GXO Logistics, Inc.GXO

GXO Logistics, Inc. Leases Disclosure

10-KFiled Feb 25, 20262 min read
9. Leases

The components of lease cost recorded in the Consolidated Statements of Operations were as follows:
Year Ended December 31,
(In millions)202520242023
Operating leases:
Operating lease cost$915 $830 $751 
Short-term lease cost181 202 225 
Variable lease cost222 153 129 
Total operating lease cost(1)
$1,318 $1,185 $1,105 
Finance leases:
Amortization of the right-of-use assets$36 $30 $30 
Interest on the lease liabilities18 10 5 
Total finance lease cost$54 $40 $35 
Total operating and finance lease cost$1,372 $1,225 $1,140 
(1) Operating lease cost is primarily included in Direct operating expense in the Consolidated Statements of Operations.
The following amounts were recorded in the Consolidated Balance Sheets related to leases:
December 31,
(In millions)20252024
Operating leases:
Operating lease assets $2,563 $2,329 
Current operating lease liabilities$745 $647 
Long-term operating lease liabilities2,044 1,898 
Total operating lease liabilities $2,789 $2,545 
Finance leases:
Property and equipment, net $306 $239 
Current debt$45 $39 
Long-term debt281 237 
Total finance lease liabilities $326 $276 

Supplemental cash flow information related to leases was as follows:
Year Ended December 31,
(In millions)202520242023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases$876 $791 $696 
Operating cash flows for finance leases18 10 5 
Financing cash flows for finance leases50 45 29 
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases, including $166 and $52 from an acquisition in 2024 and 2023, respectively
$863 $815 $568 
Finance leases, including $83 and $1 from an acquisition in 2024 and 2023, respectively
74 211 10 

Supplemental weighted-average information for leases was as follows:
December 31,
20252024
Weighted-average remaining lease term
Operating leases5.5 years5.6 years
Finance leases16.6 years24.1 years
Weighted-average discount rate
Operating leases5.1 %4.9 %
Finance leases5.6 %5.4 %
Maturities of lease liabilities as of December 31, 2025 were as follows:
(In millions)Finance LeasesOperating Leases
2026$68 $854 
202751 706 
202842 513 
202934 348 
203030 245 
Thereafter296 563 
Total lease payments521 3,229 
Less: Interest(195)(440)
Present value of lease liabilities$326 $2,789 

As of December 31, 2025, the Company had operating leases that have not yet commenced with future undiscounted lease payments of approximately $176 million. These operating leases will begin in 2026 and 2027, with initial lease terms ranging from four to ten years.
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Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2024Feb 18, 2025
2023Feb 15, 2024
2022Feb 16, 2023

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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