Installed Building Products, Inc.

Previous wording

We are one of the nation’s largest insulation installers for the residential new construction market and are also a diversified installer of complementary building products throughout the United States, including waterproofing, fire-stopping and fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving, mirrors and other products. We offer our portfolio of services for new and existing single-family and multi-family residential and commercial building projects in all 48 continental states and the District of Columbia from our national network of over 250 branch locations. During the three months ended March 31, 2026, 92% of our net revenue came from the service-based installation of these products across all of our end markets which forms our Installation operating segment and single reportable segment. In addition, we have regional distribution operations that serve the Midwest, Mountain West, Northeast and Mid-Atlantic regions of the United States, and we operate multiple cellulose insulation manufacturing facilities. We believe our business is well positioned to continue to profitably grow over the long-term due to our strong balance sheet, liquidity and our continuing acquisition strategy.

Current wording

We are one of the nation’s largest insulation installers for the residential new construction market and are also a diversified installer of complementary building products throughout the United States, including waterproofing, fire-stopping and fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving, mirrors and other products. We offer our portfolio of services for new and existing single-family and multi-family residential and commercial building projects in all 48 continental states and the District of Columbia from our national network of over 250 branch locations. During the three months ended June 30, 2026, 91% of our net revenue came from the service-based installation of these products across all of our end markets which forms our Installation operating segment and single reportable segment. In addition, we have regional distribution operations that serve the Midwest, Mountain West, Northeast and Mid-Atlantic regions of the United States, and we operate multiple cellulose insulation manufacturing facilities. We believe our business is well positioned to continue to profitably grow over the long-term due to our strong balance sheet, liquidity and our continuing acquisition strategy.

Previous wording

Net revenue decreased 3.5%, or $24.3 million to $660.5 million, while gross profit decreased 5.1% to $212.3 million during the three months ended March 31, 2026 compared to the same period in 2025. The decrease in net revenue was primarily due to a 9.9% decline in Installation segment volume. The decrease in gross profit was primarily driven by higher labor costs, vehicle insurance, depreciation and other indirect costs from shifts in end market and product mix. Certain net revenue and industry metrics we use to monitor our operations are discussed in the "Key Measures of Performance" section below, and further details regarding results of our various end markets are discussed further in the "Net Revenue, Cost of Sales and Gross Profit" section below.

Current wording

Net revenue increased 2.3%, or $17.5 million to $777.8 million, while gross profit decreased 0.4% to $258.9 million during the three months ended June 30, 2026 compared to the same period in 2025. The increase in net revenue was primarily due to a 14.1% increase in commercial end market sales growth and the contribution of our recent acquisitions, partially offset by a decline in Installation job volume in our single-family residential end market. The decrease in gross profit was primarily driven by vehicle-related costs including fuel, insurance and depreciation expense. Gross profit percentage was also impacted by higher sales in our Other category which has a lower gross margin than our Installation segment. Certain net revenue and industry metrics we use to monitor our operations are discussed in the "Key Measures of Performance" section below, and further details regarding results of our various end markets are discussed further in the "Net Revenue, Cost of Sales and Gross Profit" section below.

Previous wording

As of March 31, 2026, we had $474.3 million of cash and cash equivalents and had not drawn on our revolving line of credit. This strong liquidity position allowed us to return capital to shareholders by increasing our regular quarterly dividend 5% over the first quarter of 2025 to $0.39 per share, or $10.5 million in the aggregate. We also increased our annual variable dividend from $1.70 a share paid in the first quarter of 2025 to $1.80 a share, or a 6% increase, during the three months ended March 31, 2026. Additionally, we repurchased $25.4 million of our outstanding common stock during the three months ended March 31, 2026 for a total capital return to shareholders of $84.6 million.

Current wording

As of June 30, 2026, we had $394.5 million of cash and cash equivalents and had not drawn on our revolving line of credit. This strong liquidity position allowed us to return capital to shareholders by increasing our regular quarterly dividend 5% over the second quarter of 2025 to $0.39 per share, or $10.4 million in the aggregate. Additionally, we repurchased $76.2 million of our outstanding common stock during the three months ended June 30, 2026 for a total capital return to shareholders of $86.6 million.

Previous wording

Net revenue decreased during the three months ended March 31, 2026 over the same period in 2025 primarily due to the decline in residential job volume. Same branch sales from our single-family end market declined 11.3% while same branch sales from our multi-family end market decreased 11.2%, outpacing the 16.7% decline in national multi-family completions. These markets combined for a residential same branch sales decline of 11.2% for the three months ended March 31, 2026 over the same period in 2025. The net revenue decline was partially offset by our commercial end market increasing 10.7% on a same branch basis for the three months ended March 31, 2026 over the same period in 2025. Lastly, sales within our Distribution and Manufacturing businesses increased 34.8% during the three months ended March 31, 2026 which aligns with our strategy to enhance our procurement efforts through vertical integration in select product and end markets.

Current wording

Net revenue increased during the three months ended June 30, 2026 over the same period in 2025 primarily due to sales growth from our commercial end market and contributions from our recent acquisitions. Our commercial end market sales grew 10.4% on a same branch basis for the three months ended June 30, 2026 over the same period in 2025. Same branch sales from our single-family end market declined 7.2% while same branch sales from our multi-family end market decreased 1.4%, outpacing the 2.8% decline in national multi-family completions. These markets combined for a residential same branch sales decline of 6.1% for the three months ended March 31, 2026 over the same period in 2025. Lastly, sales within our Distribution and Manufacturing businesses increased 50.4% during the three months ended June 30, 2026 which aligns with our strategy to enhance our procurement efforts through vertical integration in select product and end markets.

Previous wording

During the three months ended March 31, 2026, gross profit as a percentage of net revenue decreased as compared to the same period in 2025, primarily due to higher labor costs and other indirect costs from shifts in product and end market mix, increased vehicle costs, including depreciation expense and auto insurance, and increased freight and shipping costs from higher Manufacturing and Distribution activity. The decline in gross profit percentage was partially offset by lower material costs from changes in end market and supplier mix. We will continue to work with our suppliers to lessen the impact on our margins and with our customers to offset further cost increases through selling price adjustments.

Current wording

During the three months ended June 30, 2026, gross profit as a percentage of net revenue decreased as compared to the same period in 2025, primarily due to higher labor costs and other indirect costs from shifts in product and end market mix, increased vehicle costs including fuel, depreciation expense and auto insurance, and increased freight and shipping costs from higher Manufacturing and Distribution activity.

Previous wording

The dollar increase in administrative expenses for the three months ended March 31, 2026 compared to 2025 was primarily due to an increase in medical benefits and liability insurance costs. In addition, facility costs increased due to inflationary pressures and acquisitions. Administrative expenses increased as a percentage of net revenue for the three months ended March 31, 2026 compared to 2025 primarily due to inflationary pressures on insurance costs, partially offset by organizational optimization cost savings and lower transaction fees.

Current wording

The dollar increase in administrative expenses for the three and six months ended June 30, 2026 compared to 2025 was primarily due to an increase in medical benefits and liability insurance costs. In addition, facility costs increased due to inflationary pressures and acquisitions. Administrative expenses increased as a percentage of net revenue for the three and six months ended June 30, 2026 compared to 2025 primarily due to inflationary pressures on insurance costs, partially offset by organizational optimization cost savings and lower transaction fees.

Previous wording

Amortization expense for the three months ended March 31, 2026 compared to 2025 increased primarily due to the acquisition of more finite-lived intangible assets.

Current wording

Amortization expense for the three and six months ended June 30, 2026 compared to 2025 increased primarily due to the acquisition of more finite-lived intangible assets.

Previous wording

Interest expense, net increased during the three months ended March 31, 2026 compared to the same period in 2025 primarily due to higher debt levels and write-offs of debt issuance costs resulting from our January 2026 transactions related to the Senior Notes (as defined below), partially offset by increased interest income on money market accounts. See Part I, Item 1. Financial Statements, Note 7, Long-Term Debt, for more information on the January 2026 debt transactions.

Current wording

Interest expense, net increased during the three months ended June 30, 2026 compared to the same period in 2025 primarily due to higher debt levels. For the six months ended June 30, 2026, interest expense, net was also impacted by the write-offs of debt issuance costs resulting from our January 2026 transactions related to the Senior Notes (as defined below). During the three and six months ended June 30, 2026, the increases were partially offset by increased interest income from higher cash balances in interest bearing money market accounts. See Part I, Item 1. Financial Statements, Note 7, Long-Term Debt, for more information on the January 2026 debt transactions.

Previous wording

The effective tax rates for the three months ended March 31, 2026 and 2025 were based on an estimated annual effective tax rate for federal, state and local tax expense.

Current wording

The effective tax rates for the three and six months ended June 30, 2026 were impacted favorably by recognition of windfall tax benefits resulted from equity vesting. The effective tax rates for the three and six months ended June 30, 2026 and 2025 were based on an estimated annual effective tax rate for federal, state and local tax expense.

Previous wording

During the three months ended March 31, 2026 and 2025, we recorded an unrealized gain of $1.6 million and an unrealized loss of $6.1 million, respectively, net of taxes, on our cash flow hedges due to the changes in the market's expectations for future long-term interest rates.

Current wording

During the three and six months ended June 30, 2026, we recorded unrealized gains of $2.3 million and $3.9 million, respectively, net of taxes, on our cash flow hedges due to the market's expectations for higher interest rates in the future. During the three and six months ended June 30, 2025, we recorded unrealized losses of $4.3 million and $10.4 million, respectively, net of taxes, on our cash flow hedges due to changes in the market's expectations for future long-term interest rates.

Previous wording

During the three months ended March 31, 2026 and 2025, we amortized $1.7 million of our remaining unrealized gains and a net impact of $(1.1) million of our remaining unrealized gains, losses and off-market terms, respectively, on our amended and terminated cash flow hedges to interest expense, not including the offsetting tax effects of $(0.4) million and $0.3 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

During the three and six months ended June 30, 2026, we amortized $1.8 million and $3.5 million, respectively, and during the three and six months ended June 30, 2025, we amortized $0.2 million and $1.0 million, respectively, of our remaining unrealized gains and losses, net, on our terminated cash flow hedges to interest expense, not including the offsetting tax effects of $0.5 million and $0.9 million for the three and six months ended June 30, 2026, respectively, and $0.1 million and $0.3 million for the three and six months ended June 30, 2025, respectively.

Previous wording

Inflation has affected the economy as a whole since 2022, but began moderating in 2023 as the Federal Reserve took actions to stabilize inflation by raising the federal funds rate multiple times through July 2023. These rate hikes indirectly affected the 30-year fixed rate mortgage average in the United States, resulting in mortgage rates peaking above 7% in recent years. These rate-driven pressures have curtailed housing demand as mortgage financing affordability has been reduced. Inflation rates in 2026 have remained above the 2% stated target, and the Iranian conflict in the Middle East has significantly raised oil prices which could push inflation higher and cause the Federal Reserve to continue to pause rate cuts or institute new rate hikes. While a more accommodating Federal Reserve monetary policy does not directly determine mortgage rates, any easing of the federal funds rate would likely contribute to a downward trend in mortgage rates. We expect to continue to be impacted by the current elevated rates in 2026 but anticipate pressures to lessen over time if mortgage rates are further reduced.

Current wording

Inflation has affected the economy as a whole since 2022, but began moderating in 2023 as the Federal Reserve took actions to stabilize inflation by raising the federal funds rate multiple times through July 2023. These rate hikes indirectly affected the 30-year fixed rate mortgage average in the United States, resulting in mortgage rates peaking above 7% in recent years. These rate-driven pressures have curtailed housing demand as mortgage financing affordability has been reduced. Inflation rates in 2026 have remained above the 2% stated target, and the Iranian conflict in the Middle East has significantly raised oil prices which could push inflation higher and cause the Federal Reserve to continue to pause rate cuts or institute new rate hikes. While a more accommodating Federal Reserve monetary policy does not directly determine mortgage rates, any easing of the federal funds rate would likely contribute to a downward trend in mortgage rates. We expect to continue to be impacted by the current elevated rates for the remainder of 2026 but anticipate pressures to lessen over time if mortgage rates are further reduced.

Previous wording

Elevated home prices, high mortgage rates, recent economic uncertainty and rising new home inventory were the primary contributors to the decline in demand of new homes in the first quarter of 2026. Activity slowed in the residential homebuilding market as non-seasonally adjusted single-family starts, our largest end market, decreased 5.5% according to the U.S. Census during the three months ended March 31, 2026 compared to the same period in 2025. Employment remains stable and continues to support demand for residential new construction activity despite the affordability concerns and recent economic uncertainty. As a result, while we expect cyclicality to continue in the housing industry, we believe the long-term opportunities in our residential and commercial end markets are favorable. Our largest customers are publicly traded homebuilders, and these builders have been able to increase affordability by offering mortgage rate buydowns as incentives to their customers. Regarding the repair and remodel markets, many existing homeowners are locked into low interest mortgages and an aging housing stock exists in many areas of the United States, bolstering demand in this end market.

Current wording

Elevated home prices, high mortgage rates, recent economic uncertainty, subdued consumer sentiment and high new home inventory were the primary contributors to the decline in demand of new homes in the first half of 2026. Activity slowed in the residential homebuilding market as non-seasonally adjusted single-family starts, our largest end market, decreased 5.3% according to the U.S. Census during the six months ended June 30, 2026 compared to the same period in 2025. Employment remains stable and continues to support demand for residential new construction activity despite the affordability concerns and recent economic uncertainty. As a result, while we expect cyclicality to continue in the housing industry, we believe the long-term opportunities in our residential and commercial end markets are favorable. Our largest customers are publicly traded homebuilders, and these builders have been able to increase affordability by offering mortgage rate buydowns as incentives to their customers. Regarding the repair and remodel markets, many existing homeowners are locked into low interest mortgages and an aging housing stock exists in many areas of the United States, bolstering demand in this end market.

Previous wording

We typically purchase the materials we use in our business directly from manufacturers. The largest fiberglass manufacturers have cut production capacity during past business cycles which has caused periods of industry-wide supply allocations. While we are not currently experiencing material supply shortages, we could incur such shortages in the remainder of 2026 and beyond if these manufacturers reduce production this year. We also experience price increases from our suppliers from time to time, and we may have more difficulty raising selling prices to offset any material price increases in 2026 if housing demand slows. We could be subject to increased material pricing on some of the complementary building products we install and sell due to tariffs imposed on goods imported from certain foreign nations. The extent of these increases will depend on a variety of factors including the magnitude of each tariff, the extent our vendors pass on the tariffs they incur, and the number of countries subject to tariffs in the future. Additionally, we may be subject to increased shipping and freight costs on inventory if the recent spike in oil prices continues and those costs are passed onto us from our suppliers. Increased market pricing, regardless of the catalyst, has and could continue to impact our results of operations in 2026, to the extent that price increases cannot be passed on to our customers. We will continue to work with our customers to adjust selling prices to offset higher costs as they occur.

Current wording

We typically purchase the materials we use in our business directly from manufacturers. The largest fiberglass manufacturers have cut production capacity during past business cycles which has caused periods of industry-wide supply allocations. While we are not currently experiencing material supply shortages, we could incur such shortages during the remainder of 2026 and beyond if these manufacturers reduce production this year. We also experience price increases from our suppliers from time to time, and we may have more difficulty raising selling prices to offset any material price increases in 2026 if housing demand slows. We could be subject to increased material pricing on some of the complementary building products we install and sell due to tariffs imposed on goods imported from certain foreign nations. The extent of these increases will depend on a variety of factors including the magnitude of each tariff, the extent our vendors pass on the tariffs they incur, and the number of countries subject to tariffs in the future. Additionally, we may be subject to increased shipping and freight costs on inventory if the recent spike in oil prices continues and those costs are passed onto us from our suppliers as we began to see during the most recent quarter. Increased market pricing, regardless of the catalyst, has and could continue to impact our results of operations in 2026, to the extent that price increases cannot be passed on to our customers. We will continue to work with our suppliers to lessen the impact on our margins and our customers to adjust selling prices to offset higher costs as they occur.

Previous wording

Our employee retention rates remained better than industry averages in the three months ended March 31, 2026. We believe this is a result of our strong culture and the various programs meant to benefit our employees, including our financial wellness plan, emotional well-being coaching, longevity stock compensation plan and comprehensive benefit packages we offer. We also provide assistance from the Installed Building Products Foundation meant to benefit our employees, their families and their communities. While improved retention drives lower costs to recruit and train new employees, resulting in greater installer productivity, these improvements are somewhat offset by the additional costs of these incentives.

Current wording

Our employee retention rates remained better than industry averages in the six months ended June 30, 2026. We believe this is a result of our strong culture and the various programs meant to benefit our employees, including our financial wellness plan, emotional well-being coaching, longevity stock compensation plan and comprehensive benefit packages we offer. We also provide assistance from the Installed Building Products Foundation meant to benefit our employees, their families and their communities. While improved retention drives lower costs to recruit and train new employees, resulting in greater installer productivity, these improvements are somewhat offset by the additional costs of these incentives.

Previous wording

Our capital resources primarily consist of cash from operations and borrowings under our various debt agreements and capital equipment leases and loans. As of March 31, 2026, we had cash and cash equivalents of $474.3 million as well as access to $375.0 million under our asset-based lending credit facility (as defined below), less $3.9 million of outstanding letters of credit, resulting in total liquidity of $845.4 million. Liquidity may also be limited in the future by certain cash collateral limitations under our asset-based credit facility (as defined below), depending on the status of our borrowing base availability.

Current wording

Our capital resources primarily consist of cash from operations and borrowings under our various debt agreements and capital equipment leases and loans. As of June 30, 2026, we had cash and cash equivalents of $394.5 million as well as access to $375.0 million under our asset-based lending credit facility (as defined below), less $2.9 million of outstanding letters of credit, resulting in total liquidity of $766.6 million. Liquidity may also be limited in the future by certain cash collateral limitations under our asset-based credit facility (as defined below), depending on the status of our borrowing base availability.

Previous wording

We believe that our cash flows from operations, combined with our current cash levels and available borrowing capacity, will be adequate to support our ongoing operations and to fund our business needs, commitments and contractual obligations for at least the next 12 months as evidenced by our net positive cash flows from operations for the three months ended March 31, 2026. We believe that we have access to additional funds, if needed, through the capital markets to obtain further debt financing under the current market conditions, but we cannot guarantee that such financing will be available on favorable terms, or at all. In the short-term, we expect the seasonal trends we typically experience to return, including higher sales in the spring, summer and fall than in the winter. This could affect the timing of cash collections and payments during the rest of 2026.

Current wording

We believe that our cash flows from operations, combined with our current cash levels and available borrowing capacity, will be adequate to support our ongoing operations and to fund our business needs, commitments and contractual obligations for at least the next 12 months as evidenced by our net positive cash flows from operations for the six months ended June 30, 2026. We believe that we have access to additional funds, if needed, through the capital markets to obtain further debt financing under the current market conditions, but we cannot guarantee that such financing will be available on favorable terms, or at all. In the short-term, we expect the seasonal trends we typically experience to return, including higher sales in the spring, summer and fall than in the winter. This could affect the timing of cash collections and payments during the rest of 2026.

Previous wording

We carefully manage our working capital and operating expenses. As of March 31, 2026 and December 31, 2025, our working capital including cash and cash equivalents was $820.3 million and $698.4 million, respectively. The increase in 2026 was primarily driven by the increase in cash due to the net borrowings of our 2034 Senior Notes (as defined below). The increase was partially offset by accounts receivable decreasing $17.7 million on lower job volume and other current assets decreasing $9.9 million, the majority of which was a result of the amortization of prepaid expenses including insurance. We continue to look for opportunities to reduce our working capital as a percentage of net revenue.

Current wording

We carefully manage our working capital and operating expenses. As of June 30, 2026 and December 31, 2025, our working capital including cash and cash equivalents was $768.4 million and $698.4 million, respectively. The increase in 2026 was primarily driven by the increase in cash due to the net borrowings of our 2034 Senior Notes (as defined below). The increase was partially offset by accounts payable increasing $32.7 million due to timing and increased material costs. We continue to look for opportunities to reduce our working capital as a percentage of net revenue.

Previous wording

Sources of cash from investing activities consist primarily of proceeds from the sales of property and equipment and, periodically, maturities from short term investments. Cash used in investing activities consists primarily of purchases of property and equipment, payments for acquisitions and, periodically, purchases of short term investments.

Current wording

Sources of cash from investing activities consist primarily of proceeds from the sales of property and equipment. Cash used in investing activities consists primarily of purchases of property and equipment and payments for acquisitions.

Previous wording

Net cash used in investing activities increased from 2025 to 2026 primarily due to increased spending on acquisitions of businesses in 2026 compared to 2025, partially offset by fewer purchases of property and equipment during the three months ended March 31, 2026.

Current wording

Net cash used in investing activities increased from 2025 to 2026 primarily due to increased spending on acquisitions of businesses in 2026 compared to 2025, partially offset by fewer purchases of property and equipment during the six months ended June 30, 2026.

Previous wording

Net cash provided by (used in) financing activities increased from 2025 to 2026 primarily due to the net proceeds on the 2034 Senior Notes (as defined below). These increases were partially offset by less proceeds from vehicle and equipment notes during the three months ended March 31, 2026. See Part I, Item 1. Financial Statements, Note 7, Long-Term Debt, for more information on the senior notes.

Current wording

Net cash used in financing activities decreased from 2025 to 2026 primarily due to the net proceeds on the 2034 Senior Notes (as defined below). The decrease in net cash used was partially offset by less proceeds from vehicle and equipment notes and higher capital returns to shareholders via dividends and common stock repurchases during the six months ended June 30, 2026. See Part I, Item 1. Financial Statements, Note 7, Long-Term Debt, for more information on our debt transactions.

Previous wording

The Term Loan amortizes in quarterly principal payments of $1.25 million, with any remaining unpaid balances due on the maturity date of March 28, 2031. As of March 31, 2026, we had $487.0 million, net of unamortized debt issuance costs, due on our Term Loan.

Current wording

The Term Loan amortizes in quarterly principal payments of $1.25 million, with any remaining unpaid balances due on the maturity date of March 28, 2031. As of June 30, 2026, we had $485.9 million, net of unamortized debt issuance costs, due on our Term Loan.

Previous wording

The ABL Revolver now bears interest at either the Secured Overnight Financing Rates ("Term SOFR") or the base rate, at our election, plus a margin of 1.00% or 1.25% per annum in the case of Term SOFR advances or 0.00% or 0.25% per annum in the case of base rate loans (in each case based on a measure of availability under the ABL Credit Agreement). The ABL Credit Agreement contains a financial covenant requiring the satisfaction of a minimum of fixed charge coverage ratio of 1.0x in the event that we do not meet a minimum measure of availability under the ABL Revolver.

Current wording

The ABL Revolver now bears interest at either the Secured Overnight Financing Rate ("Term SOFR") or the base rate, at our election, plus a margin of 1.00% or 1.25% per annum in the case of Term SOFR advances or 0.00% or 0.25% per annum in the case of base rate loans (in each case based on a measure of availability under the ABL Credit Agreement). The ABL Credit Agreement contains a financial covenant requiring the satisfaction of a minimum of fixed charge coverage ratio of 1.0x in the event that we do not meet a minimum measure of availability under the ABL Revolver.

Previous wording

The ABL Revolver also provides incremental revolving credit facility commitments of up to $105.0 million. The ABL Revolver also allows for the issuance of letters of credit of up to $100.0 million in aggregate and borrowing of swingline loans of up to $50.0 million in aggregate. Including outstanding letters of credit, our remaining availability under the ABL Revolver as of March 31, 2026 was $371.1 million.

Current wording

The ABL Revolver also provides incremental revolving credit facility commitments of up to $105.0 million. The ABL Revolver also allows for the issuance of letters of credit of up to $100.0 million in aggregate and borrowing of swingline loans of up to $50.0 million in aggregate. Including outstanding letters of credit, our remaining availability under the ABL Revolver as of June 30, 2026 was $372.1 million.

Previous wording

As of March 31, 2026, we had two active interest rate swaps with maturity dates of December 14, 2028. When combined, these interest rate swaps serve to hedge $400.0 million of the variable cash flows on our Term Loan through December 14, 2028. For further information about our interest rate swaps, see Part I, Item 1. Financial Statements, Note 11, Derivatives and Hedging Activities. The assets associated with the interest rate swaps are included in current assets and other non-current assets on the Consolidated Balance Sheets at their fair value amounts as described in Note 9, Fair Value Measurements.

Current wording

As of June 30, 2026, we had two active interest rate swaps with maturity dates of December 14, 2028. When combined, these interest rate swaps serve to hedge $400.0 million of the variable cash flows on our Term Loan through December 14, 2028. For further information about our interest rate swaps, see Part I, Item 1. Financial Statements, Note 11, Derivatives and Hedging Activities. The assets associated with the interest rate swaps are included in other current assets and other non-current assets on the Consolidated Balance Sheets at their fair value amounts as described in Note 9, Fair Value Measurements.

Previous wording

Total outstanding loan balances relating to our Master Loan and Equipment Agreements were $90.2 million as of March 31, 2026 and $98.5 million as of December 31, 2025. Depreciation of assets held under these agreements is included within cost of sales on the Condensed Consolidated Statements of Operations and Comprehensive Income included herein.

Current wording

Total outstanding loan balances relating to our Master Loan and Equipment Agreements were $82.2 million as of June 30, 2026 and $98.5 million as of December 31, 2025. Depreciation of assets held under these agreements is included within cost of sales on the Condensed Consolidated Statements of Operations and Comprehensive Income included herein.

Previous wording

Management’s discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Certain accounting policies involve judgments and uncertainties to such an extent that there is a reasonable likelihood that materially different amounts could have been reported using different assumptions or under different conditions. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of our assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our consolidated financial statements. There have been no significant changes to our critical accounting policies and estimates during the three months ended March 31, 2026 from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our 2025 Form 10-K.

Current wording

Management’s discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Certain accounting policies involve judgments and uncertainties to such an extent that there is a reasonable likelihood that materially different amounts could have been reported using different assumptions or under different conditions. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of our assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our consolidated financial statements. There have been no significant changes to our critical accounting policies and estimates during the six months ended June 30, 2026 from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our 2025 Form 10-K.