GXO Logistics(GXO) - 2025 Q2 - Quarterly Report

PART I—FINANCIAL INFORMATION This section presents the company's unaudited interim financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) This section presents the unaudited condensed consolidated financial statements, including statements of operations, comprehensive income (loss), balance sheets, cash flows, and changes in equity, along with detailed notes explaining the basis of presentation, significant accounting policies, revenue recognition, segment information, leases, acquisitions, goodwill, debt, fair value measurements, earnings per share, stockholders' equity, employee benefit plans, restructuring costs, income taxes, and commitments and contingencies Condensed Consolidated Statements of Operations This statement presents the company's revenues, operating income, and net income (loss) for the interim periods | Metric (Millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $3,299 | $2,846 | $6,276 | $5,302 | | Operating income | $89 | $75 | $33 | $36 | | Net income (loss) attributable to GXO | $26 | $38 | $(70) | $1 | | Basic EPS | $0.23 | $0.32 | $(0.60) | $0.01 | | Diluted EPS | $0.23 | $0.32 | $(0.60) | $0.01 | - For the three months ended June 30, 2025, revenue increased by $453 million (16%) year-over-year, while net income attributable to GXO decreased by $12 million (31.6%)[12] - For the six months ended June 30, 2025, the company reported a net loss of $70 million attributable to GXO, a significant decline from a net income of $1 million in the prior year period[12] Condensed Consolidated Statements of Comprehensive Income (Loss) This statement details net income (loss) and other comprehensive income (loss) components, including foreign currency adjustments | Metric (Millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $28 | $39 | $(67) | $3 | | Foreign currency translation adjustments | $136 | $(14) | $210 | $(28) | | Other comprehensive income (loss), net of tax | $128 | $(14) | $197 | $(25) | | Comprehensive income (loss) attributable to GXO | $151 | $24 | $123 | $(23) | - Comprehensive income attributable to GXO significantly increased to $151 million for the three months ended June 30, 2025, from $24 million in the prior year, primarily driven by positive foreign currency translation adjustments[14] Condensed Consolidated Balance Sheets This statement provides a snapshot of the company's assets, liabilities, and equity at specific reporting dates | Metric (Millions) | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Total assets | $11,926 | $11,266 | | Total liabilities | $8,951 | $8,231 | | Total equity | $2,975 | $3,035 | | Cash and cash equivalents | $205 | $413 | | Accounts receivable, net | $1,950 | $1,799 | | Goodwill | $3,827 | $3,549 | - Total assets increased by $660 million to $11,926 million as of June 30, 2025, compared to December 31, 2024, primarily due to increases in long-term assets like operating lease assets and goodwill[17] - Cash and cash equivalents decreased by $208 million[17] Condensed Consolidated Statements of Cash Flows This statement summarizes cash inflows and outflows from operating, investing, and financing activities | Metric (Millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $32 | $165 | | Net cash used in investing activities | $(123) | $(1,014) | | Net cash provided by (used in) financing activities | $(227) | $857 | | Net increase (decrease) in cash, restricted cash and cash equivalents | $(278) | $1 | - Net cash provided by operating activities decreased significantly to $32 million for the six months ended June 30, 2025, from $165 million in the prior year[19] - Investing activities used less cash ($123 million vs. $1,014 million) due to the absence of a large acquisition like Wincanton in 2025[19] - Financing activities shifted from providing $857 million in 2024 to using $227 million in 2025, largely due to common stock repurchases[19] Condensed Consolidated Statements of Changes in Equity This statement outlines the changes in various components of stockholders' equity over the reporting period | Metric (Millions) | Balance as of Dec 31, 2024 | Balance as of June 30, 2025 | | :---------------- | :------------------------- | :-------------------------- | | Total Equity | $3,035 | $2,975 | | Net income (loss) | $(70) | $(70) | | Common stock repurchased | $(202) | $(202) | | Other comprehensive income | $197 | $197 | - Total equity decreased from $3,035 million at December 31, 2024, to $2,975 million at June 30, 2025[21][23] - This was primarily influenced by a net loss of $70 million and $202 million in common stock repurchases, partially offset by $197 million in other comprehensive income[21][23] Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations and additional information supporting the condensed consolidated financial statements 1. Basis of Presentation and Significant Accounting Policies This note describes the basis of financial statement preparation and outlines the company's significant accounting policies - The unaudited Condensed Consolidated Financial Statements are prepared in accordance with GAAP for interim financial information and SEC rules, including all necessary recurring accruals[26][27][29] - The Company operates as one reportable segment[26][27][29] - The FASB issued ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures), which the Company is currently evaluating for impact on its financial statements[30][31] 2. Revenue Recognition This note explains the company's revenue recognition policies and provides disaggregated revenue information Revenue Disaggregated by Geographical Area (Millions) | Geographical Area | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United Kingdom | $1,590 | $1,289 | $2,981 | $2,202 | | United States | $767 | $731 | $1,519 | $1,478 | | Netherlands | $253 | $220 | $485 | $438 | | France | $216 | $201 | $402 | $401 | | Spain | $166 | $145 | $309 | $274 | | Italy | $105 | $97 | $200 | $190 | | Other | $202 | $163 | $380 | $319 | | Total | $3,299 | $2,846 | $6,276 | $5,302 | Revenue Disaggregated by Industry (Millions) | Industry Vertical | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Omnichannel retail | $1,626 | $1,316 | $3,048 | $2,338 | | Technology and consumer electronics | $402 | $363 | $795 | $745 | | Industrial and manufacturing | $403 | $331 | $765 | $597 | | Food and beverage | $359 | $326 | $673 | $642 | | Consumer packaged goods | $290 | $290 | $574 | $585 | | Other | $219 | $220 | $421 | $395 | | Total | $3,299 | $2,846 | $6,276 | $5,302 | - Contract assets increased to $260 million as of June 30, 2025, from $233 million at December 31, 2024, while contract liabilities slightly decreased to $397 million from $400 million[33] 3. Segment Information This note presents financial information for the company's operating segments, including revenue and Adjusted EBITDA - The Company is organized into three operating segments: Americas and Asia-Pacific, United Kingdom and Ireland, and Continental Europe[35][36] - Performance is evaluated based on Adjusted EBITDA[35][36] Segment Adjusted EBITDA (Millions) | Metric (Millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $3,299 | $2,846 | $6,276 | $5,302 | | Segment Adjusted EBITDA | $227 | $205 | $405 | $372 | 4. Leases This note provides details on the company's operating and finance lease assets, liabilities, and associated costs Lease Liabilities (Millions) | Lease Type | June 30, 2025 | December 31, 2024 | | :--------- | :------------ | :---------------- | | Operating lease assets | $2,646 | $2,329 | | Total operating lease liabilities | $2,871 | $2,545 | | Property and equipment, net (Finance leases) | $348 | $239 | | Total finance lease liabilities | $369 | $276 | Lease Expense (Millions) | Lease Expense (Millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total operating lease cost | $329 | $290 | $626 | $563 | | Total finance lease cost | $12 | $8 | $23 | $16 | | Total operating and finance lease cost | $341 | $298 | $649 | $579 | 5. Acquisition This note details the acquisition of Wincanton plc, including purchase price allocation and related transaction costs - On April 29, 2024, GXO completed the acquisition of Wincanton plc for £762 million ($958 million)[43] - The acquisition was approved by the CMA on June 19, 2025, subject to divestment of certain grocery contracts[43] - Transaction costs related to the Wincanton Acquisition were $14 million and $35 million for the three and six months ended June 30, 2025, respectively[44] Wincanton Acquisition - Assets Acquired and Liabilities Assumed (Millions) | Category | Amount (Millions) | | :---------------- | :---------------- | | Total assets | $1,382 | | Total liabilities | $1,146 | | Net assets purchased | $236 | | Purchase price | $958 | | Goodwill recorded | $722 | 6. Goodwill This note outlines the changes in the company's goodwill balance, primarily due to foreign exchange translation Changes in Goodwill (Millions) | Item | Amount (Millions) | | :--------------------------------- | :---------------- | | Balance as of December 31, 2024 | $3,549 | | Acquisition (Wincanton PPA reduction) | $(4) | | Impact of foreign exchange translation | $282 | | Balance as of June 30, 2025 | $3,827 | - Goodwill increased to $3,827 million as of June 30, 2025, from $3,549 million at December 31, 2024, primarily due to foreign exchange translation impact of $282 million[47] 7. Debt and Financing Arrangements This note provides a summary of the company's debt, financing arrangements, and covenant compliance Summary of Debt (Millions) | Debt Type | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Unsecured notes due 2026 | $400 | $399 | | Unsecured notes due 2029 | $594 | $593 | | Unsecured notes due 2031 | $397 | $397 | | Unsecured notes due 2034 | $491 | $490 | | Three-Year Term Loan due 2025 | $0 | $50 | | Five-Year Term Loan due 2027 | $399 | $399 | | Finance leases and other debt | $405 | $303 | | Total Debt | $2,686 | $2,631 | | Total Long-term debt | $2,596 | $2,521 | - The Company repaid the remaining $50 million of the Three-Year Term Loan due 2025 on May 16, 2025[50][52] - Total debt increased to $2,686 million as of June 30, 2025, from $2,631 million at December 31, 2024[50][52] - The Company has an $800 million revolving credit facility with no amounts outstanding as of June 30, 2025[53][54][55] - It also assumed a £175 million ($240 million) Wincanton Revolving Credit Agreement with £26 million ($36 million) outstanding[53][54][55] - The Company complied with all debt covenants as of June 30, 2025[56][57] - Bank overdrafts increased to $64 million from zero at December 31, 2024[56][57] Trade Receivables Sold (Millions) | Metric (Millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Receivables sold in period | $792 | $364 | $1,394 | $655 | | Cash consideration | $787 | $360 | $1,385 | $649 | 8. Fair Value Measurements and Financial Instruments This note details the fair value measurements of debt and derivative financial instruments used for risk management - The Company uses derivative instruments to manage exposure to interest rate and foreign currency risks[63][66] - Derivatives are classified as Level 2 within the fair value hierarchy[63][66] Fair Value of Debt (Millions) | Debt Type | June 30, 2025 Fair Value | June 30, 2025 Carrying Value | Dec 31, 2024 Fair Value | Dec 31, 2024 Carrying Value | | :------------------------ | :----------------------- | :--------------------------- | :---------------------- | :-------------------------- | | Unsecured notes due 2026 | $387 | $400 | $380 | $399 | | Unsecured notes due 2029 | $627 | $594 | $617 | $593 | | Unsecured notes due 2031 | $348 | $397 | $336 | $397 | | Unsecured notes due 2034 | $522 | $491 | $514 | $490 | | Three-Year Term Loan due 2025 | $0 | $0 | $49 | $50 | | Five-Year Term Loan due 2027 | $392 | $399 | $394 | $399 | Notional Amount and Fair Value of Derivative Instruments (Millions) | Derivative Type | June 30, 2025 Notional | June 30, 2025 Fair Value | Dec 31, 2024 Notional | Dec 31, 2024 Fair Value | | :------------------------ | :--------------------- | :----------------------- | :-------------------- | :---------------------- | | Cross-currency swap agreements (net investment hedges) | $2,024 | $219 | $1,865 | $67 | | Interest rate swaps (cash flow hedges) | $125 | $2 | $125 | $3 | | Foreign currency option contracts (not designated) | $263 | $0 | $300 | $13 | | Foreign currency forward contracts (not designated) | $271 | $2 | $125 | $1 | 9. Earnings per Share This note provides the calculation of basic and diluted earnings (loss) per share for the reporting periods Earnings (Loss) Per Share (EPS) | Metric (Shares in thousands, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to common shares | $26 | $38 | $(70) | $1 | | Basic weighted-average common shares | 114,812 | 119,427 | 116,890 | 119,350 | | Diluted weighted-average common shares | 115,055 | 119,683 | 116,890 | 119,680 | | Basic earnings (loss) per share | $0.23 | $0.32 | $(0.60) | $0.01 | | Diluted earnings (loss) per share | $0.23 | $0.32 | $(0.60) | $0.01 | - Basic and diluted EPS for the three months ended June 30, 2025, were $0.23, down from $0.32 in the prior year[71] - For the six months ended June 30, 2025, both basic and diluted EPS were $(0.60), a significant decrease from $0.01 in the prior year[71] 10. Stockholders' Equity This note outlines changes in stockholders' equity, including share repurchases and other comprehensive income (loss) - On February 18, 2025, the board authorized a $500 million share repurchase plan[72][73][121] - As of June 30, 2025, the Company repurchased approximately 5.4 million shares for $202 million, with $300 million remaining authorization[72][73][121] Changes in Accumulated Other Comprehensive Income (Loss) (AOCIL) (Millions) | AOCIL Component | As of Dec 31, 2024 | As of June 30, 2025 | | :------------------------ | :----------------- | :------------------ | | Foreign Currency Translation Adjustments | $(195) | $223 | | Net Investment Hedges | $31 | $(177) | | Cash Flow Hedges | $4 | $3 | | Defined Benefit Plans | $(155) | $(167) | | Less: AOCIL attributable to NCI | $2 | $(2) | | AOCIL attributable to GXO | $(313) | $(120) | 11. Employee Benefit Plans This note describes the company's defined benefit pension plans and defined contribution costs - The Company sponsors defined benefit pension plans, primarily in the U.K., which are closed to new participants and accruals[77][79] - Net periodic pension income for the six months ended June 30, 2025, was $9 million[77][79] Defined Contribution Costs (Millions) | Metric (Millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Defined contribution costs | $23 | $21 | $54 | $38 | 12. Restructuring Costs and Other This note details the nature and changes in the company's restructuring costs and related liabilities - Restructuring costs primarily relate to severance for administrative function optimization[82] - The restructuring liability increased to $16 million as of June 30, 2025, from $10 million at December 31, 2024[82] 13. Income Taxes This note provides information on income tax expense, effective tax rates, and the impact of new tax rules - Income tax expense for the three months ended June 30, 2025, was $15 million (effective tax rate of 34.6%), up from $14 million (25.4%) in the prior year, driven by a decrease in pre-tax income[83] - For the six months ended June 30, 2025, income tax expense was $17 million on a pre-tax loss of $(50) million, compared to $4 million on pre-tax income of $7 million in the prior year[84] - The effective tax rate change was due to decreased pre-tax income, offset by non-deductible regulatory and transaction costs[84] - The Company has incorporated the estimated annual effect of Pillar Two Global Anti-Base Erosion rules into its income tax provision for the three and six months ended June 30, 2025, expecting additional income tax related to Pillar Two during fiscal 2025[86] 14. Commitments and Contingencies This note describes the company's legal proceedings, commitments, and related accruals for potential losses - The Company is involved in various legal proceedings and establishes accruals for probable and reasonably estimable losses[87][88][89][90] - Management believes current accruals are adequate and does not expect a material adverse effect on financial results from current matters[87][88][89][90] - In Q1 2025, the Company accrued €61 million ($66 million) for a VAT deductibility investigation by Italian authorities[92] - In Q2 2025, final payments of €59 million ($68 million) were made, and $65 million in expenses were recorded for the six months ended June 30, 2025[92] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides management's perspective on the Company's financial performance and condition, discussing results of operations for the three and six months ended June 30, 2025, compared to the prior year. It highlights the impact of the Wincanton acquisition, changes in revenue, expenses, and profitability, as well as liquidity, capital resources, and significant accounting policies Business Overview This section provides an overview of GXO Logistics' business model, services, and strategic acquisitions - GXO Logistics, Inc. is the world's largest pure-play contract logistics provider, offering high-value-added warehousing, distribution, e-commerce, and reverse logistics services, differentiated by technology-enabled customized solutions[96] - The Company's business model is asset-light, resilient, with high returns, strong free cash flow, and long-term customer contracts, often with fixed and variable components[97] - The acquisition of Wincanton plc on April 29, 2024, significantly impacts year-over-year comparisons in results of operations[98] Results of Operations This section analyzes the company's financial performance for the three and six months ended June 30, 2025 Three Months Ended June 30, 2025 compared with the Three Months Ended June 30, 2024 This section compares the company's financial results for the three months ended June 30, 2025, against the prior year Key Financials - Three Months Ended June 30 (Millions) | Metric (Millions) | 2025 | 2024 | $ Change | % Change | | :---------------- | :---- | :---- | :------- | :------- | | Revenue | $3,299 | $2,846 | $453 | 16 % | | Direct operating expense | $2,813 | $2,389 | $424 | 18 % | | Operating income | $89 | $75 | $14 | 19 % | | Net income | $28 | $39 | $(11) | (28)% | - Revenue increased by 16% ($453 million), with $168 million from the Wincanton Acquisition and $127 million from favorable foreign currency movements[100][101] - Direct operating expense increased by 18% ($424 million), primarily due to the Wincanton Acquisition and business growth, rising to 85.3% of revenue from 83.9%[100][101] - Operating income increased by 19% to $89 million, but net income decreased by 28% to $28 million[99][104][105] - This decrease was primarily due to higher other expense, net (driven by increased unrealized foreign currency loss), and higher interest expense, net (due to Wincanton acquisition debt)[99][104][105] Six Months Ended June 30, 2025 compared with the Six Months Ended June 30, 2024 This section compares the company's financial results for the six months ended June 30, 2025, against the prior year Key Financials - Six Months Ended June 30 (Millions) | Metric (Millions) | 2025 | 2024 | $ Change | % Change | | :---------------- | :---- | :---- | :------- | :------- | | Revenue | $6,276 | $5,302 | $974 | 18 % | | Direct operating expense | $5,371 | $4,445 | $926 | 21 % | | Operating income | $33 | $36 | $(3) | (8)% | | Net income (loss) | $(67) | $3 | $(70) | n/m | - Revenue increased by 18% ($974 million), with $655 million from the Wincanton Acquisition and $94 million from favorable foreign currency movements[109][110] - Direct operating expense increased by 21% ($926 million), reaching 85.6% of revenue, up from 83.8%[109][110] - Operating income decreased by 8% to $33 million[108][115][116] - The Company reported a net loss of $67 million, a significant decline from a net income of $3 million in the prior year[108][115][116] - This was primarily due to lower operating income, higher other expense (increased unrealized foreign currency loss), and higher interest expense (Wincanton acquisition debt)[108][115][116] - Regulatory matter and litigation expense for the six months ended June 30, 2025, was $65 million, primarily due to a VAT deductibility matter with Italian authorities[114] Liquidity and Capital Resources This section assesses the company's cash position, borrowing capacity, and ability to meet financial obligations - As of June 30, 2025, the Company held $205 million in cash and cash equivalents, $2 million in restricted cash, and had $1,003 million in borrowing capacity under its revolving credit facilities[120] - The Company's board authorized a $500 million share repurchase plan on February 18, 2025, with $300 million remaining authorization as of June 30, 2025[121] - Repurchases are funded by existing cash, revolving credit facilities, and/or other financing sources[121] - Management believes current liquidity sources (cash, operations, revolving credit, factoring) are sufficient to fund operations and obligations for at least the next 12 months[122] Financial Condition This section analyzes changes in the company's current and long-term assets and liabilities Asset and Liability Balances (Millions) | Category (Millions) | June 30, 2025 | December 31, 2024 | $ Change | % Change | | :------------------ | :------------ | :---------------- | :------- | :------- | | Current assets | $2,589 | $2,641 | $(52) | (2)% | | Long-term assets | $9,337 | $8,625 | $712 | 8 % | | Current liabilities | $3,410 | $3,189 | $221 | 7 % | | Long-term liabilities | $5,541 | $5,042 | $499 | 10 % | - Current assets decreased due to cash used for stock repurchases and debt repayment, partially offset by increased accounts receivable[124] - Long-term assets increased primarily due to operating lease assets and foreign currency translation[124] - Liabilities increased due to bank overdrafts, derivatives' fair value, and lease liabilities[124] Cash Flow Activity This section summarizes the significant changes in cash flows from operating, investing, and financing activities Cash Flow Summary (Millions) | Activity (Millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :------------------ | :----------------------------- | :----------------------------- | :------- | :------- | | Net cash provided by operating activities | $32 | $165 | $(133) | (81)% | | Net cash used in investing activities | $(123) | $(1,014) | $891 | (88)% | | Net cash provided by (used in) financing activities | $(227) | $857 | $(1,084) | n/m | - Operating cash flows decreased by $133 million due to lower income and increased working capital consumption[126] - Investing cash flows used less cash ($123 million vs. $1.0 billion) due to the absence of a major acquisition in 2025[127] - Financing activities shifted from providing cash to using cash, primarily due to $200 million in common stock repurchases[128] Off-Balance Sheet Arrangements This section confirms the absence of material off-balance sheet financial arrangements impacting the company - The Company does not engage in any off-balance sheet financial arrangements that have a material current or future effect on its financial condition, results of operations, or liquidity[129] Contractual Obligations This section addresses the company's contractual obligations and any material changes from the prior year - As of June 30, 2025, the Company's contractual obligations had not materially changed compared with December 31, 2024[130] Critical Accounting Policies and Estimates This section confirms no material changes to the company's critical accounting policies and estimates - There have been no material changes to the critical accounting policies and estimates previously disclosed in the 2024 Form 10-K[131] Accounting Pronouncements This section refers to disclosures regarding new accounting standards and their potential impact - 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[132] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK This section addresses the Company's exposure to market risks, primarily from variable-rate debt and foreign currency fluctuations. It notes that derivative instruments are used to manage these risks and that there have been no material changes to market risk exposure for the six months ended June 30, 2025, compared to the prior year's Form 10-K - The Company is exposed to market risk from variable-rate debt and foreign currency fluctuations, which it manages using derivative instruments[133] - There have been no material changes to the Company's market risk exposure for the six months ended June 30, 2025, compared to the disclosures in the 2024 Form 10-K[133] ITEM 4. CONTROLS AND PROCEDURES This section details the evaluation of the Company's disclosure controls and procedures, concluding their effectiveness as of June 30, 2025. It also addresses changes in internal control over financial reporting, noting only those related to the Wincanton acquisition - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[134] - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025, other than those related to the acquisition of Wincanton plc[135] PART II—OTHER INFORMATION This section includes information on legal proceedings, risk factors, equity security sales, and required exhibits ITEM 1. LEGAL PROCEEDINGS This section refers to Note 14, 'Commitments and Contingencies,' in Part I, Item 1 for a description of the Company's legal proceedings - Details regarding legal proceedings are provided in Note 14. 'Commitments and Contingencies' in Part I, Item 1[136] ITEM 1A. RISK FACTORS This section updates the risk factors previously disclosed in the 2024 Form 10-K, specifically highlighting potential impacts from changes in tax laws and regulations, such as the OECD's Pillar Two rules and the recently signed One Big Beautiful Bill Act - No material changes to risk factors were identified, except for those related to changes in tax laws and regulations for U.S. and multinational companies[137] - New tax legislation, including the OECD's Pillar Two Global Anti-Base Erosion rules and the One Big Beautiful Bill Act (P.L. 119-21), may increase the Company's tax liability, with various provisions effective from 2024 through 2027[138] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS This section details the Company's share repurchase activity under the $500 million Repurchase Plan authorized on February 18, 2025, including the number of shares purchased and the remaining authorization - The Company's board authorized a $500 million share repurchase plan on February 18, 2025[139] Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :---------------- | :------------------------------- | :--------------------------- | | April 1 - April 30 | 2,590,755 | $34.86 | | May 1 - May 31 | — | — | | June 1 - June 30 | — | — | | Total | 2,590,755 | $34.86 | - As of June 30, 2025, the approximate dollar value of shares that may yet be purchased under the Repurchase Plan was $300,000,016[140][142] ITEM 6. EXHIBITS This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including offer letters, certifications from executive officers, and Inline XBRL documents - Exhibits include an offer letter, certifications from the Principal Executive Officer and Principal Financial Officer (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act), and Inline XBRL documents[143] SIGNATURES This section contains the required signatures of the company's principal executive and financial officers - The report was signed on August 6, 2025, by Malcolm Wilson (Chief Executive Officer) and Baris Oran (Chief Financial Officer)[147]