What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-25 compared with 2025-02-18 · 385 added, 361 removed, 867 unchanged (46% of the section changed)

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Note 3 - Revenue Recognition

Note 4 - Acquisitions

Note 4 - Segment Information

Note 5 - Acquisition and D ivestiture

Note 6 - Goodwill

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Note 15 - Employee Benefit Plans

Note 1 6 - Restructuring Charges and Other

Note 16 - Restructuring Costs and Other

Note 17 - Income Taxes

Note 18 - Commitments and Contingencies

Note 19 - Subsequent Events

Report of Independent Registered Public Accounting Firm

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We have audited the accompanying consolidated balance sheets of GXO Logistics, Inc.

and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, cash flows, and changes in equity for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The Company acquired Wincanton plc.

during 2024, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024, Wincanton plc.’s internal control over financial reporting associated with approximately 9.9% of total assets, excluding associated goodwill and intangible assets and approximately 11.8% of total revenues included in the consolidated financial statements of the Company as of and for the year ended December 31, 2024.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Wincanton plc.

Basis for Opinions

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Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and

testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Acquisition-date fair value of a customer relationship intangible asset

As discussed in Note 4 to the consolidated financial statements, on April 29, 2024, the Company acquired Wincanton plc in a business combination for consideration of approximately $958 million.

As a result of the transaction, the Company acquired a customer relationship intangible asset associated with the generation of future income from the acquiree’s existing customers.

The acquisition-date fair value of intangible assets recorded by the Company was $539 million, which included a customer relationship intangible asset.

We identified the evaluation of the acquisition-date fair value of the customer relationship intangible asset as a critical audit matter.

Subjective auditor judgment was required to evaluate certain assumptions used to estimate the acquisition-date fair value of the customer relationship intangible asset.

Specifically, there was limited observable market information for the forecasted revenue and customer attrition assumptions, and evaluation of the discount rate assumption required specialized skills and knowledge.

Changes in these assumptions could have had a significant impact on the acquisition-date fair value of the customer relationship intangible asset.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s process to estimate the acquisition-date fair value of the customer relationship intangible asset.

This included controls related to the determination of the forecasted revenue, customer attrition, and discount rate assumptions used in the Company’s model.

We evaluated the Company’s forecasted revenue of the acquired company by comparing it to past performance of the acquired company, and actual and forecasted revenue trends of the acquiree’s peers.

We evaluated the Company’s customer attrition assumption by comparing it to historical attrition

experienced by the acquired company.

We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the Company’s discount rate used by comparing it against a discount rate that was developed using publicly available market data for comparable entities.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Sufficiency of audit evidence over revenue from contracts with customers

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Additionally, for a sample of accrued revenue at year-end, we confirmed with the Company’s customers the amount of revenue billed subsequent to year-end and compared the result to the Company’s accounting records.

We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence.

We evaluated the

sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence.

We have served as the Company’s auditor since 2021.

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Restructuring costs and other

Litigation expense 59 — —

Regulatory matter and litigation expense 65 59 —

Net loss on divestiture of business

Operating income

Other income, net

Other income (expense), net

Interest expense, net

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$ 0.28 $ 1.12 $ 1.92

Weighted-average common shares outstanding

Weighted-average shares outstanding used in computation of earnings per share

Basic 115,677 119,413 118,908

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Cash flow hedges ( 3 ) ( 1 ) ( 2 )

Fair value hedges ( 1 ) — —

Pension plans ( 31 ) ( 42 ) ( 1 )

Other comprehensive income (loss), net of tax 112 ( 77 ) 16

( 77 ) 16 ( 127 )

Comprehensive income, net of tax

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Comprehensive income attributable to GXO

$ 144 $ 60 $ 244

See accompanying Notes to the Consolidated Financial Statements.

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Common Stock, $ 0.01 par value per share;

300,000 shares authorized, 119,496 and 119,057 shares issued and outstanding

300,000 shares authorized, 119,868 and 119,496 shares issued and 114,512 and 119,496 shares outstanding, respectively

Treasury stock, at cost;

5,356 and 0 shares, respectively

Preferred Stock, $ 0.01 par value per share;

10,000 shares authorized, none issued and outstanding

10,000 shares authorized, 0 issued and outstanding

Additional Paid-In Capital (“APIC”) 2,667 2,629

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Cash flows from operating activities:

$ 138 $ 233 $ 200

Net income $ 36 $ 138 $ 233

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

Depreciation and amortization expense

Goodwill and intangibles write-down loss held for sale

Stock-based compensation expense 47 39 35

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Acquisition of business, net of cash acquired — ( 863 ) ( 149 )

Cross-currency swap agreements settlement 4 ( 3 ) 21

Net investment hedges settlement ( 24 ) 4 ( 3 )

Other 3 — ( 2 )

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Cash flows from financing activities:

Proceeds from debt, net 1,090 — 917

Repayments of debt, net

( 408 ) ( 140 ) ( 82 )

Common stock repurchased ( 200 ) — —

Proceeds from long-term debt, net of issuance discount 577 1,096 —

Payments for debt issue costs ( 2 ) ( 9 ) —

Net borrowings under revolving credit facilities ( 25 ) ( 122 ) ( 18 )

Repayments of debt ( 180 ) ( 286 ) ( 122 )

Repayments of finance lease obligations ( 50 ) ( 45 ) ( 29 )

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Cash and cash equivalents $ 854 $ 413 $ 468

Restricted Cash (included in Other current assets) 2 — —

Restricted cash (included in Other long-term assets) 1 72 2

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Cash paid for income taxes, net

Noncash investing and financing activities:

Common stock issued for acquisition

$ — $ — $ 204

Noncash financing activities:

Excise tax liability related to stock repurchases 2 — —

See accompanying Notes to the Consolidated Financial Statements.

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(Shares in thousands, dollars in millions) Shares

Treasury stock

December 31, 2022 118,728 $ 1 $ — $ 2,575 $ 323 $ ( 254 ) $ 2,645 $ 33 $ 2,678

Net income — — — — 229 — 229 4 233

Other comprehensive loss

Other comprehensive income

— — — — — 15 15 1 16

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Tax withholding on vesting of stock compensation awards ( 226 ) — — ( 12 ) — — ( 12 ) — ( 12 )

Common stock issued for acquisition 3,758 — 204 — — 204 — 204

— — — — 2 2 ( 8 ) ( 6 )

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

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

— — — — 134 — 134 4 138

Other comprehensive income

Other comprehensive loss

— — — — — ( 74 ) ( 74 ) ( 3 ) ( 77 )

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( 168 ) — — ( 8 ) — — ( 8 ) — ( 8 )

— — — — — — ( 4 ) ( 4 )

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

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

Net income — — — 134 — 134 4 138

Other comprehensive loss — — — — ( 74 ) ( 74 ) ( 3 ) ( 77 )

Net income (loss)

— — — — 32 — 32 4 36

Other comprehensive income

— — — — — 112 112 — 112

Stock-based compensation — — — 47 — — 47 — 47

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Tax withholding on vesting of stock-based compensation awards ( 215 ) — — ( 9 ) — — ( 9 ) — ( 9 )

Other — — — — — — ( 3 ) ( 3 )

Common stock repurchased

( 5,356 ) — ( 202 ) — — — ( 202 ) — ( 202 )

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

December 31, 2025 114,512 $ 1 $ ( 202 ) $ 2,667 $ 718 $ ( 201 ) $ 2,983 $ 32 $ 3,015

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The Company provides its customers with high-value-added warehousing and distribution, order fulfillment, e-commerce, reverse logistics, and other supply chain services differentiated by its ability to deliver technology-enabled, customized solutions at scale.

The Company serves a broad range of customers across various industries, such as e-commerce, omnichannel retail, technology and consumer electronics, food and beverage, industrial and manufacturing, and consumer packaged goods, among others.

GXO serves a broad range of customers across various industries, such as e-commerce, omnichannel retail, technology and consumer electronics, food and beverage, industrial and manufacturing, and consumer packaged goods, among others.

The Company presents its operations in the Consolidated Financial Statements as one reportable segment.

The Company became a standalone publicly traded company on August 2, 2021, when XPO, Inc.

(“XPO”) spun off the Company to GXO’s stockholders and GXO’s common stock, par value of $ 0.01 per share, began trading independently on the New York Stock Exchange under the ticker symbol “GXO”.

spun off the Company to GXO’s stockholders and GXO’s common stock, par value of $ 0.01 per share, began trading independently on the New York Stock Exchange under the ticker symbol “GXO”.

GXO was incorporated as a Delaware corporation in February 2021.

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Use of Estimates

The preparation of Consolidated Financial Statements in conformity with GAAP requires the use of estimates, judgments and assumptions that affect the reported amounts in the Consolidated Financial Statements and accompanying notes.

The preparation of Consolidated Financial Statements in conformity with U.S.

generally accepted accounting principles (“GAAP”) requires the use of estimates, judgments and assumptions that affect the reported amounts in the Consolidated Financial Statements and accompanying notes.

The Company bases its estimates and judgments on historical information and on various other assumptions that it believes are reasonable under the circumstances.

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The Company considers all highly liquid investments with an original maturity of three months or less on the date of purchase to be cash equivalents.

Restricted cash primarily consists of cash deposited in relation to a contingency, and cash collateralizing operating obligations.

Restricted cash is recorded in Other long-term assets on the

Consolidated Balance Sheets.

“Commitments and Contingencies” for additional information regarding the contingency.

Restricted cash relates to deposits in connection with the ordinary conduct of

Restricted cash is recorded in Other current assets and Other long-term assets on the Consolidated Balance Sheets.

Accounts Receivable and Allowance for Credit Losses

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For internally developed computer software, all costs incurred during the planning and evaluation stages are expensed as incurred.

Software development costs are capitalized once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function intended.

Software development costs are capitalized once the preliminary project stage is complete, and it is probable that the project will be completed and the software will be used to perform the intended function.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets or the remaining lease term, whichever is shorter.

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Internal-use software 1 to 5 years

Lease Obligations

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

The Company determines if an arrangement is a lease at inception.

For leases with terms greater than 12 months, the Company recognizes lease assets and liabilities at the lease commencement date based on the present value of the lease payments over the lease term.

The Company has entered into noncancelable operating and finance leases primarily for real estate and warehouse equipment.

The Company determines whether an arrangement is a lease at inception and, if so, whether that lease meets the classification criteria for a finance or an operating lease at the commencement date.

For leases with terms greater than 12 months, the Company recognizes lease assets and lease liabilities at lease commencement based on the present value of lease payments over the lease term.

For most of the Company’s leases, the implicit rate cannot be readily determined and, as a result, the Company uses the incremental borrowing rates at the commencement date to determine the present value of future lease payments.

For leases that include fixed rental payments for both the use of the asset (“lease costs”) as well as for other occupancy or service costs relating to the asset (“non-lease costs”), the Company generally includes both the lease costs and non-lease costs as a single lease component in the measurement of the lease asset and liability.

Certain lease agreements include rental payments based on changes in the consumer price index (“CPI”).

Lease liabilities are not remeasured as a result of changes in the CPI;

instead, changes in the CPI are treated as variable lease payments and are excluded from the measurement of the right-of-use asset and lease liability.

Certain lease agreements include rental payments based on changes in the consumer price index (“CPI”) or fair market value.

Lease liabilities are not remeasured due to changes in the CPI or fair market value;

instead, such changes are treated as variable costs and are excluded from the measurement of the right-of-use asset and lease liability.

These payments are recognized in the period in which the related obligation is incurred.

Lease agreements may contain rent escalation clauses, renewal or termination options, rent holidays or certain landlord incentives, including tenant improvement allowances.

Lease expense is recognized on a straight-line basis over the non-cancelable lease term and renewal periods that are considered reasonably certain.

Amounts received from a landlord are included as a reduction to the lease asset and are included within operating activities on the Consolidated Statement of Cash Flows.

Lease agreements may include rent escalation clauses, renewal or termination options, rent holidays, and certain landlord incentives, such as tenant improvement allowances.

Lease expense is recognized on a straight-line basis over the noncancelable lease term and renewal periods that are considered reasonably certain.

Incentives received from a landlord are included as a reduction to the lease asset and are included within operating activities on the Consolidated Statement of Cash Flows.

Goodwill and Intangible Assets

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The Company estimates fair value using the expected future cash flows discounted at a rate consistent with the risks associated with the recovery of the asset.

For assets held for sale, to the extent the carrying amount is greater than the asset’s fair value less costs to sell, an impairment loss is recognized for the difference.

Revenue Recognition

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The effective portion of the gain or loss on hedges of foreign net investments is generally not reclassified to earnings unless the net investment is disposed.

To the extent derivatives do not qualify or are not designated as hedges, or are ineffective, their changes in fair value are recorded in earnings immediately, which may subject us to increased earnings volatility.

To the extent derivatives

do not qualify or are not designated as hedges, or are ineffective, their changes in fair value are recorded in earnings immediately, which may subject the Company to increased earnings volatility.

Stock-Based Compensation

The Company accounts for stock-based compensation based on the equity instrument’s grant date fair value.

Stock compensation expense is recognized using the straight-line method, based on the grant date fair value, over the requisite service period of the award, which is generally the vesting term.

Stock compensation expense is recognized over the requisite service period of the award, based on the grant date fair value, which is generally the vesting term.

For grants of stock options, the Company determines the fair value based on the Black-Scholes option-pricing model.

For grants of restricted stock units (“RSU”) subject to service-based or performance-based vesting conditions only, the Company establishes the fair value based on the market price on the date of the grant.

For grants of restricted stock awards (“RSA”) the fair value is equal to the fair market value of the Company’s common stock on the date of grant.

These shares vest and are issued upon grant.

For grants of awards subject to market-based vesting conditions (“PSU”), the Company determines the fair value based on a Monte Carlo simulation model.

For grants of restricted stock units (“RSU”) subject to service-based vesting conditions, the Company establishes the fair value based on the market price on the date of the grant.

For grants of awards subject to both market-based and performance-based vesting conditions (“PSU”), the Company determines the fair value based on a Monte Carlo simulation model.

The Company accounts for forfeitures as they occur.

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The computation of diluted earnings per share excludes the effect of the potential exercise of stock-based awards when the effect of the potential exercise would be anti-dilutive.

For the years ended December 31, 2024, 2023 and 2022, the number of common shares excluded from diluted shares outstanding was 1.1 million, 1.5 million and 2.0 million, respectively, because the effect of including those common shares in the calculation would have been anti-dilutive.

Anti-dilutive shares were immaterial for the years ended December 31, 2025, 2024 and 2023.

Defined Benefit Plans

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The Company determines the net periodic benefit cost of the plans using assumptions regarding the projected benefit obligation and the fair value of the plan assets as of the beginning of the year.

Net periodic benefit cost is recorded within Other income, net in the Consolidated Statement of Operations.

Net periodic benefit cost is recorded in Other income, net in the Consolidated Statement of Operations.

The Company calculates the funded status of the defined benefit plan as the difference between the projected benefit obligation and the fair value of the plan assets.

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The calculation of the annual effective tax rate relies on several factors including pre-tax earnings, various jurisdiction statutory tax rates, tax credits, uncertain tax positions, valuation allowances and differences between tax laws and accounting laws.

The effective tax rate in any financial

statement period may be materially impacted by changes in the blend and/or level of earnings by individual taxing jurisdictions.

The effective tax rate in any financial statement period may be materially impacted by changes in the blend and/or level of earnings by individual taxing jurisdictions.

If the Company considers that a tax position is more likely than not to be sustained upon audit, based solely on the technical merits of the position, presuming an examination by a taxing authority with full knowledge of all relevant information, the Company recognizes all or a portion of the benefit.

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Adoption of New Accounting Standards

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

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.

The Company adopted the guidance for the fiscal year ended December 31, 2024.

Adopting this new standard resulted in additional disclosure within the Company’s Consolidated Financial Statements, see Note 5.

“Segment Information.”

Accounting Pronouncements Issued But Not Yet Adopted

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.

The amendments are effective prospectively for annual periods beginning after December 15, 2024, and early adoption and retrospective application are permitted.

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

The amendments are effective prospectively for annual periods beginning after December 15, 2024.

The ASU 2023-09 did not have a material impact on the Company’s results of operations, financial position or cash flows, other than additional disclosure requirements.

The Company has retrospectively adopted and presented comparative periods in conformity with the new standard.

“Income Taxes.”

Accounting Pronouncements Issued But Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

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This standard is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted.

The Company is currently evaluating the impact of the disclosure requirements about specific expense categories in its Consolidated Financial Statements.

The Company does not expect this standard to have a material impact on its results of operations, financial position or cash flows, and is currently evaluating the impact of adopting this standard on its disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles- Goodwill and Other- Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

The amendments in this Update remove all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40.

Therefore, an entity is required to start capitalizing software costs when certain capitalization criteria are met.

The ASU also supersedes guidance on website development costs.

The amendments are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.

Early adoption is permitted as of the beginning of an annual reporting period.

The Company is currently evaluating the impact of this standard on its results of operations, financial position or cash flows, and the impact of adopting this standard on its disclosures.

Revenue Recognition

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Contract Balances

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

(In millions) 2025 2024

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Amounts included in the beginning of year contract liability balance $ 272 $ 208 $ 122

Wincanton Acquisition

On February 29, 2024, the Company and the board of directors of Wincanton plc, a logistics company based in Chippenham, United Kingdom (“Wincanton”), reached an agreement on the terms of a cash offer by the Company for the acquisition of the entire issued ordinary share capital of Wincanton (the “Wincanton Acquisition”).

Under the terms of the agreement, Wincanton shareholders received 605 pence ($ 7.64 as of the acquisition date) in cash for each Wincanton share held.

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

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

On November 14, 2024, the CMA referred the completed acquisition by GXO Logistics, Inc.

of Wincanton plc for an in-depth investigation (“Phase 2”) with a statutory deadline of April 30, 2025.

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

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

In connection with the Wincanton Acquisition, the Company incurred transaction costs of $ 61 million for the year ended December 31, 2024, which were included in Transaction and integration costs in the Consolidated Statements of Operations.

Also, 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 10.

“Debt and Financing Arrangements.”

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

The Company recorded $ 1.4 billion and $ 7 million of revenue and loss before income taxes for the year ended December 31, 2024, respectively.

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

(In millions)

Current assets

Cash and cash equivalents $ 90

Accounts receivable 241

Other current assets 70

Total current assets 401

Long-term assets

Property and equipment 137

Operating lease assets 166

Intangible assets (1)

Other long-term assets 151

Total long-term assets 993

Total assets $ 1,394

Current liabilities

Accounts payable $ 70

Accrued expenses 313

Current debt 10

Current operating lease liabilities 22

Other current liabilities 123

Total current liabilities

Long-term liabilities

Long-term debt 211

Long-term operating lease liabilities 144

Other long-term liabilities 269

Total long-term liabilities

Total liabilities $ 1,162

Net assets purchased $ 232

Purchase price (2)

Goodwill recorded (3)

(1) The Company acquired $ 539 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 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.

Goodwill acquired was recorded in the U.K.

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, other current and long-term liabilities, 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 unaudited pro forma information presents the Company’s results of operations as if the acquisition of Wincanton 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.

Year Ended December 31

(In millions) 2024 2023

Revenue $ 12,283 $ 11,529

Income before income taxes (1)

(1) Included in the Income before income taxes on a pro forma basis for the year ended December 31, 2024, were long-lived asset impairment charges of $ 90 million recorded by Wincanton before its acquisition by the Company.

PFSweb Acquisition

On September 13, 2023, the Company entered into an Agreement and Plan of Merger to acquire PFSweb, Inc., a Delaware corporation headquartered in Irving, Texas (“PFS”).

On October 23, 2023, the Company completed the acquisition of PFS (the “PFS Acquisition”).

The Company acquired the shares of PFS at a price per share of $ 7.50 in cash, totaling approximately $ 149 million, net of cash acquired.

PFS is a global provider of omnichannel commerce solutions, including a broad range of technology, infrastructure and professional services, in the United States, Canada and Europe.

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

The Company recorded the fair value of assets acquired and liabilities assumed on the date of acquisition, including intangible assets comprised of 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.

The Company does not expect the goodwill recognized in connection with the PFS Acquisition to be deductible for U.S.

income tax purposes.

Segment Information

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The CODM is our Chief Executive Officer, who assesses the Company’s performance and allocates resources.

The CODM evaluates the Company’s performance and allocates resources primarily based on adjusted earnings before interest, taxes, depreciation and amortization, adjusted for transaction and integration costs, restructuring costs, litigation expense, and unrealized gain/loss on foreign currency contracts and other adjustments (“Adjusted EBITDA”).

The CODM evaluates the Company’s performance and allocates resources primarily based on adjusted earnings before interest, taxes, depreciation and amortization, adjusted for transaction and integration costs, restructuring costs and other, regulatory matter and litigation expense, net loss on divestiture of business, and unrealized gain/loss on foreign currency contracts (“Adjusted EBITDA”).

The CODM uses Adjusted EBITDA to communicate performance targets to the segment managers, allocate resources to the segments, and to monitor segment performance.

Additionally, the CODM considers the performance of this measure against planned and forecasted amounts to make investing and resource allocation decisions.

The actual results are used in assessing performance of the Company and in establishing management’s compensation.

For disclosure purposes, we aggregate these three operating segments into one reportable segment due to the similar nature of their operations and economic characteristics.

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Selling, general and administrative expense (1)

Other income (expense), net (2)

1,029 996 931

Other (income) expense, net (2)(4)

Segment Adjusted EBITDA $ 958 $ 880 $ 808

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Depreciation expense 338 307 290

Amortization expense 108 71 68

Amortization of intangible assets acquired 119 108 71

Transaction and integration costs 54 76 34

Restructuring costs and other 27 25 25

Litigation expense 59 — —

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

Regulatory matter and litigation expense 65 59 —

Net loss on divestiture of business

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

7 ( 11 ) ( 5 )

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(1) Excludes unallocated corporate expenses.

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

(2) Other (income) expense, net 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 Consolidated Statements of Operations.

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

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

Long-lived assets geographic information

The Company’s long-lived assets for this disclosure is defined as Property and equipment, net of accumulated depreciation, and operating lease assets.

The Company’s long-lived assets for this disclosure are defined as Property and equipment, net of accumulated depreciation, plus operating lease assets.

The Company’s long-lived assets by geographic region were as follows:

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United Kingdom 1,190 1,006

Europe 939 783

Total $ 3,714 $ 3,489

(1) Europe exclusive of the United Kingdom.

(2) Includes Asia, Latin America and Canada.

Acquisition and Divestiture

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 U.K.

Competition and Markets Authority (the “CMA”).

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

(the “Wincanton Divestment”).

In the fourth quarter of 2025, the Company met the held-for-sale criteria for the anticipated Wincanton Divestment and recorded a $ 37 million write-down loss, including $ 4 million of goodwill, $ 21 million of customer relationships , and $ 12 million fair value adjustment.

Assets and liabilities held for sale were not material and are included in Other current assets and Other current liabilities, respectively, in the Consolidated Balance Sheets.

The Company expects to complete the Wincanton Divestment in 2026.

In connection with the Wincanton Acquisition, the Company incurred transaction costs of $ 48 million and $ 61 million for the years ended December 31, 2025 and 2024, respectively, which were included in Transaction and integration costs in the Consolidated Statements of Operations.

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

(In millions)

Current assets

Cash and cash equivalents $ 90

Accounts receivable 238

Other current assets 65

Total current assets 393

Long-term assets

Property and equipment 128

Operating lease assets 177

Intangible assets (1)

Other long-term assets 152

Total long-term assets 989

Total assets $ 1,382

Current liabilities

Accounts payable $ 67

Accrued expenses 293

Current debt 7

Current operating lease liabilities 41

Other current liabilities 147

Total current liabilities

Long-term liabilities

Long-term debt 215

Long-term operating lease liabilities 136

Other long-term liabilities 240

Total long-term liabilities

Total liabilities $ 1,146

Net assets purchased $ 236

Purchase price $ 958

Goodwill recorded (2)

(1) The Company acquired $ 532 million of intangible assets, comprised of customer relationships, trade names, and intellectual property with weighted-average useful lives of 12.5 years.

(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 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 following tables present the changes in goodwill for the years ended December 31, 2025 and 2024.

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Balance as of December 31, 2023

Acquisition 120

Acquisitions (1)

Foreign exchange translation (2)

Balance as of December 31, 2024

Acquisitions (2)

Acquisition (1)

Wincanton Divestment (3)

Foreign exchange translation (2)

Balance as of December 31, 2025

(1) In 2024, includes $ 726 million and $ 4 million for the preliminary purchase price allocation for the Wincanton Acquisition and adjustments to the purchase price allocation for the PFSweb, Inc.

acquisition, respectively.

In 2025, includes $ 4 million reduction 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.

(2) Includes $ 726 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.

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

(3) For additional information see note 5.

As of December 31, 2025 and 2024, there were $ 4 million and zero accumulated goodwill impairment losses, respectively.

Intangible Assets

The following table summarizes identifiable intangible assets:

The following table summarizes identifiable intangible assets subject to amortization:

December 31, 2025 December 31, 2024

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Intangible asset amortization expense was $ 119 million, $ 108 million and $ 71 million for the years ended December 31, 2025, 2024 and 2023, respectively.

In addition, in connection with the Wincanton Divestment (see note 5), $ 21 million of customer relationships were impaired in 2025.

Estimated amortization expense for each of the five succeeding fiscal years and thereafter is as follows:

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Depreciation of property and equipment was $ 338 million, $ 307 million and $ 290 million for the years ended December 31, 2025, 2024 and 2023, respectively.

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

(In millions) 2024 2023

Operating leases:

Operating lease assets $ 2,329 $ 2,201

Current operating lease liabilities $ 647 $ 597

Long-term operating lease liabilities 1,898 1,842

Total operating lease liabilities $ 2,545 $ 2,439

Finance leases:

Property and equipment, net $ 239 $ 107

Current debt $ 39 $ 26

Long-term debt 237 90

Total finance lease liabilities $ 276 $ 116

The components of lease expense were as follows:

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

Year Ended December 31,

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Finance leases:

Amortization of leased assets $ 30 $ 30 $ 30

Interest expense on lease liabilities 10 5 5

Amortization of the right-of-use assets $ 36 $ 30 $ 30

Interest on the lease liabilities 18 10 5

Total finance lease cost $ 54 $ 40 $ 35

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(1) Operating lease cost is primarily included in Direct operating expense in the Consolidated Statements of Operations.

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

(In millions) 2025 2024

Operating leases:

Operating lease assets $ 2,563 $ 2,329

Current operating lease liabilities $ 745 $ 647

Long-term operating lease liabilities 2,044 1,898

Total operating lease liabilities $ 2,789 $ 2,545

Finance leases:

Property and equipment, net $ 306 $ 239

Current debt $ 45 $ 39

Long-term debt 281 237

Total finance lease liabilities $ 326 $ 276

Supplemental cash flow information related to leases was as follows:

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Financing cash flows for finance leases 50 45 29

Leased assets obtained in exchange for new lease obligations:

Right-of-use assets obtained in exchange for lease liabilities:

Operating leases, including $ 166 and $ 52 from an acquisition in 2024 and 2023, respectively

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Present value of lease liabilities $ 326 $ 2,789

As of December 31, 2024, the Company had additional operating leases that have not yet commenced with future undiscounted lease payments of approximately $ 98 million.

These operating leases will begin in 2025, with initial lease terms ranging from 4 to 16 years.

As of December 31, 2025, the Company had operating leases that have not yet commenced with future undiscounted lease payments of approximately $ 176 million.

These operating leases will begin in 2026 and 2027, with initial lease terms ranging from four to ten years .

Debt and Financing Arrangements

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Unsecured notes due 2029 (3)

6.25 % 594 593

Unsecured notes due 2031 (4)

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Unsecured notes due 2034 (5)

Three-Year Term Loan due 2025 (6)

6.50 % 491 490

Euro Unsecured notes due 2030 (€ 500 principal) (6)

Three-Year Term Loan due 2025 (7)

Five-Year Term Loan due 2027 (8)(9)

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(1) Interest rates as of December 31, 2025.

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

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

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

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

(4) Net of unamortized discount and debt issuance costs of $ 2 million and $ 3 million as of December 31, 2025 and 2024, respectively.

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

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

(6) In 2024, the Company repaid $ 185 million of the Three-Year Term Loan due 2025.

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

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

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

(8) Net of unamortized debt issuance costs of zero and $ 1 million, as of December 31, 2025 and 2024, respectively.

(9) In November 2025, the Company repaid $ 125 million of the Five Year Term Loan due 2027.

(10) As of December 31, 2025, current debt includes $ 400 million of Unsecured notes due 2026.

Euro Unsecured Notes

In November 2025, GXO Logistics Capital B.V., a wholly owned, indirect consolidated subsidiary of the Company (the “Issuer”), issued € 500 million (approximately $ 580 million) of 3.750 % notes due 2030 at a discount to par at a price of 99.776 % (the “EUR Unsecured notes due 2030”).

The EUR Unsecured notes due 2030 accrue interest at 3.750 % per year, and mature on November 24, 2030.

Interest on the EUR Unsecured notes due 2030 is payable annually in arrears on November 24 of each year, beginning on November 24, 2026.

The EUR Unsecured notes due

2030 are fully and unconditionally guaranteed on an unsecured, unsubordinated basis by GXO Logistics, Inc.

(“GXO” and GXO’s guarantee of the Notes, the “Parent Guarantee”).

The EUR Unsecured notes due 2030 and the Parent Guarantee are unsecured, unsubordinated obligations of the Issuer and GXO, respectively, and they rank equally in right of payment with all of the Issuer’s and GXO’s respective existing and future unsecured, unsubordinated indebtedness.

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 of notes due 2029 (the “2029 Notes”) and $ 500 million of notes due 2034 (the “2034 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.

The 2029 Notes bear interest at a rate of 6.25 % per annum payable semiannually on May 6 and November 6 of each year, beginning on November 6, 2024, and maturing on May 6, 2029.

The 2034 Notes bear interest at a rate of 6.50 % per annum payable semiannually on May 6 and November 6 of each year, beginning on November 6, 2024 and maturing on May 6, 2034.

In 2021, the Company completed an offering of $ 800 million aggregate principal amount of notes, consisting of $ 400 million of notes due 2026 (the “2026 Notes”) and $ 400 million of notes due 2031 (the “2031 Notes”).

The 2026 Notes bear interest at a rate of 1.65 % per annum payable semiannually in arrears on January 15 and July 15 of each year, and maturing on July 15, 2026.

The 2031 Notes bear interest at a rate of 2.65 % per annum payable semiannually in arrears on January 15 and July 15 of each year and maturing on July 15, 2031.

In 2024, the Company issued $ 1.1 billion of unsecured notes, consisting of $ 600 million of notes due 2029 (the “Unsecured notes due 2029”) and $ 500 million of notes due 2034 (the “Unsecured notes due 2034”) to fund the Wincanton Acquisition.

The Unsecured notes due 2029 accrue interest at 6.25 % per annum, payable semiannually on May 6 and November 6 of each year, and mature on May 6, 2029.

The Unsecured notes due 2034 accrue interest at 6.50 % per annum, payable semiannually on May 6 and November 6 of each year, and mature on May 6, 2034.

In 2021, the Company issued $ 800 million of unsecured notes, consisting of $ 400 million of notes due 2026 (the “Unsecured notes due 2026”) and $ 400 million of notes due 2031 (the “Unsecured notes due 2031”).

The 2026 Notes bear interest at a rate of 1.65 % per annum payable semiannually in arrears on January 15 and July 15 of each year, and mature on July 15, 2026.

The 2031 Notes bear interest at a rate of 2.65 % per annum payable semiannually in arrears on January 15 and July 15 of each year, and mature on July 15, 2031.

Five-Year Term Loan due 2027

In 2022, the Company entered into a $ 500 million five-year unsecured term loan (the “ Five-Year Term Loan”) that will mature on May 26, 2027.

In 2022, the Company entered into a $ 500 million five-year unsecured term loan (the “ Five-Year Term Loan”), which matures on May 26, 2027.

The loan bears interest at a fluctuating rate per annum equal to, at the Company’s option, the alternate base rate or the adjusted Secured Overnight Financing Rate (SOFR), plus an applicable margin based on the Company’s credit ratings.

In 2024, the Company repaid $ 100 million of the Five-Year Term Loan.

Three-Year Term Loan due 2025

In 2022, the Company borrowed a $ 235 million three-year term loan tranche (the “ Three-Year Term Loan”) that will mature on May 26, 2025.

The Delayed Draw Term Loan bears interest at a fluctuating rate per annum equal to, at the Company’s option, the alternate base rate or the adjusted SOFR, plus an applicable margin based on the Company’s credit ratings.

In 2024, the Company repaid $ 185 million of the Three-Year Term Loan.

In 2025 and 2024, the Company repaid $ 125 million and $ 100 million, respectively, of the Five- Year Term Loan due 2027.

Three-Year Term Loan due 2025

On March 29, 2024, the Company entered into a three-year term loan credit agreement with the lenders and other parties from time to time party thereto and Bank of America N.A., as an administrative agent, that provided a three-year multicurrency £ 250 million unsecured term facility (the “Three-Year Term Loan due 2027”) to fund the Wincanton Acquisition.

Concurrently with the closing of the Unsecured Notes in 2024, the Company terminated the commitments under the Three-Year Term Loan due 2027.

No amounts were drawn under the Three-Year Term Loan due 2027.

Bridge Term Loan

On February 29, 2024, the Company entered into a 364-day bridge term loan credit agreement that provided a £ 763 million unsecured Bridge Term Loan facility (the “Bridge Term Loan”) to fund the Wincanton Acquisition.

Concurrently with the closing of the Unsecured Notes in 2024, the Company terminated the commitments under the Bridge Term Loan.

No amounts were drawn under the Bridge Term Loan.

In 2022, the Company borrowed a $ 235 million three-year term loan tranche (the “ Three-Year Term Loan”) which was to mature on May 26, 2025.

The Three-Year Term Loan bore interest at a fluctuating rate per annum equal to, at the Company’s option, the alternate base rate or the adjusted SOFR, plus an applicable margin based on the Company’s credit ratings.

The Company repaid $ 185 million in 2024 and $ 50 million in 2025.

Revolving Credit Facilities

On March 29, 2024, the Company terminated its previous revolving credit agreement expiring in 2026 and entered into a new revolving credit agreement with Bank of America N.A., as administrative agent and an issuing lender (the “Revolving Credit Agreement”).

In 2024, the Company entered into a revolving credit agreement with Bank of America N.A., as administrative agent and an issuing lender (the “Revolving Credit Agreement”).

The Revolving Credit Agreement is a five-year , unsecured, multicurrency revolving facility expiring in 2029.

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

Loans under the Revolving Credit Agreement will bear interest at a fluctuating rate per annum equal to (a) with respect to borrowings in U.S.

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.

Loans under the Revolving Credit Agreement bear interest at a fluctuating rate per annum equal to (a) with respect to borrowings in U.S.

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.

In addition, the Company is paying a commitment fee of 0.15 % per annum on the unused portion of the commitments under the Revolving Credit Facility.

No amounts were outstanding under the previous or new revolving credit agreements as of December 31, 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 £ 175 million ($ 219 million as of December 31, 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 margin.

As of December 31, 2024, the Company had £ 15 million ($ 19 million) of borrowings outstanding under this agreement.

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

As of December 31, 2025 and 2024, no principal amounts were outstanding, and letters of credit were $ 6 million and $ 1 million, respectively, under the Revolving Credit Agreement.

In connection with the Wincanton Acquisition, the Company assumed a revolving credit facility agreement (the “Wincanton Revolving Credit Agreement”) under which it may, at any time, borrow up to £ 175 million, which was to mature in 2027.

Loans under the Wincanton Revolving Credit Agreement bore interest at a daily simple rate based on SONIA plus a margin.

In November 2025, the Company terminated the Wincanton Revolving Credit Agreement.

As of December 31, 2024, the Company had £ 15 million ($ 19 million) in outstanding borrowings under this agreement.

Borrowings under revolving credit facilities maturing in three months or less are presented net in the Consolidated Statement of Cash Flows.

Long-Term Debt Maturities

Set forth below is the aggregate principal amount of the Company’s long-term debt (excluding finance lease obligations, unamortized discount and debt issuance costs) as of December 31, 2024, maturing during the following years.

Set forth below is the aggregate principal amount of the Company’s long-term debt (excluding finance lease obligations, and unamortized debt issuance costs and discounts) as of December 31, 2025, maturing during the following years.

(In millions) 2026 2027 2028 2029 2030 Thereafter

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The Company accounts for these transactions as sales of receivables and presents cash proceeds as cash provided by operating activities in the Consolidated Statements of Cash Flows.

The Company accounts for these transactions as sales because the Company sells full title and ownership in the underlying receivables and control of the receivables is considered transferred.

The Company accounts for these transactions as sales because it sells full title and ownership in the underlying receivables, and control of the receivables is considered transferred.

For these transfers, the receivables are removed from the Consolidated Balance Sheets at the date of transfer.

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Covenants and Compliance

The covenants in the Five-Year Term Loan, the Delayed Draw Term Loan, the Unsecured Notes and the Revolving Credit Facilities, which are customary for financings of this type, limit the Company’s ability to incur indebtedness and grant liens, among other restrictions.

The covenants for the Company’s debt securities, which are customary for financings of this type, limit the Company’s ability to incur indebtedness and grant liens, among other restrictions.

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

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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 December 31, 2024 and 2023, due to their short-term nature.

The carrying values of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximated their fair values as of December 31, 2025 and 2024, due to their short-term nature.

The fair value of debt was as follows:

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2 540 491 514 490

EUR notes due 2030 2 586 580 — —

Three-Year Term Loan due 2025

2 49 50 231 235

Five-Year Term Loan due 2027

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Net Investment Hedges

The Company uses fixed-to-fixed or variable-to-variable cross-currency swap agreements to hedge its net investments in foreign operations against future volatility in the exchange rates between the U.S.

dollar and the associated foreign currencies.

The Company designated these cross-currency swap agreements as qualifying hedging instruments and accounts for them as net investment hedges.

During 2024, the Company amended four cross-currency swaps with an aggregate notional amount of $ 315 million maturing in 2027 and 2028 and cross-currency swaps with an aggregate notional amount of $ 165 million matured.

The Company entered into five new cross-currency swaps with an aggregate notional amount of $ 500 million, maturing in 2025 and 2029.

Interest Rate Swap Agreements

The Company uses interest rate swap agreements to hedge the variability of cash flows resulting from floating interest rate borrowings.

The Company designated these interest rate swap agreements as qualifying hedging instruments and accounts for them as cash flow hedges.

When an interest rate swap agreement qualifies for hedge accounting as a cash flow hedge, the changes in the fair value are recorded in equity as a component of AOCIL and are reclassified into Interest expense, net over the life of the underlying debt, as interest on the Company’s floating rate debt is accrued.

During 2024, an interest rate swaps agreement with a notional amount of $ 125 million matured.

The Company uses cross-currency swaps to hedge portions of its net investments in foreign operations.

For instruments that meet the hedge accounting requirements, the net gains or losses attributable to changes in spot exchange rates are recorded in the foreign currency translation adjustment within other comprehensive income, and will be recorded in the Consolidated Statement of Operations with currency translation adjustments in the future when the respective foreign entity is sold or liquidated.

Cash flows from net investment hedges other than the excluded component are classified as investing activities in the Consolidated Statements of Cash Flows.

Cash Flow Hedges

The Company uses interest rate swaps to hedge the variability of cash flows resulting from variable-rate borrowings.

For derivative instruments that are designated and qualify as cash flow hedges, gains or losses are initially recorded in other comprehensive income, and later reclassified to earnings when the hedged interest rate payments affect the Consolidated Statement of Operations.

Fair Value Hedges

The Company uses cross-currency swaps to hedge its foreign exchange risk on intercompany loans.

For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative instrument is recognized in the Consolidated Statement of Operations during the current period, together with the gain or loss on the hedged item, other than the excluded component which reported in other comprehensive income, and later recorded in the Consolidated Statement of Operations over the term of the hedge.

Foreign Currency Exchange Rate Risk

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Derivatives designated as net investment hedges:

Cross-currency swap agreements $ 270 $ 12 $ — $ — Other current assets

Cross-currency swap agreements 1,177 48 487 3 Other long-term assets

Cross-currency swap agreements 98 7 165 7 Other current liabilities

Cross-currency swap agreements 325 2 883 49 Other long-term liabilities

Derivatives designated as cash flow hedge:

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

Cross-currency swaps $ — $ — $ 270 $ 12 Other current assets

Cross-currency swaps — — 1,177 48 Other long-term assets

Cross-currency swaps 422 33 98 7 Other current liabilities

Cross-currency swaps 1,400 143 325 2 Other long-term liabilities

Derivatives designated as cash flow hedges:

Interest rate swaps $ — $ — $ 125 $ 3 Other long-term assets

Derivatives designated as fair value hedges:

Cross-currency swaps $ 236 $ 1 $ — $ — Other long-term liabilities

Derivatives not designated as hedges:

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Foreign currency option contracts 316 4 26 — Other current liabilities

Foreign currency forward contracts — — 1 — Other current assets

Foreign currency forward contracts 231 1 125 1 Other current liabilities

As of December 31, 2024 and 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 Consolidated Statements of Operations was as follows:

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

These derivatives are valued using inputs other than quoted prices, such as foreign exchange rates and yield curves.

Derivatives designated as hedges

The effects of hedges on AOCIL and in the Consolidated Statements of Operations were as follows:

Year Ended December 31, 2025 Year Ended December 31, 2024

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

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

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

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

Derivatives designated as net investment hedges

Cross-currency swap agreements

(In millions) Amount of Gain (Loss) Recognized in Other Comprehensive Income Gain (Loss) Reclassified from AOCIL into Net Income Gain (Loss) Recognized in Net Income (Excluded from effectiveness testing) Amount of Gain (Loss) Recognized in Other Comprehensive Income Gain (Loss) Reclassified from AOCIL into Net Income Gain (Loss) Recognized in Net Income (Excluded from effectiveness testing)

Net investment hedges (1) :

Cross-currency swaps

$ ( 252 ) $ ( 3 ) $ 3 $ 108 $ 4 $ 3

Derivatives designated as cash flow hedges

Cash flow hedges (1) :

Interest rate swaps $ ( 3 ) $ — $ — $ ( 1 ) $ — $ —

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

Fair value hedges (2) :

Cross-currency swaps $ ( 1 ) $ — $ — $ — $ — $ —

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

(2) Amounts reclassified to net income are reported in Other income, net in the Consolidated Statements of Operations.

Derivatives not designated as hedges

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

Gains and losses on derivatives not designated as hedges were recognized in Other income, net in the Consolidated Statements of Operations as follows:

Year Ended December 31,

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(In millions) 2025 2024

Salaries, benefits and withholding $ 460 $ 362

Facility and transportation charges 422 346

Salaries, benefits, related taxes and temporary labor $ 627 $ 460

Facility, transportation and related expenses 383 422

Value-added tax and other taxes 254 213

Interest 20 9

Other 156 113

Accrued interest 22 20

Other accrued expenses 206 156

Total accrued expenses $ 1,492 $ 1,271

Stockholders’ Equity

Stock Repurchase Plan

On February 18, 2025, the Company’s board of directors authorized and announced the repurchase of up to $ 500 million (the “Repurchase Plan”) of its common stock.

The Repurchase Plan permits shares of common stock to be repurchased from time to time in management’s discretion, through a variety of methods, including a 10b5-1 trading plan, open market purchases, privately negotiated transactions or otherwise.

The timing and number of shares of common stock repurchased will depend on a variety of factors, including price, general business and market conditions, alternative investment opportunities and funding considerations.

The Repurchase Plan does not obligate the Company to repurchase any specific number of shares of common stock and may be suspended or discontinued at any time.

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.

In 2025, the Company repurchased approximately 5.4 million shares of its common stock for an aggregate purchase price of $ 202 million, including share repurchase costs and excise tax.

As of December 31, 2025, the remaining authorization under the Repurchase Plan was $ 300 million.

Accumulated Other Comprehensive Income - Loss

The following table summarizes the changes in AOCIL by component:

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Other comprehensive income (loss), net of tax 73 ( 54 ) ( 2 ) — ( 1 ) ( 1 ) 15

Other 2 — — — — 2

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

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Under the 2021 Incentive Plan, directors, officers and employees may be granted various types of stock-based compensation awards.

These awards include stock options, RSUs, RSAs, PSUs and cash incentive awards.

These awards include stock options, RSUs, PSUs, RSAs, and cash incentive awards.

As of December 31, 2025, approximately 5.8 million shares of common stock were available for the grant under the 2021 Incentive Plan.

The following table summarizes stock-based compensation expense recorded in Selling, general and administrative expense in the Consolidated Statements of Income:

The following table summarizes stock-based compensation expense by line item in the Consolidated Statements of Operations:

Year Ended December 31,

(In millions) 2025 2024 2023

Selling, general and administrative expense $ 43 $ 38 $ 35

Restructuring costs and other 4 1 —

Total stock-based compensation expense $ 47 $ 39 $ 35

Income tax expense (benefit) on stock-based compensation $ ( 5 ) $ ( 7 ) $ 1

The following table summarizes stock-based compensation expense by award type in the Consolidated Statements of Operations:

Year Ended December 31,

(In millions) 2025 2024 2023

RSUs $ 35 $ 28 $ 22

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Total stock-based compensation expense $ 47 $ 39 $ 35

Tax expense (benefit) on stock-based compensation $ ( 7 ) $ 1 $ ( 1 )

Stock Options

The Company’s stock options vest over five years after the grant date and have a ten-year contractual term with an exercise price equal to the stock price on the grant date.

The Black-Scholes option-pricing model was used to estimate the fair value of these awards.

The Black-Scholes option-pricing model incorporates various subjective assumptions, including expected terms and expected volatility.

A summary of stock option award activity for the year ended December 31, 2024, is presented in the following table:

Stock Options

In 2021, the Company granted stock option awards that vest over five years from the grant date and have a ten-year contractual term, at an option price equal to the fair market value of the award on the grant date.

A summary of the stock option award activity for the year ended December 31, 2025, is as follows:

(In thousands, except per share) Number of Stock Options Weighted-Average

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895 $ 64.67 6 years

Exercised ( 6 ) 12.12

Forfeited or expired ( 157 ) 64.91

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568 $ 65.05 4 years

There was no intrinsic value for options outstanding and exercisable at December 31, 2024.

As of December 31, 2024, unrecognized compensation cost related to options of $ 6 million is anticipated to be recognized over a weighted-average period of approximately 1.4 years.

The total intrinsic value of the stock options exercised during 2025, 2024 and 2023, was $ 0.2 million, zero and zero , respectively.

As of December 31, 2025, unrecognized stock-based compensation expense related to stock options was $ 1 million and is expected to be recognized over one year .

Restricted Stock Units and Performance-Based Units

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Expected volatility 41 % 30 % 32 %

A summary of RSU and PSU award activity for the year ended December 31, 2024, is presented in the following table:

A summary of the RSUs and PSUs award activity for the year ended December 31, 2025, is as follows:

(In thousands, except per share) Number of

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( 590 ) 53.12 ( 2 ) 74.84

Forfeited and canceled ( 243 ) 53.66 ( 51 ) 64.09

Forfeited ( 214 ) 46.87 ( 79 ) 62.65

Outstanding as of December 31, 2025

1,768 $ 44.27 704 $ 48.34

(1) The number of RSUs and PSUs vested includes common stock shares that the Company withheld on behalf of its employees to satisfy the tax withholding.

The total fair value of RSUs that vested during 2024 and 2023 was $ 31 million and $ 22 million, respectively.

The total fair value of PSUs that vested during 2024 and 2023 was $ 1 million and $ 7 million, respectively.

As of December 31, 2024, unrecognized compensation cost related to RSUs and PSUs of $ 64 million is anticipated to be recognized over a weighted-average period of approximately 2 years.

(1) The number of RSUs and PSUs vested included common stock shares that the Company withheld on behalf of its employees to satisfy the tax withholding.

The weighted-average grant-date fair value for RSUs granted in 2025, 2024 and 2023, was $ 39.75 , $ 50.48 and $ 49.28 , respectively.

The total fair value of RSUs that vested during 2025, 2024 and 2023, was $ 24 million, $ 31 million and $ 22 million, respectively.

The weighted-average grant-date fair value for PSUs granted in 2025, 2024 and 2023, was $ 41.27 , $ 49.01 and $ 59.16 , respectively.

The total fair value of PSUs that vested during 2025, 2024 and 2023, was zero , $ 1 million, $ 7 million, respectively.

As of December 31, 2025, unrecognized stock-based compensation expense related to RSUs and PSUs was $ 63 million and is expected to be recognized over two years .

Restricted Stock Awards

In 2024, the Company granted 12 thousand RSAs at a weighted average price of $ 50.38 , resulting in a fair value of the RSAs of $ 1 million.

In 2024, the Company granted 12 thousand RSAs at a weighted-average price of $ 50.38 and a fair value of $ 1 million.

These shares vested and were issued upon grant.

No RSAs were granted in 2025.

Employee Benefit Plans

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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.

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

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Interest cost 86 69

Actuarial (gain) loss (1)

Actuarial gain (1)

Settlements — ( 2 )

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$ 1,709 $ 1,617

(1) Actuarial gains or losses are due to changes in the discount and mortality rates.

(1) In 2025, there is a significant gain due to change in inflation assumption, offset by a significant loss due to the change in mortality assumption.

In 2024, there is a significant gain due to the change in the discount rate.

The change in the fair value of the plan assets and funded status was as follows:

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Assets assumed from Wincanton acquisition — 1,032

Actual return on plan assets ( 44 ) 60

Actual return (loss) on plan assets 74 ( 44 )

Employer contributions 1 3

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Funded status of the plan assets at end of year (1)

(1) Funded status is recorded within Other long-term assets.

(1) Funded status is recorded in Other long-term assets.

The amounts included in AOCIL that have not yet been recognized in net periodic benefit cost were as follows:

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$ 19 $ 21 $ 8

(1) Net periodic pension income is recorded within Other income, net.

(1) Net periodic pension income is recorded in Other income, net.

The amount recognized in other comprehensive income was as follows:

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The weighted-average assumptions used to determine the projected benefit obligation and the net periodic benefit cost were as follows:

Year Ended December 31,

Weighted average assumptions used to determine benefit obligation at December 31:

Discount rate

Weighted-average assumptions used to determine benefit obligations:

Effective discount rate on benefit obligations

5.51 % 5.50 %

Rate of compensation increase (1)

Weighted average assumptions used to determine net periodic benefit cost for the year ended December 31:

Discount rate

Weighted-average assumptions used to determine net cost:

Effective discount rate on benefit obligations

5.50 % 5.02 %

Rate of compensation increase (1)

Expected long-term rate of return on plan assets

Effective rate for interest cost on benefit obligations

5.25 % 4.97 %

Expected return on assets

6.13 % 5.91 %

No rate of compensation increase was assumed as the plans are frozen to additional participant benefit accruals.

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(In millions) Level 2025 2024

Cash and cash equivalents Level 1 $ 17 $ 11

Cash and cash equivalents and other Level 1 $ 28 $ 17

Fixed income securities Level 1 — 2

Cash and cash equivalents Level 2 34 123

Money market Level 2 — 18

Equities Level 2 103 93

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

Restructuring Charges and Other

Restructuring costs and other 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.

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

(In millions)

Restructuring Costs and Other

Restructuring costs and other consisted of severance paid to exiting individuals from the Company’s leadership team and severance paid as part of an initiative to optimize corporate expenses.

Restructuring liability is recorded in Accrued expenses and Other long-term liabilities in the Consolidated Balance Sheets.

The following table summarizes the restructuring liability for the year ended December 31, 2025:

(In millions) Severance Other Total

Balance as of December 31, 2024

$ 10 $ — $ 10

Charges incurred 23 4 27

Payments ( 14 ) ( 6 ) ( 20 )

Non-cash reductions ( 4 ) 2 ( 2 )

Balance as of December 31, 2025

The remaining severance liability at December 31, 2024, is expected to be substantially paid within 12 months.

$ 15 $ — $ 15

As of December 31, 2025, $ 12 million of restructuring liability is expected to be paid over one year.

Income (loss) before taxes related to the Company’s domestic and foreign operations was as follows:

8 unchanged sentences

federal $ 7 $ ( 2 ) $ 24

U.S state and local — 7 2

state and local 1 — 7

Foreign 89 48 43

1 unchanged sentence

federal $ ( 11 ) $ ( 12 ) $ ( 3 )

U.S state and local ( 1 ) ( 2 ) ( 3 )

state and local 1 ( 1 ) ( 2 )

Foreign ( 19 ) ( 25 ) ( 36 )

Total deferred income tax benefit $ ( 29 ) $ ( 38 ) $ ( 41 )

federal $ ( 4 ) $ ( 14 ) $ 21

state and local 2 ( 1 ) 5

Foreign 70 23 7

Total income tax expense $ 68 $ 8 $ 33

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law.

The legislation includes reinstatement of favorable tax treatment for certain business provisions, including 100% bonus depreciation for qualified property placed in service after January 19, 2025, immediate expensing of domestic research and experimental costs, and revisions to the business interest expense limitations.

The impact of OBBBA was limited to the current and deferred provision and did not have a material impact on the Company’s income tax expenses for the year ended December 31, 2025.

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

While the Company expects to meet transitional safe harbor requirements in most jurisdictions, there are a limited number of jurisdictions where the Company expects Pillar Two taxes to apply.

The income tax provision for the year ended December 31, 2025, includes the effects of Pillar Two taxes.

The Company continues to monitor Pillar Two developments, including the impact of the Side-by-Side Package published by the OECD on January 5, 2026 as it relates to the interplay between the U.S.

international tax system and Pillar Two for the U.S.

headquartered companies.

Income tax expense (benefit) for 2025, 2024 and 2023 varied from the amount computed by applying the statutory income tax rate to income (loss) before income taxes.

4 unchanged sentences

Year Ended December 31,

(In millions) 2024 2023 2022

Tax expense at U.S.

2025 2024 2023

(In millions, except percentages) Amount

Amount Percent Amount Percent

Federal Statutory Tax Rate $ 22 21 % $ 31 21 % $ 56 21 %

State taxes, net of U.S.

federal benefit — 4 ( 1 )

Foreign rate differential ( 11 ) ( 14 ) ( 10 )

Foreign operations (1)

Contribution- and margin-based taxes 5 5 5

Valuation allowances ( 19 ) ( 4 ) ( 3 )

Stock-based compensation 1 1 ( 1 )

State and Local Taxes, Net of Federal Tax Effect (1)

2 2 % ( 1 ) ( 1 ) % 4 2 %

Foreign Tax Effects

Changes in valuation allowances 2 2 % — — % ( 5 ) ( 2 ) %

Other — — % 2 1 % — — %

Intangible assets — — % — — % 33 13 %

Transaction costs 8 — 5

Other ( 1 ) ( 1 ) % ( 3 ) ( 2 ) % ( 4 ) ( 2 ) %

Changes in valuation allowances — — % ( 22 ) ( 15 ) % 2 1 %

Other 4 4 % — — % 2 1 %

Changes in valuation allowances 7 7 % 5 3 % 1 — %

Other ( 3 ) ( 3 ) % ( 1 ) ( 1 ) % ( 1 ) — %

Intangible assets — — % — — % ( 51 ) ( 19 ) %

Litigation 14 14 % — — % — — %

Other 1 1 % 4 3 % 2 1 %

Notional interest deduction ( 8 ) ( 8 ) % — — % — — %

Other 1 1 % — — % — — %

Changes in valuation allowances — — % — — % ( 5 ) ( 2 ) %

Foreign rate difference ( 6 ) ( 6 ) % ( 15 ) ( 10 ) % ( 15 ) ( 5 ) %

Other 4 4 % — — % — — %

Year Ended December 31,

2025 2024 2023

(In millions, except percentages) Amount Percent Amount Percent Amount Percent

Cantonal 7 7 % 1 1 % — — %

Other 1 1 % ( 3 ) ( 2 ) % — — %

United Kingdom

Changes in valuation allowances ( 8 ) ( 8 ) % 1 1 % — — %

Non-deductible transaction costs 7 7 % — — % — — %

Return to provision 5 5 % ( 8 ) ( 6 ) % — — %

Total income tax expense $ 8 $ 33 $ 64

(1) Foreign operations include the cost of inclusion of foreign income in the U.S.

net of foreign taxes and permanent items related to foreign operations.

(2) In 2023, the Company recorded an income tax benefit related to the rights to use trade names, trademarks and other intellectual property.

The Organisation 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 continues to monitor legislative developments as the enactments in certain jurisdictions may have an adverse effect on its financial statements.

Other 8 7 % 3 2 % 2 1 %

Other Foreign Jurisdictions 8 7 % 10 6 % 10 4 %

Effect of Cross-Border Tax Laws ( 1 ) ( 1 ) % — — % 3 1 %

Foreign tax credits ( 9 ) ( 9 ) % — — % — — %

Other — — % ( 1 ) ( 1 ) % ( 1 ) — %

Changes in Valuation Allowances — — % — — % — — %

Nontaxable or Nondeductible Items

Non-deductible transaction costs 6 6 % 8 5 % — — %

Other 3 3 % 2 1 % 1 — %

Changes in Unrecognized Tax Benefits 7 7 % — — % — — %

Other Adjustments

Return to provision ( 5 ) ( 5 ) % ( 5 ) ( 3 ) % ( 1 ) ( 1 ) %

Effective Tax Rate $ 68 65 % $ 8 6 % $ 33 12 %

(1) State taxes in California and Mississippi made up the majority (greater than 50 percent) of the tax effect in this category.

Income Taxes Paid

Cash paid (received) for income taxes is comprised of the following:

Year Ended December 31,

(In millions) 2025 2024 2023

federal $ ( 2 ) $ — $ 45

state and local — — 3

Netherlands 14 19 15

Swiss Cantonal - Ticino 11 * *

United Kingdom 13 * ( 7 )

Other 15 7 14

Foreign subtotal 61 43 36

Total $ 59 $ 43 $ 84

*The amount of income taxes paid (net of refunds) during the year did not meet the disaggregation threshold.

Components of the Net Deferred Tax Asset or Liability

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Accrued expenses 112 122

Net unrealized losses (1)

Gross deferred tax assets 251 236

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Net deferred tax liability $ ( 96 ) $ ( 167 )

(1) Deferred taxes related to net unrealized gains (losses) on net investment hedge and cash flow hedge are recorded in accumulated OCI.

See Note 13 – Stockholders’ Equity for additional information.

The deferred tax asset and deferred tax liability above are reflected in the Consolidated Balance Sheets as follows:

9 unchanged sentences

Federal net operating losses for all U.S.

2030 $ 17 $ 32

Tax effect (before federal benefit) of state net operating losses

1 unchanged sentence

Federal tax credit carryforwards

Various times starting in 2035 4 —

State tax credit carryforwards

11 unchanged sentences

$ 44 16 ( 10 ) $ 50

(1) In 2024, the Company released $ 22 million of valuation allowances in France.

(2) In 2023, due to the PFS Acquisition, the Company acquired $ 8 million of valuation allowances.

(1) In 2025, the additions primarily consisted of $ 14 million due to an increase in foreign net operating loss carryforward and $ 10 million due to the final purchase price allocation for the Wincanton Acquisition.

(2) In 2024, the Company released $ 22 million of valuation allowance in France.

(3) In 2023, concurrent with an acquisition, the Company acquired $ 8 million of valuation allowance.

Unrecognized Tax Benefits

3 unchanged sentences

Beginning balance

Increases related to positions taken during prior years

Reduction due to expiration of statutes of limitations

Increases related to positions taken during current year

Increases related to positions taken during prior year

Settlements with tax authorities — ( 1 ) —

1 unchanged sentence

Total unrecognized tax benefits that, if recognized, would impact the effective income tax rate as of the end of the year

The Company could reflect a reduction to unrecognized tax benefits of approximately $ 3 million over the next 12 months due to statutes of limitations expirations or because tax positions are sustained on audit.

The Company is subject to taxation in the U.S.

and foreign jurisdictions.

As of December 31, 2024, there is no ongoing examinations in the United States.

As of December 31, 2025, there are no ongoing examinations in the United States.

Various foreign tax returns for years after 2009 are open under relevant statutes of limitations and are subject to audit.

13 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 June 14, 2024, the Company’s subsidiary GXO Warehouse Company, Inc.

entered into a Confidential Settlement Agreement (the “Settlement Agreement”) to settle all claims in connection with a dispute between the Company and one of its customers related to the start-up of the customer’s warehouse that occurred in 2018 (the “Dispute”).

A payment under the Settlement Agreement was made by the Company on July 5, 2024.

As of July 10, 2024, the Dispute, which was litigated under the caption Lindt et al.

GXO Warehouse Company, Inc., docket no.

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 $ 59 million expense for the year ended December 31, 2024, for the settlement, associated legal fees, and other related expenses.

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 cooperative labor providers for their services from 2017 through 2023.

The alleged amount is approximately € 84 million ($ 87 million as of December 31, 2024).

It is probable that a loss may be incurred;

however, the possible range of losses is not reasonably estimable given the status of the ongoing investigation.

The Company is cooperating in this matter and believes that it has a number of credible defenses.

During 2024, the Company deposited a total of € 68 million ($ 70 million as of December 31, 2024) into a designated bank account in connection with the ongoing investigation.

This amount is classified as restricted cash under “Other

Long-Term Assets” on the Consolidated Balance Sheets.

In January 2025, the Company deposited the additional restricted cash amount of approximately € 16 million ($ 17 million).

Subsequent Events

Share Repurchase Program

On February 18, 2025, the GXO board of directors authorized the repurchase by the Company of up to $ 500 million (the “Repurchase Plan”) of its common stock, effective immediately.

The Company intends to fund the repurchases from existing cash, borrowings on the Company’s revolving credit facility and/or other financing sources.

The Repurchase Plan does not obligate the Company to repurchase any specific number of shares of common stock and may be suspended or discontinued at any time.

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.

In 2025, the Company recorded € 61 million ($ 65 million) of expense, including legal fees, and made final payments of € 59 million ($ 68 million) to the Italian authorities in connection with the settlement of this matter.

Related expenses, including legal fees, were recorded in Regulatory matter and litigation expense in the Consolidated Statements of Operations.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.

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-K

Item 8. Financial Statements and Supplementary Data