APi Group Corp

Previous wording

During 2022, we announced our multi-year Chubb restructuring program designed to drive efficiencies and synergies and optimize operating margin. The Chubb restructuring program includes expenses related to workforce reductions, lease termination costs, and other facility rationalization costs through fiscal year 2025.

Current wording

During 2022, we announced our multi-year Chubb restructuring program designed to drive efficiencies and synergies and optimize operating margin. The Chubb restructuring program included expenses related to workforce reductions, lease termination costs, and other facility rationalization costs. As of June 30, 2025, the Chubb restructuring program has ended and no additional expenses are expected.

Previous wording

During the three months ended March 31, 2025, we incurred no pre-tax restructuring costs within the Safety Services segment in connection with the Chubb restructuring program. In total, we estimate that we will recognize approximately $125 million of restructuring and other costs related to the Chubb restructuring program by the end of fiscal year 2025.

Current wording

During the six months ended June 30, 2025, we incurred no pre-tax restructuring costs within the Safety Services segment in connection with the Chubb restructuring program.

Previous wording

We closely monitor the effects of general changes in economic and market conditions on our customers. General economic and market conditions can positively or negatively affect demand for our customers’ products and services, which can impact their planned capital and maintenance budgets in certain end markets. Market, regulatory, and industry factors could affect demand for our services. Availability of transportation and transmission capacity and fluctuations in market prices for energy and other fuel sources can also affect demand for our services for pipeline and power generation construction services. These fluctuations, as well as the highly competitive nature of our industries, have resulted, and may continue to result, in lower proposals and lower profit on the services we provide. Increased volatility in the global economy, and the recently announced increased tariffs on imported goods by the United States, Canada, and other countries, may also impact the financial results of some of our businesses. These tariffs have a direct impact on the cost of certain materials utilized in the services we provide and will increase the overall cost of projects which could lower project activity and impact the demand for our services. In the face of increased pricing pressure on key materials or other market developments, we strive to maintain our profit margins through productivity improvements, cost reduction programs, pricing adjustments, and business streamlining efforts. Increased competition for skilled labor resources and higher labor costs can reduce our profitability and impact our ability to deliver timely service to our customers. We have experienced supply chain disruptions, which have negatively impacted the source and supply of materials needed to perform our work. In addition, fluctuations in foreign currencies may have an impact on our financial position and results of operations. However, we believe that our exposure to transactional gains or losses resulting from changes in foreign currencies is limited because our foreign operations primarily invoice and collect receivables in their respective local or functional currencies, and the expenses associated with these transactions are generally contracted and paid for in the same local currencies. In cases where operational transactions represent a material currency risk, we generally enter into cross-currency swaps. Refer to Note 8 – "Derivatives" to our condensed consolidated financial statements included in this quarterly report for additional information on our hedging activities. While we actively monitor economic, industry and market factors that could affect our business, we cannot predict the effect that changes in such factors may have on our future consolidated results of operations, liquidity, and cash flows, and we may be unable to fully mitigate, or benefit from, such changes.

Current wording

We closely monitor the effects of general changes in economic and market conditions on our customers. General economic and market conditions can positively or negatively affect demand for our customers’ products and services, which can impact their planned capital and maintenance budgets in certain end markets. Market, regulatory, and industry factors could affect demand for our services. Availability of transportation and transmission capacity and fluctuations in market prices for energy and other fuel sources can also affect demand for our services for pipeline and power generation construction services. These fluctuations, as well as the highly competitive nature of our industries, have resulted, and may continue to result, in lower proposals and lower profit on the services we provide. Increased volatility in the global economy, and the recently announced increased tariffs on imported goods by the United States, Canada, and other countries, may also impact the financial results of some of our businesses. These tariffs have a direct impact on the cost of certain materials utilized in the services we provide and will increase the overall cost of projects which could lower project activity and impact the demand for our services. In the face of increased cost pressure on key materials or other market developments, we strive to maintain our profit margins through productivity improvements, cost reduction programs, pricing adjustments, and business streamlining efforts. Increased competition for skilled labor resources and higher labor costs can reduce our profitability and impact our ability to deliver timely service to our customers. We could experience supply chain disruptions, which could negatively impact the source and supply of materials needed to perform our work. In addition, fluctuations in foreign currencies may have an impact on our financial position and results of operations. However, we believe that our exposure to transactional gains or losses resulting from changes in foreign currencies is limited because our foreign operations primarily invoice and collect receivables in their respective local or functional currencies, and the expenses associated with these transactions are generally contracted and paid for in the same local currencies. In cases where operational transactions represent a material currency risk, we generally enter into cross-currency swaps. Refer to Note 8 – "Derivatives" to our condensed consolidated financial statements included in this quarterly report for additional information on our hedging activities. While we actively monitor economic, industry and market factors that could affect our business, we cannot predict the effect that changes in such factors may have on our future consolidated results of operations, liquidity, and cash flows, and we may be unable to fully mitigate, or benefit from, such changes.

Previous wording

Investment expense and other, net includes expense (income) from foreign currency forward contracts, cross-currency swaps, interest rate swaps agreements, joint ventures, non-service pension cost, and other miscellaneous items. Non- service pension cost reflects the sum of the components of pension expense not related to service expense, i.e. interest expense, expected return on assets, and amortizations of prior service expenses and actuarial gains and losses.

Current wording

Investment expense and other, net includes expense (income) from foreign currency forward contracts, cross-currency swaps, joint ventures, non-service pension cost, and other miscellaneous items. Non-service pension cost reflects the sum of the components of pension expense not related to service expense, i.e. interest expense, expected return on assets, and amortizations of prior service expenses and actuarial gains and losses.

Previous wording

The following is a discussion of our financial condition and results of operations during the three months ended March 31, 2025 and the three months ended March 31, 2024. During 2025, the Company moved the HVAC business from the Safety Services segment to the Specialty Services segment, and prior period amounts in this discussion have been recast to reflect the current period presentation.

Current wording

The following is a discussion of our financial condition and results of operations during the three and six months ended June 30, 2025 and the three and six months ended June 30, 2024. During 2025, the Company moved the HVAC business from the Safety Services segment to the Specialty Services segment, and prior period amounts in this discussion have been recast to reflect the current period presentation.

Previous wording

Our gross profit for the three months ended March 31, 2025 was $542 million compared to $492 million for the same period in 2024, an increase of $50 million or 10.2%. Gross margin for the three months ended March 31, 2025 was 31.5%, an increase of 80 basis points compared to the prior year period, primarily due to disciplined project and customer selection, pricing improvements, and savings in our Safety Services segment related to the Chubb restructuring program.

Current wording

Our gross profit for the three months ended June 30, 2025 was $615 million compared to $544 million for the same period in 2024, an increase of $71 million or 13.1%. Gross margin for the three months ended June 30, 2025 was 30.9%, a decrease of 50 basis points compared to the prior year period. The decrease was primarily driven by mix, partially offset by pricing improvements across the business.

Previous wording

Investment expense and other, net was $0 million for the three months ended March 31, 2025 compared to $3 million of expense for the same period of 2024. The decrease in investment expense and other was primarily due to a decrease in the loss associated with the impact of foreign currency exchange rates in the current year.

Current wording

Investment (income) expense and other, net was $(2) million for the three months ended June 30, 2025 compared to $2 million of expense for the same period of 2024. The change in investment (income) expense and other, net was primarily due to a gain associated with the impact of foreign currency exchange rates in the current year compared to a loss in the prior year.

Previous wording

The effective tax rate for the three months ended March 31, 2025 was 23.4% compared to 28.0% in the same period of 2024. The difference in the effective tax rate was driven by discrete and nondeductible permanent items. The difference between the effective tax rate and the statutory U.S. federal income tax rate of 21.0% is due to nondeductible permanent items, taxes on foreign earnings in jurisdictions that have higher tax rates, state taxes, and discrete items.

Current wording

The effective tax rate for the three months ended June 30, 2025 was 28.7% compared to 22.4% in the same period of 2024. The difference in the effective tax rate was driven by an increase in discrete and nondeductible permanent items. The difference between the effective tax rate and the statutory U.S. federal income tax rate of 21.0% is due to nondeductible permanent items, taxes on foreign earnings in jurisdictions that have higher tax rates, state taxes, and discrete items.

Previous wording

Safety Services segment earnings as a percentage of net revenues for the three months ended March 31, 2025 and 2024 was approximately 15.7% and 14.8%, respectively. The increase was primarily due to disciplined customer and project selection, pricing improvements, and value capture initiatives.

Current wording

Safety Services segment earnings as a percentage of net revenues for the three months ended June 30, 2025 and 2024 was approximately 17.0% and 16.2%, respectively. The increase was primarily due to disciplined customer and project selection and pricing improvements leading to margin expansion in both service and project revenues.

Previous wording

Net revenues for the three months ended March 31, 2025 were $1,719 million compared to $1,601 million for the same period in 2024, an increase of $118 million or 7.4%. The increase in net revenues was primarily driven by revenue from acquisitions completed, pricing improvements, growth in inspection, service, and monitoring revenue, and project revenue growth in the Safety Services segment, partially offset by an anticipated decrease in Specialty Services revenues.

Current wording

Net revenues for the six months ended June 30, 2025 were $3,709 million compared to $3,331 million for the same period in 2024, an increase of $378 million or 11.3%. The increase in net revenues was primarily driven by acquisitions, project revenue growth, pricing improvements, and growth in inspection, service, and monitoring revenues.

Previous wording

Our SG&A expenses for the three months ended March 31, 2025 were $458 million compared to $392 million for the same period in 2024, an increase of $66 million. SG&A expenses as a percentage of net revenues was 26.6% during the three months ended March 31, 2025 compared to 24.5% for the same period in 2024. The increase in SG&A expenses was primarily driven by SG&A expenses from acquisitions completed, non-recurring systems and business enablement expenses, and acquisition costs that are non-recurring in nature in the three months ended March 31, 2025 compared to 2024, partially offset by savings related to the Chubb restructuring program. Our SG&A expenses excluding amortization for the three months ended March 31, 2025 were $401 million, or 23.3% of net revenues, compared to $342 million, or 21.4% of net revenues, for the same period of 2024. The increase in SG&A expenses excluding amortization as a percentage of net revenues is primarily due to the factors discussed above. See the discussion and reconciliation of our non-GAAP financial measures below.

Current wording

Our SG&A expenses for the six months ended June 30, 2025 were $930 million compared to $810 million for the same period in 2024, an increase of $120 million. SG&A expenses as a percentage of net revenues was 25.1% during the six months ended June 30, 2025 compared to 24.3% for the same period in 2024. The increase in SG&A expenses was primarily driven by SG&A expenses from acquisitions completed, non-recurring systems and business enablement expenses, acquisition and divestiture costs that are non-recurring in nature, and costs to support growth in our Safety Services segment in the six months ended June 30, 2025 compared to 2024. Our SG&A expenses excluding amortization for the six months ended June 30, 2025 were $818 million, or 22.1% of net revenues, compared to $708 million, or 21.3% of net revenues, for the same period of 2024. The increase in SG&A expenses excluding amortization as a percentage of net revenues is primarily due to the factors discussed above. See the discussion and reconciliation of our non-GAAP financial measures below.

Previous wording

Interest expense was $38 million and $34 million for the three months ended March 31, 2025 and 2024, respectively. The increase in interest expense was primarily due to an increase in average debt volume and discontinuation of benefit from certain derivatives partially offset by a decrease in floating rates and the benefits from May 2024 and February 2025 repricings.

Current wording

Interest expense was $75 million and $69 million for the six months ended June 30, 2025 and 2024, respectively. The increase in interest expense was primarily due to discontinuation of benefit from certain derivatives and investment of debt and equity proceeds of 2024, partially offset by a decrease in floating rates and the benefits from May 2024 and February 2025 repricings.

Previous wording

Our net income for the three months ended March 31, 2025 was $35 million compared to $45 million for the same period in 2024, a decrease of $10 million. The decrease is attributable to non-recurring SG&A expenses discussed above, partially offset by gross margin expansion from the factors previously referenced. Net income as a percentage of net revenues for the three months ended March 31, 2025 and 2024 was 2.0% and 2.8%, respectively. Adjusted EBITDA for the three months ended March 31, 2025 was $193 million compared to $175 million for the same period in 2024, an increase of $18 million. The Adjusted EBITDA improvement is attributable to acquisitions completed in our Safety Services segment, improved operating margin due to pricing improvements and disciplined project and customer selection, and savings in our Safety Services segment related to the Chubb restructuring program. See the discussion and reconciliation of our non-GAAP financial measures below.

Current wording

Our net income for the six months ended June 30, 2025 was $112 million compared to $114 million for the same period in 2024, a decrease of $2 million. The decrease is attributable to non-recurring SG&A expenses discussed above. Net income as a percentage of net revenues for the six months ended June 30, 2025 and 2024 was 3.0% and 3.4%, respectively. Adjusted EBITDA for the six months ended June 30, 2025 was $465 million compared to $406 million for the same period in 2024, an increase of $59 million. The Adjusted EBITDA improvement is attributable to acquisitions completed in our Safety Services segment, increase in net revenues, improved operating margin due to pricing improvements and disciplined project and customer selection. See the discussion and reconciliation of our non-GAAP financial measures below.

Previous wording

Safety Services net revenues for the three months ended March 31, 2025 increased by $150 million or 13.4% compared to the same period in 2024. The increase was primarily driven by revenue from acquisitions completed during the last year, pricing improvements, and strong growth in inspection, service, and monitoring revenues as well as project revenues.

Current wording

Safety Services net revenues for the six months ended June 30, 2025 increased by $336 million or 14.7% compared to the same period in 2024. The increase was primarily driven by revenue from acquisitions completed during the last year, pricing improvements, and growth in project and inspection, service, and monitoring revenues.

Previous wording

Our primary sources of liquidity are cash flows from the operating activities of our consolidated subsidiaries, available cash and cash equivalents, our access to our $500 million five-year senior secured revolving credit facility (the "Revolving Credit Facility") and the proceeds from debt and equity offerings. We believe these sources will be sufficient to fund our liquidity requirements for at least the next twelve months. Although we believe we have sufficient resources to fund our future cash requirements, there are many factors with the potential to influence our cash flow position including weather, seasonality, commodity prices, market conditions, and inflation, over which we have no control.

Current wording

Our primary sources of liquidity are cash flows from the operating activities of our consolidated subsidiaries, available cash and cash equivalents, our access to our $750 million five-year senior secured revolving credit facility (the "Revolving Credit Facility") and the proceeds from debt and equity offerings. We believe these sources will be sufficient to fund our liquidity requirements for at least the next twelve months. Although we believe we have sufficient resources to fund our future cash requirements, there are many factors with the potential to influence our cash flow position including weather, seasonality, commodity prices, market conditions, and inflation, over which we have no control.

Previous wording

As of March 31, 2025, we had $954 million of total liquidity, comprising $460 million in cash and cash equivalents and $494 million ($500 million less outstanding letters of credit of approximately $6 million, which reduce availability) of available borrowings under our Revolving Credit Facility.

Current wording

As of June 30, 2025, we had $1,176 million of total liquidity, comprising $432 million in cash and cash equivalents and $744 million ($750 million less outstanding letters of credit of approximately $6 million, which reduce availability) of available borrowings under our Revolving Credit Facility.

Previous wording

During 2024, we issued 12,650,000 shares of Company common stock in a public underwritten offering. The proceeds from this offering totaled approximately $458 million, net of related expenses. We expect to use the net proceeds from this offering for general corporate purposes, which may include future acquisitions and other business opportunities, capital expenditures and working capital.

Current wording

During 2024, we issued 18,975,000 shares of Company common stock in a public underwritten offering. The proceeds from this offering totaled approximately $458 million, net of related expenses. We used the net proceeds from this offering for general corporate purposes, including acquisitions and other business opportunities, capital expenditures and working capital.

Previous wording

In April 2025, our Board of Directors authorized a new share repurchase program to purchase up to $1,000 million of shares of our common stock. The timing, amount and manner of any repurchases under the new repurchase program will be determined at the discretion of our leadership based on a number of factors, including the availability of capital, capital allocation alternatives, and market conditions for our common stock. The share repurchase program is open-ended and does not require us to acquire any specific number of shares. It may be modified, suspended, extended, or terminated by us at any time without prior notice and may be executed through open-market purchases, privately negotiated transactions or otherwise, and we may enter into Rule 10b5-1 trading plans in connection with such repurchases. This new authorization replaces our previous share repurchase authorization announced in 2024.

Current wording

In April 2025, our Board of Directors authorized a new share repurchase program to purchase up to $1,000 million of shares of our common stock. The timing, amount and manner of any repurchases under the new repurchase program will be determined at the discretion of our leadership based on a number of factors, including the availability of capital, capital allocation alternatives, and market conditions for our common stock. The share repurchase program is open-ended and does not require us to acquire any specific number of shares. It may be modified, suspended, extended, or terminated by us at any time without prior notice and may be executed through open-market purchases, privately negotiated transactions or otherwise, and we may enter into Rule 10b5-1 trading plans in connection with such repurchases. This new authorization replaces our previous share repurchase authorization announced in 2024. During 2024, we repurchased 24,390,240 shares of common stock for approximately $600 million. During the six months ended June 30, 2025, we repurchased 3,095,573 shares of common stock for approximately $75 million. As of June 30, 2025, we had approximately $1,000 million of authorized repurchases remaining under the SRP.

Previous wording

Net cash provided by operating activities was $62 million for the three months ended March 31, 2025 compared to $7 million for the same period in 2024. The increase in cash provided by operating activities is primarily due to improvements in working capital efficiencies associated with the various services we provided in the three months ended March 31, 2025 compared to the same period of the prior year. Cash flow from operations is primarily driven by changes in the mix and timing of demand for our services and working capital needs associated with the various services we provide. Working capital is primarily affected by changes in total accounts receivable, accounts payable, accrued expenses, and contract assets and contract liabilities, all of which tend to be related and are affected by changes in the timing and volume of work performed.

Current wording

Net cash provided by operating activities was $145 million for the six months ended June 30, 2025 compared to $117 million for the same period in 2024. The increase in cash provided by operating activities is primarily due to improvements in working capital efficiencies associated with the various services we provided in the six months ended June 30, 2025 compared to the same period of the prior year. Cash flow from operations is primarily driven by changes in the mix and timing of demand for our services and working capital needs associated with the various services we provide. Working capital is primarily affected by changes in total accounts receivable, accounts payable, accrued expenses, and contract assets and contract liabilities, all of which tend to be related and are affected by changes in the timing and volume of work performed.

Previous wording

Net cash used in financing activities was $98 million for the three months ended March 31, 2025 compared to $213 million for the same period in 2024. The decrease in cash used in financing activities was primarily driven by stock repurchases. The cash used in financing activities for the three months ended March 31, 2025 was driven by $75 million of share repurchases and $19 million of restricted shares tendered for taxes, while in the three months ended March 31, 2024, the cash used in financing activities was driven by the Series B Preferred Stock Conversion. In the three months ended March 31, 2024, $300 million of proceeds from the 2021 Term Loan and $100 million from the Revolving Credit Facility were used for share repurchases of $600 million during the Series B Preferred Stock Conversion.

Current wording

Net cash used in financing activities was $101 million for the six months ended June 30, 2025 compared to $357 million of cash provided by financing activities for the same period in 2024. The cash used in financing activities for the six months ended June 30, 2025 was driven by $75 million of share repurchases and $20 million of restricted shares tendered for taxes, while in the six months ended June 30, 2024, cash provided by financing activities was driven by $850 million of proceeds from the repricing transactions of the 2021 Term Loan, and $458 million of proceeds from the issuance of common shares, partially offset by $334 million of payments on long-term borrowings and $600 million of payments for conversion of the Series B Preferred Stock.

Previous wording

We have entered into a Credit Agreement by and among APi Group DE, Inc., our wholly-owned subsidiary, as borrower ("APi Group DE"), APG as a guarantor, the subsidiary guarantors from time to time party thereto, the lenders from time to time party thereto, and Citibank N.A., as administrative agent and as collateral agent (the “Credit Agreement”) which provides for: (1) a term loan facility, pursuant to which we incurred the $1,200 million term loan ("2019 Term Loan") used to fund a part of the cash portion of the purchase price in the APi Acquisition, and a $1,100 million seven-year incremental term loan ("2021 Term Loan") used to fund a portion of the purchase price in the Chubb acquisition, and (2) a $500 million Revolving Credit Facility of which up to $250 million can be used for the issuance of letters of credit.

Current wording

We have entered into a Credit Agreement by and among APi Group DE, Inc., our wholly-owned subsidiary, as borrower ("APi Group DE"), APG as a guarantor, the subsidiary guarantors from time to time party thereto, the lenders from time to time party thereto, and Citibank N.A., as administrative agent and as collateral agent (the “Credit Agreement”) which provides for: (1) a term loan facility, pursuant to which we incurred the $1,200 million term loan ("2019 Term Loan") used to fund a part of the cash portion of the purchase price in the APi Acquisition, and a $1,100 million seven-year incremental term loan ("2021 Term Loan") used to fund a portion of the purchase price in the Chubb acquisition, and (2) a $750 million Revolving Credit Facility (increased from $500 million in 2025) of which up to $250 million can be used for the issuance of letters of credit.

Previous wording

The interest rate applicable to borrowings under the Revolving Credit Facility is, at our option, either (a) a base rate plus an applicable margin equal to 1.25% or (2) a Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 2.25% plus a CSA.

Current wording

The interest rate applicable to borrowings under the Revolving Credit Facility is, at our option, either (a) a base rate plus an applicable margin equal to 0.50% or (2) a Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 1.50%.

Previous wording

The Credit Agreement contains customary representations and warranties, and affirmative and negative covenants, including covenants that, among other things, restrict our, and our restricted subsidiaries’, ability to (i) incur additional indebtedness; (ii) pay dividends or make other distributions or repurchase or redeem capital stock; (iii) prepay, redeem or repurchase certain debt; (iv) make loans and investments; (v) sell, transfer and otherwise dispose of assets; (vi) incur or permit to exist certain liens; (vii) enter into transactions with affiliates; (viii) enter into agreements restricting subsidiaries’ ability to pay dividends; and (ix) consolidate, amalgamate, merge or sell all or substantially all assets. The Credit Agreement also contains customary events of default. Furthermore, with respect to the revolving credit facility, we must maintain a first lien net leverage ratio that does not exceed (i) 4.00 to 1.00 for each fiscal quarter ending in 2021, and (ii) 3.75 to 1.00 for each fiscal quarter ending thereafter, if on the last day of any fiscal quarter the outstanding amount of all revolving loans and letter of credit obligations (excluding undrawn letters of credit up to $40 million) under the Credit Agreement is greater than 30% of the total revolving credit commitments thereunder subject to a right of cure. Our first lien net leverage ratio as of March 31, 2025 was 1.7:1.0.

Current wording

The Credit Agreement contains customary representations and warranties, and affirmative and negative covenants, including covenants that, among other things, restrict our, and our restricted subsidiaries’, ability to (i) incur additional indebtedness; (ii) pay dividends or make other distributions or repurchase or redeem capital stock; (iii) prepay, redeem or repurchase certain debt; (iv) make loans and investments; (v) sell, transfer and otherwise dispose of assets; (vi) incur or permit to exist certain liens; (vii) enter into transactions with affiliates; (viii) enter into agreements restricting subsidiaries’ ability to pay dividends; and (ix) consolidate, amalgamate, merge or sell all or substantially all assets. The Credit Agreement also contains customary events of default. Furthermore, with respect to the revolving credit facility, we must maintain a first lien net leverage ratio that does not exceed (i) 4.00 to 1.00 for each fiscal quarter ending in 2021, and (ii) 3.75 to 1.00 for each fiscal quarter ending thereafter, if on the last day of any fiscal quarter the outstanding amount of all revolving loans and letter of credit obligations (excluding undrawn letters of credit up to $40 million) under the Credit Agreement is greater than 30% of the total revolving credit commitments thereunder subject to a right of cure. Our first lien net leverage ratio as of June 30, 2025 was 1.6:1.0.

Previous wording

As of March 31, 2025, the 2021 Term Loan has $2,157 million remaining principal amount outstanding. We had no amounts outstanding under the Revolving Credit Facility, under which $494 million was available after giving effect to $6 million of outstanding letters of credit, which reduces availability.

Current wording

As of June 30, 2025, the 2021 Term Loan has $2,157 million remaining principal amount outstanding. We had no amounts outstanding under the Revolving Credit Facility, under which $744 million was available after giving effect to $6 million of outstanding letters of credit, which reduces availability.

Previous wording

Under the terms of the agreement, (i) the Series B Holders each agreed to exercise their respective right to convert all of their Series B Preferred Stock into common stock, resulting in a total of 800,000 shares of Series B Preferred Stock being converted into approximately 32,803,519 shares of common stock (inclusive of approximately 283,196 shares attributable to accrued and unpaid dividends thereon (the "Conversion Shares") and (ii) upon issuance of the Conversion Shares, we agreed to immediately repurchase one-half of the Conversion Shares, on a pro rata basis, from the Series B Holders for an aggregate purchase price of $600 million.

Current wording

Under the terms of the agreement, (i) the Series B Holders each agreed to exercise their respective right to convert all of their Series B Preferred Stock into common stock, resulting in a total of 800,000 shares of Series B Preferred Stock being converted into approximately 49,205,279 shares of common stock (inclusive of approximately 424,794 shares attributable to accrued and unpaid dividends thereon (the "Conversion Shares") and (ii) upon issuance of the Conversion Shares, we agreed to immediately repurchase one-half of the Conversion Shares, on a pro rata basis, from the Series B Holders for an aggregate purchase price of $600 million.

Previous wording

•Operating and Finance Leases – See Note 12 – "Leases" in the Annual Report on Form 10-K filed on February 26, 2025. We have not had material changes to our lease obligations during the three months ended March 31, 2025.

Current wording

•Operating and Finance Leases – See Note 12 – "Leases" in the Annual Report on Form 10-K filed on February 26, 2025. We have not had material changes to our lease obligations during the six months ended June 30, 2025.