Discontinued Operations

12 Months Ended

Dec. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

As discussed above, the results of RXO, intermodal and GXO are presented as discontinued operations.

The following table summarizes the results of operations from discontinued operations:


	Years Ended December 31,
(In millions)	2022		2021		2020
Revenue	$	4,403	$	10,200	$	10,374
Cost of transportation and services (exclusive of depreciation and amortization)	3,334		5,281		4,065
Direct operating expense (exclusive of depreciation and amortization)	211		3,222		4,581
Sales, general and administrative expense	492		901		979
Depreciation and amortization expense	67		276		388
Gain on sale of business	(430)		—		—
Transaction and other operating costs	125		134		67
Operating income	604		386		294
Other income	(2)		(27)		(35)
Interest expense	—		12		18
Income from discontinued operations before income tax provision	606		401		311
Income tax provision	124		156		84
Net income from discontinued operations, net of taxes	482		245		227
Net income from discontinued operations attributable to noncontrolling interests	—		(5)		(10)
Net income from discontinued operations attributable to discontinued entities	$	482	$	240	$	217

During the years ended December 31, 2022 and 2021, we incurred approximately $152 million and $125 million, respectively, of costs related to the spin-offs, of which $120 million and $101 million, respectively, are reflected within income from discontinued operations in our Consolidated Statements of Income.

The following table summarizes the assets and liabilities from discontinued operations:


	December 31,
(In millions)	2021
Cash and cash equivalents	$	34
Accounts receivable, net	1,230
Other current assets	68
Total current assets of discontinued operations	1,332
Property and equipment, net	133
Operating lease assets	210
Goodwill	885
Identifiable intangible assets, net	110
Other long-term assets	25
Total long-term assets of discontinued operations	1,363
Accounts payable	600
Accrued expenses	307

Short-term operating lease liabilities	63
Other current liabilities	14
Total current liabilities of discontinued operations	984

Deferred tax liability	69

Long-term operating lease liabilities	156
Other long-term liabilities	56
Total long-term liabilities of discontinued operations	$	281

In 2022, RXO completed debt offerings and used the net proceeds to fund a cash payment from RXO to XPO of $446 million, which we used to repay a portion of our outstanding borrowings and fund any related fees and expenses. Additionally, in 2021, GXO completed a debt offering and used the net proceeds to fund a cash payment from GXO to XPO of $794 million, which we used to repay a portion of our outstanding borrowings. For further information, see Note 12—Debt. Prior to the spin-off of GXO, the pension plan for some employees in the United Kingdom was sold to a GXO entity and approximately $82 million of AOCI, net of tax, was transferred to GXO.

In connection with both spin-offs, we entered into separation and distribution agreements as well as various other agreements that provide a framework for the relationships between the parties going forward, including, among others, an employee matters agreement (“EMA”), a tax matters agreement, an intellectual property license agreement and a transition services agreement, through which XPO agreed to provide certain services for a period of time specified in the applicable agreement following the spin-offs. The impact of these services on the consolidated financial statements was immaterial. Additionally, in accordance with these agreements, GXO has agreed to indemnify XPO for certain 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 $17 million and $16 million, respectively, as of December 31, 2022 and $23 million and $21 million, respectively, as of December 31, 2021.