ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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03-0450326
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Five American Lane
Greenwich, CT
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06831
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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September 30,
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December 31,
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||||
(In millions, except per share data)
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2018
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|
2017
|
||||
ASSETS
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||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
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$
|
427.9
|
|
|
$
|
396.9
|
|
Accounts receivable, net of allowances of $51.9 and $42.4, respectively
|
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2,914.9
|
|
|
2,725.3
|
|
||
Other current assets
|
|
487.5
|
|
|
465.7
|
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||
Total current assets
|
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3,830.3
|
|
|
3,587.9
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|
||
Property and equipment, net of $1,454.8 and $1,109.5 in accumulated depreciation, respectively
|
|
2,705.2
|
|
|
2,663.7
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||
Goodwill
|
|
4,494.8
|
|
|
4,563.6
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|
||
Identifiable intangible assets, net of $670.6 and $559.5 in accumulated amortization, respectively
|
|
1,298.7
|
|
|
1,435.3
|
|
||
Other long-term assets
|
|
347.1
|
|
|
351.1
|
|
||
Total long-term assets
|
|
8,845.8
|
|
|
9,013.7
|
|
||
Total assets
|
|
$
|
12,676.1
|
|
|
$
|
12,601.6
|
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LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
1,231.8
|
|
|
$
|
1,250.7
|
|
Accrued expenses
|
|
1,517.9
|
|
|
1,525.8
|
|
||
Current maturities of long-term debt
|
|
84.0
|
|
|
103.7
|
|
||
Other current liabilities
|
|
161.4
|
|
|
116.9
|
|
||
Total current liabilities
|
|
2,995.1
|
|
|
2,997.1
|
|
||
Long-term debt
|
|
4,005.3
|
|
|
4,417.5
|
|
||
Deferred tax liability
|
|
428.9
|
|
|
418.8
|
|
||
Employee benefit obligations
|
|
157.9
|
|
|
162.1
|
|
||
Other long-term liabilities
|
|
499.1
|
|
|
596.1
|
|
||
Total long-term liabilities
|
|
5,091.2
|
|
|
5,594.5
|
|
||
Stockholders’ equity:
|
|
|
|
|
||||
Convertible perpetual preferred stock, $0.001 par value; 10.0 shares authorized; 0.07 of Series A shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively
|
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41.0
|
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41.2
|
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||
Common stock, $0.001 par value; 300.0 shares authorized; 126.9 and 119.9 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively
|
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0.1
|
|
|
0.1
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|
||
Additional paid-in capital
|
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3,913.5
|
|
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3,590.0
|
|
||
Retained earnings (accumulated deficit)
|
|
286.1
|
|
|
(42.6
|
)
|
||
Accumulated other comprehensive (loss) income
|
|
(59.2
|
)
|
|
15.7
|
|
||
Total stockholders' equity before noncontrolling interests
|
|
4,181.5
|
|
|
3,604.4
|
|
||
Noncontrolling interests
|
|
408.3
|
|
|
405.6
|
|
||
Total equity
|
|
4,589.8
|
|
|
4,010.0
|
|
||
Total liabilities and equity
|
|
$
|
12,676.1
|
|
|
$
|
12,601.6
|
|
|
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Three Months Ended September 30,
|
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Nine Months Ended September 30,
|
||||||||||||
(In millions, except per share data)
|
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2018
|
|
2017
|
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2018
|
|
2017
|
||||||||
Revenue
|
|
$
|
4,335.1
|
|
|
$
|
3,887.1
|
|
|
$
|
12,890.1
|
|
|
$
|
11,186.9
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Cost of transportation and services
|
|
2,248.6
|
|
|
2,043.4
|
|
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6,747.7
|
|
|
5,901.8
|
|
||||
Direct operating expense
|
|
1,430.3
|
|
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1,267.4
|
|
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4,212.7
|
|
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3,616.1
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|
||||
Sales, general and administrative expense
|
|
447.2
|
|
|
399.6
|
|
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1,351.7
|
|
|
1,213.4
|
|
||||
Total operating expenses
|
|
4,126.1
|
|
|
3,710.4
|
|
|
12,312.1
|
|
|
10,731.3
|
|
||||
Operating income
|
|
209.0
|
|
|
176.7
|
|
|
578.0
|
|
|
455.6
|
|
||||
Other expense (income)
|
|
(18.3
|
)
|
|
(16.8
|
)
|
|
(68.1
|
)
|
|
(35.8
|
)
|
||||
Foreign currency loss
|
|
3.3
|
|
|
15.0
|
|
|
5.3
|
|
|
53.9
|
|
||||
Debt extinguishment loss
|
|
16.8
|
|
|
4.6
|
|
|
27.1
|
|
|
13.6
|
|
||||
Interest expense
|
|
51.0
|
|
|
72.5
|
|
|
165.3
|
|
|
222.4
|
|
||||
Income before income tax provision
|
|
156.2
|
|
|
101.4
|
|
|
448.4
|
|
|
201.5
|
|
||||
Income tax provision
|
|
41.0
|
|
|
30.4
|
|
|
95.0
|
|
|
48.4
|
|
||||
Net income
|
|
115.2
|
|
|
71.0
|
|
|
353.4
|
|
|
153.1
|
|
||||
Net income attributable to noncontrolling interests
|
|
(6.2
|
)
|
|
(8.5
|
)
|
|
(22.8
|
)
|
|
(17.4
|
)
|
||||
Net income attributable to XPO
|
|
$
|
109.0
|
|
|
$
|
62.5
|
|
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$
|
330.6
|
|
|
$
|
135.7
|
|
|
|
|
|
|
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|
||||||||
Earnings per share data:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common shareholders
|
|
$
|
100.8
|
|
|
$
|
57.5
|
|
|
$
|
305.2
|
|
|
$
|
124.5
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
|
$
|
0.81
|
|
|
$
|
0.49
|
|
|
$
|
2.50
|
|
|
$
|
1.10
|
|
Diluted earnings per share
|
|
$
|
0.74
|
|
|
$
|
0.44
|
|
|
$
|
2.26
|
|
|
$
|
0.99
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average common shares outstanding
|
|
125.2
|
|
|
117.5
|
|
|
122.1
|
|
|
113.5
|
|
||||
Diluted weighted-average common shares outstanding
|
|
136.6
|
|
|
129.8
|
|
|
134.8
|
|
|
126.2
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
|
$
|
115.2
|
|
|
$
|
71.0
|
|
|
$
|
353.4
|
|
|
$
|
153.1
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income, net of tax
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation (loss) gain, net of tax effect of $(1.0), $19.3, $0.7 and $41.1
|
|
$
|
(12.2
|
)
|
|
$
|
50.8
|
|
|
$
|
(80.8
|
)
|
|
$
|
181.0
|
|
Unrealized (loss) gain on financial assets/liabilities designated as hedging instruments, net of tax effect of $0.1, $4.0, $(0.6) and $1.0
|
|
(0.1
|
)
|
|
2.8
|
|
|
(8.6
|
)
|
|
(2.3
|
)
|
||||
Defined benefit plans adjustments, net of tax effect of $0.1, $1.9, $0.2 and $1.9
|
|
(0.4
|
)
|
|
(1.0
|
)
|
|
(1.0
|
)
|
|
(1.0
|
)
|
||||
Other comprehensive (loss) income
|
|
(12.7
|
)
|
|
52.6
|
|
|
(90.4
|
)
|
|
177.7
|
|
||||
Comprehensive income
|
|
$
|
102.5
|
|
|
$
|
123.6
|
|
|
$
|
263.0
|
|
|
$
|
330.8
|
|
Less: Comprehensive income attributable to noncontrolling interests
|
|
4.0
|
|
|
21.1
|
|
|
7.4
|
|
|
56.0
|
|
||||
Comprehensive income attributable to XPO
|
|
$
|
98.5
|
|
|
$
|
102.5
|
|
|
$
|
255.6
|
|
|
$
|
274.8
|
|
|
|
Nine Months Ended September 30,
|
||||||
(In millions)
|
|
2018
|
|
2017
|
||||
Operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
353.4
|
|
|
$
|
153.1
|
|
Adjustments to reconcile net income to net cash from operating activities
|
|
|
|
|
||||
Depreciation and amortization
|
|
527.2
|
|
|
489.1
|
|
||
Stock compensation expense
|
|
64.1
|
|
|
50.1
|
|
||
Accretion of debt
|
|
11.1
|
|
|
14.5
|
|
||
Deferred tax expense
(benefit)
|
|
14.3
|
|
|
(3.1
|
)
|
||
Debt extinguishment loss
|
|
27.1
|
|
|
13.6
|
|
||
Unrealized (gain) loss on foreign currency option and forward contracts
|
|
(12.9
|
)
|
|
49.9
|
|
||
Other
|
|
3.2
|
|
|
20.1
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(262.0
|
)
|
|
(199.8
|
)
|
||
Other assets
|
|
(98.5
|
)
|
|
(45.4
|
)
|
||
Accounts payable
|
|
(4.1
|
)
|
|
48.6
|
|
||
Accrued expenses and other liabilities
|
|
(86.7
|
)
|
|
(71.2
|
)
|
||
Net cash provided by operating activities
|
|
536.2
|
|
|
519.5
|
|
||
Investing activities
|
|
|
|
|
||||
Payment for purchases of property and equipment
|
|
(413.1
|
)
|
|
(389.9
|
)
|
||
Proceeds from sale of assets
|
|
91.7
|
|
|
59.6
|
|
||
Other
|
|
(13.0
|
)
|
|
—
|
|
||
Net cash used by investing activities
|
|
(334.4
|
)
|
|
(330.3
|
)
|
||
Financing activities
|
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
|
895.8
|
|
|
523.5
|
|
||
Repurchase of debt
|
|
(1,225.4
|
)
|
|
(782.9
|
)
|
||
Proceeds from borrowings on ABL facility
|
|
925.0
|
|
|
495.0
|
|
||
Repayment of borrowings on ABL facility
|
|
(1,025.0
|
)
|
|
(525.0
|
)
|
||
Repayment of long-term debt and capital leases
|
|
(84.7
|
)
|
|
(80.9
|
)
|
||
Payment for debt issuance costs
|
|
(6.4
|
)
|
|
(12.8
|
)
|
||
Proceeds from forward sale settlement
|
|
348.5
|
|
|
—
|
|
||
Proceeds from common stock offering
|
|
—
|
|
|
287.6
|
|
||
Change in bank overdrafts
|
|
18.4
|
|
|
11.5
|
|
||
Payment for tax withholdings for restricted shares
|
|
(48.8
|
)
|
|
(15.2
|
)
|
||
Dividends paid
|
|
(4.1
|
)
|
|
(3.3
|
)
|
||
Other
|
|
6.2
|
|
|
(1.0
|
)
|
||
Net cash used by financing activities
|
|
(200.5
|
)
|
|
(103.5
|
)
|
||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
|
(9.9
|
)
|
|
9.4
|
|
||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
|
(8.6
|
)
|
|
95.1
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
|
449.0
|
|
|
399.8
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
|
$
|
440.4
|
|
|
$
|
494.9
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
172.0
|
|
|
$
|
176.5
|
|
Cash paid for income taxes
|
|
$
|
45.9
|
|
|
$
|
59.9
|
|
•
|
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.
|
|
|
As of September 30, 2018
|
||||||||||||||
(In millions)
|
|
Carrying Value
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
||||||||
Cash equivalents
|
|
$
|
225.7
|
|
|
$
|
225.7
|
|
|
$
|
223.1
|
|
|
$
|
2.6
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
As of December 31, 2017
|
||||||||||||||
(In millions)
|
|
Carrying Value
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
||||||||
Cash equivalents
|
|
$
|
91.1
|
|
|
$
|
91.1
|
|
|
$
|
75.4
|
|
|
$
|
15.7
|
|
(In millions)
|
|
Transportation
|
|
Logistics
|
|
Corporate
|
|
Eliminations
|
|
Total
|
||||||||||
Three Months Ended September 30, 2018
(1)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
2,850.6
|
|
|
$
|
1,516.8
|
|
|
$
|
—
|
|
|
$
|
(32.3
|
)
|
|
$
|
4,335.1
|
|
Operating income (loss)
|
|
195.2
|
|
|
59.5
|
|
|
(45.7
|
)
|
|
—
|
|
|
209.0
|
|
|||||
Depreciation and amortization
|
|
117.4
|
|
|
59.3
|
|
|
3.2
|
|
|
—
|
|
|
179.9
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended September 30, 2017
(1)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
2,579.5
|
|
|
$
|
1,340.7
|
|
|
$
|
—
|
|
|
$
|
(33.1
|
)
|
|
$
|
3,887.1
|
|
Operating income (loss)
|
|
145.2
|
|
|
67.3
|
|
|
(35.8
|
)
|
|
—
|
|
|
176.7
|
|
|||||
Depreciation and amortization
|
|
113.6
|
|
|
53.0
|
|
|
0.7
|
|
|
—
|
|
|
167.3
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2018
(1)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
8,512.4
|
|
|
$
|
4,472.7
|
|
|
$
|
—
|
|
|
$
|
(95.0
|
)
|
|
$
|
12,890.1
|
|
Operating income (loss)
|
|
539.6
|
|
|
174.3
|
|
|
(135.9
|
)
|
|
—
|
|
|
578.0
|
|
|||||
Depreciation and amortization
|
|
347.3
|
|
|
172.4
|
|
|
7.5
|
|
|
—
|
|
|
527.2
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30, 2017
(1)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
7,494.0
|
|
|
$
|
3,781.9
|
|
|
$
|
—
|
|
|
$
|
(89.0
|
)
|
|
$
|
11,186.9
|
|
Operating income (loss)
|
|
415.5
|
|
|
149.6
|
|
|
(109.5
|
)
|
|
—
|
|
|
455.6
|
|
|||||
Depreciation and amortization
|
|
335.1
|
|
|
149.3
|
|
|
4.7
|
|
|
—
|
|
|
489.1
|
|
(1)
|
Certain immaterial organizational changes were made in the first quarter of 2018 related to
the Company’s
managed transportation business. Managed Transportation previously had been included in the Logistics segment, and as of January 1, 2018, it is reflected in the Transportation segment. Prior period information was recast to conform to the current year presentation.
|
Reportable Segment
|
|
Nature, Timing of Satisfaction of Performance Obligations, and Significant Payment Terms
|
Transportation
|
|
The Company’s transportation segment generates revenue from providing truck brokerage and transportation services for its customers. Certain accessorial services may be provided to customers under their transportation contracts, such as unloading and other incidental services. The Company deems the transportation services including related accessorial services as a single performance obligation as the accessorial services are immaterial in the context of the contracts with customers. The transaction price is based on the consideration specified in the contract with the customer.
A performance obligation is created when a customer under a transportation contract submits a bill of lading for the transport of goods from origin to destination. These performance obligations are satisfied as the shipments move from origin to destination. Transportation revenue is recognized proportionally as a shipment moves from origin to destination and related costs are recognized as incurred. Some of the customer contracts contain a promise to stand ready as the Company is obligated to provide transportation services for the customer. For these contracts, the Company recognizes revenue on a straight-line basis over the term of the contract because the pattern of benefit to the customer as well as the Company’s efforts to fulfill the contract are generally distributed evenly throughout the period. Performance obligations are short-term with transit days less than one week. Generally, customers are billed either upon shipment of the freight or monthly and remit payment according to approved payment terms.
The Company recognizes revenue on a net basis when the Company does not control the specific services, is not responsible for providing the transportation service and does not have discretion in establishing the price for the service.
|
Logistics
|
|
The Company’s logistics segment generates revenue from providing warehousing services for its customers, including e-fulfillment, reverse logistics, packaging and warehousing and distributing under contracts ranging from a few months to a few years. The Company’s performance obligations are satisfied over time as the customers simultaneously receive and consume the benefits of the Company’s services. The contracts contain a single performance obligation as the distinct services provided are satisfied over time and are substantially the same and possess the same pattern of transfer. The transaction price is based on the consideration specified in the contract with the customer and contains fixed and variable consideration. In general, the fixed consideration component of a contract represents reimbursement for facility and equipment costs incurred to satisfy the performance obligation and is recognized on a straight-line basis over the term of the contract. The variable consideration component is comprised of cost reimbursement, per unit pricing or time and materials pricing and is determined based on the costs, units or hours of services provided, respectively, and is recognized over time based on the level of activity volume.
Generally, the Company’s contracts contain provisions for adjustments to pricing based on achieving agreed-upon performance metrics, changes in volumes, services and other market conditions. Revenue relating to such pricing adjustments is estimated and included in the consideration if it is probable that a significant revenue reversal will not occur in the future. The estimate of variable consideration is determined either by the expected value or most likely amount method and factors in current, past and forecasted experience with the customer. Customers are billed based on the terms specified in the contract with the customer and remit payment according to approved payment terms.
|
|
|
Three Months Ended September 30, 2018
|
||||||||||||||
(In millions)
|
|
Transportation
|
|
Logistics
|
|
Eliminations
|
|
Total
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
||||||||
United States
|
|
$
|
2,042.2
|
|
|
$
|
554.3
|
|
|
$
|
(4.8
|
)
|
|
$
|
2,591.7
|
|
North America (excluding United States)
|
|
71.3
|
|
|
19.7
|
|
|
—
|
|
|
91.0
|
|
||||
France
|
|
359.4
|
|
|
167.0
|
|
|
(5.3
|
)
|
|
521.1
|
|
||||
United Kingdom
|
|
179.2
|
|
|
357.0
|
|
|
(17.1
|
)
|
|
519.1
|
|
||||
Europe (excluding France and United Kingdom)
|
|
193.0
|
|
|
395.8
|
|
|
(4.2
|
)
|
|
584.6
|
|
||||
Other
|
|
5.5
|
|
|
23.0
|
|
|
(0.9
|
)
|
|
27.6
|
|
||||
Total
|
|
$
|
2,850.6
|
|
|
$
|
1,516.8
|
|
|
$
|
(32.3
|
)
|
|
$
|
4,335.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||
(In millions)
|
|
Transportation
|
|
Logistics
|
|
Eliminations
|
|
Total
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
||||||||
United States
|
|
$
|
6,042.3
|
|
|
$
|
1,589.5
|
|
|
$
|
(14.9
|
)
|
|
$
|
7,616.9
|
|
North America (excluding United States)
|
|
200.4
|
|
|
48.7
|
|
|
—
|
|
|
249.1
|
|
||||
France
|
|
1,133.8
|
|
|
522.6
|
|
|
(14.0
|
)
|
|
1,642.4
|
|
||||
United Kingdom
|
|
529.4
|
|
|
1,052.8
|
|
|
(50.6
|
)
|
|
1,531.6
|
|
||||
Europe (excluding France and United Kingdom)
|
|
592.0
|
|
|
1,185.4
|
|
|
(12.8
|
)
|
|
1,764.6
|
|
||||
Other
|
|
14.5
|
|
|
73.7
|
|
|
(2.7
|
)
|
|
85.5
|
|
||||
Total
|
|
$
|
8,512.4
|
|
|
$
|
4,472.7
|
|
|
$
|
(95.0
|
)
|
|
$
|
12,890.1
|
|
|
|
|
|
|
|
|
|
|
(In millions)
|
|
Three Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2018
|
||||
Transportation:
|
|
|
|
|
||||
Freight brokerage and truckload
|
|
$
|
1,196.0
|
|
|
$
|
3,585.9
|
|
LTL
|
|
1,227.9
|
|
|
3,647.4
|
|
||
Last mile
(1)
|
|
271.0
|
|
|
777.9
|
|
||
Managed transportation
|
|
110.1
|
|
|
361.3
|
|
||
Global forwarding
|
|
83.3
|
|
|
250.6
|
|
||
Transportation eliminations
|
|
(37.7
|
)
|
|
(110.7
|
)
|
||
Total Transportation segment revenue
|
|
2,850.6
|
|
|
8,512.4
|
|
||
Total Logistics segment revenue
|
|
1,516.8
|
|
|
4,472.7
|
|
||
Intersegment eliminations
|
|
(32.3
|
)
|
|
(95.0
|
)
|
||
Total revenue
|
|
$
|
4,335.1
|
|
|
$
|
12,890.1
|
|
(1)
|
Comprised of the Company’s North American last mile operations.
|
|
|
September 30, 2018
|
||||||||||||||
|
|
|
|
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
|
|
$
|
1,278.5
|
|
|
Other long-term assets
|
|
$
|
—
|
|
|
Other long-term liabilities
|
|
$
|
(113.9
|
)
|
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency option and forward contracts
|
|
223.2
|
|
|
Other current assets
|
|
0.3
|
|
|
Other current liabilities
|
|
(0.2
|
)
|
|||
Total
|
|
|
|
|
|
$
|
0.3
|
|
|
|
|
$
|
(114.1
|
)
|
|
|
December 31, 2017
|
||||||||||||||
|
|
|
|
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
|
|
$
|
1,303.7
|
|
|
Other long-term assets
|
|
$
|
—
|
|
|
Other long-term liabilities
|
|
$
|
(146.4
|
)
|
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency option and forward contracts
|
|
1,038.0
|
|
|
Other current assets
|
|
2.2
|
|
|
Other current liabilities
|
|
(15.5
|
)
|
|||
Total
|
|
|
|
|
|
$
|
2.2
|
|
|
|
|
$
|
(161.9
|
)
|
|
|
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative
|
|
Amount of Gain Reclassified from AOCI into Net Income
|
|
Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
|
||||||||||
|
|
Three Months Ended September 30,
|
||||||||||||||
(In millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2018
|
||||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
Cross-currency swap agreements
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
0.2
|
|
Interest rate swaps
|
|
0.3
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
||||
Derivatives designated as net investment hedges:
|
|
|
|
|
|
|
|
|
||||||||
Cross-currency swap agreements
|
|
5.0
|
|
|
(50.4
|
)
|
|
—
|
|
|
2.4
|
|
||||
Nonderivatives designated as hedges:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency denominated notes
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
5.8
|
|
|
$
|
(48.4
|
)
|
|
$
|
1.0
|
|
|
$
|
2.6
|
|
|
|
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative
|
|
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)
|
|
2018
|
|
2017
|
|
2018
|
|
2018
|
||||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
Cross-currency swap agreements
|
|
$
|
6.5
|
|
|
$
|
—
|
|
|
$
|
14.0
|
|
|
$
|
0.5
|
|
Interest rate swaps
|
|
—
|
|
|
1.8
|
|
|
—
|
|
|
—
|
|
||||
Derivatives designated as net investment hedges:
|
|
|
|
|
|
|
|
|
||||||||
Cross-currency swap agreements
|
|
24.6
|
|
|
(112.7
|
)
|
|
—
|
|
|
1.7
|
|
||||
Nonderivatives designated as hedges:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency denominated notes
|
|
—
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
31.1
|
|
|
$
|
(104.0
|
)
|
|
$
|
14.0
|
|
|
$
|
2.2
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||
(In millions)
|
|
Principal Balance
|
|
Carrying Value
|
|
Principal Balance
|
|
Carrying Value
|
||||||||
ABL facility
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
100.0
|
|
|
$
|
100.0
|
|
Term loan facility
|
|
1,503.0
|
|
|
1,472.6
|
|
|
1,494.0
|
|
|
1,455.6
|
|
||||
6.125% Senior notes due 2023
|
|
535.0
|
|
|
528.7
|
|
|
535.0
|
|
|
528.0
|
|
||||
6.50% Senior notes due 2022
|
|
1,200.0
|
|
|
1,189.1
|
|
|
1,600.0
|
|
|
1,583.0
|
|
||||
6.70% Senior debentures due 2034
|
|
300.0
|
|
|
204.5
|
|
|
300.0
|
|
|
202.8
|
|
||||
4.00% Euro private placement notes due 2020
|
|
13.9
|
|
|
14.6
|
|
|
14.4
|
|
|
15.3
|
|
||||
Trade Securitization Program
|
|
364.5
|
|
|
361.5
|
|
|
302.6
|
|
|
298.6
|
|
||||
Asset financing
|
|
51.5
|
|
|
51.5
|
|
|
90.0
|
|
|
90.0
|
|
||||
Capital leases for equipment
|
|
266.8
|
|
|
266.8
|
|
|
247.9
|
|
|
247.9
|
|
||||
Total debt
|
|
4,234.7
|
|
|
4,089.3
|
|
|
4,683.9
|
|
|
4,521.2
|
|
||||
Current maturities of long-term debt
|
|
84.0
|
|
|
84.0
|
|
|
103.7
|
|
|
103.7
|
|
||||
Long-term debt
|
|
$
|
4,150.7
|
|
|
$
|
4,005.3
|
|
|
$
|
4,580.2
|
|
|
$
|
4,417.5
|
|
(In millions)
|
|
Total Stockholders' Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
||||||
Balance at December 31, 2017
|
|
$
|
3,604.4
|
|
|
$
|
405.6
|
|
|
$
|
4,010.0
|
|
Net income
|
|
330.6
|
|
|
22.8
|
|
|
353.4
|
|
|||
Other comprehensive loss
|
|
(75.0
|
)
|
|
(15.4
|
)
|
|
(90.4
|
)
|
|||
Issuance of common stock from forward sale settlement
|
|
348.5
|
|
|
—
|
|
|
348.5
|
|
|||
Other
|
|
(27.0
|
)
|
|
(4.7
|
)
|
|
(31.7
|
)
|
|||
Balance at September 30, 2018
|
|
$
|
4,181.5
|
|
|
$
|
408.3
|
|
|
$
|
4,589.8
|
|
(In millions)
|
|
Total Stockholders' Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
||||||
Balance at December 31, 2016
|
|
$
|
2,700.0
|
|
|
$
|
337.6
|
|
|
$
|
3,037.6
|
|
Net income
|
|
135.7
|
|
|
17.4
|
|
|
153.1
|
|
|||
Other comprehensive income
|
|
139.1
|
|
|
38.6
|
|
|
177.7
|
|
|||
Issuance of common stock from offering
|
|
287.6
|
|
|
—
|
|
|
287.6
|
|
|||
Other
|
|
46.4
|
|
|
(4.0
|
)
|
|
42.4
|
|
|||
Balance at September 30, 2017
|
|
$
|
3,308.8
|
|
|
$
|
389.6
|
|
|
$
|
3,698.4
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions, except per share data)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Basic earnings per common share
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to XPO
|
|
$
|
109.0
|
|
|
$
|
62.5
|
|
|
$
|
330.6
|
|
|
$
|
135.7
|
|
Cumulative preferred dividends
|
|
(0.7
|
)
|
|
(0.7
|
)
|
|
(2.1
|
)
|
|
(2.2
|
)
|
||||
Non-cash allocation of undistributed earnings
|
|
(7.5
|
)
|
|
(4.3
|
)
|
|
(23.3
|
)
|
|
(9.0
|
)
|
||||
Net income attributable to common shares, basic
|
|
$
|
100.8
|
|
|
$
|
57.5
|
|
|
$
|
305.2
|
|
|
$
|
124.5
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average common shares
|
|
125.2
|
|
|
117.5
|
|
|
122.1
|
|
|
113.5
|
|
||||
Basic earnings per share
|
|
$
|
0.81
|
|
|
$
|
0.49
|
|
|
$
|
2.50
|
|
|
$
|
1.10
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per common share
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common shares, basic
|
|
$
|
100.8
|
|
|
$
|
57.5
|
|
|
$
|
305.2
|
|
|
$
|
124.5
|
|
Interest from Convertible Senior Notes
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.9
|
|
||||
Net income attributable to common shares, diluted
|
|
$
|
100.8
|
|
|
$
|
57.7
|
|
|
$
|
305.2
|
|
|
$
|
125.4
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average common shares
|
|
125.2
|
|
|
117.5
|
|
|
122.1
|
|
|
113.5
|
|
||||
Dilutive effect of Convertible Senior Notes
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
2.6
|
|
||||
Dilutive effect of non-participating stock-based awards and equity forward
|
|
11.4
|
|
|
10.4
|
|
|
12.7
|
|
|
10.1
|
|
||||
Diluted weighted-average common shares
|
|
136.6
|
|
|
129.8
|
|
|
134.8
|
|
|
126.2
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share
|
|
$
|
0.74
|
|
|
$
|
0.44
|
|
|
$
|
2.26
|
|
|
$
|
0.99
|
|
|
|
|
|
|
|
|
|
|
||||||||
Potential common shares excluded
|
|
10.2
|
|
|
10.2
|
|
|
10.2
|
|
|
10.2
|
|
|
|
Three Months Ended September 30,
|
|
Percent of Revenue
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Percent of Revenue
|
|
Change
|
||||||||||||||||||||||
(Dollars in millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||||
Revenue
|
|
$
|
4,335.1
|
|
|
$
|
3,887.1
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
11.5
|
%
|
|
$
|
12,890.1
|
|
|
$
|
11,186.9
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
15.2
|
%
|
Cost of transportation and services
|
|
2,248.6
|
|
|
2,043.4
|
|
|
51.9
|
%
|
|
52.6
|
%
|
|
10.0
|
%
|
|
6,747.7
|
|
|
5,901.8
|
|
|
52.3
|
%
|
|
52.8
|
%
|
|
14.3
|
%
|
||||
Direct operating expense
|
|
1,430.3
|
|
|
1,267.4
|
|
|
33.0
|
%
|
|
32.6
|
%
|
|
12.9
|
%
|
|
4,212.7
|
|
|
3,616.1
|
|
|
32.7
|
%
|
|
32.3
|
%
|
|
16.5
|
%
|
||||
SG&A expense
|
|
447.2
|
|
|
399.6
|
|
|
10.3
|
%
|
|
10.3
|
%
|
|
11.9
|
%
|
|
1,351.7
|
|
|
1,213.4
|
|
|
10.5
|
%
|
|
10.8
|
%
|
|
11.4
|
%
|
||||
Operating income
|
|
209.0
|
|
|
176.7
|
|
|
4.8
|
%
|
|
4.5
|
%
|
|
18.3
|
%
|
|
578.0
|
|
|
455.6
|
|
|
4.5
|
%
|
|
4.1
|
%
|
|
26.9
|
%
|
||||
Other expense (income)
|
|
(18.3
|
)
|
|
(16.8
|
)
|
|
(0.4
|
)%
|
|
(0.4
|
)%
|
|
8.9
|
%
|
|
(68.1
|
)
|
|
(35.8
|
)
|
|
(0.5
|
)%
|
|
(0.3
|
)%
|
|
90.2
|
%
|
||||
Foreign currency loss
|
|
3.3
|
|
|
15.0
|
|
|
0.1
|
%
|
|
0.4
|
%
|
|
(78.0
|
)%
|
|
5.3
|
|
|
53.9
|
|
|
—
|
%
|
|
0.5
|
%
|
|
(90.2
|
)%
|
||||
Debt extinguishment loss
|
|
16.8
|
|
|
4.6
|
|
|
0.4
|
%
|
|
0.1
|
%
|
|
265.2
|
%
|
|
27.1
|
|
|
13.6
|
|
|
0.2
|
%
|
|
0.1
|
%
|
|
99.3
|
%
|
||||
Interest expense
|
|
51.0
|
|
|
72.5
|
|
|
1.2
|
%
|
|
1.9
|
%
|
|
(29.7
|
)%
|
|
165.3
|
|
|
222.4
|
|
|
1.3
|
%
|
|
2.0
|
%
|
|
(25.7
|
)%
|
||||
Income before income tax provision
|
|
156.2
|
|
|
101.4
|
|
|
3.6
|
%
|
|
2.6
|
%
|
|
54.0
|
%
|
|
448.4
|
|
|
201.5
|
|
|
3.5
|
%
|
|
1.8
|
%
|
|
122.5
|
%
|
||||
Income tax provision
|
|
41.0
|
|
|
30.4
|
|
|
0.9
|
%
|
|
0.8
|
%
|
|
34.9
|
%
|
|
95.0
|
|
|
48.4
|
|
|
0.7
|
%
|
|
0.4
|
%
|
|
96.3
|
%
|
||||
Net income
|
|
$
|
115.2
|
|
|
$
|
71.0
|
|
|
2.7
|
%
|
|
1.8
|
%
|
|
62.3
|
%
|
|
$
|
353.4
|
|
|
$
|
153.1
|
|
|
2.7
|
%
|
|
1.4
|
%
|
|
130.8
|
%
|
|
|
Three Months Ended September 30,
|
|
Percent of Revenue
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Percent of Revenue
|
|
Change
|
||||||||||||||||||||||
(Dollars in millions)
|
|
2018
(1)
|
|
2017
(1)
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
(1)
|
|
2017
(1)
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||||
Revenue
|
|
$
|
2,850.6
|
|
|
$
|
2,579.5
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
10.5
|
%
|
|
$
|
8,512.4
|
|
|
$
|
7,494.0
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
13.6
|
%
|
Operating income
|
|
195.2
|
|
|
145.2
|
|
|
6.8
|
%
|
|
5.6
|
%
|
|
34.4
|
%
|
|
539.6
|
|
|
415.5
|
|
|
6.3
|
%
|
|
5.5
|
%
|
|
29.9
|
%
|
(1)
|
Certain immaterial organizational changes were made in the first quarter of 2018 related to
our
managed transportation business. Managed Transportation previously had been included in the Logistics segment, and as of January 1, 2018, it is reflected in the Transportation segment. Prior period information was recast to conform to the current year presentation.
|
|
|
Three Months Ended September 30,
|
|
Percent of Revenue
|
|
Change
|
|
Nine Months Ended September 30,
|
|
Percent of Revenue
|
|
Change
|
||||||||||||||||||||||
(Dollars in millions)
|
|
2018
(1)
|
|
2017
(1)
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
|
2018
(1)
|
|
2017
(1)
|
|
2018
|
|
2017
|
|
2018 vs. 2017
|
||||||||||||||
Revenue
|
|
$
|
1,516.8
|
|
|
$
|
1,340.7
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
13.1
|
%
|
|
$
|
4,472.7
|
|
|
$
|
3,781.9
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
18.3
|
%
|
Operating income
|
|
59.5
|
|
|
67.3
|
|
|
3.9
|
%
|
|
5.0
|
%
|
|
(11.6
|
)%
|
|
174.3
|
|
|
149.6
|
|
|
3.9
|
%
|
|
4.0
|
%
|
|
16.5
|
%
|
(1)
|
Certain immaterial organizational changes were made in the first quarter of 2018 related to
our
managed transportation business. Managed Transportation previously had been included in the Logistics segment, and as of January 1, 2018, it is reflected in the Transportation segment. Prior period information was recast to conform to the current year presentation.
|
Exhibit
Number
|
|
Description
|
|
|
|
10.1 +
|
|
|
|
|
|
10.2 ** +
|
|
|
|
|
|
10.3 ** +
|
|
|
|
|
|
10.4 ** +
|
|
|
|
|
|
31.1 *
|
|
|
|
|
|
31.2 *
|
|
|
|
|
|
32.1 **
|
|
|
|
|
|
32.2 **
|
|
|
|
|
|
101.INS *
|
|
XBRL Instance Document.
|
|
|
|
101.SCH *
|
|
XBRL Taxonomy Extension Schema.
|
|
|
|
101.CAL *
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
|
|
101.DEF *
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
|
|
101.LAB *
|
|
XBRL Taxonomy Extension Label Linkbase.
|
|
|
|
101.PRE *
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
+
|
This exhibit is a management contract or compensatory plan or arrangement.
|
|
XPO LOGISTICS, INC.
|
|
|
By:
|
/s/ Bradley S. Jacobs
|
|
Bradley S. Jacobs
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
By:
|
/s/ Sarah J.S. Glickman
|
|
Sarah J.S. Glickman
|
|
Acting Chief Financial Officer
|
|
(Principal Financial Officer)
|
•
|
Medical
|
•
|
Dental
|
•
|
Vision
|
•
|
Short Term and Long-Term Disability
|
•
|
401(k) plan
|
•
|
Life Insurance and AD&D
|
If to the Company:
|
XPO Logistics, Inc.
Five American Lane
Greenwich, CT 06831
Attention: Chief Human Resources Officer
|
If to you:
|
To your address as most recently supplied to the Company and set forth in the Company’s records
|
XPO LOGISTICS, INC.
|
||
|
by
|
|
|
|
/s/ Meghan Henson
|
|
|
Name: Meghan Henson
|
|
|
Title: Chief Human Resources
Officer
|
SARAH GLICKMAN
|
|
|
|
|
/s/ Sarah Glickman
|
|
|
Number of RSUs Granted Hereunder:
|
23,760 RSUs
|
Performance Goal:
|
The Performance Goal shall be achieved if the average closing price of a Share, as reported on the New York Stock Exchange or such other exchange upon which the Shares trade, equals or exceeds $200.00 over any twenty-consecutive-trading-day period ending on or prior to the End Date. The Share price goal set forth in the preceding sentence shall be subject to adjustment by the Committee in the event of an event described in Section 4(b) of the Plan.
|
If to the Company:
|
XPO Logistics, Inc.
Five American Lane
Greenwich, CT 06831
Attention: Chief Human Resources Officer
|
|
|
If to you:
|
To your address as most recently supplied to the Company and set forth in the Company’s records
|
XPO LOGISTICS, INC.
|
|
by
|
|
|
|
|
Name: Meghan Henson
|
|
Title: Chief Human Resources Officer
|
[EMPLOYEE]
|
|
|
|
|
|
|
|
|
|
|
|
Number of RSUs Granted Hereunder:
|
[ ] RSUs
|
Performance Goal:
|
The Performance Goal shall be:
(a) the achievement of an average closing price per Share, as reported on the New York Stock Exchange or such other exchange upon which the Shares trade, that equals or exceeds $225.00 over any twenty-consecutive-trading-day period ending on or prior to the last day of the Performance Period (the “
Stock Price Performance Goal
”); and
(b) the achievement by the Company of Adjusted Cash Flow Per Share of $14.00 for any fiscal year ending during the Performance Period (the “
Adjusted Cash Flow Performance Goal
”).
“
Adjusted Cash Flow Per Share
” shall mean (i) Total Adjusted Cash Flow, divided by (ii) Diluted Weighted-Average Common Shares Outstanding.
“
Adjusted EBITDA
” shall mean the Company’s consolidated annual Adjusted EBITDA, determined on the same basis that Adjusted EBITDA for the Company is determined for financial reporting purposes.
“
Capex
” shall mean the payments for purchases of property and equipment less proceeds from sale of assets determined on the same basis that Net Capex for the Company is determined for financial reporting purposes.
“
Diluted Weighted-Average Common Shares Outstanding
” shall mean the dilutive weighted-average common shares outstanding as of the last day of the applicable fiscal year as determined under US GAAP for financial reporting purposes.
“
Net Interest Expense
” shall mean interest expense less interest income determined on the same basis that net interest expense for the Company is determined for financial reporting purposes.
“
Stock Compensation
” shall mean the XPO consolidated annual stock compensation as reported in the Company’s external financial statements, including both equity-based and cash-based compensation expense.
“
Total Adjusted Cash Flow
” shall mean Adjusted EBITDA, plus Stock Compensation, minus Capex, minus Net Interest Expense.
The Stock Price Performance Goal shall be subject to adjustment by the Committee in the event of an event described in Section 4(b) of the Plan.
|
|
/s/ Bradley S. Jacobs
|
|
Bradley S. Jacobs
|
|
Chairman and Chief Executive Officer
|
Date: November 5, 2018
|
|
|
/s/ Sarah J.S. Glickman
|
|
Sarah J.S. Glickman
|
|
Acting Chief Financial Officer
|
Date: November 5, 2018
|
|
|
/s/ Bradley S. Jacobs
|
|
Bradley S. Jacobs
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
Date: November 5, 2018
|
|
|
/s/ Sarah J.S. Glickman
|
|
Sarah J.S. Glickman
|
|
Acting Chief Financial Officer
|
|
(Principal Financial Officer)
|
Date: November 5, 2018
|
|