What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-05-04 compared with 2020-11-06 · 171 added, 293 removed, 370 unchanged (56% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

September 30, December 31,

March 31, December 31,

(In millions, except per share data) 2021 2020

30 unchanged sentences

10 shares authorized;

0.07 of Series A shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively

— and 0.001 of Series A shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

Common stock, $ 0.001 par value;

300 shares authorized;

91 and 92 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively

112 and 102 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

Additional paid-in capital 1,988 1,998

7 unchanged sentences

XPO Logistics, Inc.

Condensed Consolidated Statements of Income (Loss)

Three Months Ended September 30, Nine Months Ended September 30,

Condensed Consolidated Statements of Income

Three Months Ended March 31,

(In millions, except per share data) 2021 2020

Revenue $ 4,774 $ 3,864

Operating expenses

Cost of transportation and services 2,328 1,898

1 unchanged sentence

Sales, general and administrative expense 588 525

Total operating expenses 3,998 3,925 11,424 11,893

Operating income 202 81

Other income ( 26 ) ( 18 )

Foreign currency (gain) loss — ( 5 ) ( 5 ) 5

Foreign currency gain ( 2 ) ( 8 )

Debt extinguishment loss 8 —

Interest expense 69 72

Income (loss) before income tax provision (benefit) 157 170 ( 13 ) 432

Income tax provision (benefit) 59 34 ( 2 ) 99

Net income (loss) 98 136 ( 11 ) 333

Income before income tax provision 153 35

Income tax provision 35 10

Net income 118 25

Net income attributable to noncontrolling interests ( 3 ) ( 2 )

Net income (loss) attributable to XPO $ 93 $ 130 $ ( 15 ) $ 312

Earnings (loss) per share data

Net income (loss) attributable to common shareholders $ 84 $ 117 $ ( 17 ) $ 282

Basic earnings (loss) per share $ 0.93 $ 1.27 $ ( 0.18 ) $ 2.91

Diluted earnings (loss) per share $ 0.83 $ 1.14 $ ( 0.18 ) $ 2.63

Net income attributable to XPO $ 115 $ 23

Net income attributable to common shareholders $ 115 $ 21

Earnings per share data

Basic earnings per share $ 1.08 $ 0.23

Diluted earnings per share $ 1.02 $ 0.20

Weighted-average common shares outstanding

3 unchanged sentences

XPO Logistics, Inc.

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended September 30, Nine Months Ended September 30,

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended March 31,

(In millions) 2021 2020

Net income (loss) $ 98 $ 136 $ ( 11 ) $ 333

Net income $ 118 $ 25

Other comprehensive income (loss), net of tax

Foreign currency translation gain (loss), net of tax effect of $ 13 , $( 11 ), $ 6 and $( 17 )

$ 71 $ ( 66 ) $ 27 $ ( 68 )

Unrealized gain (loss) on financial assets/liabilities designated as hedging instruments, net of tax effect of $ — , $ — , $ — and $ —

Foreign currency translation loss, net of tax effect of $( 6 ) and $( 11 )

$ ( 42 ) $ ( 65 )

Defined benefit plans adjustments, net of tax effect of $ — and $ 2

( 2 ) ( 1 ) ( 7 ) ( 1 )

Other comprehensive income (loss) 68 ( 67 ) 19 ( 68 )

Comprehensive income $ 166 $ 69 $ 8 $ 265

Comprehensive income (loss) attributable to noncontrolling interests 10 ( 9 ) 7 4

Comprehensive income attributable to XPO $ 156 $ 78 $ 1 $ 261

Other comprehensive loss ( 42 ) ( 70 )

Comprehensive income (loss) $ 76 $ ( 45 )

Comprehensive loss attributable to noncontrolling interests ( 2 ) ( 3 )

Comprehensive income (loss) attributable to XPO $ 78 $ ( 42 )

See accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

(In millions) 2021 2020

Operating activities

Net income (loss) $ ( 11 ) $ 333

Adjustments to reconcile net income (loss) to net cash from operating activities

Net income $ 118 $ 25

Adjustments to reconcile net income to net cash from operating activities

Depreciation, amortization and net lease activity 192 183

1 unchanged sentence

Accretion of debt 5 4

Deferred tax expense 4 26

Deferred tax benefit ( 4 ) ( 2 )

Debt extinguishment loss 8 —

Unrealized (gain) loss on foreign currency option and forward contracts ( 1 ) 5

Unrealized gain on foreign currency option and forward contracts ( 1 ) ( 4 )

Gains on sales of property and equipment ( 24 ) ( 27 )

Other ( 2 ) 5

Changes in assets and liabilities

7 unchanged sentences

Proceeds from sale of property and equipment 36 54

Cash collected on deferred purchase price receivable — 186

Net cash used in investing activities ( 95 ) ( 79 )

Financing activities

Proceeds from issuance of debt 1,155 1,751

Proceeds from borrowings related to securitization program 48 —

Proceeds from (repayment of) borrowings related to securitization program ( 49 ) 182

Repurchase of debt ( 1,200 ) —

Proceeds from borrowings on ABL facility — 620

2 unchanged sentences

Payment for debt issuance costs ( 5 ) —

Purchase of noncontrolling interests ( 21 ) —

Repurchase of common stock — ( 114 )

1 unchanged sentence

Payment for tax withholdings for restricted shares ( 21 ) ( 16 )

Other 2 ( 1 )

Net cash provided by (used in) financing activities ( 1,501 ) 668

4 unchanged sentences

Supplemental disclosure of cash flow information

Leased assets obtained in exchange for new operating lease liabilities $ 481 $ 559

Leased assets obtained in exchange for new operating lease liabilities, including $ 306 million related an acquisition

Leased assets obtained in exchange for new finance lease liabilities 23 8

6 unchanged sentences

(Shares in thousands, dollars in millions) Shares Amount Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total XPO Stockholders' Equity Non-controlling Interests Total Equity

Balance as of June 30, 2020 72 $ 41 91,322 $ — $ 1,963 $ 672 $ ( 192 ) $ 2,484 $ 150 $ 2,634

Net income — — — — — 93 — 93 5 98

Other comprehensive income

— — — — — — 63 63 5 68

Exercise and vesting of stock compensation awards

— — 39 — — — — — — —

Tax withholdings related to vesting of stock compensation awards

— — — — ( 3 ) — — ( 3 ) — ( 3 )

Purchase of noncontrolling interests — — — — ( 1 ) — — ( 1 ) ( 20 ) ( 21 )

Dividend declared

— — — — — — — — ( 4 ) ( 4 )

Stock compensation expense

— — — — 10 — — 10 — 10

— — — — 2 1 — 3 — 3

Balance as of September 30, 2020 72 $ 41 91,361 $ — $ 1,971 $ 766 $ ( 129 ) $ 2,649 $ 136 $ 2,785

Series A Preferred Stock Common Stock

Balance as of December 31, 2020 1 $ 1 102,052 $ — $ 1,998 $ 868 $ ( 158 ) $ 2,709 $ 140 $ 2,849

Net (income) loss — — — — — ( 15 ) — ( 15 ) 4 ( 11 )

Other comprehensive income — — — — — — 16 16 3 19

Exercise and vesting of stock compensation awards

— — 672 — — — — — — —

Tax withholdings related to vesting of stock compensation awards

— — — — ( 21 ) — — ( 21 ) — ( 21 )

Purchase of noncontrolling interests — — — — ( 1 ) — — ( 1 ) ( 20 ) ( 21 )

Retirement of common stock

— — ( 1,715 ) — ( 114 ) — — ( 114 ) — ( 114 )

Dividend declared

— — — — — ( 2 ) — ( 2 ) ( 4 ) ( 6 )

Stock compensation expense

— — — — 42 — — 42 — 42

Adoption of new accounting standard and other

— — 62 — 4 ( 3 ) — 1 — 1

Balance as of September 30, 2020 72 $ 41 91,361 $ — $ 1,971 $ 766 $ ( 129 ) $ 2,649 $ 136 $ 2,785

XPO Logistics, Inc.

Condensed Consolidated Statements of Changes in Equity (continued)

Series A Preferred Stock Common Stock

Balance as of June 30, 2019 72 $ 41 91,992 $ — $ 2,054 $ 563 $ ( 153 ) $ 2,505 $ 407 $ 2,912

— — — — — 130 — 130 6 136

Net income — — — — — 115 — 115 3 118

Other comprehensive loss — — — — — — ( 37 ) ( 37 ) ( 5 ) ( 42 )

— — — — — — ( 52 ) ( 52 ) ( 15 ) ( 67 )

Exercise and vesting of stock compensation awards

2 unchanged sentences

— — — — ( 21 ) — — ( 21 ) — ( 21 )

Dividend declared

— — — — — ( 1 ) — ( 1 ) ( 3 ) ( 4 )

Conversion of preferred stock to common stock ( 1 ) ( 1 ) 139 — 1 — — — — —

Exercise of warrants — — 9,215 — — — — — — —

Stock compensation expense

— — — — 10 — — 10 — 10

— — — — 1 ( 12 ) — ( 11 ) ( 2 ) ( 13 )

Balance as of September 30, 2019 72 $ 41 92,234 $ — $ 2,056 $ 680 $ ( 205 ) $ 2,572 $ 393 $ 2,965

Balance as of March 31, 2021 — $ — 111,676 $ — $ 1,988 $ 983 $ ( 195 ) $ 2,776 $ 138 $ 2,914

Series A Preferred Stock Common Stock

16 unchanged sentences

— — — — — ( 4 ) — ( 4 ) — ( 4 )

Balance as of September 30, 2019 72 $ 41 92,234 $ — $ 2,056 $ 680 $ ( 205 ) $ 2,572 $ 393 $ 2,965

Balance as of March 31, 2020 72 $ 41 91,044 $ — $ 1,943 $ 804 $ ( 210 ) $ 2,578 $ 150 $ 2,728

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

Organization, Description of Business and Basis of Presentation

XPO Logistics, Inc., together with its subsidiaries (“XPO” or “we”), is a top ten global provider of cutting-edge supply chain solutions to the most successful companies in the world.

XPO Logistics, Inc., together with its subsidiaries (“XPO” or “we”), provides cutting-edge supply chain solutions to the most successful companies in the world.

We use our integrated network of people, technology and physical assets to help customers manage their goods most efficiently throughout their supply chains.

2 unchanged sentences

Transportation and Logistics.

See Note 2—Segment Reporting for further information on our operations.

See Note 3—Segment Reporting for additional information on our operations.

In December 2020, we announced that our Board of Directors unanimously approved a plan to pursue a spin-off of 100 % of our Logistics segment as a separate publicly traded company.

The spin-off, which we intend to qualify as a transaction that is generally tax-free for U.S.

federal income tax purposes to XPO shareholders, would result in XPO shareholders owning stock in both companies.

If completed, the spin-off will result in separate public companies with clearly delineated service offerings.

XPO will be a global provider of primarily less-than-truckload (“LTL”) transportation and truck brokerage services, and GXO Logistics, Inc.

(“GXO”), the planned spin-off, will be a global provider of contract logistics services.

Both companies’ stocks are expected to trade on the New York Stock Exchange, and we plan to consider a dual listing on the London Stock Exchange for GXO in due course.

The transaction is currently expected to be completed in the second half of 2021, subject to various conditions, including the approval of XPO’s board of directors.

There can be no assurance that the spin-off will occur or, if it does occur, of its terms or timing.

We prepared our Condensed Consolidated Financial Statements in accordance with U.S.

generally accepted accounting principles (“GAAP”) and on the same basis as the accounting policies described in our annual report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”), except for the effects of adopting Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments” as of January 1, 2020, as described below.

generally accepted accounting principles (“GAAP”) and on the same basis as the accounting policies described in our annual report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”).

The interim reporting requirements of Form 10-Q allow certain information and note disclosures normally included in annual consolidated financial statements to be condensed or omitted.

These Condensed Consolidated Financial Statements should be read in conjunction with the 2020 Form 10-K.

We have a controlling financial interest in entities generally when we own a majority of the voting interest.

The noncontrolling interests reflected in our consolidated financial statements primarily relate to a minority interest in XPO Logistics Europe SA (“XPO Logistics Europe”), formerly known as Norbert Dentressangle SA, a business we acquired in 2015.

In July 2020, we purchased a shareholder’s noncontrolling interest in XPO Logistics Europe for € 17 million (approximately $ 20 million).

Following this acquisition, the noncontrolling interest was reduced to approximately 4 % of XPO Logistics Europe.

The Condensed Consolidated Financial Statements are not audited but reflect all adjustments that are of a normal recurring nature and are necessary for a fair presentation of financial condition, operating results and cash flows for the interim periods presented.

Operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020, particularly in light of the outbreak of a strain of coronavirus, COVID-19, in the first quarter of 2020.

The rapid escalation of COVID-19 into a pandemic in the first quarter of 2020 has affected, and will continue to affect, economic activity broadly and customer sectors served by our industry.

COVID-19 has had, and we expect will continue to have, significant effects on economic activity, on demand for our services, and on our results of operations in 2020.

Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

Restricted Cash

As of September 30, 2020 and December 31, 2019, our restricted cash included in Other long-term assets on our Condensed Consolidated Balance Sheets was $ 10 million.

Accounts Receivable and Allowance for Doubtful Accounts

We record accounts receivable at the contractual amount and we record an allowance for doubtful accounts for the amount we estimate we may not collect.

In determining the allowance for doubtful accounts, we consider historical collection experience, the age of the accounts receivable balances, the credit quality and risk of our customers, any specific customer collection issues, current economic conditions, and other factors that may impact our customers’ ability to pay.

Commencing in the first quarter of 2020 and in accordance with ASU 2016-13, we also consider reasonable and supportable forecasts of future economic conditions and their expected impact on customer collections in determining our allowance for doubtful accounts.

We write off accounts receivable balances once the receivables are no longer deemed collectible.

As of March 31, 2021 and December 31, 2020, our restricted cash included in Other long-term assets on our Condensed Consolidated Balance Sheets was $ 11 million.

Trade Receivables Securitization and Factoring Programs

3 unchanged sentences

We use trade receivables securitization and factoring programs to help manage our cash flows and offset the impact of extended payment terms for some of our customers.

XPO Logistics Europe, one of our majority-owned subsidiaries, participates in a trade receivables securitization program co-arranged by three European banks (the “Purchasers”).

Under the program, a wholly-owned bankruptcy-remote special purpose entity of XPO Logistics Europe sells trade receivables that originate with wholly-owned subsidiaries of XPO Logistics Europe in the United Kingdom and France to unaffiliated entities managed by the Purchasers.

XPO Logistics Europe SA (“XPO Logistics Europe”), one of our majority-owned subsidiaries, participates in a trade receivables securitization program co-arranged by three European banks (the “Purchasers”).

Under the program, a wholly-owned bankruptcy-remote special purpose entity of XPO Logistics Europe sells trade receivables that

originate with wholly-owned subsidiaries of XPO Logistics Europe in the United Kingdom and France to unaffiliated entities managed by the Purchasers.

The special purpose entity is a variable interest entity and is consolidated by XPO based on our control of the entity’s activities.

1 unchanged sentence

For these transfers, the receivables are removed from our Condensed Consolidated Balance Sheets at the date of transfer.

In the securitization and factoring arrangements, any continuing involvement with the receivables is limited to servicing the receivables.

In the securitization and factoring arrangements, our continuing involvement is limited to servicing the receivables.

The fair value of any servicing assets and liabilities is immaterial.

Our trade receivables securitization program permits us to borrow, on an unsecured basis, cash collected in a servicing capacity on previously sold receivables, which we report within short-term debt on our Condensed Consolidated Balance Sheets.

These borrowings amounted to € 43 million ($ 50 million) as of September 30, 2020.

We had no such borrowings outstanding as of March 31, 2021 and had borrowings of € 41 million ($ 50 million) as of December 31, 2020.

See Note 7—Debt for additional information on these borrowings.

Under a securitization program that was terminated in July 2019, if transfers were accounted for as sales, the consideration received included a simultaneous cash payment and a deferred purchase price receivable.

The deferred purchase price receivable was not a trade receivable and was recorded based on its fair value and reported within Other current assets on our Condensed Consolidated Balance Sheets.

The cash payment which we received on the date of the transfer was reflected within Net cash provided by operating activities on our Condensed Consolidated Statements of Cash Flows.

As we received cash payments on the deferred purchase price receivable, it was reflected as an investing activity.

The new program does not include a deferred purchase price mechanism.

The maximum amount of net cash proceeds available at any one time under the current securitization program is € 400 million (approximately $ 469 million as of September 30, 2020), and this amount includes any unsecured borrowings related to the program.

As of September 30, 2020, € 294 million (approximately $ 345 million) of capacity was utilized under the program and € 106 million (approximately $ 124 million) was available to us.

The weighted average interest rate was 0.64 % as of September 30, 2020.

Charges for commitment fees, which are based on a percentage of available amounts, and charges for administrative fees were not material to our results of operations for the three and nine months ended September 30, 2020 and 2019.

The securitization program expires in July 2022 and contains financial covenants customary for this type of arrangement, including maintaining a defined average days sales outstanding ratio.

The maximum amount of net cash proceeds available at any one time under the securitization program, inclusive of any unsecured borrowings, is € 400 million (approximately $ 469 million as of March 31, 2021).

As of March 31, 2021, € 82 million (approximately $ 96 million) was available to us, subject to having sufficient receivables available to sell to the Purchasers.

The weighted average interest rate was 0.58 % as of March 31, 2021.

Information related to the trade receivables sold was as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(In millions) 2021 2020

1 unchanged sentence

Receivables sold in period

$ 750 $ 790 $ 2,039 $ 1,451

Cash consideration

750 787 2,039 1,316

Deferred purchase price

Factoring programs

Receivables sold in period

$ 112 $ 196 $ 575 $ 615

Cash consideration

112 195 574 612

In addition to the cash considerations referenced above, we received $ 49 million and $ 186 million in the three and nine months ended September 30, 2019, respectively, for the realization of cash on the deferred purchase price receivable for our prior securitization program.

In March 2020, XPO Logistics Europe announced that it had entered into a definitive agreement to acquire the majority of Kuehne + Nagel’s contract logistics operations in the United Kingdom.

The operations provide a range of logistics services, including inbound and outbound distribution, reverse logistics management and inventory management, and generated annual revenues in 2019 of approximately £ 500 million ($ 639 million).

The transaction is subject to customary closing conditions and is currently being reviewed by the UK Competition and Markets Authority (the “CMA”).

The deadline for a phase 1 decision from the CMA is November 20, 2020.

The transaction is not expected to be material to our 2020 operating results.

Fair Value Measurements

7 unchanged sentences

We base our fair value estimates on market assumptions and available information.

The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and current maturities of long-term debt approximated their fair values as of September 30, 2020 and December 31, 2019 due to their short-term nature and/or being receivable or payable on demand.

The Level 1 cash equivalents included money market funds valued using quoted prices in active markets.

The Level 2 cash equivalents included short-term investments valued using published interest rates for instruments with similar terms and maturities.

The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and current maturities of long-term debt approximated their fair values as of March 31, 2021 and December 31, 2020 due to their short-term nature and/or being receivable or payable on demand.

The Level 1 cash equivalents include money market funds valued using quoted prices in active markets.

For information on the fair value hierarchy of our derivative instruments, see Note 6—Derivative Instruments and for information on financial liabilities, see Note 7—Debt.

The fair value hierarchy of cash equivalents was as follows:

(In millions) Carrying Value Fair Value Level 1 Level 2

September 30, 2020 $ 1,657 $ 1,657 $ 1,657 $ —

(In millions) Carrying Value Fair Value Level 1

March 31, 2021 $ 249 $ 249 $ 249

December 31, 2020 1,738 1,738 1,738

Cash equivalents at September 30, 2020 include a portion of the net proceeds from the issuance of senior notes due 2025 (the “Senior Notes due 2025”) which were invested in money market funds.

For further information, see Note 6—Debt.

Adoption of New Accounting Standards

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments.” The ASU, as subsequently modified, amends the incurred losses impairment method with a method that reflects expected credit losses on certain types of financial instruments, including trade receivables.

We adopted this standard on January 1, 2020 and recorded an immaterial adjustment to total equity for the cumulative impact of adoption.

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

“Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

Under the guidance, any capitalized implementation costs would be included in prepaid expenses, amortized over the term of the hosting arrangement on a straight-line basis and presented in the same line items in the Consolidated Statement of Income as the expense for fees of the associated hosting arrangements.

We adopted this standard on January 1, 2020 on a prospective basis.

The adoption did not have a material effect on our consolidated financial statements.

Accounting Pronouncements Issued but Not Yet Effective

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

The decrease in cash equivalents from December 31, 2020 was primarily due to the redemption of our senior notes due 2022 and the repayment of borrowings under our revolving loan credit agreement (the “ABL Facility”).

For further information, See Note 7—Debt for further information.

Adoption of New Accounting Standard

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, “Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.” The ASU is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740.

The ASU also clarifies and amends existing guidance to enhance consistency and comparability among reporting entities.

This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within that reporting period;

however, early adoption is permitted.

We are currently evaluating the impact of this standard on our consolidated financial statements.

We adopted this standard on January 1, 2021 on a prospective basis.

The adoption did not have a material effect on our consolidated financial statements.

Accounting Pronouncement Issued but Not Yet Effective

In March 2020, the FASB issued ASU 2020-04, “Reference rate reform (Topic 848)—Facilitation of the effects of reference rate reform on financial reporting.” The ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform.

2 unchanged sentences

We are currently evaluating the impact of the new guidance.

In January 2021, our XPO Logistics Europe subsidiary acquired the majority of Kuehne + Nagel’s contract logistics operations in the United Kingdom and Ireland, which generated annual revenues in 2020 of approximately £ 450 million ($ 585 million).

The operations, which provide a range of logistics services, including inbound and outbound distribution, reverse logistics management and inventory management, are included in our Logistics segment from the acquisition date.

Pro forma results of operations for this acquisition have not been presented as it is not material to the condensed consolidated results of operations.

Segment Reporting

4 unchanged sentences

We accomplish this by using our proprietary technology, third-party independent carriers and our transportation assets and service centers.

Our transportation services include truck brokerage, less-than-truckload (“LTL”), truckload, expedite, last mile, intermodal and drayage, managed transportation, and global forwarding.

Freight brokerage, last mile, global forwarding and managed transportation are non-asset or asset-light businesses while LTL and truckload are primarily asset-based operations.

In our Logistics segment, which we also refer to as supply chain or contract logistics, we provide a wide range of services differentiated by our proprietary technology and our ability to customize solutions for individual customers.

Our transportation services include LTL, truck brokerage services and other transportation services.

In our Logistics segment, which we sometimes refer to as supply chain, we provide a wide range of services differentiated by our proprietary technology and our ability to customize solutions for individual customers.

Our services include value-added warehousing and distribution, e-commerce and omnichannel fulfillment, cold-chain logistics, packaging and labeling, factory support, aftermarket support, inventory management, order personalization and supply chain optimization, such as product flow management.

2 unchanged sentences

Billings for such services are based on negotiated rates and are reflected as revenues of the billing segment.

We adjust these rates from time to time based on market conditions.

adjust these rates from time to time based on market conditions.

We eliminate intersegment revenues and expenses in our consolidated results.

Corporate includes corporate headquarters costs for executive officers and certain legal and financial functions, and other costs and credits not attributed to our reporting segments.

Our chief operating decision maker (“CODM”) regularly reviews financial information at the reporting segment level to allocate resources to the segments and to assess their performance.

Our chief operating decision maker (“CODM”) regularly reviews financial information at the operating segment level to allocate resources to the segments and to assess their performance.

We include items directly attributable to a segment, and those that can be allocated on a reasonable basis, in segment results reported to the CODM.

2 unchanged sentences

(In millions) Transportation Logistics Corporate Eliminations/Other Total

Three months ended September 30, 2020

Revenue $ 2,675 $ 1,580 $ — $ ( 34 ) $ 4,221

Operating income (loss) (1)

202 77 ( 56 ) — 223

Depreciation and amortization 114 76 3 — 193

Three months ended September 30, 2019

Revenue $ 2,684 $ 1,510 $ — $ ( 40 ) $ 4,154

Operating income (loss) (2)

208 61 ( 40 ) — 229

Depreciation and amortization 110 73 3 — 186

Nine months ended September 30, 2020

Three months ended March 31, 2021

Revenue $ 2,989 $ 1,818 $ — $ ( 33 ) $ 4,774

2 unchanged sentences

Depreciation and amortization 115 74 3 — 192

Nine months ended September 30, 2019

Three months ended March 31, 2020

Revenue $ 2,459 $ 1,437 $ — $ ( 32 ) $ 3,864

2 unchanged sentences

Depreciation and amortization 110 69 4 — 183

(1) Consolidated operating income for the three months ended September 30, 2020 includes $ 3 million of transaction and integration costs.

(2) Consolidated operating income for the three months ended September 30, 2019 includes $ 11 million of restructuring expense.

(3) Consolidated operating income for the nine months ended September 30, 2020 includes $ 93 million of transaction and integration costs and $ 53 million of restructuring expense.

(4) Consolidated operating income for the nine months ended September 30, 2019 includes $ 2 million of transaction and integration costs and $ 28 million of restructuring expense.

The transaction and integration costs for the first nine months of 2020 are primarily related to our previously announced exploration of strategic alternatives.

The review of strategic alternatives was terminated in March 2020.

(1) Consolidated operating income for the three months ended March 31, 2021 includes $ 18 million of transaction and integration costs and $ 4 million of restructuring expense.

$ 1 million of the transaction and integration costs relate to our Transportation segment, $ 5 million relate to our Logistics segment and $ 12 million relate to Corporate.

(2) Consolidated operating income for the three months ended March 31, 2020 includes $ 44 million of transaction and integration costs and $ 3 million of restructuring expense.

$ 7 million of the transaction and integration costs relate to our Transportation segment, $ 7 million relate to our Logistics segment and $ 30 million relate to Corporate.

The transaction and integration costs for the first three months of 2021 are primarily related to the planned spin-off of the Logistics segment and our acquisition of the Kuehne + Nagel business.

The transaction and integration costs for the first three months of 2020 are primarily related to our previously announced exploration of strategic alternatives that was terminated in March 2020.

For further information on our restructuring actions, see Note 5—Restructuring Charges.

We also incurred in the third quarter and first nine months of 2020, net incremental and direct costs as a result of the COVID-19 pandemic, including costs for personal protective equipment, site cleanings and enhanced employee benefits, such as appreciation pay.

We also incurred in the first three months of 2021 and 2020, net incremental and direct costs as a result of the COVID-19 pandemic, including costs for personal protective equipment, site cleanings and enhanced employee benefits, such as appreciation pay.

Revenue Recognition

2 unchanged sentences

Our revenue disaggregated by geographical area, based on sales office location, was as follows:

Three Months Ended September 30, 2020

(In millions) Transportation Logistics Eliminations Total

United States $ 1,904 $ 551 $ ( 14 ) $ 2,441

North America (excluding United States) 77 12 — 89

France 317 174 ( 3 ) 488

United Kingdom 175 402 ( 12 ) 565

Europe (excluding France and United Kingdom) 194 421 ( 5 ) 610

Other 8 20 — 28

Total $ 2,675 $ 1,580 $ ( 34 ) $ 4,221

Three Months Ended September 30, 2019

(In millions) Transportation Logistics Eliminations Total

United States $ 1,891 $ 581 $ ( 12 ) $ 2,460

North America (excluding United States) 76 17 — 93

France 326 164 ( 6 ) 484

United Kingdom 192 335 ( 18 ) 509

Europe (excluding France and United Kingdom) 195 389 ( 3 ) 581

Other 4 24 ( 1 ) 27

Total $ 2,684 $ 1,510 $ ( 40 ) $ 4,154

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

(In millions) Transportation Logistics Eliminations Total

6 unchanged sentences

Total $ 2,989 $ 1,818 $ ( 33 ) $ 4,774

Nine Months Ended September 30, 2019

Three Months Ended March 31, 2020

(In millions) Transportation Logistics Eliminations Total

7 unchanged sentences

Our revenue disaggregated by service offering was as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(In millions) 2021 2020

Transportation segment:

Freight brokerage and truckload $ 1,129 $ 1,083 $ 2,970 $ 3,269

LTL $ 1,221 $ 1,135

Freight brokerage and truckload 1,384 1,023

Last mile (1)

243 219 662 655

Managed transportation 97 83

10 unchanged sentences

(i) have original expected durations of one year or less or (ii) contain variable consideration.

On September 30, 2020, the fixed consideration component of our remaining performance obligation was approximately $ 1.7 billion, and we expect to recognize approximately 75 % of that amount over the next three years and the remainder thereafter.

On March 31, 2021, the fixed consideration component of our remaining performance obligation was approximately $ 2.1 billion, and we expect to recognize approximately 66 % of that amount over the next three years and the

remainder thereafter.

The remaining performance obligation at March 31, 2021 includes contracts related to the Kuehne + Nagel acquisition.

The majority of the remaining performance obligation relates to our Logistics reportable segment.

1 unchanged sentence

Restructuring Charges

We engage in restructuring actions as part of our ongoing efforts to best use our resources and infrastructure, including actions in response to COVID-19.

We engage in restructuring actions as part of our ongoing efforts to best use our resources and infrastructure.

These actions generally include severance and facility-related costs, including impairment of right-of-use assets, and are intended to improve our efficiency and profitability.

Restructuring charges were recorded on our Condensed Consolidated Statements of Income (Loss) as follows:

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2020 2019 2020 2019

Cost of transportation and services $ — $ — $ 1 $ 3

Direct operating expense — 1 6 1

Sales, general and administrative expense — 10 46 24

Total $ — $ 11 $ 53 $ 28

Our restructuring activity was as follows:

Nine Months Ended September 30, 2020

(In millions) Reserve Balance as of December 31, 2019 Charges Incurred Payments Foreign Exchange and Other Reserve Balance as of September 30, 2020

We recorded restructuring charges of $ 4 million and $ 3 million in Sales, general and administrative expense on our Condensed Consolidated Statements of Income for the first three months of 2021 and 2020, respectively.

Our restructuring-related activity was as follows:

Three Months Ended March 31, 2021

(In millions) Reserve Balance as of December 31, 2020 Charges Incurred Payments Foreign Exchange and Other Reserve Balance as of March 31, 2021

Transportation $ 7 $ 1 $ ( 4 ) $ — $ 4

3 unchanged sentences

Transportation 5 — — — 5

Logistics — 1 — ( 1 ) —

Total facilities 5 — — — 5

Total $ 33 $ 4 $ ( 9 ) $ ( 1 ) $ 27

We expect to incur additional restructuring charges during the fourth quarter of fiscal 2020 of approximately $ 10 million under previously approved restructuring actions.

We expect the majority of the cash outlays related to the charges incurred in 2020 will be complete within twelve months.

We expect the majority of the cash outlays related to the charges incurred in the first quarter of 2021 will be complete within twelve months.

Derivative Instruments

5 unchanged sentences

The fair value of our derivative instruments and the related notional amounts were as follows:

September 30, 2020

March 31, 2021

Derivative Assets Derivative Liabilities

11 unchanged sentences

Derivatives designated as hedges

Cross-currency swap agreements $ 450 Other current assets $ — Other current liabilities $ ( 44 )

Cross-currency swap agreements 740 Other long-term assets — Other long-term liabilities ( 65 )

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 —

Interest rate swaps 2,003 Other current assets — Other current liabilities ( 4 )

Total $ — $ ( 113 )

1 unchanged sentence

The derivatives are valued using inputs other than quoted prices such as foreign exchange rates and yield curves.

The effect of derivative and nonderivative instruments designated as hedges on our Condensed Consolidated Statements of Income (Loss) was as follows:

Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives Amount of Gain (Loss) Reclassified from AOCI into Net Income (Loss) Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)

Three Months Ended September 30,

(In millions) 2020 2019 2020 2019 2020 2019

Derivatives designated as cash flow hedges

Cross-currency swap agreements $ ( 9 ) $ 7 $ ( 8 ) $ 9 $ — $ 1

Interest rate swaps — 1 — — — —

Derivatives designated as net investment hedges

Cross-currency swap agreements ( 48 ) 55 — — 4 5

Total $ ( 57 ) $ 63 $ ( 8 ) $ 9 $ 4 $ 6

Amount of Gain (Loss) Recognized in Other Comprehensive Loss on Derivatives Amount of Gain (Loss) Reclassified from AOCI into Net Income (Loss) Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)

Nine Months Ended September 30,

The effect of derivative and nonderivative instruments designated as hedges on our Condensed Consolidated Statements of Income was as follows:

Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives Amount of Gain Reclassified from AOCI into Net Income Amount of Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)

Three Months Ended March 31,

(In millions) 2021 2020 2021 2020 2021 2020

5 unchanged sentences

Total $ 54 $ 41 $ 6 $ 3 $ 3 $ 4

The pre-tax gain (loss) recognized in earnings for foreign currency option and forward contracts not designated as hedging instruments was a loss of $ 1 million and a gain of $ 1 million for the three and nine months ended September 30, 2020, respectively, and a gain of $ 5 million and a loss of $ 5 million for the three and nine months ended September 30, 2019, respectively.

These amounts are recorded in Foreign currency (gain) loss on our Condensed Consolidated Statements of Income (Loss).

The pre-tax gain recognized in earnings for foreign currency option and forward contracts not designated as hedging instruments were gains of $ 1 million and $ 4 million for the three months ended March 31, 2021 and 2020, respectively.

These amounts are recorded in Foreign currency gain on our Condensed Consolidated Statements of Income.

Cross-Currency Swap Agreements

We enter into cross-currency swap agreements to manage the foreign currency exchange risk related to our international operations by effectively converting our fixed-rate U.S.

Dollar (“USD”)-denominated debt, including the associated interest payments, to fixed-rate, euro (“EUR”)-denominated debt.

We enter into cross-currency swap agreements to manage the foreign currency exchange risk related to our international operations by effectively converting our fixed-rate USD-denominated debt, including the associated interest payments, to fixed-rate, euro (“EUR”)-denominated debt.

The risk management objective of these transactions is to manage foreign currency risk relating to net investments in subsidiaries denominated in foreign currencies and reduce the variability in the functional currency equivalent cash flows of this debt.

10 unchanged sentences

We designated these cross-currency swaps as qualifying hedging instruments and account for them as cash flow hedges.

Gains and losses resulting from the change in the fair value of the cross-currency swaps are initially recognized in AOCI and reclassified to Foreign currency (gain) loss to offset the foreign exchange impact in earnings created by the intercompany loans.

Gains and losses resulting from the change in the fair value of the cross-currency swaps are initially recognized in AOCI and reclassified to Foreign currency gain to offset the foreign exchange impact in earnings created by the intercompany loans.

Cash flows related to these cash flow hedges are included in Operating activities on our Condensed Consolidated Statements of Cash Flows.

3 unchanged sentences

We designated the interest rate swaps as qualifying hedging instruments and account for these derivatives as cash flow hedges.

The interest rate swaps mature in the fourth quarter of 2020.

The interest rate swaps mature on various dates through 2021.

We record gains and losses resulting from fair value adjustments to the designated portion of interest rate swaps in AOCI and reclassify them to Interest expense on the dates that interest payments accrue.

3 unchanged sentences

Additionally, we use foreign currency forward contracts to mitigate exposure from intercompany loans that are not designated as permanent and can create volatility in earnings.

The foreign currency contracts (both option and forward contracts) were not designated as qualifying hedging instruments as of September 30, 2020.

The foreign currency contracts (both option and forward contracts) were not designated as qualifying hedging instruments as of March 31, 2021.

The contracts are used to manage our exposure to foreign currency exchange rate fluctuations and are not speculative.

The contracts generally expire in 12 months or less.

Gains or losses on the contracts are recorded in Foreign currency (gain) loss on our Condensed Consolidated Statements of Income (Loss).

Gains or losses on the contracts are recorded in Foreign currency gain on our Condensed Consolidated Statements of Income.

Cash flows related to the foreign currency contracts are included in Investing activities on our Condensed Consolidated Statements of Cash Flows, consistent with the nature and purpose for which these derivatives were acquired.

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

(In millions) Principal Balance Carrying Value Principal Balance Carrying Value

18 unchanged sentences

(In millions) Fair Value Level 1 Level 2

September 30, 2020 $ 6,989 $ 4,373 $ 2,616

March 31, 2021 $ 5,590 $ 3,190 $ 2,400

December 31, 2020 7,094 4,431 2,663

2 unchanged sentences

The fair value of the asset financing arrangements approximates carrying value as the debt is primarily issued at a floating rate, the debt may be prepaid at any time at par without penalty, and the remaining life of the debt is short-term in nature.

As of September 30, 2020, we had a borrowing base of $ 1.1 billion and availability under our revolving loan credit agreement (the “ABL Facility”) of $ 884 million after considering outstanding letters of credit on the ABL Facility of $ 16 million.

The average interest rate on outstanding borrowings as of September 30, 2020 was 1.65 %.

As of September 30, 2020, we were in compliance with the ABL Facility’s financial covenants.

In April 2020, we entered into a Senior Secured Term Loan Credit Agreement, comprised of a $ 150 million committed secured term loan facility and a $ 200 million uncommitted secured evergreen letter of credit facility.

The term loan facility is available to be drawn upon, subject to customary conditions, in multiple borrowings within nine months of the closing date.

Any term loans thereunder will bear interest at a rate equal to LIBOR or base rate, at our election, plus an applicable margin of 3.00 % to 4.50 %, for LIBOR loans, or 2.00 % to 3.50 %, for base rate loans, in each case depending upon the time elapsed since the closing date.

The term loan facility matures in April 2021.

Letters of credit under the letter of credit facility shall expire within one year of issuance and may contain automatic one-year renewals until the letter of credit facility terminates.

As of September 30, 2020, we have issued $ 199 million in aggregate face amount of letters of credit, and have not drawn on the term loan commitments.

The credit agreement governing the term loan and letter of credit facilities contains representations and warranties and affirmative and negative covenants customary for financings of this type as well as customary events of default.

As of March 31, 2021, our borrowing base was $ 1.1 billion and our availability under our ABL Facility was $ 1.084 billion after considering outstanding letters of credit on the ABL Facility of $ 16 million.

As of March 31, 2021, we were in compliance with the ABL Facility’s financial covenants.

Under our Senior Secured Term Loan Credit Agreement, we have a $ 200 million uncommitted secured evergreen letter of credit facility, under which we have issued $ 198 million in aggregate face amount of letters of credit as of March 31, 2021.

As of March 31, 2021, we were in compliance with the financial covenants in the Senior Secured Term Loan Agreement.

Term Loan Facilities

In March 2019, we entered into an amendment to our Term Loan Credit Agreement and borrowed an additional $ 500 million of incremental loans under a new tranche of term loans (the “Incremental Term Loan Facility”), increasing our total borrowing under the Term Loan Credit Agreement to $ 2.0 billion.

Proceeds from borrowings under the Incremental Term Loan Facility were used:

(i) for general corporate purposes, including to fund purchases of our equity interests described in Note 7—Stockholders’ Equity;

and (ii) to pay fees and expenses relating to, or in connection with, the transactions contemplated by the amendment.

The incremental loans under the Incremental Term Loan Facility were issued at a price of 99.50 % of par.

The interest rates on the term loan facility and the Incremental Term Loan Facility were 2.15 % and 2.65 %, respectively, as of September 30, 2020.

Senior Notes due 2025

In the second quarter of 2020, we completed private placements of $ 1.15 billion aggregate principal amount of Senior Notes due 2025.

The Senior Notes due 2025 mature on May 1, 2025 and bear interest at a rate of 6.25 % per annum.

Interest on the notes is paid semi-annually.

$ 850 million of the notes were issued at par, and $ 300 million of the notes were issued subsequently at 101.75 % of face value.

Net proceeds from the notes were invested in cash and cash equivalents.

The Senior Notes due 2025 are guaranteed by each of our direct and indirect wholly-owned restricted subsidiaries (other than some excluded subsidiaries) that are obligors under, or guarantee obligations under, our ABL Facility or existing term loan facilities or guarantee certain of our other indebtedness.

The Senior Notes due 2025 and the related guarantees are unsecured, unsubordinated indebtedness for us and our guarantors.

The Senior Notes due 2025 contain covenants customary for notes of this nature.

In the first quarter of 2021, we amended the Term Loan Credit Agreement to consolidate our tranches and lower the interest rate.

The applicable terms of the Term Loan Credit Agreement are as follows:

December 31, 2020

(In millions) March 31, 2021 First Tranche Second Tranche

Principal balance $ 2,003 $ 1,503 $ 500

Interest spread:

Base rate loans 0.75 % 1.00 % 1.50 %

LIBOR loans 1.75 % 2.00 % 2.50 %

Maturity date February 2025 February 2025 February 2025

We recorded a debt extinguishment loss of $ 3 million in the first quarter of 2021 due to this amendment.

The interest rate on our term loan facility was 1.86 % as of March 31, 2021.

Senior Notes due 2022

In February 2019, we completed a private placement of $ 1.0 billion aggregate principal amount of senior notes (“Senior Notes due 2024”), which bear interest at a rate of 6.75 % per annum.

Proceeds from the Senior Notes due 2024 were used to repay our outstanding obligation under an unsecured credit facility and to finance a portion of our share repurchases described in Note 7—Stockholders’ Equity.

Borrowings related to Securitization Program

Our trade receivables securitization program permits us to borrow, on an unsecured basis, cash collected in a servicing capacity on previously sold receivables.

These borrowings are owed to the program’s Purchasers and are included in short-term debt until they are repaid in the following month’s settlement.

The securitization program expires in July 2022 and contains financial covenants customary for this type of arrangement, including maintaining a defined average days sales outstanding ratio.

For additional information on the securitization program, see Note 1—Organization, Description of Business and Basis of Presentation.

In January 2021, we redeemed our outstanding 6.50 % senior notes due 2022.

The redemption price for the notes was 100.0 % of the principal amount, plus accrued and unpaid interest.

We paid for the redemption with available cash.

We recorded a debt extinguishment loss of $ 5 million in our first quarter 2021 results of operations due to this redemption.

Stockholders’ Equity

Series A Convertible Perpetual Preferred Stock and Warrants

In 2011, we issued 75,000 shares of the Series A Preferred Stock with an initial liquidation preference of $ 1,000 per share which are convertible into shares of our common stock at a conversion price of $ 7.00 per common share (subject to customary anti-dilution adjustments).

We also issued warrants exercisable for shares of our common stock at an initial exercise price of $ 7.00 per common share (subject to customary anti-dilution adjustments).

Our preferred stock pays quarterly cash dividends equal to the greater of:

(i) the “as-converted” dividends on our underlying common stock for the relevant quarter and (ii) 4 % of the then-applicable liquidation preference per annum.

In December 2020, some holders of our convertible preferred stock exchanged their holdings for a combination of our common stock, based on the stated conversion price, and a lump-sum payment that represents an approximation of the net present value of the future dividends payable on the preferred stock.

Additionally, some holders of our warrants exchanged (or committed to exchange subject to the satisfaction of certain customary closing conditions) their holdings, including Jacobs Private Equity, LLC, an entity controlled by the Company’s chairman and chief executive officer, for a number of shares of our common stock equal to the number of shares of common stock that such holder would be entitled to receive upon an exercise of the warrants less the number of shares of common stock that have an approximate value equal to the exercise price of the warrants.

With respect to the preferred stock, through December 31, 2020, 69,445 shares were exchanged, and we issued 9.9 million shares of common stock and paid $ 22 million of cash.

With respect to the warrants, through December 31, 2020, 0.3 million warrants were exchanged, and we issued 0.3 million shares of common stock.

In the first quarter of 2021, 975 preferred shares were exchanged, and we issued 0.1 million shares of common stock.

With respect to the warrants, in the first quarter of 2021, 9.8 million warrants were exchanged, and we issued 9.2 million shares of common stock.

These exchanges are intended to simplify our equity capital structure, including in contemplation of our previously announced plan to pursue a spin-off of our Logistics segment.

As of March 31, 2021, 40 shares of preferred stock remain outstanding, which are convertible into 5,714 shares of our common stock, and no warrants are outstanding.

Share Repurchases

In December 2018, our Board of Directors authorized the repurchase of up to $ 1 billion of our common stock (the “2018 Program”), which was completed in the first quarter of 2019.

The share repurchases under the 2018 Program were funded by an unsecured credit facility and our available cash.

In February 2019, our Board of Directors authorized additional repurchases of up to $ 1.5 billion of our common stock (the “2019 Program”).

The 2019 authorization permits us to purchase shares in both the open market and in private transactions, with the timing and number of shares dependent on a variety of factors, including price, general business conditions, market conditions, alternative investment opportunities and funding considerations.

In February 2019, our Board of Directors authorized additional repurchases of up to $ 1.5 billion of our common stock.

Our share repurchase authorization permits us to purchase shares in both the open market and in private transactions, with the timing and number of shares dependent on a variety of factors, including price, general business conditions, market conditions, alternative investment opportunities and funding considerations.

We are not obligated to repurchase any specific number of shares and may suspend or discontinue the program at any time.

The share purchases under the 2019 Program were funded by our available cash and proceeds from our 2019 debt offerings.

Information regarding our shares repurchased, based on settlement date, is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

(In millions, except per share data) 2020 2019 2020 2019

Shares purchased and retired — — 2 25

Aggregate value $ — $ — $ 114 $ 1,347

Average price per share $ — $ — $ 66.58 $ 53.41

Remaining authorization $ 503 $ 617 $ 503 $ 617

The Series A Convertible Perpetual Preferred Stock pays quarterly cash dividends equal to the greater of:

(i) the “as-converted” dividends on our underlying common stock for the relevant quarter;

and (ii) 4 % of the then-applicable liquidation preference per annum.

Earnings (Loss) per Share

In the first quarter of 2020, we purchased and retired 2 million shares at an aggregate value of $ 114 million.

The share purchases were funded by our available cash and proceeds from our 2019 debt offerings.

There were no share purchases in the first quarter of 2021.

Our remaining share repurchase authorization was $ 503 million as of March 31, 2021.

Earnings per Share

We compute basic and diluted earnings per share using the two-class method, which allocates earnings to participating securities.

The participating securities consist of our Series A Convertible Perpetual Preferred Stock.

The participating securities in 2020 consisted of our Series A Convertible Perpetual Preferred Stock.

The undistributed earnings are allocated between common shares and participating securities as if all earnings had been distributed during the period.

Losses are not allocated to the preferred shares.

As discussed in Note 8—Stockholders’ Equity, we recorded a preferred stock conversion charge in December 2020 in connection with the conversion of our Series A preferred stock.

The computations of basic and diluted earnings per share were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(In millions, except per share data) 2021 2020

Basic earnings (loss) per common share

Net income (loss) attributable to XPO $ 93 $ 130 $ ( 15 ) $ 312

Basic earnings per common share

Net income attributable to XPO $ 115 $ 23

Series A preferred stock dividends — ( 1 )

Non-cash allocation of undistributed earnings — ( 1 )

Net income (loss) attributable to common shares, basic $ 84 $ 117 $ ( 17 ) $ 282

Net income attributable to common shares, basic $ 115 $ 21

Basic weighted-average common shares 106 92

Basic earnings (loss) per share $ 0.93 $ 1.27 $ ( 0.18 ) $ 2.91

Diluted earnings (loss) per common share

Net income (loss) attributable to common shares, diluted $ 84 $ 117 $ ( 17 ) $ 282

Basic earnings per share $ 1.08 $ 0.23

Diluted earnings per common share

Net income attributable to common shares, diluted $ 115 $ 21

Basic weighted-average common shares 106 92

Dilutive effect of non-participating stock-based awards 11 10 — 10

Dilutive effect of stock-based awards and warrants 6 11

Diluted weighted-average common shares 112 103

Diluted earnings (loss) per share $ 0.83 $ 1.14 $ ( 0.18 ) $ 2.63

Diluted earnings per share $ 1.02 $ 0.20

Potential common shares excluded — 10

Certain shares were not included in the computation of Diluted earnings (loss) per share because the effect was anti-dilutive.

Certain shares were not included in the computation of diluted earnings per share because the effect was anti-dilutive.

Legal and Regulatory Matters

15 unchanged sentences

In the event we are required to satisfy a legal claim outside the scope of the coverage provided by insurance, our financial condition, results of operations or cash flows could be negatively impacted.

Subsequent Event

On April 6, 2021, the Company announced a buy-out offer to be followed by a squeeze-out for the remaining 3 % of XPO Logistics Europe that it does not already own, at a price of € 315 per share for 341,887 shares.

It is expected that the total cash consideration to be paid in connection with this offer will be approximately € 108 million (approximately $ 128 million).

The offer will be subject to review by the Supervisory Board of XPO Logistics Europe, as well as regulatory bodies, and is expected to close in the second quarter of 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements