POOL CORP

Previous wording

This report contains forward-looking information that involves risks and uncertainties. Our forward-looking statements express our current expectations or forecasts of possible future results or events, including projections of earnings and other financial performance measures, statements of management’s expectations regarding our strategic, operational and capital allocation plans and objectives, management’s views on industry, economic, competitive, technological and regulatory conditions and other forecasts of trends and other matters. Forward-looking statements speak only as of the date of this filing, and we undertake no obligation to publicly update or revise such statements to reflect new circumstances or unanticipated events as they occur. You can identify these statements by the fact that they do not relate strictly to historic or current facts and often use words such as “anticipate,” “estimate,” “expect,” “intend,” “believe,” “will,” “outlook,” “project,” “may,” “can,” “plan,” “target,” “potential,” “should” and other words and expressions of similar meaning.

Current wording

This report contains forward-looking information that involves risks and uncertainties. Our forward-looking statements express our current expectations or forecasts of possible future results or events, including projections of earnings and other financial performance measures, statements of management’s expectations regarding our strategic, operational and capital allocation plans and objectives, management’s views on economic, industry, competitive, technological and regulatory conditions and other forecasts of trends and other matters. Forward-looking statements speak only as of the date of this filing, and we undertake no obligation to publicly update or revise such statements to reflect new circumstances or unanticipated events as they occur. You can identify these statements by the fact that they do not relate strictly to historic or current facts and often use words such as “anticipate,” “estimate,” “expect,” “intend,” “believe,” “will,” “outlook,” “project,” “may,” “can,” “plan,” “target,” “potential,” “should” and other words and expressions of similar meaning.

Previous wording

Third quarter ended September 30, 2025 compared to the third quarter ended September 30, 2024

Current wording

First quarter ended March 31, 2026 compared to the first quarter ended March 31, 2025

Previous wording

Earnings per diluted share increased 4% to $3.40 in the third quarter of 2025 compared to $3.27 in the same period of 2024. We recorded a $0.3 million, or $0.01 per diluted share, tax benefit from Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting, in the third quarter of 2025 compared to a tax benefit of $0.5 million, or $0.01 per diluted share, realized in the same period of 2024. Adjusting for the impact from ASU 2016-09 in both periods, earnings per diluted share increased 4% to $3.39 compared to $3.26 in the third quarter of 2024. See RESULTS OF OPERATIONS below for definitions of our non-GAAP measures and reconciliations of our non-GAAP measures to GAAP measures.

Current wording

Earnings per diluted share increased 3% to $1.45 compared to $1.42 in the same period of 2025. We recorded a $0.8 million, or $0.02 per diluted share, tax benefit from Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting, in 2026 compared to a $3.8 million, or $0.10 per diluted share, tax benefit in 2025. Adjusting for the impact from ASU 2016-09 in both periods, earnings per diluted share increased 8% to $1.43 compared to $1.32 in 2025. See “Results of Operations” below for definitions of our non-GAAP measures and reconciliations of our non-GAAP measures to GAAP measures.

Previous wording

As of September 30, 2025, total net receivables, including pledged receivables, increased 4% compared to September 30, 2024, primarily due to higher sales in September 2025. Our days sales outstanding (DSO), as calculated on a trailing four quarters basis, was 25.9 days at September 30, 2025 and 26.7 days at September 30, 2024. Our allowance for doubtful accounts balance was $8.3 million at September 30, 2025 and $10.0 million at September 30, 2024.

Current wording

As of March 31, 2026, total net receivables, including pledged receivables, increased 13% compared to March 31, 2025, primarily due to higher sales in March 2026. Our days sales outstanding (DSO), as calculated on a trailing four quarters basis, was 26.9 days at March 31, 2026 and 25.9 days at March 31, 2025. Our allowance for doubtful accounts balance was $8.2 million at March 31, 2026 and $8.5 million at March 31, 2025.

Previous wording

Our inventory balance was $1.2 billion at September 30, 2025, an increase of $43.3 million, or 4%, from September 30, 2024, reflecting increases from inflation (including mid-season vendor price increases), new and acquired sales centers and strategic inventory purchases. Our inventory reserve was $29.0 million at September 30, 2025 and $28.6 million at September 30, 2024. Our inventory turns, as calculated on a trailing four quarters basis, were 2.8 times at both September 30, 2025 and September 30, 2024.

Current wording

Our inventory balance was $1.7 billion at March 31, 2026, an increase of $200.1 million, or 14%, from March 31, 2025, reflecting higher purchases to support service levels and a broader product range to better serve our customers ahead of the swimming pool season. Our inventory balance also reflects inflationary increases and the addition of inventory from new and acquired sales centers over the past twelve months. Our inventory reserve was $25.0 million at March 31, 2026 and $27.1 million at March 31, 2025. Our inventory turns, as calculated on a trailing four quarters basis, was 2.6 times at March 31, 2026 and 2.8 times at March 31, 2025.

Previous wording

Total debt outstanding increased $138.2 million to $1.1 billion at September 30, 2025, primarily to fund open market share repurchases of $159.1 million in the first nine months of 2025.

Current wording

Total debt outstanding increased $222.6 million to $1.2 billion at March 31, 2026, which helped to fund open market share repurchases of $349.0 million over the past twelve months.

Previous wording

We expect sales for the full year of 2025 to be relatively flat compared to 2024. We primarily source our products domestically and expect that U.S. tariffs announced so far in 2025 and their resulting price increases will positively impact net sales by approximately 1%, contributing to an estimated benefit of 2% from price for the full year of 2025.

Current wording

We expect sales for the full year of 2026 to increase by a low single-digit percentage compared to 2025.

Previous wording

In 2025, we expect our effective tax rate will be around 25.0% without the impact of ASU 2016-09. Due to ASU 2016-09, we expect our effective tax rate will fluctuate from quarter to quarter, particularly in periods when employees elect to exercise their vested stock options or when restrictions on share-based awards lapse. We recorded a $4.2 million, or $0.11 per diluted share, tax benefit from ASU 2016-09 for the nine months ended September 30, 2025. We may recognize additional tax benefits related to stock option exercises during the fourth quarter of 2025. We have not included any expected tax benefits in our full year guidance beyond what we have recognized as of September 30, 2025.

Current wording

In 2026, we expect our effective tax rate will approximate 25.0% without the impact of ASU 2016-09. Due to ASU 2016-09, we expect our effective tax rate will fluctuate from quarter to quarter, particularly in periods when employees elect to exercise their vested stock options or when restrictions on share-based awards lapse. We recorded a $0.8 million, or $0.02 per diluted share, tax benefit from ASU 2016-09 for the three months ended March 31, 2026.

Previous wording

We expect 2025 diluted EPS in the range of $10.81 to $11.31, including the impact of year-to-date tax benefits of $0.11. We expect to continue to use cash for the payment of cash dividends as and when declared by our Board of Directors (Board) and to fund opportunistic share repurchases under our Board-authorized share repurchase program.

Current wording

During 2026, we expect to continue to use cash for the payment of cash dividends as and when declared by our Board of Directors (Board) and to fund opportunistic share repurchases at our discretion.

Previous wording

The forward-looking statements in the foregoing section and elsewhere in this report are based on current market conditions and our current business plans, speak only as of the filing date of this report, are based on several assumptions and are subject to significant risks and uncertainties, including the risks detailed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024. See “Cautionary Statement for Forward-Looking Statements.”

Current wording

The forward-looking statements in the foregoing section and elsewhere in this report are based on current market conditions and our current business plans, speak only as of the filing date of this report, are based on several assumptions and are subject to significant risks and uncertainties, including the risks detailed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 within the “Forward-Looking Statements” section.

Previous wording

As of September 30, 2025, we conducted operations through 454 sales centers in North America, Europe and Australia. For the nine months ended September 30, 2025, approximately 95% of our net sales were from our operations in North America.

Current wording

As of March 31, 2026, we conducted operations through 455 sales centers in North America, Europe and Australia. For the three months ended March 31, 2026, approximately 95% of our net sales were from our operations in North America.

Previous wording

We have included the results of operations from acquisitions in 2025 and 2024 in our consolidated results since the acquisition dates.

Current wording

We have included the results of operations from acquisitions in 2025 in our consolidated results since the acquisition dates.

Previous wording

When calculating our base business results, we exclude for a period of 15 months sales centers that are acquired, opened in new markets or closed. We also exclude consolidated sales centers when we do not expect to maintain the majority of the existing business and existing sales centers that we consolidate with acquired sales centers.

Current wording

When calculating our base business results, we exclude for a period of 15 months sales centers that are acquired, opened in new markets or closed. We also exclude consolidated sales centers when we do not expect to maintain the majority of the existing business and existing sales centers that are consolidated with acquired sales centers.

Previous wording

We have not provided separate base business income statements within this Form 10-Q as our base business results for the three and nine-month periods ended September 30, 2025 closely approximated consolidated results for the same period. Acquired and new market sales centers excluded from base business contributed less than 1% to the change in our reported net sales.

Current wording

We have not provided separate base business income statements within this Form 10-Q as our base business results for the three months ended March 31, 2026 closely approximated consolidated results. Excluded sales centers contributed less than 1% to the change in our reported net sales.

Previous wording

The table below summarizes the changes in our sales center count during the first nine months of 2025:

Current wording

The table below summarizes the changes in our sales center count during the first three months of 2026:

Previous wording

The following factors impacted our sales during the quarter and are listed in order of estimated magnitude:

Current wording

The following factors impacted our sales growth during the quarter and are listed in order of estimated magnitude:

Previous wording

a benefit of approximately 2% from inflationary product cost increases, net of price deflation on some items, compared to a 1% benefit in the first nine months of 2024.

Current wording

a benefit of approximately 3% from inflationary product cost increases;

Previous wording

improved demand for building materials products (see discussion below); and

Current wording

improved demand for building materials products and equipment (see discussion below); and

Previous wording

In the third quarter of 2025, sales of equipment for maintenance, renovation and new construction activities, including swimming pool heaters, pumps, lights, filters and automation devices, increased 4% versus the same period last year, and collectively represented approximately 29% of net sales for the period. The increase in sales of equipment reflects benefits from price and some increase from volumes sold of maintenance-related products. Sales of building materials, which are primarily used in new pool construction and remodeling, increased 4% compared to the same period in 2024 and represented approximately 11% of net sales in the third quarter of 2025.

Current wording

In the first quarter of 2026, sales of equipment for maintenance, renovation and new construction activities, including swimming pool heaters, pumps, lights, filters and automation devices, increased 7% versus the same period last year, and collectively represented approximately 34% of net sales for the period. Sales of building materials, which are primarily used in new pool construction and remodeling, increased 5% compared to the same period in 2025 and represented approximately 13% of net sales in the first quarter of 2026.

Previous wording

Interest and other non-operating expenses, net for the third quarter of 2025 decreased $0.4 million compared to the third quarter of 2024. Our weighted average effective interest rate decreased to 4.5% in the third quarter of 2025 compared to 5.2% in the third quarter of 2024 on average outstanding debt of $1.1 billion and $946.1 million for the respective periods.

Current wording

Interest and other non-operating expenses, net for the first quarter of 2026 increased $1.2 million compared to the first quarter of 2025, primarily due to an increase in average outstanding debt between periods. Our weighted average effective interest rate decreased to 4.2% in the first quarter of 2026 compared to 4.5% in the first quarter of 2025 on average outstanding debt of $1.2 billion and $962.4 million for the respective periods.

Previous wording

Our effective income tax rate was 23.5% for the three months ended September 30, 2025 compared to 23.4% for the three months ended September 30, 2024. We recorded a $0.3 million, or $0.01 per diluted share, tax benefit from ASU 2016-09 in the quarter ended September 30, 2025 compared to a benefit of $0.5 million, or $0.01 per diluted share, in the same period last year. Without the benefit from ASU 2016-09 in both periods, our effective tax rate was 23.7% in both the third quarter of 2025 and the third quarter of 2024. Our third quarter effective income tax rate is historically lower compared to other quarters due to the annual expiration of statutes of limitations in the various jurisdictions where we have recorded uncertain tax positions.

Current wording

Our effective income tax rate was 24.2% for the three months ended March 31, 2026 compared to 19.4% for the three months ended March 31, 2025. We recorded a $0.8 million tax benefit from ASU 2016-09 in the quarter ended March 31, 2026 compared to a tax benefit of $3.8 million in the same period last year. Without the benefit from ASU 2016-09 in both periods, our effective tax rate was 25.3% in the first quarter of 2026 and 25.2% in the first quarter of 2025.

Previous wording

We have included adjusted diluted EPS, a non-GAAP financial measure, as a supplemental disclosure, because we believe this measure is useful to management, investors and others in assessing our period-to-period operating performance.

Current wording

We have included in this report adjusted diluted EPS, a non-GAAP financial measure, as a supplemental disclosure, because we believe this measure is useful to management, investors and others in assessing our period-to-period operating performance.

Previous wording

Our business is seasonal. In general, sales and operating income are highest during the second and third quarters, which represent the peak months of both swimming pool use and installation and irrigation and landscape installations and maintenance. Sales are lower during the first and fourth quarters. In 2024, we generated approximately 60% of our net sales and 73% of our operating income in the second and third quarters of the year.

Current wording

Our business is seasonal. In general, sales and operating income are highest during the second and third quarters, which represent the peak months of both swimming pool use and installation and irrigation and landscape installations and maintenance. Sales are lower during the first and fourth quarters. In 2025, we generated approximately 61% of our net sales and 78% of our operating income in the second and third quarters of the year.

Previous wording

We typically experience a build-up of product inventories and accounts payable during the winter months in anticipation of the peak selling season. Excluding borrowings to finance acquisitions and share repurchases, our peak borrowing usually occurs during the second quarter, primarily because extended payment terms offered by our suppliers typically are payable in April, May and June, while our peak accounts receivable collections typically occur in June, July and August.

Current wording

We typically experience a build-up of product inventories and accounts payable during the winter months in anticipation of the peak selling season. Excluding borrowings to finance acquisitions, dividend payments and share repurchases, our peak borrowing usually occurs during the second quarter, primarily because extended payment terms offered by certain of our suppliers are typically payable in April, May and June, while our peak accounts receivable collections typically occur in June, July and August.

Previous wording

Management has discussed the development, selection and disclosure of our critical accounting estimates with the Audit Committee of our Board. For a description of our critical accounting estimates that require us to make the most difficult, subjective or complex judgments, please see our 2024 Annual Report on Form 10-K. We have not changed any of these policies from those previously disclosed in that report.

Current wording

Management has discussed the development, selection and disclosure of our critical accounting estimates with the Audit Committee of our Board. For a description of our critical accounting estimates, please see the “Critical Accounting Estimates” section included in Part II, Item 7 in our 2025 Annual Report on Form 10-K. We have not changed any of these policies from those previously disclosed in that report.

Previous wording

Our primary capital needs are seasonal working capital obligations, debt repayment obligations and other general corporate initiatives, including acquisitions, opening new sales centers, customer-facing technology-related investments, dividend payments and discretionary share repurchases. Our primary working capital obligations are for the purchase of inventory, payroll, rent, other facility costs and selling and administrative expenses. Our working capital obligations fluctuate during the year, driven primarily by seasonality and the timing of inventory purchases. Our primary sources of working capital are cash from operations supplemented by bank borrowings, which have historically been sufficient to support our growth and finance acquisitions. We have funded our capital expenditures and share repurchases in substantially the same manner.

Current wording

Our primary capital needs are seasonal working capital obligations, debt repayment obligations and other general corporate initiatives, including acquisitions, opening new sales centers, technology-related investments, dividend payments and discretionary share repurchases. Our primary working capital obligations are for the purchase of inventory, payroll, rent, other facility costs and selling and administrative expenses. Our working capital obligations fluctuate during the year, driven primarily by seasonality and the timing of inventory purchases. Our primary sources of working capital are cash from operations supplemented by bank borrowings, which have historically been sufficient to support our growth and finance acquisitions. We have funded our capital expenditures and share repurchases in substantially the same manner.

Previous wording

capital expenditures primarily for maintenance and growth of our sales center network, technology-related investments and vehicle fleet;

Current wording

capital expenditures primarily for maintenance and growth of our sales center network, technology-related investments and fleet vehicles;

Previous wording

Net cash used in investing activities for the first nine months of 2025 increased $6.3 million compared to the first nine months of 2024, primarily due to a $2.7 million increase in acquisition costs and a $2.2 million increase in net capital expenditures.

Current wording

Net cash used in investing activities for the first three months of 2026 decreased $5.8 million compared to the first three months of 2025, primarily due to a $4.7 million decrease in net capital expenditures.

Previous wording

Net cash used in financing activities was $182.4 million for the first nine months of 2025 compared to $411.8 million for the first nine months of 2024, primarily reflecting $112.4 million of net debt proceeds in the first nine months of 2025 versus $128.4 million of net debt payments in the first nine months of 2024, partially offset by a $4.5 million increase in both share repurchases and dividend payments in the first nine months of 2025 versus the same period in 2024.

Current wording

Net cash used in financing activities was $58.5 million for the first three months of 2026 compared to $20.6 million for the first three months of 2025, primarily due to a decrease of $26.6 million in net debt proceeds between periods and an $8.1 million increase in share repurchases in the first three months of 2026 versus the same period in 2025.

Previous wording

To supplement cash from operations as our primary source of working capital, we plan to continue to utilize our three major credit facilities, which are the Fourth Amended and Restated Credit Facility (the Credit Facility), the term facility provided under the below-defined Term Agreement (the Term Facility) and the Receivables Securitization Facility (the Receivables Facility). For additional details regarding these facilities, see the summary descriptions below and more complete descriptions in Note 5 of our “Notes to Consolidated Financial Statements,” included in Part II, Item 8 in our 2024 Annual Report on Form 10-K and Note 5 of “Notes to Consolidated Financial Statements” included in Part I, Item 1 of this Form 10-Q.

Current wording

To supplement cash from operations as our primary source of working capital, we plan to continue to utilize our three major credit facilities, which are our Credit Facility, Term Facility and our Receivables Facility. For additional details regarding these facilities, see the summary descriptions below and more complete descriptions in Note 5 of our “Notes to Consolidated Financial Statements,” included in Part II, Item 8 in our 2025 Annual Report on Form 10-K and Note 5 of “Notes to Consolidated Financial Statements” included in Part I, Item 1 of this Form 10-Q.

Previous wording

Our Credit Facility, as recently amended, provides for $1.3 billion in borrowing capacity consisting of an $800.0 million revolving credit facility and a $500.0 million term loan facility. The Credit Facility also includes an accordion feature permitting us to request one or more incremental term loans or revolving credit facility commitment increases up to $250.0 million and sublimits for the issuance of swingline loans and standby letters of credit. We pay interest on revolving and term loan borrowings under the Credit Facility at a variable rate based on the one-month Term SOFR, plus an applicable margin. The term loan requires quarterly amortization payments commencing on September 30, 2027, with all remaining principal due on September 30, 2029. We intend to continue to use the Credit Facility for general corporate purposes, for future share repurchases and to fund future growth initiatives.

Current wording

Our Credit Facility provides for $1.3 billion in borrowing capacity consisting of an $800.0 million revolving credit facility and a $500.0 million term loan facility. The Credit Facility also includes an accordion feature permitting us to request one or more incremental term loans or revolving credit facility commitment increases up to $250.0 million and sublimits for the issuance of swingline loans and standby letters of credit. We pay interest on revolving and term loan borrowings under the Credit Facility at a variable rate based on the one-month term secured overnight financing rate (Term SOFR), plus an applicable margin. The term loan requires quarterly amortization payments commencing on September 30, 2027 with all remaining principal due on September 30, 2029. We intend to continue to use the Credit Facility for general corporate purposes, for future share repurchases and to fund future growth initiatives.

Previous wording

At September 30, 2025, there was $221.3 million of revolving borrowings outstanding, a $500.0 million term loan outstanding, $14.4 million of standby letters of credit outstanding and $564.3 million available for borrowing. The weighted average effective interest rate for the Credit Facility as of September 30, 2025 was approximately 3.8%, excluding commitment fees and including the impact of our interest rates swaps.

Current wording

At March 31, 2026, there was $346.8 million of revolving borrowings outstanding, a $500.0 million term loan outstanding, $14.4 million of standby letters of credit outstanding and $438.8 million available for borrowing under the Credit Facility. The weighted average effective interest rate for the Credit Facility as of March 31, 2026 was approximately 3.8%, excluding commitment fees and including the impact of our interest rate swaps.

Previous wording

Our Term Facility, as recently amended, provides for $90.0 million in borrowing capacity. Proceeds from the Term Facility were used to pay down the Credit Facility in December 2019, adding borrowing capacity for future share repurchases, acquisitions and growth-oriented working capital expansion. We pay interest on borrowings under the Term Facility at a variable rate based on one-month Term SOFR, plus an applicable margin. The Term Facility is repaid in quarterly installments of 1.250% of the Term Facility beginning in the third quarter of 2027, with the final principal repayment due on September 30, 2029. We may prepay amounts outstanding under the Term Facility without penalty other than interest breakage costs.

Current wording

Our Term Facility provides for $90.0 million in borrowing capacity. We pay interest on borrowings under the Term Facility at a variable rate based on one-month Term SOFR, plus an applicable margin. The Term Facility is repaid in quarterly installments of 1.250% of the Term Facility beginning in the third quarter of 2027, with the final principal repayment due on September 30, 2029. We may prepay amounts outstanding under the Term Facility without penalty other than interest breakage costs.

Previous wording

At September 30, 2025, there was $90.0 million outstanding under the Term Facility with a weighted average effective interest rate of 5.3%.

Current wording

At March 31, 2026, the Term Facility had an outstanding balance of $90.0 million at a weighted average effective interest rate of 4.9%.

Previous wording

Our two-year accounts receivable securitization facility (the Receivables Facility) offers us a low-cost form of financing. Under this facility, we can borrow up to $375.0 million between April through May and from $210.0 million to $350.0 million during the remaining months of the year. We pay interest on borrowings under the Receivables Facility at a variable rate based on one-month Term SOFR, plus an applicable margin. The Receivables Facility matures on October 30, 2026.

Current wording

Our two-year Receivables Facility offers us a lower-cost form of financing. Under this facility, we can borrow up to $375.0 million between April through May and from $210.0 million to $350.0 million during the remaining months of the year. We pay interest on borrowings under the Receivables Facility at a variable rate based on one-month Term SOFR, plus an applicable margin. The Receivables Facility matures on October 30, 2026.

Previous wording

At September 30, 2025, there was $241.3 million outstanding under the Receivables Facility at a weighted average effective interest rate of 5.1%, excluding commitment fees.

Current wording

At March 31, 2026, there was $300.0 million outstanding under the Receivables Facility at a weighted average effective interest rate of 4.6%, excluding commitment fees.

Previous wording

Maximum Average Total Leverage Ratio. On the last day of each fiscal quarter, our average total leverage ratio must be less than 3.25 to 1.00. Average Total Leverage Ratio is the ratio of the sum of (i) Total Non-Revolving Funded Indebtedness as of such date, (ii) the trailing twelve months (TTM) Average Total Revolving Funded Indebtedness and (iii) the TTM Average Accounts Securitization Proceeds divided by TTM EBITDA (as those terms are defined in the Credit Facility). As of September 30, 2025, our average total leverage ratio equaled 1.58 (compared to 1.47 as of June 30, 2025) and the TTM average total indebtedness amount used in this calculation was $1.0 billion.

Current wording

Maximum Average Total Leverage Ratio. On the last day of each fiscal quarter, our average total leverage ratio must be less than 3.25 to 1.00. Average Total Leverage Ratio is the ratio of the sum of (i) Total Non-Revolving Funded Indebtedness as of such date, (ii) the trailing twelve months (TTM) Average Total Revolving Funded Indebtedness and (iii) the TTM Average Accounts Securitization Proceeds divided by TTM EBITDA (as those terms are defined in the Credit Facility). As of March 31, 2026, our average total leverage ratio equaled 1.73 (compared to 1.67 as of December 31, 2025) and the TTM average total indebtedness amount used in this calculation was $1.1 billion.

Previous wording

Minimum Fixed Charge Coverage Ratio. On the last day of each fiscal quarter, our fixed charge ratio must be greater than or equal to 2.25 to 1.00. Fixed Charge Ratio is the ratio of the TTM EBITDAR divided by TTM Interest Expense paid or payable in cash plus TTM Rental Expense (as those terms are defined in the Credit Facility). As of September 30, 2025, our fixed charge ratio equaled 4.88 (compared to 4.90 as of June 30, 2025) and TTM Rental Expense was $110.9 million.

Current wording

Minimum Fixed Charge Coverage Ratio. On the last day of each fiscal quarter, our fixed charge ratio must be greater than or equal to 2.25 to 1.00. Fixed Charge Ratio is the ratio of the TTM EBITDAR divided by TTM Interest Expense paid or payable in cash plus TTM Rental Expense (as those terms are defined in the Credit Facility). As of March 31, 2026, our fixed charge ratio equaled 4.73 (compared to 4.78 as of December 31, 2025) and TTM Rental Expense was $114.0 million.

Previous wording

We utilize interest rate swap contracts to reduce our exposure to fluctuations in variable interest rates for future interest payments on our variable rate borrowings. Interest expense related to the notional amounts under all swap contracts is based on the fixed rates plus the applicable margin on the respective borrowings.

Current wording

We utilize interest rate swap contracts to reduce our exposure to fluctuations in variable interest rates for future interest payments on our variable rate borrowings. Interest expense related to the notional amounts under all swap contracts is based on fixed rates plus the applicable margin on the respective borrowings.

Previous wording

As of September 30, 2025, we were in compliance with all material covenants and financial ratio requirements under our Credit Facility, our Term Facility and our Receivables Facility. We believe we will remain in compliance with all material covenants and financial ratio requirements throughout the next twelve months. For additional information regarding our debt arrangements, see Note 5 of “Notes to Consolidated Financial Statements,” included in Part II, Item 8 of our 2024 Annual Report on Form 10-K, as updated by Note 5 of “Notes to Consolidated Financial Statements,” included in Part I, Item 1 of this Form 10-Q.

Current wording

As of March 31, 2026, we were in compliance with all covenants and financial ratio requirements under our Credit Facility, our Term Facility and our Receivables Facility. We believe we will remain in compliance with all material covenants and financial ratio requirements throughout the next twelve months. For additional information regarding our debt arrangements, see Note 5 of “Notes to Consolidated Financial Statements,” included in Part II, Item 8 of our 2025 Annual Report on Form 10-K, as updated by Note 5 of “Notes to Consolidated Financial Statements,” included in Part I, Item 1 of this Form 10-Q.