ROLLINS INC

Previous wording

•Quarterly operating income was $225.0 million, an increase of 17.3% over the third quarter of 2024. Quarterly operating margin was 21.9%, an increase of 100 basis points versus the third quarter of 2024. Adjusted operating income* was $232.1 million, an increase of 18.4% over the prior year. Adjusted operating margin* was 22.6%, an increase of 120 basis points compared to the prior year.

Current wording

•Quarterly operating income was $145.5 million, an increase of 2.0% over the first quarter of 2025. Quarterly operating margin was 16.1%, a decrease of 120 basis points versus the first quarter of 2025. Adjusted operating income* was $152.8 million, an increase of 4.0% over the prior year. Adjusted operating margin* was 16.9%, a decrease of 100 basis points compared to the prior year.

Previous wording

•Adjusted EBITDA* was $258.3 million, an increase of 17.7% over the prior year. Adjusted EBITDA margin* was 25.2%, an increase of 120 basis points versus the third quarter of 2024.

Current wording

•Adjusted EBITDA* was $179.5 million, an increase of 4.4% over the prior year. Adjusted EBITDA margin* was 19.8%, a decrease of 110 basis points versus the first quarter of 2025.

Previous wording

•Quarterly net income was $163.5 million, an increase of 19.4% over the prior year. Adjusted net income* was $168.5 million, an increase of 20.7% over the prior year.

Current wording

•Quarterly net income was $107.8 million, an increase of 2.5% over the prior year. Adjusted net income* was $113.2 million, an increase of 5.0% over the prior year.

Previous wording

•Quarterly EPS was $0.34 per diluted share, a 21.4% increase over the prior year EPS of $0.28. Adjusted EPS* was $0.35 per diluted share, an increase of 20.7% over the prior year.

Current wording

•Quarterly EPS was $0.22 per diluted share in the first quarter of 2026 and 2025. Adjusted EPS* was $0.24 per diluted share, an increase of 9.1% over the prior year.

Previous wording

The continued disruption in economic markets due to inflation, changing interest rates, business interruptions due to natural disasters and changes in weather patterns, employee shortages, and supply chain issues all pose challenges which may adversely affect our future performance. The Company continues to execute various strategies previously implemented to help mitigate the impact of these economic disruptors. However, the Company cannot reasonably estimate whether these strategies will help mitigate the impact of these economic disruptors in the future.

Current wording

The continued disruption in economic markets due to inflation, changing interest rates, tariffs, trade disputes, business interruptions due to natural disasters and changes in weather patterns, employee shortages, and supply chain issues all pose challenges which may adversely affect our future performance. The Company continues to execute various strategies previously implemented to help mitigate the impact of these economic disruptors. However, the Company cannot reasonably estimate whether these strategies will help mitigate the impact of these economic disruptors in the future.

Previous wording

The Company’s condensed consolidated financial statements reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and related disclosures as of the date of the condensed consolidated financial statements. The Company considered the impact of economic trends on the assumptions and estimates used in preparing the condensed consolidated financial statements. In the opinion of management, all material adjustments necessary for a fair presentation of the Company’s financial results for the quarter have been made. These adjustments are of a normal recurring nature but are complicated by the continued uncertainty surrounding these economic trends. The severity, magnitude and duration of certain economic trends continue to be uncertain and are difficult to predict. Therefore, our accounting estimates and assumptions may change over time in response to economic trends and may change materially in future periods.

Current wording

The Company’s condensed consolidated financial statements reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and related disclosures as of the date of the condensed consolidated financial statements. The Company considered the impact of economic trends on the assumptions and estimates used in preparing the condensed consolidated financial statements. In the opinion of management, all material adjustments necessary for a fair presentation of the Company’s financial results for the quarter have been made. These adjustments are of a normal recurring nature but are complicated by the continued uncertainty surrounding these macroeconomic trends. The severity, magnitude and duration of certain economic trends continue to be uncertain and are difficult to predict. Therefore, our accounting estimates and assumptions may change over time in response to economic trends and may change materially in future periods.

Previous wording

Revenues for the quarter ended September 30, 2025 were $1.0 billion, an increase of $109.8 million, or 12.0%, from 2024 revenues of $916.3 million. The increase in revenues was driven by demand from our customers across all major service offerings. Organic revenue* growth was 7.2% with acquisitions adding 4.8% in the quarter. Residential pest control revenue increased 11.2%, commercial pest control revenue increased 11.8% and termite and ancillary services grew 15.2% including both organic and acquisition-related growth in each area. Organic revenue* growth was strong across our service offerings, growing 5.2% in residential, 8.3% in commercial, and 10.8% in termite and ancillary activity.

Current wording

Revenues for the quarter ended March 31, 2026 were $906.4 million, an increase of $83.9 million, or 10.2%, from 2025 revenues of $822.5 million. The increase in revenues was driven by demand from our customers across all major service offerings. Organic revenue* growth was 6.6% with acquisitions adding 3.6% in the quarter. Residential pest control revenue increased 9.3%, commercial pest control revenue increased 9.6% and termite and ancillary services grew 13.5% including both organic and acquisition-related growth in each area. Organic revenue* growth was 4.2% in residential, 7.7% in commercial, and 9.8% in termite and ancillary activity. The Company’s foreign operations accounted for approximately 7% of total revenues for the quarters ended March 31, 2026 and March 31, 2025.

Previous wording

Revenues are impacted by the seasonal nature of the Company’s pest and termite control services. The increase in pest activity, as well as the metamorphosis of termites in the spring and summer (the occurrence of which is determined by the change in seasons), has historically resulted in an increase in the Company’s revenues as evidenced by the following table:

Current wording

Revenues are impacted by weather conditions, including climate change and the seasonal nature of the Company’s pest and termite control services. The increase in pest activity, as well as the metamorphosis of termites in the spring and summer (the occurrence of which is determined by the change in seasons), has historically resulted in an increase in the Company’s revenues as evidenced by the following table:

Previous wording

Gross profit for the quarter ended September 30, 2025 was $558.7 million, an increase of $64.3 million, or 13.0%, compared to $494.4 million for the quarter ended September 30, 2024.

Current wording

Gross profit for the quarter ended March 31, 2026 was $460.9 million, an increase of $38.5 million, or 9.1%, compared to $422.4 million for the quarter ended March 31, 2025.

Previous wording

For the quarter ended September 30, 2025, sales, general and administrative ("SG&A") expenses were $301.4 million, an increase of $26.5 million, or 9.6%, compared to the quarter ended September 30, 2024.

Current wording

For the quarter ended March 31, 2026, sales, general and administrative ("SG&A") expenses were $282.9 million, an increase of $32.4 million, or 12.9%, compared to the quarter ended March 31, 2025.

Previous wording

As a percentage of revenue, SG&A expenses increased 10 basis points to 30.2% from 30.1% in the prior year. This is primarily due to 20 basis points of higher selling and marketing costs associated with continued investments in growth initiatives, partially offset by lower insurance and claims costs and lower administrative costs.

Current wording

As a percentage of revenue, SG&A increased 70 basis points to 31.2% from 30.5% in the prior year, primarily due to 50 basis points of higher selling and marketing costs and 20 basis points of higher insurance and claims costs.

Previous wording

For the quarter ended September 30, 2025, depreciation and amortization increased $4.6 million, or 16.5%, compared to the quarter ended September 30, 2024. The increase was due to higher amortization of intangible assets from acquisitions, most notably from the acquisition of Saela Pest Control ("Saela").

Current wording

For the quarter ended March 31, 2026, depreciation and amortization increased $3.3 million, or 11.3%, compared to the quarter ended March 31, 2025. The increase was due to higher amortization of intangible assets from acquisitions, most notably from the acquisition of Saela.

Previous wording

For the quarter ended September 30, 2025, operating income increased $33.2 million, or 17.3%, compared to the prior year.

Current wording

For the quarter ended March 31, 2026, operating income increased $2.8 million, or 2.0%, compared to the prior year.

Previous wording

As a percentage of revenue, operating income was 21.9%, an increase of 100 basis points compared to the third quarter of 2024. Operating margin improved mostly due to lower insurance and claims costs and leverage in materials and supplies, administrative costs, and selling and marketing costs, partially offset by higher fleet costs.

Current wording

As a percentage of revenue, operating income was 16.1%, a decrease of 120 basis points compared to the first quarter of 2025. Operating margin reduced mostly due to higher insurance and claims costs, higher selling and marketing costs, higher fleet costs, and higher employee expenses.

Previous wording

During the quarter ended September 30, 2025, interest expense, net increased $0.8 million compared to the prior year primarily due to a higher average debt balance during the quarter ended September 30, 2025 versus the same quarter in the prior year.

Current wording

During the quarter ended March 31, 2026, interest expense, net increased $3.1 million compared to the prior year due to a higher average debt balance associated primarily with the issuance of our 2035 Senior Notes, as well as borrowings under our commercial paper program. We expect interest expense to be approximately $35 million in 2026 associated with borrowings under our 2035 Senior Notes and commercial paper program.

Previous wording

During the quarter ended September 30, 2025, other income decreased $0.2 million primarily due to lower gains on non-operational asset sales.

Current wording

During the quarter ended March 31, 2026, other (income) expense, net decreased $0.2 million primarily due to lower gains on non-operational asset sales.

Previous wording

The Company’s effective tax rate was 24.8% in the third quarter of 2025 and 26.1% in the third quarter of 2024. The reduced rate is primarily due to the purchase of transferable federal income tax credits during the three months ended September 30, 2025.

Current wording

The Company’s effective tax rate was 21.3% in the first quarter of 2026 and 23.5% in the first quarter of 2025. The reduced rate is primarily due to increased benefits from stock-based compensation and the purchase of transferable federal income tax credits during the three months ended March 31, 2026. We expect our effective tax rate to be under 25% in 2026.

Previous 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.

Current wording

Adjusted operating income and adjusted operating margin are calculated by adding back to operating income those expenses associated with 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

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.

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 associated with 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

Free cash flow is calculated by subtracting capital expenditures from cash provided by operating activities. Management uses free cash flow to demonstrate the Company’s ability to maintain its asset base and generate future cash flows from operations. Free cash flow conversion is calculated as free cash flow divided by net income. Management uses free cash flow conversion to demonstrate how much net income is converted into cash. Management believes that free cash flow is an important financial measure for use in evaluating the Company’s liquidity. Free cash flow should be considered in addition to, rather than as a substitute for, net cash provided by operating activities as a measure of our liquidity. Additionally, the Company’s definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, management believes it is important to view free cash flow as a measure that provides supplemental information to our consolidated statements of cash flows.

Current wording

Management uses free cash flow conversion to demonstrate how much net income is converted into cash. Management believes that free cash flow is an important financial measure for use in evaluating the Company’s liquidity. Free cash flow should be considered in addition to, rather than as a substitute for, net cash provided by operating activities as a measure of our liquidity. Additionally, the Company’s definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, management believes it is important to view free cash flow as a measure that provides supplemental information to our condensed consolidated statements of cash flows.

Previous 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.

Current wording

(1) Consists of expenses resulting from the amortization of intangible assets and adjustments to the fair value of contingent consideration associated with 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

(5) As of September 30, 2025 and December 31, 2024, the Company had no outstanding borrowings under our commercial paper program. The Company's short-term borrowings are presented under the short-term debt caption of our condensed consolidated statements of financial position, net of unamortized discounts.

Current wording

(5) The Company's short-term borrowings are presented under the short-term debt caption of our condensed consolidated statement of financial position, net of unamortized discounts.

Previous wording

(6) As of September 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 $7.3 million unamortized discount and $7.0 million in unamortized debt issuance costs as of September 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.

Current wording

(6) As of March 31, 2026 and December 31, 2025, the Company had outstanding borrowings of $500.0 million from the issuance of our 2035 Senior Notes. These borrowings are presented under the long-term debt caption of our condensed consolidated statement of financial position, net of unamortized discount and unamortized debt issuance costs. As of March 31, 2026 and December 31, 2025, the Company had no outstanding borrowings under the Revolving Credit Facility.

Previous 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.

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 statement of financial position.

Previous wording

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

Current wording

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

Previous wording

The Company’s $127.4 million of total cash at September 30, 2025 is held at various banking institutions. As of September 30, 2025, approximately $55.2 million is held in cash by foreign subsidiaries and the remaining $72.1 million is held at domestic banks and also includes cash-in-transit.

Current wording

The Company’s $116.5 million of total cash at March 31, 2026 is held at various banking institutions. As of March 31, 2026, approximately $56.9 million is held in cash by foreign subsidiaries and the remaining $59.6 million is held at domestic banks and also includes cash-in-transit.

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. Borrowings under this program are generally outstanding for 30 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 September 30, 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 30 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 March 31, 2026 and December 31, 2025, there were $163.9 million and $114.4 million of outstanding borrowings under the commercial paper program, respectively.

Previous wording

On May 6, 2025, we commenced an offer to exchange $500 million of the 2035 Senior Notes privately placed in February 2025 (“Initial Notes”) for the $500 million of the 2035 Senior Notes that have been registered under the Securities Act of 1933 (“Exchange Notes”). Approximately 99.6% of the $500 million aggregate principal amount of the Initial Notes were validly tendered and not withdrawn prior to the expiration of the exchange offer, and were exchanged for Exchange Notes as of June 4, 2025, pursuant to the terms of the exchange offer. The Exchange Notes are identical in all material respects to the Initial Notes, except that the Exchange Notes will have no transfer restrictions or registration rights.

Current wording

On May 6, 2025, we commenced an offer to exchange $500 million of the 2035 Senior Notes privately placed in February 2025 (“Initial Notes”) for the $500 million of the 2035 Senior Notes that have been registered under the Securities Act of 1933 (“Exchange Notes”). Approximately 99.7% of the $500 million aggregate principal amount of the Initial Notes were validly tendered and not withdrawn prior to the expiration of the exchange offer, and were exchanged for Exchange Notes as of June 4, 2025, pursuant to the terms of the exchange offer. The Exchange Notes are identical in all material respects to the Initial Notes, except that the Exchange Notes will have no transfer restrictions or registration rights.

Previous wording

As of September 30, 2025, the Company had no outstanding borrowings under the Revolving Credit Facility. As of December 31, 2024, the Company had outstanding borrowings of $397.0 million under the Revolving Credit Facility.

Current wording

As of March 31, 2026 and December 31, 2025, the Company had no outstanding borrowings under the Revolving Credit Facility.

Previous wording

The Company maintained $82.4 million in letters of credit as of September 30, 2025 and $72.0 million as of December 31, 2024. These letters of credit are required by the Company’s insurance companies, due to the Company’s high deductible insurance program, to secure various workers’ compensation and casualty insurance contracts coverage. The Company believes that it has adequate liquid assets, funding sources and insurance accruals to accommodate potential future insurance claims.

Current wording

The Company maintained $84.6 million in letters of credit as of March 31, 2026 and $82.4 million as of December 31, 2025. These letters of credit are required by the Company’s insurance carriers, due to the Company’s high deductible insurance program, to secure various workers’ compensation and casualty insurance contracts coverage. The Company believes that it has adequate liquid assets, funding sources and insurance accruals to accommodate potential future insurance claims.

Previous wording

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

Current wording

The following table sets forth a summary of our cash flows from operating, investing and financing activities for the three 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 $513.4 million and $419.5 million for the nine months ended September 30, 2025 and 2024, respectively. The $93.9 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 $118.4 million and $146.9 million for the three months ended March 31, 2026 and 2025, respectively. The $28.5 million, or 19.4%, decrease was driven primarily by the timing of approximately $39.5 million due to the timing of tax payments associated with our tax credit planning strategy, approximately $8.8 million due to the transition to semi-annual interest payments on our 2035 Senior Notes, as well as the the timing of cash receipts and cash payments to and from customers, vendors, and employees. Aside from the timing impacts of our federal income tax and interest, we continued to generate strong operating cash flows. We expect these timing differences to moderate as we go through the year, and we expect cash flow growth to improve in future quarters.

Previous wording

The Company’s investing activities used $302.8 million and $123.6 million for the nine months ended September 30, 2025 and 2024, respectively. Cash paid for acquisitions totaled $288.3 million for the nine months ended September 30, 2025, compared to $105.5 million for the nine months ended September 30, 2024, driven primarily by the Saela acquisition. The Company invested $22.4 million in capital expenditures during the year, offset by $5.9 million in cash proceeds from the sale of assets, compared with $23.4 million of capital expenditures and $3.0 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.

Current wording

The Company’s investing activities used $24.6 million and $32.6 million for the three months ended March 31, 2026 and 2025, respectively. Cash paid for acquisitions totaled $18.5 million for the three months ended March 31, 2026, compared to $27.2 million for the three months ended March 31, 2025. The Company invested $7.1 million in capital expenditures during the year, offset by $0.6 million in cash proceeds from the sale of assets, compared with $6.8 million of capital expenditures and $1.4 million in cash proceeds from asset sales in 2025. 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 $175.1 million was used in financing activities during the nine months ended September 30, 2025, compared with $305.5 million during the nine months ended September 30, 2024. A total of $239.5 million was paid in cash dividends ($0.495 per share) during the nine months ended September 30, 2025, compared to $218.0 million in cash dividends paid ($0.450 per share) during the nine months ended September 30, 2024.

Current wording

Cash of $76.2 million was used in financing activities during the three months ended March 31, 2026, compared with $4.6 million during the three months ended March 31, 2025. A total of $87.8 million was paid in cash dividends ($0.1825 per share) during the three months ended March 31, 2026, compared to $79.9 million in cash dividends paid ($0.165 per share) during the three months ended March 31, 2025.

Previous wording

During the nine months ended September 30, 2025, the Company paid $7.8 million of contingent consideration, compared to $33.4 million during the nine months ended September 30, 2024. The Company withheld $18.6 million and $11.5 million of common stock for the nine months ended September 30, 2025 and 2024, respectively, in connection with tax withholding obligations of its employees upon vesting of such employees’ equity awards.

Current wording

During the three months ended March 31, 2026, the Company paid $6.1 million of contingent consideration, compared to $1.2 million during the three months ended March 31, 2025. The Company withheld $22.4 million and $14.7 million of common stock for the three months ended March 31, 2026 and 2025, respectively, in connection with tax withholding obligations of its employees upon vesting of such employees’ equity awards.

Previous wording

The Form S-3 on file with the SEC registered $1.5 billion of the Company’s common stock, preferred stock, debt securities, depositary shares, warrants, rights, purchase contracts and units for future issuance by the Company. The Company may offer and sell some or all of such securities from time to time or through underwriters, brokers or dealers, directly to one or more other purchasers, through a block trade, through agents on a best-efforts basis, through a combination of any of the above methods of sale or through other types of transactions described in the Form S-3. The Company has not sold any securities pursuant to the Form S-3 as of the date of this Form 10-Q.

Current wording

The Form S-3 shelf registration statement on file with the SEC registered $1.5 billion of the Company’s common stock, preferred stock, debt securities, depositary shares, warrants, rights, purchase contracts and units for future issuance by the Company. The Company may offer and sell some or all of such securities from time to time or through underwriters, brokers or dealers, directly to one or more other purchasers, through a block trade, through agents on a best-efforts basis, through a combination of any of the above methods of sale or through other types of transactions described in the Form S-3. The Company has not sold any securities in a primary offering as of the date of this Form 10-Q. Management is continually evaluating the Company's financial structure and the potential need or desirability of raising additional liquidity through the sale of debt or equity securities. The Form S-3 will expire in June 2026, and the Company expects to file a new registration statement prior to the expiration date.

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 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.

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, inquiries, 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

The Company retains, up to specified limits, certain risks related to general liability, workers’ compensation and auto liability. The estimated costs of existing and future claims under the retained loss program are accrued based upon historical trends as incidents occur, whether reported or unreported (although actual settlement of the claims may not be made until future periods) and may be subsequently revised based on developments relating to such claims. The Company contracts with an independent third-party actuary to provide the Company an estimated liability based upon historical claims information. The actuarial study is a major consideration in establishing the reserve, along with management’s knowledge of changes in business practice and existing claims compared to current balances. Management’s judgment is inherently subjective as a number of factors are outside management’s knowledge and control. Additionally, historical information is not always an accurate indication of future events. The accruals and reserves we hold are based on estimates that involve a degree of judgment and are inherently variable and could be overestimated or insufficient. If actual claims exceed our estimates, our operating results could be materially affected, and our ability to take timely corrective actions to limit future costs may be limited.

Current wording

The Company retains, up to specified limits, certain risks related to general liability, workers’ compensation and auto liability. The estimated costs of existing and future claims under the retained loss program are accrued based upon historical trends as incidents occur, whether reported or unreported (although actual settlement of the claims may not be made until future periods) and may be subsequently revised based on developments relating to such claims. The Company contracts with an independent third party to provide the Company an estimated liability based upon historical claims information. The actuarial study is a major consideration in establishing the reserve, along with management’s knowledge of changes in business practice and existing claims compared to current balances. Management’s judgment is inherently subjective as a number of factors are outside management’s knowledge and control. Additionally, historical information is not always an accurate indication of future events. The accruals and reserves we hold are based on estimates that involve a degree of judgment and are inherently variable and could be overestimated or insufficient. If actual claims exceed our estimates, our operating results could be materially affected, and our ability to take timely corrective actions to limit future costs may be limited.

Previous wording

•expansion efforts and growth opportunities, including, but not limited, to anticipated organic and inorganic growth and recent and future acquisitions in the United States and in foreign markets where we have a presence and integration efforts with respect to recent acquisitions;

Current wording

•expansion efforts and growth opportunities, including, but not limited, to anticipated organic growth and recent and future acquisitions and onboarding efforts with respect to such acquisitions;

Previous wording

•our belief that no pending or threatened claim, proceeding, litigation, regulatory action or investigation, either alone or in the aggregate, including but not limited to the investigation by certain California governmental authorities regarding compliance with environmental regulations, claims filed under California's Private Attorneys General Act, and claims and investigations related to our enforcement of post-employment restrictive covenants will have a material adverse effect on our financial position, results of operations or liquidity; and

Current wording

•our belief that no pending or threatened claim, proceeding, litigation, regulatory action or investigation, either alone or in the aggregate, including but not limited to claims filed under California's Private Attorneys General Act will have a material adverse effect on our financial position, results of operations or liquidity;