XPO, Inc. 10-Q

Item 1. Financial Statements. XPO Logistics, Inc. Condensed Consolidated Balance Sheets (Unaudited) June 30, December 31, (In millions, except per share data) 2021 2020 ASSETS Current assets Cash and cash equivalents $ 801 $ 2,054 Accounts receivable, net of allowances of $ 62 and $ 65 , respectively 3,171 2,886 Other current assets 492 430 Total current assets 4,464 5,370 Long-term assets Property and equipment, net of $ 2,783 and $ 2,568 in accumulated depreciation, respectively 2,627 2,661 Operating lease assets 2,601 2,278 Goodwill 4,572 4,599 Identifiable intangible assets, net of $ 981 and $ 909 in accumulated amortization, respectively 923 974 Other long-term assets 377 287 Total long-term assets 11,100 10,799 Total assets $ 15,564 $ 16,169 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $ 1,293 $ 1,255 Accrued expenses 2,117 1,814 Short-term borrowings and current maturities of long-term debt 92 1,338 Short-term operating lease liabilities 584 483 Other current liabilities 291 263 Total current liabilities 4,377 5,153 Long-term liabilities Long-term debt 5,181 5,369 Deferred tax liability 380 371 Employee benefit obligations 167 192 Long-term operating lease liabilities 2,042 1,795 Other long-term liabilities 450 440 Total long-term liabilities 8,220 8,167 Stockholders’ equity Convertible perpetual preferred stock, $ 0.001 par value; 10 shares authorized; — and 0.001 of Series A shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively — 1 Common stock, $ 0.001 par value; 300 shares authorized; 112 and 102 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively — — Additional paid-in capital 1,971 1,998 Retained earnings 1,139 868 Accumulated other comprehensive loss ( 183 ) ( 158 ) Total stockholders’ equity before noncontrolling interests 2,927 2,709 Noncontrolling interests 40 140 Total equity 2,967 2,849 Total liabilities and equity $ 15,564 $ 16,169 See accompanying notes to condensed consolidated financial statements. 1 Table of Contents XPO Logistics, Inc. Condensed Consolidated Statements of Income (Loss) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (In millions, except per share data) 2021 2020 2021 2020 Revenue $ 5,036 $ 3,502 $ 9,810 $ 7,366 Cost of transportation and services 2,514 1,641 4,842 3,539 Direct operating expense 1,682 1,370 3,338 2,730 Sales, general and administrative expense 594 632 1,182 1,157 Operating income (loss) 246 ( 141 ) 448 ( 60 ) Other income ( 24 ) ( 21 ) ( 50 ) ( 39 ) Foreign currency (gain) loss 3 3 1 ( 5 ) Debt extinguishment loss — — 8 — Interest expense 63 82 132 154 Income (loss) before income tax provision (benefit) 204 ( 205 ) 357 ( 170 ) Income tax provision (benefit) 46 ( 71 ) 81 ( 61 ) Net income (loss) 158 ( 134 ) 276 ( 109 ) Net (income) loss attributable to noncontrolling interests ( 2 ) 3 ( 5 ) 1 Net income (loss) attributable to XPO $ 156 $ ( 131 ) $ 271 $ ( 108 ) Net income (loss) attributable to common shareholders $ 156 $ ( 132 ) $ 271 $ ( 110 ) Earnings per share data Basic earnings (loss) per share $ 1.39 $ ( 1.45 ) $ 2.48 $ ( 1.20 ) Diluted earnings (loss) per share $ 1.38 $ ( 1.45 ) $ 2.40 $ ( 1.20 ) Weighted-average common shares outstanding Basic weighted-average common shares outstanding 112 91 109 92 Diluted weighted-average common shares outstanding 113 91 113 92 See accompanying notes to condensed consolidated financial statements. 2 Table of Contents XPO Logistics, Inc. Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (In millions) 2021 2020 2021 2020 Net income (loss) $ 158 $ ( 134 ) $ 276 $ ( 109 ) Other comprehensive income (loss), net of tax Foreign currency translation gain (loss), net of tax effect of $ 3 , $ 4 , $( 3 ) and $( 7 ) $ 15 $ 21 $ ( 27 ) $ ( 44 ) Defined benefit plans adjustments, net of tax effect of $ — , $ — , $ — and $ 2 — — — ( 5 ) Other comprehensive income (loss) 15 21 ( 27 ) ( 49 ) Comprehensive income (loss) $ 173 $ ( 113 ) $ 249 $ ( 158 ) Less: Comprehensive income (loss) attributable to noncontrolling interests 5 — 3 ( 3 ) Comprehensive income (loss) attributable to XPO $ 168 $ ( 113 ) $ 246 $ ( 155 ) See accompanying notes to condensed consolidated financial statements. 3 Table of Contents XPO Logistics, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, (In millions) 2021 2020 Operating activities Net income (loss) $ 276 $ ( 109 ) Adjustments to reconcile net income (loss) to net cash from operating activities Depreciation, amortization and net lease activity 397 379 Stock compensation expense 25 39 Accretion of debt 10 8 Deferred tax (benefit) expense ( 1 ) 3 Debt extinguishment loss 8 — Unrealized (gain) loss on foreign currency option and forward contracts 1 ( 1 ) Gains on sales of property and equipment ( 31 ) ( 39 ) Other 5 42 Changes in assets and liabilities Accounts receivable ( 240 ) 186 Other assets ( 77 ) ( 84 ) Accounts payable ( 21 ) ( 277 ) Accrued expenses and other liabilities 187 247 Net cash provided by operating activities 539 394 Investing activities Payment for purchases of property and equipment ( 250 ) ( 255 ) Proceeds from sale of property and equipment 62 77 Other 34 6 Net cash used in investing activities ( 154 ) ( 172 ) Financing activities Proceeds from issuance of debt — 1,161 Proceeds from (repayment of) borrowings related to securitization program ( 49 ) 109 Repurchase of debt ( 1,200 ) — Proceeds from borrowings on ABL facility — 620 Repayment of borrowings on ABL facility ( 200 ) ( 20 ) Repayment of debt and finance leases ( 53 ) ( 40 ) Payment for debt issuance costs ( 5 ) ( 21 ) Purchase of noncontrolling interests ( 128 ) — Repurchase of common stock — ( 114 ) Change in bank overdrafts 14 23 Payment for tax withholdings for restricted shares ( 22 ) ( 18 ) Other 4 1 Net cash provided by (used in) financing activities ( 1,639 ) 1,701 Effect of exchange rates on cash, cash equivalents and restricted cash 1 ( 15 ) Net increase (decrease) in cash, cash equivalents and restricted cash ( 1,253 ) 1,908 Cash, cash equivalents and restricted cash, beginning of period 2,065 387 Cash, cash equivalents and restricted cash, end of period $ 812 $ 2,295 Supplemental disclosure of cash flow information Leased assets obtained in exchange for new operating lease liabilities, including $ 281 related to an acquisition in 2021 $ 711 $ 371 Leased assets obtained in exchange for new finance lease liabilities 41 17 Cash paid for interest 136 149 Cash paid for income taxes 65 10 See accompanying notes to condensed consolidated financial statements. 4 Table of Contents XPO Logistics, Inc. Condensed Consolidated Statements of Changes in Equity (Unaudited) Series A Preferred Stock Common Stock (Shares in thousands, dollars in millions) Shares Amount Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total XPO Stockholders' Equity Non-controlling Interests Total Equity Balance as of March 31, 2021 — $ — 111,676 $ — $ 1,988 $ 983 $ ( 195 ) $ 2,776 $ 138 $ 2,914 Net income — — — — — 156 — 156 2 158 Other comprehensive income — — — — — — 12 12 3 15 Exercise and vesting of stock compensation awards — — 44 — — — — — — — Tax withholdings related to vesting of stock compensation awards — — — — ( 1 ) — — ( 1 ) — ( 1 ) Conversion of preferred stock to common stock — — 6 — — — — — — — Purchase of noncontrolling interests — — — — ( 34 ) — — ( 34 ) ( 100 ) ( 134 ) Dividend declared — — — — — — — — ( 3 ) ( 3 ) Stock compensation expense — — — — 15 — — 15 — 15 Other — — — — 3 — — 3 — 3 Balance as of June 30, 2021 — $ — 111,726 $ — $ 1,971 $ 1,139 $ ( 183 ) $ 2,927 $ 40 $ 2,967 Series A Preferred Stock Common Stock (Shares in thousands, dollars in millions) Shares Amount Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total XPO Stockholders' Equity Non-controlling Interests Total Equity Balance as of December 31, 2020 1 $ 1 102,052 $ — $ 1,998 $ 868 $ ( 158 ) $ 2,709 $ 140 $ 2,849 Net income — — — — — 271 — 271 5 276 Other comprehensive loss — — — — — — ( 25 ) ( 25 ) ( 2 ) ( 27 ) Exercise and vesting of stock compensation awards — — 314 — — — — — — — Tax withholdings related to vesting of stock compensation awards — — — — ( 22 ) — — ( 22 ) — ( 22 ) Conversion of preferred stock to common stock ( 1 ) ( 1 ) 145 — 1 — — — — — Purchase of noncontrolling interests — — — — ( 34 ) — — ( 34 ) ( 100 ) ( 134 ) Dividend declared — — — — — — — — ( 3 ) ( 3 ) Exercise of warrants — — 9,215 — — — — — — — Stock compensation expense — — — — 25 — — 25 — 25 Other — — — — 3 — — 3 — 3 Balance as of June 30, 2021 — $ — 111,726 $ — $ 1,971 $ 1,139 $ ( 183 ) $ 2,927 $ 40 $ 2,967 5 Table of Contents XPO Logistics, Inc. Condensed Consolidated Statements of Changes in Equity (continued) (Unaudited) Series A Preferred Stock Common Stock (Shares in thousands, dollars in millions) Shares Amount Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total XPO Stockholders' Equity Non-controlling Interests Total Equity Balance as of March 31, 2020 72 $ 41 91,044 $ — $ 1,943 $ 804 $ ( 210 ) $ 2,578 $ 150 $ 2,728 Net loss — — — — — ( 131 ) — ( 131 ) ( 3 ) ( 134 ) Other comprehensive income — — — — — — 18 18 3 21 Exercise and vesting of stock compensation awards — — 216 — — — — — — — Tax withholdings related to vesting of stock compensation awards — — — — ( 2 ) — — ( 2 ) — ( 2 ) Dividend declared — — — — — ( 1 ) — ( 1 ) — ( 1 ) Stock compensation expense — — — — 20 — — 20 — 20 Other — — 62 — 2 — — 2 — 2 Balance as of June 30, 2020 72 $ 41 91,322 $ — $ 1,963 $ 672 $ ( 192 ) $ 2,484 $ 150 $ 2,634 Series A Preferred Stock Common Stock (Shares in thousands, dollars in millions) Shares Amount Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total XPO Stockholders' Equity Non-controlling Interests Total Equity Balance as of December 31, 2019 72 $ 41 92,342 $ — $ 2,061 $ 786 $ ( 145 ) $ 2,743 $ 153 $ 2,896 Net loss — — — — — ( 108 ) — ( 108 ) ( 1 ) ( 109 ) Other comprehensive loss — — — — — — ( 47 ) ( 47 ) ( 2 ) ( 49 ) Exercise and vesting of stock compensation awards — — 633 — — — — — — — Tax withholdings related to vesting of stock compensation awards — — — — ( 18 ) — — ( 18 ) — ( 18 ) Retirement of common stock — — ( 1,715 ) — ( 114 ) — — ( 114 ) — ( 114 ) Dividend declared — — — — — ( 2 ) — ( 2 ) — ( 2 ) Stock compensation expense — — — — 32 — — 32 — 32 Adoption of new accounting standard and other — — 62 — 2 ( 4 ) — ( 2 ) — ( 2 ) Balance as of June 30, 2020 72 $ 41 91,322 $ — $ 1,963 $ 672 $ ( 192 ) $ 2,484 $ 150 $ 2,634 See accompanying notes to condensed consolidated financial statements. 6 Table of Contents XPO Logistics, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Organization, Description of Business and Basis of Presentation 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 extensive network of people, technology and physical assets to help customers manage their goods most efficiently throughout their supply chains. Our customers are multinational, national, mid-size and small enterprises. We run our business on a global basis, with two reportable segments: Transportation and Logistics. See Note 3—Segment Reporting for additional information on our operations. On August 2, 2021, we completed the previously announced spin-off of our Logistics segment in a transaction intended to qualify as tax-free to our stockholders for U.S. federal income tax purposes, which was accomplished by the distribution of 100 % of the outstanding common stock of GXO Logistics, Inc. (“GXO”) to XPO stockholders. XPO stockholders received one share of GXO common stock for every share of XPO common stock held at the close of business on July 23, 2021, the record date for the distribution. XPO does not beneficially own any shares of GXO’s common stock following the spin-off. GXO, a global provider of contract logistics services, is an independent public company trading under the symbol “GXO” on the New York Stock Exchange. The historical results of operations and the financial position of GXO are included in these condensed consolidated financial statements. After the spin-off, we will no longer consolidate GXO, and all periods prior to the spin-off will reflect our Logistics segment as a discontinued operation. In connection with the spin-off, we have entered into a separation and distribution agreement as well as various other agreements with GXO that provide a framework for the relationships between the parties going forward, including, among others, an employee matters agreement, a tax matters agreement, an intellectual property license agreement and a transition services agreement, through which XPO will continue to provide certain services to GXO following the spin-off. With the completion of the spin-off, XPO is a leading provider of transportation services, primarily less-than-truckload (“LTL”) transportation and truck brokerage services. 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, 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. Our historical results reflect a noncontrolling interest in XPO Logistics Europe SA (“XPO Logistics Europe”), a business we acquired majority ownership of in 2015. In April 2021, we announced a buy-out offer to be followed by a squeeze-out for the remaining 3 % of XPO Logistics Europe that we did not already own. The buy-out offer and squeeze-out were completed in the second quarter of 2021 at a cost of $ 128 million plus expenses. Following the squeeze-out, we own all of the outstanding shares 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 the financial condition, operating results and cash flows for the interim periods presented. Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. Restricted Cash As of June 30, 2021 and December 31, 2020, our restricted cash included in Other long-term assets on our Condensed Consolidated Balance Sheets was $ 11 million. 7 Table of Contents Trade Receivables Securitization and Factoring Programs We sell certain of our trade accounts receivable on a non-recourse basis to third-party financial institutions under factoring agreements. We account for these transactions as sales of receivables and present cash proceeds as cash provided by operating activities in the Condensed Consolidated Statements of Cash Flows. We also sell trade accounts receivable under a securitization program described below. 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 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. We account for transfers under our securitization and factoring arrangements as sales because we sell full title and ownership in the underlying receivables and control of the receivables is considered transferred. For these transfers, the receivables are removed from our Condensed Consolidated Balance Sheets at the date of transfer. In the securitization and factoring arrangements, our continuing involvement is limited to servicing the receivables and, in the case of the securitization arrangements, providing recourse in certain defined circumstances. 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. We had no such borrowings outstanding as of June 30, 2021 and had borrowings of € 41 million ($ 50 million) as of December 31, 2020. See Note 7—Debt for additional information on these borrowings. 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 $ 474 million as of June 30, 2021). As of June 30, 2021, € 59 million (approximately $ 70 million) was available to us, subject to having sufficient receivables available to sell to the Purchasers. The weighted average interest rate was 0.60 % as of June 30, 2021. 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 six months ended June 30, 2021 and 2020. Information related to the trade receivables sold was as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2021 2020 2021 2020 Securitization programs Receivables sold in period $ 882 $ 598 $ 1,657 $ 1,289 Cash consideration 882 598 1,657 1,289 Factoring programs Receivables sold in period 113 199 229 463 Cash consideration 112 199 228 462 The trade receivables securitization program was amended in July 2021. See Note 11—Subsequent Events for more information. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The levels of inputs used to measure fair value are: • Level 1—Quoted prices for identical instruments in active markets; • Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are 8 Table of Contents observable in active markets; and • Level 3—Valuations based on inputs that are unobservable, generally utilizing pricing models or other valuation techniques that reflect management’s judgment and estimates. We base our fair value estimates on market assumptions and available information. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and current maturities of long-term debt approximated their fair values as of June 30, 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 June 30, 2021 $ 535 $ 535 $ 535 December 31, 2020 1,738 1,738 1,738 The decrease in cash equivalents from December 31, 2020 was primarily due to the redemption of our senior notes due 2022 in January 2021 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. 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. The amendments apply only to contracts and hedging relationships that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. The amendments are elective and are effective upon issuance through December 31, 2022. We are currently evaluating the impact of the new guidance. 2. Acquisition 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. 3. Segment Reporting We are organized into two reportable segments: Transportation and Logistics. We evaluate our performance in large part based on the various financial measures of our two reporting segments. In our Transportation segment, we provide multiple services to facilitate the movement of raw materials, parts and finished goods. We accomplish this by using our proprietary technology, third-party independent carriers and our 9 Table of Contents transportation assets and service centers. Our transportation services include LTL, truck brokerage services and other transportation services. In our Logistics segment, 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. In addition, our Logistics segment provides reverse logistics, which is also called returns management. Some of our operating units provide services to our other operating units outside of their reportable segment. Billings for such services are based on negotiated rates and are reflected as revenues of the billing segment. We adjust these rates from time to time based on market conditions. We eliminate intersegment revenues and expenses in our consolidated results. Corporate includes corporate headquarters costs for executive officers and certain legal and financial functions, and other costs and credits not attributed to our reporting segments. Our chief operating decision maker (“CODM”) regularly reviews financial information at the operating segment level to allocate resources to the segments and to assess their performance. We include items directly attributable to a segment, and those that can be allocated on a reasonable basis, in segment results reported to the CODM. We do not provide asset information by segment to the CODM. Selected financial data for our segments is as follows: (In millions) Transportation Logistics Corporate Eliminations/Other Total Three months ended June 30, 2021 Revenue $ 3,186 $ 1,881 $ — $ ( 31 ) $ 5,036 Operating income (loss) (1) 255 71 ( 80 ) — 246 Depreciation and amortization 117 85 3 — 205 Three months ended June 30, 2020 Revenue $ 2,127 $ 1,404 $ — $ ( 29 ) $ 3,502 Operating income (loss) (2) ( 15 ) ( 43 ) ( 83 ) — ( 141 ) Depreciation and amortization 113 80 3 — 196 Six months ended June 30, 2021 Revenue $ 6,175 $ 3,699 $ — $ ( 64 ) $ 9,810 Operating income (loss) (3) 464 139 ( 155 ) — 448 Depreciation and amortization 232 159 6 — 397 Six months ended June 30, 2020 Revenue $ 4,586 $ 2,841 $ — $ ( 61 ) $ 7,366 Operating income (loss) (4) 105 ( 5 ) ( 160 ) — ( 60 ) Depreciation and amortization 223 149 7 — 379 (1) Consolidated operating income for the three months ended June 30, 2021 includes $ 35 million of transaction and integration costs and $ 2 million of restructuring income. $ 2 million of the transaction and integration costs relate to our Transportation segment, $ 7 million relate to our Logistics segment and $ 26 million relate to Corporate. 10 Table of Contents (2) Consolidated operating loss for the three months ended June 30, 2020 includes $ 46 million of transaction and integration costs and $ 50 million of restructuring expense. $ 13 million of the transaction and integration costs relate to our Transportation segment, $ 18 million relate to our Logistics segment and $ 15 million relate to Corporate. (3) Consolidated operating income for the six months ended June 30, 2021 includes $ 53 million of transaction and integration costs and $ 2 million of restructuring expense. $ 3 million of the transaction and integration costs relate to our Transportation segment, $ 12 million relate to our Logistics segment and $ 38 million relate to Corporate. (4) Consolidated operating loss for the six months ended June 30, 2020 includes $ 90 million of transaction and integration costs and $ 53 million of restructuring expense. $ 20 million of the transaction and integration costs relate to our Transportation segment, $ 25 million relate to our Logistics segment and $ 45 million relate to Corporate. The transaction and integration costs for the first six months of 2021 are primarily related to the spin-off of the Logistics segment and our acquisition of the Kuehne + Nagel business in January 2021. The transaction and integration costs for the first six 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 net incremental and direct costs as a result of the COVID-19 pandemic in the second quarter and first six months of 2021 and 2020, including costs for personal protective equipment, site cleanings and enhanced employee benefits, such as appreciation pay. 4. Revenue Recognition Disaggregation of Revenues We disaggregate our revenue by geographic area and service offering. Our revenue disaggregated by geographical area, based on sales office location, was as follows: Three Months Ended June 30, 2021 (In millions) Transportation Logistics Eliminations Total Revenue United States $ 2,276 $ 551 $ ( 10 ) $ 2,817 North America (excluding United States) 95 18 — 113 France 352 190 ( 2 ) 540 United Kingdom 222 615 ( 16 ) 821 Europe (excluding France and United Kingdom) 215 482 ( 1 ) 696 Other 26 25 ( 2 ) 49 Total $ 3,186 $ 1,881 $ ( 31 ) $ 5,036 Three Months Ended June 30, 2020 (In millions) Transportation Logistics Eliminations Total Revenue United States $ 1,505 $ 509 $ ( 10 ) $ 2,004 North America (excluding United States) 71 10 — 81 France 255 142 ( 3 ) 394 United Kingdom 125 338 ( 11 ) 452 Europe (excluding France and United Kingdom) 146 383 ( 4 ) 525 Other 25 22 ( 1 ) 46 Total $ 2,127 $ 1,404 $ ( 29 ) $ 3,502 11 Table of Contents Six Months Ended June 30, 2021 (In millions) Transportation Logistics Eliminations Total Revenue United States $ 4,394 $ 1,135 $ ( 19 ) $ 5,510 North America (excluding United States) 185 32 — 217 France 694 370 ( 5 ) 1,059 United Kingdom 431 1,167 ( 31 ) 1,567 Europe (excluding France and United Kingdom) 428 947 ( 6 ) 1,369 Other 43 48 ( 3 ) 88 Total $ 6,175 $ 3,699 $ ( 64 ) $ 9,810 Six Months Ended June 30, 2020 (In millions) Transportation Logistics Eliminations Total Revenue United States $ 3,207 $ 1,045 $ ( 19 ) $ 4,233 North America (excluding United States) 142 24 — 166 France 566 292 ( 6 ) 852 United Kingdom 307 667 ( 27 ) 947 Europe (excluding France and United Kingdom) 334 769 ( 7 ) 1,096 Other 30 44 ( 2 ) 72 Total $ 4,586 $ 2,841 $ ( 61 ) $ 7,366 Our revenue disaggregated by service offering was as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2021 2020 2021 2020 Transportation segment: LTL $ 1,363 $ 979 $ 2,584 $ 2,114 Freight brokerage and truckload 1,414 818 2,798 1,841 Last mile (1) 269 218 515 419 Managed transportation 106 74 203 157 Global forwarding 114 76 214 137 Transportation eliminations ( 80 ) ( 38 ) ( 139 ) ( 82 ) Total Transportation segment revenue 3,186 2,127 6,175 4,586 Total Logistics segment revenue 1,881 1,404 3,699 2,841 Intersegment eliminations ( 31 ) ( 29 ) ( 64 ) ( 61 ) Total revenue $ 5,036 $ 3,502 $ 9,810 $ 7,366 (1) Comprised of our North American last mile operations. Performance Obligations Remaining performance obligations represent firm contracts for which services have not been performed and future revenue recognition is expected . As permitted in determining the remaining performance obligation, we omit obligations that: (i) have original expected durations of one year or less or (ii) contain variable consideration. On June 30, 2021, the fixed consideration component of our remaining performance obligation was approximately 12 Table of Contents $ 2.2 billion, and we expect approximately 67 % of that amount to be recognized over the next three years and the remainder thereafter. The remaining performance obligation at June 30, 2021 includes contracts related to the Kuehne + Nagel acquisition. The majority of the remaining performance obligation relates to our Logistics reportable segment. We estimate remaining performance obligations at a point in time and actual amounts may differ from these estimates due to changes in foreign currency exchange rates and contract revisions or terminations. 5. 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. 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 (credits) were recorded on our Condensed Consolidated Statements of Income (Loss) as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2021 2020 2021 2020 Cost of transportation and services $ — $ 1 $ — $ 1 Direct operating expense — 6 — 6 Sales, general and administrative expense ( 2 ) 43 2 46 Total $ ( 2 ) $ 50 $ 2 $ 53 Our restructuring-related activity was as follows: Six Months Ended June 30, 2021 (In millions) Reserve Balance as of December 31, 2020 Charges Incurred Payments Reversals Foreign Exchange and Other Reserve Balance as of June 30, 2021 Severance Transportation $ 7 $ 1 $ ( 7 ) $ — $ 1 $ 2 Logistics 19 6 ( 7 ) ( 9 ) ( 4 ) 5 Corporate 2 4 ( 2 ) — ( 2 ) 2 Total severance 28 11 ( 16 ) ( 9 ) ( 5 ) 9 Facilities Transportation 5 — — — — 5 Total facilities 5 — — — — 5 Total $ 33 $ 11 $ ( 16 ) $ ( 9 ) $ ( 5 ) $ 14 We expect the majority of the cash outlays related to the charges incurred in 2021 will be complete within twelve months. 13 Table of Contents 6. Derivative Instruments In the normal course of business, we are exposed to risks arising from business operations and economic factors, including fluctuations in interest rates and foreign currencies. We use derivative instruments to manage the volatility related to these exposures. The objective of these derivative instruments is to reduce fluctuations in our earnings and cash flows associated with changes in foreign currency exchange rates and interest rates. These financial instruments are not used for trading or other speculative purposes. Historically, we have not incurred, and do not expect to incur in the future, any losses as a result of counterparty default. The fair value of our derivative instruments and the related notional amounts were as follows: June 30, 2021 Derivative Assets Derivative Liabilities (In millions) Notional Amount Balance Sheet Caption Fair Value Balance Sheet Caption Fair Value Derivatives designated as hedges Cross-currency swap agreements $ 1,040 Other current assets $ — Other current liabilities $ ( 63 ) Cross-currency swap agreements 130 Other long-term assets — Other long-term liabilities ( 6 ) Derivatives not designated as hedges Foreign currency option contracts 178 Other current assets 1 Other current liabilities — Total $ 1 $ ( 69 ) December 31, 2020 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 $ 450 Other current assets $ — Other current liabilities $ ( 44 ) Cross-currency swap agreements 740 Other long-term assets — Other long-term liabilities ( 65 ) Interest rate swaps 2,003 Other current assets — Other current liabilities ( 4 ) Total $ — $ ( 113 ) The derivatives are classified as Level 2 within the fair value hierarchy. The derivatives are valued using inputs other than quoted prices such as foreign exchange rates and yield curves. The effect of derivative and nonderivative instruments designated as hedges on our Condensed Consolidated Statements of Income (Loss) was as follows: Amount of Gain (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 June 30, (In millions) 2021 2020 2021 2020 2021 2020 Derivatives designated as cash flow hedges Cross-currency swap agreements $ ( 2 ) $ ( 3 ) $ ( 2 ) $ ( 3 ) $ — $ — Derivatives designated as net investment hedges Cross-currency swap agreements ( 13 ) ( 19 ) — — 2 — Total $ ( 15 ) $ ( 22 ) $ ( 2 ) $ ( 3 ) $ 2 $ — 14 Table of Contents 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) Six Months Ended June 30, (In millions) 2021 2020 2021 2020 2021 2020 Derivatives designated as cash flow hedges Cross-currency swap agreements $ 4 $ 5 $ 4 $ — $ — $ — Interest rate swaps — ( 5 ) — — — — Derivatives designated as net investment hedges Cross-currency swap agreements 35 19 — — 5 4 Total $ 39 $ 19 $ 4 $ — $ 5 $ 4 The pre-tax gain (loss) recognized in earnings for foreign currency option and forward contracts not designated as hedging instruments were losses of $ 2 million and $ 1 million for the three and six months ended June 30, 2021, respectively, and a loss of $ 2 million and a gain of $ 2 million for the three and six months ended June 30, 2020, respectively. These amounts are recorded in Foreign currency (gain) loss on our Condensed Consolidated Statements of Income (Loss). Cross-Currency Swap Agreements We enter into cross-currency swap agreements to manage the foreign currency exchange risk related to our international operations by effectively converting our fixed-rate USD-denominated debt, including the associated interest payments, to fixed-rate, euro (“EUR”)-denominated debt. The risk management objective of these transactions is to manage foreign currency risk relating to net investments in subsidiaries denominated in foreign currencies and reduce the variability in the functional currency equivalent cash flows of this debt. During the term of the swap contracts, we will receive interest, either on a quarterly or semi-annual basis, from the counterparties based on USD fixed interest rates, and we will pay interest, also on a quarterly or semi-annual basis, to the counterparties based on EUR fixed interest rates. At maturity, we will repay the original principal amount in EUR and receive the principal amount in USD. These agreements expire at various dates through 2024. We designated these cross-currency swaps as qualifying hedging instruments and account for them as net investment hedges. We apply the simplified method of assessing the effectiveness of our net investment hedging relationships. Under this method, for each reporting period, the change in the fair value of the cross-currency swaps is initially recognized in Accumulated other comprehensive income (“AOCI”). The change in the fair value due to foreign exchange remains in AOCI and the initial component excluded from effectiveness testing will initially remain in AOCI and then will be reclassified from AOCI to Interest expense each period in a systematic manner. For net investment hedges that were de-designated prior to their maturity, the amounts in AOCI will remain in AOCI until the subsidiary is sold or substantially liquidated. Cash flows related to the periodic exchange of interest payments for these net investment hedges are included in Operating activities on our Condensed Consolidated Statements of Cash Flows. We also enter into cross-currency swap agreements to manage the related foreign currency exposure from intercompany loans. We designated these cross-currency swaps as qualifying hedging instruments and 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. Cash flows related to these cash flow hedges are included in Operating activities on our Condensed Consolidated Statements of Cash Flows. Interest Rate Hedging We execute short-term interest rate swaps to mitigate variability in forecasted interest payments on our Senior Secured Term Loan Credit Agreement (the “Term Loan Credit Agreement”). The interest rate swaps convert floating-rate interest payments into fixed rate interest payments. We designated the interest rate swaps as qualifying hedging instruments and account for these derivatives as cash flow hedges. There were no interest rate swaps 15 Table of Contents outstanding as of June 30, 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. Cash flows related to the interest rate swaps are included in Operating activities on our Condensed Consolidated Statements of Cash Flows. Foreign Currency Option and Forward Contracts We use foreign currency option contracts to mitigate the risk of a reduction in the value of earnings from our operations that use the EUR or the British pound sterling as their functional currency. 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 June 30, 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). 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. 7. Debt June 30, 2021 December 31, 2020 (In millions) Principal Balance Carrying Value Principal Balance Carrying Value ABL facility $ — $ — $ 200 $ 200 Term loan facilities 2,003 1,973 2,003 1,974 6.50 % Senior notes due 2022 — — 1,200 1,195 6.125 % Senior notes due 2023 535 532 535 531 6.75 % Senior notes due 2024 1,000 991 1,000 989 6.25 % Senior notes due 2025 1,150 1,139 1,150 1,138 6.70 % Senior debentures due 2034 300 212 300 210 Borrowings related to securitization program — — 50 50 Finance leases, asset financing and other 426 426 420 420 Total debt 5,414 5,273 6,858 6,707 Short-term borrowings and current maturities of long-term debt 92 92 1,343 1,338 Long-term debt $ 5,322 $ 5,181 $ 5,515 $ 5,369 In July and August 2021, we issued notices to redeem our outstanding senior notes due 2024 and senior notes due 2023, respectively. See Note 11—Subsequent Events for more information. The fair value of our debt and classification in the fair value hierarchy was as follows: (In millions) Fair Value Level 1 Level 2 June 30, 2021 $ 5,592 $ 3,168 $ 2,424 December 31, 2020 7,094 4,431 2,663 We valued Level 1 debt using quoted prices in active markets. We valued Level 2 debt using bid evaluation pricing models or quoted prices of securities with similar characteristics. The fair value of the asset financing arrangements approximates carrying value as the debt is primarily issued at a floating rate, the debt may be prepaid at any time at par without penalty, and the remaining life of the debt is short-term in nature. 16 Table of Contents ABL Facility As of June 30, 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 June 30, 2021, we were in compliance with the ABL Facility’s financial covenants. The ABL facility was amended in July 2021. See Note 11—Subsequent Events for more information. Secured Debt 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 June 30, 2021. As of June 30, 2021, we were in compliance with the financial covenants in the Senior Secured Term Loan Agreement. Term Loan Facilities 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) June 30, 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 six months of 2021 due to this amendment. The interest rate on our term loan facility was 1.87 % as of June 30, 2021. Senior Notes Due 2022 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 the first six months of 2021 due to this redemption. 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. Net proceeds from the notes were initially invested in cash and cash equivalents and were subsequently used to redeem our outstanding senior notes due 2022 in January 2021. GXO Revolving Credit Facility In June 2021, in preparation for the spin-off, GXO, which was our wholly-owned subsidiary at the time, entered into a five-year , unsecured, multi-currency revolving credit facility (the “GXO Facility”). Initially, the GXO Facility provides commitments up to $ 800 million, of which $ 60 million will be available for the issuance of letters of credit. Loans under the GXO Facility will bear interest at a fluctuating rate equal to: (i) with respect to borrowings in dollars, at GXO’s option, the alternate base rate or the reserve-adjusted LIBOR, (ii) with respect to borrowings in Canadian dollars, the reserve-adjusted Canadian Dollar Offered Rate and (iii) with respect to borrowings in Euros, the reserve-adjusted Euro Interbank Offered Rate, in each case, plus an applicable margin calculated based on GXO’s credit ratings. The availability of the GXO Facility was subject to the spin-off occurring. The covenants in the GXO Facility, which are customary for financings of this type, can limit the ability to incur indebtedness and grant liens, among other restrictions. In addition, the GXO Facility requires GXO to maintain a consolidated leverage ratio below a stated maximum consolidated leverage ratio. 17 Table of Contents There was no amount outstanding under the GXO Facility at June 30, 2021. Following the spin-off, the GXO Facility is not available to us. 8. 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 were 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 paid 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 (“JPE”), 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. In the second quarter of 2021, the remaining 40 preferred shares were exchanged, and we issued 5,714 shares of common stock. With respect to the warrants, in the first quarter of 2021, 9.8 million warrants were exchanged, and we issued 9.2 million shares of common stock. These exchanges were intended to simplify our equity capital structure, including in contemplation of the spin-off of our Logistics segment. As of June 30, 2021, there were no shares of preferred stock or warrants outstanding. Share Repurchases In February 2019, our Board of Directors authorized repurchases of up to $ 1.5 billion of our common stock. Our share repurchase authorization permits us to purchase shares in both the open market and in private transactions, with the timing and number of shares dependent on a variety of factors, including price, general business conditions, market conditions, alternative investment opportunities and funding considerations. We are not obligated to repurchase any specific number of shares and may suspend or discontinue the program at any time. 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 six months of 2021 or in the second quarter of 2020. Our remaining share repurchase authorization was $ 503 million as of June 30, 2021. 9. 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 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. 18 Table of Contents The computations of basic and diluted earnings (loss) per share were as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions, except per share data) 2021 2020 2021 2020 Basic earnings (loss) per common share Net income (loss) attributable to XPO $ 156 $ ( 131 ) $ 271 $ ( 108 ) Series A preferred stock dividends — ( 1 ) — ( 2 ) Net income (loss) attributable to common shares, basic $ 156 $ ( 132 ) $ 271 $ ( 110 ) Basic weighted-average common shares 112 91 109 92 Basic earnings (loss) per share $ 1.39 $ ( 1.45 ) $ 2.48 $ ( 1.20 ) Diluted earnings (loss) per common share Net income (loss) attributable to common shares, diluted $ 156 $ ( 132 ) $ 271 $ ( 110 ) Basic weighted-average common shares 112 91 109 92 Dilutive effect of stock-based awards and warrants 1 — 4 — Diluted weighted-average common shares 113 91 113 92 Diluted earnings (loss) per share $ 1.38 $ ( 1.45 ) $ 2.40 $ ( 1.20 ) Potential common shares excluded — 20 — 21 Certain shares were not included in the computation of diluted earnings (loss) per share because the effect was anti-dilutive. 10. Legal and Regulatory Matters We are involved, and will continue to be involved, in numerous proceedings arising out of the conduct of our business. These proceedings may include claims for property damage or personal injury incurred in connection with the transportation of freight, claims regarding anti-competitive practices, and employment-related claims, including claims involving asserted breaches of employee restrictive covenants. These matters also include numerous putative class action, multi-plaintiff and individual lawsuits, and administrative proceedings involving claims that our owner-operators or contract carriers should be treated as employees, rather than independent contractors (“misclassification claims”). These lawsuits and proceedings may seek substantial monetary damages (including claims for unpaid wages, overtime, failure to provide meal and rest breaks, unreimbursed business expenses, penalties and other items), injunctive relief, or both. We establish accruals for specific legal proceedings when it is considered probable that a loss has been incurred and the amount of the loss can be reasonably estimated. We review and adjust accruals for loss contingencies quarterly and as additional information becomes available. If a loss is not both probable and reasonably estimable, or if an exposure to loss exists in excess of the amount accrued, we assess whether there is at least a reasonable possibility that a loss, or additional loss, may have been incurred. If there is a reasonable possibility that a loss, or additional loss, may have been incurred, we disclose the estimate of the possible loss or range of loss if it is material and an estimate can be made, or disclose that such an estimate cannot be made. The determination as to whether a loss can reasonably be considered to be possible or probable is based on our assessment, together with legal counsel, regarding the ultimate outcome of the matter. We believe that we have adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable. We do not believe that the ultimate resolution of any matters to which we are presently a party 19 Table of Contents will have a material adverse effect on our results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on our financial condition, results of operations or cash flows. Legal costs incurred related to these matters are expensed as incurred. We carry liability and excess umbrella insurance policies that we deem sufficient to cover potential legal claims arising in the normal course of conducting our operations as a transportation and logistics company. The liability and excess umbrella insurance policies generally do not cover the misclassification claims described in this note. 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. 11. Subsequent Events As described in Note 1—Organization, Description of Business and Basis of Presentation, on August 2, 2021, we completed the spin-off of our Logistics segment into an independent public company, GXO, in a transaction intended to qualify as tax-free to our stockholders for U.S. federal income tax purposes . GXO Notes In preparation for the spin-off, in July 2021, GXO completed an offering of $ 800 million aggregate principal amount of notes, consisting of $ 400 million of notes due 2026 (the “GXO 2026 Notes”) and $ 400 million of notes due 2031 (the “GXO 2031 Notes”, and together with the GXO 2026 Notes, the “GXO Notes”). The GXO 2026 Notes will bear interest at a rate of 1.65 % per annum payable semiannually in cash in arrears on January 15 and July 15 of each year, beginning January 15, 2022, and will mature on July 15, 2026. The GXO 2031 Notes will bear interest at a rate of 2.65 % per annum payable semiannually in cash in arrears on January 15 and July 15 of each year, beginning January 15, 2022, and will mature on July 15, 2031. The net proceeds from the sale of the GXO Notes were used to fund a cash payment from GXO to XPO of $ 794 million, which we intend to use to repay a portion of our outstanding borrowings as noted below. Following the completion of the spin-off, the GXO Notes are no longer an obligation of XPO. Equity Offering In July 2021, we completed a registered underwritten offering of 5.0 million shares of our common stock at a public offering price of $ 138.00 per share, plus an additional 750,000 shares of our common stock through an option granted to underwriters. Of the 5.0 million shares, we offered 2.5 million shares directly and 2.5 million shares were offered by JPE. The additional 750,000 purchased shares were also split equally between us and JPE. We received approximately $ 385 million of proceeds, net of fees and expenses, from the sale of the shares and intend to use them to repay a portion of our outstanding borrowings as noted below and for general corporate purposes. XPO did no t receive any proceeds from the sale of shares by JPE. Debt Redemption In July 2021, we issued notice to redeem our outstanding 6.75 % senior notes due 2024 that had a principal balance of $ 1.0 billion as of June 30, 2021. Also, in August 2021, we issued notice to redeem our outstanding 6.125 % senior notes due 2023 that had a principal balance of $ 535 million as of June 30, 2021. The redemption price for our senior notes due 2024 was 103.375 %, plus accrued and unpaid interest. The redemption price for our senior notes due 2023 was 100.0 % of the principal amount, plus accrued and unpaid interest. We expect to pay for these redemptions using the cash payment of $ 794 million received from GXO, the proceeds from the July 2021 equity offering and available cash. ABL Amendment In July 2021, we amended our existing ABL facility which matures in April 2024 to reduce the commitments from $ 1.1 billion to $ 1.0 billion. There were no other significant changes made to the terms of the facility, including the maturity date, the interest rate margin, and financial covenants. 20 Table of Contents Trade Securitization Program In July 2021, in connection with the spin-off, the existing trade receivables securitization program was amended; the existing € 400 million program is now comprised of two separate € 200 million programs, one of which will continue to be available to us and one of which will be part of GXO following the spin-off. The new program expires in July 2024. Changes to Legal Entity Structure In July 2021, in connection with the spin-off of our Logistics segment, we amended our legal entity structure. These changes will result in one-time cash and non-cash tax expenses in the second half of 2021. 21 Table of Contents