GXO Logistics, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1. 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 normal recurring accruals and adjustments considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented herein have been included. The Consolidated Balance Sheet as of December 31, 2025, was derived from audited annual financial statements as of that date. Operating results for interim periods are not necessarily indicative of full-year results. 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, 2025.

The Company presents its operations asone reportable segment.

Basis of Consolidation

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 balances and transactions.

Use of Estimates

The preparation of the Company’s interim Condensed Consolidated Financial Statements requires management to make estimates and assumptions about future events. Management believes its use of estimates in these interim Condensed Consolidated Financial Statements to be reasonable.

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): 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 in interim and annual reporting periods. This update will be effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company 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.

Note 2. Revenue Recognition

Revenue disaggregated by geographical area was as follows:

The Company’s revenue can also be disaggregated by various verticals, reflecting the customers’ 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:

Contract liabilities represent the Company’s obligation to transfer services to a customer for which the Company has received consideration, or the amount due from a customer before the related services have been transferred.

Revenue recognized included in contract liabilities at the beginning of the period was $15 million and $46 million for the three months ended September 30, 2026 and 2025, respectively, and $244 million and $267 million for the nine months ended September 30, 2026 and 2025, respectively.

Note 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 earnings before interest, taxes, depreciation and amortization, adjusted for transaction and integration costs, restructuring costs and other, regulatory matters, 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, to 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 the performance of the Company and in establishing management’s compensation.

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

The Company’s segment results were as follows:

(1) Excludes unallocated corporate expenses.

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

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

(4) 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.

Note 4. Leases

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.

Total lease cost recorded in the Condensed Consolidated Statements of Operations was as follows:

(1) Operating, variable, and short-term lease costs are primarily included in Direct operating expense in the Condensed Consolidated Statements of Operations.

(2) Amortization of right-of-use assets is included in Depreciation and amortization expense in the Condensed Consolidated Statements of Operations.

(3) Interest on the lease liabilities is included in Interest expense, net in the Condensed Consolidated Statements of Operations.

(4) Total lease cost excludes sublease income for all periods presented, as it was not material.

For the nine months ended September 30, 2026, the Company recorded a net benefit of $30 million, from a real estate transaction that resulted in an early termination of a lease.

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

Supplemental cash flow information related to leases was as follows:

Note 5. Goodwill

The following table presents the changes in Goodwill for the nine months ended September 30, 2026:

Note 6. Intangible Assets

The following table summarizes identifiable intangible assets subject to amortization:

Intangible asset amortization expense was $27 million and $31 million for the three months ended September 30, 2026 and 2025, respectively, and $84 million and $90 million for the nine months ended September 30, 2026 and 2025, respectively.

Note 7. Debt and Financing Arrangements

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

(1) Net of unamortized discount and debt issuance costs of $5 million and $6 million as of September 30, 2026 and December 31, 2025, respectively.

(2) Net of unamortized discount and debt issuance costs of $2 million as of September 30, 2026 and December 31, 2025.

(3) Net of unamortized discount and debt issuance costs of $8 million and $9 million as of September 30, 2026 and December 31, 2025, respectively.

(4) Net of unamortized discount and debt issuance costs of $6 million and $7 million as of September 30, 2026 and December 31, 2025, respectively.

(5) Variable-rate debt.

(6) As of September 30, 2026, current debt consisted of $275 million five-year term loan maturing in May 2027, $82 million of finance lease liabilities and $9 million of other debt. As of December 31, 2025, current debt consisted of $400 million in unsecured notes maturing in July 2026, $45 million of finance lease liabilities and $1 million of other debt.

Repayments of Debt

Upon maturity in July 2026, the Company repaid $400 million of 1.65% unsecured notes using cash on hand.

Revolving Credit Facilities

The Company has afive-year unsecured, multi-currency 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 September 30, 2026 and December 31, 2025, no amounts were outstanding, and letters of credit were $7 million and $6 million, respectively, under the Revolving Credit Agreement. Borrowings under revolving credit facilities maturing in three months or less are presented net in the Condensed Consolidated Statement of Cash Flows.

Covenants and Compliance

The covenants governing the Company’s debt securities limit our ability to incur indebtedness and grant liens, among other restrictions. The Company’s revolving credit facility generally requires us to maintain a consolidated leverage ratio of no greater than 3.50 to 1.00, which may increase to 4.25 to 1.00 following the consummation of a material acquisition. The consolidated leverage ratio may not exceed 3.50 to 1.00 for more than five consecutive fiscal quarters. As of September 30, 2026, the Company was in compliance with the covenants contained in its debt and financing arrangements.

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 under the factoring agreements was as follows:

Note 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 independent and knowledgeable parties who are willing and able to transact for an asset or liability 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 September 30, 2026 and December 31, 2025, 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:

As of September 30, 2026 and December 31, 2025, 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 in Interest expense, net in the Condensed Consolidated Statements of Operations.

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

Derivatives Not Designated as Hedges

Gains and losses for derivatives not designated as hedges were $2 million and $3 million gains for the three months ended September 30, 2026 and 2025, respectively, and $7 million gain and $11 million loss for the nine months ended September 30, 2026 and 2025, respectively. The Company recorded gains and losses for derivatives not designated as hedges as Other income (expense), net in the Condensed Consolidated Statements of Operations.

Note 9. Divestiture

In 2024, the Company completed the acquisition of Wincanton plc (now Wincanton Limited) (the “Wincanton Acquisition”). The Wincanton Acquisition was subject to review by the U.K. Competition and Markets Authority (the “CMA”). In 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 a $12 million fair value adjustment. For the three and nine months ended September 30, 2026, the Company recorded additional impairment of $1 million and $24 million, respectively, due to a further reduction in estimated fair value. In September 2026, the Company completed the Wincanton Divestment and paid $38 million in cash in connection with the transaction.

As of December 31, 2025, Assets and liabilities held for sale were not material and are included in Other current assets and Other current liabilities, respectively, in the Condensed Consolidated Balance Sheets.

Note 10. Employee Benefit Plans

Defined Benefit Plans

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

Components of the net periodic benefit income recognized under the U.K. Retirement Plans were $7 million and $5 million for the three months ended September 30, 2026 and 2025, respectively, and $21 million and $14 million for the nine months ended September 30, 2026 and 2025, respectively. The Company recorded periodic pension income as 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 $30 million and $28 million for the three months ended September 30, 2026 and 2025, respectively, and $94 million and $82 million for the nine months ended September 30, 2026 and 2025, respectively. The Company primarily recorded defined contribution plan costs as direct operating expense in the Condensed Consolidated Statements of Operations.

Note 11. Income Taxes

Income tax expense for the three months ended September 30, 2026 decreased $21 million, or 75.0%, compared with the three months ended September 30, 2025. The Company’s effective tax rate was 10.2% for the three months ended September 30, 2026, compared with 31.2% for the three months ended September 30, 2025, primarily reflecting tax benefits related to the Wincanton Divestment and higher deferred tax benefits.

Income tax expense for the nine months ended September 30, 2026 decreased $5 million, or 11.1%, compared with the nine months ended September 30, 2025. The Company’s effective tax rate was 29.2% for the nine months ended September 30, 2026, compared with 118.1% for the nine months ended September 30, 2025, primarily reflecting the non-recurrence of non-deductible litigation costs incurred in 2025 and higher deferred tax benefits.

Note 12. Stockholders’ Equity

Stock Repurchase Plan

In 2025, the Company’s board of directors authorized and announced a repurchase plan for up to $500 million of its common stock (the “Repurchase Plan”). 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. It 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 months ended September 30, 2026, the Company repurchased approximately 1.8 million shares of its common stock for an aggregate purchase price of $85 million, including $84 million of share repurchases and $1 million of excise tax, and didnot repurchase any shares for the three months ended September 30, 2025. For the nine months ended September 30, 2026 and 2025, the Company repurchased approximately 2.1 million and 5.4 million shares of its common stock for an aggregate purchase price of $101 million and $202 million, including $100 million and $200 million of share repurchases and $1 million and $2 million of excise tax, respectively. As of September 30, 2026, $200 million remained authorized under the Repurchase Plan.

Accumulated Other Comprehensive Income (Loss)

The following tables summarize the changes in AOCIL by component:

Note 13. 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.

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.

Note 14. Earnings (Loss) per Share

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

Potentially dilutive shares outstanding of 718 thousand and 813 thousand for the three months ended September 30, 2026 and 2025, respectively, and 721 thousand and 3.4 million for the nine months ended September 30, 2026 and 2025, respectively, were excluded from the computation of diluted earnings per share because their effects would have been anti-dilutive.