☒
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ANNUAL 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
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Greenwich,
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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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Title of each class
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Trading symbol(s)
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Name of each exchange on which registered
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Common stock, par value $0.001 per share
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XPO
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New York Stock Exchange
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Large accelerated filer
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☒
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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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PART I
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Page No.
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Item 1
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Item 1A
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Item 1B
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Item 2
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Item 3
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Item 4
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PART II
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Item 5
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Item 6
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Item 7
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Item 7A
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Item 8
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Item 9
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Item 9A
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Item 9B
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PART III
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Item 10
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Item 11
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Item 12
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Item 13
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Item 14
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PART IV
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Item 15
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Item 16
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3
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4
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5
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6
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7
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8
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9
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•
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Market our diversified, multimodal solutions and expertise to customers of all sizes, both new and existing accounts;
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Market the advantages of our proprietary XPO Connect™ digital marketplace, which synthesizes data science, digital automation and real-time visibility for a superior shipper-carrier-consumer experience;
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Recruit and retain quality drivers, and best utilize our driver and equipment capacities;
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Attract and retain quality independent owner-operators and independent brokered carriers for our carrier network;
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Recruit and retain talented sales and customer service representatives, and continuously improve employee productivity with state-of-the-art training and technology; and
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Integrate industry-best practices, with a focus on automation and analytics that drive productivity and share gains.
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Develop additional business in verticals where we already have deep logistics expertise and a strong track record of successful relationships;
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Capture more share of wallet with existing customers who could use our logistics solutions for more of their supply chain needs;
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Market the advantages of our proprietary WMx technology suite, which we use to manage advanced automation, robotics, labor productivity, safety and changes in demand in complex warehouse environments;
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Partner with our customers in meeting their goals for supply chain performance, growth management and stakeholder satisfaction, and help them overcome challenges specific to their business; and
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Integrate industry-best practices, with a focus on automation and analytics that drive productivity and share gains.
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10
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11
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12
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13
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14
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Name
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Age
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Position
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Bradley S. Jacobs
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63
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Chairman of the Board and Chief Executive Officer
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Troy A. Cooper
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50
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President
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Sarah J.S. Glickman
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50
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Acting Chief Financial Officer
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Mario A. Harik
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39
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Chief Information Officer
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Kurt M. Rogers
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48
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Chief Legal Officer
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15
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•
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A reduction in overall freight volume reduces our opportunities for growth. In addition, if a downturn in our customers’ business cycles causes a reduction in the volume of freight shipped by those customers, our operating results could be adversely affected;
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Some of our customers may experience financial distress, file for bankruptcy protection, go out of business, or suffer disruptions in their business and may be unable to pay us. In addition, some customers may not pay us as quickly as they have in the past, causing our working capital needs to increase;
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The U.S. government has made significant changes in U.S. trade policy and has taken certain actions that have negatively impacted U.S. trade, including imposing tariffs on certain goods imported into the U.S. To date, several governments, including the EU, have imposed tariffs on certain goods imported from the U.S. These actions contributed to weakness in the global economy that could adversely affect our results of operations, and such weakness could continue in 2020. Any further changes in U.S. or international trade policy could trigger additional retaliatory actions by affected countries, resulting in “trade wars” and further increased costs for goods transported globally, which may reduce customer demand for these products if the parties having to pay those tariffs increase their prices, or in trading partners limiting their trade with countries that impose anti-trade measures. Such conditions could have an adverse effect on our business, results of operations and financial condition, as well as on the price of our common stock.
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A significant number of our transportation providers may go out of business and we may be unable to secure sufficient equipment capacity or services to meet our commitments to our customers; and
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We may not be able to appropriately adjust our expenses to rapid changes in market demand. In order to maintain high variability in our business model, it is necessary to adjust staffing levels when market demand changes. In periods of rapid change, it is more difficult to match our staffing levels to our business
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16
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Competition from other transportation services companies, some of which offer different services or have a broader coverage network, more fully developed information technology systems and greater capital resources than we do;
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A reduction in the rates charged by our competitors to gain business, especially during times of declining economic growth, which may limit our ability to maintain or increase our rates, maintain our operating margins or achieve significant growth in our business;
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Shippers soliciting bids from multiple transportation providers for their shipping needs, which may result in the depression of freight rates or loss of business to competitors;
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The establishment by our competitors of cooperative relationships to increase their ability to address shipper needs;
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Decisions by our current or prospective customers to develop or expand internal capabilities for some of the services we provide; and
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The development of new technologies or business models that could result in our disintermediation in certain services we provide.
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The diversion of management’s attention from operating our ongoing businesses and the overall impact on our businesses because of management’s attention to the review of strategic alternatives;
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17
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•
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Potential difficulty in maintaining employee morale and retaining key management and other employees;
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Potential difficulty in separating assets related to such businesses from the businesses we retain;
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The need to obtain regulatory approvals and other third-party consents, which could potentially disrupt customer and supplier relationships;
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Foreseen and unforeseen dis-synergy costs, costs of restructuring transactions (including taxes) and other significant costs and expenses; and
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Potential negative reactions from the financial markets if we do not complete one or more transactions.
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18
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19
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Negatively affect our ability to pay principal and interest on our debt or dividends on our Series A Preferred Stock;
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Increase our vulnerability to general adverse economic and industry conditions;
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Limit our ability to fund future capital expenditures and working capital, to engage in future acquisitions or development activities, or to otherwise realize the value of our assets and opportunities fully because of the need to dedicate a substantial portion of our cash flow from operations to payments of interest and principal or to comply with any restrictive terms of our debt;
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Limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
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Impair our ability to obtain additional financing or to refinance our indebtedness in the future; and
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Place us at a competitive disadvantage compared to our competitors that may have proportionately less debt.
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20
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Equipment shortages in the transportation industry, particularly among contracted truckload carriers and railroads;
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Interruptions or stoppages in transportation services as a result of labor disputes, seaport strikes, network congestion, weather-related issues, “Acts of God” or acts of terrorism;
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Changes in regulations impacting transportation;
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Increases in operating expenses for carriers, such as fuel costs, insurance premiums and licensing expenses, that result in a reduction in available carriers; and
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•
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Changes in transportation rates.
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21
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22
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23
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24
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25
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26
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27
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28
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Segment (Location)
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Leased Facilities
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Owned Facilities
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Customer Facilities (3)
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Total
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Transportation (North America) (1)
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386
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130
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9
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525
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Transportation (Europe)
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173
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22
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—
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195
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Transportation (Other) (2)
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8
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—
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—
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8
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Logistics (North America)
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190
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1
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128
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319
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Logistics (Europe)
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205
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7
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169
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381
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Logistics (Other) (2)
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49
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—
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15
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64
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Corporate
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12
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—
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—
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12
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Total
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1,023
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160
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321
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1,504
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(1)
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Of our owned facilities, 126 were freight service centers for our LTL business throughout the U.S.
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(2)
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Locations not in North America or Europe; primarily in Asia.
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(3)
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Locations owned or leased by customers.
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29
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30
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31
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12/31/14
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12/31/15
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12/31/16
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12/31/17
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12/31/18
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12/31/19
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||||||||||||
XPO Logistics, Inc.
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$
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100.00
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$
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66.66
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$
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105.58
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$
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224.05
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$
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139.53
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$
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194.96
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Russell Midcap
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$
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100.00
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$
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97.56
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$
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111.02
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$
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131.58
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$
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119.66
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$
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156.21
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Dow Jones Transportation Average
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$
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100.00
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$
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83.24
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$
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101.83
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$
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121.19
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$
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106.26
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$
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128.39
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S&P 400 Midcap
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$
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100.00
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$
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97.82
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$
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118.11
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$
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137.30
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$
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122.08
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$
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154.07
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As of or For the Years Ended December 31,
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(In millions, except per share data)
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2019
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2018
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2017
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2016
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2015
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Operating Results:
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Revenue
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$
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16,648
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$
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17,279
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$
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15,381
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$
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14,619
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$
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7,623
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Operating income (loss) (1)
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821
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704
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582
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464
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(29
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)
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Income (loss) before income taxes
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569
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566
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261
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107
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(283
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)
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Net income (loss) (2)
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440
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444
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360
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85
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(192
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)
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Net income (loss) attributable to common shareholders (3)
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379
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390
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312
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63
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(246
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)
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Per Share Data:
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Basic earnings (loss) per share
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$
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3.95
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$
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3.17
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$
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2.72
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$
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0.57
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$
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(2.65
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)
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Diluted earnings (loss) per share
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3.57
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2.88
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2.45
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0.53
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(2.65
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)
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|||||
Financial Position:
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||||||||||
Total assets (4)
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$
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14,128
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$
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12,270
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$
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12,602
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$
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11,698
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$
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12,643
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Long-term debt, less current portion
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5,182
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3,902
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4,418
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4,732
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|
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5,273
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Preferred stock
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41
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41
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41
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42
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42
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Total equity
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2,896
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3,970
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|
|
4,010
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|
|
3,038
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|
3,061
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(1)
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Operating income for 2017 and 2016 reflects the retrospective effects from the January 1, 2018 adoption of Accounting Standard Update (“ASU”) 2017-07, Compensation - Retirement Benefits (Topic 715): “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.”
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(2)
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Our net income for 2017 included a $173 million benefit related to the revaluation of our net deferred tax liabilities as a result of the Tax Cuts and Jobs Act (the “Tax Act”).
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(3)
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Net loss attributable to common shareholders for the year ended December 31, 2015 reflects beneficial conversion charges of $52 million on Series C Preferred Stock that were recorded as deemed distributions during the third quarter of 2015.
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(4)
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Total assets for 2019 reflects the January 1, 2019 adoption of ASU 2016-02, Leases (Topic 842).
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32
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(In millions, except per share data)
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First Quarter
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Second Quarter
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Third Quarter
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Fourth Quarter (2) (3)
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2019
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||||||||
Revenue
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$
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4,120
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$
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4,238
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$
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4,154
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|
|
$
|
4,136
|
|
Operating income
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|
132
|
|
|
258
|
|
|
229
|
|
|
202
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|
||||
Net income
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52
|
|
|
145
|
|
|
136
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|
|
107
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|
||||
Net income attributable to common shareholders (1)
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|
43
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|
|
122
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|
|
117
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|
|
96
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|
||||
Basic earnings per share (1)
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|
0.40
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|
|
1.32
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|
|
1.27
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|
|
1.04
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|
||||
Diluted earnings per share (1)
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|
0.37
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|
|
1.19
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|
1.14
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|
0.93
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2018
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||||||||
Revenue
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$
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4,192
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$
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4,363
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|
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$
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4,335
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|
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$
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4,389
|
|
Operating income
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|
141
|
|
|
228
|
|
|
209
|
|
|
126
|
|
||||
Net income
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|
79
|
|
|
159
|
|
|
115
|
|
|
91
|
|
||||
Net income attributable to common shareholders (1)
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|
67
|
|
|
138
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|
|
101
|
|
|
84
|
|
||||
Basic earnings per share (1)
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|
0.56
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|
|
1.14
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|
|
0.81
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|
|
0.67
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|
||||
Diluted earnings per share (1)
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|
0.50
|
|
|
1.03
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|
|
0.74
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|
|
0.62
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(1)
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The sum of the quarterly Net income attributable to common shareholders and earnings per share may not equal annual amounts due to differences in the weighted-average number of shares outstanding during the respective periods and the impact of the two-class method of calculating earnings per share.
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(2)
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The fourth quarter of 2019 included a restructuring charge of $21 million and gains on sales of property and equipment of $37 million.
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(3)
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The fourth quarter of 2018 included a litigation charge of $26 million, a gain on the sale of an equity investment of $24 million and a restructuring charge of $19 million.
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33
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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|
|
For the Years Ended December 31,
|
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Percent of Revenue
|
||||||||||
(Dollars in millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||
Revenue
|
|
$
|
16,648
|
|
|
$
|
17,279
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of transportation and services
|
|
8,303
|
|
|
9,013
|
|
|
49.9
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%
|
|
52.2
|
%
|
||
Direct operating expense
|
|
5,679
|
|
|
5,725
|
|
|
34.1
|
%
|
|
33.1
|
%
|
||
SG&A expense
|
|
1,845
|
|
|
1,837
|
|
|
11.1
|
%
|
|
10.6
|
%
|
||
Operating income
|
|
821
|
|
|
704
|
|
|
4.9
|
%
|
|
4.1
|
%
|
||
Other expense (income)
|
|
(54
|
)
|
|
(109
|
)
|
|
(0.3
|
)%
|
|
(0.6
|
)%
|
||
Foreign currency loss
|
|
9
|
|
|
3
|
|
|
0.1
|
%
|
|
—
|
%
|
||
Debt extinguishment loss
|
|
5
|
|
|
27
|
|
|
—
|
%
|
|
0.2
|
%
|
||
Interest expense
|
|
292
|
|
|
217
|
|
|
1.8
|
%
|
|
1.3
|
%
|
||
Income before income tax provision
|
|
569
|
|
|
566
|
|
|
3.4
|
%
|
|
3.3
|
%
|
||
Income tax provision
|
|
129
|
|
|
122
|
|
|
0.8
|
%
|
|
0.7
|
%
|
||
Net income
|
|
$
|
440
|
|
|
$
|
444
|
|
|
2.6
|
%
|
|
2.6
|
%
|
|
|
34
|
|
|
|
|
|
|
|
|
35
|
|
|
|
|
|
|
|
|
For the Quarters Ended December 31,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Restructuring charges
|
|
$
|
21
|
|
|
$
|
19
|
|
Gains on sales of property and equipment
|
|
(37
|
)
|
|
(6
|
)
|
||
Litigation costs for independent contractor matters
|
|
—
|
|
|
26
|
|
||
Gain on sale of equity investment
|
|
—
|
|
|
(24
|
)
|
|
|
36
|
|
|
|
|
|
|
|
|
For the Years Ended December 31,
|
|
Percent of Transportation Revenue
|
||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||
Revenue
|
|
$
|
10,687
|
|
|
$
|
11,343
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Operating income
|
|
752
|
|
|
646
|
|
|
7.0
|
%
|
|
5.7
|
%
|
||
Total depreciation and amortization
|
|
447
|
|
|
461
|
|
|
N/A
|
|
|
N/A
|
|
|
|
For the Years Ended December 31,
|
|
Percent of Logistics Revenue
|
||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||
Revenue
|
|
$
|
6,093
|
|
|
$
|
6,065
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Operating income
|
|
241
|
|
|
216
|
|
|
3.9
|
%
|
|
3.5
|
%
|
||
Total depreciation and amortization
|
|
277
|
|
|
244
|
|
|
N/A
|
|
|
N/A
|
|
|
|
37
|
|
|
|
|
|
|
|
|
December 31,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Cash and cash equivalents
|
|
$
|
377
|
|
|
$
|
502
|
|
Working capital
|
|
84
|
|
|
375
|
|
|
|
38
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Securitization programs (1)
|
|
|
|
|
|
|
||||||
Receivables sold in period
|
|
$
|
2,231
|
|
|
$
|
231
|
|
|
$
|
—
|
|
Cash consideration
|
|
2,095
|
|
|
179
|
|
|
—
|
|
|||
Deferred purchase price
|
|
135
|
|
|
52
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Factoring programs
|
|
|
|
|
|
|
||||||
Receivables sold in period
|
|
858
|
|
|
663
|
|
|
119
|
|
|||
Cash consideration
|
|
854
|
|
|
660
|
|
|
119
|
|
(1)
|
Receivable transfers under the securitization programs are accounted for as either sales or secured borrowings. In the prior program, a portion of the transfers were accounted for as secured borrowings while under the new program, all transfers are accounted for as sales. This change had the effect of increasing the amount of trade receivables we reported as sold in 2019.
|
|
|
39
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions, except per share data)
|
|
2019
|
|
2018
|
||||||||
|
|
2019 Program
|
|
2018 Program
|
|
2018 Program
|
||||||
Shares purchased and retired
|
|
17
|
|
8
|
|
10
|
||||||
Aggregate value
|
|
$
|
883
|
|
|
$
|
464
|
|
|
$
|
536
|
|
Average price per share
|
|
$
|
50.70
|
|
|
$
|
59.47
|
|
|
$
|
53.46
|
|
Remaining authorization
|
|
$
|
617
|
|
|
$
|
—
|
|
|
$
|
464
|
|
|
|
40
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Net cash provided by operating activities
|
|
$
|
791
|
|
|
$
|
1,102
|
|
Net cash used in investing activities
|
|
(161
|
)
|
|
(400
|
)
|
||
Net cash used in financing activities
|
|
(759
|
)
|
|
(620
|
)
|
||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
|
2
|
|
|
(17
|
)
|
||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
|
$
|
(127
|
)
|
|
$
|
65
|
|
|
|
41
|
|
|
|
|
|
|
|
|
U.S. Qualified Plans
|
|
U.S. Non-Qualified Plans
|
|
U.K. Plan
|
|||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||
Discount rate - net periodic benefit costs
|
|
4.08
|
%
|
|
3.14% - 3.38%
|
|
3.65% - 3.95%
|
|
2.84% - 3.21%
|
|
2.56
|
%
|
|
2.21
|
%
|
Discount rate - benefit obligations
|
|
3.35
|
%
|
|
4.18% - 4.39%
|
|
2.72% - 3.20%
|
|
3.93% - 4.28%
|
|
2.04
|
%
|
|
2.85
|
%
|
|
|
42
|
|
|
|
|
|
|
|
|
43
|
|
|
|
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
(In millions)
|
|
Total
|
|
2020
|
|
2021-2022
|
|
2023-2024
|
|
Thereafter
|
||||||||||
Contractual obligations
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Finance leases
|
|
$
|
403
|
|
|
$
|
71
|
|
|
$
|
131
|
|
|
$
|
119
|
|
|
$
|
82
|
|
Operating leases (1)
|
|
2,665
|
|
|
553
|
|
|
908
|
|
|
542
|
|
|
662
|
|
|||||
Purchase commitments
|
|
92
|
|
|
50
|
|
|
37
|
|
|
4
|
|
|
1
|
|
|||||
Debt (excluding finance leases)
|
|
5,072
|
|
|
26
|
|
|
1,204
|
|
|
1,537
|
|
|
2,305
|
|
|||||
Interest on debt (2)
|
|
1,331
|
|
|
279
|
|
|
517
|
|
|
334
|
|
|
201
|
|
|||||
Total contractual cash obligations
|
|
$
|
9,563
|
|
|
$
|
979
|
|
|
$
|
2,797
|
|
|
$
|
2,536
|
|
|
$
|
3,251
|
|
(1)
|
As of December 31, 2019, we had additional operating leases that have not yet commenced with future undiscounted lease payments of $176 million. These operating leases will commence in fiscal year 2020 through fiscal year 2035 with initial lease terms of 4 years to 15 years.
|
(2)
|
Estimated interest payments have been calculated based on the principal amount of debt and the applicable interest rates as of December 31, 2019.
|
|
|
44
|
|
|
|
|
|
|
|
|
45
|
|
|
|
|
|
|
|
|
46
|
|
|
|
|
|
|
|
|
47
|
|
|
|
|
|
|
|
Page No.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48
|
|
|
|
|
|
|
|
|
49
|
|
|
|
|
|
|
•
|
Comparing the Company’s actuarial reserving methodologies with generally accepted actuarial standards;
|
•
|
Evaluating assumptions used in determining the liability, including expected level of cost per claim and retention levels, in relation to recent historical loss payment trends;
|
•
|
Developing an independent expected range of reserves, including reserves for claims that have
|
|
|
50
|
|
|
|
|
|
|
•
|
Comparing the Company’s recorded liability to an independently developed liability range.
|
•
|
Comparing the valuation methodologies used by the Company to valuation standards;
|
•
|
Comparing the Company’s risk adjusted discount rate to a risk adjusted discount rate range that was independently developed using publicly available third-party market data for comparable entities;
|
•
|
Comparing the long-term growth rate to industry data, economic growth data, and long-term growth rates utilized in prior years’ valuation analyses by the Company; and
|
•
|
Evaluating the guideline public companies and transactions utilized by the Company by reading the Capital IQ business descriptions, examining financial metrics of the comparable public companies and transactions within the industry, and considering market participant guidance and perspective.
|
|
|
51
|
|
|
|
|
|
|
|
|
December 31,
|
||||||
(In millions, except per share data)
|
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
377
|
|
|
$
|
502
|
|
Accounts receivable, net of allowances of $58 and $52, respectively
|
|
2,500
|
|
|
2,596
|
|
||
Other current assets
|
|
465
|
|
|
590
|
|
||
Total current assets
|
|
3,342
|
|
|
3,688
|
|
||
Property and equipment, net of $2,054 and $1,585 in accumulated depreciation, respectively
|
|
2,704
|
|
|
2,605
|
|
||
Operating lease assets
|
|
2,245
|
|
|
—
|
|
||
Goodwill
|
|
4,450
|
|
|
4,467
|
|
||
Identifiable intangible assets, net of $850 and $706 in accumulated amortization, respectively
|
|
1,092
|
|
|
1,253
|
|
||
Other long-term assets
|
|
295
|
|
|
257
|
|
||
Total long-term assets
|
|
10,786
|
|
|
8,582
|
|
||
Total assets
|
|
$
|
14,128
|
|
|
$
|
12,270
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
1,157
|
|
|
$
|
1,258
|
|
Accrued expenses
|
|
1,414
|
|
|
1,480
|
|
||
Short-term borrowings and current maturities of long-term debt
|
|
84
|
|
|
367
|
|
||
Short-term operating lease liabilities
|
|
468
|
|
|
—
|
|
||
Other current liabilities
|
|
135
|
|
|
208
|
|
||
Total current liabilities
|
|
3,258
|
|
|
3,313
|
|
||
Long-term debt
|
|
5,182
|
|
|
3,902
|
|
||
Deferred tax liability
|
|
495
|
|
|
444
|
|
||
Employee benefit obligations
|
|
157
|
|
|
153
|
|
||
Long-term operating lease liabilities
|
|
1,776
|
|
|
—
|
|
||
Other long-term liabilities
|
|
364
|
|
|
488
|
|
||
Total long-term liabilities
|
|
7,974
|
|
|
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 December 31, 2019 and 2018, respectively
|
|
41
|
|
|
41
|
|
||
Common stock, $0.001 par value; 300 shares authorized; 92 and 116 shares issued and outstanding as of December 31, 2019 and 2018, respectively
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
2,061
|
|
|
3,311
|
|
||
Retained earnings
|
|
786
|
|
|
377
|
|
||
Accumulated other comprehensive loss
|
|
(145
|
)
|
|
(154
|
)
|
||
Total stockholders’ equity before noncontrolling interests
|
|
2,743
|
|
|
3,575
|
|
||
Noncontrolling interests
|
|
153
|
|
|
395
|
|
||
Total equity
|
|
2,896
|
|
|
3,970
|
|
||
Total liabilities and equity
|
|
$
|
14,128
|
|
|
$
|
12,270
|
|
|
|
52
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions, except per share data)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue
|
|
$
|
16,648
|
|
|
$
|
17,279
|
|
|
$
|
15,381
|
|
Operating expenses
|
|
|
|
|
|
|
||||||
Cost of transportation and services
|
|
8,303
|
|
|
9,013
|
|
|
8,132
|
|
|||
Direct operating expense
|
|
5,679
|
|
|
5,725
|
|
|
5,006
|
|
|||
Sales, general and administrative expense
|
|
1,845
|
|
|
1,837
|
|
|
1,661
|
|
|||
Total operating expenses
|
|
15,827
|
|
|
16,575
|
|
|
14,799
|
|
|||
Operating income
|
|
821
|
|
|
704
|
|
|
582
|
|
|||
Other expense (income)
|
|
(54
|
)
|
|
(109
|
)
|
|
(57
|
)
|
|||
Foreign currency loss
|
|
9
|
|
|
3
|
|
|
58
|
|
|||
Debt extinguishment loss
|
|
5
|
|
|
27
|
|
|
36
|
|
|||
Interest expense
|
|
292
|
|
|
217
|
|
|
284
|
|
|||
Income before income tax provision (benefit)
|
|
569
|
|
|
566
|
|
|
261
|
|
|||
Income tax provision (benefit)
|
|
129
|
|
|
122
|
|
|
(99
|
)
|
|||
Net income
|
|
440
|
|
|
444
|
|
|
360
|
|
|||
Net income attributable to noncontrolling interests
|
|
(21
|
)
|
|
(22
|
)
|
|
(20
|
)
|
|||
Net income attributable to XPO
|
|
$
|
419
|
|
|
$
|
422
|
|
|
$
|
340
|
|
|
|
|
|
|
|
|
||||||
Earnings per share data (Note 17):
|
|
|
|
|
|
|
||||||
Net income attributable to common shareholders
|
|
$
|
379
|
|
|
$
|
390
|
|
|
$
|
312
|
|
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
|
$
|
3.95
|
|
|
$
|
3.17
|
|
|
$
|
2.72
|
|
Diluted earnings per share
|
|
$
|
3.57
|
|
|
$
|
2.88
|
|
|
$
|
2.45
|
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding
|
|
|
|
|
|
|
||||||
Basic weighted-average common shares outstanding
|
|
96
|
|
|
123
|
|
|
115
|
|
|||
Diluted weighted-average common shares outstanding
|
|
106
|
|
|
135
|
|
|
128
|
|
|
|
53
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
|
$
|
440
|
|
|
$
|
444
|
|
|
$
|
360
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
||||||
Foreign currency translation gain (loss), net of tax effect of $(7), $(6) and $47
|
|
$
|
23
|
|
|
$
|
(100
|
)
|
|
$
|
180
|
|
Unrealized gain (loss) on financial assets/liabilities designated as hedging instruments, net of tax effect of $(1) in all periods
|
|
4
|
|
|
(6
|
)
|
|
5
|
|
|||
Defined benefit plans adjustment, net of tax effect of $1, $23 and $(29)
|
|
(19
|
)
|
|
(91
|
)
|
|
90
|
|
|||
Other comprehensive income (loss)
|
|
8
|
|
|
(197
|
)
|
|
275
|
|
|||
Comprehensive income
|
|
$
|
448
|
|
|
$
|
247
|
|
|
$
|
635
|
|
Less: Comprehensive income (loss) attributable to noncontrolling interests
|
|
20
|
|
|
(5
|
)
|
|
72
|
|
|||
Comprehensive income attributable to XPO
|
|
$
|
428
|
|
|
$
|
252
|
|
|
$
|
563
|
|
|
|
54
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Operating activities
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
440
|
|
|
$
|
444
|
|
|
$
|
360
|
|
Adjustments to reconcile net income to net cash from operating activities
|
|
|
|
|
|
|
||||||
Depreciation, amortization and net lease activity
|
|
739
|
|
|
716
|
|
|
658
|
|
|||
Stock compensation expense
|
|
67
|
|
|
49
|
|
|
79
|
|
|||
Accretion of debt
|
|
21
|
|
|
15
|
|
|
19
|
|
|||
Deferred tax expense (benefit)
|
|
46
|
|
|
45
|
|
|
(158
|
)
|
|||
Debt extinguishment loss
|
|
5
|
|
|
27
|
|
|
36
|
|
|||
Unrealized loss (gain) on foreign currency option and forward contracts
|
|
9
|
|
|
(20
|
)
|
|
49
|
|
|||
Gain on sale of equity investment
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
|||
Gains on sales of property and equipment
|
|
(110
|
)
|
|
(8
|
)
|
|
(13
|
)
|
|||
Other
|
|
21
|
|
|
8
|
|
|
26
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
(67
|
)
|
|
(13
|
)
|
|
(320
|
)
|
|||
Other assets
|
|
(47
|
)
|
|
(49
|
)
|
|
(92
|
)
|
|||
Accounts payable
|
|
(120
|
)
|
|
35
|
|
|
140
|
|
|||
Accrued expenses and other liabilities
|
|
(213
|
)
|
|
(123
|
)
|
|
1
|
|
|||
Net cash provided by operating activities
|
|
791
|
|
|
1,102
|
|
|
785
|
|
|||
Investing activities
|
|
|
|
|
|
|
||||||
Payment for purchases of property and equipment
|
|
(601
|
)
|
|
(551
|
)
|
|
(504
|
)
|
|||
Proceeds from sale of property and equipment
|
|
252
|
|
|
143
|
|
|
118
|
|
|||
Cash collected on deferred purchase price receivable
|
|
186
|
|
|
—
|
|
|
—
|
|
|||
Other
|
|
2
|
|
|
8
|
|
|
—
|
|
|||
Net cash used in investing activities
|
|
(161
|
)
|
|
(400
|
)
|
|
(386
|
)
|
|||
Financing activities
|
|
|
|
|
|
|
||||||
Proceeds from issuance of debt
|
|
1,754
|
|
|
1,074
|
|
|
819
|
|
|||
Repurchase of debt
|
|
—
|
|
|
(1,225
|
)
|
|
(1,387
|
)
|
|||
Proceeds from borrowings on ABL facility
|
|
1,935
|
|
|
1,355
|
|
|
995
|
|
|||
Repayment of borrowings on ABL facility
|
|
(1,935
|
)
|
|
(1,455
|
)
|
|
(925
|
)
|
|||
Repayment of debt and finance leases
|
|
(867
|
)
|
|
(119
|
)
|
|
(106
|
)
|
|||
Payment for debt issuance costs
|
|
(28
|
)
|
|
(10
|
)
|
|
(17
|
)
|
|||
Proceeds from forward sale settlement
|
|
—
|
|
|
349
|
|
|
—
|
|
|||
Proceeds from common stock offerings
|
|
—
|
|
|
—
|
|
|
288
|
|
|||
Purchase of noncontrolling interests
|
|
(258
|
)
|
|
—
|
|
|
—
|
|
|||
Repurchase of common stock
|
|
(1,347
|
)
|
|
(536
|
)
|
|
—
|
|
|||
Payment for tax withholdings for restricted shares
|
|
(14
|
)
|
|
(53
|
)
|
|
(17
|
)
|
|||
Dividends paid
|
|
(8
|
)
|
|
(8
|
)
|
|
(7
|
)
|
|||
Other
|
|
9
|
|
|
8
|
|
|
(9
|
)
|
|||
Net cash used in financing activities
|
|
(759
|
)
|
|
(620
|
)
|
|
(366
|
)
|
|||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
|
2
|
|
|
(17
|
)
|
|
16
|
|
|||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
|
(127
|
)
|
|
65
|
|
|
49
|
|
|||
Cash, cash equivalents and restricted cash, beginning of year
|
|
514
|
|
|
449
|
|
|
400
|
|
|||
Cash, cash equivalents and restricted cash, end of year
|
|
$
|
387
|
|
|
$
|
514
|
|
|
$
|
449
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
||||||
Cash paid for interest
|
|
$
|
282
|
|
|
$
|
233
|
|
|
$
|
274
|
|
Cash paid for income taxes
|
|
$
|
121
|
|
|
$
|
70
|
|
|
$
|
79
|
|
|
|
55
|
|
|
|
|
|
|
|
|
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 (Loss) Income
|
|
Total Stockholders’
Equity |
|
Non-controlling Interests
|
|
Total Equity
|
||||||||||||||||||
Balance as of December 31, 2016
|
|
72
|
|
|
$
|
42
|
|
|
111,087
|
|
|
$
|
—
|
|
|
$
|
3,245
|
|
|
$
|
(393
|
)
|
|
$
|
(194
|
)
|
|
$
|
2,700
|
|
|
$
|
338
|
|
|
$
|
3,038
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
340
|
|
|
—
|
|
|
340
|
|
|
20
|
|
|
360
|
|
||||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
223
|
|
|
223
|
|
|
52
|
|
|
275
|
|
||||||||
Exercise and vesting of stock compensation awards
|
|
—
|
|
|
—
|
|
|
728
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||
Tax withholdings related to vesting of stock compensation awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
||||||||
Issuance of common stock from offering
|
|
—
|
|
|
—
|
|
|
5,000
|
|
|
—
|
|
|
288
|
|
|
—
|
|
|
—
|
|
|
288
|
|
|
—
|
|
|
288
|
|
||||||||
Conversion of Series A preferred stock to common stock
|
|
—
|
|
|
(1
|
)
|
|
103
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Issuance of common stock upon conversion of convertible senior notes, net of tax
|
|
—
|
|
|
—
|
|
|
3,002
|
|
|
—
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|
—
|
|
|
49
|
|
||||||||
Dividend paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
(4
|
)
|
|
(7
|
)
|
||||||||
Impact of tax reform act
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Stock compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
||||||||
Balance as of December 31, 2017
|
|
72
|
|
|
$
|
41
|
|
|
119,920
|
|
|
$
|
—
|
|
|
$
|
3,590
|
|
|
$
|
(43
|
)
|
|
$
|
16
|
|
|
$
|
3,604
|
|
|
$
|
406
|
|
|
$
|
4,010
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
422
|
|
|
—
|
|
|
422
|
|
|
22
|
|
|
444
|
|
||||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(170
|
)
|
|
(170
|
)
|
|
(27
|
)
|
|
(197
|
)
|
||||||||
Exercise and vesting of stock compensation awards
|
|
—
|
|
|
—
|
|
|
995
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||
Tax withholdings related to vesting of stock compensation awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
|
—
|
|
|
(53
|
)
|
||||||||
Issuance of common stock from forward sale settlement
|
|
—
|
|
|
—
|
|
|
6,000
|
|
|
—
|
|
|
349
|
|
|
—
|
|
|
—
|
|
|
349
|
|
|
—
|
|
|
349
|
|
||||||||
Retirement of common stock
|
|
—
|
|
|
—
|
|
|
(11,314
|
)
|
|
—
|
|
|
(608
|
)
|
|
—
|
|
|
—
|
|
|
(608
|
)
|
|
—
|
|
|
(608
|
)
|
||||||||
Dividend paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
(6
|
)
|
|
(9
|
)
|
||||||||
Stock compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
||||||||
Other
|
|
—
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||||||
Balance as of December 31, 2018
|
|
72
|
|
|
$
|
41
|
|
|
115,683
|
|
|
$
|
—
|
|
|
$
|
3,311
|
|
|
$
|
377
|
|
|
$
|
(154
|
)
|
|
$
|
3,575
|
|
|
$
|
395
|
|
|
$
|
3,970
|
|
|
|
56
|
|
|
|
|
|
|
|
|
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 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
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
419
|
|
|
—
|
|
|
419
|
|
|
21
|
|
|
440
|
|
||||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|
(1
|
)
|
|
8
|
|
||||||||
Exercise and vesting of stock compensation awards
|
|
—
|
|
|
—
|
|
|
489
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||
Tax withholdings related to vesting of stock compensation awards
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
||||||||
Purchase of noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(255
|
)
|
|
(258
|
)
|
||||||||
Retirement of common stock
|
|
—
|
|
|
—
|
|
|
(23,932
|
)
|
|
—
|
|
|
(1,275
|
)
|
|
—
|
|
|
—
|
|
|
(1,275
|
)
|
|
—
|
|
|
(1,275
|
)
|
||||||||
Dividend paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
(5
|
)
|
|
(8
|
)
|
||||||||
Stock compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
36
|
|
||||||||
Adoption of new accounting standard and other
|
|
—
|
|
|
—
|
|
|
102
|
|
|
—
|
|
|
5
|
|
|
(7
|
)
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
(4
|
)
|
||||||||
Balance as of December 31, 2019
|
|
72
|
|
|
$
|
41
|
|
|
92,342
|
|
|
$
|
—
|
|
|
$
|
2,061
|
|
|
$
|
786
|
|
|
$
|
(145
|
)
|
|
$
|
2,743
|
|
|
$
|
153
|
|
|
$
|
2,896
|
|
|
|
57
|
|
|
|
|
|
|
|
|
58
|
|
|
|
|
|
|
|
|
59
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Beginning balance
|
|
$
|
52
|
|
|
$
|
42
|
|
|
$
|
26
|
|
Provision charged to expense
|
|
34
|
|
|
36
|
|
|
24
|
|
|||
Write-offs, less recoveries, and other adjustments
|
|
(28
|
)
|
|
(26
|
)
|
|
(8
|
)
|
|||
Ending balance
|
|
$
|
58
|
|
|
$
|
52
|
|
|
$
|
42
|
|
|
|
60
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Securitization programs
|
|
|
|
|
|
|
||||||
Receivables sold in period
|
|
$
|
2,231
|
|
|
$
|
231
|
|
|
$
|
—
|
|
Cash consideration
|
|
2,095
|
|
|
179
|
|
|
—
|
|
|||
Deferred purchase price
|
|
135
|
|
|
52
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Factoring programs
|
|
|
|
|
|
|
||||||
Receivables sold in period
|
|
858
|
|
|
663
|
|
|
119
|
|
|||
Cash consideration
|
|
854
|
|
|
660
|
|
|
119
|
|
Classification
|
|
Estimated Useful Life
|
Buildings and leasehold improvements
|
|
Term of lease to 40 years
|
Vehicles, containers, tractors, trailers and tankers
|
|
3 to 14 years
|
Rail cars and chassis
|
|
15 to 30 years
|
Machinery and equipment
|
|
3 to 15 years
|
Computer software and equipment
|
|
1 to 6 years
|
|
|
61
|
|
|
|
|
|
|
Classification
|
|
Estimated Useful Life
|
Customer relationships
|
|
5 to 16 years
|
Non-compete agreements
|
|
Term of agreement
|
|
|
62
|
|
|
|
|
|
|
|
|
As of December 31,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Accrued salaries and wages
|
|
$
|
478
|
|
|
$
|
539
|
|
Accrued transportation and facility charges
|
|
454
|
|
|
462
|
|
||
Accrued value-added tax and other taxes
|
|
163
|
|
|
172
|
|
||
Other accrued expenses
|
|
319
|
|
|
307
|
|
||
Total accrued expenses
|
|
$
|
1,414
|
|
|
$
|
1,480
|
|
(In millions)
|
|
Foreign Currency Translation Adjustments
|
|
Derivative Hedges
|
|
Defined Benefit Plans Liability
|
|
Less: AOCI Attributable to Noncontrolling Interests
|
|
AOCI Attributable to XPO
|
||||||||||
As of December 31, 2017
|
|
$
|
(43
|
)
|
|
$
|
7
|
|
|
$
|
79
|
|
|
$
|
(27
|
)
|
|
$
|
16
|
|
Other comprehensive (loss) income
|
|
(96
|
)
|
|
12
|
|
|
(89
|
)
|
|
27
|
|
|
(146
|
)
|
|||||
Amounts reclassified from AOCI
|
|
(4
|
)
|
|
(18
|
)
|
|
(2
|
)
|
|
—
|
|
|
(24
|
)
|
|||||
Net current period other comprehensive loss
|
|
(100
|
)
|
|
(6
|
)
|
|
(91
|
)
|
|
27
|
|
|
(170
|
)
|
|||||
As of December 31, 2018
|
|
(143
|
)
|
|
1
|
|
|
(12
|
)
|
|
—
|
|
|
(154
|
)
|
|||||
Other comprehensive income (loss)
|
|
33
|
|
|
10
|
|
|
(18
|
)
|
|
1
|
|
|
26
|
|
|||||
Amounts reclassified from AOCI
|
|
(10
|
)
|
|
(6
|
)
|
|
(1
|
)
|
|
—
|
|
|
(17
|
)
|
|||||
Net current period other comprehensive income (loss)
|
|
23
|
|
|
4
|
|
|
(19
|
)
|
|
1
|
|
|
9
|
|
|||||
As of December 31, 2019
|
|
$
|
(120
|
)
|
|
$
|
5
|
|
|
$
|
(31
|
)
|
|
$
|
1
|
|
|
$
|
(145
|
)
|
|
|
63
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Unrealized foreign currency option and forward contracts losses (gains)
|
|
$
|
9
|
|
|
$
|
(20
|
)
|
|
$
|
49
|
|
Realized foreign currency option and forward contracts losses
|
|
—
|
|
|
16
|
|
|
15
|
|
|||
Foreign currency transaction and remeasurement losses (gains)
|
|
—
|
|
|
7
|
|
|
(6
|
)
|
|||
Total foreign currency loss
|
|
$
|
9
|
|
|
$
|
3
|
|
|
$
|
58
|
|
•
|
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.
|
|
|
64
|
|
|
|
|
|
|
|
|
As of December 31, 2019
|
||||||||||||||
(In millions)
|
|
Carrying Value
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
||||||||
Cash equivalents
|
|
$
|
144
|
|
|
$
|
144
|
|
|
$
|
127
|
|
|
$
|
17
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
As of December 31, 2018
|
||||||||||||||
(In millions)
|
|
Carrying Value
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
||||||||
Cash equivalents
|
|
$
|
237
|
|
|
$
|
237
|
|
|
$
|
236
|
|
|
$
|
1
|
|
|
|
65
|
|
|
|
|
|
|
|
|
66
|
|
|
|
|
|
|
(In millions)
|
|
Transportation
|
|
Logistics
|
|
Corporate
|
|
Eliminations
|
|
Total
|
||||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
10,687
|
|
|
$
|
6,093
|
|
|
$
|
—
|
|
|
$
|
(132
|
)
|
|
$
|
16,648
|
|
Operating income (loss)
|
|
752
|
|
|
241
|
|
|
(172
|
)
|
|
—
|
|
|
821
|
|
|||||
Depreciation and amortization
|
|
447
|
|
|
277
|
|
|
15
|
|
|
—
|
|
|
739
|
|
|||||
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
11,343
|
|
|
$
|
6,065
|
|
|
$
|
—
|
|
|
$
|
(129
|
)
|
|
$
|
17,279
|
|
Operating income (loss)
|
|
646
|
|
|
216
|
|
|
(158
|
)
|
|
—
|
|
|
704
|
|
|||||
Depreciation and amortization
|
|
461
|
|
|
244
|
|
|
11
|
|
|
—
|
|
|
716
|
|
|||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
|
$
|
10,276
|
|
|
$
|
5,229
|
|
|
$
|
—
|
|
|
$
|
(124
|
)
|
|
$
|
15,381
|
|
Operating income (loss)
|
|
547
|
|
|
202
|
|
|
(167
|
)
|
|
—
|
|
|
582
|
|
|||||
Depreciation and amortization
|
|
447
|
|
|
203
|
|
|
8
|
|
|
—
|
|
|
658
|
|
|
|
67
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2019
|
||||||||||||||
(In millions)
|
|
Transportation
|
|
Logistics
|
|
Eliminations
|
|
Total
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
||||||||
United States
|
|
$
|
7,454
|
|
|
$
|
2,338
|
|
|
$
|
(33
|
)
|
|
$
|
9,759
|
|
North America (excluding United States)
|
|
286
|
|
|
37
|
|
|
—
|
|
|
323
|
|
||||
France
|
|
1,358
|
|
|
659
|
|
|
(12
|
)
|
|
2,005
|
|
||||
United Kingdom
|
|
760
|
|
|
1,384
|
|
|
(68
|
)
|
|
2,076
|
|
||||
Europe (excluding France and United Kingdom)
|
|
810
|
|
|
1,582
|
|
|
(16
|
)
|
|
2,376
|
|
||||
Other
|
|
19
|
|
|
93
|
|
|
(3
|
)
|
|
109
|
|
||||
Total
|
|
$
|
10,687
|
|
|
$
|
6,093
|
|
|
$
|
(132
|
)
|
|
$
|
16,648
|
|
|
|
Year Ended December 31, 2018
|
||||||||||||||
(In millions)
|
|
Transportation
|
|
Logistics
|
|
Eliminations
|
|
Total
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
||||||||
United States
|
|
$
|
8,055
|
|
|
$
|
2,196
|
|
|
$
|
(19
|
)
|
|
$
|
10,232
|
|
North America (excluding United States)
|
|
274
|
|
|
67
|
|
|
—
|
|
|
341
|
|
||||
France
|
|
1,496
|
|
|
687
|
|
|
(18
|
)
|
|
2,165
|
|
||||
United Kingdom
|
|
704
|
|
|
1,436
|
|
|
(70
|
)
|
|
2,070
|
|
||||
Europe (excluding France and United Kingdom)
|
|
793
|
|
|
1,584
|
|
|
(18
|
)
|
|
2,359
|
|
||||
Other
|
|
21
|
|
|
95
|
|
|
(4
|
)
|
|
112
|
|
||||
Total
|
|
$
|
11,343
|
|
|
$
|
6,065
|
|
|
$
|
(129
|
)
|
|
$
|
17,279
|
|
|
|
Year Ended December 31,
|
||
(In millions)
|
|
2017
|
||
Revenue
|
|
|
||
United States
|
|
$
|
9,163
|
|
North America (excluding United States)
|
|
298
|
|
|
France
|
|
2,006
|
|
|
United Kingdom
|
|
1,799
|
|
|
Europe (excluding France and United Kingdom)
|
|
1,930
|
|
|
Other
|
|
185
|
|
|
Total
|
|
$
|
15,381
|
|
|
|
68
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Transportation segment:
|
|
|
|
|
||||
Freight brokerage and truckload
|
|
$
|
4,383
|
|
|
$
|
4,784
|
|
LTL
|
|
4,815
|
|
|
4,839
|
|
||
Last mile (1)
|
|
873
|
|
|
1,065
|
|
||
Managed transportation
|
|
496
|
|
|
462
|
|
||
Global forwarding
|
|
299
|
|
|
338
|
|
||
Transportation eliminations
|
|
(179
|
)
|
|
(145
|
)
|
||
Total Transportation segment revenue
|
|
10,687
|
|
|
11,343
|
|
||
Total Logistics segment revenue
|
|
6,093
|
|
|
6,065
|
|
||
Intersegment eliminations
|
|
(132
|
)
|
|
(129
|
)
|
||
Total revenue
|
|
$
|
16,648
|
|
|
$
|
17,279
|
|
(1)
|
Comprised of our North American last mile operations.
|
|
|
Years Ended December 31,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Cost of transportation and services
|
|
$
|
2
|
|
|
$
|
—
|
|
Direct operating expense
|
|
1
|
|
|
1
|
|
||
SG&A
|
|
46
|
|
|
20
|
|
||
Total
|
|
$
|
49
|
|
|
$
|
21
|
|
|
|
69
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2019
|
|
|
||||||||||||||
(In millions)
|
|
Reserve Balance as of December 31, 2018
|
|
Charges Incurred
|
|
Payments
|
|
Foreign Exchange and Other
|
|
Reserve Balance as of December 31, 2019
|
||||||||||
Severance:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transportation
|
|
$
|
9
|
|
|
$
|
30
|
|
|
$
|
(26
|
)
|
|
$
|
(1
|
)
|
|
$
|
12
|
|
Logistics
|
|
5
|
|
|
14
|
|
|
(8
|
)
|
|
—
|
|
|
11
|
|
|||||
Corporate
|
|
2
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
2
|
|
|||||
Total Severance
|
|
16
|
|
|
47
|
|
|
(37
|
)
|
|
(1
|
)
|
|
25
|
|
|||||
Facilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transportation
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
16
|
|
|
$
|
49
|
|
|
$
|
(39
|
)
|
|
$
|
(1
|
)
|
|
$
|
25
|
|
|
|
Year Ended December 31, 2018
|
|
|
||||||||
(In millions)
|
|
Charges Incurred
|
|
Payments
|
|
Reserve Balance as of December 31, 2018
|
||||||
Severance:
|
|
|
|
|
|
|
||||||
Transportation
|
|
$
|
12
|
|
|
$
|
(3
|
)
|
|
$
|
9
|
|
Logistics
|
|
6
|
|
|
(1
|
)
|
|
5
|
|
|||
Corporate
|
|
3
|
|
|
(1
|
)
|
|
2
|
|
|||
Total
|
|
$
|
21
|
|
|
$
|
(5
|
)
|
|
$
|
16
|
|
|
|
December 31,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Property and equipment
|
|
|
|
|
||||
Land
|
|
$
|
334
|
|
|
$
|
356
|
|
Buildings and leasehold improvements
|
|
648
|
|
|
555
|
|
||
Vehicles, tractors, trailers and tankers
|
|
1,726
|
|
|
1,561
|
|
||
Machinery and equipment
|
|
949
|
|
|
809
|
|
||
Computer software and equipment
|
|
1,101
|
|
|
909
|
|
||
|
|
4,758
|
|
|
4,190
|
|
||
Less: accumulated depreciation and amortization
|
|
(2,054
|
)
|
|
(1,585
|
)
|
||
Total property and equipment, net
|
|
$
|
2,704
|
|
|
$
|
2,605
|
|
Net book value of capitalized internally-developed software included in property and equipment, net
|
|
$
|
333
|
|
|
$
|
263
|
|
|
|
70
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||
(In millions)
|
|
2019
|
||
Operating lease cost
|
|
$
|
696
|
|
Short-term lease cost
|
|
144
|
|
|
Variable lease cost
|
|
90
|
|
|
Total operating lease cost
|
|
$
|
930
|
|
Finance lease cost:
|
|
|
||
Amortization of leased assets
|
|
$
|
53
|
|
Interest on lease liabilities
|
|
7
|
|
|
Total finance lease cost
|
|
$
|
60
|
|
Total lease cost
|
|
$
|
990
|
|
Gain recognized on sale-leaseback transactions (1)
|
|
$
|
99
|
|
(1)
|
For the year ended December 31, 2019, we completed multiple sale-leaseback transactions for land and buildings, including a sale and partial leaseback of our shared-services center in Portland, Oregon and received aggregate cash proceeds of $203 million. Gains on sale-leaseback transactions are included in Direct operating expense in our Consolidated Statements of Income.
|
|
|
71
|
|
|
|
|
|
|
(In millions)
|
|
December 31, 2019
|
||
Operating leases:
|
|
|
||
Operating lease assets
|
|
$
|
2,245
|
|
Short-term operating lease liabilities
|
|
468
|
|
|
Operating lease liabilities
|
|
1,776
|
|
|
Total operating lease liabilities
|
|
$
|
2,244
|
|
Finance leases:
|
|
|
||
Property and equipment, gross
|
|
$
|
483
|
|
Accumulated depreciation
|
|
(125
|
)
|
|
Property and equipment, net
|
|
$
|
358
|
|
Short-term borrowings and current maturities of long-term debt
|
|
58
|
|
|
Long-term debt
|
|
288
|
|
|
Total finance lease liabilities
|
|
$
|
346
|
|
Weighted-average remaining lease term
|
|
|
||
Operating leases
|
|
7 years
|
|
|
Finance leases
|
|
7 years
|
|
|
Weighted-average discount rate
|
|
|
||
Operating leases
|
|
5.16
|
%
|
|
Finance leases
|
|
2.69
|
%
|
|
|
Year Ended December 31,
|
||
(In millions)
|
|
2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows for operating leases
|
|
$
|
704
|
|
Operating cash flows for finance leases
|
|
7
|
|
|
Financing cash flows for finance leases
|
|
62
|
|
|
Leased assets obtained in exchange for new lease obligations:
|
|
|
||
Operating leases
|
|
823
|
|
|
Finance leases
|
|
103
|
|
|
|
72
|
|
|
|
|
|
|
(In millions)
|
|
Finance Leases
|
|
Operating Leases
|
||||
2020
|
|
$
|
71
|
|
|
$
|
553
|
|
2021
|
|
67
|
|
|
503
|
|
||
2022
|
|
64
|
|
|
405
|
|
||
2023
|
|
70
|
|
|
316
|
|
||
2024
|
|
49
|
|
|
226
|
|
||
Thereafter
|
|
82
|
|
|
662
|
|
||
Total lease payments
|
|
$
|
403
|
|
|
$
|
2,665
|
|
Less: interest
|
|
(57
|
)
|
|
(421
|
)
|
||
Present value of lease liabilities
|
|
$
|
346
|
|
|
$
|
2,244
|
|
(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
|
|
|
|
(In millions)
|
|
Transportation
|
|
Logistics
|
|
Total
|
||||||
Goodwill as of December 31, 2017
|
|
$
|
2,527
|
|
|
$
|
2,037
|
|
|
$
|
4,564
|
|
Impact of foreign exchange translation
|
|
(7
|
)
|
|
(90
|
)
|
|
(97
|
)
|
|||
Goodwill as of December 31, 2018
|
|
2,520
|
|
|
1,947
|
|
|
4,467
|
|
|||
Impact of foreign exchange translation and other
|
|
(46
|
)
|
|
29
|
|
|
(17
|
)
|
|||
Goodwill as of December 31, 2019
|
|
$
|
2,474
|
|
|
$
|
1,976
|
|
|
$
|
4,450
|
|
|
|
73
|
|
|
|
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
(In millions)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
||||||||
Definite-lived intangibles
|
|
|
|
|
|
|
|
|
||||||||
Customer relationships
|
|
$
|
1,875
|
|
|
$
|
784
|
|
|
$
|
1,891
|
|
|
$
|
640
|
|
Trade name
|
|
51
|
|
|
51
|
|
|
52
|
|
|
52
|
|
||||
Non-compete agreements
|
|
16
|
|
|
15
|
|
|
16
|
|
|
14
|
|
||||
|
|
$
|
1,942
|
|
|
$
|
850
|
|
|
$
|
1,959
|
|
|
$
|
706
|
|
(In millions)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
||||||||||||
Estimated amortization expense
|
|
$
|
145
|
|
|
$
|
137
|
|
|
$
|
127
|
|
|
$
|
110
|
|
|
$
|
106
|
|
|
$
|
467
|
|
|
|
December 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
|
|
$
|
1,233
|
|
|
Other long-term assets
|
|
$
|
—
|
|
|
Other long-term liabilities
|
|
$
|
(18
|
)
|
Interest rate swap
|
|
2,003
|
|
|
Other current assets
|
|
—
|
|
|
Other current liabilities
|
|
(7
|
)
|
|||
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign currency option contracts
|
|
365
|
|
|
Other current assets
|
|
1
|
|
|
Other current liabilities
|
|
—
|
|
|||
Total
|
|
|
|
|
|
$
|
1
|
|
|
|
|
$
|
(25
|
)
|
|
|
74
|
|
|
|
|
|
|
|
|
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 Derivative
|
|
Amount of Gain (Loss) Reclassified from AOCI into Net Income
|
|
Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
|
||||||||||||||||||||||||||||||
|
|
Years Ended December 31,
|
||||||||||||||||||||||||||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Cross-currency swap agreements
|
|
$
|
7
|
|
|
$
|
13
|
|
|
$
|
(21
|
)
|
|
$
|
5
|
|
|
$
|
17
|
|
|
$
|
(3
|
)
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Interest rate swaps
|
|
5
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Derivatives designated as net investment hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Cross-currency swap agreements
|
|
55
|
|
|
52
|
|
|
(100
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
4
|
|
|
8
|
|
|||||||||
Nonderivatives designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Foreign currency denominated notes
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Total
|
|
$
|
67
|
|
|
$
|
65
|
|
|
$
|
(111
|
)
|
|
$
|
5
|
|
|
$
|
17
|
|
|
$
|
(3
|
)
|
|
$
|
11
|
|
|
$
|
5
|
|
|
$
|
8
|
|
|
|
75
|
|
|
|
|
|
|
|
|
76
|
|
|
|
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
(In millions)
|
|
Principal Balance
|
|
Carrying Value
|
|
Principal Balance
|
|
Carrying Value
|
||||||||
ABL facility
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Term loan facility
|
|
2,003
|
|
|
1,969
|
|
|
1,503
|
|
|
1,474
|
|
||||
6.125% Senior Notes due 2023
|
|
535
|
|
|
530
|
|
|
535
|
|
|
529
|
|
||||
6.50% Senior Notes due 2022
|
|
1,200
|
|
|
1,192
|
|
|
1,200
|
|
|
1,190
|
|
||||
6.70% Senior Debentures due 2034
|
|
300
|
|
|
208
|
|
|
300
|
|
|
205
|
|
||||
6.75% Senior notes due 2024
|
|
1,000
|
|
|
987
|
|
|
—
|
|
|
—
|
|
||||
Trade securitization program
|
|
—
|
|
|
—
|
|
|
283
|
|
|
281
|
|
||||
Unsecured credit facility
|
|
—
|
|
|
—
|
|
|
250
|
|
|
246
|
|
||||
Finance leases, asset financing and other
|
|
380
|
|
|
380
|
|
|
344
|
|
|
344
|
|
||||
Total debt
|
|
5,418
|
|
|
5,266
|
|
|
4,415
|
|
|
4,269
|
|
||||
Short-term borrowings and current maturities of long-term debt
|
|
84
|
|
|
84
|
|
|
371
|
|
|
367
|
|
||||
Long-term debt
|
|
$
|
5,334
|
|
|
$
|
5,182
|
|
|
$
|
4,044
|
|
|
$
|
3,902
|
|
(In millions)
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
||||||
December 31, 2019
|
|
$
|
5,580
|
|
|
$
|
3,190
|
|
|
$
|
2,390
|
|
December 31, 2018
|
|
4,305
|
|
|
2,020
|
|
|
2,285
|
|
(In millions)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
||||||||||||
Principal payments on debt
|
|
$
|
26
|
|
|
$
|
3
|
|
|
$
|
1,201
|
|
|
$
|
536
|
|
|
$
|
1,001
|
|
|
$
|
2,305
|
|
|
|
77
|
|
|
|
|
|
|
(In millions)
|
|
2019
|
|
2018
|
||||
Commitment:
|
|
|
|
|
||||
Facility
|
|
$
|
1,503
|
|
|
$
|
1,503
|
|
Incremental loans
|
|
500
|
|
|
N/A
|
|
||
Interest rate:
|
|
|
|
|
||||
Facility
|
|
|
|
|
||||
Base rate loans
|
|
1.00
|
%
|
|
1.00
|
%
|
||
LIBOR loans
|
|
2.00
|
%
|
|
2.00
|
%
|
||
Incremental loans
|
|
|
|
|
||||
Base rate loans
|
|
1.50
|
%
|
|
N/A
|
|
||
LIBOR loans
|
|
2.50
|
%
|
|
N/A
|
|
||
Maturity date
|
|
February 23, 2025
|
|
|
February 23, 2025
|
|
|
|
78
|
|
|
|
|
|
|
|
|
79
|
|
|
|
|
|
|
|
|
80
|
|
|
|
|
|
|
|
|
U.S. Plans
|
|
U.K. Plan
|
||||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Projected benefit obligation at beginning of year
|
|
$
|
1,659
|
|
|
$
|
1,821
|
|
|
$
|
1,164
|
|
|
$
|
1,305
|
|
Interest cost
|
|
66
|
|
|
59
|
|
|
29
|
|
|
28
|
|
||||
Plan amendment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
||||
Actuarial loss (gain)
|
|
214
|
|
|
(147
|
)
|
|
136
|
|
|
(62
|
)
|
||||
Benefits paid
|
|
(77
|
)
|
|
(74
|
)
|
|
(56
|
)
|
|
(56
|
)
|
||||
Foreign currency exchange rate changes
|
|
—
|
|
|
—
|
|
|
50
|
|
|
(70
|
)
|
||||
Projected benefit obligation at end of year (1)
|
|
$
|
1,862
|
|
|
$
|
1,659
|
|
|
$
|
1,323
|
|
|
$
|
1,164
|
|
(1)
|
As of December 31, 2019, the accumulated benefit obligations for the U.K. Plan was equal to the projected benefit obligations. As of December 31, 2018, the accumulated benefit obligations for the U.S. and U.K. plans were equal to the projected benefit obligations.
|
|
|
U.S. Plans
|
|
U.K. Plan
|
||||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Fair value of plan assets at beginning of year
|
|
$
|
1,582
|
|
|
$
|
1,764
|
|
|
$
|
1,227
|
|
|
$
|
1,390
|
|
Actual return on plan assets
|
|
353
|
|
|
(113
|
)
|
|
138
|
|
|
(35
|
)
|
||||
Employer contributions
|
|
5
|
|
|
5
|
|
|
2
|
|
|
3
|
|
||||
Benefits paid
|
|
(77
|
)
|
|
(74
|
)
|
|
(56
|
)
|
|
(56
|
)
|
||||
Foreign currency exchange rate changes
|
|
—
|
|
|
—
|
|
|
51
|
|
|
(75
|
)
|
||||
Fair value of plan assets at end of year
|
|
$
|
1,863
|
|
|
$
|
1,582
|
|
|
$
|
1,362
|
|
|
$
|
1,227
|
|
|
|
U.S. Plans
|
|
U.K. Plan
|
||||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Funded status at end of year
|
|
$
|
1
|
|
|
$
|
(77
|
)
|
|
$
|
39
|
|
|
$
|
63
|
|
Amount recognized in balance sheet:
|
|
|
|
|
|
|
|
|
||||||||
Long-term assets
|
|
$
|
76
|
|
|
$
|
—
|
|
|
$
|
39
|
|
|
$
|
63
|
|
Current liabilities
|
|
(6
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
||||
Long-term liabilities
|
|
(69
|
)
|
|
(72
|
)
|
|
—
|
|
|
—
|
|
||||
Net amount recognized
|
|
$
|
1
|
|
|
$
|
(77
|
)
|
|
$
|
39
|
|
|
$
|
63
|
|
Plans with projected and accumulated benefit obligation in excess of plan assets:
|
|
|
|
|
|
|
|
|
||||||||
Projected and accumulated benefit obligation
|
|
$
|
75
|
|
|
$
|
1,659
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fair value of plan assets
|
|
—
|
|
|
1,582
|
|
|
—
|
|
|
—
|
|
|
|
81
|
|
|
|
|
|
|
|
|
U.S. Plans
|
|
U.K. Plan
|
||||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Actuarial (loss) gain
|
|
$
|
(5
|
)
|
|
$
|
(53
|
)
|
|
$
|
(54
|
)
|
|
$
|
5
|
|
Prior-service credit
|
|
—
|
|
|
—
|
|
|
18
|
|
|
19
|
|
||||
AOCI
|
|
$
|
(5
|
)
|
|
$
|
(53
|
)
|
|
$
|
(36
|
)
|
|
$
|
24
|
|
|
|
U.S. Plans
|
|
U.K. Plan
|
||||||||||||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Net periodic benefit (income) expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest cost
|
|
$
|
66
|
|
|
$
|
59
|
|
|
$
|
77
|
|
|
$
|
29
|
|
|
$
|
28
|
|
|
$
|
34
|
|
Expected return on plan assets
|
|
(90
|
)
|
|
(92
|
)
|
|
(93
|
)
|
|
(58
|
)
|
|
(67
|
)
|
|
(60
|
)
|
||||||
Amortization of prior-service credit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
||||||
Recognized AOCI loss due to settlements
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit income
|
|
$
|
(24
|
)
|
|
$
|
(33
|
)
|
|
$
|
(17
|
)
|
|
$
|
(30
|
)
|
|
$
|
(41
|
)
|
|
$
|
(27
|
)
|
Amounts recognized in Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Actuarial (gain) loss
|
|
$
|
(49
|
)
|
|
$
|
58
|
|
|
$
|
(41
|
)
|
|
$
|
57
|
|
|
$
|
40
|
|
|
$
|
(72
|
)
|
Prior-service cost
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
||||||
Reclassification of recognized AOCI gain due to settlements
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Reclassification of prior-service credit to net periodic benefit income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
1
|
|
||||||
(Gain) loss recognized in Other comprehensive income (loss)
|
|
$
|
(49
|
)
|
|
$
|
58
|
|
|
$
|
(40
|
)
|
|
$
|
58
|
|
|
$
|
61
|
|
|
$
|
(71
|
)
|
|
|
U.S. Qualified Plans
|
|
U.S. Non-Qualified Plans
|
|
U.K. Plan
|
|||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|||||
Discount rate - net periodic benefit costs
|
|
4.08
|
%
|
|
3.14% - 3.38%
|
|
3.83% - 4.35%
|
|
3.65% - 3.95%
|
|
2.84% - 3.21%
|
|
4.35
|
%
|
|
2.56
|
%
|
|
2.21
|
%
|
|
2.70
|
%
|
Discount rate - benefit obligations
|
|
3.35
|
%
|
|
4.18% - 4.39%
|
|
3.55% - 3.71%
|
|
2.72% - 3.20%
|
|
3.93% - 4.28%
|
|
3.21% - 3.60%
|
|
|
2.04
|
%
|
|
2.85
|
%
|
|
2.53
|
%
|
Expected long-term rate of return on plan assets
|
|
5.80
|
%
|
|
3.00% - 5.40%
|
|
2.35% - 5.65%
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
4.85
|
%
|
|
4.95
|
%
|
|
5.00
|
%
|
|
|
82
|
|
|
|
|
|
|
(In millions)
|
|
U.S. Plans
|
|
U.K. Plan
|
||||
Year ending December 31:
|
|
|
|
|
||||
2020
|
|
$
|
90
|
|
|
$
|
42
|
|
2021
|
|
93
|
|
|
44
|
|
||
2022
|
|
95
|
|
|
46
|
|
||
2023
|
|
98
|
|
|
46
|
|
||
2024
|
|
100
|
|
|
49
|
|
||
2025-2029
|
|
524
|
|
|
268
|
|
|
|
83
|
|
|
|
|
|
|
(Dollars in millions)
|
|
December 31, 2019
|
|
|
|||||||||||||||
Asset category (U.S. Qualified Plans)
|
|
Level 1
|
|
Level 2
|
|
Not Subject to Leveling (1)
|
|
Total
|
|
Percentage of Plan Assets
|
|||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Short-term investment fund
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
24
|
|
|
1.3
|
%
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. large companies
|
|
—
|
|
|
—
|
|
|
140
|
|
|
140
|
|
|
7.5
|
%
|
||||
U.S. small companies
|
|
30
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
1.6
|
%
|
||||
International
|
|
72
|
|
|
—
|
|
|
75
|
|
|
147
|
|
|
7.9
|
%
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Global long-term debt instruments
|
|
405
|
|
|
1,108
|
|
|
5
|
|
|
1,518
|
|
|
81.5
|
%
|
||||
Derivatives
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
0.2
|
%
|
||||
Total U.S. Plan assets
|
|
$
|
507
|
|
|
$
|
1,112
|
|
|
$
|
244
|
|
|
$
|
1,863
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Asset category (U.K. Plan)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents
|
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34
|
|
|
2.5
|
%
|
Fixed income securities
|
|
—
|
|
|
773
|
|
|
474
|
|
|
1,247
|
|
|
91.6
|
%
|
||||
Derivatives
|
|
—
|
|
|
(8
|
)
|
|
89
|
|
|
81
|
|
|
5.9
|
%
|
||||
Total U.K. Plan assets
|
|
$
|
34
|
|
|
$
|
765
|
|
|
$
|
563
|
|
|
$
|
1,362
|
|
|
100.0
|
%
|
(1)
|
Investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient are not classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total defined benefit pension plan assets.
|
|
|
84
|
|
|
|
|
|
|
(Dollars in millions)
|
|
December 31, 2018
|
|
|
|||||||||||||||
Asset category (U.S. Qualified Plans)
|
|
Level 1
|
|
Level 2
|
|
Not Subject to Leveling (1)
|
|
Total
|
|
Percentage of Plan Assets
|
|||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Short-term investment fund
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37
|
|
|
$
|
37
|
|
|
2.3
|
%
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. large companies
|
|
—
|
|
|
—
|
|
|
107
|
|
|
107
|
|
|
6.8
|
%
|
||||
U.S. small companies
|
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
1.6
|
%
|
||||
International
|
|
59
|
|
|
—
|
|
|
60
|
|
|
119
|
|
|
7.5
|
%
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Global long-term debt instruments
|
|
223
|
|
|
1,063
|
|
|
8
|
|
|
1,294
|
|
|
81.8
|
%
|
||||
Derivatives
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Total U.S. Plan assets
|
|
$
|
308
|
|
|
$
|
1,062
|
|
|
$
|
212
|
|
|
$
|
1,582
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Asset category (U.K. Plan)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents
|
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57
|
|
|
4.6
|
%
|
Fixed income securities
|
|
—
|
|
|
615
|
|
|
363
|
|
|
978
|
|
|
79.7
|
%
|
||||
Derivatives
|
|
—
|
|
|
5
|
|
|
26
|
|
|
31
|
|
|
2.6
|
%
|
||||
Hedge funds (2)
|
|
—
|
|
|
—
|
|
|
38
|
|
|
38
|
|
|
3.1
|
%
|
||||
Diversified multi-asset funds:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Dynamic asset allocation
|
|
—
|
|
|
—
|
|
|
123
|
|
|
123
|
|
|
10.0
|
%
|
||||
Total U.K. Plan assets
|
|
$
|
57
|
|
|
$
|
620
|
|
|
$
|
550
|
|
|
$
|
1,227
|
|
|
100.0
|
%
|
(1)
|
Investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient are not classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total defined benefit pension plan assets.
|
(2)
|
The fair value of the fund is based on the fair value of the underlying assets, substantially all of which is invested in the York Credit Opportunities Master Fund, L.P., an exempted limited partnership formed under the laws of the Cayman Islands. The fund offers very limited liquidity with redemption only allowed on the anniversary of investment with 60 days’ prior notice.
|
|
|
85
|
|
|
|
|
|
|
|
|
As of December 31,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Projected benefit obligation at beginning of year
|
|
$
|
34
|
|
|
$
|
40
|
|
Interest cost on projected benefit obligation
|
|
1
|
|
|
1
|
|
||
Actuarial loss (gain)
|
|
9
|
|
|
(5
|
)
|
||
Participant contributions
|
|
1
|
|
|
2
|
|
||
Benefits paid
|
|
(4
|
)
|
|
(4
|
)
|
||
Projected and accumulated benefit obligation at end of year
|
|
$
|
41
|
|
|
$
|
34
|
|
Funded status of the plan
|
|
$
|
(41
|
)
|
|
$
|
(34
|
)
|
Amounts recognized in the balance sheet consist of:
|
|
|
|
|
||||
Current liabilities
|
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
Long-term liabilities
|
|
(38
|
)
|
|
(31
|
)
|
||
Net amount recognized
|
|
$
|
(41
|
)
|
|
$
|
(34
|
)
|
Discount rate assumption as of December 31
|
|
3.09
|
%
|
|
4.21
|
%
|
(In millions)
|
|
2019
|
|
2018
|
||||
Actuarial gain (loss)
|
|
$
|
2
|
|
|
$
|
12
|
|
AOCI
|
|
$
|
2
|
|
|
$
|
12
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions, except discount rate)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Service cost - benefits earned during the year
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Interest cost on projected benefit obligation
|
|
1
|
|
|
1
|
|
|
2
|
|
|||
Amortization of actuarial gain
|
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Net periodic benefit (gain) expense
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
2
|
|
Discount rate assumption used to calculate interest cost
|
|
3.87% - 4.36%
|
|
|
3.11% - 3.67%
|
|
|
3.90
|
%
|
|
|
86
|
|
|
|
|
|
|
(In millions)
|
|
Benefit Payments
|
||
Year ending December 31:
|
|
|
||
2020
|
|
$
|
3
|
|
2021
|
|
3
|
|
|
2022
|
|
3
|
|
|
2023
|
|
4
|
|
|
2024
|
|
4
|
|
|
2025-2029
|
|
15
|
|
|
|
87
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions, except per share data)
|
|
2019
|
|
2018
|
||||||||
|
|
2019 Program
|
|
2018 Program
|
|
2018 Program
|
||||||
Shares purchased and retired
|
|
17
|
|
8
|
|
10
|
||||||
Aggregate value
|
|
$
|
883
|
|
|
$
|
464
|
|
|
$
|
536
|
|
Average price per share
|
|
$
|
50.70
|
|
|
$
|
59.47
|
|
|
$
|
53.46
|
|
Remaining authorization
|
|
$
|
617
|
|
|
$
|
—
|
|
|
$
|
464
|
|
|
|
Years ended December 31,
|
||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Restricted stock units
|
|
$
|
30
|
|
|
$
|
21
|
|
|
$
|
12
|
|
Performance-based restricted stock units
|
|
6
|
|
|
9
|
|
|
10
|
|
|||
Cash-settled performance-based restricted stock units
|
|
31
|
|
|
19
|
|
|
55
|
|
|||
Other
|
|
—
|
|
|
—
|
|
|
2
|
|
|||
Total stock-based compensation expense
|
|
$
|
67
|
|
|
$
|
49
|
|
|
$
|
79
|
|
Tax benefit on stock-based compensation
|
|
(2
|
)
|
|
(22
|
)
|
|
(8
|
)
|
|
|
88
|
|
|
|
|
|
|
|
|
Stock Options
|
|||||||
|
|
Number of Stock Options
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Term
|
|||
Outstanding as of December 31, 2018
|
|
702,318
|
|
|
$
|
12.70
|
|
|
3.05
|
Granted
|
|
—
|
|
|
—
|
|
|
|
|
Exercised
|
|
(125,125
|
)
|
|
14.46
|
|
|
|
|
Forfeited
|
|
(1,438
|
)
|
|
22.83
|
|
|
|
|
Outstanding as of December 31, 2019
|
|
575,755
|
|
|
$
|
12.29
|
|
|
2.47
|
Options exercisable as of December 31, 2019
|
|
575,755
|
|
|
$
|
12.29
|
|
|
2.47
|
|
|
RSUs
|
|
PRSUs
|
||||||||||
|
|
Number of RSUs
|
|
Weighted-Average Grant Date Fair Value
|
|
Number of PRSUs
|
|
Weighted-Average Grant Date Fair Value
|
||||||
Outstanding as of December 31, 2018
|
|
1,085,628
|
|
|
$
|
68.24
|
|
|
1,036,925
|
|
|
$
|
43.51
|
|
Granted
|
|
1,148,380
|
|
|
50.85
|
|
|
1,030,368
|
|
|
15.93
|
|
||
Vested
|
|
(195,609
|
)
|
|
65.62
|
|
|
(407,245
|
)
|
|
30.40
|
|
||
Forfeited and canceled
|
|
(308,984
|
)
|
|
72.90
|
|
|
(75,783
|
)
|
|
35.21
|
|
||
Outstanding as of December 31, 2019
|
|
1,729,415
|
|
|
$
|
56.17
|
|
|
1,584,265
|
|
|
$
|
29.35
|
|
|
|
89
|
|
|
|
|
|
|
|
|
Number of Cash-Settled PRSUs
|
|
Outstanding as of December 31, 2018
|
|
753,276
|
|
Granted
|
|
—
|
|
Vested
|
|
(317,949
|
)
|
Forfeited and canceled
|
|
—
|
|
Outstanding as of December 31, 2019
|
|
435,327
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
U.S.
|
|
$
|
379
|
|
|
$
|
319
|
|
|
$
|
278
|
|
Foreign
|
|
190
|
|
|
247
|
|
|
(17
|
)
|
|||
Income before income tax provision (benefit)
|
|
$
|
569
|
|
|
$
|
566
|
|
|
$
|
261
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
|
||||||
U.S. Federal
|
|
$
|
18
|
|
|
$
|
2
|
|
|
$
|
2
|
|
State
|
|
3
|
|
|
6
|
|
|
(3
|
)
|
|||
Foreign
|
|
62
|
|
|
69
|
|
|
59
|
|
|||
Total current income tax provision
|
|
$
|
83
|
|
|
$
|
77
|
|
|
$
|
58
|
|
Deferred:
|
|
|
|
|
|
|
||||||
U.S. Federal (1)
|
|
$
|
52
|
|
|
$
|
57
|
|
|
$
|
(134
|
)
|
State
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
|||
Foreign (2) (3)
|
|
(6
|
)
|
|
(14
|
)
|
|
(21
|
)
|
|||
Total deferred income tax provision (benefit)
|
|
46
|
|
|
45
|
|
|
(157
|
)
|
|||
Total income tax provision (benefit)
|
|
$
|
129
|
|
|
$
|
122
|
|
|
$
|
(99
|
)
|
(1)
|
On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into law. The Tax Act includes numerous changes to existing U.S. tax law, including a permanent reduction in the federal corporate income tax rate from 35% to 21%. The rate reduction
|
|
|
90
|
|
|
|
|
|
|
(2)
|
On December 29, 2019, a law was published in France modifying the phases of previously enacted rate reductions. Consequently, we recorded a tax expense of $3 million in the fourth quarter of 2019 related to the revaluation of our net deferred tax liabilities due to the expected recognition of these liabilities.
|
(3)
|
On December 31, 2017, a law was published in France enacting a rate reduction from 34.4% to 25.8% to be phased in over five years starting in 2018. On December 29, 2017, a law was published in Belgium enacting a tax rate reduction from 34% to 25% to be phased in over three years starting in 2018. Consequently, we recorded a tax benefit of $10 million in the fourth quarter of 2017 related to the revaluation of our net deferred tax liabilities.
|
|
|
Years Ended December 31,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
U.S. federal statutory tax rate
|
|
21.0
|
%
|
|
21.0
|
%
|
|
35.0
|
%
|
State taxes, net of U.S. federal benefit
|
|
0.7
|
|
|
1.2
|
|
|
(1.2
|
)
|
Foreign rate differential
|
|
(0.3
|
)
|
|
(1.1
|
)
|
|
(6.7
|
)
|
Foreign operations (1)
|
|
2.9
|
|
|
8.3
|
|
|
(0.1
|
)
|
Valuation allowance
|
|
0.1
|
|
|
(3.7
|
)
|
|
0.8
|
|
Changes in uncertain tax positions
|
|
(0.9
|
)
|
|
—
|
|
|
5.1
|
|
Effect of law changes (2) (3)
|
|
0.6
|
|
|
—
|
|
|
(70.2
|
)
|
Stock-based compensation
|
|
(0.3
|
)
|
|
(3.8
|
)
|
|
(3.3
|
)
|
Other
|
|
(1.2
|
)
|
|
(0.3
|
)
|
|
2.4
|
|
Effective tax rate
|
|
22.6
|
%
|
|
21.6
|
%
|
|
(38.2
|
)%
|
(1)
|
Foreign operations include the net impact of the changes to foreign valuation allowances, the cost of foreign inclusion net of foreign tax credits, and permanent items related to foreign operations.
|
(2)
|
In 2019, there were tax rate changes in France.
|
(3)
|
In 2017, there were tax rate changes in the U.S., France and Belgium.
|
|
|
91
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Deferred tax asset
|
|
|
|
|
||||
Net operating loss and other tax attribute carryforwards
|
|
$
|
129
|
|
|
$
|
154
|
|
Accrued expenses
|
|
45
|
|
|
60
|
|
||
Pension and other retirement obligations
|
|
17
|
|
|
25
|
|
||
Other
|
|
59
|
|
|
62
|
|
||
Total deferred tax asset
|
|
250
|
|
|
301
|
|
||
Valuation allowance
|
|
(69
|
)
|
|
(73
|
)
|
||
Total deferred tax asset, net
|
|
181
|
|
|
228
|
|
||
Deferred tax liability
|
|
|
|
|
||||
Intangible assets
|
|
(297
|
)
|
|
(330
|
)
|
||
Property and equipment
|
|
(324
|
)
|
|
(299
|
)
|
||
Other
|
|
(46
|
)
|
|
(35
|
)
|
||
Total deferred tax liability
|
|
(667
|
)
|
|
(664
|
)
|
||
Net deferred tax liability
|
|
$
|
(486
|
)
|
|
$
|
(436
|
)
|
|
|
December 31,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Other long-term assets
|
|
$
|
9
|
|
|
$
|
8
|
|
Deferred tax liability
|
|
(495
|
)
|
|
(444
|
)
|
||
Net deferred tax liability
|
|
$
|
(486
|
)
|
|
$
|
(436
|
)
|
|
|
92
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||
(In millions)
|
|
Expiration Date
|
|
2019
|
|
2018
|
||||
Federal net operating losses for all U.S. operations (including those of minority owned subsidiaries)
|
|
2032 - 2037 (1)
|
|
$
|
72
|
|
|
$
|
82
|
|
Tax effect (before federal benefit) of state net operating losses
|
|
Various times starting in 2020 (1)
|
|
26
|
|
|
26
|
|
||
Federal tax credit carryforwards
|
|
Various times starting in 2032 (1)
|
|
4
|
|
|
16
|
|
||
State tax credit carryforward
|
|
Various times starting in 2020 (1)
|
|
10
|
|
|
8
|
|
||
Foreign net operating losses available to offset future taxable income
|
|
Various times starting in 2020 (1)
|
|
379
|
|
|
382
|
|
(1)
|
Some credits and losses have unlimited carryforward periods.
|
(In millions)
|
|
Beginning Balance
|
|
Additions
|
|
Reductions/
Charges |
|
Ending Balance
|
||||||||
Year Ended December 31, 2019
|
|
$
|
73
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
69
|
|
Year Ended December 31, 2018
|
|
93
|
|
|
—
|
|
|
(20
|
)
|
|
73
|
|
||||
Year Ended December 31, 2017
|
|
83
|
|
|
29
|
|
|
(19
|
)
|
|
93
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Beginning balance
|
|
$
|
23
|
|
|
$
|
25
|
|
|
$
|
15
|
|
Additions for tax positions of the current period
|
|
—
|
|
|
1
|
|
|
2
|
|
|||
Additions for tax positions of prior years
|
|
3
|
|
|
2
|
|
|
17
|
|
|||
Reductions for tax positions of prior years
|
|
(7
|
)
|
|
(3
|
)
|
|
—
|
|
|||
Settlements with tax authorities
|
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
|||
Reductions due to the statute of limitations
|
|
(1
|
)
|
|
(1
|
)
|
|
(6
|
)
|
|||
Currency translation adjustment
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
Ending balance
|
|
$
|
17
|
|
|
$
|
23
|
|
|
$
|
25
|
|
Interest and penalties
|
|
7
|
|
|
6
|
|
|
5
|
|
|||
Gross unrecognized tax benefits
|
|
$
|
24
|
|
|
$
|
29
|
|
|
$
|
30
|
|
|
|
|
|
|
|
|
||||||
Total UTB that, if recognized, would impact the effective income tax rate as of the end of the year
|
|
$
|
16
|
|
|
$
|
22
|
|
|
$
|
23
|
|
|
|
93
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In millions, except per share data)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Basic earnings per common share
|
|
|
|
|
|
|
||||||
Net income attributable to XPO
|
|
$
|
419
|
|
|
$
|
422
|
|
|
$
|
340
|
|
Series A preferred stock dividends
|
|
(3
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|||
Non-cash allocation of undistributed earnings
|
|
(37
|
)
|
|
(29
|
)
|
|
(25
|
)
|
|||
Net income attributable to common shares, basic
|
|
$
|
379
|
|
|
$
|
390
|
|
|
$
|
312
|
|
|
|
|
|
|
|
|
||||||
Basic weighted-average common shares
|
|
96
|
|
|
123
|
|
|
115
|
|
|||
Basic earnings per share
|
|
$
|
3.95
|
|
|
$
|
3.17
|
|
|
$
|
2.72
|
|
|
|
|
|
|
|
|
||||||
Diluted earnings per common share
|
|
|
|
|
|
|
||||||
Net income attributable to common shares, basic
|
|
$
|
379
|
|
|
$
|
390
|
|
|
$
|
312
|
|
Interest from Convertible Senior Notes
|
|
—
|
|
|
—
|
|
|
1
|
|
|||
Net income attributable to common shares, diluted
|
|
$
|
379
|
|
|
$
|
390
|
|
|
$
|
313
|
|
|
|
|
|
|
|
|
||||||
Basic weighted-average common shares
|
|
96
|
|
|
123
|
|
|
115
|
|
|||
Dilutive effect of Convertible Senior Notes
|
|
—
|
|
|
—
|
|
|
2
|
|
|||
Dilutive effect of non-participating stock-based awards and equity forward
|
|
10
|
|
|
12
|
|
|
11
|
|
|||
Diluted weighted-average common shares
|
|
106
|
|
|
135
|
|
|
128
|
|
|||
|
|
|
|
|
|
|
||||||
Diluted earnings per share
|
|
$
|
3.57
|
|
|
$
|
2.88
|
|
|
$
|
2.45
|
|
|
|
|
|
|
|
|
||||||
Potential common shares excluded
|
|
10
|
|
|
10
|
|
|
10
|
|
|
|
94
|
|
|
|
|
|
|
|
|
95
|
|
|
|
|
|
|
|
|
96
|
|
|
|
|
|
|
|
|
97
|
|
|
|
|
|
|
|
|
98
|
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
2.1
|
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
3.5
|
|
|
|
|
|
3.6
|
|
|
|
|
|
3.7
|
|
|
|
|
|
3.8
|
|
|
|
|
|
3.9
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
|
|
99
|
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
4.8
|
|
|
|
|
|
4.9 *
|
|
|
|
|
|
10.1 +
|
|
|
|
|
|
10.2 +
|
|
|
|
|
|
10.3 +
|
|
|
|
|
|
10.4 +
|
|
|
|
|
|
10.5 +
|
|
|
|
|
|
10.6 +
|
|
|
|
|
|
10.7 +
|
|
|
|
|
|
10.8 +
|
|
|
|
|
|
10.9 +
|
|
|
|
|
|
|
|
100
|
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
10.10 +
|
|
|
|
|
|
10.11 +
|
|
|
|
|
|
10.12 +
|
|
|
|
|
|
10.13 +
|
|
|
|
|
|
10.14 +
|
|
|
|
|
|
10.15 +
|
|
|
|
|
|
10.16 +
|
|
|
|
|
|
10.17 +
|
|
|
|
|
|
10.18 +
|
|
|
|
|
|
10.19 +
|
|
|
|
|
|
10.20 +
|
|
|
|
|
|
10.21 +
|
|
|
|
|
|
10.22 +
|
|
|
|
|
|
10.23 +
|
|
|
|
|
|
10.24 +
|
|
|
|
|
|
|
|
101
|
|
|
|
|
|
|
Exhibit
Number
|
|
Description
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10.25 +
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10.26 +
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10.27 +
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10.28 +
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10.29 +
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10.30 +
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10.31 +
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10.32 +
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10.33 +
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10.34 +
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10.35
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10.36
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10.37
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10.38
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10.39
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102
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Exhibit
Number
|
|
Description
|
|
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10.40
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10.41
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10.42
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10.43
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10.44
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10.45
|
|
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10.46
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21 *
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|
23 *
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31.1 *
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31.2 *
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32.1**
|
|
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|
32.2**
|
|
|
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|
|
101.INS *
|
|
XBRL Instance Document.
|
|
|
|
|
|
103
|
|
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|
|
|
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|
|
104
|
|
|
|
|
|
|
|
XPO LOGISTICS, INC.
|
|
|
By:
|
/s/ Bradley S. Jacobs
|
|
Bradley S. Jacobs
|
|
(Chairman of the Board of Directors and Chief Executive Officer)
|
|
|
By:
|
/s/ Sarah J.S. Glickman
|
|
Sarah J.S. Glickman
|
|
(Acting Chief Financial Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Bradley S. Jacobs
|
|
Chairman of the Board of Directors and Chief Executive Officer
(Principal Executive Officer)
|
|
February 10, 2020
|
Bradley S. Jacobs
|
|
|
|
|
/s/ Sarah J.S. Glickman
|
|
Acting Chief Financial Officer
(Principal Financial Officer)
|
|
February 10, 2020
|
Sarah J.S. Glickman
|
|
|
|
|
/s/ Lance A. Robinson
|
|
Chief Accounting Officer
(Principal Accounting Officer)
|
|
February 10, 2020
|
Lance A. Robinson
|
|
|
|
|
/s/ AnnaMaria DeSalva
|
|
Vice Chairman of the Board of Directors
|
|
February 10, 2020
|
AnnaMaria DeSalva
|
|
|
|
|
/s/ Gena L. Ashe
|
|
Director
|
|
February 10, 2020
|
Gena L. Ashe
|
|
|
|
|
/s/ Marlene M. Colucci
|
|
Director
|
|
February 10, 2020
|
Marlene M. Colucci
|
|
|
|
|
/s/ Michael G. Jesselson
|
|
Lead Independent Director
|
|
February 10, 2020
|
Michael G. Jesselson
|
|
|
|
|
/s/ Aris Kekedjian
|
|
Director
|
|
February 10, 2020
|
Aris Kekedjian
|
|
|
|
|
/s/ Adrian P. Kingshott
|
|
Director
|
|
February 10, 2020
|
Adrian P. Kingshott
|
|
|
|
|
/s/ Jason D. Papastavrou
|
|
Director
|
|
February 10, 2020
|
Jason D. Papastavrou
|
|
|
|
|
/s/ Oren G. Shaffer
|
|
Director
|
|
February 10, 2020
|
Oren G. Shaffer
|
|
|
|
|
|
|
105
|
|
|
|
|
|
|
Name
|
Country and/or State of Incorporation
|
XPO Logistics, Inc.
|
Delaware
|
XPO CNW, Inc.
|
Delaware
|
XPO Logistics Freight, Inc.
|
Delaware
|
XPO Logistics Worldwide, LLC
|
Delaware
|
XPO Intermodal, Inc.
|
Tennessee
|
XPO Global Forwarding, Inc.
|
Delaware
|
XPO Last Mile Holding, Inc.
|
Delaware
|
XPO Last Mile, Inc.
|
Georgia
|
XPO Logistics, LLC
|
Delaware
|
XPO Logistics Express, LLC
|
Delaware
|
XPO Logistics France
|
France
|
XPO Logistics Europe
|
France
|
XPO Global Forwarding International
|
France
|
XPO Holding Transport Solutions Europe
|
France
|
XPO Supply Chain International
|
France
|
XPO Logistics Supply Chain Holding Company
|
Delaware
|
XPO Logistics Supply Chain, Inc.
|
North Carolina
|
|
/s/ Bradley S. Jacobs
|
|
Bradley S. Jacobs
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
Date: February 10, 2020
|
|
|
/s/ Sarah J.S. Glickman
|
|
Sarah J.S. Glickman
|
|
Acting Chief Financial Officer
|
|
(Principal Financial Officer)
|
Date: February 10, 2020
|
|
|
/s/ Bradley S. Jacobs
|
|
Bradley S. Jacobs
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
Date: February 10, 2020
|
|
|
/s/ Sarah J.S. Glickman
|
|
Sarah J.S. Glickman
|
|
Acting Chief Financial Officer
|
|
(Principal Financial Officer)
|
Date: February 10, 2020
|
|