GXO Logistics, Inc.

1. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of GXO Logistics, Inc. (“GXO” or the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the rules of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. The Company’s Condensed Consolidated Financial Statements include the accounts of GXO and its majority-owned subsidiaries and variable interest entities of which the Company is the primary beneficiary. The Company has eliminated intercompany accounts and transactions.

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

The Company presents its operations asone reportable segment.

Accounting Pronouncements Issued But Not Yet Adopted

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 the disclosure requirements about income taxes paid and the rate reconciliation in its Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This standard requires all public companies to disclose more detailed information about certain costs and expenses in the notes to the financial statements at interim and annual reporting periods. 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.

2. Revenue Recognition

Revenue disaggregated by geographical area was as follows:

The Company’s revenue can also be disaggregated by various verticals, reflecting the customer’s principal industry. Revenue disaggregated by industry was as follows:

Contract Assets and Liabilities

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

Revenue recognized included the following:

3. Segment Information

The Company is organized geographically into three operating segments: i) Americas and Asia-Pacific, ii) United Kingdom and Ireland, and iii) Continental Europe. The Company’s reporting unit results are regularly provided to the chief operating decision maker (“CODM”). 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 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 intoone reportable segment.

The Company’s segment results were as follows:

(1) Excludes unallocated corporate expenses.

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

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

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

4. Leases

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

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

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

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

Supplemental cash flow information was as follows:

5. Acquisition

Wincanton Acquisition

On April 29, 2024, the Company completed the acquisition of Wincanton plc (now Wincanton Limited) for a total consideration of £762 million ($958 million as of the acquisition date) (the “Wincanton Acquisition”). The Wincanton Acquisition was subject to review by the Competition and Markets Authority (the “CMA”) in the U.K. On June 19, 2025, the CMA approved the Wincanton Acquisition, subject to the divestment of certain grocery contracts in the U.K.

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

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

(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.

6. Goodwill

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

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

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

As of June 30, 2025 and December 31, 2024, there wereno accumulated goodwill impairment losses.

7. Debt and Financing Arrangements

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

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

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

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

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

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

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

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

Revolving Credit Facilities

The Company has afive-year unsecured, multicurrency revolving credit facility expiring in 2029 (the “Revolving Credit Agreement”). The aggregate commitment of all lenders under the Revolving Credit Agreement is equal to $800 million, of which $100 million is available for the issuance of letters of credit. As of June 30, 2025, and December 31, 2024, no amounts were outstanding under the Revolving Credit Agreement and letters of credit were $1 million under the Revolving Credit Agreement.

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 ($240 million as of

June 30, 2025) in aggregate at any time, expiring in March 2027. Loans under the Wincanton Revolving Credit Agreement bear interest at daily simple Sterling Overnight Index Average rate plus a margin. As of June 30, 2025, and December 31, 2024, the Company had £26 million ($36 million) and £15 million ($19 million) of borrowings outstanding under the Wincanton Revolving Credit Agreement, respectively.

Covenants and Compliance

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

Bank Overdraft

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

Factoring Programs

The Company sells certain of its trade receivables on a non-recourse basis to third-party financial institutions under various factoring agreements.

Information related to the trade receivables sold was as follows:

8. Fair Value Measurements and Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The levels of inputs used to measure fair value are:

•Level 1—Quoted prices for identical instruments in active markets;

•Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets; and

•Level 3—Valuations based on inputs that are unobservable, generally utilizing pricing models or other valuation techniques that reflect management’s judgment and estimates.

Assets and Liabilities

The Company bases its fair value estimates on market assumptions and available information. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and current maturities of long-term debt approximated their fair values as of June 30, 2025 and December 31, 2024, due to their short-term nature.

Debt

The fair value of debt was as follows:

Financial Instruments

The Company directly manages its exposure to risks arising from business operations and economic factors, including fluctuations in interest rates and foreign currencies. The Company uses derivative instruments to manage the volatility related to these exposures.

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

(1) In February 2025, the Company terminated a cross-currency swap with a notional amount of $100 million scheduled to mature in November 2025.

(2) In February 2025, the Company amendedone cross-currency swap with a notional amount of $98 million to $102 million scheduled to mature in December 2025.

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

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

As of June 30, 2025 and December 31, 2024, the derivatives were classified as Level 2 within the fair value hierarchy. The derivatives are valued using inputs other than quoted prices such as foreign exchange rates and yield curves.

The effect of hedges on AOCIL and in the Condensed Consolidated Statements of Operations was as follows:

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

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

Derivatives Not Designated as Hedges

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

9. Earnings per Share

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

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

Accumulated Other Comprehensive Income - Loss

The following tables summarize the changes in AOCIL by component:

11. Employee Benefit Plans

Defined Benefit Plans

The Company offers pension plans in certain jurisdictions, with the most significant in the U.K. In the U.K., the Company sponsors two defined benefit pension schemes (the “U.K. Retirement Plans”). The U.K. Retirement Plans do not allow for new plan participants or additional benefit accruals. The funded status of the U.K. Retirement Plans was recorded in Other long-term assets in the Condensed Consolidated Balance Sheets.

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

Components of the net periodic benefit income recognized under the U.K. Retirement Plans were as follows:

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

Defined Contribution Plans

Also, the Company has defined-contribution retirement plans for its United States employees and employees of certain foreign subsidiaries. In these plans, employees are allowed to contribute a portion of their salaries and bonuses to the plans, and the Company matches a portion of the employee contributions.

Defined contribution plan costs were as follows:

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

12. Restructuring Costs and Other

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

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

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

13. Income Taxes

Income tax expense for the three months ended June 30, 2025 and 2024, was $15 million and $14 million, respectively, and the Company’s effective tax rate for the three months ended June 30, 2025 and 2024, was 34.6%, and 25.4%, respectively. The increase in the Company’s effective tax rate was primarily driven by a decrease in pre-tax income.

Income tax expense for the six months ended June 30, 2025 and 2024, was $17 million and $4 million, respectively, and the Company’s effective tax rate for the six months ended June 30, 2025 and 2024, was an expense on a pre-tax loss of (35.3)% and an expense on pre-tax income of 52.3%, respectively. The change in the Company’s effective tax rate was primarily driven by a decrease in pre-tax income, offset by non-deductible regulatory matter and transaction costs.

On July 4, 2025, the One Big Beautiful Bill Act (P.L. 119-21) was signed into law. The legislation has multiple effective dates, with certain provisions effective in 2025 and others effective through 2027. The Company is currently assessing its impact on its Consolidated Financial Statements.

In 2021, the Organization for Economic Co-operation and Development (“OECD”) issued administrative guidance for the Pillar Two Global Anti-Base Erosion rules (“Pillar Two”), which generally imposes a 15% global minimum tax on multinational companies. The Company has incorporated the estimated annual effect of Pillar Two into its income tax provision for the three and six months ended June 30, 2025, and the Company expects to incur additional income tax related to Pillar Two during fiscal 2025. For the three and the six months ended June 30, 2024, Pillar Two did not have a material impact on the Company’s income tax expense. Pillar Two did not have a material impact on the Company’s fiscal 2024 income tax expense. The Company continues to monitor Pillar Two developments, including the impact of the statement issued by the G7 on June 28, 2025 regarding the interplay between the U.S. international tax system and Pillar Two as it relates to U.S.-headquartered companies.

14. Commitments and Contingencies

The Company is involved, and will continue to be involved, in numerous legal proceedings arising from the conduct of its business. These proceedings may include personal injury claims arising from the transportation and handling of goods, contractual disputes and employment-related claims, including alleged violations of wage and hour laws.

The Company establishes accruals for specific legal proceedings when it is considered probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company reviews and adjusts accruals for loss contingencies quarterly and as additional information becomes available. If a loss is not both probable and reasonably estimable, or if an exposure to a loss exists in excess of the amount accrued, the Company assesses whether there is at least a reasonable possibility that a loss, or additional loss, may have been incurred. If there is a reasonable possibility that a loss, or additional loss, may have been incurred, the Company discloses the estimate of the possible loss or range of loss if it is material and an estimate can be made, or discloses that such an estimate cannot be made. The determination as to whether a loss can reasonably be considered to be possible or probable is based on management’s assessment, together with legal counsel, regarding the ultimate outcome of the matter.

Management of the Company believes that it has adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable. Management of the Company does not believe that the ultimate resolution of any matters to which the Company is presently a party will have a material adverse effect on its results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s financial condition, results of operations or cash flows. Legal costs related to these matters are expensed as they are incurred.

The Company carries liability and excess umbrella insurance policies that are deemed sufficient to cover potential legal claims arising in the normal course of conducting its operations. In the event the Company is required to satisfy a legal claim outside the scope of the coverage provided by insurance, its financial condition, results of operations or cash flows could be negatively impacted.

On July 2, 2024, the Italian authorities initiated an investigation into the deductibility of value-added tax (VAT) payments made by the Company to certain third-party service providers. The challenged amount was €84 million ($91 million as of March 31, 2025), which the Company deposited into a restricted bank account to secure the investigation. In the first quarter of 2025, the Company accrued €61 million ($66 million) of expense, including legal fees, related to this matter. In the second quarter of 2025, the Company agreed and made final payments of €59 million ($68 million) to the Italian authorities and released any remaining restrictions on this cash account. And for the three and six months ended June 30, 2025, the Company released $1 million and recorded $65 million, respectively, of expenses, including legal fees, related to this matter, which was recorded within the Regulatory matter and litigation expense line in the Condensed Consolidated Statements of Operations.