Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________

FORM 10-Q

_______________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40470

_______________________________________________________

GXO Logistics, Inc.

(Exact name of registrant as specified in its charter)

____________________________________________________________________________________________________________


Delaware						86-2098312
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)
Two American Lane
Greenwich, Connecticut						06831
(Address of principal executive offices)						(Zip Code)

(203) 489-1287

Registrant’s telephone number, including area code

_______________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.01 per share

GXO

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 6, 2023, there were 118,954,910 shares of the registrant’s common stock, par value $0.01 per share, outstanding.


GXO Logistics, Inc.
Form 10-Q
For the Quarterly Period Ended September 30, 2023
Table of Contents
						Page
Part I—Financial Information
Item 1. Financial Statements (Unaudited)						2
Condensed Consolidated Statements of Operations						2
Condensed Consolidated Statements of Comprehensive Income						3
Condensed Consolidated Balance Sheets						4
Condensed Consolidated Statements of Cash Flows						5
Condensed Consolidated Statements of Changes in Equity						6
Notes to Condensed Consolidated Financial Statements						8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations						20
Item 3. Quantitative and Qualitative Disclosures About Market Risk						28
Item 4. Controls and Procedures						28
Part II—Other Information
Item 1. Legal Proceedings						29
Item 1A. Risk Factors						29
Item 5. Other Information						29
Item 6. Exhibits						30
Signatures						31

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GXO Logistics, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions, shares in thousands, except per share amounts)	2023		2022		2023		2022
Revenue	$	2,471	$	2,287	$	7,188	$	6,526
Direct operating expense	2,012		1,885		5,875		5,408
Selling, general and administrative expense	258		227		761		637
Depreciation and amortization expense	101		89		268		242
Transaction and integration costs	3		14		22		57
Restructuring costs and other	7		—		31		14
Operating income	90		72		231		168
Other income, net	7		17		8		56
Interest expense, net	(14)		(6)		(41)		(19)
Income before income taxes	83		83		198		205
Income tax expense	(15)		(19)		(38)		(51)
Net income	68		64		160		154
Net income attributable to noncontrolling interests	(2)		(1)		(4)		(3)
Net income attributable to GXO	$	66	$	63	$	156	$	151

Earnings per share
Basic	$	0.55	$	0.53	$	1.31	$	1.30
Diluted	$	0.55	$	0.53	$	1.31	$	1.29
Weighted-average common shares outstanding
Basic	118,941		118,621		118,883		116,508
Diluted	119,645		119,065		119,430		117,107

See accompanying Notes to Condensed Consolidated Financial Statements.

GXO Logistics, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Net income	$	68	$	64	$	160	$	154
Other comprehensive income (loss), net of tax
Foreign currency translation loss, net of tax expense of $(9), $(22), $0 and $(32)	(69)		(43)		(39)		(163)
Net unrealized gain on cash flow hedges, net of tax expense of $(1), $(2), $(1) and $(2)	—		9		1		9
Defined benefit plans, amortization of net loss, net of tax of $0, $0, $0 and $0	1		—		2		—
Other comprehensive loss, net of tax	(68)		(34)		(36)		(154)
Comprehensive income	—		30		124		—
Less: Comprehensive income (loss) attributable to noncontrolling interest	—		(1)		3		(1)
Comprehensive income attributable to GXO	$	—	$	31	$	121	$	1

See accompanying Notes to Condensed Consolidated Financial Statements.

GXO Logistics, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)


	September 30,		December 31,
(Dollars in millions, shares in thousands, except per share amounts)	2023		2022
ASSETS
Current assets
Cash and cash equivalents	$	473	$	495
Accounts receivable, net of allowance of $18 and $12	1,661		1,647
Other current assets	332		286
Total current assets	2,466		2,428
Long-term assets
Property and equipment, net of accumulated depreciation of $1,463 and $1,297	923		960
Operating lease assets	2,133		2,227
Goodwill	2,734		2,728
Intangible assets, net of accumulated amortization of $507 and $456	507		570
Other long-term assets	328		306
Total long-term assets	6,625		6,791
Total assets	$	9,091	$	9,219
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	597	$	717
Accrued expenses	975		995
Current debt	26		67
Current operating lease liabilities	561		560
Other current liabilities	275		193
Total current liabilities	2,434		2,532
Long-term liabilities
Long-term debt	1,621		1,739
Long-term operating lease liabilities	1,800		1,853
Other long-term liabilities	419		417
Total long-term liabilities	3,840		4,009
Commitments and contingencies (Note 12)
Stockholders’ Equity
Common Stock, $0.01 par value per share; 300,000 shares authorized, 118,951 and 118,728 issued and outstanding	1		1
Preferred Stock, $0.01 par value per share; 10,000 shares authorized, none issued and outstanding	—		—
Additional paid-in capital	2,593		2,575
Retained earnings	479		323
Accumulated Other Comprehensive Income (Loss) (“AOCIL”)	(289)		(254)
Total stockholders’ equity before noncontrolling interests	2,784		2,645
Noncontrolling interests	33		33
Total equity	2,817		2,678
Total liabilities and equity	$	9,091	$	9,219

See accompanying Notes to Condensed Consolidated Financial Statements.

GXO Logistics, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended September 30,
(In millions)	2023		2022
Cash flows from operating activities:
Net income	$	160	$	154
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization expense	268		242
Stock-based compensation expense	25		24
Deferred tax expense (benefit)	(29)		—
Other	16		(4)
Changes in operating assets and liabilities
Accounts receivable	(23)		(22)
Other assets	(39)		(28)
Accounts payable	(69)		(68)
Accrued expenses and other liabilities	34		18
Net cash provided by operating activities	343		316
Cash flows from investing activities:
Capital expenditures	(205)		(239)
Proceeds from sales of property and equipment	13		22
Acquisition of businesses, net of cash acquired	—		(874)
Net proceeds from cross-currency swap agreements	—		26
Other	—		9
Net cash used in investing activities	(192)		(1,056)
Cash flows from financing activities:
Proceeds from issuance of debt, net	—		898
Repayments of debt, net	(139)		—
Repayments of finance lease obligations	(24)		(23)
Taxes paid related to stock-based compensation awards	(7)		(12)

Net cash provided by (used in) financing activities	(170)		863
Effect of exchange rates on cash, restricted cash and cash equivalents	(2)		(22)
Net (decrease) increase in cash, restricted cash and cash equivalents	(21)		101
Cash, restricted cash and cash equivalents, beginning of period	495		333
Cash, restricted cash and cash equivalents, end of period	$	474	$	434

Cash and cash equivalents	$	473	$	434
Restricted Cash (included in Other long-term assets)	1		—
Total cash, restricted cash and cash equivalents	$	474	$	434

Non-cash investing activities:
Common stock issued for acquisition	$	—	$	203

See accompanying Notes to Condensed Consolidated Financial Statements.

GXO Logistics, Inc.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Common Stock			Additional Paid-In Capital		Retained Earnings		AOCIL		Equity Before Noncontrolling Interests		Noncontrolling Interests		Total Equity
(Shares in thousands, dollars in millions)	Shares	Amount
Balance as of June 30, 2023	118,932	$	1	$	2,587	$	413	$	(223)	$	2,778	$	33	$	2,811
Net income	—	—		—		66		—		66		2		68
Other comprehensive loss	—	—		—		—		(66)		(66)		(2)		(68)
Stock-based compensation	—	—		7		—		—		7		—		7
Vesting of stock-based compensation awards	30	—		—		—		—		—		—		—
Tax withholding on vesting of stock-based compensation awards	(11)	—		(1)		—		—		(1)		—		(1)
Balance as of September 30, 2023	118,951	$	1	$	2,593	$	479	$	(289)	$	2,784	$	33	$	2,817


(Shares in thousands, dollars in millions)	Common Stock			Additional Paid-In Capital		Retained Earnings		AOCIL		Equity Before Noncontrolling Interests		Noncontrolling Interests		Total Equity
	Shares	Amount
Balance as of December 31, 2022	118,728	$	1	$	2,575	$	323	$	(254)	$	2,645	$	33	$	2,678
Net income	—	—		—		156		—		156		4		160
Other comprehensive loss	—	—		—		—		(35)		(35)		(1)		(36)
Stock-based compensation	—	—		25		—		—		25		—		25
Vesting of stock-based compensation awards	366	—		—		—		—		—		—		—
Tax withholding on vesting of stock-based compensation awards	(143)	—		(7)		—		—		(7)		—		(7)
Dividends	—	—		—		—		—		—		(3)		(3)
Balance as of September 30, 2023	118,951	$	1	$	2,593	$	479	$	(289)	$	2,784	$	33	$	2,817

See accompanying Notes to Condensed Consolidated Financial Statements.

GXO Logistics, Inc.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Common Stock			Additional Paid-In Capital		Retained Earnings		AOCIL		Equity Before Noncontrolling Interests		Noncontrolling Interests		Total Equity
(Shares in thousands, dollars in millions)	Shares	Amount
Balance as of June 30, 2022	118,610	$	1	$	2,561	$	214	$	(246)	$	2,530	$	31	$	2,561
Net income	—	—		—		63		—		63		1		64
Other comprehensive loss	—	—		—		—		(32)		(32)		(2)		(34)
Stock-based compensation	—	—		8		—		—		8		—		8
Vesting of stock compensation awards	33	—		—		—		—		—		—		—
Tax withholding on vesting of stock compensation awards	(14)	—		—		—		—		—		—		—
Balance as of September 30, 2022	118,629	$	1	$	2,569	$	277	$	(278)	$	2,569	$	30	$	2,599


	Common Stock			Additional Paid-In Capital		Retained Earnings		AOCIL		Equity Before Noncontrolling Interests		Noncontrolling Interests		Total Equity
(Shares in thousands, dollars in millions)	Shares	Amount
Balance as of December 31, 2021	114,659	$	1	$	2,354	$	126	$	(130)	$	2,351	$	39	$	2,390
Net income	—	—		—		151		—		151		3		154
Other comprehensive loss	—	—		—		—		(150)		(150)		(4)		(154)
Stock-based compensation	—	—		24		—		—		24		—		24
Vesting of stock compensation awards	374	—		—		—		—		—		—		—
Tax withholding on vesting of stock compensation awards	(153)	—		(12)		—		—		(12)		—		(12)
Common stock issued for acquisition	3,749	—		203		—		—		203		—		203
Deconsolidation of variable interest entity	—	—		—		—		2		2		(5)		(3)
Dividends	—	—		—		—		—		—		(3)		(3)
Balance as of September 30, 2022	118,629	$	1	$	2,569	$	277	$	(278)	$	2,569	$	30	$	2,599

See accompanying Notes to Condensed Consolidated Financial Statements.

GXO Logistics, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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 U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. 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, 2023. 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 unaudited 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, 2022 (the “2022 Form 10-K”). Certain amounts reported for prior periods have been reclassified to conform to the current period’s presentation.

The Company presents its operations as one reportable segment.

Recently Adopted Accounting Pronouncements

In 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The ASU applies only to contracts and hedging relationships that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. In 2021, the FASB expanded the scope of the guidance to include derivatives. On March 9, 2023, the Company entered into Amendment No. 1 to its revolving credit facility replacing LIBOR-based benchmark rates with SOFR-based benchmark rates and other conforming changes (the “Revolving Credit Facility”). The Company has transitioned its existing contracts to a replacement index. ASU 2020-04 and its amendments did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

2. Revenue Recognition

Revenue disaggregated by geographical area was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
United Kingdom	$	958	$	890	$	2,695	$	2,371
United States	711		709		2,117		2,075
France	207		171		626		530
Netherlands	216		175		610		508
Spain	133		117		396		360
Italy	97		81		279		243
Other	149		144		465		439
Total	$	2,471	$	2,287	$	7,188	$	6,526

The Company’s revenue can also be disaggregated by the customer’s primary industry. Revenue disaggregated by industry was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Omnichannel retail	$	1,051	$	919	$	3,041	$	2,618
Technology and consumer electronics	360		338		1,081		963
Food and beverage	362		335		1,004		1,009
Industrial and manufacturing	263		275		803		807
Consumer packaged goods	231		227		689		663
Other	204		193		570		466
Total	$	2,471	$	2,287	$	7,188	$	6,526

Contract Assets and Liabilities

Contract assets consist of two components, customer acquisition costs and costs to fulfill a contract. Contract assets are amortized to Direct operating expense in the Condensed Consolidated Statements of Operations over the contract term. Contract liabilities represent the Company’s obligation to transfer services to a customer for which the Company has received consideration or the amount is due from the customer.

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


	September 30,		December 31,
(In millions)	2023		2022
Contract assets included in:
Other current assets	$	13	$	25
Other long-term assets	161		165
Total contract assets	$	174	$	190
Contract liabilities included in:
Other current liabilities	$	183	$	154
Other long-term liabilities	114		134
Total contract liabilities	$	297	$	288

Revenue included the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Amounts included in the beginning-of-year contract liability balance	$	11	$	12	$	109	$	83

Remaining Performance Obligations

As of September 30, 2023, the fixed consideration component of the Company’s remaining performance obligation was approximately $3.4 billion, and the Company expects to recognize approximately 72% of that amount over the next three years and the remainder thereafter. The Company estimates remaining performance obligations at a point in time, and actual amounts may differ from these estimates due to changes in foreign currency exchange rates and contract revisions or terminations.

3. Leases

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

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


	September 30,		December 31,
(In millions)	2023		2022
Operating leases:
Operating lease assets	$	2,133	$	2,227

Current operating lease liabilities	$	561	$	560
Long-term operating lease liabilities	1,800		1,853
Total operating lease liabilities	$	2,361	$	2,413

Finance leases:
Property and equipment, net	$	111	$	123

Current debt	$	26	$	35
Long-term debt	91		97
Total finance lease liabilities	$	117	$	132

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Operating leases:
Operating lease cost	$	163	$	187	$	561	$	527
Short-term lease cost	78		24		170		69
Variable lease cost	36		31		93		73
Total operating lease cost (1)	$	277	$	242	$	824	$	669
Finance leases:
Amortization of leases	$	10	$	5	$	23	$	23
Interest expense on lease liabilities	1		1		3		4
Total finance lease cost	$	11	$	6	$	26	$	27
Total operating and finance lease cost	$	288	$	248	$	850	$	696

(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:


	Nine Months Ended September 30,
(In millions)	2023		2022
Leased assets obtained in exchange for new operating lease liabilities, including $207 from an acquisition in 2022	$	389	$	911
Leased assets obtained in exchange for new finance lease liabilities, including $16 from an acquisition in 2022	8		18

4. Debt and Financing Arrangements

The following table summarizes the carrying value of debt:


			September 30,		December 31,
(In millions)	Rate (1)		2023		2022
1.65% Unsecured notes due 2026 (2)	1.65	%	$	398	$	397
2.65% Unsecured notes due 2031 (3)	2.65	%	397		397
Two-Year Term Loan due 2024 (4)	—	%	—		115
Three-Year Term Loan due 2025 (5)	6.54	%	235		234
Five-Year Term Loan due 2027 (6)	6.67	%	499		499
Finance leases and other	Various		118		164
Total debt			1,647		1,806
Less: Current debt			26		67
Total Long-term debt			$	1,621	$	1,739

(1) Interest rate as of September 30, 2023.

(2) Net of unamortized debt issuance costs of $2 million as of September 30, 2023, and $3 million as of December 31, 2022.

(3) Net of unamortized debt issuance costs of $3 million as of September 30, 2023 and December 31, 2022.

(4) Repaid in the second quarter of 2023.

(5) Net of unamortized debt issuance costs of $1 million as of December 31, 2022.

(6) Net of unamortized debt issuance costs of $1 million as of September 30, 2023 and December 31, 2022.

Factoring Programs

The Company sells certain of its trade receivables on a non-recourse basis to third-party financial institutions under various factoring agreements. The Company accounts for these transactions as sales of receivables and presents cash proceeds as cash provided by operating activities in the Condensed Consolidated Statements of Cash Flows.

Information related to the trade receivables sold was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Receivables sold in period	$	288	$	259	$	820	$	716
Cash consideration	286		258		815		714
Net cash provided by operating cash flows (1)	27		18		27		16

(1) The nine months ended September 30, 2022, includes $134 million of cash provided by factoring program, reduced by $118 million of cash used in the securitization program that was terminated in the first quarter of 2022.

Covenants and Compliance

The covenants in the unsecured notes, term loans and 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. In addition, the facilities require the Company to maintain a consolidated leverage ratio below a specified maximum.

As of September 30, 2023, the Company was in compliance with the covenants contained in its debt and financing arrangements.

5. 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 September 30, 2023, and December 31, 2022, due to their short-term nature.

Debt

The fair value of debt was as follows:


		September 30, 2023				December 31, 2022
(In millions)	Level	Fair Value		Carrying Value		Fair Value		Carrying Value
1.65% Unsecured notes due 2026	2	$	353	$	398	$	342	$	397
2.65% Unsecured notes due 2031	2	303		397		294		397
Two-Year Term Loan due 2024	2	—		—		115		115
Three-Year Term Loan due 2025	2	233		235		234		234
Five-Year Term Loan due 2027	2	495		499		499		499

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 objective of these derivative instruments is to reduce fluctuations in earnings and cash flows associated with changes in foreign currency exchange rates and interest rates. These financial instruments are not used for trading or other speculative purposes. The Company does not expect to incur any losses as a result of counterparty default.

The fair value of the Company’s derivative instruments and the related notional amounts was as follows:


	September 30, 2023
(In millions)	Notional		Derivative Assets (1)		Derivative Liabilities (2)
Designated as hedges:
Cross-currency swap agreements	$	1,337	$	26	$	14
Interest rate swaps (3)	250		9		—
Not designated as hedges:
Foreign currency option contracts	$	424	$	16	$	—
Foreign currency forward contracts	58		—		—

(1) Derivative assets are included in Other current assets and Other long-term assets in the Condensed Consolidated Balance Sheets.

(2) Derivative liabilities are included in Other current liabilities and Other long-term liabilities in the Condensed Consolidated Balance Sheets.

(3) In June 2023, the Company amended one interest rate swap, with a notional amount of $125 million, scheduled to mature in 2027 to 2024.


	December 31, 2022
(In millions)	Notional		Derivative Assets (1)		Derivative Liabilities (2)
Designated as hedges:
Cross-currency swap agreements	$	1,337	$	22	$	13
Interest rate swaps	250		9		—
Not designated as hedges:
Foreign currency option contracts	$	354	$	—	$	5
Foreign currency forward contracts	3		—		—

(1) Derivative assets are included in Other current assets and Other long-term assets in the Condensed Consolidated Balance Sheets.

(2) Derivative liabilities are included in Other current liabilities and Other long-term liabilities in the Condensed Consolidated Balance Sheets.

As of September 30, 2023 and December 31, 2022, the derivatives were classified as Level 2 within the fair value hierarchy.

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


	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
(In millions)	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative		Gain (Loss) Reclassified from AOCIL into Net Income (1)		Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) (1)		Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative		Gain (Loss) Reclassified from AOCIL into Net Income (1)		Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) (1)
Derivatives designated as net investment hedges:
Cross-currency swap agreements	$	36	$	(3)	$	1	$	2	$	(3)	$	2
Derivatives designated as cash flow hedges:
Interest rate swaps	$	1	$	—	$	—	$	2	$	—	$	—

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


	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
(In millions)	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative		Gain (Loss) Reclassified from AOCIL into Net Income (1)		Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) (1)		Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative		Gain (Loss) Reclassified from AOCIL into Net Income (1)		Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) (1)
Derivatives designated as net investment hedges:
Cross-currency swap agreements	$	90	$	—	$	1	$	136	$	2	$	3
Derivatives designated as cash flow hedges:
Interest rate swaps	$	12	$	—	$	—	$	11	$	—	$	—

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


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

(In millions)	2023		2022		2023		2022
Realized foreign currency contracts gain (loss)	$	(3)	$	10	$	(9)	$	19
Unrealized foreign currency contracts gain (loss)	8		(1)		12		14
Total foreign currency gain recognized in net income	$	5	$	9	$	3	$	33

6. Stockholders’ Equity

The following tables summarize the changes in AOCIL by component:


(In millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Defined Benefit Plan		Less: AOCIL attributable to noncontrolling interest		AOCIL attributable to GXO
As of June 30, 2023	$	(119)	$	8	$	(111)	$	(1)	$	(223)
Foreign currency translation loss	(98)		—		—		2		(96)
Unrealized gain on hedges, net of tax	27		—		—		—		27
Amounts reclassified from AOCIL to net income	2		—		1		—		3
Other comprehensive income (loss), net of tax	(69)		—		1		2		(66)
As of September 30, 2023	$	(188)	$	8	$	(110)	$	1	$	(289)


(In millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Defined Benefit Plan		Less: AOCIL attributable to noncontrolling interest		AOCIL attributable to GXO
As of December 31, 2022	$	(149)	$	7	$	(112)	$	—	$	(254)
Foreign currency translation loss	(41)		—		—		1		(40)
Unrealized gain on hedges, net of tax	1		1		—		—		2
Amounts reclassified from AOCIL to net income	1		—		2		—		3
Other comprehensive income (loss), net of tax	(39)		1		2		1		(35)

As of September 30, 2023	$	(188)	$	8	$	(110)	$	1	$	(289)


(In millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Defined Benefit Plan		Less: AOCIL attributable to noncontrolling interest		AOCIL attributable to GXO
As of June 30, 2022	$	(169)	$	—	$	(76)	$	(1)	$	(246)
Foreign currency translation loss	(111)		—		—		2		(109)
Unrealized gain on hedges, net of tax	69		9		—		—		78
Amounts reclassified from AOCIL to net income	(1)		—		—		—		(1)
Other comprehensive income (loss), net of tax	(43)		9		—		2		(32)
As of September 30, 2022	$	(212)	$	9	$	(76)	$	1	$	(278)


(In millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Defined Benefit Plan		Less: AOCIL attributable to noncontrolling interest		AOCIL attributable to GXO
As of December 31, 2021	$	(53)	$	—	$	(76)	$	(1)	$	(130)
Foreign currency translation loss	(260)		—		—		4		(256)
Unrealized gain on hedges, net of tax	102		9		—		—		111
Amounts reclassified from AOCIL to net income	(5)		—		—		—		(5)
Other comprehensive income (loss), net of tax	(163)		9		—		4		(150)
Deconsolidation of variable interest entity	4		—		—		(2)		2
As of September 30, 2022	$	(212)	$	9	$	(76)	$	1	$	(278)

7. Employee Benefit Plans

Defined Benefit Plans

The Company sponsors a retirement plan in the U.K. (the “U.K. Retirement Plan”). Components of the net periodic benefit cost recognized under the U.K. Retirement Plan were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Interest cost	$	(11)	$	(5)	$	(30)	$	(16)
Expected return on plan assets	14		12		38		41
Amortization of net loss	(1)		—		(2)		—
Net periodic pension income (1)	$	2	$	7	$	6	$	25

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

The Company also maintains defined benefit pension plans for some of its foreign subsidiaries that are excluded from the disclosure due to their immateriality.

Defined Contribution Plans

The Company has defined contribution retirement plans for its U.S. employees and employees of certain foreign subsidiaries. The Company’s contributions for the three months ended September 30, 2023 and 2022, were $15 million and $12 million, respectively, and for the nine months ended September 30, 2023 and 2022 were $47 million and $40 million, respectively. Defined contribution costs were primarily recorded in Direct operating expense in the Condensed Consolidated Statements of Operations.

8. Restructuring Costs and Other

For the three months ended September 30, 2023, Restructuring costs and other totaled $7 million including $6 million related to severance charges, primarily from the exit of non-core businesses in Asia. For the nine months ended September 30, 2023, Restructuring costs and other totaled $31 million, including $24 million related to severance charges and $7 million related to non-cash impairment charges.

The following is a roll forward of the restructuring liability, which is included in Other current liabilities in the Condensed Consolidated Balance Sheets:


(In millions)
Balance as of December 31, 2022	$	13
Charges incurred	24
Payments	(26)
Balance as of September 30, 2023	$	11

The remaining restructuring liability at September 30, 2023 primarily relates to severance payments and is expected to be substantially paid within the next 12 months.

9. Income Taxes

The effective tax rate was 17.9% for the three months ended September 30, 2023, compared with 22.5% for the same period in 2022. The effective tax rate was 19.1% for the nine months ended September 30, 2023, compared with 24.7% for the same period in 2022. The decrease in our effective tax rate for the three months was primarily driven by a tax benefit related to return-to-provision true-up adjustments. The decrease in our effective tax rate for the nine months was primarily driven by a tax benefit related to valuation allowance release.

As of September 30, 2023 and December 31, 2022, the Company had valuation allowances of $36 million and $44 million on its deferred income tax asset, respectively.

10. Goodwill

The following table presents the changes in Goodwill for the nine months ended September 30, 2023:


(In millions)
Balance as of December 31, 2022	$	2,728
Acquisition (1)	44
Impact of foreign exchange translation (2)	(38)
Balance as of September 30, 2023	$	2,734

(1) Represents the finalization of the purchase price allocation for the Clipper acquisition. See Note 11 — Acquisition for additional information.

(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 September 30, 2023, and December 31, 2022, there were no accumulated goodwill impairment losses.

11. Acquisition

On May 24, 2022, the Company completed the acquisition of Clipper Logistics plc (“Clipper”), an omnichannel retail logistics specialist based in Leeds, England (the “Clipper Acquisition”). The Company acquired Clipper for $1,106 million, consisting of $902 million in cash and the issuance of 3,757,657 shares of GXO common stock with a value of $204 million.

The Company accounted for the Clipper Acquisition as a business combination using the acquisition method of accounting. The fair value of assets acquired and liabilities assumed was based on management’s estimate of the fair value using valuation techniques including income, cost and market approaches.

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


(In millions)
ASSETS
Current assets
Cash and cash equivalents	$	26
Accounts receivable	143
Other current assets	67
Total current assets	236
Long-term assets
Property and equipment	80
Operating lease assets	219
Intangible assets (1)	392
Other long-term assets	29
Total long-term assets	720
Total assets	$	956
LIABILITIES
Current liabilities
Accounts payable	$	81
Accrued expenses	96
Current debt	55
Current operating lease liabilities	43
Other current liabilities	56
Total current liabilities	331
Long-term liabilities
Long-term debt	10
Long-term operating lease liabilities	176
Other long-term liabilities	173
Total long-term liabilities	359
Total liabilities	$	690
Net assets purchased	$	266
Cash paid	$	902
Common stock issued (2)	204
Purchase price paid	$	1,106
Goodwill recorded (3)	$	840

(1) The Company acquired $392 million of intangible assets, comprised of customer relationships and trade names, with weighted-average useful lives of 15 years.

(2) Represents the fair value of the Company’s common stock issued.

(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 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 Clipper Acquisition to be deductible for income tax purposes.

12. Commitments and Contingencies

The Company is involved, and will continue to be involved, in numerous legal proceedings arising out of 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.

13. Subsequent Events

Financial Instruments - Net Investment Hedges

In October 2023, the Company terminated a hedge with a notional amount of $115 million. Also, the Company amended a $235 million hedge to extend its maturity from 2024 to 2025. Additionally, the Company entered into various hedges for an aggregate notional amount of $313 million that will mature from 2025 to 2028.

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”), and on October 23, 2023, the Company completed its acquisition of PFS. PFS provides e-commerce order fulfillment services. The Company acquired the shares of PFSweb at a price per share of $7.50 in cash, totaling approximately $181 million.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q and other written reports and oral statements we make from time to time contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target,” “trajectory” or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to a material difference include those discussed below and the risks discussed in the Company’s other filings with the Securities and Exchange Commission (the “SEC”). All forward-looking statements set forth in this Quarterly Report on Form 10-Q are qualified by these cautionary statements, and there can be no assurance that the results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the SEC on February 16, 2023 (the “2022 Form 10-K”), and the unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Business Overview

GXO Logistics, Inc., together with its subsidiaries, (“GXO,” the “Company” or “we”) is the largest pure-play contract logistics provider in the world and a foremost innovator in the industry. We provide our customers with high-value-add warehousing and distribution, order fulfillment, e-commerce, reverse logistics and other supply chain services differentiated by our ability to deliver technology-enabled, customized solutions at scale. Our customers rely on us to move their goods with high efficiency through their supply chains — from the moment inbound goods arrive at our warehouses, through fulfillment and distribution and the management of returned products. Our customer base includes many blue-chip leaders in sectors that demonstrate high growth and/or durable demand, with significant growth potential through customer outsourcing of logistics and warehousing services.

We strive to provide all customers with consistent quality service and cutting-edge automation. We also collaborate with our largest customers on planning and forecasting and assist with network optimization, working with these customers to design or redesign their supply chains to meet specific goals, such as environmental, social and governance. Our multidisciplinary, consultative approach has led to many of our key customer relationships extending for years and expanding in scope.

The most dramatic growth in secular demand in recent years has been in e-commerce and related sectors, including omnichannel retail and other direct-to-consumer channels. We expect to attract new customers and expand the services we provide to existing customers through new projects, thus earning more of their external and internal logistics spending. We use technology to manage advanced automation, labor productivity, sustainability, safety and the complex flow of goods within sophisticated warehouse environments.

Our business model is asset-light and historically resilient in cycles, with high returns, strong free cash flow and visibility into revenue and earnings. The vast majority of our contracts with customers are long-term in nature, and our warehouse lease arrangements generally align with contract length. The Company has both fixed-price contracts (closed book or hybrid contracts) and cost-plus contracts (open book contracts). Most of our customer contracts contain both fixed and variable components. The fixed component is typically designed to cover warehouse, technology and equipment costs, while the variable component is determined based on expected volumes and associated labor costs. Under fixed-price contracts, the Company agrees to perform the specified work for a pre-determined price. To the extent the Company’s actual costs vary from the estimates upon which the price was negotiated, the Company will generate more or less profit. Cost-plus contracts provide for the payment of allowable costs incurred during the performance of the contract plus a specified margin.

On May 24, 2022, the Company completed the acquisition of Clipper Logistics plc (“Clipper”), an omnichannel retail logistics specialist based in Leeds, England (the “Clipper Acquisition”). Due to the Clipper Acquisition, comparisons in our results of operations between 2023 and 2022 are less meaningful.

Results of Operations

Three Months Ended September 30, 2023 Compared with the Three Months Ended September 30, 2022


	Three Months Ended September 30,
(In millions)	2023		2022		$ Change		% Change
Revenue	$	2,471	$	2,287	$	184	8	%
Direct operating expense	2,012		1,885		127		7	%
Selling, general and administrative expense	258		227		31		14	%
Depreciation and amortization expense	101		89		12		13	%
Transaction and integration costs	3		14		(11)		(79)	%
Restructuring costs and other	7		—		7		n/m
Operating income	90		72		18		25	%
Other income, net	7		17		(10)		(59)	%
Interest expense, net	(14)		(6)		(8)		n/m
Income before income taxes	83		83		—		—	%
Income tax expense	(15)		(19)		4		(21)	%
Net income	$	68	$	64	$	4	6	%

n/m - not meaningful

Revenue for the three months ended September 30, 2023, increased by 8%, or $184 million, to $2.5 billion compared with $2.3 billion for the same period in 2022. The increase in 2023 compared to the prior period primarily reflects growth in our Continental Europe and United Kingdom and Ireland operations. Foreign currency movement increased revenue by $126 million for the three months ended September 30, 2023 compared with the prior period.

Direct operating expense is comprised of both fixed and variable expenses and consist of operating costs related to our warehouses, including personnel costs, rent expenses, utility costs, equipment maintenance and repair costs, transportation costs, costs of materials and supplies and information technology expenses. Direct operating expense for the three months ended September 30, 2023, increased by 7%, or $127 million, to $2.0 billion compared with $1.9 billion for the same period in 2022. Direct operating expense increased primarily due to higher personnel and temporary labor expenses and higher facilities and equipment expense. As a percentage of revenue, direct operating expense for the three months ended September 30, 2023, was 81.4% compared with 82.4% for the same period in 2022.

increased by 14%, or $31 million, to $258 million compared with $227 million for the same period in 2022. SG&A increased due to higher personnel costs, primarily for certain administrative functions, and higher bad debt expense.

Depreciation and amortization expense for the three months ended September 30, 2023 increased by $12 million to $101 million compared with $89 million for the same period in 2022. Amortization expense was $18 million and $21 million for the three months ended September 30, 2023 and 2022, respectively. The increase in depreciation and amortization expense was primarily related to increased depreciation expense due to the impact of prior capital investments associated with new contracts.

Transaction and integration costs for the three months ended September 30, 2023 were $3 million and primarily related to the acquisition of PFSweb, Inc. Transaction and integration costs for the three months ended September 30, 2022 were $14 million and primarily related to the Clipper Acquisition.

Restructuring costs and other are primarily related to severance, including projects to optimize finance, human resources and information technology functions, and are not associated with customer attrition. Restructuring costs and other for the three months ended September 30, 2023 was $7 million and primarily related to the exit of non-core businesses in Asia.

Other income, net decreased due to foreign currency movements and lower pension income. Other income, net was as follows:


	Three Months Ended September 30,
(In millions)	2023		2022		$ Change		% Change
Net periodic pension income	$	2	$	7	$	(5)	(71)	%
Foreign currency:
Realized foreign currency contracts gain (loss)	(3)		10		(13)		n/m
Unrealized foreign currency contracts gain (loss)	8		(1)		9		n/m
Foreign currency remeasurement gain	—		1		(1)		(100)	%
Total foreign currency gain	5		10		(5)		(50)	%

Other income, net	$	7	$	17	$	(10)	(59)	%

n/m - not meaningful

Interest expense, net increased primarily due to higher variable interest rates on our debt compared with the prior period. Interest expense, net was as follows:


	Three Months Ended September 30,
(In millions)	2023		2022		$ Change		% Change
Debt and capital leases	$	25	$	16	$	9	56	%
Cross-currency swaps	(9)		(9)		—		—	%
Interest income	(2)		(1)		(1)		100	%
Interest expense, net	$	14	$	6	$	8	n/m

n/m - not meaningful

Income before income taxes for both the three months ended September 30, 2023 and 2022 was $83 million.

Income tax expense for the three months ended September 30, 2023 was $15 million compared with $19 million for the same period in 2022. Our effective tax rate was 17.9% for the three months ended September 30, 2023, compared with 22.5% for the same period in 2022. The change in our effective tax rate was primarily driven by a tax benefit related to return-to-provision true-up adjustments.

Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022


	Nine months ended September 30,
(In millions)	2023		2022		$ Change		% Change
Revenue	$	7,188	$	6,526	$	662	10	%
Direct operating expense	5,875		5,408		467		9	%
Selling, general and administrative expense	761		637		124		19	%
Depreciation and amortization expense	268		242		26		11	%
Transaction and integration costs	22		57		(35)		(61)	%
Restructuring costs and other	31		14		17		n/m
Operating income	231		168		63		38	%
Other income, net	8		56		(48)		(86)	%
Interest expense, net	(41)		(19)		(22)		n/m
Income before income taxes	198		205		(7)		(3)	%
Income tax expense	(38)		(51)		13		(25)	%
Net income	$	160	$	154	$	6	4	%

n/m - not meaningful

Revenue for the nine months ended September 30, 2023 increased by 10%, or $662 million, to $7.2 billion compared with $6.5 billion for the same period in 2022. The increase primarily reflects an increase of $378 million from the Clipper Acquisition for the periods that were not comparable and growth in our Continental Europe operations. Foreign currency movement increased revenue by $43 million for the nine months ended September 30, 2023 compared with the prior period.

Direct operating expense is comprised of both fixed and variable expenses and consist of operating costs related to our warehouses, including personnel costs, rent expenses, utility costs, equipment maintenance and repair costs, transportation costs, costs of materials and supplies and information technology expenses. Direct operating expense for the nine months ended September 30, 2023 increased by 9%, or $467 million, to $5.9 billion compared with $5.4 billion for the same period in 2022. Direct operating expense increased primarily due to the Clipper Acquisition, as well as higher personnel and temporary labor expenses and higher facilities and equipment expense. As a percentage of revenue, direct operating expense for the nine months ended September 30, 2023, was 81.7% compared with 82.9% for the same period in 2022.

Selling, general and administrative expense (“SG&A”) primarily consists of salary and benefits for executive and administrative functions, professional fees and legal costs. SG&A for the nine months ended September 30, 2023, increased by 19%, or $124 million, to $761 million compared with $637 million for the same period in 2022. SG&A increased primarily due to the Clipper Acquisition and higher personnel costs, primarily for certain administrative functions, and higher bad debt expense.

Depreciation and amortization expense for the nine months ended September 30, 2023 increased by $26 million to $268 million compared with $242 million for the same period in 2022. Amortization expense was $54 million and $48 million for the nine months ended September 30, 2023 and 2022, respectively. Depreciation and amortization expense increased primarily due to the Clipper Acquisition.

Transaction and integration costs for the nine months ended September 30, 2023 were $22 million compared with $57 million for the same period in 2022. Transaction and integration costs for the nine months ended September 30, 2023 and 2022, primarily related to the Clipper Acquisition.

Restructuring costs and other are primarily related to severance, including projects to optimize finance, human resources and information technology functions, and are not associated with customer attrition. Restructuring costs and other for the nine months ended September 30, 2023 was $31 million and included severance charges of

$24 million and impairment charges of $7 million due to closing certain corporate and administrative offices and the exit of non-core businesses in Asia. For the nine months ended September 30, 2022, Restructuring costs and other was $14 million and included severance charges of $6 million and $8 million related to the deconsolidation of a joint venture.

Other income, net decreased due to foreign currency movements and lower pension income. Other income, net was as follows:


	Nine Months Ended September 30,
(In millions)	2023		2022		$ Change		% Change
Net periodic pension income	$	6	$	25	$	(19)	(76)	%
Foreign currency:
Realized foreign currency contracts gain (loss)	(9)		19		(28)		n/m
Unrealized foreign currency contracts gain	12		14		(2)		(14)	%
Foreign currency remeasurement loss	(1)		(2)		1		(50)	%
Total foreign currency gain	2		31		(29)		(94)	%

Other income, net	$	8	$	56	$	(48)	(86)	%

n/m - not meaningful

Interest expense, net increased primarily due to debt incurred for the Clipper Acquisition and higher variable interest rates on our debt compared with the prior period, partially offset by higher gains on cross-currency swaps in the current period. Interest expense, net was as follows:


	Nine Months Ended September 30,
(In millions)	2023		2022		$ Change		% Change
Debt and capital leases	$	72	$	37	$	35	95	%
Cross-currency swaps	(25)		(16)		(9)		56	%
Interest income	(6)		(2)		(4)		n/m
Interest expense, net	$	41	$	19	$	22	n/m

n/m - not meaningful

Income before income taxes for the nine months ended September 30, 2023, decreased to $198 million compared with $205 million for the same period in 2022. The decrease was due to lower Other income, net and higher interest expense, partially offset by higher operating income.

Income tax expense for the nine months ended September 30, 2023 was $38 million compared with $51 million for the same period in 2022. Our effective tax rate was 19.1% for the nine months ended September 30, 2023, compared with 24.7% for the same period in 2022. The change in our effective tax rate was primarily driven by a tax benefit related to a valuation allowance release.

Liquidity and Capital Resources

Our ability to fund our operations and anticipated capital needs is reliant upon the generation of cash from operations, supplemented as necessary by periodic utilization of our revolving credit facilities. Our principal uses of cash in the future will be to fund our operations, working capital needs, capital expenditures, repayment of borrowings and strategic business development transactions. The timing and magnitude of our start-ups can vary and may positively or negatively impact our cash flows.

As of September 30, 2023, we held cash and cash equivalents of $473 million and we had $799 million of borrowing capacity available, net of letters of credit under our Revolving Credit Facility.

We continually evaluate our liquidity requirements and capital structure in consideration of our operating needs, growth initiatives and capital resources. We believe that our existing liquidity and sources of capital are sufficient to support our operations over the next 12 months.

Factoring Programs

We sell certain of our trade receivables on a non-recourse basis to third-party financial institutions under various factoring agreements. We account for these transactions as sales of receivables and present cash proceeds as cash provided by operating activities in the Condensed Consolidated Statements of Cash Flows.

Information related to the trade receivables sold was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Receivables sold in period	$	288	$	259	$	820	$	716
Cash consideration	286		258		815		714
Net cash provided by operating cash flows (1)	27		18		27		16

Covenants and Compliance

The covenants in the unsecured notes, term loans and revolving credit facilities, which are customary for financings of this type, limit our ability to incur indebtedness and grant liens, among other restrictions. In addition, the facilities require us to maintain a consolidated leverage ratio below a specified maximum.

As of September 30, 2023, we were in compliance with the covenants contained in our debt and financing arrangements.

Financial Condition

The following table summarizes our asset and liability balances:


(In millions)	September 30, 2023		December 31, 2022		$ Change		% Change
Current assets	$	2,466	$	2,428	$	38	2	%
Long-term assets	6,625		6,791		(166)		(2)	%
Total Assets	$	9,091	$	9,219	$	(128)	(1)	%
Current liabilities	$	2,434	$	2,532	$	(98)	(4)	%
Long-term liabilities	3,840		4,009		(169)		(4)	%
Total Liabilities	$	6,274	$	6,541	$	(267)	(4)	%

The decrease in total assets from December 31, 2022 to September 30, 2023 reflects a decrease in long-term assets primarily due to depreciation and amortization of property and equipment, operating leases and intangible assets.

The decrease in total liabilities from December 31, 2022 to September 30, 2023 primarily reflects the decrease in accounts payable due to the timing of payments and the early repayment of our $115 million two-year term loan.

Cash Flow Activity

Our cash flows from operating, investing and financing activities, as reflected on our Condensed Consolidated Statements of Cash Flows, are summarized as follows:


	Nine Months Ended September 30,
(In millions)	2023		2022		$ Change		% Change
Net cash provided by operating activities	$	343	$	316	$	27	9	%
Net cash used in investing activities	(192)		(1,056)		864		(82)	%
Net cash provided by (used in) financing activities	(170)		863		(1,033)		n/m
Effect of exchange rates on cash, restricted cash and cash equivalents	(2)		(22)		20		(91)	%
Net (decrease) increase in cash, restricted cash and cash equivalents	$	(21)	$	101	$	(122)	(121)	%

Operating Activities

Cash flows provided by operating activities for the nine months ended September 30, 2023 increased by $27 million compared with the same period in 2022 due to increase in cash generated from net income adjusted for non-cash charges.

Investing Activities

Investing activities used $192 million of cash for the nine months ended September 30, 2023, compared with $1.1 billion used for the same period of 2022. During the nine months ended September 30, 2023, we used $205 million of cash to purchase property and equipment and received $13 million of cash from sales of property and equipment. During the nine months ended September 30, 2022, we used $874 million, net of cash received, to fund the Clipper Acquisition, used $239 million of cash to purchase property and equipment, received $26 million in proceeds from cross-currency swap agreements, excluding accrued interest, and received $22 million of cash from sales of property and equipment.

Financing Activities

Financing activities used $170 million of cash for the nine months ended September 30, 2023, including $139 million used to repay debt, $24 million to repay finance lease obligations and $7 million in payments for employee taxes on stock-based compensation awards. Financing activities generated $863 million of cash for the nine months ended September 30, 2022, including $898 million in proceeds from long-term debt, partially offset by $23 million to repay finance lease obligations and $12 million in payments for employee taxes on stock-based compensation awards.

Off-Balance Sheet Arrangements

We do not engage in any off-balance sheet financial arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Contractual Obligations

As of September 30, 2023, the Company’s contractual obligations had not materially changed compared with December 31, 2022.

Critical Accounting Policies and Estimates

There have been no material changes to the critical accounting policies and estimates as previously disclosed in “Critical Accounting Policies” in Part II, Item 7 of our Form 10-K for the year ended December 31, 2022.

Accounting Pronouncements

Information related to new accounting standards is included in Note 1 — Basis of Presentation and Significant Accounting Policies in Part I, Item 1 of this Quarterly Report on Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk that may impact our Condensed Consolidated Financial Statements due primarily to variable rate long-term debt obligations and fluctuations in certain foreign currencies. To reduce our exposure to market risk associated with interest and foreign currency exchange rate risks, we enter into various derivative instruments. There have been no material changes to our exposure to market risk for the nine months ended September 30, 2023, from those previously disclosed in “Quantitative and Qualitative Disclosures About Market Risk” contained in Part II, Item 7A of our Form 10-K for the year ended December 31, 2022.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of September 30, 2023. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures as of September 30, 2023 were effective as of such time such that the information required to be included in our Securities and Exchange Commission (“SEC”) reports is: (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to the Company, including our consolidated subsidiaries and (ii) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

Other than the design and implementation of internal controls related to the acquisition of Clipper Logistics plc, there have not been any changes in our internal control over financial reporting during the quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note 12 — Commitments and Contingencies in Part I, Item 1 of this Quarterly Report on Form 10-Q for a description of our legal proceedings.

ITEM 1A. RISK FACTORS

There are no material changes to the risk factors as previously disclosed in “Risk Factors” contained in Part I, Item 1A of our Form 10-K for the year ended December 31, 2022.

ITEM 5. OTHER INFORMATION

Compensatory Arrangements of the Former Chief Human Resources Officer

As previously disclosed, Maryclaire Hammond ceased service as the Chief Human Resources Officer of the Company on November 3, 2023, and will separate from employment with the Company on December 31, 2023. In exchange for certain separation benefits, on November 7, 2023 Ms. Hammond entered into a settlement agreement with GXO Logistics UK Limited releasing legal claims and reaffirming her obligations under her Service Agreement with GXO Logistics UK Limited, dated May 14, 2021. Pursuant to the settlement agreement, Ms. Hammond will receive (1) 12 months of pay in lieu of notice, consisting of base salary, employer pension contributions and car allowance, as well as 12 months of continued health benefits, (2) an annual incentive bonus for 2023, calculated at the higher of actual performance or target, and an ex gratia payment equal to £278,175, payable in April 2025, (3) vesting of a portion of her unvested equity compensation awards, and (4) certain ancillary benefits, including reimbursement of legal fees in connection with the settlement agreement, outplacement services for up to 12 months, and global tax support for a transition period. This description is qualified in its entirety by reference to the full text of the settlement agreement, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.

ITEM 6. EXHIBITS


Exhibit Number						Description
10.1						Settlement Agreement, dated as of November 7, 2023, by and between GXO Logistics UK Limited and Maryclaire Hammond.
31.1*						Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023.
31.2*						Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023.
32.1**						Certification of the Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023.
32.2**						Certification of the Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023.
101.INS*						Inline XBRL Instance Document.
101.SCH*						Inline XBRL Taxonomy Extension Schema.
101.CAL*						Inline XBRL Taxonomy Extension Calculation Linkbase.
101.DEF*						Inline XBRL Taxonomy Extension Definition Linkbase.
101.LAB*						Inline XBRL Taxonomy Extension Label Linkbase.
101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase.
104*						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
*						Filed herewith.
**						Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		GXO Logistics, Inc.

Date: November 8, 2023	By:	/s/ Malcolm Wilson
		Malcolm Wilson
		(Chief Executive Officer)
		(Principal Executive Officer)

Date: November 8, 2023	By:	/s/ Baris Oran
		Baris Oran
		(Chief Financial Officer)
		(Principal Financial Officer)

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Exhibit 31.1

CERTIFICATION

I, Malcolm Wilson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 of GXO Logistics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


			/s/ Malcolm Wilson
			Malcolm Wilson
			Chief Executive Officer
			(Principal Executive Officer)
Date: November 8, 2023

Exhibit 31.2

CERTIFICATION

I, Baris Oran, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 of GXO Logistics, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


			/s/ Baris Oran
			Baris Oran
			Chief Financial Officer
			(Principal Financial Officer)
Date: November 8, 2023

Exhibit 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

Pursuant to 18 U.S.C. Section 1350

As adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Solely for the purposes of complying with 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, the undersigned Chief Executive Officer of GXO Logistics, Inc. (the “Company”), hereby certify, based on my knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


			/s/ Malcolm Wilson
			Malcolm Wilson
			Chief Executive Officer
			(Principal Executive Officer)
Date: November 8, 2023

Exhibit 32.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

Pursuant to 18 U.S.C. Section 1350

As adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Solely for the purposes of complying with 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, the undersigned Chief Financial Officer of GXO Logistics, Inc. (the “Company”), hereby certify, based on my knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


			/s/ Baris Oran
			Baris Oran
			Chief Financial Officer
			(Principal Financial Officer)
Date: November 8, 2023

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2023	Nov. 06, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-40470
Entity Registrant Name	GXO Logistics, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	86-2098312
Entity Address, Address Line One	Two American Lane
Entity Address, City or Town	Greenwich
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06831
City Area Code	203
Local Phone Number	489-1287
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	GXO
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		118,954,910
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001852244
Current Fiscal Year End Date	--12-31

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Revenue	$ 2,471	$ 2,287	$ 7,188	$ 6,526
Direct operating expense	2,012	1,885	5,875	5,408
Selling, general and administrative expense	258	227	761	637
Depreciation and amortization expense	101	89	268	242
Transaction and integration costs	3	14	22	57
Restructuring costs and other	7	0	31	14
Operating income	90	72	231	168
Other income, net	7	17	8	56
Interest expense, net	(14)	(6)	(41)	(19)
Income before income taxes	83	83	198	205
Income tax expense	(15)	(19)	(38)	(51)
Net income	68	64	160	154
Net income attributable to noncontrolling interests	(2)	(1)	(4)	(3)
Net income attributable to GXO	$ 66	$ 63	$ 156	$ 151
Earnings per share
Basic (in dollars per share)	$ 0.55	$ 0.53	$ 1.31	$ 1.30
Diluted (in dollars per share)	$ 0.55	$ 0.53	$ 1.31	$ 1.29
Weighted-average common shares outstanding
Basic (in shares)	118,941	118,621	118,883	116,508
Diluted (in shares)	119,645	119,065	119,430	117,107

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 68	$ 64	$ 160	$ 154
Other comprehensive income (loss), net of tax
Foreign currency translation loss, net of tax expense of $(9), $(22), $0 and $(32)	(69)	(43)	(39)	(163)
Net unrealized gain on cash flow hedges, net of tax expense of $(1), $(2), $(1) and $(2)	0	9	1	9
Defined benefit plans, amortization of net loss, net of tax of $0, $0, $0 and $0	1	0	2	0
Other comprehensive loss, net of tax	(68)	(34)	(36)	(154)
Comprehensive income	0	30	124	0
Less: Comprehensive income (loss) attributable to noncontrolling interest	0	(1)	3	(1)
Comprehensive income attributable to GXO	$ 0	$ 31	$ 121	$ 1

Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Foreign currency translation gain (loss), tax	$ (9)	$ (22)	$ 0	$ (32)
Unrealized gain (loss) on financial assets/liabilities designated as hedging instruments, tax	(1)	(2)	(1)	(2)
Defined benefit plans, amortization of net loss, tax	$ 0	$ 0	$ 0	$ 0

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 473	$ 495
Accounts receivable, net of allowance of $18 and $12	1,661	1,647
Other current assets	332	286
Total current assets	2,466	2,428
Long-term assets
Property and equipment, net of accumulated depreciation of $1,463 and $1,297	923	960
Operating lease assets	2,133	2,227
Goodwill	2,734	2,728
Intangible assets, net of accumulated amortization of $507 and $456	507	570
Other long-term assets	328	306
Total long-term assets	6,625	6,791
Total assets	9,091	9,219
Current liabilities
Accounts payable	597	717
Accrued expenses	975	995
Current debt	26	67
Current operating lease liabilities	561	560
Other current liabilities	275	193
Total current liabilities	2,434	2,532
Long-term liabilities
Long-term debt	1,621	1,739
Long-term operating lease liabilities	1,800	1,853
Other long-term liabilities	419	417
Total long-term liabilities	3,840	4,009
Commitments and contingencies (Note 12)
Stockholders’ Equity
Common Stock, $0.01 par value per share; 300,000 shares authorized, 118,951 and 118,728 issued and outstanding	1	1
Preferred Stock, $0.01 par value per share; 10,000 shares authorized, none issued and outstanding	0	0
Additional paid-in capital	2,593	2,575
Retained earnings	479	323
Accumulated Other Comprehensive Income (Loss) (“AOCIL”)	(289)	(254)
Total stockholders’ equity before noncontrolling interests	2,784	2,645
Noncontrolling interests	33	33
Total equity	2,817	2,678
Total liabilities and equity	$ 9,091	$ 9,219

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Accounts receivable, allowance for credit loss	$ 18	$ 12
Property and equipment, accumulated depreciation	1,463	1,297
Identifiable intangible assets, accumulated amortization	$ 507	$ 456
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	300,000	300,000
Common stock, shares issued (in shares)	118,951	118,728
Common stock, shares outstanding (in shares)	118,951	118,728
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	10,000	10,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net income	$ 160	$ 154
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization expense	268	242
Stock-based compensation expense	25	24
Deferred tax expense (benefit)	(29)	0
Other	16	(4)
Changes in operating assets and liabilities
Accounts receivable	(23)	(22)
Other assets	(39)	(28)
Accounts payable	(69)	(68)
Accrued expenses and other liabilities	34	18
Net cash provided by operating activities	343	316
Cash flows from investing activities:
Capital expenditures	(205)	(239)
Proceeds from sales of property and equipment	13	22
Acquisition of businesses, net of cash acquired	0	(874)
Net proceeds from cross-currency swap agreements	0	26
Other	0	9
Net cash used in investing activities	(192)	(1,056)
Cash flows from financing activities:
Proceeds from issuance of debt, net	0	898
Repayments of debt, net	(139)	0
Repayments of finance lease obligations	(24)	(23)
Taxes paid related to stock-based compensation awards	(7)	(12)
Net cash provided by (used in) financing activities	(170)	863
Effect of exchange rates on cash, restricted cash and cash equivalents	(2)	(22)
Net (decrease) increase in cash, restricted cash and cash equivalents	(21)	101
Cash, restricted cash and cash equivalents, beginning of period	495	333
Cash, restricted cash and cash equivalents, end of period	474	434
Supplemental Cash Flow Information [Abstract]
Cash and cash equivalents	473	434
Restricted Cash (included in Other long-term assets)	1	0
Total cash, restricted cash and cash equivalents	474	434
Non-cash investing activities:
Common stock issued for acquisition	$ 0	$ 203

Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) shares in Thousands, $ in Millions	Total	Equity Before Noncontrolling Interests	Common Stock	Additional Paid-In Capital	Retained Earnings	AOCIL	Noncontrolling Interests
Beginning balance (in shares) at Dec. 31, 2021			114,659
Beginning balance at Dec. 31, 2021	$ 2,390	$ 2,351	$ 1	$ 2,354	$ 126	$ (130)	$ 39
Increase (Decrease) in Stockholders' Equity
Net income	154	151			151		3
Other comprehensive loss	(154)	(150)				(150)	(4)
Stock-based compensation	24	24		24
Vesting of stock-based compensation awards (in shares)			374
Tax withholding on vesting of stock compensation awards (in shares)			(153)
Tax withholding on vesting of stock-based compensation awards	(12)	(12)		(12)
Dividends	(3)						(3)
Common stock issued for acquisition (in shares)			3,749
Common stock issued for acquisition	203	203		203
Deconsolidation of variable interest entity	(3)	2				2	(5)
Ending balance (in shares) at Sep. 30, 2022			118,629
Ending balance at Sep. 30, 2022	2,599	2,569	$ 1	2,569	277	(278)	30
Beginning balance (in shares) at Jun. 30, 2022			118,610
Beginning balance at Jun. 30, 2022	2,561	2,530	$ 1	2,561	214	(246)	31
Increase (Decrease) in Stockholders' Equity
Net income	64	63			63		1
Other comprehensive loss	(34)	(32)				(32)	(2)
Stock-based compensation	8	8		8
Vesting of stock-based compensation awards (in shares)			33
Tax withholding on vesting of stock compensation awards (in shares)			(14)
Ending balance (in shares) at Sep. 30, 2022			118,629
Ending balance at Sep. 30, 2022	$ 2,599	2,569	$ 1	2,569	277	(278)	30
Beginning balance (in shares) at Dec. 31, 2022	118,728		118,728
Beginning balance at Dec. 31, 2022	$ 2,678	2,645	$ 1	2,575	323	(254)	33
Increase (Decrease) in Stockholders' Equity
Net income	160	156			156		4
Other comprehensive loss	(36)	(35)				(35)	(1)
Stock-based compensation	25	25		25
Vesting of stock-based compensation awards (in shares)			366
Tax withholding on vesting of stock compensation awards (in shares)			(143)
Tax withholding on vesting of stock-based compensation awards	(7)	(7)		(7)
Dividends	$ (3)						(3)
Ending balance (in shares) at Sep. 30, 2023	118,951		118,951
Ending balance at Sep. 30, 2023	$ 2,817	2,784	$ 1	2,593	479	(289)	33
Beginning balance (in shares) at Jun. 30, 2023			118,932
Beginning balance at Jun. 30, 2023	2,811	2,778	$ 1	2,587	413	(223)	33
Increase (Decrease) in Stockholders' Equity
Net income	68	66			66		2
Other comprehensive loss	(68)	(66)				(66)	(2)
Stock-based compensation	7	7		7
Vesting of stock-based compensation awards (in shares)			30
Tax withholding on vesting of stock compensation awards (in shares)			(11)
Tax withholding on vesting of stock-based compensation awards	$ (1)	(1)		(1)
Ending balance (in shares) at Sep. 30, 2023	118,951		118,951
Ending balance at Sep. 30, 2023	$ 2,817	$ 2,784	$ 1	$ 2,593	$ 479	$ (289)	$ 33

Basis of Presentation and Significant Accounting Policies	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation and Significant Accounting Policies	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 U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. 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, 2023. 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 unaudited 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, 2022 (the “2022 Form 10-K”). Certain amounts reported for prior periods have been reclassified to conform to the current period’s presentation. The Company presents its operations as one reportable segment. Recently Adopted Accounting Pronouncements In 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The ASU applies only to contracts and hedging relationships that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. In 2021, the FASB expanded the scope of the guidance to include derivatives. On March 9, 2023, the Company entered into Amendment No. 1 to its revolving credit facility replacing LIBOR-based benchmark rates with SOFR-based benchmark rates and other conforming changes (the “Revolving Credit Facility”). The Company has transitioned its existing contracts to a replacement index. ASU 2020-04 and its amendments did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

Revenue Recognition

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

2. Revenue Recognition

Revenue disaggregated by geographical area was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
United Kingdom	$	958	$	890	$	2,695	$	2,371
United States	711		709		2,117		2,075
France	207		171		626		530
Netherlands	216		175		610		508
Spain	133		117		396		360
Italy	97		81		279		243
Other	149		144		465		439
Total	$	2,471	$	2,287	$	7,188	$	6,526

The Company’s revenue can also be disaggregated by the customer’s primary industry. Revenue disaggregated by industry was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Omnichannel retail	$	1,051	$	919	$	3,041	$	2,618
Technology and consumer electronics	360		338		1,081		963
Food and beverage	362		335		1,004		1,009
Industrial and manufacturing	263		275		803		807
Consumer packaged goods	231		227		689		663
Other	204		193		570		466
Total	$	2,471	$	2,287	$	7,188	$	6,526

Contract Assets and Liabilities

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


	September 30,		December 31,
(In millions)	2023		2022
Contract assets included in:
Other current assets	$	13	$	25
Other long-term assets	161		165
Total contract assets	$	174	$	190
Contract liabilities included in:
Other current liabilities	$	183	$	154
Other long-term liabilities	114		134
Total contract liabilities	$	297	$	288

Revenue included the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Amounts included in the beginning-of-year contract liability balance	$	11	$	12	$	109	$	83

Remaining Performance Obligations

Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

3. Leases

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


	September 30,		December 31,
(In millions)	2023		2022
Operating leases:
Operating lease assets	$	2,133	$	2,227

Current operating lease liabilities	$	561	$	560
Long-term operating lease liabilities	1,800		1,853
Total operating lease liabilities	$	2,361	$	2,413

Finance leases:
Property and equipment, net	$	111	$	123

Current debt	$	26	$	35
Long-term debt	91		97
Total finance lease liabilities	$	117	$	132

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Operating leases:
Operating lease cost	$	163	$	187	$	561	$	527
Short-term lease cost	78		24		170		69
Variable lease cost	36		31		93		73
Total operating lease cost (1)	$	277	$	242	$	824	$	669
Finance leases:
Amortization of leases	$	10	$	5	$	23	$	23
Interest expense on lease liabilities	1		1		3		4
Total finance lease cost	$	11	$	6	$	26	$	27
Total operating and finance lease cost	$	288	$	248	$	850	$	696

(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:


	Nine Months Ended September 30,
(In millions)	2023		2022
Leased assets obtained in exchange for new operating lease liabilities, including $207 from an acquisition in 2022	$	389	$	911
Leased assets obtained in exchange for new finance lease liabilities, including $16 from an acquisition in 2022	8		18

Leases

3. Leases

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


	September 30,		December 31,
(In millions)	2023		2022
Operating leases:
Operating lease assets	$	2,133	$	2,227

Current operating lease liabilities	$	561	$	560
Long-term operating lease liabilities	1,800		1,853
Total operating lease liabilities	$	2,361	$	2,413

Finance leases:
Property and equipment, net	$	111	$	123

Current debt	$	26	$	35
Long-term debt	91		97
Total finance lease liabilities	$	117	$	132

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Operating leases:
Operating lease cost	$	163	$	187	$	561	$	527
Short-term lease cost	78		24		170		69
Variable lease cost	36		31		93		73
Total operating lease cost (1)	$	277	$	242	$	824	$	669
Finance leases:
Amortization of leases	$	10	$	5	$	23	$	23
Interest expense on lease liabilities	1		1		3		4
Total finance lease cost	$	11	$	6	$	26	$	27
Total operating and finance lease cost	$	288	$	248	$	850	$	696

(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:


	Nine Months Ended September 30,
(In millions)	2023		2022
Leased assets obtained in exchange for new operating lease liabilities, including $207 from an acquisition in 2022	$	389	$	911
Leased assets obtained in exchange for new finance lease liabilities, including $16 from an acquisition in 2022	8		18

Debt and Financing Arrangements

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Debt and Financing Arrangements

4. Debt and Financing Arrangements

The following table summarizes the carrying value of debt:


			September 30,		December 31,
(In millions)	Rate (1)		2023		2022
1.65% Unsecured notes due 2026 (2)	1.65	%	$	398	$	397
2.65% Unsecured notes due 2031 (3)	2.65	%	397		397
Two-Year Term Loan due 2024 (4)	—	%	—		115
Three-Year Term Loan due 2025 (5)	6.54	%	235		234
Five-Year Term Loan due 2027 (6)	6.67	%	499		499
Finance leases and other	Various		118		164
Total debt			1,647		1,806
Less: Current debt			26		67
Total Long-term debt			$	1,621	$	1,739

(1) Interest rate as of September 30, 2023.

(2) Net of unamortized debt issuance costs of $2 million as of September 30, 2023, and $3 million as of December 31, 2022.

(3) Net of unamortized debt issuance costs of $3 million as of September 30, 2023 and December 31, 2022.

(4) Repaid in the second quarter of 2023.

(5) Net of unamortized debt issuance costs of $1 million as of December 31, 2022.

(6) Net of unamortized debt issuance costs of $1 million as of September 30, 2023 and December 31, 2022.

Factoring Programs

Information related to the trade receivables sold was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Receivables sold in period	$	288	$	259	$	820	$	716
Cash consideration	286		258		815		714
Net cash provided by operating cash flows (1)	27		18		27		16

Covenants and Compliance

As of September 30, 2023, the Company was in compliance with the covenants contained in its debt and financing arrangements.

Fair Value Measurements and Financial Instruments

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements and Financial Instruments

5. Fair Value Measurements and Financial Instruments

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

•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

Debt

The fair value of debt was as follows:


		September 30, 2023				December 31, 2022
(In millions)	Level	Fair Value		Carrying Value		Fair Value		Carrying Value
1.65% Unsecured notes due 2026	2	$	353	$	398	$	342	$	397
2.65% Unsecured notes due 2031	2	303		397		294		397
Two-Year Term Loan due 2024	2	—		—		115		115
Three-Year Term Loan due 2025	2	233		235		234		234
Five-Year Term Loan due 2027	2	495		499		499		499

Financial Instruments

The fair value of the Company’s derivative instruments and the related notional amounts was as follows:


	September 30, 2023
(In millions)	Notional		Derivative Assets (1)		Derivative Liabilities (2)
Designated as hedges:
Cross-currency swap agreements	$	1,337	$	26	$	14
Interest rate swaps (3)	250		9		—
Not designated as hedges:
Foreign currency option contracts	$	424	$	16	$	—
Foreign currency forward contracts	58		—		—

(1) Derivative assets are included in Other current assets and Other long-term assets in the Condensed Consolidated Balance Sheets.

(2) Derivative liabilities are included in Other current liabilities and Other long-term liabilities in the Condensed Consolidated Balance Sheets.

(3) In June 2023, the Company amended one interest rate swap, with a notional amount of $125 million, scheduled to mature in 2027 to 2024.


	December 31, 2022
(In millions)	Notional		Derivative Assets (1)		Derivative Liabilities (2)
Designated as hedges:
Cross-currency swap agreements	$	1,337	$	22	$	13
Interest rate swaps	250		9		—
Not designated as hedges:
Foreign currency option contracts	$	354	$	—	$	5
Foreign currency forward contracts	3		—		—

(1) Derivative assets are included in Other current assets and Other long-term assets in the Condensed Consolidated Balance Sheets.

(2) Derivative liabilities are included in Other current liabilities and Other long-term liabilities in the Condensed Consolidated Balance Sheets.

As of September 30, 2023 and December 31, 2022, the derivatives were classified as Level 2 within the fair value hierarchy.

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


	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
(In millions)	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative		Gain (Loss) Reclassified from AOCIL into Net Income (1)		Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) (1)		Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative		Gain (Loss) Reclassified from AOCIL into Net Income (1)		Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) (1)
Derivatives designated as net investment hedges:
Cross-currency swap agreements	$	36	$	(3)	$	1	$	2	$	(3)	$	2
Derivatives designated as cash flow hedges:
Interest rate swaps	$	1	$	—	$	—	$	2	$	—	$	—

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


	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
(In millions)	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative		Gain (Loss) Reclassified from AOCIL into Net Income (1)		Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) (1)		Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative		Gain (Loss) Reclassified from AOCIL into Net Income (1)		Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) (1)
Derivatives designated as net investment hedges:
Cross-currency swap agreements	$	90	$	—	$	1	$	136	$	2	$	3
Derivatives designated as cash flow hedges:
Interest rate swaps	$	12	$	—	$	—	$	11	$	—	$	—

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


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

(In millions)	2023		2022		2023		2022
Realized foreign currency contracts gain (loss)	$	(3)	$	10	$	(9)	$	19
Unrealized foreign currency contracts gain (loss)	8		(1)		12		14
Total foreign currency gain recognized in net income	$	5	$	9	$	3	$	33

Stockholders' Equity

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Stockholders' Equity

6. Stockholders’ Equity

The following tables summarize the changes in AOCIL by component:


(In millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Defined Benefit Plan		Less: AOCIL attributable to noncontrolling interest		AOCIL attributable to GXO
As of June 30, 2023	$	(119)	$	8	$	(111)	$	(1)	$	(223)
Foreign currency translation loss	(98)		—		—		2		(96)
Unrealized gain on hedges, net of tax	27		—		—		—		27
Amounts reclassified from AOCIL to net income	2		—		1		—		3
Other comprehensive income (loss), net of tax	(69)		—		1		2		(66)
As of September 30, 2023	$	(188)	$	8	$	(110)	$	1	$	(289)


(In millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Defined Benefit Plan		Less: AOCIL attributable to noncontrolling interest		AOCIL attributable to GXO
As of December 31, 2022	$	(149)	$	7	$	(112)	$	—	$	(254)
Foreign currency translation loss	(41)		—		—		1		(40)
Unrealized gain on hedges, net of tax	1		1		—		—		2
Amounts reclassified from AOCIL to net income	1		—		2		—		3
Other comprehensive income (loss), net of tax	(39)		1		2		1		(35)

As of September 30, 2023	$	(188)	$	8	$	(110)	$	1	$	(289)


(In millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Defined Benefit Plan		Less: AOCIL attributable to noncontrolling interest		AOCIL attributable to GXO
As of June 30, 2022	$	(169)	$	—	$	(76)	$	(1)	$	(246)
Foreign currency translation loss	(111)		—		—		2		(109)
Unrealized gain on hedges, net of tax	69		9		—		—		78
Amounts reclassified from AOCIL to net income	(1)		—		—		—		(1)
Other comprehensive income (loss), net of tax	(43)		9		—		2		(32)
As of September 30, 2022	$	(212)	$	9	$	(76)	$	1	$	(278)


(In millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Defined Benefit Plan		Less: AOCIL attributable to noncontrolling interest		AOCIL attributable to GXO
As of December 31, 2021	$	(53)	$	—	$	(76)	$	(1)	$	(130)
Foreign currency translation loss	(260)		—		—		4		(256)
Unrealized gain on hedges, net of tax	102		9		—		—		111
Amounts reclassified from AOCIL to net income	(5)		—		—		—		(5)
Other comprehensive income (loss), net of tax	(163)		9		—		4		(150)
Deconsolidation of variable interest entity	4		—		—		(2)		2
As of September 30, 2022	$	(212)	$	9	$	(76)	$	1	$	(278)

Employee Benefit Plans

9 Months Ended

Sep. 30, 2023

Retirement Benefits [Abstract]

Employee Benefit Plans

7. Employee Benefit Plans

Defined Benefit Plans

The Company sponsors a retirement plan in the U.K. (the “U.K. Retirement Plan”). Components of the net periodic benefit cost recognized under the U.K. Retirement Plan were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Interest cost	$	(11)	$	(5)	$	(30)	$	(16)
Expected return on plan assets	14		12		38		41
Amortization of net loss	(1)		—		(2)		—
Net periodic pension income (1)	$	2	$	7	$	6	$	25

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

The Company also maintains defined benefit pension plans for some of its foreign subsidiaries that are excluded from the disclosure due to their immateriality.

Defined Contribution Plans

Restructuring Costs and Other

9 Months Ended

Sep. 30, 2023

Restructuring and Related Activities [Abstract]

Restructuring Costs and Other

8. Restructuring Costs and Other

The following is a roll forward of the restructuring liability, which is included in Other current liabilities in the Condensed Consolidated Balance Sheets:


(In millions)
Balance as of December 31, 2022	$	13
Charges incurred	24
Payments	(26)
Balance as of September 30, 2023	$	11

The remaining restructuring liability at September 30, 2023 primarily relates to severance payments and is expected to be substantially paid within the next 12 months.

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income Taxes	9. Income Taxes The effective tax rate was 17.9% for the three months ended September 30, 2023, compared with 22.5% for the same period in 2022. The effective tax rate was 19.1% for the nine months ended September 30, 2023, compared with 24.7% for the same period in 2022. The decrease in our effective tax rate for the three months was primarily driven by a tax benefit related to return-to-provision true-up adjustments. The decrease in our effective tax rate for the nine months was primarily driven by a tax benefit related to valuation allowance release. As of September 30, 2023 and December 31, 2022, the Company had valuation allowances of $36 million and $44 million on its deferred income tax asset, respectively.

Goodwill

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

10. Goodwill

The following table presents the changes in Goodwill for the nine months ended September 30, 2023:


(In millions)
Balance as of December 31, 2022	$	2,728
Acquisition (1)	44
Impact of foreign exchange translation (2)	(38)
Balance as of September 30, 2023	$	2,734

(1) Represents the finalization of the purchase price allocation for the Clipper acquisition. See Note 11 — Acquisition for additional information.

(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 September 30, 2023, and December 31, 2022, there were no accumulated goodwill impairment losses.

Acquisition

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisition

11. Acquisition

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


(In millions)
ASSETS
Current assets
Cash and cash equivalents	$	26
Accounts receivable	143
Other current assets	67
Total current assets	236
Long-term assets
Property and equipment	80
Operating lease assets	219
Intangible assets (1)	392
Other long-term assets	29
Total long-term assets	720
Total assets	$	956
LIABILITIES
Current liabilities
Accounts payable	$	81
Accrued expenses	96
Current debt	55
Current operating lease liabilities	43
Other current liabilities	56
Total current liabilities	331
Long-term liabilities
Long-term debt	10
Long-term operating lease liabilities	176
Other long-term liabilities	173
Total long-term liabilities	359
Total liabilities	$	690
Net assets purchased	$	266
Cash paid	$	902
Common stock issued (2)	204
Purchase price paid	$	1,106
Goodwill recorded (3)	$	840

(1) The Company acquired $392 million of intangible assets, comprised of customer relationships and trade names, with weighted-average useful lives of 15 years.

(2) Represents the fair value of the Company’s common stock issued.

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	12. Commitments and Contingencies The Company is involved, and will continue to be involved, in numerous legal proceedings arising out of 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.

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2023
Subsequent Events [Abstract]
Subsequent Events	13. Subsequent Events Financial Instruments - Net Investment Hedges In October 2023, the Company terminated a hedge with a notional amount of $115 million. Also, the Company amended a $235 million hedge to extend its maturity from 2024 to 2025. Additionally, the Company entered into various hedges for an aggregate notional amount of $313 million that will mature from 2025 to 2028. 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”), and on October 23, 2023, the Company completed its acquisition of PFS. PFS provides e-commerce order fulfillment services. The Company acquired the shares of PFSweb at a price per share of $7.50 in cash, totaling approximately $181 million.

Basis of Presentation and Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation	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 U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. 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, 2023. 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 unaudited 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, 2022 (the “2022 Form 10-K”).
Reclassifications	Certain amounts reported for prior periods have been reclassified to conform to the current period’s presentation.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements In 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The ASU applies only to contracts and hedging relationships that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. In 2021, the FASB expanded the scope of the guidance to include derivatives. On March 9, 2023, the Company entered into Amendment No. 1 to its revolving credit facility replacing LIBOR-based benchmark rates with SOFR-based benchmark rates and other conforming changes (the “Revolving Credit Facility”). The Company has transitioned its existing contracts to a replacement index. ASU 2020-04 and its amendments did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Revenue from External Customers by Geographic Areas

Revenue disaggregated by geographical area was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
United Kingdom	$	958	$	890	$	2,695	$	2,371
United States	711		709		2,117		2,075
France	207		171		626		530
Netherlands	216		175		610		508
Spain	133		117		396		360
Italy	97		81		279		243
Other	149		144		465		439
Total	$	2,471	$	2,287	$	7,188	$	6,526

Schedule of Disaggregation of Revenue

The Company’s revenue can also be disaggregated by the customer’s primary industry. Revenue disaggregated by industry was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Omnichannel retail	$	1,051	$	919	$	3,041	$	2,618
Technology and consumer electronics	360		338		1,081		963
Food and beverage	362		335		1,004		1,009
Industrial and manufacturing	263		275		803		807
Consumer packaged goods	231		227		689		663
Other	204		193		570		466
Total	$	2,471	$	2,287	$	7,188	$	6,526

Schedule of Contract with Customer, Contract Asset, Contract Liability, and Receivable

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


	September 30,		December 31,
(In millions)	2023		2022
Contract assets included in:
Other current assets	$	13	$	25
Other long-term assets	161		165
Total contract assets	$	174	$	190
Contract liabilities included in:
Other current liabilities	$	183	$	154
Other long-term liabilities	114		134
Total contract liabilities	$	297	$	288

Revenue included the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Amounts included in the beginning-of-year contract liability balance	$	11	$	12	$	109	$	83

Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of Supplemental Balance Sheet Information

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


	September 30,		December 31,
(In millions)	2023		2022
Operating leases:
Operating lease assets	$	2,133	$	2,227

Current operating lease liabilities	$	561	$	560
Long-term operating lease liabilities	1,800		1,853
Total operating lease liabilities	$	2,361	$	2,413

Finance leases:
Property and equipment, net	$	111	$	123

Current debt	$	26	$	35
Long-term debt	91		97
Total finance lease liabilities	$	117	$	132

Schedule of Lease Expenses and Supplemental Cash Flows

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Operating leases:
Operating lease cost	$	163	$	187	$	561	$	527
Short-term lease cost	78		24		170		69
Variable lease cost	36		31		93		73
Total operating lease cost (1)	$	277	$	242	$	824	$	669
Finance leases:
Amortization of leases	$	10	$	5	$	23	$	23
Interest expense on lease liabilities	1		1		3		4
Total finance lease cost	$	11	$	6	$	26	$	27
Total operating and finance lease cost	$	288	$	248	$	850	$	696

(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:


	Nine Months Ended September 30,
(In millions)	2023		2022
Leased assets obtained in exchange for new operating lease liabilities, including $207 from an acquisition in 2022	$	389	$	911
Leased assets obtained in exchange for new finance lease liabilities, including $16 from an acquisition in 2022	8		18

Debt and Financing Arrangements (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Debt

The following table summarizes the carrying value of debt:


			September 30,		December 31,
(In millions)	Rate (1)		2023		2022
1.65% Unsecured notes due 2026 (2)	1.65	%	$	398	$	397
2.65% Unsecured notes due 2031 (3)	2.65	%	397		397
Two-Year Term Loan due 2024 (4)	—	%	—		115
Three-Year Term Loan due 2025 (5)	6.54	%	235		234
Five-Year Term Loan due 2027 (6)	6.67	%	499		499
Finance leases and other	Various		118		164
Total debt			1,647		1,806
Less: Current debt			26		67
Total Long-term debt			$	1,621	$	1,739

(1) Interest rate as of September 30, 2023.

(2) Net of unamortized debt issuance costs of $2 million as of September 30, 2023, and $3 million as of December 31, 2022.

(3) Net of unamortized debt issuance costs of $3 million as of September 30, 2023 and December 31, 2022.

(4) Repaid in the second quarter of 2023.

(5) Net of unamortized debt issuance costs of $1 million as of December 31, 2022.

(6) Net of unamortized debt issuance costs of $1 million as of September 30, 2023 and December 31, 2022.

Schedule of Trade Receivables Sold

Information related to the trade receivables sold was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Receivables sold in period	$	288	$	259	$	820	$	716
Cash consideration	286		258		815		714
Net cash provided by operating cash flows (1)	27		18		27		16

Fair Value Measurements and Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Debt Fair Values

The fair value of debt was as follows:


		September 30, 2023				December 31, 2022
(In millions)	Level	Fair Value		Carrying Value		Fair Value		Carrying Value
1.65% Unsecured notes due 2026	2	$	353	$	398	$	342	$	397
2.65% Unsecured notes due 2031	2	303		397		294		397
Two-Year Term Loan due 2024	2	—		—		115		115
Three-Year Term Loan due 2025	2	233		235		234		234
Five-Year Term Loan due 2027	2	495		499		499		499

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The fair value of the Company’s derivative instruments and the related notional amounts was as follows:


	September 30, 2023
(In millions)	Notional		Derivative Assets (1)		Derivative Liabilities (2)
Designated as hedges:
Cross-currency swap agreements	$	1,337	$	26	$	14
Interest rate swaps (3)	250		9		—
Not designated as hedges:
Foreign currency option contracts	$	424	$	16	$	—
Foreign currency forward contracts	58		—		—

(1) Derivative assets are included in Other current assets and Other long-term assets in the Condensed Consolidated Balance Sheets.

(2) Derivative liabilities are included in Other current liabilities and Other long-term liabilities in the Condensed Consolidated Balance Sheets.

(3) In June 2023, the Company amended one interest rate swap, with a notional amount of $125 million, scheduled to mature in 2027 to 2024.


	December 31, 2022
(In millions)	Notional		Derivative Assets (1)		Derivative Liabilities (2)
Designated as hedges:
Cross-currency swap agreements	$	1,337	$	22	$	13
Interest rate swaps	250		9		—
Not designated as hedges:
Foreign currency option contracts	$	354	$	—	$	5
Foreign currency forward contracts	3		—		—

(1) Derivative assets are included in Other current assets and Other long-term assets in the Condensed Consolidated Balance Sheets.

(2) Derivative liabilities are included in Other current liabilities and Other long-term liabilities in the Condensed Consolidated Balance Sheets.

Schedule of Derivative Instruments, Gain (Loss)

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


	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
(In millions)	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative		Gain (Loss) Reclassified from AOCIL into Net Income (1)		Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) (1)		Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative		Gain (Loss) Reclassified from AOCIL into Net Income (1)		Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) (1)
Derivatives designated as net investment hedges:
Cross-currency swap agreements	$	36	$	(3)	$	1	$	2	$	(3)	$	2
Derivatives designated as cash flow hedges:
Interest rate swaps	$	1	$	—	$	—	$	2	$	—	$	—

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


	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
(In millions)	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative		Gain (Loss) Reclassified from AOCIL into Net Income (1)		Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) (1)		Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative		Gain (Loss) Reclassified from AOCIL into Net Income (1)		Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) (1)
Derivatives designated as net investment hedges:
Cross-currency swap agreements	$	90	$	—	$	1	$	136	$	2	$	3
Derivatives designated as cash flow hedges:
Interest rate swaps	$	12	$	—	$	—	$	11	$	—	$	—

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


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

(In millions)	2023		2022		2023		2022
Realized foreign currency contracts gain (loss)	$	(3)	$	10	$	(9)	$	19
Unrealized foreign currency contracts gain (loss)	8		(1)		12		14
Total foreign currency gain recognized in net income	$	5	$	9	$	3	$	33

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Loss

The following tables summarize the changes in AOCIL by component:


(In millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Defined Benefit Plan		Less: AOCIL attributable to noncontrolling interest		AOCIL attributable to GXO
As of June 30, 2023	$	(119)	$	8	$	(111)	$	(1)	$	(223)
Foreign currency translation loss	(98)		—		—		2		(96)
Unrealized gain on hedges, net of tax	27		—		—		—		27
Amounts reclassified from AOCIL to net income	2		—		1		—		3
Other comprehensive income (loss), net of tax	(69)		—		1		2		(66)
As of September 30, 2023	$	(188)	$	8	$	(110)	$	1	$	(289)


(In millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Defined Benefit Plan		Less: AOCIL attributable to noncontrolling interest		AOCIL attributable to GXO
As of December 31, 2022	$	(149)	$	7	$	(112)	$	—	$	(254)
Foreign currency translation loss	(41)		—		—		1		(40)
Unrealized gain on hedges, net of tax	1		1		—		—		2
Amounts reclassified from AOCIL to net income	1		—		2		—		3
Other comprehensive income (loss), net of tax	(39)		1		2		1		(35)

As of September 30, 2023	$	(188)	$	8	$	(110)	$	1	$	(289)


(In millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Defined Benefit Plan		Less: AOCIL attributable to noncontrolling interest		AOCIL attributable to GXO
As of June 30, 2022	$	(169)	$	—	$	(76)	$	(1)	$	(246)
Foreign currency translation loss	(111)		—		—		2		(109)
Unrealized gain on hedges, net of tax	69		9		—		—		78
Amounts reclassified from AOCIL to net income	(1)		—		—		—		(1)
Other comprehensive income (loss), net of tax	(43)		9		—		2		(32)
As of September 30, 2022	$	(212)	$	9	$	(76)	$	1	$	(278)


(In millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Defined Benefit Plan		Less: AOCIL attributable to noncontrolling interest		AOCIL attributable to GXO
As of December 31, 2021	$	(53)	$	—	$	(76)	$	(1)	$	(130)
Foreign currency translation loss	(260)		—		—		4		(256)
Unrealized gain on hedges, net of tax	102		9		—		—		111
Amounts reclassified from AOCIL to net income	(5)		—		—		—		(5)
Other comprehensive income (loss), net of tax	(163)		9		—		4		(150)
Deconsolidation of variable interest entity	4		—		—		(2)		2
As of September 30, 2022	$	(212)	$	9	$	(76)	$	1	$	(278)

Employee Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2023

Retirement Benefits [Abstract]

Schedule of Projected Benefit Obligations

The Company sponsors a retirement plan in the U.K. (the “U.K. Retirement Plan”). Components of the net periodic benefit cost recognized under the U.K. Retirement Plan were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2023		2022		2023		2022
Interest cost	$	(11)	$	(5)	$	(30)	$	(16)
Expected return on plan assets	14		12		38		41
Amortization of net loss	(1)		—		(2)		—
Net periodic pension income (1)	$	2	$	7	$	6	$	25

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

Restructuring Costs and Other (Tables)

9 Months Ended

Sep. 30, 2023

Restructuring and Related Activities [Abstract]

Schedule of Restructuring and Related Costs

The following is a roll forward of the restructuring liability, which is included in Other current liabilities in the Condensed Consolidated Balance Sheets:


(In millions)
Balance as of December 31, 2022	$	13
Charges incurred	24
Payments	(26)
Balance as of September 30, 2023	$	11

Goodwill (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table presents the changes in Goodwill for the nine months ended September 30, 2023:


(In millions)
Balance as of December 31, 2022	$	2,728
Acquisition (1)	44
Impact of foreign exchange translation (2)	(38)
Balance as of September 30, 2023	$	2,734

(1) Represents the finalization of the purchase price allocation for the Clipper acquisition. See Note 11 — Acquisition for additional information.

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

Acquisition (Tables)

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Fair Value of Assets Acquired and Liabilities Assumed at Acquisition Date

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


(In millions)
ASSETS
Current assets
Cash and cash equivalents	$	26
Accounts receivable	143
Other current assets	67
Total current assets	236
Long-term assets
Property and equipment	80
Operating lease assets	219
Intangible assets (1)	392
Other long-term assets	29
Total long-term assets	720
Total assets	$	956
LIABILITIES
Current liabilities
Accounts payable	$	81
Accrued expenses	96
Current debt	55
Current operating lease liabilities	43
Other current liabilities	56
Total current liabilities	331
Long-term liabilities
Long-term debt	10
Long-term operating lease liabilities	176
Other long-term liabilities	173
Total long-term liabilities	359
Total liabilities	$	690
Net assets purchased	$	266
Cash paid	$	902
Common stock issued (2)	204
Purchase price paid	$	1,106
Goodwill recorded (3)	$	840

(1) The Company acquired $392 million of intangible assets, comprised of customer relationships and trade names, with weighted-average useful lives of 15 years.

(2) Represents the fair value of the Company’s common stock issued.

Basis of Presentation and Significant Accounting Policies (Details)	9 Months Ended
	Sep. 30, 2023 segment
Accounting Policies [Abstract]
Number of reportable segments	1

Revenue Recognition - Revenue Disaggregated by Geographic Area (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue
Revenue	$ 2,471	$ 2,287	$ 7,188	$ 6,526
United Kingdom
Disaggregation of Revenue
Revenue	958	890	2,695	2,371
United States
Disaggregation of Revenue
Revenue	711	709	2,117	2,075
France
Disaggregation of Revenue
Revenue	207	171	626	530
Netherlands
Disaggregation of Revenue
Revenue	216	175	610	508
Spain
Disaggregation of Revenue
Revenue	133	117	396	360
Italy
Disaggregation of Revenue
Revenue	97	81	279	243
Other
Disaggregation of Revenue
Revenue	$ 149	$ 144	$ 465	$ 439

Revenue Recognition - Revenue Disaggregated by Industry Sector (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue
Revenue	$ 2,471	$ 2,287	$ 7,188	$ 6,526
Omnichannel retail
Disaggregation of Revenue
Revenue	1,051	919	3,041	2,618
Technology and consumer electronics
Disaggregation of Revenue
Revenue	360	338	1,081	963
Food and beverage
Disaggregation of Revenue
Revenue	362	335	1,004	1,009
Industrial and manufacturing
Disaggregation of Revenue
Revenue	263	275	803	807
Consumer packaged goods
Disaggregation of Revenue
Revenue	231	227	689	663
Other
Disaggregation of Revenue
Revenue	$ 204	$ 193	$ 570	$ 466

Revenue Recognition - Contract Liability (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Contract assets included in:
Other current assets	$ 13		$ 13		$ 25
Other long-term assets	161		161		165
Total contract assets	174		174		190
Contract liabilities included in:
Other current liabilities	183		183		154
Other long-term liabilities	114		114		134
Total contract liabilities	297		297		$ 288
Amounts included in the beginning-of-year contract liability balance	$ 11	$ 12	$ 109	$ 83

Revenue Recognition - Narrative (Details) $ in Billions	Sep. 30, 2023 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
Remaining performance obligation	$ 3.4
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
Remaining performance obligation percentage	72.00%
Performance obligations expected to be satisfied, expected timing	3 years

Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Operating leases:
Operating lease assets	$ 2,133	$ 2,227
Current operating lease liabilities	561	560
Long-term operating lease liabilities	1,800	1,853
Total operating lease liabilities	2,361	2,413
Finance leases:
Property and equipment, net	111	123
Current debt	26	35
Long-term debt	91	97
Total finance lease liabilities	$ 117	$ 132
Finance lease, right-of-use asset, statement of financial position	Property and equipment, net of accumulated depreciation of $1,463 and $1,297	Property and equipment, net of accumulated depreciation of $1,463 and $1,297
Finance lease, liability, current, statement of financial position	Current debt	Current debt
Finance lease, liability, noncurrent, statement of financial position	Long-term debt	Long-term debt

Leases - Lease Costs (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Leases - Lease Costs (Details) - USD ($) $ in Millions	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating lease cost	$ 163	$ 187	$ 561	$ 527
Short-term lease cost	78	24	170	69
Variable lease cost	36	31	93	73
Total operating lease cost	277	242	824	669
Amortization of leases	10	5	23	23
Interest expense on lease liabilities	1	1	3	4
Total finance lease cost	11	6	26	27
Total operating and finance lease cost	$ 288	$ 248	$ 850	$ 696

Leases - Supplemental Cash Flows (Details) - USD ($) $ in Millions	9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Lessor, Lease, Description [Line Items]
Leased assets obtained in exchange for new operating lease liabilities, including $207 from an acquisition in 2022	$ 389	$ 911
Leased assets obtained in exchange for new finance lease liabilities, including $16 from an acquisition in 2022	$ 8	$ 18
Clipper
Lessor, Lease, Description [Line Items]
Leased assets obtained in exchange for new operating lease liabilities, including $207 from an acquisition in 2022			$ 207
Leased assets obtained in exchange for new finance lease liabilities, including $16 from an acquisition in 2022			$ 16

Debt and Financing Arrangements - Schedule of Debt (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Debt Instrument
Total debt	$ 1,647	$ 1,806
Less: Current debt	26	67
Total Long-term debt	$ 1,621	1,739
Unsecured Debt \| Unsecured Notes Due 2026
Debt Instrument
Interest rate (as a percent)	1.65%
Unamortized discount (premium) and debt issuance costs, net	$ 2	3
Unsecured Debt \| Unsecured Notes Due 2026 \| Fair Value, Inputs, Level 2 \| Carrying Value
Debt Instrument
Fair value of debt	$ 398	397
Unsecured Debt \| Unsecured Notes Due 2031
Debt Instrument
Interest rate (as a percent)	2.65%
Unamortized discount (premium) and debt issuance costs, net	$ 3	3
Unsecured Debt \| Unsecured Notes Due 2031 \| Fair Value, Inputs, Level 2 \| Carrying Value
Debt Instrument
Fair value of debt	$ 397	397
Unsecured Debt \| Two Year Term Loan Due 2024
Debt Instrument
Interest rate (as a percent)	0.00%
Debt term (in years)	2 years
Unsecured Debt \| Two Year Term Loan Due 2024 \| Fair Value, Inputs, Level 2 \| Carrying Value
Debt Instrument
Fair value of debt	$ 0	115
Unsecured Debt \| Three Year Term Loan Due 2025
Debt Instrument
Interest rate (as a percent)	6.54%
Debt term (in years)	3 years
Unamortized discount (premium) and debt issuance costs, net		1
Unsecured Debt \| Three Year Term Loan Due 2025 \| Fair Value, Inputs, Level 2 \| Carrying Value
Debt Instrument
Fair value of debt	$ 235	234
Unsecured Debt \| Five Year Term Loan Due 2027
Debt Instrument
Interest rate (as a percent)	6.67%
Debt term (in years)	5 years
Unamortized discount (premium) and debt issuance costs, net	$ 1	1
Unsecured Debt \| Five Year Term Loan Due 2027 \| Fair Value, Inputs, Level 2 \| Carrying Value
Debt Instrument
Fair value of debt	499	499
Unsecured Debt \| Finance leases and other
Debt Instrument
Total debt	$ 118	$ 164

Debt and Financing Arrangements - Schedule of Trade Receivables Sold (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Debt Disclosure [Abstract]
Receivables sold in period	$ 288	$ 259	$ 820	$ 716
Cash consideration	286	258	815	714
Net cash provided by operating cash flows	$ 27	$ 18	$ 27	16
Cash provided from factoring programs				134
Cash used in the securitization program				$ 118

Fair Value Measurements and Financial Instruments - Fair Value of Debt (Details) - Unsecured Debt - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
1.65% Unsecured notes due 2026
Fair Value Measurement Inputs and Valuation Techniques
Interest rate (as a percent)	1.65%
2.65% Unsecured notes due 2031
Fair Value Measurement Inputs and Valuation Techniques
Interest rate (as a percent)	2.65%
Two Year Term Loan Due 2024
Fair Value Measurement Inputs and Valuation Techniques
Interest rate (as a percent)	0.00%
Debt term (in years)	2 years
Three Year Term Loan Due 2025
Fair Value Measurement Inputs and Valuation Techniques
Interest rate (as a percent)	6.54%
Debt term (in years)	3 years
Five Year Term Loan Due 2027
Fair Value Measurement Inputs and Valuation Techniques
Interest rate (as a percent)	6.67%
Debt term (in years)	5 years
Fair Value \| 1.65% Unsecured notes due 2026 \| Fair Value, Inputs, Level 2
Fair Value Measurement Inputs and Valuation Techniques
Fair value of debt	$ 353	$ 342
Fair Value \| 2.65% Unsecured notes due 2031 \| Fair Value, Inputs, Level 2
Fair Value Measurement Inputs and Valuation Techniques
Fair value of debt	303	294
Fair Value \| Two Year Term Loan Due 2024 \| Fair Value, Inputs, Level 2
Fair Value Measurement Inputs and Valuation Techniques
Fair value of debt	0	115
Fair Value \| Three Year Term Loan Due 2025 \| Fair Value, Inputs, Level 2
Fair Value Measurement Inputs and Valuation Techniques
Fair value of debt	233	234
Fair Value \| Five Year Term Loan Due 2027 \| Fair Value, Inputs, Level 2
Fair Value Measurement Inputs and Valuation Techniques
Fair value of debt	495	499
Carrying Value \| 1.65% Unsecured notes due 2026 \| Fair Value, Inputs, Level 2
Fair Value Measurement Inputs and Valuation Techniques
Fair value of debt	398	397
Carrying Value \| 2.65% Unsecured notes due 2031 \| Fair Value, Inputs, Level 2
Fair Value Measurement Inputs and Valuation Techniques
Fair value of debt	397	397
Carrying Value \| Two Year Term Loan Due 2024 \| Fair Value, Inputs, Level 2
Fair Value Measurement Inputs and Valuation Techniques
Fair value of debt	0	115
Carrying Value \| Three Year Term Loan Due 2025 \| Fair Value, Inputs, Level 2
Fair Value Measurement Inputs and Valuation Techniques
Fair value of debt	235	234
Carrying Value \| Five Year Term Loan Due 2027 \| Fair Value, Inputs, Level 2
Fair Value Measurement Inputs and Valuation Techniques
Fair value of debt	$ 499	$ 499

Fair Value Measurements and Financial Instruments - Fair Value by Balance Sheet Location (Details) - USD ($) $ in Millions	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022
Designated as hedges: \| Cross-currency swap agreements
Derivatives, Fair Value
Notional	$ 1,337		$ 1,337
Derivative Assets	26		22
Derivative Liabilities	14		13
Designated as hedges: \| Interest rate swaps
Derivatives, Fair Value
Notional	250		250
Derivative Assets	9		9
Derivative Liabilities	0		0
Designated as hedges: \| Interest Rate Swap, Amended
Derivatives, Fair Value
Notional		$ 125
Not designated as hedges: \| Foreign currency option contracts
Derivatives, Fair Value
Notional	424		354
Derivative Assets	16		0
Derivative Liabilities	0		5
Not designated as hedges: \| Foreign currency forward contracts
Derivatives, Fair Value
Notional	58		3
Derivative Assets	0		0
Derivative Liabilities	$ 0		$ 0

Fair Value Measurements and Financial Instruments - Derivative and Nonderivative Instruments Designated as Hedges (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Interest rate swaps
Derivative Instruments, Gain (Loss)
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative, cash flow hedges	$ 1	$ 12	$ 2	$ 11
Gain (Loss) Reclassified from AOCL into Net Income, cash flow hedges	0	0	0	0
Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing)	0	0	0	0
Foreign Exchange Contract \| Not designated as hedges:
Derivative Instruments, Gain (Loss)
Realized foreign currency contracts gain (loss)	(3)	10	(9)	19
Unrealized foreign currency contracts gain (loss)	8	(1)	12	14
Total foreign currency gain recognized in net income	5	9	3	33
Cross-currency swap agreements \| Cross-currency swap agreements
Derivative Instruments, Gain (Loss)
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative, net investment hedges	36	90	2	136
Gain (Loss) Reclassified from AOCL into Net Income, net investment hedges	(3)	0	(3)	2
Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing)	$ 1	$ 1	$ 2	$ 3

Stockholders' Equity (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Stockholders' Equity (Details) - USD ($) $ in Millions	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax
Beginning balance	$ 2,811	$ 2,561	$ 2,678	$ 2,390
Deconsolidation of variable interest entity				(3)
Ending balance	2,817	2,599	2,817	2,599
Foreign Currency Translation Adjustments
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax
Beginning balance	(119)	(169)	(149)	(53)
Foreign currency translation loss	(98)	(111)	(41)	(260)
Unrealized gain on hedges, net of tax	27	69	1	102
Amounts reclassified from AOCIL to net income	2	(1)	1	(5)
Other comprehensive income (loss), net of tax	(69)	(43)	(39)	(163)
Deconsolidation of variable interest entity				4
Ending balance	(188)	(212)	(188)	(212)
Cash Flow Hedges
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax
Beginning balance	8	0	7	0
Foreign currency translation loss	0	0	0	0
Unrealized gain on hedges, net of tax	0	9	1	9
Amounts reclassified from AOCIL to net income	0	0	0	0
Other comprehensive income (loss), net of tax	0	9	1	9
Deconsolidation of variable interest entity				0
Ending balance	8	9	8	9
Defined Benefit Plan
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax
Beginning balance	(111)	(76)	(112)	(76)
Foreign currency translation loss	0	0	0	0
Unrealized gain on hedges, net of tax	0	0	0	0
Amounts reclassified from AOCIL to net income	1	0	2	0
Other comprehensive income (loss), net of tax	1	0	2	0
Deconsolidation of variable interest entity				0
Ending balance	(110)	(76)	(110)	(76)
Less: AOCIL attributable to noncontrolling interest
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax
Beginning balance	(1)	(1)	0	(1)
Foreign currency translation loss	2	2	1	4
Unrealized gain on hedges, net of tax	0	0	0	0
Amounts reclassified from AOCIL to net income	0	0	0	0
Other comprehensive income (loss), net of tax	2	2	1	4
Deconsolidation of variable interest entity				(2)
Ending balance	1	1	1	1
AOCIL attributable to GXO
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax
Beginning balance	(223)	(246)	(254)	(130)
Foreign currency translation loss	(96)	(109)	(40)	(256)
Unrealized gain on hedges, net of tax	27	78	2	111
Amounts reclassified from AOCIL to net income	3	(1)	3	(5)
Other comprehensive income (loss), net of tax	(66)	(32)	(35)	(150)
Deconsolidation of variable interest entity				2
Ending balance	$ (289)	$ (278)	$ (289)	$ (278)

Employee Benefit Plans - Schedule of Projected Benefit Obligations (Details) - Pension Plan - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Defined Benefit Plan Disclosure
Interest cost	$ (11)	$ (5)	$ (30)	$ (16)
Expected return on plan assets	14	12	38	41
Amortization of net loss	(1)	0	(2)	0
Net periodic pension income	$ 2	$ 7	$ 6	$ 25

Employee Benefit Plans - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Foreign Plan
Defined Benefit Plan Disclosure
Defined contribution plans	$ 15	$ 12	$ 47	$ 40

Restructuring Costs and Other - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Restructuring Cost and Reserve
Restructuring costs and other	$ 7	$ 0	$ 31	$ 14
Employee Severance
Restructuring Cost and Reserve
Restructuring costs and other	$ 6		24
Facility Closing
Restructuring Cost and Reserve
Restructuring costs and other			$ 7

Restructuring Costs and Other - Schedule of Restructuring and Related Costs (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Restructuring Reserve
Charges incurred	$ 7	$ 0	$ 31	$ 14
Employee Severance
Restructuring Reserve
Charges incurred	6		24
Restructuring Actions
Restructuring Reserve
Restructuring reserve, beginning balance			13
Payments			(26)
Restructuring reserve, ending balance	$ 11		$ 11

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Effective tax rate	17.90%	22.50%	19.10%	24.70%
Valuation allowance for deferred tax assets	$ 36		$ 36		$ 44

Goodwill (Details) - USD ($) $ in Millions	9 Months Ended
Goodwill (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Goodwill
Goodwill, Beginning Balance	$ 2,728
Acquisition	44
Impact of foreign exchange translation	(38)
Goodwill, Ending Balance	2,734
Accumulated goodwill impairment loss	$ 0	$ 0

Acquisition - Narrative (Details) - Clipper $ in Millions	May 24, 2022 USD ($) shares
Business Acquisition
Purchase price paid	$ 1,106
Cash paid	$ 902
Common stock issued (in shares) \| shares	3,757,657
Common stock issued	$ 204

Acquisition - Schedule of Fair Value of Assets Acquired and Liabilities Assumed at Acquisition Date (Details) - USD ($) $ in Millions	May 24, 2022	Sep. 30, 2023	Dec. 31, 2022
Long-term liabilities
Goodwill recorded		$ 2,734	$ 2,728
Clipper
Current assets
Cash and cash equivalents	$ 26
Accounts receivable	143
Other current assets	67
Total current assets	236
Long-term assets
Property and equipment	80
Operating lease assets	219
Intangible assets	392
Other long-term assets	29
Total long-term assets	720
Total assets	956
Current liabilities
Accounts payable	81
Accrued expenses	96
Current debt	55
Current operating lease liabilities	43
Other current liabilities	56
Total current liabilities	331
Long-term liabilities
Long-term debt	10
Long-term operating lease liabilities	176
Other long-term liabilities	173
Total long-term liabilities	359
Total liabilities	690
Net assets purchased	266
Cash paid	902
Common stock issued	204
Purchase price paid	1,106
Goodwill recorded	$ 840
Weighted-average amortization period (in years)	15 years

Subsequent Events (Details) - Subsequent Event - USD ($)	Oct. 23, 2023	Oct. 31, 2023
PFSweb, Inc
Subsequent Event [Line Items]
Price per share (in dollar par share)	$ 7.50
Cash paid	$ 181,000,000
Cross-currency swap agreements \| Derivative Period One
Subsequent Event [Line Items]
Notional		$ 115,000,000
Cross-currency swap agreements \| Derivative Period Two
Subsequent Event [Line Items]
Notional		235,000,000
Cross-currency swap agreements \| Derivative Period Three
Subsequent Event [Line Items]
Notional		$ 313,000,000

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