INSPERITY, INC.

We have a revolving credit facility (the “Facility”) with a revolving credit commitment of $750 million. The Facility may be further increased to $800 million based on the terms and subject to the conditions set forth in the agreement relating to the Facility (as amended, the “Credit Agreement”). The Facility is available for working capital and general corporate purposes, including acquisitions, stock repurchases and issuances of letters of credit. Our obligations under the Facility are secured by 100% of the stock of our captive insurance subsidiary and are guaranteed by all of our subsidiaries other than our captive insurance subsidiary and certain other excluded subsidiaries. At September 30, 2026, our outstanding balance on the Facility was $419 million, and we had an outstanding $1 million letter of credit issued under the Facility, resulting in unused commitment of $330 million.

The Facility contains both affirmative and negative covenants that we believe are customary for arrangements of this nature. Covenants include, but are not limited to, limitations on our ability to incur additional indebtedness, sell material assets, retire, redeem or otherwise reacquire our capital stock, acquire the capital stock or assets of another business, make investments and pay dividends. In addition, the Credit Agreement requires us to comply with financial covenants limiting our total funded debt, minimum interest coverage ratio, and maximum leverage ratio. We were in compliance with all financial covenants under the Credit Agreement at September 30, 2026.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Facility matures on December 15, 2028. Borrowings under the Facility bear interest at an annual rate equal to an alternate base rate or Term SOFR for term SOFR loans, in either case plus an applicable margin. Term SOFR is a forward-looking term rate based on the secured overnight financing rate. Depending on our leverage ratio, the applicable margin varies (1) in the case of SOFR loans, from 1.50% to 2.50% and (2) in the case of alternate base rate loans, from 0.50% to 1.50%. The alternate base rate is the highest of (1) the prime rate most recently published in The Wall Street Journal, (2) the federal funds rate plus 0.50%; and (3) the Term SOFR rate plus 2.00%. We also pay an unused commitment fee on the average daily unused portion of the Facility at a rate of 0.25% per year. The average interest rate for the nine month period ended September 30, 2026 was 5.8%. Interest expense and unused commitment fees are recorded in other income (expense).

For the nine months ended September 30, 2026, our provision for income taxes differed from the U.S. statutory rate primarily due to state income taxes, non-deductible expenses and vesting of certain restricted and long-term incentive stock awards. During the first nine months of 2026, we recognized $9 million of income tax expense related to the vesting of certain long-term incentive and restricted stock awards, primarily due to the vesting date price being below the grant date price. During the first nine months of 2025, we recognized $1 million of income tax expense related to the vesting of certain long-term incentive and restricted stock awards.

During the nine months ended September 30, 2026, we repurchased or withheld an aggregate of 302,258 shares of our common stock, as described below.

Repurchase Program

Our Board of Directors (the “Board”) has authorized a program to repurchase shares of our outstanding common stock (“Repurchase Program”). The purchases may be made from time to time in the open market or directly from stockholders at prevailing market prices based on market conditions and other factors. During the nine months ended September 30, 2026,130,000 shares were repurchased under the Repurchase Program. As of September 30, 2026, we were authorized to repurchase an additional 1,277,764 shares under the Repurchase Program.

Withheld Shares

During the nine months ended September 30, 2026, we withheld 172,258 shares to satisfy tax withholding obligations for the vesting of long-term incentive and restricted stock unit awards.

Dividends

The Board declared and paid quarterly dividends as follows:

During the nine months ended September 30, 2026 and 2025, we declared and paid dividends totaling $69 million and $68 million, respectively.

Basic EPS is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period, plus the dilutive effect of time-based and performance-based restricted stock units (“RSUs”).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes net income (loss) and basic and diluted shares used in the earnings per share computations:

Litigation

We are a defendant in various lawsuits and claims arising in the normal course of business. Management believes it has valid defenses in these cases and is defending them vigorously. While the results of litigation cannot be predicted with certainty, management believes the final outcome of such litigation will not have a material adverse effect on our financial position or results of operations.