What changed in this filing

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Item 1. Financial Statements

2024-11-05 compared with 2024-08-06 · 121 added, 105 removed, 551 unchanged (29% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended June 30, Six Months Ended June 30,

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

(Dollars in millions, shares in thousands, except per share amounts) 2024 2023 2024 2023

7 unchanged sentences

Operating income 81 90 117 231

Other income, net 1 1 7 1

Other income (expense), net ( 6 ) 7 1 8

Interest expense, net ( 33 ) ( 14 ) ( 69 ) ( 41 )

12 unchanged sentences

GXO Logistics, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended June 30, Six Months Ended June 30,

Condensed Consolidated Statements of Comprehensive Income

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

(In millions) 2024 2023 2024 2023

5 unchanged sentences

Other comprehensive income (loss), net of tax 163 ( 68 ) 138 ( 36 )

Comprehensive income (loss), net of tax 25 88 ( 22 ) 124

Comprehensive income, net of tax 198 — 176 124

Comprehensive income attributable to NCI 3 — 4 3

Comprehensive income (loss) attributable to GXO $ 24 $ 86 $ ( 23 ) $ 121

Comprehensive income attributable to GXO $ 195 $ — $ 172 $ 121

See accompanying Notes to Condensed Consolidated Financial Statements.

1 unchanged sentence

Condensed Consolidated Balance Sheets

June 30, December 31,

September 30, December 31,

(Dollars in millions, shares in thousands, except per share amounts) 2024 2023

40 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

(In millions) 2024 2023

16 unchanged sentences

Acquisition of businesses, net of cash acquired ( 863 ) —

Cross-currency swap agreements settlement ( 5 ) —

Net cash used in investing activities ( 1,107 ) ( 192 )

4 unchanged sentences

Taxes paid related to net share settlement of equity awards ( 8 ) ( 7 )

Other ( 6 ) 5

Net cash provided by (used in) financing activities 829 ( 170 )

15 unchanged sentences

dollars in millions) Shares Amount

Balance as of March 31, 2024 119,368 $ 1 $ 2,602 $ 515 $ ( 249 ) $ 2,869 $ 34 $ 2,903

Balance as of June 30, 2024 119,437 $ 1 $ 2,610 $ 553 $ ( 263 ) $ 2,901 $ 32 $ 2,933

Net income — — — 33 — 33 2 35

Other comprehensive loss — — — — ( 14 ) ( 14 ) — ( 14 )

Other comprehensive Income — — — — 162 162 1 163

Stock-based compensation — — 11 — — 11 — 11

1 unchanged sentence

Tax withholding on vesting of stock-based compensation awards ( 26 ) — ( 1 ) — — ( 1 ) — ( 1 )

Other — — — — — — ( 3 ) ( 3 )

Balance as of June 30, 2024 119,437 $ 1 $ 2,610 $ 553 $ ( 263 ) $ 2,901 $ 32 $ 2,933

Balance as of September 30, 2024 119,472 $ 1 $ 2,620 $ 586 $ ( 101 ) $ 3,106 $ 35 $ 3,141

Common Stock APIC Retained

5 unchanged sentences

Net income — — — 34 — 34 4 38

Other comprehensive loss — — — — ( 24 ) ( 24 ) ( 1 ) ( 25 )

Other comprehensive Income — — — — 138 138 — 138

Stock-based compensation — — 30 — — 30 — 30

2 unchanged sentences

Other — — — — — — ( 3 ) ( 3 )

Balance as of June 30, 2024 119,437 $ 1 $ 2,610 $ 553 $ ( 263 ) $ 2,901 $ 32 $ 2,933

Balance as of September 30, 2024 119,472 $ 1 $ 2,620 $ 586 $ ( 101 ) $ 3,106 $ 35 $ 3,141

See accompanying Notes to Condensed Consolidated Financial Statements.

6 unchanged sentences

dollars in millions) Shares Amount

Balance as of March 31, 2023 118,889 $ 1 $ 2,580 $ 348 $ ( 244 ) $ 2,685 $ 34 $ 2,719

Balance as of June 30, 2023 118,932 $ 1 $ 2,587 $ 413 $ ( 223 ) $ 2,778 $ 33 $ 2,811

Net income — — — 66 — 66 2 68

Other comprehensive income — — — 21 21 1 22

Other comprehensive loss — — — — ( 66 ) ( 66 ) ( 2 ) ( 68 )

Stock-based compensation — — 7 — — 7 — 7

1 unchanged sentence

Tax withholding on vesting of stock compensation awards ( 11 ) — ( 1 ) — — ( 1 ) — ( 1 )

Other — — — — — — ( 3 ) ( 3 )

Balance as of June 30, 2023 118,932 $ 1 $ 2,587 $ 413 $ ( 223 ) $ 2,778 $ 33 $ 2,811

Balance as of September 30, 2023 118,951 $ 1 $ 2,593 $ 479 $ ( 289 ) $ 2,784 $ 33 $ 2,817

Common Stock APIC Retained

5 unchanged sentences

Net income — — — 156 — 156 4 160

Other comprehensive income — — — — 31 31 1 32

Other comprehensive loss — — — — ( 35 ) ( 35 ) ( 1 ) ( 36 )

Stock-based compensation — — 25 — — 25 — 25

2 unchanged sentences

Other — — — — — — ( 3 ) ( 3 )

Balance as of June 30, 2023 118,932 $ 1 $ 2,587 $ 413 $ ( 223 ) $ 2,778 $ 33 $ 2,811

Balance as of September 30, 2023 118,951 $ 1 $ 2,593 $ 479 $ ( 289 ) $ 2,784 $ 33 $ 2,817

See accompanying Notes to Condensed Consolidated Financial Statements.

30 unchanged sentences

Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements.

Early adoption is permitted.

The Company is currently evaluating the impact of this ASU on its Consolidated Financial Statements.

The Company does not expect the adoption of this new standard to impact its Consolidated Financial Statements other than incremental disclosures on its Annual Report on Form 10-K for the year ending December 31, 2024.

Revenue Recognition

Revenue disaggregated by geographical area was as follows:

Three Months Ended June 30, Six Months Ended June 30,

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

(In millions) 2024 2023 2024 2023

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Revenue disaggregated by industry was as follows:

Three Months Ended June 30, Six Months Ended June 30,

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

(In millions) 2024 2023 2024 2023

8 unchanged sentences

The contract asset and contract liability balances from contracts with customers were as follows:

June 30, December 31,

September 30, December 31,

(In millions) 2024 2023

8 unchanged sentences

Revenue recognized included the following:

Three Months Ended June 30, Six Months Ended June 30,

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

(In millions) 2024 2023 2024 2023

4 unchanged sentences

As permitted in determining the remaining performance obligation, the Company omits obligations that have original expected durations of one year or less or contain variable consideration.

As of June 30, 2024, the fixed consideration component of the Company’s remaining performance obligation was approximately $ 4.1 billion, and the Company expects to recognize approximately 76 % of that amount over the next three years and the remainder thereafter.

As of September 30, 2024, the fixed consideration component of the Company’s remaining performance obligation was approximately $ 3.9 billion, and the Company expects to recognize approximately 77 % of that amount over the next three years and the remainder thereafter.

The Company estimates 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.

2 unchanged sentences

The following amounts were recorded in the Condensed Consolidated Balance Sheets related to leases:

June 30, December 31,

September 30, December 31,

(In millions) 2024 2023

10 unchanged sentences

The components of lease expense recorded in the Condensed Consolidated Statements of Operations were as follows:

Three Months Ended June 30, Six Months Ended June 30,

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

(In millions) 2024 2023 2024 2023

12 unchanged sentences

Supplemental cash flow information was as follows:

Six Months Ended June 30,

Nine Months Ended September 30,

(In millions) 2024 2023

6 unchanged sentences

On April 10, 2024, the Wincanton shareholders approved the Wincanton Acquisition and on April 29, 2024, the Company completed the Wincanton Acquisition for total consideration of approximately £ 762 million ($ 958 million).

The Competition and Markets Authority (the “CMA”) in the U.K.

is currently reviewing the Wincanton Acquisition.

The Company estimates that the CMA’s review of the acquisition will be completed during the second half of 2024.

The Wincanton Acquisition is subject to a review by the Competition and Markets Authority (the “CMA”) in the U.K.

On November 1, 2024, the CMA announced that it intends to refer the Wincanton Acquisition for an in-depth Phase 2 investigation unless acceptable undertakings are agreed between the Company and the CMA by November 15, 2024.

Wincanton is a logistics provider specializing in both warehousing and transportation solutions in the U.K.

Wincanton services industries in grocery, retail and manufacturing, consumer goods, ecommerce, healthcare, defense, industrial, and energy.

The Company incurred transaction and financing costs related to the Wincanton Acquisition of $ 11 million and $ 26 million for the three and six months ended June 30, 2024, respectively, which are included in Transaction and integration costs in the Condensed Consolidated Statements of Operations.

Loan due 2027”), and (iii) in April 2024, the Company issued $ 1.1 billion aggregate principal amount of senior notes (the “Unsecured Notes”).

Wincanton provides services to customers in grocery, retail and manufacturing, consumer goods, ecommerce, healthcare, defense, industrial, and energy industries.

The Company incurred acquisition costs related to the Wincanton Acquisition of $ 19 million and $ 45 million for the three and nine months ended September 30, 2024, respectively, which are included in Transaction and integration costs in the Condensed Consolidated Statements of Operations.

In connection with the Wincanton Acquisition, (i) the Company entered into a bridge term loan credit agreement (the “Bridge Term Loan”), (ii) the Company entered into a three-year term loan credit agreement (“Three-Year Term Loan due 2027”), and (iii) in April 2024, the Company issued $ 1.1 billion aggregate principal amount of senior notes (the “Unsecured Notes”).

For additional information regarding the financing agreements entered in connection with the Wincanton Acquisition, see Note 6.

1 unchanged sentence

Wincanton’s results of operations are included in the Condensed Consolidated Statements of Operations from the date of acquisition.

The Company recorded $ 333 million and $ 3 million of revenue and income before income taxes for both the three and six months ended June 30, 2024, respectively.

For the three months ended September 30, 2024, the Company recorded $ 529 million and $ 4 million of revenue and loss before income taxes, respectively.

For the nine months ended September 30, 2024, the Company recorded $ 862 million and $ 1 million of revenue and loss before income taxes, respectively.

The following table summarizes the fair values of assets acquired and liabilities assumed at the acquisition date:

28 unchanged sentences

Goodwill recorded (3)

(1) The Company acquired $ 519 million of intangible assets, comprised of customer relationships, trade names, and intellectual property with weighted-average useful lives of 12.5 years.

(2) The Company recorded a realized foreign currency gain of $ 5 million which represents the change in foreign currency rates from the acquisition date through the settlement date.

The gain is included as a component of “Transaction and Integration expense” on the Condensed Consolidated Statements of Operations.

The gain is included as a component of “Transaction and Integration costs” on the Condensed Consolidated Statements of Operations.

(3) Goodwill represents the excess of the purchase price over the fair value of identifiable assets acquired and liabilities assumed at the acquisition date.

5 unchanged sentences

The Company expects to finalize the purchase price allocation within the measurement period, which will not exceed one year from the acquisition date.

The following unaudited pro forma information presents the Company’s results of operations as if the acquisition of Wincanton occurred on January 1, 2023.

The following unaudited pro forma information presents the Company’s results of operations as if the Wincanton Acquisition occurred on January 1, 2023.

The pro forma results reflect the impact of incremental interest expense to finance the acquisition and amortization expense on acquired intangible assets.

Adjustments have also been made to remove transaction related costs.

The unaudited pro forma information is not necessarily indicative of what the results of operations of the combined company would have been had the acquisition been completed as of January 1, 2023.

Three Months Ended Six Months Ended

June 30, June 30,

The unaudited pro forma information is not necessarily indicative of what the results of operations of the combined company would have been had the Wincanton Acquisition been completed as of January 1, 2023.

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

(In millions) 2024 2023 2024 2023

2 unchanged sentences

61 67 ( 8 ) 135

(1) Included in the Income (loss) before income taxes on a pro forma basis for the six months ended June 30, 2024 were long-lived asset impairment charges of $ 90 million recorded by Wincanton.

(1) Included in the Income (loss) before income taxes on a pro forma basis for the nine months ended September 30, 2024 were long-lived asset impairment charges of $ 90 million recorded by Wincanton.

(2) Included in the Income (loss) before income taxes on a pro forma basis for the three and nine months ended September 30, 2024 were foreign currency losses of $ 11 million and $ 12 million, respectively, compared with foreign currency gains of $ 5 million and $ 2 million for the three and nine months ended September 30, 2023, respectively.

PFSweb Acquisition

3 unchanged sentences

PFS’s service offerings include order fulfillment, fulfillment-as-a-service, order management and customer care.

The Company recorded the preliminary fair value of assets acquired and liabilities assumed on the date of acquisition, including intangible assets comprising customer relationships, trademarks, trade names and developed technology of $ 55 million with a weighted-average amortization period of 13 years.

The Company recorded the fair value of assets acquired and liabilities assumed on the date of acquisition, including intangible assets comprising customer relationships, trademarks, trade names and developed technology of $ 55 million with a weighted-average amortization period of 13 years.

Goodwill acquired in connection with the acquisition was $ 80 million, recorded in the Americas and Asia-Pacific reporting unit, and was attributed to anticipated synergies.

1 unchanged sentence

income tax purposes.

The Company expects to finalize the purchase price allocation within the measurement period, which will not exceed one year from the acquisition date.

The following table presents the changes in Goodwill for the six months ended June 30, 2024:

The following table presents the changes in Goodwill for the nine months ended September 30, 2024:

(In millions)

2 unchanged sentences

Impact of foreign exchange translation (2)

Balance as of June 30, 2024

Balance as of September 30, 2024

(1) Includes $ 673 million and $ 4 million for the preliminary purchase price allocation for the Wincanton Acquisition and adjustments to the purchase price allocation for the PFS Acquisition, respectively.

(2) Changes to goodwill amounts resulting from foreign currency translation after the acquisition date are presented as the impact of foreign exchange translation.

As of June 30, 2024 and December 31, 2023, there were no accumulated goodwill impairment losses.

As of September 30, 2024 and December 31, 2023, there were no accumulated goodwill impairment losses.

Debt and Financing Arrangements

The following table summarizes the carrying value of the Company’s debt:

June 30, December 31,

(In millions) Rate (1)

September 30, December 31,

(In millions, except percentages) Rate (1)

Unsecured notes due 2026 (2)

12 unchanged sentences

Total Long-term debt $ 2,556 $ 1,620

(1) Interest rate as of June 30, 2024.

(2) Net of unamortized debt issuance costs of $ 2 million as of June 30, 2024 and December 31, 2023.

(3) Net of unamortized debt issuance costs of $ 8 million as of June 30, 2024.

(4) Net of unamortized debt issuance costs of $ 3 million as of June 30, 2024 and December 31, 2023.

(5) Net of unamortized debt issuance costs of $ 10 million as of June 30, 2024.

(1) Interest rate as of September 30, 2024.

(2) Net of unamortized debt issuance costs of $ 1 million and $ 2 million as of September 30, 2024 and December 31, 2023, respectively.

(3) Net of unamortized debt issuance costs of $ 7 million as of September 30, 2024.

(4) Net of unamortized debt issuance costs of $ 3 million as of September 30, 2024 and December 31, 2023.

(5) Net of unamortized debt issuance costs of $ 10 million as of September 30, 2024.

(6) On June 27, 2024, the Company repaid $ 50 million of the Three-Year Term Loan due 2025.

(7) Net of unamortized debt issuance costs of $ 1 million as of June 30, 2024 and December 31, 2023.

(7) Net of unamortized debt issuance costs of $ 1 million as of September 30, 2024 and December 31, 2023.

(8) On May 6, 2024, the Company repaid $ 100 million of the Five-Year Term Loan due 2027.

Unsecured Notes

On April 25, 2024, the Company entered into an underwriting agreement to issue and sell $ 1.1 billion of Unsecured Notes, consisting of $ 600 million in aggregate principal amount of its 6.25 % senior notes due 2029 (the “2029 Notes”) and $ 500 million in aggregate principal amount of its 6.50 % senior notes due 2034 (the “2034 Notes”) in a registered public offering to fund the Wincanton Acquisition.

On April 25, 2024, the Company entered into an underwriting agreement to issue and sell $ 1.1 billion of Unsecured Notes, consisting of $ 600 million in aggregate principal amount of its 6.25 % senior notes due 2029 (the “2029 Notes”) and $ 500 million in aggregate principal amount of its 6.50 % senior notes due 2034 (the “2034 Notes,” and together with the 2029 Notes, the ‘‘Unsecured Notes”) in a registered public offering to fund the Wincanton Acquisition.

The closing of the sale of the Unsecured Notes occurred on May 6, 2024.

15 unchanged sentences

Dollars, at the Company’s option the alternate base rate or term Secured Overnight Financing Rate (“SOFR”), (b) with respect to borrowings in Canadian Dollars, term Canadian Overnight Repo Rate Average (“CORRA”), (c) with respect to borrowings in Pounds Sterling, daily simple Sterling Overnight Index Average Rate (“SONIA”) and (d) with respect to borrowings in Euros, Euro Interbank Offered Rate (“EURIBOR”), in each case, plus an applicable margin calculated based on the Company’s credit ratings.

No amounts were outstanding under the previous or new revolving credit agreements as of June 30, 2024 or December 31, 2023.

In connection with the Wincanton Acquisition, the Company assumed a revolving credit facility agreement (the “Wincanton Revolving Credit Agreement”) under which it may borrow up to approximately £ 175 million ($ 221 million as of June 30, 2024) in aggregate at any time, expiring in March 2027.

No amounts were outstanding under the previous or new revolving credit agreements as of September 30, 2024 or December 31, 2023.

In connection with the Wincanton Acquisition, the Company assumed a revolving credit facility agreement (the “Wincanton Revolving Credit Agreement”) under which it may borrow up to approximately £ 175 million ($ 234 million as of September 30, 2024) in aggregate at any time, expiring in March 2027.

Loans under the Wincanton Revolving Credit Agreement will bear interest at daily simple SONIA plus a fixed margin.

As of June 30, 2024, the Company had £ 74 million ($ 94 million) of borrowings outstanding under this agreement.

As of September 30, 2024, the Company had £ 55 million ($ 74 million) of borrowings outstanding under the Wincanton Revolving Credit Agreement.

Amounts drawn and repaid in 90 days or less under the revolving credit facilities are presented net in the Condensed Consolidated Statements of Cash Flows.

2 unchanged sentences

Information related to the trade receivables sold was as follows:

Three Months Ended June 30, Six Months Ended June 30,

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

(In millions) 2024 2023 2024 2023

2 unchanged sentences

Net cash provided by operating cash flows

140 27 158 27

Covenants and Compliance

1 unchanged sentence

In addition, the facilities require the Company to maintain a consolidated leverage ratio below a specified maximum.

As of June 30, 2024, the Company complied with the covenants contained in its debt and financing arrangements.

As of September 30, 2024, the Company complied with the covenants contained in its debt and financing arrangements.

Fair Value Measurements and Financial Instruments

8 unchanged sentences

The Company bases its 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, 2024 and December 31, 2023, due to their short-term nature.

The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and current maturities of long-term debt approximated their fair values as of September 30, 2024 and December 31, 2023, due to their short-term nature.

The fair value of debt was as follows:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(In millions) Level Fair

13 unchanged sentences

The notional amount and fair value of derivative instruments were as follows:

June 30, 2024 December 31, 2023 Balance Sheet Location

September 30, 2024 December 31, 2023 Balance Sheet Location

(In millions) Notional Amount

1 unchanged sentence

Derivatives designated as net investment hedges:

Cross-currency swap agreements $ — $ — $ 487 $ 3 Other long-term assets

Cross-currency swap agreements (1)

$ 1,037 $ 18 $ 487 $ 3 Other long-term assets

Cross-currency swap agreements 165 2 165 7 Other current liabilities

150 7 165 7 Other current liabilities

Cross-currency swap agreements (2)(3)

1,800 65 883 49 Other long-term liabilities

Foreign currency forward

contracts (4)

111 — — — Other current liabilities

Derivatives designated as cash flow hedge:

Interest rate swaps $ — $ — $ 125 $ 2 Other current assets

Interest rate swaps (5)

$ — $ — $ 125 $ 2 Other current assets

Interest rate swaps

125 2 125 3 Other long-term assets

Interest rate swaps (6)

125 1 — — Other long-term liabilities

Derivatives not designated as hedges:

Foreign currency option contracts $ 439 $ 4 $ 397 $ 8 Other current assets

Foreign currency option contracts 68 2 — — Other long-term assets

Foreign currency option contracts 68 — — — Other current liabilities

Foreign currency forward contracts 9 — 1 — Other current assets

(1) In April 2024, the Company amended four cross-currency swaps with an aggregate notional value of $ 315 million that will mature in 2027 and 2028, and entered into three cross-currency swaps with an aggregate notional value of $ 300 million that will mature in 2029.

(2) In January 2024, the Company entered into an interest rate swap schedule to mature in 2025, with a notional amount of $ 125 million.

As of June 30, 2024 and December 31, 2023, the derivatives were classified as Level 2 within the fair value hierarchy.

Foreign currency forward contracts 72 2 — — Other current liabilities

(1) In September 2024, a cross-currency swap of the Company with a notional amount of $ 85 million matured.

(2) In April 2024, the Company amended four cross-currency swaps with an aggregate notional amount of $ 315 million, scheduled to mature in 2027 and 2028.

In May 2024 and in September 2024, the Company entered into cross-currency swaps with an aggregate notional amount of $ 300 million and $ 200 million, scheduled to mature in 2029 and 2025, respectively.

(3) In October 2024, the Company amended the rate of two of its cross-currency swap with a notional amount of $ 200 million.

(4) In September 2024, the Company entered into a foreign currency forward with a notional amount of $ 111 million, scheduled to mature in 2024.

(5) In June 2024, an interest rate swap of the Company with a notional amount of $ 125 million matured.

(6) In January 2024, the Company entered into an interest rate swap with a notional amount of $ 125 million, scheduled to mature in 2025.

As of September 30, 2024 and December 31, 2023, the derivatives were 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 hedges on AOCIL and in the Condensed Consolidated Statements of Operations was as follows:

Three Months Ended June 30, 2024 Six Months Ended June 30, 2024

Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024

(In millions) Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative Gain (Loss) Reclassified from AOCIL into Net Income (1)

7 unchanged sentences

(1) Amounts reclassified to Net income are reported within Interest expense, net in the Condensed Consolidated Statements of Operations.

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

(In millions) Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative Gain (Loss) Reclassified from AOCIL into Net Income (1)

9 unchanged sentences

Gains and losses recognized in Other income, net in the Condensed Consolidated Statements of Operations for foreign currency options and forward contracts were as follows:

Three Months Ended June 30, Six Months Ended June 30,

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

(In millions) 2024 2023 2024 2023

Realized loss $ ( 4 ) $ ( 3 ) $ ( 6 ) $ ( 9 )

Unrealized gain 1 3 4 4

Unrealized gain (loss) ( 8 ) 8 ( 4 ) 12

Foreign currency gain (loss) $ ( 12 ) $ 5 $ ( 10 ) $ 3

1 unchanged sentence

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

Three Months Ended June 30, Six Months Ended June 30,

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

(Dollars in millions, shares in thousands, except per share amounts)

18 unchanged sentences

attributable to

As of March 31, 2024 $ ( 124 ) $ ( 20 ) $ 6 $ ( 111 ) $ — $ ( 249 )

As of June 30, 2024 $ ( 145 ) $ ( 13 ) $ 6 $ ( 111 ) $ — $ ( 263 )

Other comprehensive income (loss) before reclassifications 227 ( 71 ) ( 5 ) ( 7 ) ( 1 ) 143

Amounts reclassified to net income (loss) — ( 4 ) — 1 — ( 3 )

Amounts reclassified to net income — 1 — — — 1

Tax amounts — 16 1 1 — 18

Other comprehensive income (loss), net of tax 227 ( 54 ) ( 4 ) ( 6 ) ( 1 ) 162

As of June 30, 2024 $ ( 145 ) $ ( 13 ) $ 6 $ ( 111 ) $ — $ ( 263 )

As of September 30, 2024 $ 82 $ ( 67 ) $ 2 $ ( 117 ) $ ( 1 ) $ ( 101 )

Foreign Currency Adjustment

8 unchanged sentences

Other comprehensive income (loss), net of tax 165 ( 20 ) ( 3 ) ( 4 ) — 138

As of June 30, 2024 $ ( 145 ) $ ( 13 ) $ 6 $ ( 111 ) $ — $ ( 263 )

As of September 30, 2024 $ 82 $ ( 67 ) $ 2 $ ( 117 ) $ ( 1 ) $ ( 101 )

Foreign Currency Adjustment

3 unchanged sentences

attributable to

As of March 31, 2023 $ ( 132 ) $ ( 4 ) $ 4 $ ( 112 ) $ — $ ( 244 )

As of June 30, 2023 $ ( 99 ) $ ( 20 ) $ 8 $ ( 111 ) $ ( 1 ) $ ( 223 )

Other comprehensive income (loss) before reclassifications ( 98 ) 36 1 — 2 ( 59 )

Amounts reclassified to net income (loss) — ( 3 ) — 1 — ( 2 )

Amounts reclassified to net income — 2 — 1 — 3

Tax amounts — ( 9 ) ( 1 ) — — ( 10 )

Other comprehensive income (loss), net of tax ( 98 ) 29 — 1 2 ( 66 )

As of June 30, 2023 $ ( 99 ) $ ( 20 ) $ 8 $ ( 111 ) $ ( 1 ) $ ( 223 )

As of September 30, 2023 $ ( 197 ) $ 9 $ 8 $ ( 110 ) $ 1 $ ( 289 )

Foreign Currency Adjustment

5 unchanged sentences

Other comprehensive income (loss) before reclassifications ( 42 ) 2 2 — 1 ( 37 )

Amounts reclassified to net income (loss) — ( 1 ) — 1 — —

Amounts reclassified to net income — 1 — 2 — 3

Tax amounts 1 ( 1 ) ( 1 ) — — ( 1 )

Other comprehensive income (loss), net of tax ( 41 ) 2 1 2 1 ( 35 )

As of June 30, 2023 $ ( 99 ) $ ( 20 ) $ 8 $ ( 111 ) $ ( 1 ) $ ( 223 )

As of September 30, 2023 $ ( 197 ) $ 9 $ 8 $ ( 110 ) $ 1 $ ( 289 )

Employee Benefit Plans

5 unchanged sentences

and Ireland (the “Wincanton Retirement Plan”).

The Company recognized £ 109 million ($ 137 million) of assets on the acquisition date, reflecting the funded status of the Wincanton Retirement Plan which is recorded in Other long-term assets.

The Company recognized £ 109 million ($ 137 million) of assets on the acquisition date, reflecting the funded status of the Wincanton Retirement Plan which is recorded in Other long-term assets in the Condensed Consolidated Balance Sheets.

Retirement Plan and the Wincanton Retirement Plan (collectively the “U.K.

Retirement Plans”) do not allow for new plan participants or additional benefit accruals.

The Company deems other international retirement plans to be immaterial to its Condensed Consolidated Financial Statements and are excluded from this disclosure.

The Company deems other international retirement plans to be immaterial to its Condensed Consolidated Financial Statements and they are excluded from this disclosure.

Components of the net periodic benefit income recognized under the U.K.

Retirement Plans were as follows:

Three Months Ended June 30, Six Months Ended June 30,

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

(In millions) 2024 2023 2024 2023

1 unchanged sentence

Expected return on plan assets 29 14 65 38

Amortization of prior service cost 1 — 1 —

Amortization of net loss ( 1 ) ( 1 ) ( 3 ) ( 2 )

6 unchanged sentences

Defined contribution costs were as follows:

Three Months Ended June 30, Six Months Ended June 30,

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

(In millions) 2024 2023 2024 2023

9 unchanged sentences

Payments ( 17 )

Balance as of June 30, 2024

The restructuring liability as of June 30, 2024 is expected to be substantially paid within the next 12 months.

Income tax expense for the three months ended June 30, 2024 and 2023, was $ 14 million and $ 20 million, respectively, and the Company’s effective tax rate for the three months ended June 30, 2024 and 2023, was 25.4 % and 23.0 %, respectively.

The increase in the Company’s effective tax rate for the three months ended June 30, 2024 compared with 2023 was driven by non-deductible items partially offset by a return-to-provision benefit in 2024.

Income tax expense for the six months ended June 30, 2024 and 2023, was $ 4 million and $ 23 million, respectively, and the Company’s effective tax rate for the six months ended June 30, 2024 and 2023, was 52.3 % and 19.9 %, respectively.

The increase in the Company’s effective tax rate for the six months ended June 30, 2024, was primarily driven by a decrease in pre-tax income partially offset by non-deductible items.

The Organization for Economic Co-operation and Development (“OECD”) issued administrative guidance for the Pillar Two Global Anti-Base Erosion rules (“Pillar Two”), which imposes a 15% global minimum tax on multinational companies.

Balance as of September 30, 2024

The restructuring liability as of September 30, 2024 is expected to be substantially paid within the next 12 months.

Income tax expense for the three months ended September 30, 2024 and 2023, was $ 7 million and $ 15 million, respectively, and the Company’s effective tax rate for the three months ended September 30, 2024 and 2023, was 16.5 % and 17.9 %, respectively.

The decrease in our effective tax rate for the three months ended September 30, 2024 compared with 2023 was primarily driven by fluctuations in our jurisdictional income profile.

Income tax expense for the nine months ended September 30, 2024 and 2023, was $ 11 million and $ 38 million, respectively, and the Company’s effective tax rate for the nine months ended September 30, 2024 and 2023, was 21.9 % and 19.1 %, respectively.

The increase in the Company’s effective tax rate for the nine months ended September 30, 2024 is due to a tax benefit related to a valuation allowance release in the prior year period.

multinational companies.

Many Pillar Two rules are effective for fiscal years beginning on January 1, 2024, with other aspects to be effective from 2025.

9 unchanged sentences

Management of the Company believes that it has adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable.

Management of the Company does not believe that the ultimate resolution of any matters to which the Company is presently a party will have a material adverse effect on its results

of operations, financial condition or cash flows.

Management of the Company does not believe that the ultimate resolution of any matters to which the Company is presently a party will have a material adverse effect on its 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 the Company’s financial condition, results of operations or cash flows.

7 unchanged sentences

GXO Warehouse Company, Inc., docket no.

4:22-cv-00384-BP, in Federal District Court for the Western District of Missouri, was dismissed with prejudice, each side to bear their own costs and fees, and the Court retains jurisdiction to enforce the terms of the Confidential Settlement Agreement.

4:22-cv-00384-BP, in Federal District Court for the Western District of Missouri (the “Court”), was dismissed with prejudice with each side to bear their own costs and fees, and the Court retained jurisdiction to enforce the terms of the Settlement Agreement.

Among other things in the Settlement Agreement, the parties each denied the allegations and counterclaims asserted in the Dispute, and agreed to a mutual release of claims arising from, under or otherwise in connection with their prior business relationship and the Dispute, in exchange for a payment by the Company of $ 45 million.

The Company intends to pursue reimbursement in connection with this Dispute under its existing insurance policies.

The Company recognized $ 60 million expense for the six months ended June 30, 2024, for the settlement, associated legal fees, costs and other related expenses.

The Company recognized $ 59 million expense for the nine months ended September 30, 2024, for the settlement, associated legal fees, costs and other related expenses.

On July 2, 2024, the Italian authorities launched an investigation into the deductibility of value-added tax payments by GXO to certain third-party cooperative labor providers for their services provided from 2017 through 2023.

The alleged amount is € 84 million ($ 90 million as of June 30, 2024).

It is reasonably po ssible that a loss may be incurred;

The alleged amount is € 84 million ($ 93 million as of September 30, 2024).

It is reasonably possible that a loss may be incurred;

however, the possible range of losses is not reasonably estimable given the status of the on-going investigation.

We are cooperating in this matter and believe that we have a number of credible defenses.

In August, 2024 the Company deposited € 17 million ($ 19 million as of September 30, 2024) into a bank account in connection with the investigation.

This amount is classified as restricted cash in Other long-term assets on the Condensed

Consolidated Balance Sheets.

In October and November 2024, the Company deposited an additional € 34 million ($ 38 million as of September 30, 2024) of restricted cash.

The Company has agreed to deposit an additional € 33 million ($ 37 million as of September 30, 2024) of restricted cash in December 2024 and January 2025.

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

What changed 10-Q

Item 1. Financial Statements