COMFORT SYSTEMS USA INC

Previous wording

Approximately 91.6% of our revenue is earned on a project basis for installation services in newly constructed facilities or for replacement of systems in existing facilities. When competing for project business, we usually estimate the costs we will incur on a project, and then propose a bid to the customer that includes a contract price and other performance and payment terms. Our bid price and terms are intended to cover our estimated costs on the project and provide a profit margin to us commensurate with the value of the installed system to the customer, the risk that project costs or duration will vary from estimate, the schedule on which we will be paid, the opportunities for other work that we might forego by committing capacity to this project, and other costs that we incur to support our operations but which are not specific to the project. Typically, customers will seek pricing from competitors for a given project. While the criteria on which customers select a provider vary widely and include factors such as quality, technical expertise, on-time performance, post-project support and service, and company history and financial strength, we believe that price for value is the most influential factor for most customers in choosing a mechanical or electrical installation and service provider.

Current wording

Approximately 92.1% of our revenue is earned on a project basis for installation services in newly constructed facilities or for replacement of systems in existing facilities. When competing for project business, we usually estimate the costs we will incur on a project, and then propose a bid to the customer that includes a contract price and other performance and payment terms. Our bid price and terms are intended to cover our estimated costs on the project and provide a profit margin to us commensurate with the value of the installed system to the customer, the risk that project costs or duration will vary from estimate, the schedule on which we will be paid, the opportunities for other work that we might forego by committing capacity to this project, and other costs that we incur to support our operations but which are not specific to the project. Typically, customers will seek pricing from competitors for a given project. While the criteria on which customers select a provider vary widely and include factors such as quality, technical expertise, on-time performance, post-project support and service, and company history and financial strength, we believe that price for value is the most influential factor for most customers in choosing a mechanical or electrical installation and service provider.

Previous wording

As of March 31, 2025, we had 8,750 projects in process. Our average project takes six to nine months to complete, with an average contract price of approximately $1.9 million. Our projects generally require working capital funding of equipment and labor costs. Customer payments on periodic billings generally do not recover these costs until late in the job. Our average project duration, together with typical retention terms as discussed above, generally allow us to complete the realization of revenue and earnings in cash within one year. We have what we consider to be a well-diversified distribution of revenue across end-use sectors that we believe reduces our exposure to negative developments in any given sector. Because of the integral nature of our services to most buildings, we have the legal right in almost all cases to attach liens to buildings or related funding sources when we have not been fully paid for installing systems, except with respect to some government buildings. The service work that we do, which is discussed further below, usually does not give rise to lien rights.

Current wording

As of June 30, 2025, we had 9,106 projects in process. Our average project takes six to nine months to complete, with an average contract price of approximately $2.0 million. Our projects generally require working capital funding of equipment and labor costs. Customer payments on periodic billings generally do not recover these costs until late in the job. Our average project duration, together with typical retention terms as discussed above, generally allow us to complete the realization of revenue and earnings in cash within one year. We have what we consider to be a well-diversified distribution of revenue across end-use sectors that we believe reduces our exposure to negative developments in any given sector. Because of the integral nature of our services to most buildings, we have the legal right in almost all cases to attach liens to buildings or related funding sources when we have not been fully paid for installing systems, except with respect to some government buildings. The service work that we do, which is discussed further below, usually does not give rise to lien rights.

Previous wording

We also perform larger projects. Taken together, projects with contract prices of $2 million or more totaled $14.74 billion of aggregate contract value as of March 31, 2025, or approximately 90% of a total contract value for all projects in progress, totaling $16.43 billion. Generally, projects closer in size to $2 million will be completed in one year or less. It is unusual for us to work on a project that exceeds two years in length.

Current wording

We also perform larger projects. Taken together, projects with contract prices of $2 million or more totaled $16.72 billion of aggregate contract value as of June 30, 2025, or approximately 90% of a total contract value for all projects in progress, totaling $18.50 billion. Generally, projects closer in size to $2 million will be completed in one year or less. It is unusual for us to work on a project that exceeds two years in length.

Previous wording

In addition to project work, approximately 8.4% of our revenue represents maintenance and repair service on already installed HVAC, electrical, and controls systems. This kind of work usually takes from a few hours to a few days to perform. Prices to the customer are based on the equipment and materials used in the service as well as technician labor time. We usually bill the customer for service work when it is complete, typically with payment terms of up to thirty days. We also provide maintenance and repair service under ongoing contracts. Under these contracts, we are paid regular monthly or quarterly amounts and provide specified service based on customer requirements. These agreements typically are for one or more years and frequently contain thirty- to sixty-day cancellation notice periods.

Current wording

In addition to project work, approximately 7.9% of our revenue represents maintenance and repair service on already installed HVAC, electrical, and controls systems. This kind of work usually takes from a few hours to a few days to perform. Prices to the customer are based on the equipment and materials used in the service as well as technician labor time. We usually bill the customer for service work when it is complete, typically with payment terms of up to thirty days. We also provide maintenance and repair service under ongoing contracts. Under these contracts, we are paid regular monthly or quarterly amounts and provide specified service based on customer requirements. These agreements typically are for one or more years and frequently contain thirty- to sixty-day cancellation notice periods.

Previous wording

In 2020, the advent of a global pandemic led to some delays in service and construction, including delayed project starts and air pockets or pauses during 2020 and 2021. We experienced increasing demand in 2022, 2023 and 2024, and we expect that the demand environment, especially for manufacturing and technology customers, will remain at high levels in 2025. While the impacts from the supply chain shortages have improved, we continue to experience increased labor costs and delays in delivery of certain materials and equipment. We anticipate that constraints and delays in our supply chain will persist in the near term, and that pressure on cost and availability, especially for skilled labor, will continue throughout 2025.

Current wording

In 2020, the advent of a global pandemic led to some delays in service and construction, including delayed project starts and air pockets or pauses during 2020 and 2021. We experienced increasing demand in 2022, 2023 and 2024, and we expect that the demand environment, especially for manufacturing and technology customers, will remain at high levels in 2025 and 2026. While the impacts from the supply chain shortages have improved, we continue to experience increased labor costs and delays in delivery of certain materials and equipment. We anticipate that constraints and delays in our supply chain will persist in the near term, and that pressure on cost and availability, especially for skilled labor, will continue over the next few quarters.

Previous wording

We had 47 operating locations as of December 31, 2024. In the first quarter of 2025, we completed the acquisition of Century Contractors, LLC (“Century”), which reports as a separate operating location. We had 48 operating locations as of March 31, 2025. Acquisitions are included in our results of operations from the respective acquisition date. The same-store comparison from 2025 to 2024, as described below, excludes Century, which was acquired on January 1, 2025, one month of results for Summit Industrial Construction, LLC (“Summit”), which was acquired on February 1, 2024, and one month of results for J & S Mechanical Contractors, Inc. (“J&S”), which was acquired on February 1, 2024. An operating location is included in the same-store comparison on the first day it has comparable prior year operating data, except for immaterial acquisitions that are often absorbed and integrated with existing operations.

Current wording

Plumbing & Mechanical LLC (“Right Way”), which reports as a separate operating location. We had 48 operating locations as of June 30, 2025. Acquisitions are included in our results of operations from the respective acquisition date. The same-store comparison from 2025 to 2024, as described below, excludes Right Way, which was acquired May 1, 2025, Century, which was acquired on January 1, 2025, one month of results for Summit Industrial Construction, LLC (“Summit”), which was acquired on February 1, 2024, and one month of results for J & S Mechanical Contractors, Inc. (“J&S”), which was acquired on February 1, 2024. An operating location is included in the same-store comparison on the first day it has comparable prior year operating data, except for immaterial acquisitions that are often absorbed and integrated with existing operations.

Previous wording

Revenue—Revenue for the first quarter of 2025 increased $294.3 million, or 19.1%, to $1.83 billion compared to the same period in 2024. The increase included a 15.4% increase in revenue related to same-store activity and a 3.7% increase related to the Century, Summit and J&S acquisitions. The same-store revenue growth was largely driven by strong market conditions, including the increase in our backlog. The increase in demand has been strong in the technology sector, particularly for data centers.

Current wording

Revenue for the first six months of 2025 increased $657.3 million, or 19.6%, to $4.00 billion compared to the same period in 2024. The increase included a 17.1% increase in revenue related to same-store activity and a 2.5% increase related to the acquisitions of Right Way, Century, Summit and J&S. The same-store revenue growth was largely driven by strong market conditions, including the increase in our backlog. The increase in demand has been especially strong in the technology sector, particularly for data centers.

Previous wording

Revenue for our mechanical segment increased $217.2 million, or 18.3%, to $1.40 billion for the first quarter of 2025 compared to the same period in 2024. Of this increase, $56.7 million resulted from the acquisitions of Century, Summit and J&S, and $160.5 million was attributable to same-store activity. The same-store revenue increase primarily resulted from an increase in activity in the technology sector at our North Carolina operation ($58.9 million) and one of our Texas operations ($49.9 million) and in the office building and technology sectors at one of our Virgina operations ($45.3 million). The same-store revenue increase was partially offset by a decrease in activity in the technology sector at one of our Texas operations ($26.7 million).

Current wording

Revenue for our mechanical segment increased $404.2 million, or 15.3%, to $3.04 billion for the first six months of 2025 compared to the same period in 2024. Of this increase, $83.8 million resulted from the acquisitions of Right Way, Century, Summit and J&S, and $320.4 million was attributable to same-store activity. The same-store revenue increase primarily resulted from an increase in activity in the technology sector at one of our North Carolina operations ($109.1 million), one of our Virginia operations ($89.9 million) and one of our Texas operations ($62.7 million).

Previous wording

Revenue for our electrical segment increased $77.1 million, or 21.9%, to $429.1 million for the first quarter of 2025 compared to the same period in 2024. The increase primarily resulted from an increase in activity in the technology sector at our Texas electrical operation ($77.1 million). The revenue increase was partially offset by a decrease in activity in the manufacturing sector at our North Carolina electrical operation ($26.8 million).

Current wording

Revenue for our electrical segment increased $253.1 million, or 35.6%, to $963.7 million for the first six months of 2025 compared to the same period in 2024. The increase primarily resulted from an increase in activity in the technology sector at our Texas electrical operation ($232.2 million). The revenue increase was partially offset by a decrease in activity in the manufacturing sector at our North Carolina electrical operation ($38.2 million).

Previous wording

Backlog as of March 31, 2025 was $6.89 billion, a 14.9% increase from December 31, 2024 backlog of $5.99 billion, and a 16.5% increase from March 31, 2024 backlog of $5.91 billion. The sequential backlog increase included the acquisition of Century ($47.3 million), as well as a same-store increase of $847.6 million, or 14.1%. Same-store sequential backlog growth was primarily a result of increased project bookings in the technology sector at our North Carolina operations ($317.9 million), our Texas electrical operation ($181.7 million) and one of our Indiana operations ($111.5 million) and in the manufacturing sector at our Kentucky electrical operation ($104.0 million). The year-over-year backlog increase included the acquisition of Century ($47.3 million), as well as a same-store increase of $929.9 million, or 15.7%. Same-store year-over-year backlog growth was primarily attributable to increased project bookings in the technology sector at one of our Texas operations ($335.0 million), our North Carolina operations ($332.2 million) and our Texas electrical operation ($218.1 million), in the manufacturing sector at our Kentucky electrical operation ($166.1 million) and in the healthcare and technology sectors at another one of our Texas operations ($116.1

Current wording

Backlog as of June 30, 2025 was $8.12 billion, a 17.9% increase from March 31, 2025 backlog of $6.89 billion, and a 40.7% increase from June 30, 2024 backlog of $5.77 billion. The sequential backlog increase included the acquisition of Right Way ($137.6 million), as well as a same-store increase of $1.10 billion, or 15.9%. Same-store sequential backlog growth was primarily a result of increased project bookings in the technology sector at our Texas electrical operation ($533.6 million) and one of our North Carolina operations ($412.1 million). The year-over-year backlog increase included the acquisitions of Right Way ($137.6 million) and Century ($54.2 million), as well as a same-store increase of $2.16 billion, or 37.4%. Same-store year-over-year backlog growth was primarily attributable to increased project bookings in the technology sector at one of our North Carolina operations ($867.8 million), our Texas electrical operation ($686.1 million) and one of our Texas operations ($590.5 million). The year-over-year backlog increase was partially offset by the completion of project work in the office buildings sector at one of our Virginia operations ($95.1 million).

Previous wording

Gross Profit—Gross profit increased $106.1 million, or 35.7%, to $403.4 million for the first quarter of 2025 as compared to the same period in 2024. The increase included an $11.1 million, or 3.7%, increase related to the Century, Summit, and J&S acquisitions, as well as a 32.0% increase in same-store activity. The same-store increase in gross profit was driven by both higher revenues in the current year as well as improved execution in our operations, including improvements in project execution at two of our Texas operations ($38.8 million) and one of our South Carolina operations ($10.8 million). Additionally, we had increased volumes at our Texas electrical operation ($13.9 million). As a percentage of revenue, gross profit for the first quarter increased from 19.3% in 2024 to 22.0% in 2025, primarily due to the factors discussed above and improvements in our mechanical segment gross profit margin.

Current wording

Gross Profit—Gross profit increased $146.3 million, or 40.2%, to $509.9 million for the second quarter of 2025 as compared to the same period in 2024. The increase included a $3.6 million, or 1.0%, increase related to the Right Way and Century acquisitions, as well as a 39.2% increase in same-store activity. The same-store increase in gross profit was driven by both higher revenues in the current year as well as improved execution in our operations, including improvements in project execution at four of our Texas operations ($86.1 million). Additionally, we had increased volumes at our Texas electrical operation ($36.1 million) and one of our Virginia operations ($13.6 million). As a percentage of revenue, gross profit for the second quarter increased from 20.1% in 2024 to 23.5% in 2025, primarily due to the factors discussed above and improvements in our mechanical segment gross profit margin.

Previous wording

Selling, General and Administrative Expenses (“SG&A”)—SG&A increased $32.2 million, or 19.8%, to $194.9 million for the first quarter of 2025 as compared to 2024. On a same-store basis, excluding amortization expense, SG&A increased $26.9 million, or 17.9%. The same-store increase is primarily due to higher same-store revenue and increased compensation costs ($20.7 million), largely attributable to increased headcount. Amortization expense increased $2.0 million during the period, primarily as a result of the Century, Summit, and J&S acquisitions. As a percentage of revenue, SG&A for the first quarter remained steady at 10.6% in both 2024 and 2025.

Current wording

SG&A increased $63.1 million, or 18.4%, to $405.3 million for the first six months of 2025 as compared to 2024. On a same-store basis, excluding amortization expense, SG&A increased $54.8 million, or 17.4%. The same-store increase is primarily due to higher same-store revenue and increased compensation costs ($41.8 million), largely attributable to increased headcount and increased cost of labor. Amortization expense increased $2.6 million during the period, primarily as a result of the Summit, J&S, Right Way and Century acquisitions. As a percentage of revenue, SG&A for the six-month period decreased from 10.2% in 2024 to 10.1% in 2025 due to leverage resulting from the increase in revenue.

Previous wording

Interest Income—Interest income increased $2.7 million, or 166.2%, to $4.3 million for the first quarter of 2025 as compared to the same period in 2024. The increase in interest income for the first quarter of 2025 is due to an increase in our average cash balance compared to the prior year.

Current wording

Interest Income—Interest income increased $1.6 million, or 123.0%, to $2.8 million for the second quarter of 2025 as compared to the same period in 2024. Interest income increased $4.2 million, or 147.2%, to $7.1 million, for the first six months of 2025 compared to the same period in 2024. The increase in interest income for the second quarter and the first six months of 2025 is due to an increase in our average cash balance compared to the prior year.

Previous wording

Changes in the Fair Value of Contingent Earn-out Obligations—The contingent earn-out obligations are measured at fair value each reporting period, and changes in estimates of fair value are recognized in earnings. Expense from changes in the fair value of contingent earn-out obligations for the first quarter of 2025 decreased $8.7 million, or 69.9%, as compared to the same period in 2024. The decrease in earn-out expense was primarily caused by lower expenses at J&S, as a result of them achieving their maximum cumulative earn-out target in the prior year and one of our South Carolina operations, as a result of their earn-out period ending in the prior year. Additionally, we had lower expenses at Summit, driven by larger changes in their forecasted results in the prior year. Expense or income from changes in earn-out valuations may be more volatile in future periods due to large earn-out agreements for acquisitions that closed in 2024.

Current wording

Changes in the Fair Value of Contingent Earn-out Obligations—The contingent earn-out obligations are measured at fair value each reporting period, and changes in estimates of fair value are recognized in earnings. Expense from changes in the fair value of contingent earn-out obligations for the second quarter of 2025 decreased $10.6 million, or 72.3%, as compared to the same period in 2024. Expense from changes in the fair value of contingent earn-out obligations for the first six months of 2025 decreased $19.3 million, or 71.2%, as compared to the same period in 2024. The decrease in earn-out expense for the second quarter and the first six months of 2025 was primarily caused by lower expenses at J&S, as a result of them achieving their maximum cumulative earn-out target in the prior year. Additionally, we had lower expenses at Summit, driven by larger changes in their forecasted results in the prior year.

Previous wording

Provision for Income Taxes—Our provision for income taxes for the three months ended March 31, 2025 was $38.7 million with an effective tax rate of 18.6% as compared to a provision for income taxes of $26.7 million with an effective tax rate of 21.7% for the same period in 2024. The effective tax rate for 2025 was lower than the 21% federal statutory rate primarily due to recognizing $8.9 million of net interest income on our 2022 federal overpayment (4.3%) and a $6.3 million credit for increasing research activities (“R&D tax credit”) (3.0%), partially offset by $7.0 million of net state income taxes (3.3%) and $2.5 million of nontaxable or nondeductible items (1.2%). The effective tax rate for 2024 was slightly higher than the 21% federal statutory rate primarily due to $4.5 million of net state income taxes (3.7%) and $1.9 million of nontaxable or nondeductible items (1.6%) partially offset by a $5.4 million R&D tax credit (4.4%).

Current wording

Provision for Income Taxes—Our provision for income taxes for the six months ended June 30, 2025 was $104.4 million with an effective tax rate of 20.7% as compared to a provision for income taxes of $62.4 million with an effective tax rate of 21.3% for the same period in 2024. The effective tax rate for 2025 was slightly lower than the 21% federal statutory rate primarily due to an $11.8 million credit for increasing research activities (“R&D tax credit”) (2.3%) and recognizing $8.9 million of net interest income on our 2022 federal overpayment (1.8%), partially offset by $15.5 million of net state income taxes (3.1%) and $2.3 million of nontaxable or nondeductible items (0.5%). The effective tax rate for 2024 was slightly higher than the 21% federal statutory rate primarily due to $10.5 million of net state income taxes (3.6%) and $2.1 million of nontaxable or nondeductible items (0.7%) partially offset by an $11.4 million R&D tax credit (3.9%).

Previous wording

We experienced strong ongoing demand in the first quarter of 2025, although we continue to experience increased labor costs and impacts from supply chain shortages, including delays in delivery of certain materials and equipment. We are recognizing these challenges in our job planning and pricing, and we are ordering materials on an earlier timeline and seeking to collaborate with customers to share supply risks and to mitigate the effects of these challenges. We have been generally successful in maintaining productivity and in procuring needed materials despite ongoing challenges.

Current wording

We experienced strong ongoing demand in the first six months of 2025, although we continue to experience increased labor costs and impacts from supply chain shortages, including delays in delivery of certain materials and equipment. We are recognizing these challenges in our job planning and pricing, and we are ordering materials on an earlier timeline and seeking to collaborate with customers to share supply risks and to mitigate the effects of these

Previous wording

We have a good pipeline of opportunities and potential backlog. Considering our substantial advance bookings, we currently anticipate solid earnings for 2025. Although we are preparing for a wide range of challenges and economic circumstances, including a potential recession, we currently expect that supportive conditions for our industry, especially for our manufacturing and technology customers, are likely to continue throughout 2025.

Current wording

We have a good pipeline of opportunities and potential backlog. Considering our substantial advance bookings, we currently anticipate solid earnings for the remainder of 2025 and believe we are well positioned for continued success in 2026. Although we are preparing for a wide range of challenges and economic circumstances, including a potential recession, we currently expect that supportive conditions for our industry, especially for our manufacturing and technology customers, are likely to continue in 2025 and 2026.

Previous wording

Cash Provided by (Used in) Operating Activities—Cash flow from operations is primarily influenced by demand for our services and operating margins but can also be influenced by working capital needs associated with the various types of services that we provide. In particular, working capital needs may increase when we commence large volumes of work under circumstances where project costs, primarily associated with labor, equipment and subcontractors, are required to be paid before the receivables resulting from the work performed are billed and collected. Working capital needs are generally higher during the late winter and spring months as we prepare and plan for the increased project demand when favorable weather conditions exist in the summer and fall months. Conversely, working capital assets are typically converted to cash during the late summer and fall months as project completion is underway. These seasonal trends are sometimes offset by changes in the timing of major projects, which can be impacted by the weather, project delays or accelerations and other economic factors that may affect customer spending.

Current wording

Cash Provided by Operating Activities—Cash flow from operations is primarily influenced by demand for our services and operating margins but can also be influenced by working capital needs associated with the various types of services that we provide. In particular, working capital needs may increase when we commence large volumes of work under circumstances where project costs, primarily associated with labor, equipment and subcontractors, are required to be paid before the receivables resulting from the work performed are billed and collected. Working capital needs are generally higher during the late winter and spring months as we prepare and plan for the increased project demand when favorable weather conditions exist in the summer and fall months. Conversely, working capital assets are typically converted to cash during the late summer and fall months as project completion is underway. These seasonal trends are sometimes offset by changes in the timing of major projects, which can be impacted by the weather, project delays or accelerations and other economic factors that may affect customer spending.

Previous wording

Cash used in operating activities was $88.0 million during the first three months of 2025 compared to cash provided by operating activities of $146.6 million during the same period in 2024. The $234.5 million increase in cash used was primarily due to a $431.3 million decrease in accounts payable and other current liabilities driven by the size and timing of payments, including fewer net advance payments received in the current year as compared to the prior year. We made an $80.0 million federal tax payment in the first quarter of 2025 that otherwise would have been paid in

Current wording

Cash provided by operating activities was $164.5 million during the first six months of 2025 compared to $336.4 million during the same period in 2024. The $171.9 million decrease in cash provided was primarily due to a $598.1 million decrease in accounts payable and other current liabilities, as well as a $118.1 million increase in costs and estimated earnings in excess of billings and unbilled accounts receivable, driven by the size and timing of payments, including fewer net advance payments received in the current year as compared to the prior year. We made an $80.0 million federal tax payment in the first quarter of 2025 that otherwise would have been paid in the second half of 2024, as a result of tax relief from the Internal Revenue Service due to Hurricane Beryl. These decreases in cash were partially offset by a $344.0 million benefit from changes in billings in excess of costs and estimated earnings and deferred revenue driven by timing of customer billings and payments and an increase in earnings compared to the prior year. In 2023, we filed our 2022 federal tax return requesting a refund of our $107.1 million overpayment, which was received in

Previous wording

the second half of 2024, as a result of tax relief from the Internal Revenue Service due to Hurricane Beryl. These decreases in cash were partially offset by a $173.8 million benefit from changes in receivables, net and an increase in earnings compared to the prior year. In 2023, we filed our 2022 federal tax return requesting a refund of our $107.1 million overpayment, which was received in April 2025 and will therefore positively impact our second quarter cashflows. Along with the refund, we received $11.3 million of interest income (or $8.9 million, net of tax) that reduced our provision for income taxes in the first quarter of 2025.

Current wording

April 2025 and positively impacted our second quarter cashflows. Along with the refund, we received $11.3 million (or $8.9 million, net of tax) of interest income that reduced our provision for income taxes in the first quarter of 2025.

Previous wording

Cash Used in Investing Activities—During the first three months of 2025, cash used in investing activities was $96.8 million compared to $221.6 million during the same period in 2024. The $124.9 million decrease in cash used primarily related to a decrease in cash paid (net of cash acquired) for acquisitions in the current year compared to the same period in 2024.

Current wording

Cash Used in Investing Activities—During the first six months of 2025, cash used in investing activities was $183.0 million compared to $282.4 million during the same period in 2024. The $99.4 million decrease in cash used primarily related to a decrease in cash paid (net of cash acquired) for acquisitions in the current year compared to the same period in 2024.

Previous wording

Cash Used in Financing Activities—Cash used in financing activities was $160.4 million for the first three months of 2025 compared to $29.3 million during the same period in 2024. The $131.2 million increase in cash used was primarily due to an increase in share repurchases of $91.1 million in the current year compared to the same period in 2024.

Current wording

Cash Used in Financing Activities—Cash used in financing activities was $199.8 million for the first six months of 2025 compared to $59.7 million during the same period in 2024. The $140.1 million increase in cash used was primarily due to an increase in share repurchases of $100.2 million in the current year compared to the same period in 2024.

Previous wording

On March 29, 2007, our Board of Directors (the “Board”) approved a stock repurchase program to acquire up to 1.0 million shares of our outstanding common stock. Subsequently, the Board has from time to time increased the number of shares that may be acquired under the program and approved extensions of the program. On August 7, 2024, the Board approved an extension to the program by increasing the shares authorized for repurchase by 0.4 million shares. Since the inception of the repurchase program, the Board has approved 11.4 million shares to be repurchased. As of March 31, 2025, we have repurchased a cumulative total of 10.7 million shares at an average price of $39.26 per share under the repurchase program.

Current wording

On March 29, 2007, our Board of Directors (the “Board”) approved a stock repurchase program to acquire up to 1.0 million shares of our outstanding common stock. Subsequently, the Board has from time to time increased the number of shares that may be acquired under the program and approved extensions of the program. On May 16, 2025, the Board approved an extension to the program by increasing the shares authorized for repurchase by 0.4 million shares. Since the inception of the repurchase program, the Board has approved 11.8 million shares to be repurchased. As of June 30, 2025, we have repurchased a cumulative total of 10.8 million shares at an average price of $40.89 per share under the repurchase program.

Previous wording

The share repurchases will be made from time to time at our discretion in the open market or privately negotiated transactions, as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. The Board may modify, suspend, extend or terminate the program at any time. During the three months ended March 31, 2025, we repurchased 0.3 million shares for approximately $92.2 million, inclusive of the applicable excise tax, at an average price of $349.34 per share.

Current wording

The share repurchases will be made from time to time at our discretion in the open market or privately negotiated transactions, including pursuant to Rule 10b5-1 share repurchase plans, as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. The Board may modify, suspend, extend or terminate the program at any time. During the six months ended June 30, 2025, we repurchased 0.3 million shares for approximately $112.2 million, inclusive of the applicable excise tax, at an average price of $343.79 per share.

Previous wording

We have an $850.0 million senior credit facility (the “Facility”) provided by a syndicate of banks, which is composed of a revolving credit line guaranteed by certain of our subsidiaries. The Facility also provides for an accordion or increase option not to exceed the greater of (a) $250 million and (b) 1.0x Credit Facility Adjusted EBITDA (as defined below), as well as a sublimit of up to $175.0 million issuable in the form of letters of credit. The Facility expires in July 2027 and is secured by a first lien on substantially all of our personal property except for assets related to projects subject to surety bonds and the equity of, and assets held by, certain unrestricted subsidiaries and our wholly owned captive insurance company, and a second lien on our assets related to projects subject to surety bonds. As of March 31,

Current wording

We have an $850.0 million senior credit facility (the “Facility”) provided by a syndicate of banks, which is composed of a revolving credit line guaranteed by certain of our subsidiaries. The Facility also provides for an accordion or increase option not to exceed the greater of (a) $250 million and (b) 1.0x Credit Facility Adjusted EBITDA (as defined below), as well as a sublimit of up to $175.0 million issuable in the form of letters of credit. The Facility expires in July 2027 and is secured by a first lien on substantially all of our personal property except for assets related to projects subject to surety bonds and the equity of, and assets held by, certain unrestricted subsidiaries and our wholly owned captive insurance company, and a second lien on our assets related to projects subject to surety bonds. As of June 30, 2025, we had no outstanding borrowings on the revolving credit facility, $83.2 million in letters of credit outstanding and $766.8 million of credit available.

Previous wording

There are two interest rate options for borrowings under the Facility, the Base Rate Loan (as defined in the Facility) option and the Secured Overnight Financing Rate (“SOFR”) Loan option. These rates are floating rates determined by the broad financial markets, meaning they can and do move up and down from time to time. Additional margins are then added to these two rates.

Current wording

There are two interest rate options for borrowings under the Facility, the Base Rate Loan (as defined in the Facility) option and the Secured Overnight Financing Rate (“SOFR”) Loan option. These rates are floating rates

Previous wording

As of March 31, 2025, we have $83.2 million in letter of credit commitments, of which $61.2 million will expire in 2025 and $22.0 million will expire in 2026. The substantial majority of these letters of credit are posted with insurers who disburse funds on our behalf in connection with our workers’ compensation, auto liability and general liability insurance program. These letters of credit provide additional security to the insurers that sufficient financial resources will be available to fund claims on our behalf, many of which develop over long periods of time, should we ever encounter financial duress. Posting of letters of credit for this purpose is a common practice for entities that manage their self-insurance programs through third-party insurers as we do. While some of these letter of credit commitments expire in the next twelve months, we expect nearly all of them, particularly those supporting our insurance programs, will be renewed annually.

Current wording

As of June 30, 2025, we have $83.2 million in letter of credit commitments, of which $61.1 million will expire in 2025 and $22.1 million will expire in 2026. The substantial majority of these letters of credit are posted with insurers who disburse funds on our behalf in connection with our workers’ compensation, auto liability and general liability insurance program. These letters of credit provide additional security to the insurers that sufficient financial resources will be available to fund claims on our behalf, many of which develop over long periods of time, should we ever encounter financial duress. Posting of letters of credit for this purpose is a common practice for entities that manage their self-insurance programs through third-party insurers as we do. While some of these letter of credit commitments expire in the next twelve months, we expect nearly all of them, particularly those supporting our insurance programs, will be renewed annually.

Previous wording

As part of the consideration used to acquire seven companies, we have outstanding notes to the former owners of the acquired companies. Together, these notes had an outstanding balance of $67.1 million as of March 31, 2025. At March 31, 2025, future principal payments of notes to former owners by maturity year are as follows (dollars in thousands):

Current wording

We have outstanding notes to the former owners of acquired companies. Together, these notes had an outstanding balance of $72.3 million as of June 30, 2025. At June 30, 2025, future principal payments of notes to former owners by maturity year are as follows (dollars in thousands):

Previous wording

We have generated positive net free cash flow for the last twenty-six calendar years, much of which occurred during challenging economic and industry conditions. We also continue to have significant borrowing capacity under our

Current wording

We have generated positive net free cash flow for the last twenty-six calendar years, much of which occurred during challenging economic and industry conditions. We also continue to have significant borrowing capacity under our credit facility, and we maintain what we feel are reasonable cash balances. We believe these factors will provide us with sufficient liquidity to fund our operations for the foreseeable future.

Previous wording

Many customers, particularly in connection with new construction, require us to post performance and payment bonds issued by a financial institution known as a surety. If we fail to perform under the terms of a contract or to pay subcontractors and vendors who provided goods or services under a contract, the customer may demand that the surety make payments or provide services under the bond. We must reimburse the sureties for any expenses or outlays they incur.

Current wording

Many customers, particularly in connection with new construction, require us to post performance and payment bonds issued by a financial institution known as a surety. If we fail to perform under the terms of a contract or to pay