0001852244-22-000020 | 10-Q | XBRL Viewer

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Employee Benefit Plans - Schedule of Projected Benefit Obligations (Details) - Pension Plan - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Defined Benefit Plan Disclosure
Interest cost	$ (6)	$ 0
Expected return on plan assets	15	0
Net periodic benefit income	$ 9	$ 0

Restructuring and Other (Tables)

3 Months Ended

Mar. 31, 2022

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

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


(In millions)
Balance as of December 31, 2021	$	3
Charges incurred	5
Payments	(4)

Balance as of March 31, 2022	$	4

Debt and Financing Arrangements - Schedule of Debt (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Debt Instrument
Finance leases and other	$ 146	$ 168
Total debt and obligations under finance leases	939	961
Short-term borrowings and obligations under finance leases	32	34
Total long-term debt	907	927
Unsecured Debt \| Unsecured Notes Due 2026
Debt Instrument
Long-term debt	$ 397	397
Interest rate, stated percentage	1.65%
Unamortized discount (premium) and debt issuance costs, net	$ 3	3
Unsecured Debt \| Unsecured Notes Due 2031
Debt Instrument
Long-term debt	$ 396	396
Interest rate, stated percentage	2.65%
Unamortized discount (premium) and debt issuance costs, net	$ 4	$ 4

Restructuring and Other - Restructuring and Related Costs (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Restructuring Reserve
Charges incurred	$ 13	$ 4
Restructuring Actions
Restructuring Reserve
Restructuring reserve, beginning balance	3
Charges incurred	5
Payments	(4)
Restructuring reserve, ending balance	$ 4

Fair Value Measurements and Financial Instruments - Fair Value by Balance Sheet Location (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Other current liabilities \| Derivatives designated as hedges \| Cross-currency swap agreements
Derivatives, Fair Value
Notional Amount		$ 328
Derivative liability, fair value		4
Other long-term liabilities \| Derivatives designated as hedges \| Cross-currency swap agreements
Derivatives, Fair Value
Notional Amount	$ 487	165
Derivative liability, fair value	13	4
Other current assets \| Derivatives not designated as hedges \| Foreign currency option contracts
Derivatives, Fair Value
Notional Amount	315	368
Derivative asset, fair value	$ 16	11
Other long-term assets \| Derivatives not designated as hedges \| Foreign currency option contracts
Derivatives, Fair Value
Notional Amount		37
Derivative asset, fair value		$ 1

Fair Value Measurements and Financial Instruments

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements and Financial Instruments

7. 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 March 31, 2022 and December 31, 2021, due to their short-term nature.

Debt

The fair value of debt was as follows:


		March 31, 2022				December 31, 2021
(In millions)	Level	Fair Value		Carrying Value		Fair Value		Carrying Value
1.65% Unsecured notes due 2026	2	$	364	$	397	$	391	$	397
2.65% Unsecured notes due 2031	2	351		396		394		396

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. 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.

Derivatives

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

March 31, 2022

(In millions)

Notional Amount

Balance Sheet Caption

Fair Value

Derivatives designated as hedges

Liabilities:

Cross-currency swap agreements (1)

487

Other long-term liabilities

Derivatives not designated as hedges

Assets:

Foreign currency option contracts

315

Other current assets

(1) In the first quarter of 2022, the Company extended certain cross-currency swap agreements scheduled to mature in 2022. The new maturity of these cross-currency swap agreements is 2027.


	December 31, 2021
(In millions)	Notional Amount		Balance Sheet Caption	Fair Value
Derivatives designated as hedges
Liabilities:
Cross-currency swap agreements	$	328	Other current liabilities	$	4
Cross-currency swap agreements	165		Other long-term liabilities	4
Derivatives not designated as hedges
Assets:
Foreign currency option contracts	$	368	Other current assets	$	11
Foreign currency option contracts	37		Other long-term assets	1

As of March 31, 2022 and December 31, 2021, the derivatives are classified as Level 2 within the fair value hierarchy. The derivatives are valued using inputs other than quoted prices such as foreign exchange rates and yield curves.

The effect of net investment hedges on Accumulated Other Comprehensive Income (“AOCI”) and the Condensed Consolidated Statements of Operations was as follows:


	Three Months Ended March 31, 2022
(In millions)	Gain or (Loss) Recognized in Other Comprehensive Income		Gain or (Loss) Reclassified from AOCI into Net Income(1)		Gain or (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) (1)


Derivatives designated as hedges
Cross-currency swap agreements	$	3	$	—	$	2
Total	$	3	$	—	$	2

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

The gain recognized in earnings for foreign currency option contracts not designated as hedging instruments was $8 million for the three months ended March 31, 2022, of which $6 million was unrealized. These amounts are recorded in Other income, net in the Condensed Consolidated Statements of Operations.

There were no derivative instruments in the condensed consolidated financial statements as of March 31, 2021.

Stockholders' Equity

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Stockholders' Equity

10. Stockholders’ Equity

The following table summarizes the changes in AOCI by component:


(In millions)	Foreign Currency Translation Adjustments		Defined Benefit Plan		Less: AOCI attributable to noncontrolling interest		AOCI attributable to GXO
As of December 31, 2021	$	(53)	$	(76)	$	(1)	$	(130)
Unrealized gain (loss), net of tax	(43)		—		1		(42)
Amounts reclassified from AOCI to net income	(2)		—		—		(2)
Other comprehensive income (loss), net of tax	(45)		—		1		(44)
Deconsolidation of variable interest entity	4		—		(2)		2
As of March 31, 2022	$	(94)	$	(76)	$	(2)	$	(172)


(In millions)	Foreign Currency Translation Adjustments		Defined Benefit Plan		Less: AOCI attributable to noncontrolling interest		AOCI attributable to GXO
As of December 31, 2020	$	61	$	(1)	$	(2)	$	58
Unrealized gain (loss), net of tax	(46)		—		4		(42)
Amounts reclassified from AOCI to net income	—		—		—		—
Other comprehensive income (loss), net of tax	(46)		—		4		(42)
As of March 31, 2021	$	15	$	(1)	$	2	$	16

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

Earnings per Share

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Earnings per Share

9. Earnings per Share

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


	Three Months Ended March 31,
(Dollars in millions, shares in thousands, except per share data)		2022		2021
Net income attributable to common shares		$	37	$	14

Basic weighted-average common shares (1)		114,731		114,626
Diluted effect of stock-based awards		838		—
Diluted weighted-average common shares (1)		115,569		114,626

Basic earnings per share		$	0.32	$	0.12
Diluted earnings per share		$	0.32	$	0.12

(1) On August 2, 2021, 114,626,250 shares of common stock of the Company were distributed and began regular-way trading. This share amount is utilized for the calculation of basic and diluted earnings per share for the three months ended March 31, 2021.

For the three months ended March 31, 2022, approximately 1.4 million shares are excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

Acquisitions (Details) £ / shares in Units, $ / shares in Units, $ in Millions, £ in Billions			12 Months Ended
	Feb. 28, 2022 USD ($) shares	Feb. 28, 2022 GBP (£) shares	Dec. 31, 2021 USD ($)	Mar. 31, 2022 USD ($) $ / shares	Mar. 31, 2022 £ / shares
Business Acquisition
Goodwill			$ 2,017	$ 1,986
Clipper
Business Acquisition
Consideration transferred	$ 1,300	£ 1.0
Business acquisition par share (in dollar par share) \| (per share)				$ 9.06	£ 6.90
Common stock shares (in shares) \| shares	0.0359	0.0359
Kuehne + Nagel
Business Acquisition
Operating and finance lease, right-of-use asset			300
Operating and finance lease, liability			300
Acquired intangibles			16
Goodwill			$ 26

Employee Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2022

Retirement Benefits [Abstract]

Schedule of Projected Benefit Obligations

In July 2021, the Company became the plan sponsor for a retirement plan in the U.K. (the “U.K. Retirement Plan”). Components of the net periodic benefit cost under the U.K. Retirement Plan were as follows:


	Three Months Ended March 31,
(In millions)	2022		2021
Interest cost	$	(6)	$	—
Expected return on plan assets	15		—
Net periodic benefit income (1)	$	9	$	—

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

Revenue Recognition - Contract Liability (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Revenue from Contract with Customer [Abstract]
Contract assets	$ 146		$ 147
Contract liabilities	228		$ 220
Amounts included in the beginning of year contract liability balance	$ 63	$ 60

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement of Comprehensive Income [Abstract]
Net income	$ 38	$ 17
Other comprehensive loss, net of tax
Foreign currency translation loss, net of tax benefit of $— and $3, respectively	(45)	(45)
Unrealized gain (loss) on hedging instruments, net of tax expense of $— and $(1), respectively	0	(1)
Other comprehensive loss	(45)	(46)
Comprehensive loss	(7)	(29)
Less: Comprehensive income attributable to noncontrolling interest	0	(1)
Comprehensive loss attributable to GXO	$ (7)	$ (28)

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income (loss) and other comprehensive income (loss), attributable to noncontrolling interests. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income. Excludes changes in equity resulting from investments by owners and distributions to owners.

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- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

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- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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+ Details

Earnings per Share - Computations of Basic and Diluted Earnings (Loss) per Share (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
	Aug. 02, 2021	Mar. 31, 2022	Mar. 31, 2021
Class of Stock
Net income attributable to common shares, basic		$ 37	$ 14
Net income attributable to common shares, diluted		$ 37	$ 14
Basic weighted-average common shares (in shares)		114,731,000	114,626,000
Diluted effect of stock-based awards (in shares)		838,000	0
Diluted weighted-average common shares (in shares)		115,569,000	114,626,000
Basic earnings per share (in dollars per share)		$ 0.32	$ 0.12
Diluted earnings per share (in dollars per share)		$ 0.32	$ 0.12
Common Stock
Class of Stock
New stock issued during period (in shares)	114,626,250

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Accounts receivable, allowance for credit loss	$ 13	$ 13
Property and equipment, accumulated depreciation	1,145	1,128
Identifiable intangible assets, accumulated amortization	$ 414	$ 407
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)	114,840	114,659
Common stock, shares outstanding (in shares)	114,840	114,659
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

Fair Value Measurements and Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Schedule of Debt Fair Values

The fair value of debt was as follows:


		March 31, 2022				December 31, 2021
(In millions)	Level	Fair Value		Carrying Value		Fair Value		Carrying Value
1.65% Unsecured notes due 2026	2	$	364	$	397	$	391	$	397
2.65% Unsecured notes due 2031	2	351		396		394		396

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 were as follows:

March 31, 2022

(In millions)

Notional Amount

Balance Sheet Caption

Fair Value

Derivatives designated as hedges

Liabilities:

Cross-currency swap agreements (1)

487

Other long-term liabilities

Derivatives not designated as hedges

Assets:

Foreign currency option contracts

315

Other current assets

(1) In the first quarter of 2022, the Company extended certain cross-currency swap agreements scheduled to mature in 2022. The new maturity of these cross-currency swap agreements is 2027.


	December 31, 2021
(In millions)	Notional Amount		Balance Sheet Caption	Fair Value
Derivatives designated as hedges
Liabilities:
Cross-currency swap agreements	$	328	Other current liabilities	$	4
Cross-currency swap agreements	165		Other long-term liabilities	4
Derivatives not designated as hedges
Assets:
Foreign currency option contracts	$	368	Other current assets	$	11
Foreign currency option contracts	37		Other long-term assets	1

Derivative Instruments, Gain (Loss)

The effect of net investment hedges on Accumulated Other Comprehensive Income (“AOCI”) and the Condensed Consolidated Statements of Operations was as follows:


	Three Months Ended March 31, 2022
(In millions)	Gain or (Loss) Recognized in Other Comprehensive Income		Gain or (Loss) Reclassified from AOCI into Net Income(1)		Gain or (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) (1)


Derivatives designated as hedges
Cross-currency swap agreements	$	3	$	—	$	2
Total	$	3	$	—	$	2

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

Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

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


	Three Months Ended March 31,
(Dollars in millions, shares in thousands, except per share data)		2022		2021
Net income attributable to common shares		$	37	$	14

Basic weighted-average common shares (1)		114,731		114,626
Diluted effect of stock-based awards		838		—
Diluted weighted-average common shares (1)		115,569		114,626

Basic earnings per share		$	0.32	$	0.12
Diluted earnings per share		$	0.32	$	0.12

Leases

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Leases

5. Leases

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

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


(In millions)	March 31, 2022		December 31, 2021
Operating leases:
Operating lease assets	$	1,771	$	1,772

Current operating lease liabilities	$	455	$	453
Long-term operating lease liabilities	1,388		1,391
Total operating lease liabilities	$	1,843	$	1,844

Finance leases:


Property and equipment, net	$	136	$	155

Short-term borrowings and obligations under finance leases	$	32	$	34
Long-term debt and obligations under finance leases	114		133
Total finance lease liabilities	$	146	$	167

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


	Three Months Ended March 31,
(In millions)		2022		2021
Operating leases:
Operating lease cost		$	169	$	164
Short-term lease cost		22		19
Variable lease cost		20		19
Total operating lease cost		$	211	$	202
Finance leases:
Amortization of leased assets		$	7	$	4
Interest expense on lease liabilities		1		1
Total finance lease cost		$	8	$	5
Total operating and finance lease cost		$	219	$	207

Supplemental cash flow information was as follows:


	Three Months Ended March 31,
(In millions)	2022		2021
Leased assets obtained in exchange for new operating lease liabilities	$	154	$	412
Leased assets obtained in exchange for new finance lease liabilities	1		30

Leases

5. Leases

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


(In millions)	March 31, 2022		December 31, 2021
Operating leases:
Operating lease assets	$	1,771	$	1,772

Current operating lease liabilities	$	455	$	453
Long-term operating lease liabilities	1,388		1,391
Total operating lease liabilities	$	1,843	$	1,844

Finance leases:


Property and equipment, net	$	136	$	155

Short-term borrowings and obligations under finance leases	$	32	$	34
Long-term debt and obligations under finance leases	114		133
Total finance lease liabilities	$	146	$	167

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


	Three Months Ended March 31,
(In millions)		2022		2021
Operating leases:
Operating lease cost		$	169	$	164
Short-term lease cost		22		19
Variable lease cost		20		19
Total operating lease cost		$	211	$	202
Finance leases:
Amortization of leased assets		$	7	$	4
Interest expense on lease liabilities		1		1
Total finance lease cost		$	8	$	5
Total operating and finance lease cost		$	219	$	207

Supplemental cash flow information was as follows:


	Three Months Ended March 31,
(In millions)	2022		2021
Leased assets obtained in exchange for new operating lease liabilities	$	154	$	412
Leased assets obtained in exchange for new finance lease liabilities	1		30

Fair Value Measurements and Financial Instruments - Derivative and Nonderivative Instruments Designated as Hedges (Details) $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)
Derivative Instruments, Gain (Loss)
Gain or (Loss) Recognized in Other Comprehensive Income	$ 3
Gain or (Loss) Reclassified from AOCI into Net Income	0
Gain or (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing)	2
Currency Swap \| Derivatives designated as hedges
Derivative Instruments, Gain (Loss)
Gain or (Loss) Recognized in Other Comprehensive Income	3
Gain or (Loss) Reclassified from AOCI into Net Income	0
Gain or (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing)	$ 2

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Statement [Abstract]
Revenue	$ 2,083	$ 1,822
Direct operating expense	1,748	1,520
Selling, general and administrative expense	190	171
Depreciation and amortization expense	76	79
Transaction and integration costs	19	18
Restructuring costs and other	13	4
Operating income	37	30
Other income, net	16	1
Interest expense, net	(4)	(5)
Income before income taxes	49	26
Income tax expense	(11)	(9)
Net income	38	17
Less: Net income attributable to noncontrolling interests	(1)	(3)
Net income attributable to GXO	$ 37	$ 14
Earnings per share data
Basic earnings per share (in dollars per share)	$ 0.32	$ 0.12
Diluted earnings per share (in dollars per share)	$ 0.32	$ 0.12
Weighted-average common shares outstanding
Basic weighted-average common shares outstanding (in shares)	114,731	114,626
Diluted weighted-average common shares outstanding (in shares)	115,569	114,626

Revenue Recognition - Revenue Disaggregated by Industry Sector (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Disaggregation of Revenue
Revenue	$ 2,083	$ 1,822
E-commerce, omnichannel retail and consumer technology
Disaggregation of Revenue
Revenue	1,130	951
Food and beverage
Disaggregation of Revenue
Revenue	338	299
Industrial and manufacturing
Disaggregation of Revenue
Revenue	263	248
Consumer packaged goods
Disaggregation of Revenue
Revenue	213	186
Other
Disaggregation of Revenue
Revenue	$ 139	$ 138

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

Basis of Presentation and Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2022
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company (“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 Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”). The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the 2021 Form 10-K. 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 three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.
Adoption of New Accounting Standards and Accounting Pronouncements Issued but Not Yet Adopted	Recently Adopted Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” The ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers. On January 1, 2022, the Company adopted the guidance. The adoption of this new standard did not have a material impact on the Company’s condensed consolidated financial statements. Accounting Pronouncements Not Yet Adopted In March 2020, the 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. The amendments apply 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. The amendments are elective and are effective upon issuance through December 31, 2022. The Company intends to apply this guidance when modifications of contracts that include LIBOR occur, which is not expected to have a material impact on the Company’s condensed consolidated financial statements.

Revenue Recognition

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue Recognition

2. Revenue Recognition

Revenue disaggregated by geographical area was as follows:


	Three Months Ended March 31,
(In millions)		2022		2021
United Kingdom		$	704	$	552
United States		681		584
France		176		180
Netherlands		170		148
Spain		120		119
Other		232		239
Total		$	2,083	$	1,822

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


	Three Months Ended March 31,
(In millions)		2022		2021
E-commerce, omnichannel retail and consumer technology		$	1,130	$	951
Food and beverage		338		299
Industrial and manufacturing		263		248
Consumer packaged goods		213		186
Other		139		138
Total		$	2,083	$	1,822

Contract Balances


(In millions)	March 31, 2022		December 31, 2021
Contract assets (1)	$	146	$	147
Contract liabilities (2)	228		220

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

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

Revenue included the following:


	Three Months Ended March 31,
(In millions)		2022		2021
Amounts included in the beginning of year contract liability balance		$	63	$	60

Remaining Performance Obligations

As of March 31, 2022, the fixed consideration component of the Company’s remaining performance obligation was approximately $2.6 billion, and the Company expects to recognize approximately 69% 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.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

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+ Details

Debt and Financing Arrangements - Narrative (Details) £ in Millions, $ in Millions		12 Months Ended
	Feb. 28, 2022	Dec. 31, 2021	Mar. 31, 2022 USD ($)	Mar. 31, 2022 GBP (£)	Mar. 22, 2022 GBP (£) debt_instrument
Revolving Credit Facility
Debt Instrument
Debt term		5 years
Maximum borrowing capacity			$ 800
Long-term line of credit			0
Letter of Credit
Debt Instrument
Maximum borrowing capacity			60
Term Loan Credit Agreement \| Unsecured Debt
Debt Instrument
Face amount			493		£ 375.0
Number of term loans \| debt_instrument					2
Term Loan Credit Agreement, Loan Maturing On Second Anniversary \| Unsecured Debt
Debt Instrument
Loans payable			246		£ 187.5
Term Loan Credit Agreement, Loan Maturing On Third Anniversary \| Unsecured Debt
Debt Instrument
Loans payable			246		£ 187.5
Bridge Credit Agreement \| Unsecured Debt
Debt Instrument
Face amount			$ 979	£ 745.0
Debt term	364 days
Interest to be paid, period after closing	3 months
Interest to be paid, period after previous payment date	3 months

Restructuring and Other

3 Months Ended

Mar. 31, 2022

Restructuring and Related Activities [Abstract]

Restructuring and Other

4. Restructuring and Other

Restructuring

The Company engages in restructuring actions as part of its ongoing efforts to best use its resources and infrastructure. These actions generally include severance and facility-related costs and are intended to improve efficiency and profitability.

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


(In millions)
Balance as of December 31, 2021	$	3
Charges incurred	5
Payments	(4)

Balance as of March 31, 2022	$	4

The remaining restructuring liability at March 31, 2022, primarily relates to severance payments and is expected to be substantially paid within the next twelve months.

Other

In the first quarter of 2022, the Company deconsolidated a 50% owned joint venture. The deconsolidation resulted in an $8 million charge recorded in the first quarter of 2022.

Employee Benefit Plans - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Retirement Benefits [Abstract]
Defined contribution plans	$ 4	$ 4

Leases (Tables)

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Supplemental Balance Sheet Information

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


(In millions)	March 31, 2022		December 31, 2021
Operating leases:
Operating lease assets	$	1,771	$	1,772

Current operating lease liabilities	$	455	$	453
Long-term operating lease liabilities	1,388		1,391
Total operating lease liabilities	$	1,843	$	1,844

Finance leases:


Property and equipment, net	$	136	$	155

Short-term borrowings and obligations under finance leases	$	32	$	34
Long-term debt and obligations under finance leases	114		133
Total finance lease liabilities	$	146	$	167

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 March 31,
(In millions)		2022		2021
Operating leases:
Operating lease cost		$	169	$	164
Short-term lease cost		22		19
Variable lease cost		20		19
Total operating lease cost		$	211	$	202
Finance leases:
Amortization of leased assets		$	7	$	4
Interest expense on lease liabilities		1		1
Total finance lease cost		$	8	$	5
Total operating and finance lease cost		$	219	$	207

Supplemental cash flow information was as follows:


	Three Months Ended March 31,
(In millions)	2022		2021
Leased assets obtained in exchange for new operating lease liabilities	$	154	$	412
Leased assets obtained in exchange for new finance lease liabilities	1		30

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net income	$ 38	$ 17
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization expense	76	79
Stock-based compensation expense	6	5
Deferred tax benefit	3	6
Other	4	(7)
Changes in operating assets and liabilities
Accounts receivable	(33)	3
Other assets	(7)	(65)
Accounts payable	(39)	(17)
Accrued expenses and other liabilities	(2)	26
Net cash provided by operating activities	46	47
Cash flows from investing activities:
Capital expenditures	(65)	(67)
Proceeds from sales of property and equipment	3	0
Purchase and sale of affiliate trade receivables, net	0	20
Acquisition of businesses, net of cash acquired	0	9
Other	18	0
Net cash used in investing activities	(44)	(38)
Cash flows from financing activities
Repayment of debt related to securitization transactions and other	0	(25)
Repayment of debt and finance leases	(9)	(26)
Net transfers from XPO Logistics, Inc.	0	138
Other	(9)	(7)
Net cash provided by (used in) financing activities	(18)	80
Effect of exchange rates on cash and cash equivalents	(5)	(3)
Net increase (decrease) in cash and cash equivalents	(21)	86
Cash and cash equivalents, beginning of period	333	328
Cash and cash equivalents, end of period	$ 312	$ 414

Debt and Financing Arrangements

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Debt and Financing Arrangements

6. Debt and Financing Arrangements

The following table summarizes the carrying value of debt:


(In millions)	March 31, 2022		December 31, 2021
1.65% Unsecured notes due 2026 (1)	$	397	$	397
2.65% Unsecured notes due 2031 (2)	396		396
Finance leases and other	146		168
Total debt and obligations under finance leases	939		961
Less: Short-term borrowings and obligations under finance leases	32		34
Total long-term debt and obligations under finance leases	$	907	$	927

(1) The carrying value of the 1.65% Unsecured Notes due 2026 is presented net of unamortized debt issuance cost and discount of $3 million and $3 million as of March 31, 2022, and December 31, 2021, respectively.

(2) The carrying value of the 2.65% Unsecured Notes due 2031 is presented net of unamortized debt issuance cost and discount of $4 million and $4 million as of March 31, 2022, and December 31, 2021, respectively.

Term Loan Credit Agreement

On March 22, 2022, the Company entered into a Term Loan Credit Agreement that provides a £375 million ($493 million as of March 31, 2022) unsecured term loan facility, which will partially fund the Clipper Acquisition. The Term Loan Credit Agreement consists of two delayed draw term loans of £187.5 million ($246 million as of March 31, 2022). The loans may be borrowed in multiple draws beginning on the acquisition date. The loans mature on the second and third anniversary following the funding date, respectively. Loans under the Term Loan Credit Agreement bear interest at a fluctuating rate per annum equal to (a) with respect to borrowings in U.S. dollars, at our option, the alternate base rate or the adjusted secured overnight financing rate and (b) with respect to borrowings in British Pounds Sterling, the daily simple Sterling Overnight Interbank Average rate (“SONIA”), in each case, plus an applicable margin based on the Company’s credit ratings.

The Term Loan Credit Agreement contains representations and warranties, affirmative and negative covenants and events of default customary for unsecured financings of this type, including negative covenants that, among other things, limit the ability of the Company and its subsidiaries to incur liens, limit the ability of the Company to make certain fundamental changes and limit the ability of certain of its subsidiaries to incur indebtedness, in each case subject to a number of important exceptions and qualifications. In addition, the Term Loan Credit Agreement requires the Company, beginning with the last day of the first full fiscal quarter following the initial funding of loans under the Term Loan Credit Agreement, to maintain a consolidated leverage ratio less than or equal to a specified maximum consolidated leverage ratio.

Bridge Term Loan Credit Agreement

On February 28, 2022, the Company entered into a Bridge Term Loan Credit Agreement that provided a £745 million ($979 million as of March 31, 2022) unsecured term loan facility for the Clipper Acquisition. The Bridge Term Loan Credit Agreement matures 364 days after an advance. Loans under the Bridge Term Loan Credit Agreement bear interest at the daily simple SONIA rate plus an applicable margin calculated based on the Company’s credit ratings. Interest will be paid in arrears, initially on the three-month anniversary of the acquisition closing date and thereafter on the date that is three months following the previous payment date.

Concurrently with the effectiveness of the Term Loan Credit Agreement, the Company reduced commitments under the Bridge Term Loan Credit Agreement by the aggregate amount of commitments under the Term Loan Credit Agreement.

Revolving Credit Facility

In 2021, the Company entered into a five-year unsecured multi-currency Revolving Credit Facility (the “Revolving Credit Facility”). The Revolving Credit Facility provides commitments of up to $800 million, of which $60 million is available for the issuance of letters of credit. No amounts were outstanding under the Revolving Credit Facility as of March 31, 2022.

Sales of Certain Receivables

The Company sells certain of its trade accounts receivables on a non-recourse basis to third-party financial institutions under various factoring agreements. The Company also sold certain European trade accounts receivable under a securitization program. In the first quarter of 2022, the Company terminated its securitization program. The Company accounts for these transactions as sales of receivables and presents cash proceeds as cash provided by operating activities in the Consolidated Statements of Cash Flows. The Company uses the sale of certain receivables to help manage its working capital.

Information related to the trade receivables sold was as follows:


	Three Months Ended March 31,
(In millions)		2022		2021
Factoring agreements
Receivables sold in period		$	229	$	100
Cash consideration		228		100



Securitization program
Receivables sold in period		$	—	$	428
Cash consideration		—		428

Covenants and Compliance

As of March 31, 2022, the Company was in compliance with the covenants contained in its debt and financing arrangements.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Stockholders' Equity (Details) - USD ($) $ in Millions	3 Months Ended
Stockholders' Equity (Details) - USD ($) $ in Millions	Mar. 31, 2022	Mar. 31, 2021
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax
Beginning balance	$ 2,390	$ 2,948
Deconsolidation of variable interest entity	(3)
Ending balance	2,375	3,043
Foreign Currency Translation Adjustments
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax
Beginning balance	(53)	61
Unrealized gain (loss), net of tax	(43)	(46)
Amounts reclassified from AOCI to net income	(2)	0
Other comprehensive income (loss), net of tax	(45)	(46)
Deconsolidation of variable interest entity	4
Ending balance	(94)	15
Defined Benefit Plan
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax
Beginning balance	(76)	(1)
Unrealized gain (loss), net of tax	0	0
Amounts reclassified from AOCI to net income	0	0
Other comprehensive income (loss), net of tax	0	0
Deconsolidation of variable interest entity	0
Ending balance	(76)	(1)
Less: AOCI attributable to noncontrolling interest
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax
Beginning balance	(1)	(2)
Unrealized gain (loss), net of tax	1	4
Amounts reclassified from AOCI to net income	0	0
Other comprehensive income (loss), net of tax	1	4
Deconsolidation of variable interest entity	(2)
Ending balance	(2)	2
Accumulated Other Comprehensive Loss
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax
Beginning balance	(130)	58
Unrealized gain (loss), net of tax	(42)	(42)
Amounts reclassified from AOCI to net income	(2)	0
Other comprehensive income (loss), net of tax	(44)	(42)
Deconsolidation of variable interest entity	2
Ending balance	$ (172)	$ 16

Employee Benefit Plans

3 Months Ended

Mar. 31, 2022

Retirement Benefits [Abstract]

Employee Benefit Plans

8. Employee Benefit Plans

Defined Benefit Plans


	Three Months Ended March 31,
(In millions)	2022		2021
Interest cost	$	(6)	$	—
Expected return on plan assets	15		—
Net periodic benefit income (1)	$	9	$	—

(1) Net periodic benefit income is recorded within 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 disclosures due to their immateriality.

Defined Contribution Plans

The Company’s costs for defined contribution plans were $4 million for the three months ended March 31, 2022 and 2021, and were primarily included within Direct operating expenses in the Condensed Consolidated Statements of Operations.

- Definition

The entire disclosure for retirement benefits.

+ References

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+ Details

Acquisitions	3 Months Ended
Acquisitions	Mar. 31, 2022
Business Combination and Asset Acquisition [Abstract]
Acquisitions	3. Acquisitions Clipper Acquisition On February 28, 2022, the Company and the board of directors of Clipper Logistics plc, a retail logistics company based in Leeds, England (“Clipper”), reached an agreement on the terms of a cash and share offer by the Company for the acquisition of the entire issued ordinary share capital of Clipper for approximately £1.0 billion (approximately $1.3 billion) (the “Clipper Acquisition”). Under the terms of the agreement, Clipper shareholders will be entitled to receive 690 pence (approximately $9.06 as of March 31, 2022) in cash and 0.0359 of a share of GXO common stock per share. In connection with the Clipper Acquisition, (i) the Company and Clipper entered into a Cooperation Agreement, (ii) the Company entered into a Bridge Term Loan Credit Agreement and (iii) the Company entered into a Term Loan Credit Agreement. For additional information regarding the financing agreements entered in connection with the Clipper Acquisition, see Note 6. Debt and Financing Arrangements. In April 2022, the Clipper Acquisition was approved by Clippers’ shareholders. Kuehne + Nagel Acquisition In 2021, the Company acquired the majority of Kuehne + Nagel’s contract logistics operations in the U.K. Kuehne + Nagel’s operations provide a range of logistics services, including inbound and outbound distribution, reverse logistics management and inventory management. The Company recorded assets and liabilities at fair value. Operating and finance lease assets and liabilities, goodwill, and intangible assets acquired were $300 million, $16 million and $26 million, respectively.

Earnings per Share - Narrative (Details) shares in Millions	3 Months Ended
Earnings per Share - Narrative (Details) shares in Millions	Mar. 31, 2022 shares
Stock Options and Restricted Stock Units (RSUs)
Class of Stock
Antidilutive securities excluded from computation of earnings per share (in shares)	1.4

Fair Value Measurements and Financial Instruments - Narrative (Details) - Foreign currency option contracts $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)
Derivative Instruments, Gain (Loss)
Derivative instruments not designated as hedging instruments, gain (loss), net	$ 8
Unrealized gain (loss) on derivatives	$ 6

Debt and Financing Arrangements (Tables)

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Schedule of Debt

The following table summarizes the carrying value of debt:


(In millions)	March 31, 2022		December 31, 2021
1.65% Unsecured notes due 2026 (1)	$	397	$	397
2.65% Unsecured notes due 2031 (2)	396		396
Finance leases and other	146		168
Total debt and obligations under finance leases	939		961
Less: Short-term borrowings and obligations under finance leases	32		34
Total long-term debt and obligations under finance leases	$	907	$	927

Schedule of Accounts Receivable Securitization and Factoring Programs

Information related to the trade receivables sold was as follows:


	Three Months Ended March 31,
(In millions)		2022		2021
Factoring agreements
Receivables sold in period		$	229	$	100
Cash consideration		228		100



Securitization program
Receivables sold in period		$	—	$	428
Cash consideration		—		428

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	11. 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 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 incurred related to these matters are expensed as 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.

Revenue Recognition - Revenue Disaggregated by Geographic Area (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Disaggregation of Revenue
Revenue	$ 2,083	$ 1,822
United Kingdom
Disaggregation of Revenue
Revenue	704	552
United States
Disaggregation of Revenue
Revenue	681	584
France
Disaggregation of Revenue
Revenue	176	180
Netherlands
Disaggregation of Revenue
Revenue	170	148
Spain
Disaggregation of Revenue
Revenue	120	119
Other
Disaggregation of Revenue
Revenue	$ 232	$ 239

- Definition

+ References

+ Details

Debt and Financing Arrangements - Trade Receivables Sold (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Factoring agreements
Receivables sold in period	$ 229	$ 100
Cash consideration	228	100
Securitization program
Receivables sold in period	0	428
Cash consideration	$ 0	$ 428

Basis of Presentation and Significant Accounting Policies	3 Months Ended
	Mar. 31, 2022
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 the Company (“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 Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”). The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the 2021 Form 10-K. 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 three months ended March 31, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. On August 2, 2021, the Company completed the separation from XPO Logistics, Inc. (“XPO”) (the “Separation”). Prior to the Separation, the Company’s financial statements were prepared on a standalone combined basis and were derived from the consolidated financial statements and accounting records of XPO. On August 2, 2021, the Company became a standalone publicly-traded company, and its financial statements post-Separation are prepared on a consolidated basis. The combined consolidated financial statements for all periods presented prior to the Separation are now also referred to as “condensed consolidated financial statements” and have been prepared under GAAP. Prior to the Separation, the Company’s historical assets and liabilities presented were wholly owned by XPO and were reflected on a historical cost basis. In connection with the Separation, the Company’s assets and liabilities were transferred to the Company on a carry-over basis. Prior to the Separation, the historical results of operations included allocations of XPO costs and expenses, including XPO’s corporate function, which incurred a variety of expenses including, but not limited to, information technology, human resources, accounting, sales and sales operations, procurement, executive services, legal, corporate finance and communications. An allocation of these expenses is included to burden all business units comprising XPO’s historical results of operations, including GXO. The charges reflected have been either specifically identified or allocated using drivers including proportional adjusted earnings before interest, taxes, depreciation and amortization, which include adjustments for transaction and integration costs, as well as restructuring costs and other adjustments, or headcount. The majority of these allocated costs are recorded within Selling, general and administrative expense; Depreciation and amortization expense; and Transaction and integration costs in the Consolidated Statements of Operations. The Company’s consolidated financial statements include the accounts of GXO Logistics, Inc. and its majority-owned subsidiaries and variable interest entities where the Company is the primary beneficiary. The Company has eliminated intercompany accounts and transactions. The Company presents its operations as one reportable segment. Recently Adopted Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” The ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers. On January 1, 2022, the Company adopted the guidance. The adoption of this new standard did not have a material impact on the Company’s condensed consolidated financial statements. Accounting Pronouncements Not Yet Adopted In March 2020, the 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. The amendments apply 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. The amendments are elective and are effective upon issuance through December 31, 2022. The Company intends to apply this guidance when modifications of contracts that include LIBOR occur, which is not expected to have a material impact on the Company’s condensed consolidated financial statements.

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement of Comprehensive Income [Abstract]
Foreign currency translation gain (loss), tax	$ 0	$ 3
Unrealized gain (loss) on financial assets/liabilities designated as hedging instruments, tax	$ 0	$ (1)

Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue from External Customers by Geographic Areas

Revenue disaggregated by geographical area was as follows:


	Three Months Ended March 31,
(In millions)		2022		2021
United Kingdom		$	704	$	552
United States		681		584
France		176		180
Netherlands		170		148
Spain		120		119
Other		232		239
Total		$	2,083	$	1,822

Disaggregation of Revenue

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


	Three Months Ended March 31,
(In millions)		2022		2021
E-commerce, omnichannel retail and consumer technology		$	1,130	$	951
Food and beverage		338		299
Industrial and manufacturing		263		248
Consumer packaged goods		213		186
Other		139		138
Total		$	2,083	$	1,822

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

Contract Balances


(In millions)	March 31, 2022		December 31, 2021
Contract assets (1)	$	146	$	147
Contract liabilities (2)	228		220

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

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

Revenue included the following:


	Three Months Ended March 31,
(In millions)		2022		2021
Amounts included in the beginning of year contract liability balance		$	63	$	60

Revenue Recognition - Narrative (Details) $ in Billions	Mar. 31, 2022 USD ($)
Revenue from Contract with Customer [Abstract]
Remaining performance obligation	$ 2.6
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
Remaining performance obligation percentage	69.00%
Performance obligations expected to be satisfied, expected timing	3 years

Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Operating leases:
Operating lease assets	$ 1,771	$ 1,772
Current operating lease liabilities	455	453
Long-term operating lease liabilities	1,388	1,391
Total operating lease liabilities	1,843	1,844
Finance leases:
Property and equipment, net	136	155
Short-term borrowings and obligations under finance leases	32	34
Long-term debt and obligations under finance leases	114	133
Total finance lease liabilities	$ 146	$ 167
Finance Lease, Right-of-Use Asset, Statement of Financial Position	Property and equipment, net of $1,145 and $1,128 in accumulated depreciation, respectively	Property and equipment, net of $1,145 and $1,128 in accumulated depreciation, respectively
Finance Lease, Liability, Current, Statement of Financial Position	Short-term borrowings and obligations under finance leases	Short-term borrowings and obligations under finance leases
Finance Lease, Liability, Noncurrent, Statement of Financial Position	Long-term debt and obligations under finance leases	Long-term debt and obligations under finance leases

Fair Value Measurements and Financial Instruments - Fair Value of Debt (Details) - Unsecured Debt - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
1.65% Unsecured notes due 2026
Fair Value Measurement Inputs and Valuation Techniques
Interest rate, stated percentage	1.65%
2.65% Unsecured notes due 2031
Fair Value Measurement Inputs and Valuation Techniques
Interest rate, stated percentage	2.65%
Fair Value \| 1.65% Unsecured notes due 2026 \| Fair Value, Inputs, Level 2
Fair Value Measurement Inputs and Valuation Techniques
Fair value of debt	$ 364	$ 391
Fair Value \| 2.65% Unsecured notes due 2031 \| Fair Value, Inputs, Level 2
Fair Value Measurement Inputs and Valuation Techniques
Fair value of debt	351	394
Carrying Value \| 1.65% Unsecured notes due 2026 \| Fair Value, Inputs, Level 2
Fair Value Measurement Inputs and Valuation Techniques
Fair value of debt	397	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	$ 396	$ 396

Leases - Lease Costs and Supplemental Cash Flows (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Leases [Abstract]
Operating lease cost	$ 169	$ 164
Short-term lease cost	22	19
Variable lease cost	20	19
Total Operating Lease Costs	211	202
Amortization of leased assets	7	4
Interest expense on lease liabilities	1	1
Total finance lease cost	8	5
Total operating and finance lease cost	219	207
Leased assets obtained in exchange for new operating lease liabilities	154	412
Leased assets obtained in exchange for new finance lease liabilities	$ 1	$ 30

Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) shares in Thousands, $ in Millions	Total	Common Stock	XPO Logistics, Inc. Investment	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Equity Before Noncontrolling Interests	Noncontrolling Interests
Beginning balance (in shares) at Dec. 31, 2020		0
Beginning balance at Dec. 31, 2020	$ 2,948	$ 0	$ 2,765	$ 0	$ 0	$ 58	$ 2,823	$ 125
Increase (Decrease) in Stockholders' Equity
Net income	17		14				14	3
Other comprehensive loss	(46)					(42)	(42)	(4)
Net transfers from XPO Logistics, Inc.	124		124				124
Ending balance (in shares) at Mar. 31, 2021		0
Ending balance at Mar. 31, 2021	3,043	$ 0	2,903	0	0	16	2,919	124
Beginning balance (in shares) at Dec. 31, 2021		114,659
Beginning balance at Dec. 31, 2021	2,390	$ 1	0	2,354	126	(130)	2,351	39
Increase (Decrease) in Stockholders' Equity
Net income	38				37		37	1
Other comprehensive loss	(45)					(44)	(44)	(1)
Stock-based compensation	6			6			6
Vesting of stock compensation awards (in shares)		181
Tax withholding on vesting of stock compensation awards	(11)			(11)			(11)
Deconsolidation of variable interest entity	(3)					2	2	(5)
Ending balance (in shares) at Mar. 31, 2022		114,840
Ending balance at Mar. 31, 2022	$ 2,375	$ 1	$ 0	$ 2,349	$ 163	$ (172)	$ 2,341	$ 34

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 312	$ 333
Accounts receivable, net of allowances of $13 and $13, respectively	1,492	1,507
Other current assets	226	259
Total current assets	2,030	2,099
Long-term assets
Property and equipment, net of $1,145 and $1,128 in accumulated depreciation, respectively	833	863
Operating lease assets	1,771	1,772
Goodwill	1,986	2,017
Intangible assets, net of $414 and $407 in accumulated amortization, respectively	239	257
Other long-term assets	267	263
Total long-term assets	5,096	5,172
Total assets	7,126	7,271
Current liabilities
Accounts payable	549	624
Accrued expenses	940	998
Short-term borrowings and obligations under finance leases	32	34
Current operating lease liabilities	455	453
Other current liabilities	146	220
Total current liabilities	2,122	2,329
Long-term liabilities
Long-term debt and obligations under finance leases	907	927
Long-term operating lease liabilities	1,388	1,391
Other long-term liabilities	334	234
Total long-term liabilities	2,629	2,552
Commitments and contingencies
Stockholders’ Equity
Common Stock, $0.01 par value per share, 300,000 shares authorized, 114,840 and 114,659 shares issued and outstanding, as of March 31, 2022 and December 31, 2021, respectively	1	1
Preferred Stock, $0.01 par value per share, 10,000 shares authorized, 0 shares issued and outstanding, as of March 31, 2022 and December 31, 2021, respectively	0	0
Additional paid-in capital	2,349	2,354
Retained earnings	163	126
Accumulated other comprehensive loss	(172)	(130)
Total stockholders’ equity before noncontrolling interests	2,341	2,351
Noncontrolling interests	34	39
Total equity	2,375	2,390
Total liabilities and equity	$ 7,126	$ 7,271

Restructuring and Other - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Restructuring Cost and Reserve
Restructuring costs and other	$ 13	$ 4
Deconsolidation Actions
Restructuring Cost and Reserve
Percent ownership prior to deconsolidation	50.00%
Restructuring costs and other	$ 8

Basis of Presentation and Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2022 segment
Accounting Policies [Abstract]
Number of reportable segments	1

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in AOCI by component:


(In millions)	Foreign Currency Translation Adjustments		Defined Benefit Plan		Less: AOCI attributable to noncontrolling interest		AOCI attributable to GXO
As of December 31, 2021	$	(53)	$	(76)	$	(1)	$	(130)
Unrealized gain (loss), net of tax	(43)		—		1		(42)
Amounts reclassified from AOCI to net income	(2)		—		—		(2)
Other comprehensive income (loss), net of tax	(45)		—		1		(44)
Deconsolidation of variable interest entity	4		—		(2)		2
As of March 31, 2022	$	(94)	$	(76)	$	(2)	$	(172)


(In millions)	Foreign Currency Translation Adjustments		Defined Benefit Plan		Less: AOCI attributable to noncontrolling interest		AOCI attributable to GXO
As of December 31, 2020	$	61	$	(1)	$	(2)	$	58
Unrealized gain (loss), net of tax	(46)		—		4		(42)
Amounts reclassified from AOCI to net income	—		—		—		—
Other comprehensive income (loss), net of tax	(46)		—		4		(42)
As of March 31, 2021	$	15	$	(1)	$	2	$	16