PROG Holdings, Inc.

Previous wording

The following discussion should be read in conjunction with the condensed consolidated financial statements as of September 30, 2024 and December 31, 2023, and for the three and nine months ended September 30, 2024 and 2023, including the notes to those statements, appearing elsewhere in this report. We also suggest that management’s discussion and analysis appearing in this report be read in conjunction with the management’s discussion and analysis and consolidated financial statements included in our 2023 Annual Report.

Current wording

The following discussion should be read in conjunction with the condensed consolidated financial statements as of and for the three months ended March 31, 2025 and 2024, including the notes to those statements, appearing elsewhere in this report. We also suggest that management’s discussion and analysis appearing in this report be read in conjunction with the management’s discussion and analysis and consolidated financial statements included in our 2024 Annual Report.

Previous wording

PROG Holdings also owns Build, a credit building financial management tool. Build is not expected to be a reportable segment in 2024 as its financial results are not expected to be material to the Company's consolidated financial results in 2024. Build's financial results are reported within "Other" for segment reporting purposes.

Current wording

PROG Holdings also owns Build, a credit building financial management tool. Build is not expected to be a reportable segment in 2025 as its financial results are not expected to be significant to the Company's consolidated financial results in 2025. Build's financial results are reported within "Other" for segment reporting purposes.

Previous wording

During the first nine months of 2024, the Company's lease application volume increased due to progress in executing our strategic growth initiatives and the tightening of the credit supply above Progressive Leasing. This tightening contributed to a favorable impact on our Progressive Leasing Gross Merchandise Volume ("GMV") in the third quarter of 2024 when compared to the same period in 2023. Despite the increase in demand for our lease-to-own offerings, the Company continues to operate in a challenging macroeconomic environment. We believe the higher year-over-year inflation in 2023, which remained elevated in 2024, particularly in housing, food, and gas costs, has disproportionately negatively affected the customers we serve and has resulted in an unfavorable impact on our GMV during 2023 and 2024. While the rate of increase in inflation has slowed, the cost of living remains significantly higher than it was prior to the COVID-19 pandemic, and we believe inflation continues to present a challenge to our customers. We believe the significant increase in inflation and elevated interest rates for extended periods have also unfavorably impacted consumer confidence within our customer base, resulting in a decrease in demand for the types of merchandise offered by many of our key national and regional POS partners. In light of these macroeconomic challenges and to align the cost structure of our business with our near-term revenue outlook, the Company executed a number of cost reduction initiatives beginning in 2022, and continuing into 2024, to drive efficiencies and right-size variable costs, while attempting to minimize the negative impact on growth-related initiatives.

Current wording

Due to inflationary pressures in recent years, the cost of living remains significantly higher than it was prior to 2020, particularly with respect to housing, food and gas costs. We believe the increased cost of living has had a disproportionate negative effect on the customers we serve and an unfavorable impact on our GMV and financial performance in the first quarter of 2025. We believe the inflationary pressures, the cost of living and elevated interest rates for extended periods, coupled with uncertainty in the overall macroeconomic environment, including recent changes in tariff-related policies, also unfavorably impacted consumer confidence within our customer base, resulting in a decrease in demand for the types of merchandise offered by many of our key national and regional POS partners.

Previous wording

•We reported revenues of $606.1 million, which was a 4.0% increase compared to the $582.9 million we reported for the third quarter of 2023.

Current wording

•We reported revenues of $684.1 million, which was a 6.6% increase compared to the $641.9 million we reported for the first quarter of 2024, as a result of a larger lease portfolio entering the first quarter of 2025.

Previous wording

•GMV increased by $47.5 million for Progressive Leasing and increased by $3.5 million for Vive in the third quarter of 2024, compared to the same period in the prior year. The increase in GMV for Progressive Leasing was due to a combination of: (i) positive customer responses to our strategic initiatives, such as e-commerce integrations with our POS partners and direct-to-consumer marketing, and (ii) increasing demand for our lease-to-own offering arising out of a tightening of the credit supply above Progressive Leasing, which resulted in an increase in lease applications when compared to the same period in the prior year. The increase in GMV for Vive was due to the expansion of certain product offerings to a wider consumer base resulting in more loan originations. GMV from our Other operations increased by $42.4 million, due to an increase in Four loan originations in the third quarter of 2024 compared to the third quarter of 2023.

Current wording

•GMV decreased by $16.6 million for Progressive Leasing and increased by $4.7 million for Vive in the first quarter of 2025, compared to the same period in the prior year. The decrease in GMV for Progressive Leasing was due to the bankruptcy of a major POS partner in late 2024 and tightening of our decisioning posture. We believe the reduction in GMV was also driven by inflationary pressures, elevated cost of living, and an uncertain macroeconomic outlook, all of which have negatively impacted consumer confidence and demand for our lease-to-own offering when compared to the same period in the prior year. The increase in GMV for Vive was due to the expansion of loan origination programs associated with Vive's national retail merchants. GMV from our Other operations increased by $71.1 million, due to an increase in Four loan originations in the first quarter of 2025 compared to the first quarter of 2024.

Previous wording

The number of customers for Progressive Leasing was slightly higher compared to the prior year. This increase is due to increasing demand due to our strategic initiatives and tightening of the credit supply above Progressive Leasing. The increase in Vive customers was primarily due to an increase in loan originations compared to the same period in the prior year. The increase in the number of customers for Other was the result of continued growth in our other strategic businesses.

Current wording

The number of active customers for Progressive Leasing and Vive was essentially flat compared to the same period in the prior year. The increase in the number of customers for Other was the result of continued growth in Four and our other strategic businesses.

Previous wording

Key Components of Earnings Before Income Tax (Benefit) Expense

Current wording

Key Components of Earnings Before Income Tax Expense

Previous wording

In this MD&A section, we review our condensed consolidated results. For the three and nine months ended September 30, 2024 and the comparable prior year periods, some of the key revenue, cost and expense items that affected earnings before income taxes were as follows:

Current wording

In this MD&A section, we review our condensed consolidated results. For the three months ended March 31, 2025 and the comparable prior year periods, some of the key revenue, cost and expense items that affected earnings before income taxes were as follows:

Previous wording

Revenues. We separate our total revenues into two components: (i) lease revenues and fees and (ii) interest and fees on loans receivable. Lease revenues and fees include all revenues derived from lease agreements from our Progressive Leasing segment. Lease revenues are recorded net of a provision for uncollectible renewal payments. Interest and fees on loans receivable represents merchant fees, finance charges and annual and other fees earned on outstanding loans in our Vive segment and, to a lesser extent, from Four.

Current wording

Revenues. We separate our total revenues into two components: (i) lease revenues and fees and (ii) interest and fees on loans receivable. Lease revenues and fees include all revenues derived from lease agreements from our Progressive Leasing segment. Lease revenues are recorded net of a provision for uncollectible renewal payments. Interest and fees on loans receivable represents merchant fees, finance charges and annual and other fees earned on outstanding loans in our Vive segment and, to a lesser extent, from Four and our other strategic businesses.

Previous wording

The increase in Progressive Leasing revenues was primarily the result of the 11.6% increase in gross merchandise volume for the third quarter of 2024 as compared to the third quarter of 2023, due to an increase in customer demand for our lease-to-own offerings. Vive revenues declined primarily due to a smaller loan portfolio entering the third quarter of 2024 as compared to the third quarter of 2023, due to a decrease in customer demand for products offered by certain Vive POS partners during 2023 and the first part of 2024. The increase to Other revenue was primarily driven by an increase in Four's GMV as compared to the third quarter of 2023.

Current wording

The increase in Progressive Leasing revenues was primarily due to a larger lease portfolio entering the period, as measured by its gross leased asset balance, resulting from the 9.1% increase in GMV for the fourth quarter of 2024 as compared to the fourth quarter of 2023. Progressive Leasing revenues also increased due to higher early buyouts in the first quarter of 2025 compared to the same quarter in 2024. Vive revenues declined slightly due to a smaller loan portfolio entering the first quarter of 2025 as compared to the first quarter of 2024. The increase to Other revenue was primarily driven by an increase in Four's GMV as compared to the same period in 2024, due to increased loan originations.

Previous wording

Information about certain significant components of operating expenses for the third quarter of 2024 as compared to the third quarter of 2023 is as follows:

Current wording

Information about certain significant components of operating expenses for the first quarter of 2025 as compared to the first quarter of 2024 is as follows:

Previous wording

The provision for loan losses increased $10.2 million compared to the same period in 2023. The increase is primarily the result of an $8.8 million increase in the provision for loan losses for our Other operations, due to continued growth of our other strategic operations and Four. The provision for loan losses at Vive also increased $1.4 million due to higher delinquencies compared to the same period in 2023.

Current wording

Provision for loan losses increased $3.3 million compared to the same period in 2024. The increase was primarily the result of a $2.6 million increase in the provision for loan losses for our Other operations, due to the continued growth of our Four business and our other strategic operations. The provision for loan losses at Vive also increased $0.7 million resulting from a higher allowance for loan receivable losses primarily driven by uncertainty in the overall macroeconomic environment.

Previous wording

Restructuring expense increased $18.9 million due to additional restructuring activities during thenine months ended September 30, 2024 compared to the same period in 2023. For the nine months ended September 30, 2024, restructuring costs included $7.8 million associated with the early termination of an independent sales agent agreement for Progressive Leasing, $2.0 million associated with the early termination of a third party vendor agreement within other strategic operations, $6.0 million of operating lease right-of-use asset and other fixed asset impairment charges related to the reduction of Progressive Leasing office space, and $5.0 million of employee severance for Progressive Leasing and Other operations. For the same period in 2023, restructuring costs primarily related to employee severance within Progressive Leasing.

Current wording

Restructuring expense decreased $18.0 million at Progressive Leasing compared to the same period in 2024. In 2025, there were no new restructuring activities and the expense was not significant. For the same period in 2024, restructuring costs included $7.8 million associated with the early termination of an independent sales agent agreement, $6.0 million of operating lease right-of-use asset and other fixed asset impairment charges related to the reduction of Progressive Leasing office space, $4.1 million of employee severance within Progressive Leasing and $0.1 million of other restructuring costs.

Previous wording

Depreciation of lease merchandise. Depreciation of lease merchandise increased by 5.0% during the three months ended September 30, 2024 compared to the same period in 2023. The increase was primarily due to growth in the Company's lease portfolio, resulting from positive customer responses to our strategic initiatives and increasing demand for our lease-to-own offering. As a percentage of lease revenues and fees, depreciation of lease merchandise increased to 68.8% from 67.7% in the prior year quarter, primarily due to a normalized level of early buyouts during the three months ended September 30, 2024 as compared to a relatively lower level of early buyouts during the same period in 2023.

Current wording

Depreciation of lease merchandise. Depreciation of lease merchandise increased by 6.7% during the three months ended March 31, 2025 compared to the same period in 2024. The increase was primarily due to growth in the Company's lease portfolio entering the first quarter of 2025. As a percentage of lease revenues and fees, depreciation of lease merchandise increased to 70.7% from 69.5% in the prior year quarter, primarily due to a higher level of early buyouts during the three months ended March 31, 2025 as compared to the same period in 2024.

Previous wording

Provision for lease merchandise write-offs. The provision for lease merchandise write-offs increased $7.8 million compared to the same period in 2023. The provision for lease merchandise write-offs as a percentage of lease revenues increased to 7.7% during the third quarter of 2024 from 6.6% in the same period in 2023. The increase was due to higher write-offs in the third quarter of 2024 compared to the same period in 2023, resulting from our lease portfolio performance returning to pre-pandemic trends. Given the significant economic uncertainty resulting from persistent inflationary pressures and increased interest rates for an extended period, and the potential effects of such developments on Progressive Leasing's POS partners, customers, and business going forward, a high level of estimation was involved in determining the allowance as of September 30, 2024. Actual lease merchandise write-offs could differ materially from the allowance for those write-offs.

Current wording

Provision for lease merchandise write-offs. The provision for lease merchandise write-offs increased $4.9 million compared to the same period in 2024. The provision for lease merchandise write-offs as a percentage of lease revenues increased to 7.4% during the first quarter of 2025 from 7.0% in the same period in 2024. The increase was due to higher write-offs and delinquencies in the first quarter of 2025 compared to the same period in 2024. Given the significant economic uncertainty resulting from persistent inflationary pressures, increased interest rates for an extended period, and/or the impact of tariffs, and the potential effects of such developments on Progressive Leasing's POS partners, customers, and business going forward, a high level of estimation was involved in determining the allowance as of March 31, 2025. Actual lease merchandise write-offs could differ materially from the allowance for those write-offs.

Previous wording

Information about our earnings before income tax (benefit) expense by reportable segment is as follows:

Current wording

Information about our earnings before income tax expense by reportable segment is as follows:

Previous wording

The loss before income tax (benefit) expense within Other primarily relates to losses from our other strategic operations. Factors impacting the change in earnings before income taxes for each reporting segment are discussed above.

Current wording

The loss before income tax expense within Other primarily relates to losses from our other strategic operations. Factors impacting the change in earnings before income taxes for each reporting segment are discussed above.

Previous wording

Income tax (benefit) expense for the nine months ended September 30, 2024 was a benefit of $17.9 million compared to an expense of $47.4 million in the prior year comparable period. The effective income tax rate was (14.7)% during the nine months ended September 30, 2024 compared to 28.3% in the same period in 2023. The decrease in the effective tax rate was primarily due to the $51.4 million non-cash reversal of the uncertain tax position related to Progressive Leasing.

Current wording

Income tax expense increased to $12.5 million for the three months ended March 31, 2025 compared to $9.6 million in the prior year comparable period, primarily due to higher earnings before income tax expense. The effective income tax rate was 26.5% for the three months ended March 31, 2025 compared to 30.4% for the same period in 2024. The decrease in the effective income tax rate was primarily the result of discrete income tax expense in 2024 related to uncertain tax position liabilities.

Previous wording

•Cash and cash equivalents increased $66.3 million to $221.7 million during the nine months ended September 30, 2024. For additional information, refer to the "Liquidity and Capital Resources" section below.

Current wording

•Cash and cash equivalents increased $117.6 million to $213.3 million during the three months ended March 31, 2025. For additional information, refer to the "Liquidity and Capital Resources" section below.

Previous wording

•Lease merchandise, net of accumulated depreciation and allowances, decreased $79.0 million due primarily to a 16.6% decrease in Progressive Leasing's GMV for the third quarter of 2024 as compared to the fourth quarter of 2023.

Current wording

•Lease merchandise, net of accumulated depreciation and allowances, decreased $124.8 million due primarily to a 32.7% decrease in Progressive Leasing's GMV for the first quarter of 2025 as compared to the fourth quarter of 2024. Seasonally higher exercises of early buyouts during the first quarter also contributed to the decrease.

Previous wording

As of September 30, 2024, the Company had $221.7 million of cash, $350.0 million of availability under the Revolving Facility, and $600.0 million of indebtedness.

Current wording

As of March 31, 2025, the Company had $213.3 million of cash, $350.0 million of availability under the Revolving Facility, and $600.0 million of gross indebtedness.

Previous wording

Cash provided by operating activities was $223.0 million and $292.5 million during the nine months ended September 30, 2024 and 2023, respectively. The $69.5 million decrease in operating cash flows was primarily due to a $78.5 million increase in cash paid for leased merchandise and $23.9 million decrease in cash received on accounts receivable. Operating cash flows were positively impacted by a $45.0 million decrease in cash paid for taxes when compared to the same period in 2023. Other changes in cash provided by operating activities are discussed above in our discussion of results for the nine months ended September 30, 2024.

Current wording

Cash provided by operating activities was $209.9 million and $135.7 million during the three months ended March 31, 2025 and 2024, respectively. The $74.2 million increase in operating cash flows was primarily due to an increase in cash received from exercises of early lease buyout options, a $15.2 million decrease in cash paid for lease merchandise, and a $7.6 million decrease in cash payments on accounts payable and accrued expenses. Operating cash flows were negatively impacted by a $4.1 million increase in cash paid for taxes when compared to the same period in 2024. Other changes in cash provided by operating activities are discussed above in our discussion of results for the three months ended March 31, 2025.

Previous wording

Cash used in investing activities was $35.6 million and $18.8 million during the nine months ended September 30, 2024 and 2023, respectively. The $16.8 million increase in investing cash outflows was primarily the result of an $143.1 million increase in cash investments in loans receivable due mainly to growth in Four loan originations, offset by a decline in Vive originations due to a decrease in demand for products provided by Vive's POS partners. This increase in loan originations was partially offset by a $125.2 million increase in proceeds from loans receivable, due to an increase in Four loan repayments.

Current wording

Cash used in investing activities was $4.1 million and $3.6 million during the three months ended March 31, 2025 and 2024, respectively. The $0.5 million increase in investing cash outflows was primarily the result of an $88.9 million increase in cash investments in loans receivable due mainly to growth in Four loan originations. This increase in loan originations was partially offset by a $88.3 million increase in proceeds from loans receivable, primarily due to an increase in Four loan repayments.

Previous wording

Cash used in financing activities was $121.1 million during the nine months ended September 30, 2024 compared to $110.9 million during the same period in 2023. Cash used in financing activities during the nine months ended September 30, 2024 was primarily for the Company's repurchase of $98.2 million of its common stock and $15.4 million paid for cash dividends, compared to $108.3 million of share repurchases and no cash paid for dividends during the same period in the prior year.

Current wording

Cash used in financing activities was $88.2 million during the three months ended March 31, 2025 compared to $34.7 million during the same period in 2024. Cash used in financing activities during the three months ended March 31, 2025 was primarily for the repayment of $50.0 million that was drawn on our revolving credit facility during the fourth quarter of 2024, $26.1 million for share repurchases and $5.3 million paid for cash dividends. Cash used in financing activities during the three months ended March 31, 2024 consisted of no debt repayment, $24.4 million of share repurchases and $5.2 million paid for cash dividends.

Previous wording

We purchase our stock in the market from time to time as authorized by our Board of Directors. Effective November 3, 2021, the Company announced that its Board of Directors had authorized a new $1 billion share repurchase program that replaced the previous $300 million repurchase program. On February 21, 2024, the Company's Board of Directors reauthorized the repurchase of Company common stock at an aggregate purchase price of up to $500 million under the Company's existing share repurchase program, with such reauthorized share repurchase program to be extended for a period of three years from February 21, 2024, or until the $500 million aggregate purchase price of Company common stock purchased pursuant to the reauthorized share repurchase program has been met, whichever occurs first. The Company repurchased 2,620,562 shares for $98.2 million during the nine months ended September 30, 2024. That amount does not include any excise tax that may be assessed on those repurchases. As of September 30, 2024, we had the authority to purchase additional shares up to our remaining authorization limit of $401.8 million.

Current wording

We purchase our stock in the market from time to time as authorized by our Board of Directors. Effective February 21, 2024, the Company's Board of Directors reauthorized the repurchase of Company common stock at an aggregate purchase price of up to $500 million under the Company's existing share repurchase program, with such reauthorized share repurchase program to be extended for a period of three years from February 21, 2024, or until the $500 million aggregate purchase price of Company common stock purchased pursuant to the reauthorized share repurchase program has been met, whichever occurs first.

Previous wording

On August 8, 2024, our Board of Directors declared a quarterly cash dividend in the amount of $0.12 per share of outstanding common stock, which was paid on September 3, 2024. Aggregate dividend payments during the nine months ended September 30, 2024 were $15.4 million. While we expect to continue paying quarterly cash dividends in future periods, the future payment of dividends, if permitted, will be at the sole discretion of our Board of Directors and will depend on our capital allocation strategy at that time as well as other factors, including our earnings, financial condition, and other considerations that our Board of Directors deems relevant.

Current wording

On February 26, 2025, our Board of Directors declared a quarterly cash dividend in the amount of $0.13 per share of outstanding common stock, which was paid on March 25, 2025. Aggregate dividend payments during the three months ended March 31, 2025 were $5.3 million. While we expect to continue paying quarterly cash dividends in future periods, the future payment of dividends, if permitted, will be at the sole discretion of our Board of Directors and will depend on our capital allocation strategy at that time as well as other factors, including our earnings, financial condition, and other considerations that our Board of Directors deems relevant.

Previous wording

On November 24, 2020, the Company entered into a credit agreement with a consortium of lenders providing for a $350.0 million senior revolving credit facility, under which revolving borrowings became available on the date of the completion of the separation and distribution transaction pursuant to which our former Aaron's Business segment was spun-off into a separate publicly-traded company, and under which all borrowings and commitments will mature or terminate on November 24, 2025.

Current wording

On November 24, 2020, the Company entered into a credit agreement with a consortium of lenders providing for a $350.0 million senior revolving credit facility (the "Revolving Facility"). On November 15, 2024, the Company entered into an amendment to the Revolving Facility, the primary purpose of which was to extend the maturity date of the Revolving Facility from November 24, 2025 to November 15, 2029.

Previous wording

As of September 30, 2024, the Company had no outstanding balance and $350.0 million remaining available for borrowings on the Revolving Facility. The Revolving Facility includes an uncommitted incremental facility increase option ("Incremental Facilities") which, subject to certain terms and conditions, permits the Company at any time prior to the maturity date to request an increase in extensions of credit available thereunder by an aggregate additional principal amount of up to $300.0 million.

Current wording

The Revolving Facility includes an uncommitted incremental facility increase option ("Incremental Facilities") which, subject to certain terms and conditions, permits the Company at any time prior to the maturity date to request an increase in extensions of credit available thereunder by an aggregate additional principal amount of up to $300.0 million. As of March 31, 2025, the Company had no outstanding balance and $350.0 million remaining available for borrowings on the Revolving Facility.

Previous wording

Our Revolving Facility contains certain financial covenants, which include requirements that the Company maintain ratios of (i) total net debt to EBITDA of no more than 2.50:1.00 and (ii) consolidated interest coverage of no less than 3.00:1.00. The Company will be in default under the Revolving Facility if it fails to comply with these covenants, and all borrowings outstanding may become due immediately. Additionally, under the Revolving Facility, if the total net debt to EBITDA, as defined by the Revolving Facility, exceeds 1.25, the revolver becomes fully secured for the remaining duration of the Revolving Facility term. As of June 30, 2022, the Company exceeded the 1.25 total net debt to EBITDA ratio and the Revolving Facility became fully secured. At September 30, 2024, we were in compliance with the financial covenants set forth in the Revolving Facility and believe that we will continue to be in compliance in the future.

Current wording

The Revolving Facility is fully secured and contains certain financial covenants, which include requirements that the Company maintain ratios of (i) total net debt to EBITDA of no more than 2.50:1.00 and (ii) consolidated interest coverage of no less than 3.00:1.00. The Company will be in default under the Revolving Facility if it fails to comply with these covenants, and all borrowings outstanding may become due immediately. As of March 31, 2025, the Company was in compliance with the financial covenants set forth in the Revolving Facility and believes it will continue to be in compliance in the future.

Previous wording

The indenture discussed above contains various other covenants and obligations to which the Company and its subsidiaries are subject while the Senior Notes are outstanding. The covenants in the indenture may limit the extent to which, or the ability of the Company and its subsidiaries to, among other things: (i) incur additional debt and guarantee debt; (ii) pay dividends or make other distributions or repurchase or redeem capital stock; (iii) prepay, redeem or repurchase certain debt; (iv) issue certain preferred stock or similar equity securities; (v) make loans and investments; (vi) sell assets; (vii) incur liens; (viii) enter into transactions with affiliates; (ix) enter into agreements restricting the ability of the Company’s subsidiaries to pay dividends; and (x) consolidate, merge or sell all or substantially all of the Company’s assets. The indenture also contains customary events of default for transactions of this type and amount. We were in compliance with these covenants at September 30, 2024 and believe that we will continue to be in compliance in the future.

Current wording

The indenture discussed above contains various other covenants and obligations to which the Company and its subsidiaries are subject while the Senior Notes are outstanding. The covenants in the indenture may limit the extent to which, or the ability of the Company and its subsidiaries to, among other things: (i) incur additional debt and guarantee debt; (ii) pay dividends or make other distributions or repurchase or redeem capital stock; (iii) prepay, redeem or repurchase certain debt; (iv) issue certain preferred stock or similar equity securities; (v) make loans and investments; (vi) sell assets; (vii) incur liens; (viii) enter into transactions with affiliates; (ix) enter into agreements restricting the ability of the Company’s subsidiaries to pay dividends; and (x) consolidate, merge or sell all or substantially all of the Company’s assets. The indenture also contains customary events of default for transactions of this type and amount. The Company was in compliance with these covenants at March 31, 2025 and believes that it will continue to be in compliance in the future.

Previous wording

During the nine months ended September 30, 2024, we made net tax payments of $31.8 million. Within the next three months, we anticipate making estimated tax payments of $24.5 million for United States federal income taxes and state income taxes.

Current wording

During the three months ended March 31, 2025, we made net tax payments of $0.3 million. Within the next nine months, we anticipate making estimated tax payments of $80.2 million for United States federal income taxes and state income taxes.

Previous wording

Deferred income tax liabilities as of September 30, 2024 were $81.7 million. Deferred income tax liabilities are calculated based on temporary differences between the tax basis of assets and liabilities and their respective book basis, which will result in taxable amounts in future years when the liabilities are settled at their reported financial statement amounts. The results of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods.

Current wording

Deferred income tax liabilities as of March 31, 2025 were $64.4 million. Deferred income tax liabilities are calculated based on temporary differences between the tax basis of assets and liabilities and their respective book basis, which will result in taxable amounts in future years when the liabilities are settled at their reported financial statement amounts. The results of these calculations do not have a direct connection with the amount of cash taxes to be paid in any future periods.

Previous wording

We lease management and information technology space for corporate functions as well as storage space for our hub facilities under operating leases expiring at various times through 2027. Our corporate and segment management office leases contain renewal options for additional periods ranging from three to five years.

Current wording

We lease management and information technology space for corporate functions under operating leases expiring at various times through 2028. Our corporate and segment management office leases contain renewal options for additional periods ranging from three to five years.

Previous wording

Future interest payments on the Company's variable-rate debt are based on a rate per annum equal to, at our option, (i) the Secured Overnight Financing Rate ("SOFR") plus a margin within the range of 1.5% to 2.5% for revolving loans, based on total leverage, or (ii) the administrative agent's base rate plus a margin ranging from 0.5% to 1.5%, as specified in the agreement. Future interest payments related to our Revolving Facility are based on the borrowings outstanding at that time. Future interest payments may be different depending on future borrowing activity and interest rates. The Company had no outstanding borrowings under the Revolving Facility as of September 30, 2024.

Current wording

Future interest payments on the Company's variable-rate debt are based on a rate per annum equal to, at our option, (i) the Secured Overnight Financing Rate ("SOFR") plus a margin within the range of 1.5% to 2.5% for revolving loans, based on total leverage, or (ii) the administrative agent's base rate plus a margin ranging from 0.5% to 1.5%, as specified in the agreement. Future interest payments related to our Revolving Facility are based on the borrowings outstanding at that time and may be different depending on future borrowing activity and interest rates. The Company had no outstanding borrowings under the Revolving Facility as of March 31, 2025.

Previous wording

On November 26, 2021, the Company issued $600 million aggregate principal amount of Senior Notes that bear a fixed annual interest rate of 6.0%. Interest will accrue on the outstanding balance and will be payable semi-annually. The Senior Notes will mature on November 15, 2029.

Current wording

On November 26, 2021, the Company issued $600 million aggregate principal amount of Senior Notes that bear a fixed annual interest rate of 6.0%. Interest accrues on the outstanding balance and is payable semi-annually. The Senior Notes will mature on November 15, 2029.

Previous wording

The Company, through its Vive business, had unconditionally cancellable unfunded lending commitments totaling approximately $498.7 million and $523.9 million as of September 30, 2024 and December 31, 2023, respectively, that do not give rise to revenues and cash flows. These unfunded commitments arise in the ordinary course of business from credit card agreements with individual cardholders that give them the ability to borrow, against unused amounts, up to the maximum credit limit assigned to their account. While these unfunded amounts represented the total available unused lines of credit, the Company does not anticipate that all cardholders will utilize their entire available line at any given point in time. Commitments to extend unsecured credit are agreements to lend to a cardholder so long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

Current wording

The Company, through its Vive business, had unconditionally cancellable unfunded lending commitments totaling approximately $459.8 million and $461.1 million as of March 31, 2025 and December 31, 2024, respectively, that do not give rise to revenues and cash flows. These unfunded commitments arise in the ordinary course of business from credit card agreements with individual cardholders that give them the ability to borrow, against unused amounts, up to the maximum credit limit assigned to their account. While these unfunded amounts represented the total available unused lines of credit, the Company does not anticipate that all cardholders will utilize their entire available line at any given point in time. Commitments to extend unsecured credit are agreements to lend to a cardholder so long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.