• GXO Reports First Quarter 2024 Results

    Source: Nasdaq GlobeNewswire / 07 May 2024 15:30:00   America/Chicago

    • First quarter revenue of $2.5 billion, up 6% year over year; organic revenue growth1 of 1%
    • Signed new business wins of approximately $250 million in annualized revenue in 1Q 2024; up 55% year over year
    • Sales pipeline at 12-month high of $2.2 billion
    • Completed acquisition of Wincanton on April 29, 2024

    GREENWICH, Conn., May 07, 2024 (GLOBE NEWSWIRE) -- GXO Logistics, Inc. (NYSE: GXO) today announced results for the first quarter 2024.

    Malcolm Wilson, chief executive officer of GXO, said, “We delivered a strong start to 2024, reflecting our solid execution amid improving industry dynamics. The company grew revenue by 6% to $2.5 billion and delivered positive organic revenue growth, while gaining market share. We look forward to driving continued growth throughout 2024 and are on track to achieve our full-year outlook.

    “We’re seeing strengthening demand from global blue-chip customers to realize operational efficiencies today while planning fulfillment strategies to meet their future needs. We signed approximately $250 million dollars of new business during the quarter, and total new business wins were up 55% year over year. More than half of these new wins came from customers outsourcing to us or partnering with us for the first time.

    “In the first quarter, we also announced our strategic acquisition of Wincanton, which we closed last week. Wincanton gives us a platform for growth in attractive verticals, including industrial and aerospace in Europe, and we expect to deliver double-digit accretion to adjusted EPS post-synergies.

    “Looking forward, our new business wins and our sales pipeline give us confidence that our growth trajectory is accelerating. We’re investing in our sales organization, expanding automation and AI across our footprint, and diversifying into new geographies and verticals to best position ourselves to deliver shareholder value through profitable growth.”

    First Quarter 2024 Results

    Revenue increased to $2.5 billion, compared with $2.3 billion for the first quarter 2023. Net loss was $36 million, primarily driven by a $63 million expense associated with legacy litigation, compared with $26 million net income for the first quarter 2023. Diluted loss per share was $0.31, compared with $0.21 diluted earnings per share for the first quarter 2023.

    Adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA1”) was $154 million, compared with $158 million for the first quarter 2023. Adjusted diluted EPS1 was $0.45, compared with $0.49 for the first quarter 2023.

    GXO generated $50 million of cash flow from operations, compared with $39 million for the first quarter 2023. In the first quarter of 2024, GXO used $17 million of free cash flow1, compared with $43 million used for the first quarter 2023.

    Cash Balances and Outstanding Debt

    As of March 31, 2024, cash and cash equivalents and debt outstanding were $423 million and $1.6 billion, respectively, as part of GXO’s investment grade balance sheet.

    Updated guidance

    As previously announced on April 24, 2024, the company reiterated its guidance for the full year 2024 and its 2027 financial targets as follows:

    • 2024 Guidance2
      • Standalone basis (unchanged):
        • Organic revenue growth1 of 2% to 5%;
        • Adjusted EBITDA1 of $760 million to $790 million;
        • Adjusted diluted EPS1 of $2.70 to $2.90; and
        • Free cash flow conversion1 of 30% to 40% of adjusted EBITDA1.
      • Including expected impact of Wincanton acquisition:
        • Organic revenue growth1 of 2% to 5%;
        • Adjusted EBITDA1 of $805 million to $835 million;
        • Adjusted diluted EPS1 of $2.73 to $2.93; and
        • Free cash flow conversion1 of 30% to 40% of adjusted EBITDA1.
    • 2027 Financial Targets2
      • Organic revenue CAGR (2024-2027)1,3 of approximately 10%, to approximately $15.5 billion to $16.0 billion of revenue;
      • Approximately 15% adjusted EBITDA CAGR (2024-2027)1,3, to approximately $1.25 billion to $1.30 billion of adjusted EBITDA1;
      • Adjusted diluted EPS CAGR (2024-2027)1,3 of more than 15%;
      • Free cash flow conversion1 of greater than 30% of adjusted EBITDA (2024-2027)1; and
      • Operating return on invested capital1 of more than 30%.

    Conference Call

    GXO will hold a conference call on Wednesday, May 8, 2024, at 8:30 a.m. Eastern Time. Participants can call toll-free (from US/Canada) 877-407-8029; international callers dial +1 201-689-8029. Conference ID: 13745710. A live webcast of the conference will be available on the Investor Relations area of the company’s website, investors.gxo.com. The conference will be archived until May 22, 2024. To access the replay by phone, call toll-free (from US/Canada) 877-660-6853; international callers dial +1 201-612-7415. Use participant passcode 13745710.

    About GXO Logistics

    GXO Logistics, Inc. (NYSE: GXO) is the world’s largest pure-play contract logistics provider and is benefiting from the rapid growth of ecommerce, automation and outsourcing. GXO is committed to providing a diverse, world-class workplace for more than 130,000 team members across more than 970 facilities totaling approximately 200 million square feet. The company partners with the world’s leading blue-chip companies to solve complex logistics challenges with technologically advanced supply chain and ecommerce solutions, at scale and with speed. GXO corporate headquarters is in Greenwich, Connecticut, USA. Visit GXO.com for more information and connect with GXO on LinkedIn, X, Facebook, Instagram and YouTube.

    Non-GAAP Financial Measures

    As required by the rules of the Securities and Exchange Commission (“SEC”), we provide reconciliations of the non-GAAP financial measures contained in this press release to the most directly comparable measure under GAAP, which are set forth in the financial tables below.

    GXO’s non-GAAP financial measures in this press release include: adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), adjusted EBITDA margin, adjusted EBITDA CAGR, adjusted earnings before interest, taxes and amortization (“adjusted EBITA”), adjusted EBITA, net of income taxes paid, adjusted EBITA margin, adjusted net income attributable to GXO, adjusted earnings per share (basic and diluted) (“adjusted EPS”), adjusted diluted EPS CAGR, free cash flow, free cash flow conversion, organic revenue, organic revenue growth, organic revenue CAGR, net leverage ratio, net debt, and operating return on invested capital (“ROIC”).

    We believe that the above adjusted financial measures facilitate analysis of our ongoing business operations because they exclude items that may not be reflective of, or are unrelated to, GXO’s core operating performance, and may assist investors with comparisons to prior periods and assessing trends in our underlying businesses. Other companies may calculate these non-GAAP financial measures differently, and therefore our measures may not be comparable to similarly titled measures used by other companies. GXO’s non-GAAP financial measures should only be used as supplemental measures of our operating performance.

    Adjusted EBITDA, adjusted EBITA, adjusted net income attributable to GXO and adjusted EPS include adjustments for transaction and integration costs, litigation expenses as well as restructuring costs and other adjustments as set forth in the financial table below. Transaction and integration adjustments are generally incremental costs that result from an actual or planned acquisition, divestiture or spin-off and may include transaction costs, consulting fees, retention awards, internal salaries and wages (to the extent the individuals are assigned full-time to integration and transformation activities), and certain costs related to integrating and separating IT systems. Litigation expenses primarily relate to the settlement of ongoing legal matters. Restructuring costs primarily relate to severance costs associated with business optimization initiatives.

    We believe that adjusted EBITDA, adjusted EBITDA margin, adjusted EBITA, adjusted EBITA, net of income taxes paid, and adjusted EBITA margin, improve comparability from period to period by removing the impact of our capital structure (interest and financing expenses), asset base (depreciation and amortization), tax impacts and other adjustments as set out in the attached tables, which management has determined are not reflective of core operating activities and thereby assist investors with assessing trends in our underlying businesses.

    We believe that organic revenue and organic revenue growth are important measures because they exclude the impact of foreign currency exchange rate fluctuations, revenue from acquired businesses and revenue from disposed business.

    We believe that adjusted net income attributable to GXO and adjusted EPS improve the comparability of our operating results from period to period by removing the impact of certain costs and gains, which management has determined are not reflective of our core operating activities, including amortization of acquisition-related intangible assets.

    We believe that free cash flow and free cash flow conversion are important measures of our ability to repay maturing debt or fund other uses of capital that we believe will enhance stockholder value. We calculate free cash flow as cash flows from operations less capital expenditures plus proceeds from sale of property and equipment. We calculate free cash flow conversion as free cash flow divided by adjusted EBITDA, expressed as a percentage.

    We believe that net debt and net leverage ratio are important measures of our overall liquidity position and are calculated by adding bank overdrafts and removing cash and cash equivalents from our total debt and net debt as a ratio of our adjusted EBITDA. We calculate ROIC as our adjusted EBITA, net of income taxes paid divided by the average invested capital. We believe ROIC provides investors with an important perspective on how effectively GXO deploys capital and use this metric internally as a high-level target to assess overall performance throughout the business cycle.

    Management uses these non-GAAP financial measures in making financial, operating and planning decisions and evaluating GXO’s ongoing performance.

    With respect to our financial targets for full-year 2024 organic revenue growth, adjusted EBITDA, adjusted diluted EPS, and free cash flow conversion and our 2027 financial targets of organic revenue CAGR, adjusted EBITDA, adjusted EBITDA CAGR, adjusted diluted EPS CAGR, free cash flow conversion and ROIC, a reconciliation of these non-GAAP measures to the corresponding GAAP measures is not available without unreasonable effort due to the variability and complexity of the reconciling items described above that we exclude from these non-GAAP target measures. The variability of these items may have a significant impact on our future GAAP financial results and, as a result, we are unable to prepare the forward-looking statements of income and cash flows prepared in accordance with GAAP, that would be required to produce such a reconciliation.

    Forward-Looking Statements

    This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, including our full-year 2024 guidance, our 2027 guidance, and the expected impact of the acquisition of Wincanton on our results of operations. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target,” “trajectory” or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by the company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors the company believes are appropriate in the circumstances.

    These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to a material difference include, but are not limited to, the risks discussed in our filings with the SEC and the following: economic conditions generally; supply chain challenges, including labor shortages; competition and pricing pressures; our ability to align our investments in capital assets, including equipment, service centers and warehouses, to our respective customers’ demands; our ability to successfully integrate and realize anticipated benefits, synergies, cost savings and profit improvement opportunities with respect to acquired companies, including the acquisition of Wincanton; acquisitions may be unsuccessful or result in other risks or developments that adversely affect our financial condition and results; our ability to develop and implement suitable information technology systems and prevent failures in or breaches of such systems; our indebtedness; our ability to raise debt and equity capital; litigation; labor matters, including our ability to manage its subcontractors, and risks associated with labor disputes at our customers’ facilities and efforts by labor organizations to organize its employees; risks associated with defined benefit plans for our current and former employees; our ability to attract or retain necessary talent; the increased costs associated with labor; fluctuations in currency exchange rates; fluctuations in fixed and floating interest rates; fluctuations in customer confidence and spending; issues related to our intellectual property rights; governmental regulation, including environmental laws, trade compliance laws, as well as changes in international trade policies and tax regimes; governmental or political actions, including the United Kingdom’s exit from the European Union; natural disasters, terrorist attacks or similar incidents; damage to our reputation; a material disruption of our operations; the inability to achieve the level of revenue growth, cash generation, cost savings, improvement in profitability and margins, fiscal discipline, or strengthening of competitiveness and operations anticipated or targeted; failure in properly handling the inventory of our customers; the impact of potential cyber-attacks and information technology or data security breaches; and the inability to implement technology initiatives or business systems successfully; our ability to achieve Environmental, Social and Governance goals; and a determination by the IRS that the distribution or certain related spin-off transactions should be treated as taxable transactions. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors.

    All forward-looking statements set forth in this release are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on us or our business or operations. Forward-looking statements set forth in this release speak only as of the date hereof, and we do not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, except to the extent required by law.

    Investor Contact

    Chris Jordan
    +1 (203) 769-7228
    chris.jordan@gxo.com

    Media Contact

    Matthew Schmidt
    +1 (203) 307-2809
    matt.schmidt@gxo.com

     
    GXO Logistics, Inc.
    Condensed Consolidated Statements of Operations
    (Unaudited)
     
      Three Months Ended March 31,
    (Dollars in millions, shares in thousands, except per share amounts)  2024   2023 
    Revenue $2,456  $2,323 
    Direct operating expense  2,056   1,906 
    Selling, general and administrative expense  249   258 
    Depreciation and amortization expense  92   83 
    Transaction and integration costs  19   13 
    Restructuring costs and other  16   21 
    Litigation expense(1)  63   — 
    Operating income (loss)  (39)  42 
    Other income, net  6   — 
    Interest expense, net  (13)  (13)
    Income (loss) before income taxes  (46)  29 
    Income tax (expense) benefit  10   (3)
    Net income (loss)  (36)  26 
    Net income attributable to Noncontrolling Interests (“NCI”)  (1)  (1)
    Net income (loss) attributable to GXO $(37) $25 
         
    Earnings (loss) per share    
    Basic $(0.31) $0.21 
    Diluted $(0.31) $0.21 
         
    Weighted-average common shares outstanding    
    Basic  119,273   118,781 
    Diluted  119,273   119,231 
    (1) During the first quarter of 2024, a trial was held in the United States District Court for the Western District of Missouri in connection with a dispute between the Company and one of its customers related to the start-up of the customer’s warehouse that occurred in 2018 (Lindt et al v. GXO Warehouse Company, Inc., docket no. 4:22-cv-00384-BP). In March 2024, the jury returned verdicts in favor of the customer. The Company recognized a $63 million expense in the three months ended March 31, 2024 for the jury verdicts, potential post-trial awards of interest, associated legal fees, costs and other related expenses. The Company believes that this case was incorrectly decided and intends to pursue post-verdict remedies as necessary, including an appeal, and will pursue reimbursement under its existing insurance policies.


    GXO Logistics, Inc.
    Condensed Consolidated Balance Sheets
    (Unaudited)
     
      March 31, December 31,
    (Dollars in millions, shares in thousands, except per share amounts)  2024   2023 
    ASSETS    
    Current assets    
    Cash and cash equivalents $423  $468 
    Accounts receivable, net of allowance of $10 and $11  1,665   1,753 
    Other current assets  375   347 
    Total current assets  2,463   2,568 
    Long-term assets    
    Property and equipment, net of accumulated depreciation of $1,599 and $1,545  951   953 
    Operating lease assets  2,192   2,201 
    Goodwill  2,870   2,891 
    Intangible assets, net of accumulated amortization of $542 and $528  542   567 
    Other long-term assets  362   327 
    Total long-term assets  6,917   6,939 
    Total assets $9,380  $9,507 
    LIABILITIES AND EQUITY    
    Current liabilities    
    Accounts payable $615  $709 
    Accrued expenses  976   966 
    Current debt  126   27 
    Current operating lease liabilities  597   597 
    Other current liabilities  311   327 
    Total current liabilities  2,625   2,626 
    Long-term liabilities    
    Long-term debt  1,511   1,620 
    Long-term operating lease liabilities  1,836   1,842 
    Other long-term liabilities  505   473 
    Total long-term liabilities  3,852   3,935 
    Commitments and Contingencies    
    Stockholders’ Equity    
    Common Stock, $0.01 par value per share; 300,000 shares authorized, 119,368 and 119,057 issued and outstanding  1   1 
    Preferred Stock, $0.01 par value per share; 10,000 shares authorized, none issued and outstanding  —   — 
    Additional Paid-In Capital (“APIC”)  2,602   2,598 
    Retained earnings  515   552 
    Accumulated Other Comprehensive Income (Loss) (“AOCIL”)  (249)  (239)
    Total stockholders’ equity before NCI  2,869   2,912 
    NCI  34   34 
    Total equity  2,903   2,946 
    Total liabilities and equity $9,380  $9,507 


    GXO Logistics, Inc.
    Condensed Consolidated Statements of Cash Flows
    (Unaudited)
     
      Three Months Ended March 31,
    (In millions)  2024   2023 
    Cash flows from operating activities:    
    Net income (loss) $(36) $26 
    Adjustments to reconcile net income (loss) to net cash provided by operating activities    
    Depreciation and amortization expense  92   83 
    Stock-based compensation expense  8   9 
    Deferred tax benefit  (2)  (7)
    Other  14   9 
    Changes in operating assets and liabilities    
    Accounts receivable  70   57 
    Other assets  (42)  11 
    Accounts payable  (106)  (49)
    Accrued expenses and other liabilities  52   (100)
    Net cash provided by operating activities  50   39 
    Cash flows from investing activities:    
    Capital expenditures  (73)  (91)
    Proceeds from sale of property and equipment  6   9 
    Purchase of Wincanton plc shares  (15)  — 
    Net cash used in investing activities  (82)  (82)
    Cash flows from financing activities:    
    Repayments of debt, net  —   (21)
    Repayments of finance lease obligations  (8)  (8)
    Taxes paid related to net share settlement of equity awards  (4)  (4)
    Other  4   4 
    Net cash used in financing activities  (8)  (29)
    Effect of exchange rates on cash and cash equivalents  (5)  3 
    Net decrease in cash, restricted cash and cash equivalents  (45)  (69)
    Cash, restricted cash and cash equivalents, beginning of period  470   495 
    Cash, restricted cash and cash equivalents, end of period $425  $426 
         
    Reconciliation of cash, restricted cash and cash equivalents    
    Cash and cash equivalents $423  $426 
    Restricted Cash (included in Other long-term assets)  2   — 
    Total cash, restricted cash and cash equivalents $425  $426 


    GXO Logistics, Inc.
    Key Data
    Disaggregation of Revenue
    (Unaudited)
     
    Revenue disaggregated by geographical area was as follows:
     
      Three Months Ended March 31,
    (In millions)  2024   2023 
    United Kingdom $913  $844 
    United States  747   714 
    Netherlands  218   196 
    France  200   202 
    Spain  129   127 
    Italy  93   88 
    Other  156   152 
    Total $2,456  $2,323 


    The Company’s revenue can also be disaggregated by the customer’s primary industry. Revenue disaggregated by industries was as follows:
     
      Three Months Ended March 31,
    (In millions)  2024   2023 
    Omnichannel retail $1,022  $964 
    Technology and consumer electronics  382   366 
    Food and beverage  316   307 
    Consumer packaged goods  295   226 
    Industrial and manufacturing  266   270 
    Other  175   190 
    Total $2,456  $2,323 


    GXO Logistics, Inc.
    Reconciliation of Net Income (Loss) to Adjusted EBITDA
    and Adjusted EBITDA Margins
    (Unaudited)
     
      Three Months Ended March 31, Year Ended
    December 31,    		 Trailing Twelve
    Months Ended
    March 31, 2024
    (In millions)  2024   2023   2023  
    Net income (loss) attributable to GXO $(37) $25  $229  $167 
    Net income attributable to NCI  1   1   4   4 
    Net income (loss) $(36) $26  $233  $171 
    Interest expense, net  13   13   53   53 
    Income tax expense (benefit)  (10)  3   33   20 
    Depreciation and amortization expense  92   83   361   370 
    Transaction and integration costs  19   13   34   40 
    Restructuring costs and other  16   21   32   27 
    Litigation expense  63   —   —   63 
    Unrealized gain on foreign currency options and other  (3)  (1)  (5)  (7)
    Adjusted EBITDA(1) $154  $158  $741  $737 
             
    Revenue $2,456  $2,323     
    Operating income (loss) $(39) $42     
    Operating income margin(2)  (1.6)%  1.8%    
    Adjusted EBITDA margin(1)(3)  6.3%  6.8%    
    (1) See the “Non-GAAP Financial Measures” section of this press release.
    (2) Operating income margin is calculated as operating income (loss) divided by revenue for the period.
    (3) Adjusted EBITDA margin is calculated as adjusted EBITDA divided by revenue for the period.


    GXO Logistics, Inc.
    Reconciliation of Net Income (loss) to Adjusted EBITA
    and Adjusted EBITA Margins
    (Unaudited)
     
      Three Months Ended March 31, Year Ended
    December 31,    		 Trailing Twelve Months Ended March 31, 2024
    (In millions)  2024   2023   2023  
    Net income (loss) attributable to GXO $(37) $25  $229  $167 
    Net income attributable to NCI  1   1   4   4 
    Net income (loss) $(36) $26  $233  $171 
    Interest expense, net  13   13   53   53 
    Income tax expense (benefit)  (10)  3   33   20 
    Amortization expense  19   17   71   73 
    Transaction and integration costs  19   13   34   40 
    Restructuring costs and other  16   21   32   27 
    Litigation expense  63   —   —   63 
    Unrealized gain on foreign currency options and other  (3)  (1)  (5)  (7)
    Adjusted EBITA(1) $81  $92  $451  $440 
             
    Revenue $2,456  $2,323     
    Adjusted EBITA margin(1)(2)  3.3%  4.0%    
    (1) See the “Non-GAAP Financial Measures” section of this press release.
    (2) Adjusted EBITA margin is calculated as adjusted EBITA divided by revenue for the period.


    GXO Logistics, Inc.
    Reconciliation of Net Income (loss) to Adjusted Net Income
    and Adjusted Earnings Per Share
    (Unaudited)
     
      Three Months Ended March 31,
    (Dollars in millions, shares in thousands, except per share amounts)  2024   2023 
    Net income (loss) $(36) $26 
    Net income attributable to NCI  (1)  (1)
    Net income (loss) attributable to GXO $(37) $25 
    Amortization expense  19   17 
    Transaction and integration costs  19   13 
    Restructuring costs and other  16   21 
    Litigation expense  63   — 
    Unrealized gain on foreign currency options  (3)  (1)
    Income tax associated with the adjustments above(1)  (23)  (11)
    Discrete tax benefit(2)  —   (5)
    Adjusted net income attributable to GXO(3) $54  $59 
         
    Adjusted basic EPS(3) $0.45  $0.50 
    Adjusted diluted EPS(3) $0.45  $0.49 
         
    Weighted-average common shares outstanding    
    Basic  119,273   118,781 
    Diluted  119,273   119,231 
    (1) The income tax rate applied to items is based on the GAAP annual effective tax rate.
    (2) Discrete tax benefit from intangible assets and the release of valuation allowances.
    (3) See the “Non-GAAP Financial Measures” section of this press release.


    GXO Logistics, Inc.
    Other Reconciliations
    (Unaudited)
     
    Reconciliation of Cash Flows from Operations to Free Cash Flow:
     
      Three Months Ended March 31,
    (In millions)  2024   2023 
    Cash flows from operations $50  $39 
    Capital expenditures  (73)  (91)
    Proceeds from sale of property and equipment  6   9 
    Free cash flow(1) $(17) $(43)
         
    Cash flows from operations to net income (loss)  (138.9)%  150.0%
    Free cash flow conversion(1)(2)  (11.0)%  (27.2)%
    (1) See the “Non-GAAP Financial Measures” section of this press release.
    (2) The Company calculates free cash flow conversion as free cash flow divided by adjusted EBITDA, expressed as a percentage.


    Reconciliation of Revenue to Organic Revenue:
     
      Three Months Ended March 31,
    (In millions)  2024   2023 
    Revenue $2,456  $2,323 
    Revenue from acquired business(1)  (63)  — 
    Revenue from disposed business(1)  (1)  (4)
    Foreign exchange rates  (50)  — 
    Organic revenue(2) $2,342  $2,319 
         
    Revenue growth(3)  5.7%  
    Organic revenue growth(2)(4)  1.0%  
    (1) The Company excludes revenue from acquired and disposed businesses for periods that are no comparable.
    (2) See the “Non-GAAP Financial Measures” section of this press release.
    (3) Revenue growth is calculated as the change in the period-over-period revenue divided by the prior period, expressed as a percentage.
    (4) Organic revenue growth is calculated as the change in the period-over-period organic revenue divided by the prior period, expressed as a percentage.


    GXO Logistics, Inc.
    Liquidity Reconciliations
    (Unaudited)
     
    Reconciliation of Total Debt and Net Debt:
    (In millions) March 31, 2024
    Current debt $126 
    Long-term debt  1,511 
    Total debt $1,637 
    Plus Bank overdrafts  2 
    Less: Cash and cash equivalents  (423)
    Net debt(1) $1,216 
    (1) See the “Non-GAAP Financial Measures” section of this press release.


    Reconciliation of Total debt to Net income Ratio:
    (In millions) March 31, 2024
    Total debt $1,637 
    Trailing twelve months net income $171 
    Debt to net income ratio  9.6x 


    Reconciliation of Net Leverage Ratio:
    (In millions) March 31, 2024
    Net debt $1,216 
    Trailing twelve months adjusted EBITDA(1) $737 
    Net leverage ratio(1)  1.6x 
    (1) See the “Non-GAAP Financial Measures” section of this press release.


    GXO Logistics, Inc.
    Return on Invested Capital
    (Unaudited)
     
    Adjusted EBITA, net of income taxes paid:
     
      Three Months
    Ended March 31,    		 Year Ended Trailing
    Twelve
    Months
    Ended
    March 31,
    2024
    (In millions)  2024   2023  December 31, 2023 
    Adjusted EBITA(1) $81  $92  $451  $440 
    Less: Cash paid for income taxes  (1)  —   (84)  (85)
    Adjusted EBITA, net of income taxes paid(1) $80  $92  $367  $355 
    (1) See the “Non-GAAP Financial Measures” section of this press release.


    Return on Invested Capital:
     
      March 31,  
    (In millions)  2024   2023  Average
    Selected Assets:      
    Accounts receivable, net $1,665  $1,605  $1,635 
    Other current assets  375   280   328 
    Property and equipment, net  951   964   958 
    Selected Liabilities:      
    Accounts payable $(615) $(652) $(634)
    Accrued expenses  (976)  (908)  (942)
    Other current liabilities  (311)  (209)  (260)
    Invested capital $1,089  $1,080  $1,085 
           
    Trailing twelve months net income
    to average invested capital    		      15.8%
    Operating return on invested capital(1)(2)      32.7%
    (1) See the “Non-GAAP Financial Measures” section of this press release.
    (2) The ratio of operating return on invested capital is calculated as trailing twelve months adjusted EBITA, net of income taxes paid, divided by the average invested capital.
     

    _____________________________
    ¹ For definitions of non-GAAP measures see the “Non-GAAP Financial Measures” section in this press release.
    ² Our guidance reflects current FX rates.
    ³ Compound Annual Growth Rate (CAGR).


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