What changed in this filing

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Item 1. Financial Statements

2025-08-06 compared with 2025-05-08 · 205 added, 139 removed, 436 unchanged (44% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended March 31,

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

(Dollars in millions, shares in thousands, except per share amounts) 2025 2024 2025 2024

6 unchanged sentences

Regulatory matter and litigation expense ( 1 ) ( 3 ) 65 60

Operating loss ( 56 ) ( 39 )

Operating income 89 75 33 36

Other income (expense), net ( 10 ) 1 ( 15 ) 7

Interest expense, net ( 36 ) ( 23 ) ( 68 ) ( 36 )

Loss before income taxes ( 93 ) ( 46 )

Income tax (expense) benefit ( 2 ) 10

Net loss ( 95 ) ( 36 )

Income (loss) before income taxes 43 53 ( 50 ) 7

Income tax expense ( 15 ) ( 14 ) ( 17 ) ( 4 )

Net income (loss) 28 39 ( 67 ) 3

Net income attributable to noncontrolling interests (“NCI”) ( 2 ) ( 1 ) ( 3 ) ( 2 )

Net loss attributable to GXO $ ( 96 ) $ ( 37 )

Loss per share

Net income (loss) attributable to GXO $ 26 $ 38 $ ( 70 ) $ 1

Earnings (loss) per share

Basic $ 0.23 $ 0.32 $ ( 0.60 ) $ 0.01

Diluted $ 0.23 $ 0.32 $ ( 0.60 ) $ 0.01

Weighted-average shares used in computation of loss per share

Weighted-average shares used in computation of earnings (loss) per share

Basic 114,812 119,427 116,890 119,350

2 unchanged sentences

GXO Logistics, Inc.

Condensed Consolidated Statements of Comprehensive Loss

Three Months Ended March 31,

Condensed Consolidated Statements of Comprehensive Income (Loss)

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

(In millions) 2025 2024 2025 2024

Net loss $ ( 95 ) $ ( 36 )

Net income (loss) $ 28 $ 39 $ ( 67 ) $ 3

Other comprehensive income (loss), net of tax

3 unchanged sentences

Other comprehensive income (loss), net of tax 128 ( 14 ) 197 ( 25 )

Comprehensive loss, net of tax ( 26 ) ( 47 )

Comprehensive income (loss), net of tax 156 25 130 ( 22 )

Comprehensive income attributable to NCI 5 1 7 1

Comprehensive loss attributable to GXO $ ( 28 ) $ ( 47 )

Comprehensive income (loss) attributable to GXO $ 151 $ 24 $ 123 $ ( 23 )

See accompanying Notes to Condensed Consolidated Financial Statements.

1 unchanged sentence

Condensed Consolidated Balance Sheets

March 31, December 31,

June 30, December 31,

(Dollars in millions, shares in thousands, except per share amounts) 2025 2024

42 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

(In millions) 2025 2024

Cash flows from operating activities:

Net loss $ ( 95 ) $ ( 36 )

Adjustments to reconcile net loss to net cash provided by operating activities

Net income (loss) $ ( 67 ) $ 3

Adjustments to reconcile net income (loss) to net cash provided by operating activities

Depreciation and amortization expense 219 191

1 unchanged sentence

Deferred tax benefit

( 25 ) ( 16 )

Changes in operating assets and liabilities

7 unchanged sentences

Proceeds from sale of property and equipment 2 10

Purchase of Wincanton plc shares — ( 15 )

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

Net cash used in investing activities ( 123 ) ( 1,014 )

1 unchanged sentence

Common stock repurchased ( 200 ) —

Proceeds from debt, net — 1,085

Net borrowings under revolving credit facilities 8 —

Repayments of debt, net ( 55 ) ( 196 )

Repayments of finance lease obligations ( 24 ) ( 19 )

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

Net cash used in financing activities ( 66 ) ( 8 )

Net changes in bank overdraft positions 64 3

Other ( 13 ) ( 9 )

Net cash provided by (used in) financing activities ( 227 ) 857

Effect of exchange rates on cash and cash equivalents 40 ( 7 )

Net decrease in cash, restricted cash and cash equivalents ( 103 ) ( 45 )

Net increase (decrease) in cash, restricted cash and cash equivalents ( 278 ) 1

Cash, restricted cash and cash equivalents, beginning of period 485 470

2 unchanged sentences

Cash and cash equivalents $ 205 $ 469

Restricted Cash (included in Current assets) 92 —

Restricted Cash (included in Other long-term assets) 2 2

1 unchanged sentence

Non-cash financing activities:

Unsettled stock repurchases for which trades occurred $ 4 $ —

Excise tax liability related to stock repurchases $ 2 $ —

7 unchanged sentences

dollars in millions) Shares Amount Treasury Stock

Balance as of March 31, 2025 116,955 $ 1 $ ( 111 ) $ 2,635 $ 590 $ ( 245 ) $ 2,870 $ 34 $ 2,904

Net income — — — — 26 — 26 2 28

Other comprehensive income — — — — — 125 125 3 128

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

Vesting of stock compensation awards 125 — — — — — — — —

Tax withholding on vesting of stock-based compensation awards ( 38 ) — — ( 1 ) — — ( 1 ) — ( 1 )

Common stock repurchased ( 2,590 ) — ( 91 ) — — — ( 91 ) — ( 91 )

Dividends to NCI — — — — — — — ( 4 ) ( 4 )

Balance as of June 30, 2025 114,452 $ 1 $ ( 202 ) $ 2,645 $ 616 $ ( 120 ) $ 2,940 $ 35 $ 2,975

Common Stock APIC Retained

Earnings AOCIL Equity Before

NCI NCI Total

(Shares in thousands,

dollars in millions) Shares Amount Treasury Stock

Balance as of December 31, 2024 119,496 $ 1 $ — $ 2,629 $ 686 $ ( 313 ) $ 3,003 $ 32 $ 3,035

5 unchanged sentences

Common stock repurchased ( 5,356 ) — ( 202 ) — — — ( 202 ) — ( 202 )

Dividends to NCI — — — — — — — ( 4 ) ( 4 )

Balance as of June 30, 2025 114,452 $ 1 $ ( 202 ) $ 2,645 $ 616 $ ( 120 ) $ 2,940 $ 35 $ 2,975

See accompanying Notes to Condensed Consolidated Financial Statements.

GXO Logistics, Inc.

Condensed Consolidated Statements of Changes in Equity

Common Stock APIC Retained

Earnings AOCIL Equity Before

NCI NCI Total

(Shares in thousands,

dollars in millions) Shares Amount

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

Net income — — — 38 — 38 1 39

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

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

Vesting of stock compensation awards 115 — — — — — — —

Tax withholding on vesting of stock compensation awards ( 46 ) — ( 3 ) — — ( 3 ) — ( 3 )

Dividends to NCI — — — — — — ( 3 ) ( 3 )

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

Common Stock APIC Retained

4 unchanged sentences

Balance as of December 31, 2023 119,057 $ 1 $ 2,598 $ 552 $ ( 239 ) $ 2,912 $ 34 $ 2,946

Net income (loss) — — — ( 37 ) — ( 37 ) 1 ( 36 )

Net income — — — 1 — 1 2 3

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

1 unchanged sentence

Vesting of stock compensation awards 509 — — — — — — —

Tax withholding on vesting of stock-based compensation awards ( 83 ) — ( 4 ) — — ( 4 ) — ( 4 )

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

Tax withholding on vesting of stock compensation awards ( 129 ) — ( 7 ) — — ( 7 ) — ( 7 )

Dividends to NCI — — — — — — ( 3 ) ( 3 )

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

See accompanying Notes to Condensed Consolidated Financial Statements.

4 unchanged sentences

The accompanying unaudited Condensed Consolidated Financial Statements of GXO Logistics, Inc.

(“GXO” or the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the rules of the U.S.

Securities and Exchange Commission (the “SEC”).

Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.

4 unchanged sentences

The accompanying Condensed Consolidated Financial Statements and Notes thereto should be read in conjunction with the Annual Report on Form 10-K for the year ended December 31, 2024.

Certain amounts reported for prior periods have been reclassified to conform to the current period’s presentation.

The Company presents its operations as one reportable segment.

Accounting Pronouncements Issued But Not Yet Adopted

In March 2024, the SEC adopted final rules designed to enhance public company disclosures related to the risks and impacts of climate-related matters.

The new rules include disclosures relating to climate-related risks and risk management, as well as the board and management’s governance of such risks.

In addition, the rules include requirements to disclose the financial effects of severe weather events and other natural conditions in the audited financial statements.

Larger registrants will also be required to disclose information about greenhouse gas emissions, which will be subject to a phased-in assurance requirement.

The disclosures are required for annual periods ending December 31, 2025.

In April 2024, the SEC issued an order staying the implementation of the new climate-related disclosure rules pending completion of judicial review of consolidated changes to the rules by the U.S.

Court of Appeals for the Eighth Circuit.

In February 2025, the SEC requested that the court not schedule the matter for argument in order to allow time for the SEC to determine appropriate next steps.

On March 27, 2025, the SEC voted to end its legal defense of the final rules, although judicial review remains ongoing.

The Company continues to monitor developments and evaluate the potential impact of these rules on its Consolidated Financial Statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which provides for expanded disclosures primarily related to income taxes paid and the rate reconciliation.

8 unchanged sentences

Revenue disaggregated by geographical area was as follows:

Three Months Ended March 31,

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

(In millions) 2025 2024 2025 2024

4 unchanged sentences

Spain 166 145 309 274

Italy 105 97 200 190

Other 202 163 380 319

2 unchanged sentences

Revenue disaggregated by industry was as follows:

Three Months Ended March 31,

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

(In millions) 2025 2024 2025 2024

8 unchanged sentences

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

March 31, December 31,

June 30, December 31,

(In millions) 2025 2024

8 unchanged sentences

Revenue recognized included the following:

Three Months Ended March 31,

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

(In millions) 2025 2024 2025 2024

Amounts included in the beginning of year contract liability balance

$ 24 $ 48 $ 221 $ 153

Segment Information

9 unchanged sentences

The Company’s segment results were as follows:

Three Months Ended March 31,

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

(In millions) 2025 2024 2025 2024

2 unchanged sentences

Selling, general and administrative expense (1)

Other (income), net (2)

257 252 503 488

Other (income) expense (2)(4)

2 — ( 3 ) ( 3 )

Segment Adjusted EBITDA $ 227 $ 205 $ 405 $ 372

6 unchanged sentences

Unrealized (gain) loss on foreign currency contracts (4)

8 ( 1 ) 18 ( 4 )

Interest expense, net 36 23 68 36

Loss before income taxes ( 93 ) ( 46 )

Income tax (expense) benefit ( 2 ) 10

Net loss $ ( 95 ) $ ( 36 )

Income (loss) before income taxes 43 53 ( 50 ) 7

Income tax expense ( 15 ) ( 14 ) ( 17 ) ( 4 )

Net income (loss) $ 28 $ 39 $ ( 67 ) $ 3

(1) Excludes unallocated corporate expenses.

(2) Other income, net excluding unrealized (gain) loss on foreign currency contracts.

(2) Other (income) expense, excluding unrealized (gain) loss on foreign currency contracts.

(3) Corporate expenses include unallocated costs related to corporate functions such as salaries and benefits, rent, and professional fees which are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

(4) Included in Other income, net in the Condensed Consolidated Statements of Operations .

The Company has operating leases for real estate, warehouse equipment, trucks, trailers, containers and material handling equipment.

In addition, the Company has finance leases for warehouse equipment.

(4) Included in Other income/expense, net in the Condensed Consolidated Statements of Operations .

The Company has operating leases for real estate and warehouse equipment.

Also, the Company has finance leases for real estate, warehouse equipment and fleet, and technology and automated systems.

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

March 31, December 31,

June 30, December 31,

(In millions) 2025 2024

10 unchanged sentences

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

Three Months Ended March 31,

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

(In millions) 2025 2024 2025 2024

4 unchanged sentences

Total operating lease cost (1)

$ 329 $ 290 $ 626 $ 563

Finance leases:

5 unchanged sentences

Supplemental cash flow information was as follows:

Three Months Ended March 31,

Six Months Ended June 30,

(In millions) 2025 2024

Leased assets obtained in exchange for new lease obligations:

Operating leases $ 197 $ 167

Finance leases 36 —

Operating leases, including $ 244 from an acquisition in 2024

Finance leases, including $ 36 from an acquisition in 2024

Wincanton Acquisition

On April 29, 2024, the Company completed the acquisition of Wincanton plc for total consideration of approximately £ 762 million ($ 958 million as of acquisition date) (the “Wincanton Acquisition”).

The Wincanton Acquisition is subject to a review by the Competition and Markets Authority (the “CMA”) in the U.K., which is expected to be completed by June 25, 2025.

In connection with the Wincanton Acquisition, the Company incurred transaction costs of $ 21 million and $ 15 million for the three months ended March 31, 2025 and 2024, respectively, which were included in Transaction and integration costs in the Condensed Consolidated Statements of Operations.

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

On April 29, 2024, the Company completed the acquisition of Wincanton plc (now Wincanton Limited) for a total consideration of £ 762 million ($ 958 million as of the acquisition date) (the “Wincanton Acquisition”).

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

On June 19, 2025, the CMA approved the Wincanton Acquisition, subject to the divestment of certain grocery contracts in the U.K.

In connection with the Wincanton Acquisition, the Company incurred transaction costs of $ 14 million and $ 11 million for the three months ended June 30, 2025 and 2024, respectively, and $ 35 million and $ 26 million for the six months ended June 30, 2025 and 2024, respectively, which were included in Transaction and integration costs in the Condensed Consolidated Statements of Operations.

The final fair value of assets acquired and liabilities assumed at the acquisition date was:

(In millions)

29 unchanged sentences

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

Goodwill acquired was recorded in the U.K.

and Ireland reporting unit and was primarily attributed to anticipated synergies.

Goodwill acquired was recorded in the United Kingdom and Ireland reporting unit and was primarily attributed to anticipated synergies.

The Company does not expect the goodwill recognized in connection with the Wincanton Acquisition to be deductible for income tax purposes.

The fair values of the assets acquired and liabilities assumed are considered preliminary and subject to adjustment as additional information is obtained and reviewed.

The final allocation of the purchase price may differ from the preliminary allocation based on completion of the valuation.

The primary areas of the purchase price allocation that are not yet finalized relate to intangible assets, goodwill, other long-term assets, lease assets and liabilities, accrued expenses, and income taxes.

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 three months ended March 31, 2025:

The following table presents the changes in Goodwill for the six months ended June 30, 2025:

(In millions)

2 unchanged sentences

Impact of foreign exchange translation (2)

Balance as of March 31, 2025

(1) This includes a $ 19 million goodwill reduction for the preliminary purchase price allocation for the Wincanton Acquisition.

Balance as of June 30, 2025

(1) Represents $ 4 million reduction in goodwill for the purchase price allocation of the Wincanton Acquisition.

(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 March 31, 2025 and December 31, 2024, there were no accumulated goodwill impairment losses.

As of June 30, 2025 and December 31, 2024, there were no accumulated goodwill impairment losses.

Debt and Financing Arrangements

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

March 31, December 31,

June 30, December 31,

(In millions, except percentages) Rate (1)

14 unchanged sentences

Total Long-term debt $ 2,596 $ 2,521

(1) Interest rate as of March 31, 2025.

(2) Net of unamortized discount and debt issuance costs of $ 0 million and $ 1 million as of March 31, 2025 and December 31, 2024, respectively.

(3) Net of unamortized discount and debt issuance costs of $ 7 million as of March 31, 2025 and December 31, 2024.

(4) Net of unamortized discount and debt issuance costs of $ 3 million as of March 31, 2025 and December 31, 2024.

(5) Net of unamortized discount and debt issuance costs of $ 10 million as of March 31, 2025 and December 31, 2024.

(6) Net of unamortized debt issuance costs of $ 1 million as of March 31, 2025 and December 31, 2024.

(1) Interest rate as of June 30, 2025.

(2) Net of unamortized discount and debt issuance costs of $ 1 million as of December 31, 2024.

(3) Net of unamortized discount and debt issuance costs of $ 6 million and $ 7 million as of June 30, 2025 and December 31, 2024, respectively.

(4) Net of unamortized discount and debt issuance costs of $ 3 million as of June 30, 2025 and December 31, 2024.

(5) Net of unamortized discount and debt issuance costs of $ 9 million and $ 10 million as of June 30, 2025 and December 31, 2024, respectively.

(6) On May 16, 2025, the Company repaid the remaining $ 50 million of the Three-Year Term Loan due 2025.

(7) Net of unamortized debt issuance costs of $ 1 million as of June 30, 2025 and December 31, 2024.

Revolving Credit Facilities

1 unchanged sentence

The aggregate commitment of all lenders under the Revolving Credit Agreement is equal to $ 800 million, of which $ 100 million is available for the issuance of letters of credit.

As of March 31, 2025, and

December 31, 2024, no amounts were outstanding under the Revolving Credit Agreement and letters of credit were $ 1 million under this agreement.

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 £ 175 million ($ 226 million as of March 31, 2025) in aggregate at any time, expiring in March 2027.

As of June 30, 2025, and December 31, 2024, no amounts were outstanding under the Revolving Credit Agreement and letters of credit were $ 1 million under the Revolving Credit Agreement.

June 30, 2025) in aggregate at any time, expiring in March 2027.

Loans under the Wincanton Revolving Credit Agreement bear interest at daily simple Sterling Overnight Index Average rate plus a margin.

As of March 31, 2025, and December 31, 2024, the Company had £ 59 million ($ 76 million as of March 31, 2025) and £ 15 million ($ 19 million as of December 31, 2024) of borrowings outstanding under the Wincanton Revolving Credit Agreement, respectively.

As of June 30, 2025, and December 31, 2024, the Company had £ 26 million ($ 36 million) and £ 15 million ($ 19 million) of borrowings outstanding under the Wincanton Revolving Credit Agreement, respectively.

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 March 31, 2025, the Company complied with the covenants contained in its debt and financing arrangements.

As of June 30, 2025, the Company complied with the covenants contained in its debt and financing arrangements.

Bank Overdraft

As of June 30, 2025, and December 31, 2024, the Company had $ 64 million and zero bank overdrafts, which were reported within Other current liabilities in the Condensed Consolidated Balance Sheets.

Factoring Programs

1 unchanged sentence

Information related to the trade receivables sold was as follows:

Three Months Ended March 31,

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

(In millions) 2025 2024 2025 2024

1 unchanged sentence

Cash consideration 787 360 1,385 649

Net cash provided by (used in) operating cash flows

Net cash provided by operating cash flows

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 March 31, 2025 and December 31, 2024, 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 June 30, 2025 and December 31, 2024, due to their short-term nature.

The fair value of debt was as follows:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(In millions) Level Fair

Value Carrying Value Fair

Value Carrying Value

Value Carrying

Unsecured notes due 2026 2 $ 387 $ 400 $ 380 $ 399

3 unchanged sentences

Three-Year Term Loan due 2025

2 49 50 49 50

Five-Year Term Loan due 2027

4 unchanged sentences

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

March 31, 2025 December 31, 2024 Balance Sheet Location

(In millions) Notional Amount

Value Notional Amount

June 30, 2025 December 31, 2024 Balance Sheet Location

(In millions) Notional

Value Notional

Derivatives designated as net investment hedges:

18 unchanged sentences

(3) In February 2025, the Company entered into three cross-currency swap agreements with an aggregate notional amount of $ 250 million, of which $ 100 million is scheduled to mature in November 2025 and $ 150 million is scheduled to mature in November 2030.

(4) As of March 31, 2025, two foreign currency option contracts not designated as hedges had an aggregate notional amount of $ 12 million and fair value of zero .

As of March 31, 2025 and December 31, 2024, the derivatives were classified as Level 2 within the fair value hierarchy.

(4) As of June 30, 2025, five foreign currency option contracts not designated as hedges had an aggregate notional amount of $ 27 million and fair value of zero .

As of June 30, 2025 and December 31, 2024, 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 March 31, 2025 Three Months Ended March 31, 2024

Three Months Ended June 30, 2025 Six Months Ended June 30, 2025

(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, 2024 Six Months Ended June 30, 2024

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

Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) (1)

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

Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) (1)

Derivatives designated as net investment hedges

Cross-currency swap agreements $ 15 $ 4 $ — $ 47 $ 2 $ 1

Derivatives designated as cash flow hedges

Interest rate swaps $ ( 1 ) $ — $ — $ 1 $ — $ —

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

Derivatives Not Designated as Hedges

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 March 31,

Gains and losses recognized in Other income (expense), 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,

(In millions) 2025 2024 2025 2024

2 unchanged sentences

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

Three Months Ended March 31,

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

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

Net loss attributable to common shares

2025 2024 2025 2024

Net income (loss) attributable to common shares

$ 26 $ 38 $ ( 70 ) $ 1

Basic weighted-average common shares 114,812 119,427 116,890 119,350

1 unchanged sentence

115,055 119,683 116,890 119,680

Basic loss per share

Basic earnings (loss) per share

$ 0.23 $ 0.32 $ ( 0.60 ) $ 0.01

Diluted loss per share

Diluted earnings (loss) per share

$ 0.23 $ 0.32 $ ( 0.60 ) $ 0.01

Antidilutive shares excluded from diluted weighted-average common shares

Shares not included in the computation of diluted earnings per share because the effect would be antidilutive

2,075 1,087 3,396 1,074

Stockholders’ Equity

5 unchanged sentences

The repurchase of shares of the Company’s common stock is recorded as treasury stock within equity and is accounted for under the cost method inclusive of share repurchase costs and excise tax on share repurchases in excess of issuances.

During the three months ended March 31, 2025, the Company repurchased approximately 2.8 million shares of its common stock for an aggregate purchase price of $ 111 million, including share repurchase costs and excise tax.

For the three and six months ended June 30, 2025, the Company repurchased approximately 2.6 million and 5.4 million shares of its common stock for an aggregate purchase price of $ 91 million and $ 202 million including share repurchase costs and excise tax, respectively.

Accumulated Other Comprehensive Income - Loss

5 unchanged sentences

attributable to

As of December 31, 2024 $ ( 195 ) $ 31 $ 4 $ ( 155 ) $ 2 $ ( 313 )

As of March 31, 2025 $ ( 64 ) $ ( 26 ) $ 3 $ ( 159 ) $ 1 $ ( 245 )

Other comprehensive income (loss) before reclassifications 288 ( 194 ) ( 1 ) ( 12 ) ( 3 ) 78

2 unchanged sentences

Other comprehensive income (loss), net of tax 287 ( 151 ) — ( 8 ) ( 3 ) 125

As of March 31, 2025 $ ( 64 ) $ ( 26 ) $ 3 $ ( 159 ) $ 1 $ ( 245 )

As of June 30, 2025 $ 223 $ ( 177 ) $ 3 $ ( 167 ) $ ( 2 ) $ ( 120 )

Foreign Currency Adjustment

5 unchanged sentences

Other comprehensive income (loss) before reclassifications 419 ( 270 ) ( 2 ) ( 18 ) ( 4 ) 125

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

Amounts reclassified to net loss — 1 — 3 — 4

Tax amounts ( 1 ) 61 1 3 — 64

Other comprehensive income (loss), net of tax 418 ( 208 ) ( 1 ) ( 12 ) ( 4 ) 193

As of June 30, 2025 $ 223 $ ( 177 ) $ 3 $ ( 167 ) $ ( 2 ) $ ( 120 )

Foreign Currency Adjustment

(In millions) Foreign

Adjustments Net Investment Hedges Cash

Hedges Defined

attributable to

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

Other comprehensive income (loss) before reclassifications ( 22 ) 14 — ( 1 ) — ( 9 )

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

Tax amounts 1 ( 3 ) — — — ( 2 )

Other comprehensive income (loss), net of tax ( 21 ) 7 — — — ( 14 )

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

Foreign Currency Adjustment

(In millions) Foreign

Adjustments Net Investment Hedges Cash

Hedges Defined

attributable to

As of December 31, 2023 $ ( 83 ) $ ( 47 ) $ 5 $ ( 113 ) $ ( 1 ) $ ( 239 )

Other comprehensive income (loss) before reclassifications ( 63 ) 47 1 — 1 ( 14 )

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

Tax amounts 1 ( 10 ) — — — ( 9 )

Other comprehensive income (loss), net of tax ( 62 ) 34 1 2 1 ( 24 )

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

Employee Benefit Plans

Defined Benefit Plans

The Company sponsors defined benefit pension schemes in the U.K.

The Company offers pension plans in certain jurisdictions, with the most significant in the U.K.

In the U.K., the Company sponsors two defined benefit pension schemes (the “U.K.

Retirement Plans”).

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

The funded status of the U.K.

Retirement Plans was recorded in Other long-term assets in the Condensed Consolidated Balance Sheets.

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

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

The Company considers its other defined benefit pension plans not material to its Consolidated Financial Statements and excludes them from the disclosure below.

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

Retirement Plans were as follows:

Three Months Ended March 31,

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

(In millions) 2025 2024 2025 2024

1 unchanged sentence

Expected return on plan assets 27 23 54 36

Amortization of prior service cost — —

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

Net periodic pension income (1)

(1) Net periodic pension income is recorded in Other income, net in the Condensed Consolidated Statements of Operations.

$ 4 $ 5 $ 9 $ 8

(1) Net periodic pension income was recorded in Other income (expense), net in the Condensed Consolidated Statements of Operations.

Defined Contribution Plans

The Company has defined contribution retirement plans for its U.S.

employees and employees of certain foreign subsidiaries.

Defined contribution costs were as follows:

Three Months Ended March 31,

Also, the Company has defined-contribution retirement plans for its United States employees and employees of certain foreign subsidiaries.

In these plans, employees are allowed to contribute a portion of their salaries and bonuses to the plans, and the Company matches a portion of the employee contributions.

Defined contribution plan costs were as follows:

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

(In millions) 2025 2024 2025 2024

Defined contribution costs (1)

(1) Defined contribution costs were primarily recorded in Direct operating expense in the Condensed Consolidated Statements of Operations.

$ 23 $ 21 $ 54 $ 38

(1) Defined contribution plan costs were primarily recorded in Direct operating expense in the Condensed Consolidated Statements of Operations.

Restructuring Costs and Other

Restructuring costs primarily related to severance, including projects to optimize the Company’s finance, human resources and information technology functions, and closing certain corporate and administrative offices, which were not associated with customer attrition.

Restructuring costs and other were primarily related to severance in connection with actions taken to optimize certain administrative functions.

The following table summarizes changes in the restructuring liability, which is included in Other current liabilities in the Condensed Consolidated Balance Sheets:

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Payments ( 11 )

Balance as of March 31, 2025

As of March 31, 2025, $ 16 million of the restructuring liability is expected to be paid within the next 12 months.

Income tax for the three months ended March 31, 2025, was a $ 2 million income tax expense compared with a $ 10 million income tax benefit for the same period in 2024.

The Company’s effective tax rate for the three months

ended March 31, 2025, was an expense on a pre-tax loss of ( 2.7 )%, compared to a benefit on a pre-tax loss of 21.1 % for the same period in 2024.

The change to the Company’s effective tax rate was primarily driven by non-deductible transaction costs and a non-deductible regulatory matter.

Other reductions, net ( 2 )

Balance as of June 30, 2025

As of June 30, 2025, $ 12 million of the restructuring liability is expected to be paid within the next 12 months.

Income tax expense for the three months ended June 30, 2025 and 2024, was $ 15 million and $ 14 million, respectively, and the Company’s effective tax rate for the three months ended June 30, 2025 and 2024, was 34.6 %, and 25.4 %, respectively.

The increase in the Company’s effective tax rate was primarily driven by a decrease in pre-tax income.

Income tax expense for the six months ended June 30, 2025 and 2024, was $ 17 million and $ 4 million, respectively, and the Company’s effective tax rate for the six months ended June 30, 2025 and 2024, was an expense on a pre-tax loss of ( 35.3 )% and an expense on pre-tax income of 52.3 %, respectively.

The change in the Company’s effective tax rate was primarily driven by a decrease in pre-tax income, offset by non-deductible regulatory matter and transaction costs.

On July 4, 2025, the One Big Beautiful Bill Act (P.L.

119-21) was signed into law.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others effective through 2027.

The Company is currently assessing its impact on its Consolidated Financial Statements.

In 2021, the Organization for Economic Co-operation and Development (“OECD”) issued administrative guidance for the Pillar Two Global Anti-Base Erosion rules (“Pillar Two”), which generally imposes a 15% global minimum tax on multinational companies.

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

The Company has reviewed its global legal entity structure and considered all the jurisdictions for which the Company is potentially subject to Pillar Two.

The Company has determined that most of its entities are not subject to Pillar Two, because these jurisdictions either are subject to tax in excess of 15%, can apply a safe-harbor, or the entities are organized in jurisdictions that have not (yet) fully enacted Pillar Two.

For the three months ended March 31, 2025 and 2024, Pillar Two did not have a material impact on the Company’s income tax expense/benefit.

Pillar Two did not have a significant impact on the Company’s fiscal 2024 and the Company currently does not expect it to have a significant impact on its fiscal 2025 income tax expense.

The Company has incorporated the estimated annual effect of Pillar Two into its income tax provision for the three and six months ended June 30, 2025, and the Company expects to incur additional income tax related to Pillar Two during fiscal 2025.

For the three and the six months ended June 30, 2024, Pillar Two did not have a material impact on the Company’s income tax expense.

Pillar Two did not have a material impact on the Company’s fiscal 2024 income tax expense.

The Company continues to monitor Pillar Two developments, including the impact of the statement issued by the G7 on June 28, 2025 regarding the interplay between the U.S.

international tax system and Pillar Two as it relates to U.S.-headquartered companies.

Commitments and Contingencies

3 unchanged sentences

The Company reviews and adjusts 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 a loss exists in excess of the amount accrued, the Company assesses whether there is at least a reasonable possibility that a loss, or additional loss, may have been incurred.

If a loss is not both probable and

reasonably estimable, or if an exposure to a loss exists in excess of the amount accrued, the Company assesses 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, the Company discloses the estimate of the possible loss or range of loss if it is material and an estimate can be made, or discloses that such an estimate cannot be made.

6 unchanged sentences

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

On July 2, 2024, the Italian authorities launched an investigation into the deductibility of value-added tax payments by the Company to certain third-party service providers.

The challenged amount is € 84 million ($ 91 million as of March 31, 2025).

As of March 31, 2025, the Company deposited € 84 million ($ 91 million as of March 31, 2025) into a designated bank account in connection with the ongoing investigation.

This amount is classified as restricted cash under “Current Assets” in the Condensed Consolidated Balance Sheets.

In April 2025, the Company made a partial payment of € 15 million ($ 17 million) to the Italian authorities funded from the designated bank account reducing the restricted cash balance.

For the three months ended March 31, 2025, the Company accrued € 61 million ($ 66 million) of expense associated with this contingency which is recorded within the Regulatory matter and litigation expense line in the Condensed Consolidated Statements of Operations for the probable and reasonably

estimable loss.

The Company expects to reach a settlement agreement in 2025 consistent with the amount recorded for the three months ended March 31, 2025.

On July 2, 2024, the Italian authorities initiated an investigation into the deductibility of value-added tax (VAT) payments made by the Company to certain third-party service providers.

The challenged amount was € 84 million ($ 91 million as of March 31, 2025), which the Company deposited into a restricted bank account to secure the investigation.

In the first quarter of 2025, the Company accrued € 61 million ($ 66 million) of expense, including legal fees, related to this matter.

In the second quarter of 2025, the Company agreed and made final payments of € 59 million ($ 68 million) to the Italian authorities and released any remaining restrictions on this cash account.

And for the three and six months ended June 30, 2025, the Company released $ 1 million and recorded $ 65 million, respectively, of expenses, including legal fees, related to this matter, which was recorded within the Regulatory matter and litigation expense line in the Condensed Consolidated Statements of Operations.

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