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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
Form 10-Q
___________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from____________to____________
Commission File Number: 001-32172
_______________________________________________________
https://cdn.kscope.io/03ac85aa3d77527e6dbec0d45a5faec9-xpo-20220331_g1.jpg
XPO Logistics, Inc.
(Exact name of registrant as specified in its charter)
_______________________________________________________
Delaware03-0450326
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
Five American Lane
Greenwich,CT06831
(Address of principal executive offices)(Zip Code)
(855) 976-6951
(Registrant’s telephone number, including area code)
______________________________________________________________________________________________________________
N/A
______________________________________________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, par value $0.001 per shareXPONew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
As of May 4, 2022, there were 115,018,449 shares of the registrant’s common stock, par value $0.001 per share, outstanding.



XPO Logistics, Inc.
Quarterly Report on Form 10-Q
For the Quarterly Period Ended March 31, 2022
Table of Contents
 
Page No.


Table of Contents
Part I—Financial Information
Item 1. Financial Statements.
XPO Logistics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
March 31,December 31,
(In millions, except per share data)20222021
ASSETS
Current assets
Cash and cash equivalents$1,004 $260 
Accounts receivable, net of allowances of $47 and $47, respectively
2,248 2,105 
Other current assets279 286 
Current assets of discontinued operations24 26 
Total current assets3,555 2,677 
Long-term assets
Property and equipment, net of $1,790 and $1,828 in accumulated depreciation, respectively
1,796 1,808 
Operating lease assets821 908 
Goodwill2,332 2,479 
Identifiable intangible assets, net of $578 and $612 in accumulated amortization, respectively
548 580 
Other long-term assets268 255 
Total long-term assets5,765 6,030 
Total assets$9,320 $8,707 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable$1,330 $1,110 
Accrued expenses1,084 1,107 
Short-term borrowings and current maturities of long-term debt682 58 
Short-term operating lease liabilities134 170 
Other current liabilities178 69 
Current liabilities of discontinued operations24 24 
Total current liabilities3,432 2,538 
Long-term liabilities
Long-term debt2,877 3,514 
Deferred tax liability300 316 
Employee benefit obligations120 122 
Long-term operating lease liabilities682 752 
Other long-term liabilities311 327 
Total long-term liabilities4,290 5,031 
Stockholders’ equity
Common stock, $0.001 par value; 300 shares authorized; 115 shares issued and outstanding as of
March 31, 2022 and December 31, 2021
  
Additional paid-in capital1,176 1,179 
Retained earnings531 43 
Accumulated other comprehensive loss(109)(84)
Total equity1,598 1,138 
Total liabilities and equity$9,320 $8,707 
See accompanying notes to condensed consolidated financial statements.

1

Table of Contents
XPO Logistics, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended March 31,
(In millions, except per share data)20222021
Revenue$3,473 $2,989 
Cost of transportation and services (exclusive of depreciation and amortization)2,437 2,053 
Direct operating expense (exclusive of depreciation and amortization)385 334 
Sales, general and administrative expense344 338 
Depreciation and amortization expense116 119 
Gain on sale of business(450) 
Transaction and integration costs10 5 
Restructuring costs6 1 
Operating income625 139 
Other income(14)(16)
Debt extinguishment loss 8 
Interest expense37 65 
Income from continuing operations before income tax provision602 82 
Income tax provision113 19 
Income from continuing operations489 63 
Income (loss) from discontinued operations, net of taxes(1)55 
Net income488 118 
Net income from discontinued operations attributable to noncontrolling interests (3)
Net income attributable to XPO$488 $115 
Net income (loss) attributable to common shareholders
Continuing operations$489 $63 
Discontinued operations(1)52 
Net income attributable to common shareholders $488 $115 
Earnings (loss) per share data
Basic earnings per share from continuing operations$4.26 $0.59 
Basic earnings (loss) per share from discontinued operations(0.01)0.49 
Basic earnings per share attributable to common shareholders$4.25 $1.08 
Diluted earnings per share from continuing operations$4.23 $0.56 
Diluted earnings (loss) per share from discontinued operations(0.01)0.46 
Diluted earnings per share attributable to common shareholders$4.22 $1.02 
Weighted-average common shares outstanding
Basic weighted-average common shares outstanding115 106 
Diluted weighted-average common shares outstanding116 112 
See accompanying notes to condensed consolidated financial statements.

2

Table of Contents
XPO Logistics, Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
Three Months Ended March 31,
(In millions)20222021
Net income$488 $118 
Other comprehensive loss, net of tax
Foreign currency translation loss, net of tax effect of $(2) and $(6)
$(26)$(42)
Unrealized gain on financial assets/liabilities designated as hedging instruments, net of tax
effect of $ and $
1  
Other comprehensive loss(25)(42)
Comprehensive income$463 $76 
Less: Comprehensive loss attributable to noncontrolling interests (2)
Comprehensive income attributable to XPO$463 $78 
See accompanying notes to condensed consolidated financial statements.

3

Table of Contents
XPO Logistics, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 31,
(In millions)20222021
Cash flows from operating activities of continuing operations
Net income$488 $118 
Income (loss) from discontinued operations, net of taxes(1)55 
Income from continuing operations 489 63 
Adjustments to reconcile income from continuing operations to net cash from
operating activities
Depreciation, amortization and net lease activity116 119 
Stock compensation expense8 6 
Accretion of debt4 5 
Deferred tax (benefit) expense(12)9 
Debt extinguishment loss 8 
Gain on sale of business(450) 
Gains on sales of property and equipment(1)(23)
Other10 2 
Changes in assets and liabilities
Accounts receivable(405)(198)
Other assets94 (21)
Accounts payable366 34 
Accrued expenses and other liabilities(19)73 
Net cash provided by operating activities from continuing operations200 77 
Cash flows from investing activities of continuing operations
Proceeds from sale of business705  
Payment for purchases of property and equipment(137)(74)
Proceeds from sale of property and equipment3 36 
Net cash provided by (used in) investing activities from continuing operations571 (38)
Cash flows from financing activities of continuing operations
Repayment of borrowings related to securitization program (24)
Repurchase of debt (1,200)
Repayment of borrowings on ABL facility (200)
Repayment of debt and finance leases(16)(24)
Payment for debt issuance costs (5)
Change in bank overdrafts3 8 
Payment for tax withholdings for restricted shares(12)(21)
Other1 2 
Net cash used in financing activities from continuing operations(24)(1,464)
4

Table of Contents
Three Months Ended March 31,
(In millions)20222021
Cash flows from discontinued operations
Operating activities of discontinued operations1 96 
Investing activities of discontinued operations (57)
Financing activities of discontinued operations  (37)
Net cash provided by discontinued operations 1 2 
Effect of exchange rates on cash, cash equivalents and restricted cash(3)(2)
Net increase (decrease) in cash, cash equivalents and restricted cash745 (1,425)
Cash, cash equivalents and restricted cash, beginning of period273 2,065 
Cash, cash equivalents and restricted cash, end of period1,018 640 
Less: Cash, cash equivalents and restricted cash of discontinued operations, end of
period
4 407 
Cash, cash equivalents and restricted cash of continued operations, end of period$1,014 $233 
Supplemental disclosure of cash flow information
Leased assets obtained in exchange for new operating lease liabilities$46 $79 
Leased assets obtained in exchange for new finance lease liabilities4 16 
Cash paid for interest13 74 
Cash paid for income taxes5 1 
See accompanying notes to condensed consolidated financial statements.

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XPO Logistics, Inc.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Series A Preferred StockCommon Stock 
(Shares in thousands, dollars in millions)SharesAmountSharesAmountAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossTotal XPO Stockholders' EquityNon-controlling InterestsTotal Equity
Balance as of December 31, 2021 $ 114,737 $ $1,179 $43 $(84)$1,138 $ $1,138 
Net income— — — — — 488 — 488 — 488 
Other comprehensive loss— — — — — — (25)(25)— (25)
Exercise and vesting of stock compensation awards
— — 245 — — — — — — — 
Tax withholdings related to vesting of stock compensation awards
— — — — (12)— — (12)— (12)
Stock compensation expense
— — — — 8 — — 8 — 8 
Other
— — — — 1 — — 1 — 1 
Balance as of March 31, 2022 $ 114,982 $ $1,176 $531 $(109)$1,598 $ $1,598 
Series A Preferred StockCommon Stock
(Shares in thousands, dollars in millions)SharesAmountSharesAmountAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossTotal XPO Stockholders' EquityNon-controlling InterestsTotal Equity
Balance as of December 31, 20201 $1 102,052 $ $1,998 $868 $(158)$2,709 $140 $2,849 
Net income— — — — — 115 — 115 3 118 
Other comprehensive loss— — — — — — (37)(37)(5)(42)
Exercise and vesting of stock compensation awards
— — 270 — — — — — — — 
Tax withholdings related to vesting of stock compensation awards
— — — — (21)— — (21)— (21)
Conversion of preferred stock to common stock(1)(1)139 — 1 — — — —  
Exercise of warrants— — 9,215 — — — — — — — 
Stock compensation expense
— — — — 10 — — 10 — 10 
Balance as of March 31, 2021 $ 111,676 $ $1,988 $983 $(195)$2,776 $138 $2,914 

See accompanying notes to condensed consolidated financial statements.
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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”), is a leading provider of freight transportation services. We use our proprietary technology to move goods efficiently through our customers’ supply chains, primarily by providing less-than-truckload (“LTL”) and truck brokerage services. See Note 4—Segment Reporting for additional information on our operations.
2022 Strategic Plan
On March 8, 2022, we announced that our Board of Directors approved a plan to pursue the strategic spin-off of our tech-enabled brokered transportation platform in North America as a publicly traded company and to pursue two divestitures: the sale of our North American intermodal operation and the sale or listing of our European business. We sold our intermodal operation, which provides rail brokerage and drayage services, in March 2022. For further information, see Note 3—Divestiture.
If the spin-off to XPO shareholders is completed, the transaction will result in two pure-play, publicly traded companies with simplified business models and clearly delineated value propositions. The core business of the spin-off will be our truck brokerage service, with complementary brokered services for managed transportation, last mile logistics and global forwarding. The remaining company will be an asset-based provider of LTL service in North America. The planned spin-off transaction, which is intended to be tax-free to XPO and our shareholders for U.S. federal income tax purposes, would result in XPO shareholders owning stock in both companies. In connection with the transaction, it is anticipated that a portion of XPO’s outstanding debt may be repaid using proceeds from borrowings incurred and debt securities to be issued by the spun-off company.
We currently expect to complete the spin-off in the fourth quarter of 2022, subject to various conditions, including the effectiveness of a Form 10 registration statement, receipt of a tax opinion from counsel, the refinancing of XPO’s debt on terms satisfactory to the XPO Board of Directors, and final approval by the XPO Board of Directors, among other requirements. There can be no assurance that any strategic transaction will occur, or if one or more do occur, of the terms or timing.
2021 Spin-Off of the Logistics Segment
On August 2, 2021, we completed the spin-off of our Logistics segment as GXO Logistics, Inc. (“GXO”). The historical results of our Logistics segment are presented as discontinued operations in our Condensed Consolidated Financial Statements. For information on our discontinued operations, see Note 2—Discontinued Operations.
Basis of Presentation
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, 2021 (the “2021 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 2021 Form 10-K.
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 months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.
We have recast prior period amounts to conform to the current period’s presentation.

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Restricted Cash
As of March 31, 2022 and December 31, 2021, our restricted cash included in Other long-term assets on our Condensed Consolidated Balance Sheets was $10 million.
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 also sell trade accounts receivable under our securitization program. 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.
The maximum amount of net cash proceeds available at any one time under our securitization program, inclusive of any unsecured borrowings, is €200 million (approximately $221 million as of March 31, 2022). As of March 31, 2022, €1 million (approximately $1 million) was available under the program, subject to having sufficient receivables available to sell and with consideration to amounts previously purchased. The weighted average interest rate was 0.53% as of March 31, 2022. 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 months ended March 31, 2022 and 2021.
Information related to the trade receivables sold was as follows:
Three Months Ended March 31,
(In millions)2022
2021 (1)
Securitization programs
Receivables sold in period
$447 $347 
Cash consideration
447 347 
Factoring programs
Receivables sold in period
27 16 
Cash consideration
27 16 
(1)    Information for the three months ended March 31, 2021 excludes the Logistics segment.
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 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 March 31, 2022 and December 31, 2021 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 and a cash deposit for the securitization program. Our derivative instruments are classified as Level 2 and are valued using inputs other than quoted prices, such as foreign exchange rates and yield curves. For information on financial liabilities, see Note 7—Debt.

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The fair value hierarchy of cash equivalents was as follows:
(In millions)Carrying ValueFair ValueLevel 1
March 31, 2022$931 $931 $931 
December 31, 2021181 181 181 
Cash equivalents at March 31, 2022 include the cash proceeds from the sale of our intermodal operation in March 2022. For further information, see Note 3—Divestiture.
Adoption of New Accounting Standard
In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance.” The ASU increases the transparency surrounding government assistance by requiring annual disclosure of (i) the types of assistance received, (ii) an entity’s accounting for the assistance and (iii) the effect of the assistance on the entity’s financial statements. We adopted this standard on January 1, 2022, on a prospective basis. The adoption did not have a material impact on our financial statement disclosures.
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 intend to apply this guidance if modifications of contracts that include LIBOR occur, which is not expected to have a material impact on our consolidated financial statements.
2. Discontinued Operations
The following table summarizes the financial results from discontinued operations of GXO:
Three Months Ended March 31,
(In millions)2021
Revenue$1,818 
Direct operating expense (exclusive of depreciation and amortization)1,514 
Sales, general and administrative expense150 
Depreciation and amortization expense73 
Transaction and other operating costs17 
Operating income64 
Other income(11)
Interest expense4 
Income from discontinued operations before income tax provision71 
Income tax provision16 
Net income from discontinued operations, net of taxes55 
Net income from discontinued operations attributable to noncontrolling
interests
(3)
Net income from discontinued operations attributable to GXO$52 
During the three months ended March 31, 2022 and 2021, we incurred approximately $4 million and $13 million, respectively, of costs related to the GXO spin-off. For the three months ended March 31, 2021, $12 million of these

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costs are reflected within income from discontinued operations in our Condensed Consolidated Statements of Income.
In accordance with a separation and distribution agreement, GXO has agreed to indemnify XPO for payments XPO makes with respect to certain self-insurance matters that were incurred by GXO prior to the spin-off and remain obligations of XPO. The receivable and reserve for these matters was approximately $20 million each as of March 31, 2022 and approximately $23 million and $21 million, respectively, as of December 31, 2021.
3. Divestiture
In March 2022, we sold our North American intermodal operation for cash proceeds of approximately $705 million, net of cash disposed and subject to a customary post-closing purchase price adjustment. We recorded a pre-tax gain on the sale of $450 million, net of transaction costs, for the three months ended March 31, 2022. We agreed to provide certain specified customary transition services for a period not exceeding 12 months from the sale. The intermodal operation generated revenue of $1.2 billion and operating income of $53 million for the year ended December 31, 2021. The intermodal operation was included in our Brokerage and Other Services segment through the date of the sale.
4. Segment Reporting
We are organized into two reportable segments: (i) North American LTL and (ii) Brokerage and Other Services.
In our asset-based North American LTL segment, we provide our customers with geographic density and day-definite regional, inter-regional and transcontinental LTL freight services. Our services include cross-border U.S. freight movements to and from Mexico and Canada, as well as intra-Canada service.
In our asset-light Brokerage and Other Services segment, shippers create demand for our technology-enabled services and we place their freight with qualified independent carriers, pricing the transactions on either a contract or a spot basis. Our truck brokerage business is the largest component of the segment, which also includes three complementary brokered services: managed transportation, last mile logistics for heavy goods and global forwarding. Our European business, which we plan to divest through either a sale or a listing on a European stock exchange, is also currently reported within this segment.
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. Our CODM evaluates segment profit (loss) based on adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), which we define as income from continuing operations before debt extinguishment loss, interest expense, income tax, depreciation and amortization expense, gain on sale of business, transaction and integration costs, restructuring costs and other adjustments.

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Selected financial data for our segments is as follows:
Three Months Ended March 31,
(in millions)20222021
Revenue
North American LTL$1,105 $962 
Brokerage and Other Services2,432 2,071 
Eliminations(64)(44)
Total$3,473 $2,989 
Adjusted EBITDA
North American LTL$205 $214 
Brokerage and Other Services164 125 
Corporate(48)(60)
Total adjusted EBITDA321 279 
Less:
Debt extinguishment loss 8 
Interest expense 37 65 
Income tax provision113 19 
Depreciation and amortization expense116 119 
Unrealized (gain) loss on foreign currency option and forward contracts (1)
Gain on sale of business(450) 
Transaction and integration costs (1)
10 5 
Restructuring costs (2)
6 1 
Income from continuing operations$489 $63 
Depreciation and amortization expense
North American LTL$55 $55 
Brokerage and Other Services60 60 
Corporate1 4 
Total$116 $119 
(1)    Transaction and integration costs for the three months ended March 31, 2022 and 2021 are primarily comprised of third-party professional fees related to strategic initiatives, including the spin-offs and other disposal activities, as well as retention awards paid to certain employees. Transaction and integration costs for the three months ended March 31, 2022 and 2021 include $2 million and $1 million, respectively, related to our Brokerage and Other Services segment and $8 million and $4 million, respectively, related to Corporate.
(2)    See Note 6— Restructuring Charges for further information on our restructuring actions.


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5. 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 March 31, 2022
(In millions)North American LTLBrokerage and Other ServicesEliminationsTotal
Revenue
United States$1,082 $1,519 $(64)$2,537 
North America (excluding United States)23 101  124 
France 352  352 
United Kingdom 225  225 
Europe (excluding France and United Kingdom) 210  210 
Other 25  25 
Total$1,105 $2,432 $(64)$3,473 

Three Months Ended March 31, 2021
(In millions)North American LTLBrokerage and Other ServicesEliminationsTotal
Revenue
United States$940 $1,221 $(44)$2,117 
North America (excluding United States)22 69  91 
France 342  342 
United Kingdom 209  209 
Europe (excluding France and United Kingdom) 213  213 
Other 17  17 
Total$962 $2,071 $(44)$2,989 



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Our revenue disaggregated by service offering was as follows:
Three Months Ended March 31,
(In millions)20222021
North America
LTL (1)
$1,133 $976 
Truck brokerage824 596 
Last mile246 246 
Other brokerage (2)
551 453 
Total North America2,754 2,271 
Europe787 763 
Eliminations(68)(45)
Total$3,473 $2,989 
(1)    LTL revenue is before intercompany eliminations and includes revenue from our trailer manufacturing business.
(2)    Other brokerage includes intermodal, expedite, freight forwarding and managed transportation services. Freight forwarding includes operations conducted outside of North America but managed by our North American entities. In March 2022, we sold our intermodal operation. For further information, see Note 3—Divestiture.
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 March 31, 2022, the fixed consideration component of our remaining performance obligation was approximately $120 million, and we expect approximately 89% of that amount to be recognized over the next three years and the remainder thereafter. 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.
6. Restructuring Charges
We engage in restructuring actions as part of our ongoing efforts to best use our resources and infrastructure, including actions in connection with spin-offs and other disposal activities. These actions generally include severance and facility-related costs, including impairment of operating lease assets, as well as contract termination costs and are intended to improve our efficiency and profitability.

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Our restructuring-related activity was as follows:
Three Months Ended March 31, 2022
(In millions)Reserve Balance
as of
December 31, 2021
Charges IncurredPaymentsReserve Balance
as of
March 31, 2022
Severance
Brokerage and Other Services$6 $2 $(3)$5 
Corporate7 1 (2)6 
Total severance13 3 (5)11 
Facilities
Brokerage and Other Services2   2 
Total facilities2   2 
Contract termination
North American LTL 3 (3) 
Total contract termination 3 (3) 
Total$15 $6 $(8)$13 
We expect the majority of the cash outlays related to the charges incurred in the first quarter of 2022 will be complete within 12 months.
7. Debt
March 31, 2022December 31, 2021
(In millions)Principal BalanceCarrying ValuePrincipal BalanceCarrying Value
Term loan facilities$2,003 $1,979 $2,003 $1,977 
6.25% Senior notes due 2025
1,150 1,141 1,150 1,141 
6.70% Senior debentures due 2034
300 215 300 214 
Finance leases, asset financing and other224 224 240 240 
Total debt3,677 3,559 3,693 3,572 
Short-term borrowings and current maturities of long-term debt682 682 58 58 
Long-term debt$2,995 $2,877 $3,635 $3,514 

The fair value of our debt and classification in the fair value hierarchy was as follows:
(In millions)Fair ValueLevel 1Level 2
March 31, 2022$3,717 $1,500 $2,217 
December 31, 20213,811 1,571 2,240 
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.
ABL Facility
As of March 31, 2022, our borrowing base was $1.0 billion and our availability under our revolving loan credit agreement (the “ABL Facility”) was $996 million after considering outstanding letters of credit of $4 million. As of March 31, 2022, we were in compliance with the ABL Facility’s financial covenants.

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Letters of Credit Facility
As of March 31, 2022, we have issued $185 million in aggregate face amount of letters of credit under our $200 million uncommitted secured evergreen letter of credit facility.
Term Loan Facilities
In the first quarter of 2021, we amended our Senior Secured Term Loan Credit Agreement (the “Term Loan Credit Agreement”) and recorded a debt extinguishment loss of $3 million. The interest rate on our term loan facility was 1.99% as of March 31, 2022.