Company: QXO-PB
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001628280-25-040367
Chunk: 127

Company: QXO, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 127
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5December 31,2024Inventory$228.0 $— Selling, general and administrative132.1 — Payroll and employee benefit costs108.8 8.1 Customer rebates80.0 — Interest expense27.2 — Income taxes— 24.0 Other9.6 6.5 Total accrued expenses$585.7 $38.6 

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Asset Retirement ObligationsA liability for an asset retirement obligation is recorded in the period in which it is incurred. When an asset retirement obligation liability is initially recorded, the Company capitalizes the cost by increasing the carrying amount of the related long-lived asset. For each subsequent period, the liability is increased for accretion expense and the capitalized cost is depreciated over the useful life of the related asset. In connection with the Beacon Acquisition, the Company recognized $28.4 million of asset retirement obligations, which are included in other long-term liabilities on the condensed consolidated balance sheet.Financial InstrumentsFair 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. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:•Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.•Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.•Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.The Company’s current financial assets and liabilities approximate fair value due to their short-term nature and include cash and cash equivalents, accounts receivable, vendor rebates receivable, income tax receivable, prepaid expenses and other current assets, accounts payable, and accrued liabilities.Additionally, the Company has a free-standing interest rate swap that was acquired in the Beacon Acquisition. The fair value of the free-standing interest rate swap is determined through the use of a pricing model, which utilizes verifiable inputs such as market interest rates that are observable at commonly quoted intervals (generally referred to as the “forward curve”) for the full term of the agreement and is classified as Level 2 in the fair value hierarchy. As of June 30,