ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
03-0450326
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Five American Lane
Greenwich, CT
|
|
06831
|
(Address of principal executive offices)
|
|
(Zip Code)
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Title of each class
|
|
Trading symbol(s)
|
|
Name of each exchange on which registered
|
Common stock, par value $0.001 per share
|
|
XPO
|
|
New York Stock Exchange
|
Large accelerated filer
|
|
ý
|
|
Accelerated filer
|
|
¨
|
|
Emerging growth company
|
¨
|
|
|
|
|
|
|
|
|
|
|
Non-accelerated filer
|
|
¨
|
|
Smaller reporting company
|
|
¨
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Page No.
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
||||
(In millions, except per share data)
|
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
376
|
|
|
$
|
502
|
|
Accounts receivable, net of allowances of $55 and $52, respectively
|
|
2,753
|
|
|
2,596
|
|
||
Other current assets
|
|
554
|
|
|
590
|
|
||
Total current assets
|
|
3,683
|
|
|
3,688
|
|
||
Property and equipment, net of $1,709 and $1,585 in accumulated depreciation, respectively
|
|
2,559
|
|
|
2,605
|
|
||
Operating lease assets
|
|
2,047
|
|
|
—
|
|
||
Goodwill
|
|
4,443
|
|
|
4,467
|
|
||
Identifiable intangible assets, net of $736 and $706 in accumulated amortization, respectively
|
|
1,204
|
|
|
1,253
|
|
||
Other long-term assets
|
|
260
|
|
|
257
|
|
||
Total long-term assets
|
|
10,513
|
|
|
8,582
|
|
||
Total assets
|
|
$
|
14,196
|
|
|
$
|
12,270
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
1,188
|
|
|
$
|
1,258
|
|
Accrued expenses
|
|
1,507
|
|
|
1,480
|
|
||
Short-term borrowings and current maturities of long-term debt
|
|
114
|
|
|
367
|
|
||
Short-term operating lease liabilities
|
|
448
|
|
|
—
|
|
||
Other current liabilities
|
|
184
|
|
|
208
|
|
||
Total current liabilities
|
|
3,441
|
|
|
3,313
|
|
||
Long-term debt
|
|
5,362
|
|
|
3,902
|
|
||
Deferred tax liability
|
|
442
|
|
|
444
|
|
||
Employee benefit obligations
|
|
145
|
|
|
153
|
|
||
Operating lease liabilities
|
|
1,586
|
|
|
—
|
|
||
Other long-term liabilities
|
|
387
|
|
|
488
|
|
||
Total long-term liabilities
|
|
7,922
|
|
|
4,987
|
|
||
Stockholders’ equity:
|
|
|
|
|
||||
Convertible perpetual preferred stock, $0.001 par value; 10 shares authorized; 0.07 of Series A shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively
|
|
41
|
|
|
41
|
|
||
Common stock, $0.001 par value; 300 shares authorized; 93 and 116 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
2,122
|
|
|
3,311
|
|
||
Retained earnings
|
|
428
|
|
|
377
|
|
||
Accumulated other comprehensive loss
|
|
(153
|
)
|
|
(154
|
)
|
||
Total stockholders’ equity before noncontrolling interests
|
|
2,438
|
|
|
3,575
|
|
||
Noncontrolling interests
|
|
395
|
|
|
395
|
|
||
Total equity
|
|
2,833
|
|
|
3,970
|
|
||
Total liabilities and equity
|
|
$
|
14,196
|
|
|
$
|
12,270
|
|
|
|
Three Months Ended March 31,
|
||||||
(In millions, except per share data)
|
|
2019
|
|
2018
|
||||
Revenue
|
|
$
|
4,120
|
|
|
$
|
4,192
|
|
Operating expenses
|
|
|
|
|
||||
Cost of transportation and services
|
|
2,096
|
|
|
2,225
|
|
||
Direct operating expense
|
|
1,406
|
|
|
1,376
|
|
||
Sales, general and administrative expense
|
|
486
|
|
|
450
|
|
||
Total operating expenses
|
|
3,988
|
|
|
4,051
|
|
||
Operating income
|
|
132
|
|
|
141
|
|
||
Other expense (income)
|
|
(17
|
)
|
|
(19
|
)
|
||
Foreign currency loss
|
|
2
|
|
|
12
|
|
||
Debt extinguishment loss
|
|
5
|
|
|
10
|
|
||
Interest expense
|
|
71
|
|
|
59
|
|
||
Income before income tax provision
|
|
71
|
|
|
79
|
|
||
Income tax provision
|
|
19
|
|
|
—
|
|
||
Net income
|
|
52
|
|
|
79
|
|
||
Net income attributable to noncontrolling interests
|
|
(5
|
)
|
|
(6
|
)
|
||
Net income attributable to XPO
|
|
$
|
47
|
|
|
$
|
73
|
|
|
|
|
|
|
||||
Earnings per share data:
|
|
|
|
|
||||
Net income attributable to common shareholders
|
|
$
|
43
|
|
|
$
|
67
|
|
|
|
|
|
|
||||
Basic earnings per share
|
|
$
|
0.40
|
|
|
$
|
0.56
|
|
Diluted earnings per share
|
|
$
|
0.37
|
|
|
$
|
0.50
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding
|
|
|
|
|
||||
Basic weighted-average common shares outstanding
|
|
107
|
|
|
120
|
|
||
Diluted weighted-average common shares outstanding
|
|
117
|
|
|
133
|
|
|
|
Three Months Ended March 31,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Net income
|
|
$
|
52
|
|
|
$
|
79
|
|
|
|
|
|
|
||||
Other comprehensive (loss) income, net of tax
|
|
|
|
|
||||
Foreign currency translation (loss) gain, net of tax effect of $(6) and $18
|
|
$
|
(1
|
)
|
|
$
|
45
|
|
Unrealized loss on financial assets/liabilities designated as hedging instruments, net of tax effect of $1 and $(4)
|
|
(3
|
)
|
|
—
|
|
||
Other comprehensive (loss) income
|
|
(4
|
)
|
|
45
|
|
||
Comprehensive income
|
|
$
|
48
|
|
|
$
|
124
|
|
Less: Comprehensive income attributable to noncontrolling interests
|
|
—
|
|
|
18
|
|
||
Comprehensive income attributable to XPO
|
|
$
|
48
|
|
|
$
|
106
|
|
|
|
Three Months Ended March 31,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
52
|
|
|
$
|
79
|
|
Adjustments to reconcile net income to net cash from operating activities
|
|
|
|
|
||||
Depreciation and amortization
|
|
180
|
|
|
171
|
|
||
Stock compensation expense
|
|
13
|
|
|
22
|
|
||
Accretion of debt
|
|
5
|
|
|
4
|
|
||
Deferred tax (benefi
t) expense
|
|
(5
|
)
|
|
7
|
|
||
Debt extinguishment loss
|
|
5
|
|
|
10
|
|
||
Unrealized loss on foreign currency option and forward contracts
|
|
2
|
|
|
4
|
|
||
Gains on sale of property and equipment
|
|
(21
|
)
|
|
—
|
|
||
Other
|
|
13
|
|
|
(28
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(246
|
)
|
|
(100
|
)
|
||
Other assets
|
|
(30
|
)
|
|
(90
|
)
|
||
Accounts payable
|
|
(57
|
)
|
|
(55
|
)
|
||
Accrued expenses and other liabilities
|
|
(7
|
)
|
|
(43
|
)
|
||
Net cash used in operating activities
|
|
(96
|
)
|
|
(19
|
)
|
||
Investing activities
|
|
|
|
|
||||
Payment for purchases of property and equipment
|
|
(118
|
)
|
|
(142
|
)
|
||
Proceeds from sale of property and equipment
|
|
47
|
|
|
10
|
|
||
Cash collected on deferred purchase price receivable
|
|
71
|
|
|
—
|
|
||
Net cash used in investing activities
|
|
—
|
|
|
(132
|
)
|
||
Financing activities
|
|
|
|
|
||||
Proceeds from issuance of debt
|
|
1,751
|
|
|
905
|
|
||
Repurchase of debt
|
|
—
|
|
|
(812
|
)
|
||
Proceeds from borrowings on ABL facility
|
|
1,075
|
|
|
390
|
|
||
Repayment of borrowings on ABL facility
|
|
(1,075
|
)
|
|
(330
|
)
|
||
Repayment of long-term debt and capital leases
|
|
(534
|
)
|
|
(37
|
)
|
||
Payment for debt issuance costs
|
|
(24
|
)
|
|
(6
|
)
|
||
Repurchase of common stock
|
|
(1,227
|
)
|
|
—
|
|
||
Change in bank overdrafts
|
|
6
|
|
|
56
|
|
||
Payment for tax withholdings for restricted shares
|
|
(2
|
)
|
|
(40
|
)
|
||
Dividends paid
|
|
(1
|
)
|
|
(1
|
)
|
||
Other
|
|
2
|
|
|
1
|
|
||
Net cash (used in) provided by financing activities
|
|
(29
|
)
|
|
126
|
|
||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
|
—
|
|
|
8
|
|
||
Net decrease in cash, cash equivalents and restricted cash
|
|
(125
|
)
|
|
(17
|
)
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
|
514
|
|
|
449
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
|
$
|
389
|
|
|
$
|
432
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
49
|
|
|
$
|
43
|
|
Cash paid for income taxes
|
|
$
|
8
|
|
|
$
|
3
|
|
|
|
Series A Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
(Shares in thousands, dollars in millions)
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Additional Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Total XPO Stockholders' Equity
|
|
Non-controlling Interests
|
|
Total Equity
|
||||||||||||||||||
Balance as of December 31, 2018
|
|
72
|
|
|
$
|
41
|
|
|
115,683
|
|
|
$
|
—
|
|
|
$
|
3,311
|
|
|
$
|
377
|
|
|
$
|
(154
|
)
|
|
$
|
3,575
|
|
|
$
|
395
|
|
|
$
|
3,970
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
47
|
|
|
5
|
|
|
52
|
|
||||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
(5
|
)
|
|
(4
|
)
|
||||||||
Exercise and vesting of stock compensation awards
|
|
—
|
|
|
—
|
|
|
94
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Tax withholdings related to vesting of stock compensation awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||||
Retirement of common stock
|
|
—
|
|
|
—
|
|
|
(22,570
|
)
|
|
—
|
|
|
(1,195
|
)
|
|
—
|
|
|
—
|
|
|
(1,195
|
)
|
|
—
|
|
|
(1,195
|
)
|
||||||||
Dividend declared ($10.00 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||||
Stock compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||||||
Adoption of new accounting standard
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||||
Balance as of March 31, 2019
|
|
72
|
|
|
$
|
41
|
|
|
93,207
|
|
|
$
|
—
|
|
|
$
|
2,122
|
|
|
$
|
428
|
|
|
$
|
(153
|
)
|
|
$
|
2,438
|
|
|
$
|
395
|
|
|
$
|
2,833
|
|
|
|
Series A Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
(Shares in thousands, dollars in millions)
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Additional Paid-In Capital
|
|
(Accumulated Deficit)/Retained Earnings
|
|
Accumulated Other Comprehensive Income
|
|
Total XPO Stockholders' Equity
|
|
Non-controlling Interests
|
|
Total Equity
|
||||||||||||||||||
Balance as of December 31, 2017
|
|
72
|
|
|
$
|
41
|
|
|
119,920
|
|
|
$
|
—
|
|
|
$
|
3,590
|
|
|
$
|
(43
|
)
|
|
$
|
16
|
|
|
$
|
3,604
|
|
|
$
|
406
|
|
|
$
|
4,010
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
|
6
|
|
|
79
|
|
||||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
33
|
|
|
12
|
|
|
45
|
|
||||||||
Exercise and vesting of stock compensation awards
|
|
—
|
|
|
—
|
|
|
678
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||
Tax withholdings related to vesting of stock compensation awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
||||||||
Dividend declared ($10.00 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||||
Stock compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||||
Balance as of March 31, 2018
|
|
72
|
|
|
$
|
41
|
|
|
120,598
|
|
|
$
|
—
|
|
|
$
|
3,558
|
|
|
$
|
33
|
|
|
$
|
49
|
|
|
$
|
3,681
|
|
|
$
|
424
|
|
|
$
|
4,105
|
|
|
|
March 31,
|
|
March 31,
|
||||
(In millions)
|
|
2019
|
|
2018
|
||||
Securitization program
|
|
|
|
|
||||
Receivables sold
|
|
$
|
323
|
|
|
$
|
—
|
|
Cash consideration
|
|
260
|
|
|
—
|
|
||
Deferred purchase price
|
|
63
|
|
|
—
|
|
||
|
|
|
|
|
||||
Factoring programs
|
|
|
|
|
||||
Receivables sold
|
|
184
|
|
|
141
|
|
||
Cash consideration
|
|
183
|
|
|
141
|
|
•
|
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.
|
(In millions)
|
|
Carrying Value
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
||||||||
March 31, 2019
|
|
$
|
171
|
|
|
$
|
171
|
|
|
$
|
168
|
|
|
$
|
3
|
|
December 31, 2018
|
|
237
|
|
|
237
|
|
|
236
|
|
|
1
|
|
(In millions)
|
|
Transportation
|
|
Logistics
|
|
Corporate
|
|
Eliminations
|
|
Total
|
||||||||||
Three months ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
2,659
|
|
|
$
|
1,494
|
|
|
$
|
—
|
|
|
$
|
(33
|
)
|
|
$
|
4,120
|
|
Operating income (loss)
|
|
128
|
|
|
46
|
|
|
(42
|
)
|
|
—
|
|
|
132
|
|
|||||
Depreciation and amortization
|
|
116
|
|
|
61
|
|
|
3
|
|
|
—
|
|
|
180
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three months ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
2,774
|
|
|
$
|
1,448
|
|
|
$
|
—
|
|
|
$
|
(30
|
)
|
|
$
|
4,192
|
|
Operating income (loss)
|
|
139
|
|
|
48
|
|
|
(46
|
)
|
|
—
|
|
|
141
|
|
|||||
Depreciation and amortization
|
|
114
|
|
|
55
|
|
|
2
|
|
|
—
|
|
|
171
|
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||
(In millions)
|
|
Transportation
|
|
Logistics
|
|
Eliminations
|
|
Total
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
||||||||
United States
|
|
$
|
1,836
|
|
|
$
|
557
|
|
|
$
|
(5
|
)
|
|
$
|
2,388
|
|
North America (excluding United States)
|
|
67
|
|
|
18
|
|
|
—
|
|
|
85
|
|
||||
France
|
|
364
|
|
|
169
|
|
|
(5
|
)
|
|
528
|
|
||||
United Kingdom
|
|
188
|
|
|
335
|
|
|
(18
|
)
|
|
505
|
|
||||
Europe (excluding France and United Kingdom)
|
|
201
|
|
|
392
|
|
|
(4
|
)
|
|
589
|
|
||||
Other
|
|
3
|
|
|
23
|
|
|
(1
|
)
|
|
25
|
|
||||
Total
|
|
$
|
2,659
|
|
|
$
|
1,494
|
|
|
$
|
(33
|
)
|
|
$
|
4,120
|
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||
(In millions)
|
|
Transportation
|
|
Logistics
|
|
Eliminations
|
|
Total
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
||||||||
United States
|
|
$
|
1,954
|
|
|
$
|
502
|
|
|
$
|
(5
|
)
|
|
$
|
2,451
|
|
North America (excluding United States)
|
|
62
|
|
|
13
|
|
|
—
|
|
|
75
|
|
||||
France
|
|
389
|
|
|
179
|
|
|
(4
|
)
|
|
564
|
|
||||
United Kingdom
|
|
170
|
|
|
339
|
|
|
(16
|
)
|
|
493
|
|
||||
Europe (excluding France and United Kingdom)
|
|
196
|
|
|
390
|
|
|
(4
|
)
|
|
582
|
|
||||
Other
|
|
3
|
|
|
25
|
|
|
(1
|
)
|
|
27
|
|
||||
Total
|
|
$
|
2,774
|
|
|
$
|
1,448
|
|
|
$
|
(30
|
)
|
|
$
|
4,192
|
|
|
|
Three Months Ended March 31,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Transportation:
|
|
|
|
|
||||
Freight brokerage and truckload
|
|
$
|
1,092
|
|
|
$
|
1,179
|
|
LTL
|
|
1,179
|
|
|
1,173
|
|
||
Last mile
(1)
|
|
224
|
|
|
238
|
|
||
Managed transportation
|
|
124
|
|
|
137
|
|
||
Global forwarding
|
|
77
|
|
|
82
|
|
||
Transportation eliminations
|
|
(37
|
)
|
|
(35
|
)
|
||
Total Transportation segment revenue
|
|
2,659
|
|
|
2,774
|
|
||
Total Logistics segment revenue
|
|
1,494
|
|
|
1,448
|
|
||
Intersegment eliminations
|
|
(33
|
)
|
|
(30
|
)
|
||
Total revenue
|
|
$
|
4,120
|
|
|
$
|
4,192
|
|
(1)
|
Comprised of the Company’s North American last mile operations.
|
|
|
|
|
Three Months Ended March 31, 2019
|
|
|
||||||||||||||
(In millions)
|
|
Reserve Balance as of December 31, 2018
|
|
Charges Incurred
|
|
Payments
|
|
Foreign Exchange and Other
|
|
Reserve Balance as of March 31, 2019
|
||||||||||
Severance:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transportation
|
|
$
|
9
|
|
|
$
|
9
|
|
|
$
|
(7
|
)
|
|
$
|
1
|
|
|
$
|
12
|
|
Logistics
|
|
5
|
|
|
1
|
|
|
(1
|
)
|
|
(1
|
)
|
|
4
|
|
|||||
Corporate
|
|
2
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
2
|
|
|||||
Total severance
|
|
16
|
|
|
10
|
|
|
(9
|
)
|
|
1
|
|
|
18
|
|
|||||
Facilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transportation
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Total
|
|
$
|
16
|
|
|
$
|
13
|
|
|
$
|
(9
|
)
|
|
$
|
1
|
|
|
$
|
21
|
|
(In millions)
|
|
Three Months Ended March 31, 2019
|
||
Operating lease cost
|
|
$
|
175
|
|
Short-term lease cost
|
|
46
|
|
|
Variable lease cost
|
|
18
|
|
|
Total operating lease cost
|
|
$
|
239
|
|
Finance lease cost:
|
|
|
||
Amortization of leased assets
|
|
$
|
11
|
|
Interest on lease liabilities
|
|
2
|
|
|
Total finance lease cost
|
|
$
|
13
|
|
Total lease cost
|
|
$
|
252
|
|
Gain recognized on sale-leaseback transactions
|
|
$
|
19
|
|
(In millions)
|
|
March 31, 2019
|
||
Operating leases:
|
|
|
||
Operating lease assets
|
|
$
|
2,047
|
|
Short-term operating lease liabilities
|
|
448
|
|
|
Operating lease liabilities
|
|
1,586
|
|
|
Total operating lease liabilities
|
|
$
|
2,034
|
|
Finance leases:
|
|
|
||
Property and equipment, gross
|
|
$
|
390
|
|
Accumulated depreciation
|
|
(90
|
)
|
|
Property and equipment, net
|
|
$
|
300
|
|
Short-term borrowings and current maturities of long-term debt
|
|
53
|
|
|
Long-term debt
|
|
231
|
|
|
Total finance lease liabilities
|
|
$
|
284
|
|
Weighted-average remaining lease term
|
|
|
||
Operating leases
|
|
6 years
|
|
|
Finance leases
|
|
5 years
|
|
|
Weighted-average discount rate
|
|
|
||
Operating leases
|
|
5.12
|
%
|
|
Finance leases
|
|
2.55
|
%
|
(In millions)
|
|
Three Months Ended March 31, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
265
|
|
Operating cash flows from finance leases
|
|
2
|
|
|
Financing cash flows from finance leases
|
|
15
|
|
|
Leased assets obtained in exchange for new lease obligations:
|
|
|
||
Operating leases
|
|
175
|
|
|
Finance leases
|
|
13
|
|
(In millions)
|
|
Finance Leases
|
|
Operating Leases
|
||||
Remainder of 2019
|
|
$
|
46
|
|
|
$
|
395
|
|
2020
|
|
58
|
|
|
521
|
|
||
2021
|
|
55
|
|
|
396
|
|
||
2022
|
|
51
|
|
|
304
|
|
||
2023
|
|
52
|
|
|
227
|
|
||
Thereafter
|
|
40
|
|
|
561
|
|
||
Total lease payments
|
|
$
|
302
|
|
|
$
|
2,404
|
|
Less: interest
|
|
(18
|
)
|
|
(370
|
)
|
||
Present value of lease liabilities
|
|
$
|
284
|
|
|
$
|
2,034
|
|
(In millions)
|
|
Capital Leases
|
|
Operating Leases
|
||||
Year ending December 31:
|
|
|
|
|
||||
2019
|
|
$
|
61
|
|
|
$
|
577
|
|
2020
|
|
60
|
|
|
460
|
|
||
2021
|
|
55
|
|
|
367
|
|
||
2022
|
|
52
|
|
|
288
|
|
||
2023
|
|
43
|
|
|
221
|
|
||
Thereafter
|
|
39
|
|
|
523
|
|
||
Total minimum lease payments
|
|
$
|
310
|
|
|
$
|
2,436
|
|
Amount representing interest
|
|
(21
|
)
|
|
|
|||
Present value of minimum lease payments
|
|
$
|
289
|
|
|
|
|
|
March 31, 2019
|
||||||||||||||
|
|
|
|
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
|
|
$
|
1,261
|
|
|
Other long-term assets
|
|
$
|
—
|
|
|
Other long-term liabilities
|
|
$
|
(42
|
)
|
Interest rate swap
|
|
3,506
|
|
|
Other current assets
|
|
—
|
|
|
Other current liabilities
|
|
(6
|
)
|
|||
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency option contracts
|
|
673
|
|
|
Other current assets
|
|
5
|
|
|
Other current liabilities
|
|
(1
|
)
|
|||
Total
|
|
|
|
|
|
$
|
5
|
|
|
|
|
$
|
(49
|
)
|
|
|
December 31, 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
|
|
$
|
1,270
|
|
|
Other long-term assets
|
|
$
|
—
|
|
|
Other long-term liabilities
|
|
$
|
(81
|
)
|
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency option contracts
|
|
473
|
|
|
Other current assets
|
|
7
|
|
|
Other current liabilities
|
|
—
|
|
|||
Total
|
|
|
|
|
|
$
|
7
|
|
|
|
|
$
|
(81
|
)
|
|
|
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives
|
|
Amount of Gain (Loss) Reclassified from AOCI into Net Income
|
|
Amount of Gain (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
|
||||||||||||||||||
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cross-currency swap agreements
|
|
$
|
6
|
|
|
$
|
(11
|
)
|
|
$
|
5
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swaps
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Derivatives designated as net investment hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cross-currency swap agreements
|
|
35
|
|
|
(47
|
)
|
|
—
|
|
|
—
|
|
|
2
|
|
|
(3
|
)
|
||||||
Total
|
|
$
|
35
|
|
|
$
|
(58
|
)
|
|
$
|
5
|
|
|
$
|
(2
|
)
|
|
$
|
2
|
|
|
$
|
(3
|
)
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
(In millions)
|
|
Principal Balance
|
|
Carrying Value
|
|
Principal Balance
|
|
Carrying Value
|
||||||||
ABL facility
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Term loan facility
|
|
2,003
|
|
|
1,965
|
|
|
1,503
|
|
|
1,474
|
|
||||
6.125% Senior notes due 2023
|
|
535
|
|
|
529
|
|
|
535
|
|
|
529
|
|
||||
6.50% Senior notes due 2022
|
|
1,200
|
|
|
1,190
|
|
|
1,200
|
|
|
1,190
|
|
||||
6.70% Senior debentures due 2034
|
|
300
|
|
|
206
|
|
|
300
|
|
|
205
|
|
||||
6.75% Senior notes due 2024
|
|
1,000
|
|
|
985
|
|
|
—
|
|
|
—
|
|
||||
Trade securitization program
|
|
272
|
|
|
270
|
|
|
283
|
|
|
281
|
|
||||
Unsecured credit facility
|
|
—
|
|
|
—
|
|
|
250
|
|
|
246
|
|
||||
Finance leases
|
|
284
|
|
|
284
|
|
|
289
|
|
|
289
|
|
||||
Asset financing and other
|
|
46
|
|
|
47
|
|
|
55
|
|
|
55
|
|
||||
Total debt
|
|
5,640
|
|
|
5,476
|
|
|
4,415
|
|
|
4,269
|
|
||||
Short-term borrowings and current maturities of long-term debt
|
|
114
|
|
|
114
|
|
|
371
|
|
|
367
|
|
||||
Long-term debt
|
|
$
|
5,526
|
|
|
$
|
5,362
|
|
|
$
|
4,044
|
|
|
$
|
3,902
|
|
(In millions)
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
||||||
March 31, 2019
|
|
$
|
5,635
|
|
|
$
|
3,075
|
|
|
$
|
2,560
|
|
December 31, 2018
|
|
4,305
|
|
|
2,020
|
|
|
2,285
|
|
|
|
Three Months Ended March 31,
|
||||||
(In millions, except per share data)
|
|
2019
|
|
2018
|
||||
Basic earnings per common share
|
|
|
|
|
||||
Net income attributable to XPO
|
|
$
|
47
|
|
|
$
|
73
|
|
Series A preferred stock dividends
|
|
(1
|
)
|
|
(1
|
)
|
||
Non-cash allocation of undistributed earnings
|
|
(3
|
)
|
|
(5
|
)
|
||
Net income attributable to common shares, basic
|
|
$
|
43
|
|
|
$
|
67
|
|
|
|
|
|
|
||||
Basic weighted-average common shares
|
|
107
|
|
|
120
|
|
||
Basic earnings per share
|
|
$
|
0.40
|
|
|
$
|
0.56
|
|
|
|
|
|
|
||||
Diluted earnings per common share
|
|
|
|
|
||||
Net income attributable to common shares, diluted
|
|
$
|
43
|
|
|
$
|
67
|
|
|
|
|
|
|
||||
Basic weighted-average common shares
|
|
107
|
|
|
120
|
|
||
Dilutive effect of non-participating stock-based awards and equity forward
|
|
10
|
|
|
13
|
|
||
Diluted weighted-average common shares
|
|
117
|
|
|
133
|
|
||
|
|
|
|
|
||||
Diluted earnings per share
|
|
$
|
0.37
|
|
|
$
|
0.50
|
|
|
|
|
|
|
||||
Potential common shares excluded
|
|
10
|
|
|
10
|
|
|
|
Three Months Ended March 31,
|
|
Percent of Revenue
|
|
Change
|
|||||||||||
(Dollars in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019 vs. 2018
|
|||||||
Revenue
|
|
$
|
4,120
|
|
|
$
|
4,192
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
(1.7
|
)%
|
Cost of transportation and services
|
|
2,096
|
|
|
2,225
|
|
|
50.9
|
%
|
|
53.1
|
%
|
|
(5.8
|
)%
|
||
Direct operating expense
|
|
1,406
|
|
|
1,376
|
|
|
34.1
|
%
|
|
32.8
|
%
|
|
2.2
|
%
|
||
SG&A expense
|
|
486
|
|
|
450
|
|
|
11.8
|
%
|
|
10.7
|
%
|
|
8.0
|
%
|
||
Operating income
|
|
132
|
|
|
141
|
|
|
3.2
|
%
|
|
3.4
|
%
|
|
(6.4
|
)%
|
||
Other expense (income)
|
|
(17
|
)
|
|
(19
|
)
|
|
(0.4
|
)%
|
|
(0.5
|
)%
|
|
(10.5
|
)%
|
||
Foreign currency loss
|
|
2
|
|
|
12
|
|
|
—
|
%
|
|
0.3
|
%
|
|
(83.3
|
)%
|
||
Debt extinguishment loss
|
|
5
|
|
|
10
|
|
|
0.1
|
%
|
|
0.2
|
%
|
|
(50.0
|
)%
|
||
Interest expense
|
|
71
|
|
|
59
|
|
|
1.7
|
%
|
|
1.4
|
%
|
|
20.3
|
%
|
||
Income before income tax provision
|
|
71
|
|
|
79
|
|
|
1.7
|
%
|
|
1.9
|
%
|
|
(10.1
|
)%
|
||
Income tax provision
|
|
19
|
|
|
—
|
|
|
0.5
|
%
|
|
—
|
%
|
|
100.0
|
%
|
||
Net income
|
|
$
|
52
|
|
|
$
|
79
|
|
|
1.3
|
%
|
|
1.9
|
%
|
|
(34.2
|
)%
|
|
|
Three Months Ended March 31,
|
|
Percent of Revenue
|
|
Change
|
|||||||||||
(Dollars in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019 vs. 2018
|
|||||||
Revenue
|
|
$
|
2,659
|
|
|
$
|
2,774
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
(4.1
|
)%
|
Operating income
|
|
128
|
|
|
139
|
|
|
4.8
|
%
|
|
5.0
|
%
|
|
(7.9
|
)%
|
|
|
Three Months Ended March 31,
|
|
Percent of Revenue
|
|
Change
|
|||||||||||
(Dollars in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019 vs. 2018
|
|||||||
Revenue
|
|
$
|
1,494
|
|
|
$
|
1,448
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
3.2
|
%
|
Operating income
|
|
46
|
|
|
48
|
|
|
3.1
|
%
|
|
3.3
|
%
|
|
(4.2
|
)%
|
|
|
March 31,
|
|
March 31,
|
||||
(In millions)
|
|
2019
|
|
2018
|
||||
Securitization program
|
|
|
|
|
||||
Receivables sold
|
|
$
|
323
|
|
|
$
|
—
|
|
Cash consideration
|
|
260
|
|
|
—
|
|
||
Deferred purchase price
|
|
63
|
|
|
—
|
|
||
|
|
|
|
|
||||
Factoring programs
|
|
|
|
|
||||
Receivables sold
|
|
184
|
|
|
141
|
|
||
Cash consideration
|
|
183
|
|
|
141
|
|
|
|
Three Months Ended March 31,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Net cash used in operating activities
|
|
$
|
(96
|
)
|
|
$
|
(19
|
)
|
Net cash used in investing activities
|
|
—
|
|
|
(132
|
)
|
||
Net cash (used in) provided by financing activities
|
|
(29
|
)
|
|
126
|
|
||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
|
—
|
|
|
8
|
|
||
Net decrease in cash, cash equivalents and restricted cash
|
|
$
|
(125
|
)
|
|
$
|
(17
|
)
|
(In millions, except per share data)
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
(2)
|
||||||
January 1, 2019 through January 31, 2019
|
|
7
|
|
|
$
|
59.38
|
|
|
7
|
|
|
$
|
20
|
|
February 1, 2019 through February 28, 2019
|
|
3
|
|
|
53.85
|
|
|
3
|
|
|
1,382
|
|
||
March 1, 2019 through March 31, 2019
|
|
13
|
|
|
49.37
|
|
|
13
|
|
|
737
|
|
||
Total
|
|
23
|
|
|
$
|
53.10
|
|
|
23
|
|
|
$
|
737
|
|
(1)
|
Based on settlement date.
|
(2)
|
On December 14, 2018,
we announced that our Board of Directors authorized the repurchase of up to
$1 billion
of our common stock. This authorization was completed in the first quarter of 2019. On February 14, 2019, we announced that our Board of Directors authorized additional repurchases of up to
$1.5 billion
of our common stock. The purchases in the first quarter of 2019 under both authorizations are reflected in the above table. Subsequent to the end of the first quarter and through
April 30, 2019
, based on the settlement date,
we
purchased and retired
2 million
shares of
our
common stock having an aggregate value of
$119 million
at an average price of
$56.74
per share. We are
not obligated to repurchase any specific number of shares and may suspend or discontinue the program at any time.
Also, the program does not have an expiration date. For further details, refer to
Note 8
—Stockholders’ Equity
to the Condensed Consolidated Financial Statements.
|
Exhibit
Number
|
|
Description
|
|
|
|
4.1
|
|
|
|
|
|
10.1 *
|
|
|
|
|
|
10.2
|
|
|
|
|
|
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.
|
|
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)
|
BORROWER:
|
|
|||
|
|
|
|
|
|
|
|
|
|
XPO LOGISTICS, INC.
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ravi Tulsyan
|
|
||
|
Name: Ravi Tulsyan
|
|
||
|
Title: Senior Vice President and Treasurer
|
|
GUARANTORS:
|
|
BOUNCE LOGISTICS, LLC
|
|
CON-WAY MULTIMODAL INC.
|
|
MANUFACTURERS CONSOLIDATION SERVICE OF
|
|
|
CANADA, INC.
|
XPO AIR CHARTER, LLC
|
|
XPO CNW, INC.
|
|
XPO COURIER, LLC
|
|
XPO CUSTOMS CLEARANCE SOLUTIONS, LLC
|
|
XPO DEDICATED, LLC
|
|
XPO ENTERPRISE SERVICES, INC.
|
|
XPO GLOBAL FORWARDING, INC.
|
|
XPO INTERMODAL, INC.
|
|
XPO INTERMODAL SERVICES, LLC
|
|
XPO INTERMODAL SOLUTIONS, INC.
|
|
XPO LAND HOLDINGS, LLC
|
|
XPO LAST MILE, INC.
|
|
XPO LAST MILE HOLDING, INC.
|
|
XPO LOGISTICS CARTAGE, LLC
|
|
XPO LOGISTICS DRAYAGE, LLC
|
|
XPO LOGISTICS EXPRESS, LLC
|
|
XPO LOGISTICS FREIGHT, INC.
|
|
XPO LOGISTICS MANAGED TRANSPORTATION, LLC
|
|
XPO LOGISTICS MANUFACTURING, LLC
|
|
XPO LOGISTICS NLM, LLC
|
|
XPO LOGISTICS PORT SERVICES, LLC
|
|
XPO LOGISTICS SUPPLY CHAIN CORPORATE SERVICES,
|
|
|
INC.
|
XPO LOGISTICS SUPPLY CHAIN HOLDING COMPANY
|
|
XPO LOGISTICS SUPPLY CHAIN OF NEW JERSEY, LLC
|
|
XPO LOGISTICS SUPPLY CHAIN OF TEXAS, LLC
|
|
XPO LOGISTICS SUPPLY CHAIN, INC.
|
|
XPO LOGISTICS WORLDWIDE GOVERNMENT SERVICES,
|
|
|
LLC
|
XPO LOGISTICS WORLDWIDE, INC.
|
|
XPO LOGISTICS WORLDWIDE, LLC
|
|
XPO LOGISTICS, LLC
|
|
XPO LTL SOLUTIONS, INC.
|
|
XPO PROPERTIES, INC.
|
|
XPO SERVCO, LLC
|
|
XPO STACKTRAIN, LLC
|
|
XPO TRANSPORT, LLC
|
By:
|
/s/ Ravi Tulsyan
|
|
||
|
Name: Ravi Tulsyan
|
|
||
|
Title: Senior Vice President and Treasurer
|
|
PDS TRUCKING, INC.
|
|
|||
XPO DISTRIBUTION SERVICES, INC.
|
|
|||
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Dominick Muzi
|
|
||
|
Name: Dominick Muzi
|
|
||
|
Title: President & Chief Operating Officer
|
|
CTP LEASING, INC.
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Donald Powers
|
|
||
|
Name: Donald Powers
|
|
||
|
Title: President
|
|
AGENT:
|
|
|||
|
|
|
|
|
MORGAN STANLEY SENIOR FUNDING, INC., as Agent
|
|
|||
|
||||
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Chance Moreland
|
|
||
Names:
|
Chance Moreland
|
|
||
Title
|
Authorized Signatory
|
|
|
/s/ Bradley S. Jacobs
|
|
Bradley S. Jacobs
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
Date: May 1, 2019
|
|
|
/s/ Sarah J.S. Glickman
|
|
Sarah J.S. Glickman
|
|
Acting Chief Financial Officer
|
|
(Principal Financial Officer)
|
Date: May 1, 2019
|
|
|
/s/ Bradley S. Jacobs
|
|
Bradley S. Jacobs
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
Date: May 1, 2019
|
|
|
/s/ Sarah J.S. Glickman
|
|
Sarah J.S. Glickman
|
|
Acting Chief Financial Officer
|
|
(Principal Financial Officer)
|
Date: May 1, 2019
|
|