/or being receivable or payable on demand. The Level 1 cash equivalents include money market funds valued using quoted prices in active markets and a cash deposit for the securitization program. For information on the fair value hierarchy of our derivative instruments, see Note 7—Derivative Instruments; and for further information on financial liabilities, see Note 8—Debt. The fair value hierarchy of cash equivalents was as follows: (In millions) Carrying Value Fair Value Level 1 September 30, 2022 $ 502 $ 502 $ 502 December 31, 2021 181 181 181 Adoption of New Accounting Standard In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance.” The ASU increases the transparency surrounding government assistance by requiring annual disclosure of: (i) the types of assistance received; (ii) an entity’s accounting for the assistance; and (iii) the effect of the assistance on the entity’s financial statements. We adopted this standard on January 1, 2022, on a prospective basis. The adoption did not have a material impact on our financial statement disclosures. Accounting Pronouncement Issued but Not Yet Effective In September 2022, the FASB issued ASU 2022-04, “Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations.” The ASU increases the transparency surrounding supplier finance programs by requiring the buyer to disclose information on an annual basis about the key terms of the program, the outstanding obligation amounts as of the end of the period, a rollforward of such amounts, and the balance sheet presentation of the related amounts. Additionally, the obligation amount outstanding at the end of the period must be disclosed in interim periods. The amendments are effective for fiscal years beginning after December 15, 2022 except for the requirement to disclose the rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. We are currently evaluating the impact of the new guidance, which is limited to financial statement disclosures. In March 2020, the FASB issued ASU 2020-04, “Reference rate reform (Topic 848)—Facilitation of the effects of reference rate reform on financial reporting.” The ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform. The amendments apply only to contracts and hedging relationships that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. The amendments are elective and are effective upon issuance through December 31, 2022. We intend to apply this guidance if modifications of contracts that include LIBOR occur. Adoption of the standard is not expected to have a material impact on our consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued OperationsOn August 2, 2021, we completed the spin-off of our logistics segment as GXO Logistics, Inc. (“GXO”). In connection with the spin-off, we received a cash distribution of $794 million, which we used to repay a portion of our outstanding borrowings. The historical results of our logistics segment are presented as discontinued operations in our Condensed Consolidated Financial Statements. The following table summarizes the financial results from discontinued operations of GXO: Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2021 2021 Revenue $ 651 $ 4,350 Direct operating expense (exclusive of depreciation and amortization) 544 3,614 Sales, general and administrative expense 53 363 Depreciation and amortization expense 26 185 Transaction and other operating costs 59 101 Operating income (loss) (31) 87 Other income (4) (27) Interest expense 3 12 Income (loss) from discontinued operations before income tax provision (30) 102 Income tax provision 48 80 Net income (loss) from discontinued operations, net of taxes (78) 22 Net income from discontinued operations attributable to noncontrolling interests — (5) Net income (loss) from discontinued operations attributable to GXO $ (78) $ 17 No costs related to the GXO spin-off were incurred for the three months ended September 30, 2022. For the nine months ended September 30, 2022, we incurred costs of approximately $4 million related to the GXO spin-off. For the three and nine months ended September 30, 2021, we incurred costs of approximately $68 million and $111 million, respectively, related to the GXO spin-off, of which $57 million and $96 million, respectively, are reflected within income (loss) from discontinued operations in our Condensed Consolidated Statements of Income (Loss). In accordance with a separation and distribution agreement, GXO has agreed to indemnify XPO for payments XPO makes with respect to certain self-insurance matters that were incurred by the logistics segment prior to the spin-off and remain obligations of XPO. The receivable and accrued expense for these matters was approximately $17 million each as of September 30, 2022 and approximately $23 million and $21 million, respectively, as of December 31, 2021. In March 2022, we sold intermodal for cash proceeds of approximately $705 million, net of cash disposed and subject to customary post-closing working capital adjustments that remain ongoing. We recorded a $450 million pre-tax gain on the sale, net of transaction costs, during the first quarter of 2022. During the second quarter of 2022, we recognized a working capital adjustment of $16 million, which reduced the gain initially recognized in the first quarter of 2022. We agreed to provide certain specified customary transition services for a period not exceeding 12 months from the sale. Intermodal generated revenue of $1.2 billion ($1.1 billion excluding intercompany transactions) and operating income of approximately $53 million for the year ended December 31, 2021. Intermodal was included in our Brokerage and Other Services segment through the date of the sale. In conjunction with the RXO spin-off, and effective in the fourth quarter of 2022, the results of intermodal qualify to be accounted for as a discontinued operation because the sale was part of one strategic plan of disposal, and all periods prior to the date of the spin-off will be reflected as a discontinued operation. |
Divestiture
Divestiture | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestiture | Discontinued OperationsOn August 2, 2021, we completed the spin-off of our logistics segment as GXO Logistics, Inc. (“GXO”). In connection with the spin-off, we received a cash distribution of $794 million, which we used to repay a portion of our outstanding borrowings. The historical results of our logistics segment are presented as discontinued operations in our Condensed Consolidated Financial Statements. The following table summarizes the financial results from discontinued operations of GXO: Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2021 2021 Revenue $ 651 $ 4,350 Direct operating expense (exclusive of depreciation and amortization) 544 3,614 Sales, general and administrative expense 53 363 Depreciation and amortization expense 26 185 Transaction and other operating costs 59 101 Operating income (loss) (31) 87 Other income (4) (27) Interest expense 3 12 Income (loss) from discontinued operations before income tax provision (30) 102 Income tax provision 48 80 Net income (loss) from discontinued operations, net of taxes (78) 22 Net income from discontinued operations attributable to noncontrolling interests — (5) Net income (loss) from discontinued operations attributable to GXO $ (78) $ 17 No costs related to the GXO spin-off were incurred for the three months ended September 30, 2022. For the nine months ended September 30, 2022, we incurred costs of approximately $4 million related to the GXO spin-off. For the three and nine months ended September 30, 2021, we incurred costs of approximately $68 million and $111 million, respectively, related to the GXO spin-off, of which $57 million and $96 million, respectively, are reflected within income (loss) from discontinued operations in our Condensed Consolidated Statements of Income (Loss). In accordance with a separation and distribution agreement, GXO has agreed to indemnify XPO for payments XPO makes with respect to certain self-insurance matters that were incurred by the logistics segment prior to the spin-off and remain obligations of XPO. The receivable and accrued expense for these matters was approximately $17 million each as of September 30, 2022 and approximately $23 million and $21 million, respectively, as of December 31, 2021. In March 2022, we sold intermodal for cash proceeds of approximately $705 million, net of cash disposed and subject to customary post-closing working capital adjustments that remain ongoing. We recorded a $450 million pre-tax gain on the sale, net of transaction costs, during the first quarter of 2022. During the second quarter of 2022, we recognized a working capital adjustment of $16 million, which reduced the gain initially recognized in the first quarter of 2022. We agreed to provide certain specified customary transition services for a period not exceeding 12 months from the sale. Intermodal generated revenue of $1.2 billion ($1.1 billion excluding intercompany transactions) and operating income of approximately $53 million for the year ended December 31, 2021. Intermodal was included in our Brokerage and Other Services segment through the date of the sale. In conjunction with the RXO spin-off, and effective in the fourth quarter of 2022, the results of intermodal qualify to be accounted for as a discontinued operation because the sale was part of one strategic plan of disposal, and all periods prior to the date of the spin-off will be reflected as a discontinued operation. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Effective through September 30, 2022, we are organized into two reportable segments: (i) North American LTL; and (ii) Brokerage and Other Services. In our asset-based North American LTL segment, we provide our customers with geographic density and day-definite regional, national and cross-border LTL freight services. In our asset-light Brokerage and Other Services segment, our core truck brokerage business places shippers’ freight with qualified independent carriers using our XPO Connect ® technology platform. Truck brokerage is the largest component of the segment, which also includes complementary brokered transportation services for managed transportation, last mile and freight forwarding. In addition, our European business is reported in this segment, and intermodal was included in the segment through its date of sale in March 2022. Some of our operating units provide services to our other operating units outside of their reportable segment. Billings for such services are based on negotiated rates and are reflected as revenues of the billing segment. We adjust these rates from time to time based on market conditions. We eliminate intersegment revenues and expenses in our consolidated results. Corporate includes corporate headquarters costs for executive officers and certain legal and financial functions, and other costs and credits not attributed to our operating segments. Our chief operating decision maker (“CODM”) regularly reviews financial information at the operating segment level to allocate resources to the segments and to assess their performance. We include items directly attributable to a segment, and those that can be allocated on a reasonable basis, in segment results reported to the CODM. We do not provide asset information by segment to the CODM. Our CODM evaluates segment profit (loss) based on adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), which we define as net income from continuing operations attributable to common shareholders before debt extinguishment loss, interest expense, income tax, depreciation and amortization expense, gain on sale of business, litigation settlements for significant matters, transaction and integration costs, restructuring costs and other adjustments. Selected financial data for our segments is as follows: Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2022 2021 2022 2021 Revenue North American LTL $ 1,204 $ 1,071 $ 3,548 $ 3,114 Brokerage and Other Services 1,921 2,261 6,420 6,493 Eliminations (83) (62) (221) (162) Total $ 3,042 $ 3,270 $ 9,747 $ 9,445 Adjusted EBITDA North American LTL $ 258 $ 222 $ 757 $ 694 Brokerage and Other Services 123 131 439 386 Corporate (29) (46) (118) (164) Total adjusted EBITDA 352 307 1,078 916 Less: Debt extinguishment loss — 46 26 54 Interest expense 35 53 103 176 Income tax provision 34 11 194 60 Depreciation and amortization expense 118 118 349 357 Unrealized loss on foreign currency option and forward contracts — — — 1 Gain on sale of business — — (434) — Litigation settlements — 29 — 29 Transaction and integration costs (1) 25 15 60 26 Restructuring costs (2) 9 14 19 16 Net income from continuing operations attributable to common shareholders $ 131 $ 21 $ 761 $ 197 Depreciation and amortization expense North American LTL $ 60 $ 57 $ 175 $ 169 Brokerage and Other Services 54 60 168 180 Corporate 4 1 6 8 Total $ 118 $ 118 $ 349 $ 357 (1) Transaction and integration costs for the periods ended September 30, 2022 and 2021 are primarily comprised of third-party professional fees related to strategic initiatives, including the spin-offs and other divestment activities, as well as retention awards paid to certain employees. Transaction and integration costs for the three months ended September 30, 2022 and 2021 include $— million and $1 million, respectively, related to our North American LTL segment, $3 million and $5 million, respectively, related to our Brokerage and Other Services segment and $22 million and $9 million, respectively, related to Corporate. Transaction and integration costs for the nine months ended September 30, 2022 and 2021 include $2 million and $1 million, respectively, related to our North American LTL segment, $6 million and $8 million, respectively, related to our Brokerage and Other Services segment and $52 million and $17 million, respectively, related to Corporate. (2) See Note 6— Restructuring Charges for further information on our restructuring actions. In connection with the RXO spin-off, and effective in the fourth quarter of 2022, we will revise our reportable segments to reflect our new internal organization. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenues We disaggregate our revenue by geographic area and service offering. Our revenue disaggregated by geographical area, based on sales office location, was as follows: Three Months Ended September 30, 2022 (In millions) North American LTL Brokerage and Other Services Eliminations Total Revenue United States $ 1,178 $ 1,079 $ (83) $ 2,174 North America (excluding United States) 26 90 — 116 France — 313 — 313 United Kingdom — 217 — 217 Europe (excluding France and United Kingdom) — 212 — 212 Other — 10 — 10 Total $ 1,204 $ 1,921 $ (83) $ 3,042 Three Months Ended September 30, 2021 (In millions) North American LTL Brokerage and Other Services Eliminations Total Revenue United States $ 1,049 $ 1,384 $ (62) $ 2,371 North America (excluding United States) 22 73 — 95 France — 330 — 330 United Kingdom — 224 — 224 Europe (excluding France and United Kingdom) — 199 — 199 Other — 51 — 51 Total $ 1,071 $ 2,261 $ (62) $ 3,270 Nine Months Ended September 30, 2022 (In millions) North American LTL Brokerage and Other Services Eliminations Total Revenue United States $ 3,472 $ 3,739 $ (221) $ 6,990 North America (excluding United States) 76 293 — 369 France — 1,017 — 1,017 United Kingdom — 666 — 666 Europe (excluding France and United Kingdom) — 653 — 653 Other — 52 — 52 Total $ 3,548 $ 6,420 $ (221) $ 9,747 Nine Months Ended September 30, 2021 (In millions) North American LTL Brokerage and Other Services Eliminations Total Revenue United States $ 3,046 $ 3,881 $ (162) $ 6,765 North America (excluding United States) 68 212 — 280 France — 1,024 — 1,024 United Kingdom — 655 — 655 Europe (excluding France and United Kingdom) — 627 — 627 Other — 94 — 94 Total $ 3,114 $ 6,493 $ (162) $ 9,445 Our revenue disaggregated by service offering was as follows: Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2022 2021 2022 2021 North America LTL (1) $ 1,250 $ 1,091 $ 3,658 $ 3,165 Truck brokerage 686 700 2,265 1,903 Last mile 264 250 784 765 Other brokerage (2) 186 547 936 1,486 Total North America 2,386 2,588 7,643 7,319 Europe 741 757 2,335 2,311 Eliminations (85) (75) (231) (185) Total $ 3,042 $ 3,270 $ 9,747 $ 9,445 (1) LTL revenue is before intercompany eliminations and includes revenue from our trailer manufacturing business. (2) Other brokerage includes expedite, freight forwarding and managed transportation services, and intermodal through its date of sale in March 2022. For further information, see Note 3—Divestiture. Freight forwarding includes operations conducted outside of North America but managed by our North American entities. Performance Obligations Remaining performance obligations represent firm contracts for which services have not been performed and future revenue recognition is expected. As permitted in determining the remaining performance obligation, we omit obligations that: (i) have original expected durations of one year or less; or (ii) contain variable consideration. On September 30, 2022, the fixed consideration component of our remaining performance obligation was approximately $151 million, and we expect approximately 91% of that amount to be recognized over the next three years and the remainder thereafter. We estimate remaining performance obligations at a point in time; actual amounts may differ from these estimates due to changes in foreign currency exchange rates and contract revisions or terminations. |
Restructuring Charges
Restructuring Charges | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring ChargesWe engage in restructuring actions as part of our ongoing efforts to best use our resources and infrastructure, including actions in connection with spin-offs and other divestment activities. These actions generally include severance and facility-related costs, including impairment of operating lease assets, as well as contract termination costs, and are intended to improve our efficiency and profitability going forward. Our restructuring-related activity was as follows: Nine Months Ended September 30, 2022 (In millions) Reserve Balance Charges Incurred Payments Foreign Exchange and Other Reserve Balance Severance North American LTL $ — $ 2 $ — $ — $ 2 Brokerage and Other Services 6 6 (9) (1) 2 Corporate 7 6 (6) — 7 Total severance 13 14 (15) (1) 11 Facilities Brokerage and Other Services 2 1 (1) — 2 Total facilities 2 1 (1) — 2 Contract termination North American LTL — 3 (3) — — Brokerage and Other Services — 1 — — 1 Total contract termination — 4 (3) — 1 Total $ 15 $ 19 $ (19) $ (1) $ 14 We expect that the majority of the cash outlays related to the charges incurred in the first nine months of 2022 will be completed within 12 months. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments In the normal course of business, we are exposed to risks arising from business operations and economic factors, including fluctuations in interest rates and foreign currencies. We use derivative instruments to manage the volatility related to these exposures. The objective of these derivative instruments is to reduce fluctuations in our 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. Historically, we have not incurred, and do not expect to incur in the future, any losses as a result of counterparty default. The fair value of our derivative instruments and the related notional amounts were as follows: September 30, 2022 Derivative Assets Derivative Liabilities (In millions) Notional Amount Balance Sheet Caption Fair Value Balance Sheet Caption Fair Value Derivatives designated as hedges Cross-currency swap agreements $ 332 Other current assets $ 18 Other current liabilities $ — Cross-currency swap agreements 79 Other long-term assets 10 Other long-term liabilities — Interest rate swaps 2,003 Other current assets 6 Other current liabilities — Total $ 34 $ — December 31, 2021 Derivative Assets Derivative Liabilities (In millions) Notional Amount Balance Sheet Caption Fair Value Balance Sheet Caption Fair Value Derivatives designated as hedges Cross-currency swap agreements $ 362 Other current assets $ — Other current liabilities $ (4) Cross-currency swap agreements 110 Other long-term assets — Other long-term liabilities — Interest rate swaps 2,003 Other current assets — Other current liabilities — Total $ — $ (4) The derivatives are classified as Level 2 within the fair value hierarchy. The derivatives are valued using inputs other than quoted prices, such as foreign exchange rates and yield curves. The effect of derivative and nonderivative instruments designated as hedges on our Condensed Consolidated Statements of Income (Loss) was as follows: Amount of Gain Recognized in Other Comprehensive Loss on Derivatives Amount of Gain Reclassified from AOCI into Net Income (Loss) Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) Three Months Ended September 30, (In millions) 2022 2021 2022 2021 2022 2021 Derivatives designated as cash flow hedges Cross-currency swap agreements $ — $ — $ — $ 3 $ — $ — Derivatives designated as net investment hedges Cross-currency swap agreements 25 41 — — 1 1 Total $ 25 $ 41 $ — $ 3 $ 1 $ 1 Amount of Gain Recognized in Other Comprehensive Loss on Derivatives Amount of Gain Reclassified from AOCI into Net Income Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) Nine Months Ended September 30, (In millions) 2022 2021 2022 2021 2022 2021 Derivatives designated as cash flow hedges Cross-currency swap agreements $ — $ 4 $ — $ 7 $ — $ — Interest rate swaps 5 — — — — — Derivatives designated as net investment hedges Cross-currency swap agreements 62 76 — — 5 6 Total $ 67 $ 80 $ — $ 7 $ 5 $ 6 Cross-Currency Swap Agreements We enter into cross-currency swap agreements to manage the foreign currency exchange risk related to our international operations by effectively converting our fixed-rate USD-denominated debt, including the associated interest payments, to fixed-rate, euro (“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 this debt. During the term of the swap contracts, we will receive interest, either on a quarterly or semi-annual basis, from the counterparties based on USD fixed interest rates, and we will pay interest, also on a quarterly or semi-annual basis, to the counterparties based on EUR fixed interest rates. At maturity, we will repay the original principal amount in EUR and receive the principal amount in USD. These agreements expire at various dates through 2024. We designated these cross-currency swaps as qualifying hedging instruments and account for them as net investment hedges. We apply the simplified method of assessing the effectiveness of our net investment hedging relationships. Under this method, for each reporting period, the change in the fair value of the cross-currency swaps is initially recognized in Accumulated other comprehensive income (“AOCI”). The change in the fair value due to foreign exchange remains in AOCI and the initial component excluded from effectiveness testing will initially remain in AOCI and then will be reclassified from AOCI to Interest expense each period in a systematic manner. Cash flows related to the periodic exchange of interest payments for these net investment hedges are included in Cash flows from operating activities of continuing operations on our Condensed Consolidated Statements of Cash Flows. During the first nine months of 2022, we received approximately $29 million related to the settlement of certain cross currency swaps that matured during the period. The fair value adjustments related to these swaps remain in AOCI and partially offset foreign currency translation adjustment losses on our net investments in foreign subsidiaries. The proceeds were included in Cash flows from investing activities of continuing operations on our Condensed Consolidated Statements of Cash Flows. Prior to the spin-off of GXO in 2021, we held cross-currency swap agreements to manage the related foreign currency exposure from intercompany loans. We designated these cross-currency swaps as qualifying hedging instruments and accounted for them as cash flow hedges. Gains and losses resulting from the change in the fair value of the cross-currency swaps was initially recognized in AOCI and reclassified to Other income on our Condensed Consolidated Statements of Income (Loss) to offset the foreign exchange impact in earnings created by settling intercompany loans. Cash flows related to these cash flow hedges was included in Cash flows from operating activities of continuing operations on our Condensed Consolidated Statements of Cash Flows. These swaps were re-designated as net investment hedges in the third quarter of 2021. Interest Rate Hedging We execute short-term interest rate swaps to mitigate variability in forecasted interest payments on our Senior Secured Term Loan Credit Agreement (the “Term Loan Credit Agreement”). The interest rate swaps convert floating-rate interest payments into fixed rate interest payments. We designated the interest rate swaps as qualifying hedging instruments and account for these derivatives as cash flow hedges. The outstanding interest rate swaps mature in the fourth quarter of 2022. We record gains and losses resulting from fair value adjustments to the designated portion of interest rate swaps in AOCI and reclassify them to Interest expense on the dates that interest payments accrue. Cash flows related to the interest rate swaps are included in Cash flows from operating activities of continuing operations on our Condensed Consolidated Statements of Cash Flows. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt September 30, 2022 December 31, 2021 (In millions) Principal Balance Carrying Value Principal Balance Carrying Value Term loan facility $ 2,003 $ 1,978 $ 2,003 $ 1,977 6.25% senior notes due 2025 520 517 1,150 1,141 6.70% senior debentures due 2034 300 216 300 214 Finance leases, asset financing and other 197 197 240 240 Total debt 3,020 2,908 3,693 3,572 Short-term borrowings and current maturities of long-term debt 60 60 58 58 Long-term debt $ 2,960 $ 2,848 $ 3,635 $ 3,514 The fair value of our debt and classification in the fair value hierarchy was as follows: (In millions) Fair Value Level 1 Level 2 September 30, 2022 $ 2,944 $ 808 $ 2,136 December 31, 2021 3,811 1,571 2,240 We valued Level 1 debt using quoted prices in active markets. We valued Level 2 debt using bid evaluation pricing models or quoted prices of securities with similar characteristics. The fair value of the asset financing arrangements approximates carrying value as the debt is primarily issued at a floating rate, the debt may be prepaid at any time at par without penalty, and the remaining life of the debt is short-term in nature. ABL Facility As of September 30, 2022, our borrowing base was $1 billion and our availability under our revolving loan credit agreement (the “ABL Facility”) was $996 million after considering outstanding letters of credit of $4 million. As of September 30, 2022, we were in compliance with the ABL Facility’s financial covenants. In connection with the spin-off, effective November 4, 2022, the commitments under the ABL Facility will automatically be reduced from $1 billion to $600 million with no further action by any of the parties thereto. Adjusting for this reduction of commitments and the borrowing base, our total liquidity of $1.5 billion as of September 30, 2022 would have been $1.0 billion. Letters of Credit Facility As of September 30, 2022, we had issued $185 million in aggregate face amount of letters of credit under our $200 million uncommitted secured evergreen letter of credit facility. Term Loan Facility In the first quarter of 2021, we amended our Term Loan Credit Agreement and recorded a debt extinguishment loss of $3 million in the first nine months of 2021. The interest rate on our term loan facility was 4.38% as of September 30, 2022. Senior Notes Due 2025 In April 2022, we redeemed $630 million of the then $1.15 billion outstanding principal amount of our 6.25% senior notes due 2025 (“Senior Notes due 2025”). The redemption price for the notes was 100% of the principal amount plus a premium, as defined in the indenture, of approximately $21 million and accrued and unpaid interest. We paid for the redemption using available liquidity. We recorded a debt extinguishment loss of $26 million in the first nine months of 2022 due to this redemption. In October 2022, we commenced a tender offer to purchase for cash any and all of our outstanding Senior Notes due 2025. See Note 12—Subsequent Events for more information. Senior Notes Due 2023 and 2024 In the third quarter of 2021, we redeemed our outstanding 6.125% senior notes due 2023 (“Senior Notes due 2023”) and our outstanding 6.75% senior notes due 2024 (“Senior Notes due 2024”). The redemption price for the Senior Notes due 2023 was 100.0% of the principal amount, plus accrued and unpaid interest and the redemption price for the Senior Notes due 2024 was 103.375% of the principle amount, plus accrued and unpaid interest. We paid for the redemption using approximately $794 million of cash received from GXO, proceeds from an equity offering described in Note 9—Stockholders’ Equity and available cash. We recorded debt extinguishment losses in the third quarter of 2021 of $3 million and $43 million related to the redemption of the Senior Notes due 2023 and Senior Notes due 2024, respectively. Senior Notes Due 2022 In the first quarter of 2021, we redeemed our outstanding 6.50% senior notes due 2022. The redemption price for the notes was 100% of the principal amount, plus accrued and unpaid interest. We paid for the redemption with available cash. We recorded a debt extinguishment loss of $5 million in the first nine months of 2021 due to this redemption. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Share Issuance In July 2021, we completed a registered underwritten offering of 5.0 million shares of our common stock at a public offering price of $138.00 per share, plus an additional 750,000 shares of our common stock through an option granted to underwriters. Of the 5.0 million shares, we offered 2.5 million shares directly and 2.5 million shares were offered by Jacobs Private Equity, LLC (“JPE”), an entity controlled by the Company’s former chief executive officer and current executive chairman. The additional 750,000 purchased shares were also split equally between us and JPE. We received approximately $384 million of proceeds, net of fees and expenses, from the sale of the shares and used them to repay a portion of our outstanding borrowings and for general corporate purposes. XPO did not receive any proceeds from the sale of shares by JPE. Series A Convertible Perpetual Preferred Stock and Warrants Commencing in the fourth quarter of 2020, holders of our convertible preferred stock and warrants exchanged their holdings for our common stock or a combination of our common stock and cash. These exchanges were intended to simplify our equity capital structure, including in contemplation of the spin-off of our logistics segment. In the first quarter of 2021, 975 preferred shares were exchanged, and we issued approximately 139 thousand shares of common stock. In the second quarter of 2021, the remaining 40 preferred shares were exchanged, and we issued 5,714 shares of common stock. With respect to the warrants, in the first quarter of 2021, 9.8 million warrants were exchanged, and we issued 9.2 million shares of common stock. The warrants exchanged included holdings of JPE. Subsequent to the exchange in the second quarter of 2021, there are no shares of preferred stock or warrants outstanding. Share Repurchases In February 2019, our Board of Directors authorized repurchases of up to $1.5 billion of our common stock. Our share repurchase authorization permits us to purchase shares in both the open market and in private transactions, with the timing and number of shares dependent on a variety of factors, including price, general business conditions, market conditions, alternative investment opportunities and funding considerations. We are not obligated to repurchase any specific number of shares and may suspend or discontinue the program at any time. There have been no share repurchases since the first quarter of 2020. Our remaining share repurchase authorization was $503 million as of September 30, 2022. |
Earnings (Loss) per Share
Earnings (Loss) per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) per Share | Earnings (Loss) per Share The computations of basic and diluted earnings per share were as follows: Three Months Ended September 30, Nine Months Ended September 30, (In millions, except per share data) 2022 2021 2022 2021 Net income from continuing operations attributable to common shares $ 131 $ 21 $ 761 $ 197 Net income (loss) from discontinued operations, net of amounts attributable to noncontrolling interest — (78) (1) 17 Net income (loss) attributable to common shares, basic $ 131 $ (57) $ 760 $ 214 Basic weighted-average common shares 115 115 115 111 Dilutive effect of stock-based awards and warrants 1 1 1 3 Diluted weighted-average common shares 116 116 116 114 Basic earnings from continuing operations per share $ 1.14 $ 0.19 $ 6.62 $ 1.78 Basic earnings (loss) from discontinued operations per share — (0.69) (0.01) 0.15 Basic earnings (loss) per share $ 1.14 $ (0.50) $ 6.61 $ 1.93 Diluted earnings from continuing operations per share $ 1.13 $ 0.19 $ 6.58 $ 1.73 Diluted earnings (loss) from discontinued operations per share — (0.68) (0.01) 0.14 Diluted earnings (loss) per share $ 1.13 $ (0.49) $ 6.57 $ 1.87 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are involved, and expect to continue to be involved, in numerous proceedings arising out of the conduct of our business. These proceedings may include claims for property damage or personal injury incurred in connection with the transportation of freight, environmental liability, commercial disputes, insurance coverage disputes and employment-related claims, including claims involving asserted breaches of employee restrictive covenants. We establish 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. We review and adjust accruals for loss contingencies quarterly and as additional information becomes available. If a loss is not both probable and reasonably estimable, or if an exposure to loss exists in excess of the amount accrued, we assess 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, we disclose the estimate of the possible loss or range of loss if it is material and an estimate can be made, or disclose that such an estimate cannot be made. The determination as to whether a loss can reasonably be considered to be possible or probable is based on our assessment, together with legal counsel, regarding the ultimate outcome of the matter. We believe that we have adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable. We do not believe that the ultimate resolution of any matters to which we are presently a party will have a material adverse effect on our 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 our financial condition, results of operations or cash flows. Legal costs incurred related to these matters are expensed as incurred. We carry liability and excess umbrella insurance policies that we deem sufficient to cover potential legal claims arising in the normal course of conducting our operations as a transportation company. In the event we are required to satisfy a legal claim outside the scope of the coverage provided by insurance, our financial condition, results of operations or cash flows could be negatively impacted. As of October 31, 2022, the company’s last mile subsidiary was involved in several class action and collective action cases involving claims that the contract carriers with which it contracted for performance of delivery services, or their delivery workers, should be treated as employees, rather than independent contractors (“misclassification claims”). The misclassification claims pertained solely to the company’s last mile services, which operated as a wholly owned subsidiary of the company until the spin-off of RXO was completed. As of November 1, 2022, pursuant to the Separation and Distribution Agreement between the company and RXO, the liabilities of the company’s last mile subsidiary, including legal liabilities, if any, related to the misclassification claims, were spun-off as part of RXO. Pursuant to the Separation and Distribution Agreement, RXO has agreed to indemnify the company for certain matters relating to RXO, including indemnifying the company from and against any liabilities, damages, costs, or expenses incurred by the company arising out of or resulting from the misclassification claims described above. Shareholder Litigation On December 14, 2018, a putative class action captioned Labul v. XPO Logistics, Inc. et al. was filed in the U.S. District Court for the District of Connecticut against us and some of our current and former executives, alleging violations of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 thereunder, and Section 20(a) of the Exchange Act. On March 19, 2021, the Court dismissed the complaint with prejudice, and on June 30, 2022, the U.S. Court of Appeals for the Second Circuit affirmed the dismissal. The case is now concluded. Also, on May 13, 2019, Adriana Jez filed a purported shareholder derivative action captioned Jez v. Jacobs, et al. , (the “Jez complaint”) in the U.S. District Court for the District of Delaware, alleging breaches of fiduciary duty, unjust enrichment, waste of corporate assets, and violations of the Exchange Act against some of our current and former directors and officers, with the company as a nominal defendant. The Jez complaint was later consolidated with similar derivative complaints. On July 26, 2022, the Court issued an order dismissing the consolidated derivative complaints with prejudice. The case is now concluded. Insurance Contribution Litigation In April 2012, Allianz Global Risks US Insurance Company sued eighteen insurance companies in a case captioned Allianz Global Risks US Ins. Co. v. ACE Property & Casualty Ins. Co., et al., Multnomah County Circuit Court (Case No. 1204-04552). Allianz sought contribution on environmental and product liability claims that Allianz agreed to defend and indemnify on behalf of its insured, Daimler Trucks North America (“DTNA”). Defendants had insured Freightliner’s assets, which DTNA acquired in 1981. Con-way, Freightliner’s former parent company, intervened. We acquired Con-way in 2015. Con-way and Freightliner had self-insured under fronting agreements with defendant insurers ACE, Westport, and General. Under those agreements, Con-way agreed to indemnify the fronting carriers for damages assessed under the fronting policies. Con-way’s captive insurer, Centron, was also a named defendant. After a seven-week jury trial in 2014, the jury found that Con-way and the fronting insurers never intended that the insurers defend or indemnify any claims against Freightliner. In June 2015, Allianz appealed to the Oregon Court of Appeals. In May 2019, the Oregon Court of Appeals upheld the jury verdict. In September 2019, Allianz appealed to the Oregon Supreme Court. In March 2021, the Oregon Supreme Court reversed the jury verdict, holding that it was an error to allow the jury to decide how the parties intended the fronting policies to operate, and also holding that the trial court improperly instructed the jury concerning one of the pollution exclusions at issue. In July of 2021, the matter was remanded to the trial court for further proceedings consistent with the Oregon Supreme Court’s decision. There is no date yet set for the next stages of the proceeding. The parties have filed cross-motions for summary judgment concerning the interpretation of certain of the fronting policies, which are yet to be decided. Following summary judgment, we anticipate a jury trial on the pollution exclusion, then a bench trial on allocation of defense costs among the subject insurance policies. We have accrued an immaterial amount for the potential exposure associated with Centron in the bench trial regarding allocation. As any losses that may arise in connection with the fronting policies issued by defendant insurers ACE, Westport, and General are not reasonably estimable at this time, no liability has been accrued in the accompanying interim consolidated financial statements for those potential exposures. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events As described in Note 1—Organization, Description of Business and Basis of Presentation, on November 1, 2022, we completed the spin-off of our tech-enabled brokered transportation platform into an independent public company, RXO, in a transaction intended to be tax-free to XPO and our shareholders for U.S. federal income tax purposes. RXO Debt In preparation for the spin-off, in October 2022, a wholly-owned subsidiary of XPO that merged with and into RXO substantially concurrent with the consummation of the spin-off, completed an offering of $355 million aggregate principal amount of notes due 2027 (the “RXO Notes”). The RXO Notes bear interest at a rate of 7.50% per annum payable semiannually in cash in arrears on May 15 and November 15 of each year, beginning May 15, 2023, and mature on November 15, 2027. They were issued at an issue price of 98.962% of par. In addition to the RXO Notes, RXO entered into a term loan facility that provides $100 million in aggregate principal amount of term loans (the “RXO Term Loan”) and a revolving credit facility that provides $500 million in aggregate commitments. The net proceeds (including any interest thereon) from the issuance of the RXO Notes and incurrence of the RXO Term Loan, together with RXO’s cash and cash equivalents on hand, were used to fund a cash distribution of approximately $488 million to XPO in October 2022, which we intend to use to repay existing indebtedness and fund any related fees and expenses prior to the 12-month anniversary of the distribution. As the spin-off has been consummated, the RXO Notes, the RXO Term Loan and RXO’s revolving credit facility are direct obligations of RXO. Debt Tender Offer In October 2022, we commenced a tender offer to purchase for cash any and all of our outstanding Senior Notes due 2025, which had a principal balance outstanding of $520 million as of September 30, 2022. The tender offer will expire on November 17, 2022, unless extended or earlier terminated by XPO. |
Organization, Description of _2
Organization, Description of Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation We prepared our Condensed Consolidated Financial Statements in accordance with U.S. generally accepted accounting principles (“GAAP”) and on the same basis as the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”). The interim reporting requirements of Form 10-Q allow certain information and note disclosures normally included in annual consolidated financial statements to be condensed or omitted. These Condensed Consolidated Financial Statements should be read in conjunction with the 2021 Form 10-K. The Condensed Consolidated Financial Statements are not audited but reflect all adjustments that are of a normal recurring nature and are necessary for a fair presentation of the financial condition, operating results and cash flows for the interim periods presented. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. |
Trade Receivables Securitization and Factoring Programs | Trade Receivables Securitization and Factoring Programs We sell certain of our trade accounts receivable on a non-recourse basis to third-party financial institutions under factoring agreements. We also sell trade accounts receivable under our securitization program. We use trade receivables securitization and factoring programs to help manage our cash flows and offset the impact of extended payment terms for some of our customers. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The levels of inputs used to measure fair value are: • 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. We base our fair value estimates on market assumptions and available information. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and current maturities of long-term debt approximated their fair values as of September 30, 2022 and December 31, 2021 due to their short-term nature and/or being receivable or payable on demand. The Level 1 cash equivalents include money market funds valued using quoted prices in active markets and a cash deposit for the securitization program. For information on the fair value hierarchy of our derivative instruments, see Note 7—Derivative Instruments; and for further information on financial liabilities, see Note 8—Debt. |
Adoption of New Accounting Standard and Accounting Pronouncement Issued but Not Yet Effective | Adoption of New Accounting Standard In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance.” The ASU increases the transparency surrounding government assistance by requiring annual disclosure of: (i) the types of assistance received; (ii) an entity’s accounting for the assistance; and (iii) the effect of the assistance on the entity’s financial statements. We adopted this standard on January 1, 2022, on a prospective basis. The adoption did not have a material impact on our financial statement disclosures. Accounting Pronouncement Issued but Not Yet Effective In September 2022, the FASB issued ASU 2022-04, “Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations.” The ASU increases the transparency surrounding supplier finance programs by requiring the buyer to disclose information on an annual basis about the key terms of the program, the outstanding obligation amounts as of the end of the period, a rollforward of such amounts, and the balance sheet presentation of the related amounts. Additionally, the obligation amount outstanding at the end of the period must be disclosed in interim periods. The amendments are effective for fiscal years beginning after December 15, 2022 except for the requirement to disclose the rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. We are currently evaluating the impact of the new guidance, which is limited to financial statement disclosures. In March 2020, the FASB issued ASU 2020-04, “Reference rate reform (Topic 848)—Facilitation of the effects of reference rate reform on financial reporting.” The ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform. The amendments apply only to contracts and hedging relationships that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. The amendments are elective and are effective upon issuance through December 31, 2022. We intend to apply this guidance if modifications of contracts that include LIBOR occur. Adoption of the standard is not expected to have a material impact on our consolidated financial statements. |
Segment Reporting | Segment Reporting Effective through September 30, 2022, we are organized into two reportable segments: (i) North American LTL; and (ii) Brokerage and Other Services. In our asset-based North American LTL segment, we provide our customers with geographic density and day-definite regional, national and cross-border LTL freight services. In our asset-light Brokerage and Other Services segment, our core truck brokerage business places shippers’ freight with qualified independent carriers using our XPO Connect ® technology platform. Truck brokerage is the largest component of the segment, which also includes complementary brokered transportation services for managed transportation, last mile and freight forwarding. In addition, our European business is reported in this segment, and intermodal was included in the segment through its date of sale in March 2022. Some of our operating units provide services to our other operating units outside of their reportable segment. Billings for such services are based on negotiated rates and are reflected as revenues of the billing segment. We adjust these rates from time to time based on market conditions. We eliminate intersegment revenues and expenses in our consolidated results. Corporate includes corporate headquarters costs for executive officers and certain legal and financial functions, and other costs and credits not attributed to our operating segments. |
Revenue Recognition | Remaining performance obligations represent firm contracts for which services have not been performed and future revenue recognition is expected. As permitted in determining the remaining performance obligation, we omit obligations that: (i) have original expected durations of one year or less; or (ii) contain variable consideration. On September 30, 2022, the fixed consideration component of our remaining performance obligation was approximately $151 million, and we expect approximately 91% of that amount to be recognized over the next three years and the remainder thereafter. We estimate remaining performance obligations at a point in time; actual amounts may differ from these estimates due to changes in foreign currency exchange rates and contract revisions or terminations. |
Organization, Description of _3
Organization, Description of Business and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounts Receivable Securitization and Factoring Programs | Information related to the trade receivables sold was as follows: Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2022 2021 2022 2021 Securitization programs Receivables sold in period $ 418 $ 504 $ 1,323 $ 1,259 Cash consideration 418 504 1,323 1,259 Factoring programs Receivables sold in period 42 17 102 46 Cash consideration 42 17 102 46 |
Summary of Carrying Value and Valuation of Financial Instruments Within the Fair-Value Hierarchy | The fair value hierarchy of cash equivalents was as follows: (In millions) Carrying Value Fair Value Level 1 September 30, 2022 $ 502 $ 502 $ 502 December 31, 2021 181 181 181 (In millions) Fair Value Level 1 Level 2 September 30, 2022 $ 2,944 $ 808 $ 2,136 December 31, 2021 3,811 1,571 2,240 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Assets and Liabilities from Discontinued Operations | The following table summarizes the financial results from discontinued operations of GXO: Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2021 2021 Revenue $ 651 $ 4,350 Direct operating expense (exclusive of depreciation and amortization) 544 3,614 Sales, general and administrative expense 53 363 Depreciation and amortization expense 26 185 Transaction and other operating costs 59 101 Operating income (loss) (31) 87 Other income (4) (27) Interest expense 3 12 Income (loss) from discontinued operations before income tax provision (30) 102 Income tax provision 48 80 Net income (loss) from discontinued operations, net of taxes (78) 22 Net income from discontinued operations attributable to noncontrolling interests — (5) Net income (loss) from discontinued operations attributable to GXO $ (78) $ 17 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Selected Financial Data for Each Operating Segment | Selected financial data for our segments is as follows: Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2022 2021 2022 2021 Revenue North American LTL $ 1,204 $ 1,071 $ 3,548 $ 3,114 Brokerage and Other Services 1,921 2,261 6,420 6,493 Eliminations (83) (62) (221) (162) Total $ 3,042 $ 3,270 $ 9,747 $ 9,445 Adjusted EBITDA North American LTL $ 258 $ 222 $ 757 $ 694 Brokerage and Other Services 123 131 439 386 Corporate (29) (46) (118) (164) Total adjusted EBITDA 352 307 1,078 916 Less: Debt extinguishment loss — 46 26 54 Interest expense 35 53 103 176 Income tax provision 34 11 194 60 Depreciation and amortization expense 118 118 349 357 Unrealized loss on foreign currency option and forward contracts — — — 1 Gain on sale of business — — (434) — Litigation settlements — 29 — 29 Transaction and integration costs (1) 25 15 60 26 Restructuring costs (2) 9 14 19 16 Net income from continuing operations attributable to common shareholders $ 131 $ 21 $ 761 $ 197 Depreciation and amortization expense North American LTL $ 60 $ 57 $ 175 $ 169 Brokerage and Other Services 54 60 168 180 Corporate 4 1 6 8 Total $ 118 $ 118 $ 349 $ 357 (1) Transaction and integration costs for the periods ended September 30, 2022 and 2021 are primarily comprised of third-party professional fees related to strategic initiatives, including the spin-offs and other divestment activities, as well as retention awards paid to certain employees. Transaction and integration costs for the three months ended September 30, 2022 and 2021 include $— million and $1 million, respectively, related to our North American LTL segment, $3 million and $5 million, respectively, related to our Brokerage and Other Services segment and $22 million and $9 million, respectively, related to Corporate. Transaction and integration costs for the nine months ended September 30, 2022 and 2021 include $2 million and $1 million, respectively, related to our North American LTL segment, $6 million and $8 million, respectively, related to our Brokerage and Other Services segment and $52 million and $17 million, respectively, related to Corporate. (2) See Note 6— Restructuring Charges for further information on our restructuring actions. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregation of Revenues | We disaggregate our revenue by geographic area and service offering. Our revenue disaggregated by geographical area, based on sales office location, was as follows: Three Months Ended September 30, 2022 (In millions) North American LTL Brokerage and Other Services Eliminations Total Revenue United States $ 1,178 $ 1,079 $ (83) $ 2,174 North America (excluding United States) 26 90 — 116 France — 313 — 313 United Kingdom — 217 — 217 Europe (excluding France and United Kingdom) — 212 — 212 Other — 10 — 10 Total $ 1,204 $ 1,921 $ (83) $ 3,042 Three Months Ended September 30, 2021 (In millions) North American LTL Brokerage and Other Services Eliminations Total Revenue United States $ 1,049 $ 1,384 $ (62) $ 2,371 North America (excluding United States) 22 73 — 95 France — 330 — 330 United Kingdom — 224 — 224 Europe (excluding France and United Kingdom) — 199 — 199 Other — 51 — 51 Total $ 1,071 $ 2,261 $ (62) $ 3,270 Nine Months Ended September 30, 2022 (In millions) North American LTL Brokerage and Other Services Eliminations Total Revenue United States $ 3,472 $ 3,739 $ (221) $ 6,990 North America (excluding United States) 76 293 — 369 France — 1,017 — 1,017 United Kingdom — 666 — 666 Europe (excluding France and United Kingdom) — 653 — 653 Other — 52 — 52 Total $ 3,548 $ 6,420 $ (221) $ 9,747 Nine Months Ended September 30, 2021 (In millions) North American LTL Brokerage and Other Services Eliminations Total Revenue United States $ 3,046 $ 3,881 $ (162) $ 6,765 North America (excluding United States) 68 212 — 280 France — 1,024 — 1,024 United Kingdom — 655 — 655 Europe (excluding France and United Kingdom) — 627 — 627 Other — 94 — 94 Total $ 3,114 $ 6,493 $ (162) $ 9,445 Our revenue disaggregated by service offering was as follows: Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2022 2021 2022 2021 North America LTL (1) $ 1,250 $ 1,091 $ 3,658 $ 3,165 Truck brokerage 686 700 2,265 1,903 Last mile 264 250 784 765 Other brokerage (2) 186 547 936 1,486 Total North America 2,386 2,588 7,643 7,319 Europe 741 757 2,335 2,311 Eliminations (85) (75) (231) (185) Total $ 3,042 $ 3,270 $ 9,747 $ 9,445 (1) LTL revenue is before intercompany eliminations and includes revenue from our trailer manufacturing business. (2) Other brokerage includes expedite, freight forwarding and managed transportation services, and intermodal through its date of sale in March 2022. For further information, see Note 3—Divestiture. Freight forwarding includes operations conducted outside of North America but managed by our North American entities. |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring - Related Activity | Our restructuring-related activity was as follows: Nine Months Ended September 30, 2022 (In millions) Reserve Balance Charges Incurred Payments Foreign Exchange and Other Reserve Balance Severance North American LTL $ — $ 2 $ — $ — $ 2 Brokerage and Other Services 6 6 (9) (1) 2 Corporate 7 6 (6) — 7 Total severance 13 14 (15) (1) 11 Facilities Brokerage and Other Services 2 1 (1) — 2 Total facilities 2 1 (1) — 2 Contract termination North American LTL — 3 (3) — — Brokerage and Other Services — 1 — — 1 Total contract termination — 4 (3) — 1 Total $ 15 $ 19 $ (19) $ (1) $ 14 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments Measured at Fair Value in Statement of Financial Position | The fair value of our derivative instruments and the related notional amounts were as follows: September 30, 2022 Derivative Assets Derivative Liabilities (In millions) Notional Amount Balance Sheet Caption Fair Value Balance Sheet Caption Fair Value Derivatives designated as hedges Cross-currency swap agreements $ 332 Other current assets $ 18 Other current liabilities $ — Cross-currency swap agreements 79 Other long-term assets 10 Other long-term liabilities — Interest rate swaps 2,003 Other current assets 6 Other current liabilities — Total $ 34 $ — December 31, 2021 Derivative Assets Derivative Liabilities (In millions) Notional Amount Balance Sheet Caption Fair Value Balance Sheet Caption Fair Value Derivatives designated as hedges Cross-currency swap agreements $ 362 Other current assets $ — Other current liabilities $ (4) Cross-currency swap agreements 110 Other long-term assets — Other long-term liabilities — Interest rate swaps 2,003 Other current assets — Other current liabilities — Total $ — $ (4) |
Schedule of Gains and Losses Recognized on the Balance Sheet for Derivative Instruments | The effect of derivative and nonderivative instruments designated as hedges on our Condensed Consolidated Statements of Income (Loss) was as follows: Amount of Gain Recognized in Other Comprehensive Loss on Derivatives Amount of Gain Reclassified from AOCI into Net Income (Loss) Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) Three Months Ended September 30, (In millions) 2022 2021 2022 2021 2022 2021 Derivatives designated as cash flow hedges Cross-currency swap agreements $ — $ — $ — $ 3 $ — $ — Derivatives designated as net investment hedges Cross-currency swap agreements 25 41 — — 1 1 Total $ 25 $ 41 $ — $ 3 $ 1 $ 1 Amount of Gain Recognized in Other Comprehensive Loss on Derivatives Amount of Gain Reclassified from AOCI into Net Income Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) Nine Months Ended September 30, (In millions) 2022 2021 2022 2021 2022 2021 Derivatives designated as cash flow hedges Cross-currency swap agreements $ — $ 4 $ — $ 7 $ — $ — Interest rate swaps 5 — — — — — Derivatives designated as net investment hedges Cross-currency swap agreements 62 76 — — 5 6 Total $ 67 $ 80 $ — $ 7 $ 5 $ 6 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | September 30, 2022 December 31, 2021 (In millions) Principal Balance Carrying Value Principal Balance Carrying Value Term loan facility $ 2,003 $ 1,978 $ 2,003 $ 1,977 6.25% senior notes due 2025 520 517 1,150 1,141 6.70% senior debentures due 2034 300 216 300 214 Finance leases, asset financing and other 197 197 240 240 Total debt 3,020 2,908 3,693 3,572 Short-term borrowings and current maturities of long-term debt 60 60 58 58 Long-term debt $ 2,960 $ 2,848 $ 3,635 $ 3,514 |
Schedule of Fair Value of Debt | The fair value hierarchy of cash equivalents was as follows: (In millions) Carrying Value Fair Value Level 1 September 30, 2022 $ 502 $ 502 $ 502 December 31, 2021 181 181 181 (In millions) Fair Value Level 1 Level 2 September 30, 2022 $ 2,944 $ 808 $ 2,136 December 31, 2021 3,811 1,571 2,240 |
Earnings (Loss) per Share (Tabl
Earnings (Loss) per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The computations of basic and diluted earnings per share were as follows: Three Months Ended September 30, Nine Months Ended September 30, (In millions, except per share data) 2022 2021 2022 2021 Net income from continuing operations attributable to common shares $ 131 $ 21 $ 761 $ 197 Net income (loss) from discontinued operations, net of amounts attributable to noncontrolling interest — (78) (1) 17 Net income (loss) attributable to common shares, basic $ 131 $ (57) $ 760 $ 214 Basic weighted-average common shares 115 115 115 111 Dilutive effect of stock-based awards and warrants 1 1 1 3 Diluted weighted-average common shares 116 116 116 114 Basic earnings from continuing operations per share $ 1.14 $ 0.19 $ 6.62 $ 1.78 Basic earnings (loss) from discontinued operations per share — (0.69) (0.01) 0.15 Basic earnings (loss) per share $ 1.14 $ (0.50) $ 6.61 $ 1.93 Diluted earnings from continuing operations per share $ 1.13 $ 0.19 $ 6.58 $ 1.73 Diluted earnings (loss) from discontinued operations per share — (0.68) (0.01) 0.14 Diluted earnings (loss) per share $ 1.13 $ (0.49) $ 6.57 $ 1.87 |
Organization, Description of _4
Organization, Description of Business and Basis of Presentation - Narrative (Details) | Nov. 01, 2022 Rate | Sep. 30, 2022 USD ($) | Sep. 30, 2022 EUR (€) | Dec. 31, 2021 USD ($) |
Variable Interest Entity [Line Items] | ||||
Restricted cash included in other long-term assets | $ | $ 10,000,000 | $ 10,000,000 | ||
RXO | Subsequent Event | ||||
Variable Interest Entity [Line Items] | ||||
Percent of shares outstanding distributed | 100% | |||
Spinoff Transaction, Exchange Ratio | Rate | 100% | |||
XPO Collections Designated Activity Company Limited | Affiliated Entity | Trade Receivables Securitization Program Two | ||||
Variable Interest Entity [Line Items] | ||||
Aggregate maximum borrowing capacity | 196,000,000 | € 200,000,000 | ||
Remaining borrowing availability | $ 6,000,000 | € 6,000,000 | ||
Weighted average interest rate | 1.16% | 1.16% |
Organization, Description of _5
Organization, Description of Business and Basis of Presentation - Schedule of Accounts Receivable Securitization and Factoring Programs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Securitization programs | ||||
Receivables sold in period | $ 418 | $ 504 | $ 1,323 | $ 1,259 |
Cash consideration | 418 | 504 | 1,323 | 1,259 |
Factoring programs | ||||
Receivables sold in period | 42 | 17 | 102 | 46 |
Cash consideration | $ 42 | $ 17 | $ 102 | $ 46 |
Organization, Description of _6
Organization, Description of Business and Basis of Presentation - Schedule of Financial Instruments Within the Fair Value Hierarchy (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 502 | $ 181 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 502 | 181 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 502 | $ 181 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Distribution from GXO | $ 0 | $ 794,000,000 | |||
Net loss from discontinued operations | $ 0 | $ (78,000,000) | (1,000,000) | 22,000,000 | |
Spinoff | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Incurred cost | 0 | 68,000,000 | 4,000,000 | 111,000,000 | |
Net loss from discontinued operations | $ 57,000,000 | $ 96,000,000 | |||
GXO | Affiliated Entity | Separation and Distribution Agreements | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Due from related parties | 17,000,000 | 17,000,000 | $ 23,000,000 | ||
Self insurance reserve | $ 17,000,000 | $ 17,000,000 | $ 21,000,000 |
Discontinued Operations - Finan
Discontinued Operations - Financial Results from Discontinued Operations of GXO (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net income (loss) from discontinued operations, net of taxes | $ 0 | $ (78) | $ (1) | $ 22 |
Net income from discontinued operations attributable to noncontrolling interests | 0 | 0 | 0 | (5) |
Net income (loss) from discontinued operations attributable to GXO | $ 0 | (78) | $ (1) | 17 |
GXO | Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | 651 | 4,350 | ||
Direct operating expense (exclusive of depreciation and amortization) | 544 | 3,614 | ||
Sales, general and administrative expense | 53 | 363 | ||
Depreciation and amortization expense | 26 | 185 | ||
Transaction and other operating costs | 59 | 101 | ||
Operating income (loss) | (31) | 87 | ||
Other income | (4) | (27) | ||
Interest expense | 3 | 12 | ||
Income (loss) from discontinued operations before income tax provision | (30) | 102 | ||
Income tax provision | 48 | 80 | ||
Net income (loss) from discontinued operations, net of taxes | (78) | 22 | ||
Net income from discontinued operations attributable to noncontrolling interests | 0 | (5) | ||
Net income (loss) from discontinued operations attributable to GXO | $ (78) | $ 17 |
Divestiture (Details)
Divestiture (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gain on sale of business | $ 0 | $ 0 | $ 434 | $ 0 | |||
Revenue | 3,042 | 3,270 | 9,747 | 9,445 | |||
Operating income | 185 | 112 | 1,040 | 442 | |||
Eliminations | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Revenue | $ (83) | $ (62) | $ (221) | $ (162) | $ 1,100 | ||
North American Intermodal Operation | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Revenue | 1,200 | ||||||
Operating income | $ 53 | ||||||
North American Intermodal Operation | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from sale of assets | $ 705 | ||||||
Gain on sale of business | $ 450 | ||||||
Purchase price adjustments | $ 16 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Reporting - Selected Fi
Segment Reporting - Selected Financial Data for Each of Operating Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||||
Revenue | $ 3,042 | $ 3,270 | $ 9,747 | $ 9,445 | |
Total adjusted EBITDA | 352 | 307 | 1,078 | 916 | |
Debt extinguishment loss | 0 | 46 | 26 | 54 | |
Interest expense | 35 | 53 | 103 | 176 | |
Income tax provision | 34 | 11 | 194 | 60 | |
Depreciation and amortization expense | 118 | 118 | 349 | 357 | |
Unrealized loss on foreign currency option and forward contracts | 0 | 0 | 0 | 1 | |
Gain on sale of business | 0 | 0 | (434) | 0 | |
Litigation settlements | 0 | 29 | 0 | 29 | |
Transaction and integration costs | 25 | 15 | 60 | 26 | |
Restructuring costs | 9 | 14 | 19 | 16 | |
Income from continuing operations | 131 | 21 | 761 | 197 | |
Operating Segments | North American LTL | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 1,204 | 1,071 | 3,548 | 3,114 | |
Total adjusted EBITDA | 258 | 222 | 757 | 694 | |
Depreciation and amortization expense | 60 | 57 | 175 | 169 | |
Transaction and integration costs | 0 | 1 | 2 | 1 | |
Operating Segments | Brokerage and Other Services | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 1,921 | 2,261 | 6,420 | 6,493 | |
Total adjusted EBITDA | 123 | 131 | 439 | 386 | |
Depreciation and amortization expense | 54 | 60 | 168 | 180 | |
Transaction and integration costs | 3 | 5 | 6 | 8 | |
Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | (83) | (62) | (221) | (162) | $ 1,100 |
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Total adjusted EBITDA | (29) | (46) | (118) | (164) | |
Depreciation and amortization expense | 4 | 1 | 6 | 8 | |
Transaction and integration costs | $ 22 | $ 9 | $ 52 | $ 17 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue by Geographical Area (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 3,042 | $ 3,270 | $ 9,747 | $ 9,445 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,174 | 2,371 | 6,990 | 6,765 |
North America (excluding United States) | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 116 | 95 | 369 | 280 |
France | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 313 | 330 | 1,017 | 1,024 |
United Kingdom | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 217 | 224 | 666 | 655 |
Europe (excluding France and United Kingdom) | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 212 | 199 | 653 | 627 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 10 | 51 | 52 | 94 |
Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (83) | (62) | (221) | (162) |
Eliminations | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (83) | (62) | (221) | (162) |
Eliminations | North America (excluding United States) | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Eliminations | France | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Eliminations | United Kingdom | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Eliminations | Europe (excluding France and United Kingdom) | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Eliminations | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
North American LTL | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,204 | 1,071 | 3,548 | 3,114 |
North American LTL | Operating Segments | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,178 | 1,049 | 3,472 | 3,046 |
North American LTL | Operating Segments | North America (excluding United States) | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 26 | 22 | 76 | 68 |
North American LTL | Operating Segments | France | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
North American LTL | Operating Segments | United Kingdom | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
North American LTL | Operating Segments | Europe (excluding France and United Kingdom) | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
North American LTL | Operating Segments | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Brokerage and Other Services | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,921 | 2,261 | 6,420 | 6,493 |
Brokerage and Other Services | Operating Segments | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,079 | 1,384 | 3,739 | 3,881 |
Brokerage and Other Services | Operating Segments | North America (excluding United States) | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 90 | 73 | 293 | 212 |
Brokerage and Other Services | Operating Segments | France | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 313 | 330 | 1,017 | 1,024 |
Brokerage and Other Services | Operating Segments | United Kingdom | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 217 | 224 | 666 | 655 |
Brokerage and Other Services | Operating Segments | Europe (excluding France and United Kingdom) | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 212 | 199 | 653 | 627 |
Brokerage and Other Services | Operating Segments | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 10 | $ 51 | $ 52 | $ 94 |
Revenue Recognition - Disaggr_2
Revenue Recognition - Disaggregation of Revenue by Products and Services (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 3,042 | $ 3,270 | $ 9,747 | $ 9,445 |
Operating Segments | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,386 | 2,588 | 7,643 | 7,319 |
Operating Segments | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 741 | 757 | 2,335 | 2,311 |
Segment Reconciling Items | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (85) | (75) | (231) | (185) |
LTL | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,204 | 1,071 | 3,548 | 3,114 |
LTL | Operating Segments | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,250 | 1,091 | 3,658 | 3,165 |
Truck brokerage | Operating Segments | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 686 | 700 | 2,265 | 1,903 |
Last mile | Operating Segments | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 264 | 250 | 784 | 765 |
Other brokerage | Operating Segments | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 186 | $ 547 | $ 936 | $ 1,486 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligations (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 151 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 91% |
Performance obligations expected to be satisfied, expected timing | 3 years |
Restructuring Charges (Details)
Restructuring Charges (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Reserve, beginning balance | $ 15 |
Charges Incurred | 19 |
Payments | (19) |
Foreign Exchange and Other | (1) |
Reserve, ending balance | 14 |
Severance | |
Restructuring Reserve [Roll Forward] | |
Reserve, beginning balance | 13 |
Charges Incurred | 14 |
Payments | (15) |
Foreign Exchange and Other | (1) |
Reserve, ending balance | 11 |
Facilities | |
Restructuring Reserve [Roll Forward] | |
Reserve, beginning balance | 2 |
Charges Incurred | 1 |
Payments | (1) |
Foreign Exchange and Other | 0 |
Reserve, ending balance | 2 |
Contract termination | |
Restructuring Reserve [Roll Forward] | |
Reserve, beginning balance | 0 |
Charges Incurred | 4 |
Payments | (3) |
Foreign Exchange and Other | 0 |
Reserve, ending balance | 1 |
Operating Segments | North American LTL | Severance | |
Restructuring Reserve [Roll Forward] | |
Reserve, beginning balance | 0 |
Charges Incurred | 2 |
Payments | 0 |
Foreign Exchange and Other | 0 |
Reserve, ending balance | 2 |
Operating Segments | North American LTL | Contract termination | |
Restructuring Reserve [Roll Forward] | |
Reserve, beginning balance | 0 |
Charges Incurred | 3 |
Payments | (3) |
Foreign Exchange and Other | 0 |
Reserve, ending balance | 0 |
Operating Segments | Brokerage and Other Services | Severance | |
Restructuring Reserve [Roll Forward] | |
Reserve, beginning balance | 6 |
Charges Incurred | 6 |
Payments | (9) |
Foreign Exchange and Other | (1) |
Reserve, ending balance | 2 |
Operating Segments | Brokerage and Other Services | Facilities | |
Restructuring Reserve [Roll Forward] | |
Reserve, beginning balance | 2 |
Charges Incurred | 1 |
Payments | (1) |
Foreign Exchange and Other | 0 |
Reserve, ending balance | 2 |
Operating Segments | Brokerage and Other Services | Contract termination | |
Restructuring Reserve [Roll Forward] | |
Reserve, beginning balance | 0 |
Charges Incurred | 1 |
Payments | 0 |
Foreign Exchange and Other | 0 |
Reserve, ending balance | 1 |
Corporate | Severance | |
Restructuring Reserve [Roll Forward] | |
Reserve, beginning balance | 7 |
Charges Incurred | 6 |
Payments | (6) |
Foreign Exchange and Other | 0 |
Reserve, ending balance | $ 7 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Derivative Instruments Measured at Fair Value in Statement of Financial Position (Details) - Level 2 - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | $ 34 | $ 0 |
Derivative Liabilities | 0 | (4) |
Derivatives designated as hedges | Cross-currency swap agreements | Other Current Assets and Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 332 | 362 |
Derivatives designated as hedges | Cross-currency swap agreements | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 18 | 0 |
Derivatives designated as hedges | Cross-currency swap agreements | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | 0 | (4) |
Derivatives designated as hedges | Cross-currency swap agreements | Other Long Term Assets and Other Long Term Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 79 | 110 |
Derivatives designated as hedges | Cross-currency swap agreements | Other long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 10 | 0 |
Derivatives designated as hedges | Cross-currency swap agreements | Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | 0 | 0 |
Derivatives designated as hedges | Interest rate swaps | Other Current Assets and Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | 2,003 | 2,003 |
Derivatives designated as hedges | Interest rate swaps | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 6 | 0 |
Derivatives designated as hedges | Interest rate swaps | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | $ 0 | $ 0 |
Derivative Instruments - Sche_2
Derivative Instruments - Schedule of Gains and Losses Recognized on the Statements of Income for Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain Recognized in Other Comprehensive Loss on Derivatives | $ 25 | $ 41 | $ 67 | $ 80 |
Amount of Gain Reclassified from AOCI into Net Income (Loss) | 0 | 3 | 0 | 7 |
Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) | 1 | 1 | 5 | 6 |
Derivatives designated as hedges | Cross-currency swap agreements | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain Recognized in Other Comprehensive Loss on Derivatives | 0 | 0 | 0 | 4 |
Amount of Gain Reclassified from AOCI into Net Income (Loss) | 0 | 3 | 0 | 7 |
Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) | 0 | 0 | 0 | 0 |
Derivatives designated as hedges | Interest rate swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain Recognized in Other Comprehensive Loss on Derivatives | 5 | 0 | ||
Amount of Gain Reclassified from AOCI into Net Income (Loss) | 0 | 0 | ||
Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) | 0 | 0 | ||
Derivatives designated as hedges | Cross-currency swap agreements | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain Recognized in Other Comprehensive Loss on Derivatives | 25 | 41 | 62 | 76 |
Amount of Gain Reclassified from AOCI into Net Income (Loss) | 0 | 0 | 0 | 0 |
Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing) | $ 1 | $ 1 | $ 5 | $ 6 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Proceeds from settlement of cross currency swaps | $ 29 | $ 0 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Apr. 30, 2021 |
Debt Instrument [Line Items] | |||
Total debt, principal balance | $ 3,020 | $ 3,693 | |
Short-term debt and current maturities of long-term debt, principal balance | 60 | 58 | |
Long-term debt excluding current maturities, principal balance | 2,960 | 3,635 | |
Long-term debt, carrying value | 2,848 | 3,514 | |
Carrying Value | |||
Debt Instrument [Line Items] | |||
Long-term debt, carrying value | 2,848 | 3,514 | |
Total debt, carrying value | 2,908 | 3,572 | |
Short-term debt and current maturities of long-term debt, carrying value | 60 | 58 | |
Term loan facility | |||
Debt Instrument [Line Items] | |||
Long-term Debt | 2,003 | 2,003 | |
Term loan facility | Carrying Value | |||
Debt Instrument [Line Items] | |||
Long-term debt, carrying value | $ 1,978 | 1,977 | |
6.25% senior notes due 2025 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 6.25% | 6.25% | |
Long-term Debt | $ 520 | 1,150 | |
6.25% senior notes due 2025 | Carrying Value | |||
Debt Instrument [Line Items] | |||
Long-term debt, carrying value | $ 517 | 1,141 | |
6.70% senior debentures due 2034 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 6.70% | ||
Long-term Debt | $ 300 | 300 | |
6.70% senior debentures due 2034 | Carrying Value | |||
Debt Instrument [Line Items] | |||
Long-term debt, carrying value | 216 | 214 | |
Finance leases, asset financing and other | |||
Debt Instrument [Line Items] | |||
Finance leases, asset financing and other | 197 | 240 | |
Finance leases, asset financing and other | Carrying Value | |||
Debt Instrument [Line Items] | |||
Finance leases, asset financing and other | $ 197 | $ 240 |
Debt - Fair Value of Debt (Deta
Debt - Fair Value of Debt (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Fair value of debt | $ 2,944 | $ 3,811 |
Level 1 | ||
Debt Instrument [Line Items] | ||
Fair value of debt | 808 | 1,571 |
Level 2 | ||
Debt Instrument [Line Items] | ||
Fair value of debt | $ 2,136 | $ 2,240 |
Debt - ABL Facility (Details)
Debt - ABL Facility (Details) - Revolving Credit Facility - USD ($) | Nov. 04, 2022 | Oct. 31, 2022 | Sep. 30, 2022 |
Subsequent Event | |||
Debt Instrument [Line Items] | |||
Aggregate maximum borrowing capacity | $ 500,000,000 | ||
ABL facility | |||
Debt Instrument [Line Items] | |||
Line of credit facility, borrowing base | $ 1,000,000,000 | ||
Remaining borrowing availability | 996,000,000 | ||
Letters of credit outstanding, amount | 4,000,000 | ||
Aggregate maximum borrowing capacity | 1,500,000,000 | ||
ABL facility | Would Have Been if There Was no Amendment | |||
Debt Instrument [Line Items] | |||
Aggregate maximum borrowing capacity | $ 1,000,000,000 | ||
ABL facility | Subsequent Event | |||
Debt Instrument [Line Items] | |||
Line of credit facility, borrowing base | $ 600,000,000 |
Debt - Letters of Credit Facili
Debt - Letters of Credit Facility (Details) - Uncommitted Secured Letter of Credit Facility | Sep. 30, 2022 USD ($) |
Debt Instrument [Line Items] | |
Debt instrument face amount | $ 185,000,000 |
Aggregate maximum borrowing capacity | $ 200,000,000 |
Debt - Term Loan Facility (Deta
Debt - Term Loan Facility (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | ||||
Debt extinguishment loss | $ 0 | $ 46 | $ 26 | $ 54 |
Term Loan Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Debt extinguishment loss | $ 3 | |||
Annual effective interest rate | 4.38% | 4.38% |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Apr. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Apr. 30, 2021 | Jan. 31, 2021 | |
Debt Instrument [Line Items] | |||||||||
Debt extinguishment loss | $ 0 | $ 46,000,000 | $ 26,000,000 | $ 54,000,000 | |||||
6.25% senior notes due 2025 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, redemption amount | 630,000,000 | 630,000,000 | |||||||
Long-term Debt | $ 520,000,000 | $ 520,000,000 | $ 1,150,000,000 | ||||||
Stated interest rate | 6.25% | 6.25% | 6.25% | ||||||
Redemption price percentage | 100% | ||||||||
Redemption price | $ 21,000,000 | ||||||||
Debt extinguishment loss | $ 26,000,000 | ||||||||
6.125% Senior notes due 2023 | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate | 6.125% | 6.125% | |||||||
Redemption price percentage | 100% | ||||||||
Redemption price | $ 794,000,000 | ||||||||
Debt extinguishment loss | $ (3,000,000) | ||||||||
6.75% Senior notes due 2024 | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate | 6.75% | 6.75% | |||||||
Redemption price percentage | 103.375% | ||||||||
Debt extinguishment loss | $ (43,000,000) | ||||||||
6.50% Senior notes due 2022 | |||||||||
Debt Instrument [Line Items] | |||||||||
Stated interest rate | 6.50% | ||||||||
Redemption price percentage | 100% | ||||||||
Debt extinguishment loss | $ 5,000,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 33 Months Ended | ||
Jul. 31, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Feb. 28, 2019 | |
Over-Allotment Option | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock, number of shares issued in transaction (in shares) | 5,000,000 | |||||
Sale of stock, consideration received on transaction | $ 384,000,000 | |||||
Over-Allotment Option | XPO | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock, number of shares issued in transaction (in shares) | 2,500,000 | |||||
Over-Allotment Option | JPE | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock, number of shares issued in transaction (in shares) | 2,500,000 | |||||
Underwriters | ||||||
Class of Stock [Line Items] | ||||||
Public offering price (in dollars per share) | $ 138 | |||||
Additional shares of common stock through an option granted to underwriters (in shares) | 750,000 | |||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Conversion of preferred stock to common stock (in shares) | 145,000 | |||||
Exercise of warrants (in shares) | 9,200,000 | 9,215,000 | ||||
Warrant | ||||||
Class of Stock [Line Items] | ||||||
Conversion of preferred stock and warrants, amount converted (in shares) | 9,800,000 | |||||
2019 Share Repurchase Program | ||||||
Class of Stock [Line Items] | ||||||
Stock repurchase program authorized amount | $ 1,500,000,000 | |||||
Shares repurchased and retired (in shares) | 0 | |||||
Shares repurchased, remaining authorization amount | $ 503,000,000 | |||||
Convertible Preferred Stock | Series A Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Conversion of preferred stock and warrants, amount converted (in shares) | 40 | 975 | ||||
Convertible Preferred Stock | Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Conversion of preferred stock to common stock (in shares) | 5,714 | 139,000 |
Earnings (Loss) per Share - Sch
Earnings (Loss) per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share, Basic, Two Class Method [Abstract] | ||||
Net income from continuing operations attributable to common shares | $ 131 | $ 21 | $ 761 | $ 197 |
Net income (loss) from discontinued operations, net of amounts attributable to noncontrolling interest | 0 | (78) | (1) | 17 |
Net income (loss) attributable to common shareholders , basic | $ 131 | $ (57) | $ 760 | $ 214 |
Basic weighted-average common shares (in shares) | 115 | 115 | 115 | 111 |
Dilutive effect of stock-based awards and warrants (in shares) | 1 | 1 | 1 | 3 |
Diluted weighted-average common shares (in shares) | 116 | 116 | 116 | 114 |
Basic earnings from continuing operations per share (in dollars per share) | $ 1.14 | $ 0.19 | $ 6.62 | $ 1.78 |
Basic earnings (loss) from discontinued operations per share (in dollars per share) | 0 | (0.69) | (0.01) | 0.15 |
Basic earnings (loss) per share attributable to common shareholders (in dollars per share) | 1.14 | (0.50) | 6.61 | 1.93 |
Diluted earnings from continuing operations per share (in dollars per share) | 1.13 | 0.19 | 6.58 | 1.73 |
Diluted earnings (loss) from discontinued operations per share (in dollars per share) | 0 | (0.68) | (0.01) | 0.14 |
Diluted earnings (loss) per share attributable to common shareholders (in dollars per share) | $ 1.13 | $ (0.49) | $ 6.57 | $ 1.87 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) | 1 Months Ended |
Apr. 30, 2012 claimant | |
Insurance Contribution Litigation | |
Loss Contingencies [Line Items] | |
Number of insurance companies | 18 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Oct. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | |
Short-term Debt [Line Items] | |||
Dividend declared | $ 3,000,000 | ||
Senior Notes | |||
Short-term Debt [Line Items] | |||
Outstanding balance | $ 520,000,000 | ||
Subsequent Event | RXO | |||
Short-term Debt [Line Items] | |||
Dividend declared | $ 488,000,000 | ||
Subsequent Event | Revolving Credit Facility | |||
Short-term Debt [Line Items] | |||
Aggregate maximum borrowing capacity | 500,000,000 | ||
Subsequent Event | Term Loan Credit Agreement | |||
Short-term Debt [Line Items] | |||
Aggregate maximum borrowing capacity | 100,000,000 | ||
Subsequent Event | RXO Notes | |||
Short-term Debt [Line Items] | |||
Debt instrument face amount | $ 355,000,000 | ||
Stated interest rate | 7.50% | ||
Redemption price percentage | 98.962% |