ROLLINS INC

Previous wording

•Quarterly operating income was $142.6 million, an increase of 7.7% over the first quarter of 2024. Quarterly operating margin was 17.3%, a decrease of 40 basis points versus the first quarter of 2024. Adjusted operating income* was $146.9 million, an increase of 6.7% over the prior year. Adjusted operating income margin* was 17.9%, a decrease of 50 basis points compared to the prior year.

Current wording

•Quarterly operating income was $198.3 million, an increase of 8.7% over the second quarter of 2024. Quarterly operating margin was 19.8%, a decrease of 60 basis points versus the second quarter of 2024. Adjusted operating income* was $205.9 million, an increase of 10.3% over the prior year. Adjusted operating margin* was 20.6%, a decrease of 30 basis points compared to the prior year.

Previous wording

•Adjusted EBITDA* was $171.9 million, an increase of 6.9% over the prior year. Adjusted EBITDA margin* was 20.9%, a decrease of 60 basis points versus the first quarter of 2024.

Current wording

•Adjusted EBITDA* was $231.2 million, an increase of 10.0% over the prior year. Adjusted EBITDA margin* was 23.1%, a decrease of 50 basis points versus the second quarter of 2024.

Previous wording

•Quarterly net income was $105.2 million, an increase of 11.5% over the prior year. Adjusted net income* was $107.9 million, an increase of 9.7% over the prior year.

Current wording

•Quarterly net income was $141.5 million, an increase of 9.3% over the prior year. Adjusted net income* was $146.9 million, an increase of 11.1% over the prior year.

Previous wording

•Quarterly EPS was $0.22 per diluted share, a 15.8% increase over the prior year EPS of $0.19. Adjusted EPS* was $0.22 per diluted share, an increase of 10.0% over the prior year.

Current wording

•Quarterly EPS was $0.29 per diluted share, a 7.4% increase over the prior year EPS of $0.27. Adjusted EPS* was $0.30 per diluted share, an increase of 11.1% over the prior year.

Previous wording

•Operating cash flow was $146.9 million for the quarter, an increase of 15.3% compared to the prior year. The Company invested $27.2 million in acquisitions, $6.8 million in capital expenditures, and paid dividends totaling $79.9 million.

Current wording

•Operating cash flow was $175.1 million for the quarter, an increase of 20.7% compared to the prior year. The Company invested $226.4 million in acquisitions, $7.1 million in capital expenditures, and paid dividends totaling $79.5 million.

Previous wording

Demand remains favorable to start the second quarter and the pipeline of acquisition activity remains healthy. Although we continue to navigate a highly uncertain macroeconomic environment, we believe we are well positioned to continue to deliver strong results in 2025.

Current wording

Demand remains favorable to start the third quarter and the pipeline of acquisition activity remains healthy. Although we continue to navigate a highly uncertain macroeconomic environment, we believe we are well positioned to continue to deliver strong results in 2025.

Previous wording

The following presents a summary of revenues by service offering for the first quarter ended March 31, 2025 and March 31, 2024, respectively:

Current wording

The following presents a summary of revenues by service offering for the three months ended June 30, 2025 and June 30, 2024, respectively:

Previous wording

Gross profit for the quarter ended March 31, 2025 was $422.4 million, an increase of $39.6 million, or 10.3%, compared to $382.8 million for the quarter ended March 31, 2024. Gross margin improved 20 basis points to 51.4% in 2025 compared to 51.2% in 2024, as pricing more than offset inflationary pressures. We saw leverage across a number of cost categories, including 10 basis points in each of employee expenses and materials and supplies, with the most significant leverage in insurance and claims of 40 basis points. This was partially offset by 40 basis points of higher fleet expenses associated with our leased vehicles due to higher lease costs.

Current wording

Gross margin declined 20 basis points to 53.8% in 2025 compared to 54.0% in 2024. We saw leverage across a number of cost categories, including 30 basis points in employee expenses and 40 basis points in materials and supplies. This was fully offset by 40 basis points of higher insurance and claims costs associated with legacy auto claims and 30 basis points of higher fleet expenses.

Previous wording

For the quarter ended March 31, 2025, sales, general and administrative ("SG&A") expenses were $250.5 million, an increase of $27.5 million, or 12.3%, compared to the quarter ended March 31, 2024.

Current wording

For the quarter ended June 30, 2025, sales, general and administrative ("SG&A") expenses were $307.6 million, an increase of $36.0 million, or 13.3%, compared to the quarter ended June 30, 2024.

Previous wording

For the quarter ended March 31, 2025, depreciation and amortization increased $1.9 million, or 7.0%, compared to the quarter ended March 31, 2024. The increase was due to higher amortization of intangible assets from acquisitions.

Current wording

For the quarter ended June 30, 2025, depreciation and amortization increased $4.0 million, or 14.5%, compared to the quarter ended June 30, 2024. The increase was due to higher amortization of intangible assets from acquisitions, most notably from the acquisition of Saela Pest Control ("Saela").

Previous wording

For the quarter ended March 31, 2025, operating income increased $10.2 million, or 7.7%, compared to the prior year.

Current wording

For the quarter ended June 30, 2025, operating income increased $16.0 million, or 8.7%, compared to the prior year.

Previous wording

As a percentage of revenue, operating income was 17.3%, a decrease of 40 basis points compared to the first quarter of 2024. Operating margin declined mostly due to investments in growth initiatives and higher fleet costs, partially offset by leverage in insurance and claims, administrative costs, employee expenses, and materials and supplies.

Current wording

As a percentage of revenue, operating income was 19.8%, a decrease of 60 basis points compared to the second quarter of 2024. Operating margin declined mostly due to higher insurance and claims costs and higher fleet costs, partially offset by leverage in materials and supplies, employee expenses, and selling and marketing costs.

Previous wording

During the quarter ended March 31, 2025, interest expense, net decreased $1.9 million compared to the prior year due to both a lower average outstanding debt balance compared to the same quarter in the prior year and a lower average interest rate on our borrowings. For full year 2025, we expect to incur a higher level of interest expense compared to 2024 due to a higher level of acquisition activity. We expect to incur between $8.0 million to $10.0 million of interest expense in the second quarter of 2025.

Current wording

During the quarter ended June 30, 2025, interest expense, net decreased $0.4 million compared to the prior year primarily due to a lower average interest rate on our borrowings.

Previous wording

During the quarter ended March 31, 2025, other income increased $0.8 million primarily due to higher gains on non-operational asset sales.

Current wording

During the quarter ended June 30, 2025, other income decreased $0.1 million primarily due to lower gains on non-operational asset sales.

Previous wording

Revenues for the quarter ended March 31, 2025 were $822.5 million, an increase of $74.2 million, or 9.9%, from 2024 revenues of $748.3 million. The increase in revenues was driven by demand from our customers across all major service offerings, partially offset by foreign currency headwind of 40 basis points, primarily related to the Canadian Dollar. Organic revenue* growth was 7.4% with acquisitions adding 2.5% in the quarter. Residential pest control revenue increased 8.2%, commercial pest control revenue increased 10.2% and termite and ancillary services grew 13.2% including both organic and acquisition-related growth in each area. Organic revenue* growth was strong across our service offerings, growing 5.7% in residential, 7.4% in commercial, and 11.1% in termite and ancillary activity, despite having one less business day in the quarter ended March 31, 2025 compared to the same quarter in 2024.

Current wording

Revenues for the six months ended June 30, 2025 were $1.8 billion, an increase of $181.8 million, or 11.1%, from 2024 revenues of $1.6 billion. The increase in revenues was driven by demand from our customers across all major service offerings, partially offset by foreign currency headwind of 20 basis points primarily related to the Canadian Dollar. Organic revenue* growth was 7.4% with acquisitions adding 3.7% in the six months ended June 30, 2025. Residential pest control revenue increased 10.1%, commercial pest control revenue increased 10.8% and termite and ancillary services grew 13.6%, including both organic and acquisition-related growth in each area. Organic revenue* growth was strong across our service offerings, growing 5.2% in residential, 7.9% in commercial, and 10.7% in termite and ancillary activity despite having one less business day in the six months ended June 30, 2025 compared to the same period in 2024.

Previous wording

A non-GAAP financial measure is a numerical measure of financial performance, financial position, or cash flows that either 1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of operations, balance sheet or statement of cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.

Current wording

A non-GAAP financial measure is a numerical measure of financial performance, financial position, or cash flows that either 1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the condensed consolidated statements of income, financial position, or cash flows, or 2) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.

Previous wording

Adjusted operating income and adjusted operating margin are calculated by adding back to net income those expenses resulting from the amortization of certain intangible assets, adjustments to the fair value of contingent consideration resulting from the acquisition of Fox Pest Control, and restructuring costs related to restructuring and workforce reduction plans. Adjusted operating margin is calculated as adjusted operating income divided by revenues. Management uses adjusted operating income and adjusted operating margin as measures of operating performance because these measures allow the Company to compare performance consistently over various periods.

Current wording

Adjusted operating income and adjusted operating margin are calculated by adding back to net income those expenses resulting from the amortization of intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control. Adjusted operating margin is calculated as adjusted operating income divided by revenues. Management uses adjusted operating income and adjusted operating margin as measures of operating performance because these measures allow the Company to compare performance consistently over various periods.

Previous wording

Adjusted net income and adjusted EPS are calculated by adding back to the GAAP measures amortization of certain intangible assets, adjustments to the fair value of contingent consideration resulting from the acquisition of Fox Pest Control, and restructuring costs related to restructuring and workforce reduction plans, and excluding gains and losses on the sale of non-operational assets and gains on the sale of businesses, and by further subtracting the tax impact of those expenses, gains, or losses. Management uses adjusted net income and adjusted EPS as measures of operating performance because these measures allow the Company to compare performance consistently over various periods.

Current wording

Adjusted net income and adjusted EPS are calculated by adding back to the GAAP measures amortization of intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control, excluding gains and losses on the sale of non-operational assets and gains on the sale of businesses, and by further subtracting the tax impact of those expenses, gains, or losses. Management uses adjusted net income and adjusted EPS as measures of operating performance because these measures allow the Company to compare performance consistently over various periods.

Previous wording

EBITDA is calculated by adding back to net income depreciation and amortization, interest expense, net, and provision for income taxes. EBITDA margin is calculated as EBITDA divided by revenues. Adjusted EBITDA and adjusted EBITDA margin are calculated by further adding back those expenses resulting from the adjustments to the fair value of contingent consideration resulting from the acquisition of Fox Pest Control, restructuring costs related to restructuring and workforce reduction plans, and excluding gains and losses on the sale of non-operational assets and gains on the sale of businesses. Management uses EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin as measures of operating performance because these measures allow the Company to compare performance consistently over various periods. Incremental EBITDA margin is calculated as the change in EBITDA divided by the change in revenue. Management uses incremental EBITDA margin as a measure of operating performance because this measure allows the Company to compare performance consistently over various periods. Adjusted incremental EBITDA margin is calculated as the change in adjusted EBITDA divided by the change in revenue. Management uses adjusted incremental EBITDA margin as a measure of operating performance because this measure allows the Company to compare performance consistently over various periods.

Current wording

EBITDA is calculated by adding back to net income depreciation and amortization, interest expense, net, and provision for income taxes. EBITDA margin is calculated as EBITDA divided by revenues. Adjusted EBITDA and adjusted EBITDA margin are calculated by further adding back those expenses resulting from the adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control, and excluding gains and losses on the sale of non-operational assets and gains on the sale of businesses. Management uses EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin as measures of operating performance because these measures allow the Company to compare performance consistently over various periods. Incremental EBITDA margin is calculated as the change in EBITDA divided by the change in revenue. Management uses incremental EBITDA margin as a measure of operating performance because this measure allows the Company to compare performance consistently over various periods. Adjusted incremental EBITDA margin is calculated as the change in adjusted EBITDA divided by the change in revenue. Management uses adjusted incremental EBITDA margin as a measure of operating performance because this measure allows the Company to compare performance consistently over various periods.

Previous wording

Adjusted SG&A is calculated by removing the adjustments to the fair value of contingent consideration resulting from the acquisition of Fox Pest Control. Management uses adjusted SG&A to compare SG&A expenses consistently over various periods.

Current wording

Adjusted SG&A is calculated by removing the adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control. Management uses adjusted SG&A to compare SG&A expenses consistently over various periods.

Previous wording

Leverage ratio, a financial valuation measure, is calculated by dividing adjusted net debt by adjusted EBITDAR. Adjusted net debt is calculated by adding operating lease liabilities to total long-term debt less a cash adjustment of 90% of total consolidated cash. Adjusted EBITDAR is calculated by adding back to net income depreciation and amortization, interest expense, net, provision for income taxes, operating lease cost, and stock-based compensation expense. Management uses leverage ratio as an assessment of overall liquidity, financial flexibility, and leverage.

Current wording

Leverage ratio, a financial valuation measure, is calculated by dividing adjusted net debt by adjusted EBITDAR. Adjusted net debt is calculated by adding short-term debt and operating lease liabilities to total long-term debt less a cash adjustment of 90% of total consolidated cash. Adjusted EBITDAR is calculated by adding back to net income depreciation and amortization, interest expense, net, provision for income taxes, operating lease cost, and stock-based compensation expense. Management uses leverage ratio as an assessment of overall liquidity, financial flexibility, and leverage.

Previous wording

(1) Consists of expenses resulting from the amortization of certain intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisition of Fox Pest Control ("Fox"). While we exclude such expenses in this non-GAAP measure, the revenue from the acquired company is reflected in this non-GAAP measure and the acquired assets contribute to revenue generation.

Current wording

(1) Consists of expenses resulting from the amortization of intangible assets and adjustments to the fair value of contingent consideration resulting from the acquisitions of Fox Pest Control and Saela Pest Control. While we exclude such expenses in this non-GAAP measure, the revenue from the acquired companies is reflected in this non-GAAP measure and the acquired assets contribute to revenue generation.

Previous wording

(4) In some cases, the sum of the individual EPS amounts may not equal total non-GAAP EPS calculations due to rounding.

Current wording

(4) In some cases, the sum of the individual EPS amounts may not equal total adjusted EPS calculations due to rounding.

Previous wording

(5) As of March 31, 2025, the Company had outstanding borrowings of $500.0 million from the issuance of our 2035 Senior Notes and no outstanding borrowings under the Revolving Credit Facility. The Company’s borrowings are presented under the long-term debt caption of our condensed consolidated balance sheet, net of a $7.6 million unamortized discount and $6.9 million in unamortized debt issuance costs as of March 31, 2025.

Current wording

(6) As of June 30, 2025, the Company had outstanding borrowings of $500.0 million from the issuance of our 2035 Senior Notes and no outstanding borrowings under the Revolving Credit Facility. These borrowings are presented under the long-term debt caption of our condensed consolidated statements of financial position, net of a $7.5 million unamortized discount and $7.2 million in unamortized debt issuance costs as of June 30, 2025. As of December 31, 2024, the Company had outstanding borrowings of $397.0 million under the Revolving Credit Facility. Borrowings under the Revolving Credit Facility are presented under the long-term debt caption of our condensed consolidated statements of financial position, net of $1.7 million in unamortized debt issuance costs as of December 31, 2024.

Previous wording

(6) Operating lease liabilities are presented under the operating lease liabilities - current and operating lease liabilities, less current portion captions of our consolidated balance sheet.

Current wording

(7) Operating lease liabilities are presented under the operating lease liabilities - current and operating lease liabilities, less current portion captions of our condensed consolidated statements of financial position.

Previous wording

(7) Represents 90% of cash and cash equivalents per our consolidated balance sheet as of both periods presented.

Current wording

(8) Represents 90% of cash and cash equivalents per our condensed consolidated statements of financial position as of both periods presented.

Previous wording

The Company’s $201.2 million of total cash at March 31, 2025 is held at various banking institutions. As of March 31, 2025, approximately $50.2 million is held in cash by foreign subsidiaries and the remaining $151.0 million is held at domestic banks.

Current wording

The Company’s $123.0 million of total cash at June 30, 2025 is held at various banking institutions. As of June 30, 2025, approximately $60.0 million is held in cash by foreign subsidiaries and the remaining $63.0 million is held at domestic banks and also includes cash-in-transit.

Previous wording

We believe our current cash and cash equivalents balances, future cash flows expected to be generated from operating activities, access to debt financing based on our creditworthiness, our $1 billion commercial paper program, which is backstopped by our Revolving Credit Facility, and available borrowings under our Revolving Credit Facility, will be sufficient to finance our current operations and obligations, and fund expansion of the business for the foreseeable future.

Current wording

We believe our current cash and cash equivalents balances, future cash flows expected to be generated from operating activities, access to debt financing based on our creditworthiness, our $1 billion commercial paper program which is backstopped by our Revolving Credit Facility, as defined below, and available borrowings under our Revolving Credit Facility will be sufficient to finance our current operations and obligations and fund expansion of the business for the foreseeable future.

Previous wording

In February 2025, we issued ten-year notes with an aggregate principal amount of $500 million due on February 24, 2035 (the “2035 Senior Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. We issued the 2035 Senior Notes at 98.443% of par, representing a discount of $7.8 million, and paid approximately $5.4 million for debt issuance costs. The interest is payable semi-annually in arrears on February 24 and August 24 of each year at 5.25% per annum, beginning on August 24, 2025, and the entire principal amount is due at the time of maturity. We used the net proceeds from this offering primarily to repay outstanding borrowings under the Revolving Credit Facility, as well as for general corporate purposes.

Current wording

In February 2025, we issued ten-year notes with an aggregate principal amount of $500 million due on February 24, 2035 (the “2035 Senior Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. We issued the 2035 Senior Notes at 98.443% of par, representing a discount of $7.8 million, and paid approximately $6.0 million for debt issuance costs. The interest is payable semi-annually in arrears on February 24 and August 24 of each year at 5.25% per annum, beginning on August 24, 2025, and the entire principal amount is due at the time of maturity. We used the net proceeds from this offering primarily to repay outstanding borrowings under the Revolving Credit Facility, as well as for general corporate purposes.

Previous wording

In March 2025, we established a commercial paper program under which we may issue unsecured commercial paper up to a total of $1 billion outstanding at any time, with maturities of up to 397 days from the date of issue. The net proceeds from the issuance of commercial paper are expected to be used for general corporate purposes. As of March 31, 2025, there were no outstanding borrowings under the commercial paper program.

Current wording

In March 2025, we established a commercial paper program under which we may issue unsecured commercial paper up to a total of $1 billion outstanding at any time, with maturities of up to 397 days from the date of issue. Borrowings under this program are generally outstanding for 16 days or less. The net proceeds from the issuance of commercial paper are used for various purposes, including general corporate purposes and funding for acquisitions. As of June 30, 2025, there were $60.0 million of outstanding borrowings under the commercial paper program.

Previous wording

In February 2023, the Company entered into a credit agreement with, among others, JPMorgan Chase Bank, N.A. (“JPMorgan Chase”), as administrative agent (in such capacity, the “Administrative Agent”).

Current wording

In February 2023, the Company entered into a credit agreement (the "Credit Agreement") with, among others, JPMorgan Chase Bank, N.A. (“JPMorgan Chase”), as administrative agent (in such capacity, the “Administrative Agent”).

Previous wording

The following table sets forth a summary of our cash flows from operating, investing and financing activities for the three month periods presented:

Current wording

The following table sets forth a summary of our cash flows from operating, investing and financing activities for the six month periods presented:

Previous wording

Cash from operating activities is the principal source of cash generation for our businesses. The most significant source of cash in our cash flow from operations is customer-related activities, the largest of which is collecting cash resulting from services sold. The most significant operating use of cash is to pay our suppliers, employees, and tax authorities. The Company’s operating activities generated net cash of $146.9 million and $127.4 million for the three months ended March 31, 2025 and 2024, respectively. The $19.5 million increase was driven primarily by strong operating results and the timing of cash receipts and cash payments to and from customers, vendors, employees, and tax and regulatory authorities.

Current wording

Cash from operating activities is the principal source of cash generation for our businesses. The most significant source of cash in our cash flow from operations is customer-related activities, the largest of which is collecting cash resulting from services sold. The most significant operating use of cash is to pay our suppliers, employees, and tax authorities. The Company’s operating activities generated net cash of $322.0 million and $272.5 million for the six months ended June 30, 2025 and 2024, respectively. The $49.5 million increase was driven primarily by strong operating results and the timing of cash receipts and cash payments to and from customers, vendors, employees, and tax and regulatory authorities.

Previous wording

The US Internal Revenue Service provided disaster relief to all State of Georgia taxpayers due to the impact of Hurricane Helene. Therefore, we did not make an estimated payment for US federal income tax purposes in the fourth quarter of 2024. That tax payment is due in the second quarter of 2025. We expect cash flows from operating activities to be negatively impacted associated with timing of this payment and normal recurring federal income tax payments in the second quarter of 2025.

Current wording

The U.S. Internal Revenue Service provided disaster relief to all State of Georgia taxpayers due to the impact of Hurricane Helene. Therefore, we did not make an estimated payment for U.S. federal income tax purposes in the fourth quarter of 2024. That tax payment was made during the second quarter of 2025. We have implemented tax planning strategies that have deferred certain additional tax payments into the second half of 2025.

Previous wording

The Company’s investing activities used $32.6 million and $52.5 million for the three months ended March 31, 2025 and 2024, respectively. Cash paid for acquisitions totaled $27.2 million for the three months ended March 31, 2025, compared to $47.1 million for the three months ended March 31, 2024. The Company invested $6.8 million in capital expenditures during the year, offset by $1.4 million in cash proceeds from the sale of assets, compared with $7.2 million of capital expenditures and $0.7 million in cash proceeds from asset sales in 2024. The Company’s investing activities were funded through existing cash balances, operating cash flows, and borrowings.

Current wording

The Company’s investing activities used $263.1 million and $93.6 million for the six months ended June 30, 2025 and 2024, respectively. Cash paid for acquisitions totaled $253.6 million for the six months ended June 30, 2025, compared to $81.7 million for the six months ended June 30, 2024, driven primarily by the Saela acquisition. The Company invested $13.9 million in capital expenditures during the year, offset by $3.5 million in cash proceeds from the sale of assets, compared with $15.9 million of capital expenditures and $2.3 million in cash proceeds from asset sales in 2024. The Company’s investing activities were funded primarily through existing cash balances, operating cash flows, and proceeds from borrowings, including our commercial paper program.

Previous wording

Cash of $4.6 million was used in financing activities during the three months ended March 31, 2025, compared with $64.3 million during the three months ended March 31, 2024. A total of $79.9 million was paid in cash dividends ($0.165 per share) during the three months ended March 31, 2025, compared to $72.6 million in cash dividends paid ($0.150 per share) during the three months ended March 31, 2024.

Current wording

Cash of $28.6 million was used in financing activities during the six months ended June 30, 2025, compared with $173.9 million during the six months ended June 30, 2024. A total of $159.4 million was paid in cash dividends ($0.330 per share) during the six months ended June 30, 2025, compared to $145.2 million in cash dividends paid ($0.300 per share) during the six months ended June 30, 2024.

Previous wording

During the three months ended March 31, 2025, the company received proceeds of $492.2 million and paid $5.4 million of debt issuance costs related to the issuance of the 2035 Senior Notes. Those proceeds were used primarily to repay borrowings under the credit agreement. Net repayments on the credit agreement during the three months ended March 31, 2025 were $397.0 million, resulting in net incremental borrowings in the quarter of $95.2 million compared to net borrowings of $20.0 million during 2024.

Current wording

During the six months ended June 30, 2025, the Company received proceeds of $492.2 million and paid $6.0 million of debt issuance costs related to the issuance of the 2035 Senior Notes. Those proceeds were used primarily to repay borrowings under the credit agreement. The Company received net proceeds of $60.0 million under its commercial paper program during the six months ended June 30, 2025. Proceeds from borrowings under the commercial paper program were primarily used for general corporate purposes, as well as to fund acquisitions. Net proceeds from borrowings during the six months ended June 30, 2025 were $155.2 million, compared to net proceeds of $11.0 million during 2024.

Previous wording

During the three months ended March 31, 2025, the Company paid $1.2 million of contingent consideration, compared to $1.5 million during the three months ended March 31, 2024. The Company withheld $14.7 million and $11.3 million of common stock for the three months ended March 31, 2025 and 2024, respectively, in connection with tax withholding obligations of its employees upon vesting of such employees’ equity awards.

Current wording

During the six months ended June 30, 2025, the Company paid $3.4 million of contingent consideration, compared to $30.3 million during the six months ended June 30, 2024. The Company withheld $14.9 million and $11.6 million of common stock for the six months ended June 30, 2025 and 2024, respectively, in connection with tax withholding obligations of its employees upon vesting of such employees’ equity awards.

Previous wording

In the normal course of business, the Company and its subsidiaries are involved in, and will continue to be involved in, various claims, arbitrations, contractual disputes, investigations, litigation, and tax and other regulatory matters relating to, and arising out of, our businesses and our operations. These matters may involve, but are not limited to, allegations that our services or vehicles caused damage or injury, claims that our services did not achieve the desired results, claims related to acquisitions and allegations by federal, state or local authorities, including taxing authorities, of violations of regulations or statutes. In addition, we are parties to employment-related investigations, cases, and claims from time to time, which may include claims on a representative or class action basis alleging wage and hour law violations, claims filed under California's Private Attorneys General Act, and claims related to our enforcement of post-employment restrictive covenants. We are also involved from time to time in certain environmental matters primarily arising in the normal course of business.We evaluate pending and threatened claims and establish loss contingency reserves based upon outcomes we currently believe to be probable and reasonably estimable in accordance with ASC 450.

Current wording

In the normal course of business, the Company and its subsidiaries are involved in, and will continue to be involved in, various claims, arbitrations, contractual disputes, investigations, litigation, and tax and other regulatory matters relating to, and arising out of, our businesses and our operations. These matters may involve, but are not limited to, allegations that our services or vehicles caused damage or injury, claims that our services did not achieve the desired results, claims related to acquisitions and allegations by federal, state or local authorities, including taxing authorities, of violations of regulations or statutes. In addition, we are parties to employment-related investigations, cases, and claims from time to time, which may include claims on a representative or class action basis alleging wage and hour law violations, claims filed under California's Private Attorneys General Act, and claims and investigations related to our enforcement of post-employment restrictive covenants. We are also involved from time to time in certain environmental matters primarily arising in the normal course of business. We evaluate pending and threatened claims and establish loss contingency reserves based upon outcomes we currently believe to be probable and reasonably estimable in accordance with ASC 450.

Previous wording

Management does not believe that any pending claim, proceeding or litigation, regulatory action or investigation, either alone or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or liquidity; however, it is possible that an unfavorable outcome of some or all of the matters could result in a charge that might be material to the results of an individual quarter or year.

Current wording

Management does not believe that any pending or threatened claim, proceeding, litigation, regulatory action or investigation, either alone or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or liquidity; however, it is possible that an unfavorable outcome of some or all of the matters could result in a charge that might be material to the results of an individual quarter or year.