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Item 7. Management’s Discussion and Analysis

2026-02-25 compared with 2025-02-26 · 147 added, 253 removed, 326 unchanged (55% of the section changed)

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We have a winning leadership culture driven by entrepreneurial business leaders that deliver innovative solutions to our customers.

We focus on growing our recurring revenues and repeat business from our diversified long-standing customers across a variety of end markets, which we believe provides us with stable cash flows and a platform for organic growth.

We believe maintenance and service revenues are generally more predictable through contractual arrangements with typical terms ranging from days to three years, with the majority having short durations and are often recurring due to consistent renewal rates and long-standing customer relationships.

We focus on growing our recurring revenue streams and repeat business from a diverse set of long-standing customers across a variety of end markets, which we believe provides us with stable cash flows and a platform for organic growth.

We believe inspection, service, and monitoring revenues are generally more predictable through contractual arrangements with typical terms ranging from days to five years, with the majority having durations of less than six months and are often recurring due to consistent renewal rates and long-standing customer relationships.

C ERTAIN F ACTORS AND T RENDS A FFECTING OUR R ESULTS OF O PERATIONS

Segment Realignment

During 2025, due to a change in the way the businesses are managed, we realigned our segments by moving the HVAC business from the Safety Services segment to the Specialty Services segment.

As such, all segment-related prior period amounts have been recast to reflect this change as of the beginning of the earliest period presented.

For additional information about our segments, see Note 22 – “Segment Information” to our consolidated financial statements included in this Annual Report.

During 2025, we completed 14 acquisitions.

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For additional information about our acquisitions, see Note 4 – “Business Combinations” to our consolidated financial statements included in this Annual Report.

On June 30, 2025, we executed a three-for-two stock split by issuing a stock dividend of one-half of one share of common stock for each share of common stock.

For additional information about our stock split, see Note 19 – "Shareholders' Equity and Redeemable Convertible Preferred Stock" to our consolidated financial statements included herein.

Table of Conten t s

Restructuring

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.

We incurred pre-tax restructuring costs within the Safety Services segment of $12 million and $37 million in connection with the Chubb restructuring program in 2024 and 2023, respectively.

In total, we estimate that we will recognize an aggregate of approximately $125 million of restructuring and other costs related to the Chubb restructuring program by the end of fiscal year 2025.

In 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.

During 2025, we incurred $4 million of pre-tax restructuring costs within the Safety Services segment in connection with the Chubb restructuring program.

As of June 30,2025, the Chubb restructuring program ended and no additional expenses are expected.

For additional information about our restructuring activity, see Note 6 – “Restructuring" to our consolidated financial statements included in this Annual Report.

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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.

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.

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 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 have experienced supply chain disruptions, which have negatively impacted the source and supply of materials needed to perform our work.

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.

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Fluctuations in end-user demand, or in the supply of services within those industries, can affect demand for our services.

As a result, our business may be adversely affected by industry declines or by delays in new projects.

As a result, our businesses may be adversely affected by industry declines or by delays in new projects.

Variations or unanticipated changes in project schedules in connection with large projects can create fluctuations in net revenues.

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Net revenues are generated from the sale of various types of contracted services, fabrication, and distribution.

We derive net revenues primarily from services under contractual arrangements with durations ranging from days to three years, with the majority having durations of less than six months, and which may provide the customer with pricing options that include a combination of fixed, unit, or time and material pricing.

We derive net revenues primarily from services under contractual arrangements with durations ranging from days to five years,

Table of Conten t s

with the majority having durations of less than six months, and which may provide the customer with pricing options that include a combination of fixed, unit, or time and material pricing.

Net revenues for fixed price agreements are generally recognized over time using the cost-to-cost method of accounting which measures progress based on the cost incurred to total expected cost in satisfying our performance obligation.

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General and administrative expenses also include outside professional fees and other corporate expenses.

Amortization of intangible assets

Amortization expense reflects the charges incurred to amortize our finite-lived identifiable intangible assets, such as customer relationships, which are amortized over their estimated useful lives.

There is a portion of amortization expense related to the backlog intangible assets reflected in cost of revenues in the consolidated statements of operations.

Loss (gain) on extinguishment of debt, net

Loss (gain) on extinguishment of debt, net reflects the difference between the repurchase price and the carrying amount of debt at the time of extinguishment.

Investment expense (income) and other, net

Investment expense (income) and other, net includes expense (income) from foreign currency forward contracts, cross-currency swaps, interest rate swaps agreements, joint ventures, non-service pension expense (benefit), and other miscellaneous items.

Non-service pension expense (benefit) 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.

Investment expense (income) and other, net includes income and expense from foreign currency forward contracts, cross-currency swaps, joint ventures, non-service pension cost, and other miscellaneous items including loss (gains) on extinguishment of debt.

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 amortization of prior service costs and actuarial gains and losses.

Table of Conten t s

R ESULTS OF O PERATIONS

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Interest expense, net 141 146 (5) (3.4 %)

Loss on extinguishment of debt, net 1 7 (6) (85.7 %)

Investment expense (income) and other, net — 8 (8) NM

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Net revenues for the year ended December 31, 2025 were $7,911 million compared to $7,018 million for the year ended December 31, 2024, an increase of $893 million or 12.7%.

The increase was primarily driven by revenue from acquisitions completed within the Safety Services segment, growth in inspection, service, and monitoring revenues, and

pricing improvements in our Safety Services segment, partially offset by divestitures, planned disciplined customer and project selection, as well as project delays in our HVAC business and Specialty Services segment.

The increase was primarily driven by growth in inspection, service, and monitoring revenues, strong growth in project revenues, acquisitions, and pricing improvements.

The following table presents our gross profit (net revenues less cost of revenues) and gross margin (gross profit as a percentage of net revenues) for the years ended December 31, 2025 and 2024, respectively:

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Our gross profit for the year ended December 31, 2025 was $2,487 million compared to $2,178 million for the year ended December 31, 2024, an increase of $309 million, or 14.2%.

Gross margin for the year ended December 31, 2024 was 31.0%, an increase of 300 basis points compared to the prior year, primarily driven by planned disciplined customer and project selection, pricing improvements in our Safety Services segment, and savings from the Chubb restructuring program.

Gross margin for the year ended December 31, 2025 was 31.4%, an increase of 40 basis points compared to the prior year period.

The increase was primarily driven by disciplined customer and project selection and pricing improvements, partially offset by project revenues mix.

Table of Conten t s

Selling, general, and administrative expenses

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SG&A expenses as a % of net revenues 24.4 % 24.1 %

SG&A expenses (excluding amortization and impairment) (non-GAAP) $ 1,478 $ 1,372 $ 106 7.7 %

SG&A expenses (excluding amortization and impairment) as a % of net revenues (non-GAAP) 21.1 % 19.8 %

SG&A expenses (excluding amortization) (non-GAAP) $ 1,705 $ 1,478 $ 227 15.4 %

SG&A expenses (excluding amortization) as a % of net revenues (non-GAAP) 21.6 % 21.1 %

Our SG&A expenses for the year ended December 31, 2025, were $1,933 million compared to $1,694 million for 2024, an increase of $239 million.

SG&A expenses as a percentage of net revenues was 24.4% during the year ended December 31, 2025 compared to 24.1% in 2024.

The increase in SG&A expenses was primarily driven by investments to support our Safety Services segment, SG&A expenses from acquisitions completed, and acquisitions costs in the year ended December 31, 2024.

The increase in SG&A expenses was partially offset by savings related to the Chubb restructuring program in the year ended December 31, 2024 and a $12 million impairment charge included in 2023, related to assets sold in that year.

Our SG&A expenses excluding amortization and impairment for the year ended December 31, 2024 was $1,478 million, or 21.1% of net revenues, compared to $1,372 million or 19.8% of net revenues for 2023, primarily due to the factors discussed above.

The increase in SG&A expenses was primarily driven by non-recurring systems and business enablement expenses, SG&A expenses from acquisitions completed during the last year, and investments to support growth.

Our SG&A expenses excluding amortization for the year ended December 31, 2025 were $1,705 million, or 21.6% of net revenues, compared to $1,478 million or 21.1% of net revenues for 2024.

The increase in SG&A expenses excluding amortization as a percentage of net revenues is primarily due to the factors discussed above.

See "Non-GAAP Financial Measures" below for a discussion and reconciliation of our non-GAAP financial measures.

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Interest expense was $141 million and $146 million for the years ended December 31, 2025 and 2024, respectively.

The increase in interest expense was primarily due to an increase in debt outstanding partially offset by lower interest rates on our floating interest rate debt and increased interest income generated by the investment of the equity and debt financings that were ultimately used in the Elevated acquisition.

Loss on extinguishment of debt, net

During the year ended December 31, 2024, we made a $100 million payment to pay down outstanding principal of the 2021 Term Loan.

In connection with the payment, we recognized a net loss on debt extinguishment of $1 million.

During the year ended December 31, 2023, we made payments of $375 million and $100 million to pay down outstanding

principal amounts of the 2019 Term Loan and 2021 Term Loan, respectively.

In connection with the payments, we recognized a net loss on debt extinguishment of $7 million.

The decrease in interest expense was primarily due to a decrease in floating rates, partially offset by discontinuation of benefits from certain derivatives.

Investment expense (income) and other, net

Investment expense (income) and other, net was $7 million and $(25) million for the years ended December 31, 2024 and 2023, respectively.

The change in investment expense (income) and other, net was primarily due to an increase in non-service pension costs in the current year partially offset by an increase in earnings from joint ventures.

The non-service pension expense (benefit) was $22 million and $(12) million for the years ended December 31, 2024 and 2023, respectively.

The change was due to higher interest costs as a result of higher discount rates in 2024 compared to 2023.

Investment expense (income) and other, net was $0 and $8 million for the years ended December 31, 2025 and 2024, respectively.

The change in investment expense (income) and other, net was primarily due to an increase in joint venture income and a decrease in non-service pension cost in the current year compared to the prior year.

Income tax provision

The effective tax rate for the year ended December 31, 2025 was 26.9% compared to an effective tax rate of 24.0% for the year ended December 31, 2024.

The decrease was primarily due to current year changes to the geographical income mix and valuation allowance positions.

The Organization for Economic Co-operation and Development ("OECD") has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as "Pillar 2"), with certain aspects of Pillar 2 effective January 1, 2024 and other aspects effective January 1, 2025.

While it is uncertain whether the U.S.

will enact legislation to adopt Pillar 2, certain countries in which we operate have adopted the legislation, and other countries are in the process of introducing legislation to implement Pillar 2.

Therefore, we have considered Pillar 2 tax within the provisions for income taxes and do not expect Pillar 2 to have a material impact on the effective tax rate or the consolidated financial statements.

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.

The Organization for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2), with rules effective beginning in 2024 and expanding in 2025.

Several jurisdictions in which the Company operates have enacted Pillar 2 legislation, while others continue to advance implementation;

has not adopted the rules.

On January 5, 2026, the OECD/G20 released the Side by Side (SbS) package, which provides administrative simplifications and new safe harbors, including exemptions from two of the three top‑up taxes for qualifying U.S.-parented groups and an extension of the Transitional Country-by-Country Reporting Safe Harbor through 2027.

The Company is monitoring these developments and evaluating potential impacts.

Based on current information, the Company has considered Pillar 2 tax within the provision for income taxes and does not expect Pillar 2 to have a material effect on its effective tax rate or consolidated financial statements.

Table of Conten t s

Net income and adjusted EBITDA

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Net income as a percentage of net revenues for the years ended December 31, 2025 and 2024 was 3.8% and 3.6%, respectively.

The net income improvement is primarily attributable to significant gross margin expansion resulting from the factors mentioned above, partially offset by SG&A expenses discussed above.

The net income improvement is primarily attributable to strong revenue growth and gross margin expansion previously referenced and a decrease in interest expense, partially offset by the increase in SG&A expenses discussed above.

Adjusted EBITDA for the years ended December 31, 2025 and 2024 was $1,041 million and $893 million, respectively, an increase of $148 million.

The increase in Adjusted EBITDA was primarily driven by the factors previously discussed.

The increase in adjusted EBITDA was driven by the same factors that explained the increase in net income.

See "Non-GAAP Financial Measures" below for a discussion and reconciliation of our non-GAAP financial measures.

Operating Segment Results

Segment Results

Year Ended December 31, Change

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Safety Services net revenues for the year ended December 31, 2025 were $5,456 million compared to $4,797 million during the same period in the prior year.

The increase was primarily driven by revenue from acquisitions, increased inspection, service, and monitoring revenues, and pricing improvements, partially offset by a decline in project revenues in the HVAC business.

The increase was driven by growth in inspection, service, and monitoring revenues, acquisitions, strong growth in project revenues, and pricing improvements.

Table of Conten t s

Safety Services segment earnings as a percentage of net revenues was 16.8% and 15.9% for the years ended December 31, 2025 and 2024, respectively.

The increase was primarily the result of planned disciplined project and customer selection, pricing improvements, savings from the Chubb restructuring program, and improved mix of inspection, services and monitoring revenues.

The increase was primarily driven by disciplined customer and project selection as well as pricing improvements leading to margin expansion in inspection, service, and monitoring revenues and project revenues.

Specialty Services

Specialty Services net revenues for the years ended December 31, 2025 and 2024 were $2,460 million and $2,229 million, respectively.

The decrease was primarily driven by divestitures, the impact of the planned exit of a customer relationship in the Infrastructure/Utility reporting unit, project delays, and project and customer selection.

The increase was driven by strong growth in project revenues.

Specialty Services segment earnings as a percentage of net revenues for the years ended December 31, 2025 and 2024 was 10.7% and 11.4%, respectively.

The increase was primarily the result of planned disciplined project and customer selection during the year ended December 31, 2024.

The decrease was driven primarily by increased project starts, mix, and increased material costs.

Year ended December 31, 2024 versus year ended December 31, 2023

The following is a discussion of our financial condition and results of operations for the years ended December 31, 2023 and 2022.

The following financial information has been extracted from our audited consolidated financial statements included in this Annual Report.

Year Ended December 31, Change

($ in millions) 2023 2022 $ %

Net revenues $ 6,928 $ 6,558 $ 370 5.6 %

Cost of revenues 4,988 4,844 144 3.0 %

Gross profit 1,940 1,714 226 13.2 %

Selling, general, and administrative expenses 1,581 1,552 29 1.9 %

Operating income 359 162 197 121.6 %

Interest expense, net 145 125 20 16.0 %

Loss (gain) on extinguishment of debt, net

Investment income and other, net

(25) (51) 26 NM

Other expense, net 127 69 58 84.1 %

Income before income taxes 232 93 139 149.5 %

Income tax provision 79 20 59 295.0 %

Net income $ 153 $ 73 $ 80 109.6 %

NM = Not meaningful

Net revenues for the year ended December 31, 2023 were $6,928 million compared to $6,558 million for the year ended December 31, 2022, an increase of $370 million or 5.6%.

The increase in net revenues was attributable to the Safety Services and Specialty Services segments and was primarily driven by growth in inspection, service, and monitoring revenue.

Year Ended December 31, Change

($ in millions) 2023 2022 $ %

Gross profit $ 1,940 $ 1,714 $ 226 13.2 %

Gross margin 28.0 % 26.1 %

Our gross profit for the year ended December 31, 2023 was $1,940 million compared to $1,714 million in the year ended December 31, 2022, an increase of $226 million, or 13.2%.

Gross margin for the year ended December 31, 2023 was 28.0%, an increase of 190 basis points compared to the prior year, primarily due to planned disciplined project and customer selection, pricing improvements in our Safety Services segment, and an improved mix of inspection, service, and monitoring revenue, which generates higher margins.

Selling, general, and administrative expenses

The following table presents selling, general, and administrative expenses for the years ended December 31, 2023 and 2022, respectively:

Year Ended December 31, Change

($ in millions) 2023 2022 $ %

Selling, general, and administrative expenses $ 1,581 $ 1,552 $ 29 1.9 %

SG&A expenses as a % of net revenues 22.8 % 23.7 %

SG&A expenses (excluding amortization and impairment) (non-GAAP) $ 1,372 $ 1,355 $ 17 1.3 %

SG&A expenses (excluding amortization and impairment) as a % of net revenues (non-GAAP) 19.8 % 20.7 %

Our SG&A expenses for the year ended December 31, 2023, were $1,581 million compared to $1,552 million for the same period in 2022, an increase of $29 million.

SG&A expenses as a percentage of net revenues was 22.8% during the year ended December 31, 2023 compared to 23.7% in 2022.

The decrease in SG&A expenses as a percentage of net revenues was primarily driven by lower acquisition and integration related expenses incurred, partially offset by an impairment charge of $12 million related to assets sold in 2023 and investments to support our Safety Services and Specialty Services segments.

Our SG&A expenses excluding amortization and impairment for the year ended December 31, 2023 was $1,372 million, or 19.8% of net revenues, compared to $1,355 million or 20.7% of net revenues for 2022, primarily due to the factors discussed above.

See "Non-GAAP Financial Measures" below for a discussion and reconciliation of our non-GAAP financial measures.

Interest expense, net

Interest expense was $145 million and $125 million for the years ended December 31, 2023 and 2022, respectively.

The increase in interest expense was primarily due to higher interest rates on our floating interest rate debt in 2023, partially offset by a decrease in the outstanding principal amounts of floating rate debt reflecting the debt repayments described below.

Loss (gain) on extinguishment of debt, net

During the year ended December 31, 2023, we made payments of $375 million and $100 million to pay down outstanding principal amounts of the 2019 Term Loan and 2021 Term Loan, respectively.

In connection with the payments, we recognized a net loss on debt extinguishment of $7 million.

During 2022, we repurchased $13 million and $23 million of the outstanding principal amount of the 4.125% Senior Notes and 4.750% Senior Notes, respectively.

In connection with these repurchases, we recognized a net gain on debt extinguishment of $5 million.

Non-service pension benefit

The non-service pension benefit was $12 million and $42 million for the years ended December 31, 2023 and 2022, respectively.

The change was due to higher interest costs as a result of higher discount rates in 2023 compared to 2022.

Investment income and other, net

Investment income and other, net was $13 million and $9 million for the years ended December 31, 2023 and 2022, respectively.

The increase in investment income was primarily due to an increase in earnings from joint ventures.

Income tax provision

The effective tax rate for the year ended December 31, 2023 was 33.9% compared to an effective tax rate of 22.0% for the year ended December 31, 2022.

The increase was primarily due to changes in 2023 to the geographical income mix and valuation allowance positions.

Additionally, a benefit for withholding taxes on foreign earnings reduced the effective tax rate in the prior year.

Net income and Adjusted EBITDA

The following table presents net income and Adjusted EBITDA for the years ended December 31, 2023 and 2022, respectively:

Year Ended December 31, Change

($ in millions) 2023 2022 $ %

Net income $ 153 $ 73 $ 80 109.6 %

Adjusted EBITDA (non-GAAP) 782 673 109 16.2 %

Net income as a % of net revenues 2.2 % 1.1 %

Adjusted EBITDA as a % of net revenues 11.3 % 10.3 %

Net income for the year ended December 31, 2023 was $153 million compared to $73 million for the year ended December 31, 2022, an increase of $80 million.

Net income as a percentage of net revenues for the years ended December 31, 2023 and 2022 was 2.2% and 1.1%, respectively.

The improvement is primarily attributable to planned disciplined project and customer selection, pricing improvements within our Safety Services and Specialty Services segments, and growth in inspection, service, and monitoring revenue, as well as savings in our Safety Services segment related to the Chubb restructuring program.

The net income increase was partially offset by an impairment charge of $12 million related to assets sold in 2023, an increase in interest expense of $20 million, and an increase in the income tax provision of $59 million.

Adjusted EBITDA for the years ended December 31, 2023 and 2022 was $782 million and $673 million, respectively, an increase of $109 million.

With the exception of savings in our Safety Services segment related to the Chubb restructuring program, which is excluded from adjusted EBITDA, the increase in adjusted EBITDA was primarily driven by the factors previously discussed.

See "Non-GAAP Financial Measures" below for a discussion and reconciliation of our non-GAAP financial measures.

Operating Segment Results

Year Ended December 31, Change

($ in millions) 2023 2022 $ %

Safety Services $ 4,871 $ 4,575 $ 296 6.5 %

Specialty Services 2,079 2,030 49 2.4 %

Corporate and Eliminations (22) (47) NM NM

$ 6,928 $ 6,558 $ 370 5.6 %

Segment Earnings

Year Ended December 31, Change

($ in millions) 2023 2022 $ %

Safety Services $ 664 $ 559 $ 105 18.8 %

Safety Services segment earnings as a % of net revenues 13.6 % 12.2 %

Specialty Services $ 239 $ 210 $ 29 13.8 %

Specialty Services segment earnings as a % of net revenues 11.5 % 10.3 %

Corporate and Eliminations $ (121) $ (96) NM NM

Adjusted EBITDA (non-GAAP) $ 782 $ 673 $ 109 16.2 %

NM = Not meaningful

The following discussion breaks down the net revenues and segment earnings by reportable segment for the years ended December 31, 2023 and 2022.

Safety Services

Safety Services net revenues for the year ended December 31, 2023 were $4,871 million compared to $4,575 million during the same period in the prior year.

The increase was driven by increased inspection, service, and monitoring revenue.

This increase was also due to continued strength in our end markets and strategic pricing improvements.

Safety Services segment earnings as a percentage of net revenues was 13.6% and 12.2% for the years ended December 31, 2023 and 2022, respectively.

The increase was primarily the result of planned disciplined project and customer selection, pricing improvements, and improved mix of inspection, service, and monitoring revenue, which generates higher margins.

Specialty Services

Specialty Services net revenues for the years ended December 31, 2023 and 2022 were $2,079 million and $2,030 million, respectively.

The increase was primarily due to strong growth in the service business during the year ended December 31, 2023 compared to the same period in the prior year.

The increase was partially offset by continued planned disciplined customer and project selection and customer project delays in the fabrication business.

Specialty Services segment earnings as a percentage of net revenues was 11.5% and 10.3% for the years ended December 31, 2023 and 2022, respectively.

The increase was primarily the result of planned disciplined project and customer selection during the year ended December 31, 2023 compared to the same period in 2022.

For a discussion of our financial condition and results of operations for the year ended December 31, 2023 and comparison to the year ended December 31, 2024, refer to the Management's Discussion and Analysis of Financial Condition and Results of Operations included in Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on May 2, 2025.

N ON -G AAP F INANCIAL M EASURES

We supplement our reporting of consolidated financial information determined in accordance with GAAP with SG&A expenses (excluding amortization and impairment) and adjusted EBITDA (defined below), which are non-GAAP financial measures.

We supplement our reporting of consolidated financial information determined in accordance with GAAP with SG&A expenses (excluding amortization) and adjusted EBITDA (defined below), which are non-GAAP financial measures.

We use these non-GAAP financial measures to evaluate our performance, both internally and as compared with our peers, because they exclude certain items that may not be indicative of our core operating results.

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These non-GAAP financial measures, however, have limitations as analytical tools and should not be considered in isolation from, a substitute for, or superior to, the related financial information that we report in accordance with GAAP.

The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by GAAP to be recorded in our financial statements and may not be comparable to similarly titled measures of other companies due to potential differences in calculation methods.

The principal limitation of these non-GAAP financial measures is that they exclude significant expenses, gains, and other non-recurring items that are required by GAAP to be recorded in our financial statements and may not be comparable to similarly titled measures of other companies due to potential differences in calculation methods.

In addition, these measures are subject to inherent limitations as they reflect the exercise of judgment by management about which items are excluded or included in determining these non-GAAP financial measures.

Investors are encouraged to review the following reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures and not to rely on any single financial measure to evaluate our business.

SG&A expenses (excluding amortization and impairment)

SG&A expenses (excluding amortization and impairment) is a measure of operating costs used by management to manage the business and its segments.

We believe this non-GAAP measure provides meaningful information and helps investors understand our operational selling, general, and administrative expenses excluding acquisition-related amortization expense and impairment charges to better enable investors to understand our financial results and assess our prospects for future performance.

The following tables present reconciliations of SG&A expenses to SG&A expenses (excluding amortization and impairment) for the periods indicated:

SG&A expenses (excluding amortization)

SG&A expenses (excluding amortization) is a measure of operating costs used by management to manage the business.

We believe this non-GAAP measure provides meaningful information and helps investors understand our core selling, general, and administrative expenses excluding acquisition-related amortization expense to better enable investors to understand our financial results and assess our prospects for future performance.

Table of Conten t s

The following tables present reconciliations of SG&A expenses to SG&A expenses (excluding amortization) for the periods indicated:

Year Ended December 31,

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Reported SG&A expenses $ 1,933 $ 1,694

Adjustments to reconcile SG&A expenses to SG&A expenses (excluding amortization and impairment)

Adjustments to reconcile SG&A expenses to SG&A expenses (excluding amortization)

Amortization expense (228) (216)

Impairment of goodwill, intangibles, and other assets — (12) —

SG&A expenses (excluding amortization and impairment) $ 1,478 $ 1,372 $ 1,355

SG&A expenses (excluding amortization) $ 1,705 $ 1,478

Adjusted EBITDA

Adjusted Earnings before interest, taxes, depreciation and amortization after adjustments for non-recurring items (“Adjusted EBITDA”) is the measure of profitability used by management.

Adjustments include expenses that are non-recurring in nature and that may not be indicative of the Company’s core operating results, including business transformation and other expenses for the integration of acquired businesses, the impact and results of businesses classified as assets held-for-sale and divested, and one-time and other infrequent events such as impairment charges, restructuring costs, transaction and other costs related to acquisitions, and non-service pension cost or benefit.

Adjusted earnings before interest, taxes, depreciation, and amortization (“adjusted EBITDA”) is the measure of profitability used by management to manage the business.

Adjustments include expenses that are non-recurring in nature and that may not be indicative of the Company’s core operating results, including systems and business enablement expenses, business process transformation expenses, and one-time and other infrequent events such as impairment charges, restructuring costs, transaction and other costs related to acquisitions and divestitures, non-service pension cost, and miscellaneous capital market activities.

We supplement the reporting of our consolidated financial information with adjusted EBITDA.

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Contingent consideration and compensation 2 3

Non-service pension cost (benefit) 22 (12) (42)

Inventory step-up — — 9

Non-service pension cost 19 22

Systems and business enablement 96 —

Business process transformation expenses 4 52

Acquisition related expenses 13 7 121

Loss (gain) on extinguishment of debt, net

Acquisition and divestiture related expenses 24 13

Restructuring program related costs 14 32

Other (8) 10 (2)

Adjusted EBITDA $ 1,041 $ 893

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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.

As of December 31, 2024, we had $993 million of total liquidity, comprising $499 million in cash and cash equivalents and $494 million ($500 million less outstanding letters of credit of approximately $6 million, which reduces availability) of available borrowings under our Revolving Credit Facility.

During 2022, we completed the Second Amendment to our credit agreement.

As part of this amendment, we entered into a $1,100 million seven-year incremental term loan ("2021 Term Loan"), the Revolving Credit Facility was upsized by $200 million to $500 million, the maturity date of the Revolving Credit Facility was extended five years, and the letter of credit limit was increased by $100 million to $250 million.

During 2023, we completed the Fourth Amendment to our credit agreement, repricing our 2019 Term Loan and 2021 Term Loan.

The repricing reduced the applicable margin on all outstanding amounts by 25 basis points.

Additionally, $422 million of the 2019 Term Loan was extended to the 2021 Term Loan and assumed all the same terms as the repriced 2021 Term Loan.

We made a repayment of $100 million on the 2019 Term Loan concurrent with the close of this transaction.

During the first quarter of 2024, we completed the Fifth Amendment to our credit agreement, upsizing our 2021 Term Loan by $300 million.

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, supply and material prices, market conditions, and inflation, over which we have no control.

As of December 31, 2025, we had $1,657 million of total liquidity, comprised of $912 million in cash and cash equivalents and $745 million ($750 million less outstanding letters of credit comprised of approximately $5 million, which reduce availability) of available borrowings under our Revolving Credit Facility.

Table of Conten t s

During 2024, we completed the Fifth Amendment to our credit agreement, upsizing our 2021 Term Loan by $300 million.

The loan proceeds were directed as consideration for a portion of the purchase price for the Series B Preferred Stock Conversion.

During the second quarter of 2024, we completed the Sixth Amendment to our credit agreement, upsizing and repricing the 2021 Term Loan and repaying the 2019 Term Loan.

We incurred approximately $550 million of incremental principal on our 2021 Term Loan.

The proceeds were used to repay the remaining $330 million of the 2019 Term Loan, repay $100 million of the Revolving Credit Facility outstanding, and for general corporate purposes, including to partially fund the Elevated acquisition.

During the second quarter of 2024, we issued 12,650,000 shares of Company common stock in a public underwritten offering.

We also completed the Sixth Amendment to our credit agreement, refinancing the 2021 Term Loan by increasing its principal amount and lowering the interest margin by 50 basis points.

The amendment also removed the credit spread adjustment.

In connection with this transaction, we added approximately $550 million of incremental principal on our 2021 Term Loan.

The proceeds were used to fully repay the remaining $330 million balance of the 2019 Term Loan, to pay down $100 million outstanding under the Revolving Credit Facility, and for general corporate purposes, including partial funding of the Elevated acquisition.

Additionally, we made a repayment of $100 million on the 2021 Term Loan.

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.

The net proceeds from this offering were used for general corporate purposes and to partially fund the Elevated acquisition.

During the fourth quarter of 2024, we made a repayment of $100 million on the 2021 Term Loan.

In February 2025, we completed the Seventh Amendment to our credit agreement, repricing the 2021 Term Loan.

We used the net proceeds from this offering for general corporate purposes, including acquisitions and other business opportunities, capital expenditures and working capital.

During the first quarter of 2025, we completed the Seventh Amendment to our credit agreement, repricing the 2021 Term Loan.

The repricing reduced the applicable margin on the 2021 Term Loan by 25 basis points.

During the second quarter of 2025, we completed the Eighth Amendment to our credit agreement, which increased the Revolving Credit Facility from $500 million to $750 million, extended the facility's maturity to five years from the date of the Eighth Amendment, reduced the applicable margin by 75 basis points, and eliminated the credit spread adjustment.

We expect to continue to be able to access the capital markets through equity and debt offerings for liquidity purposes as needed.

Our principal liquidity requirements have been, and we expect will continue to be, for working capital and general corporate purposes, including capital expenditures and debt service, identifying, executing, and integrating strategic acquisitions and business transformation transactions or initiatives, as well as any accrued consideration and compensation due to selling shareholders, including tax payments in connection therewith.

Our capital expenditures were approximately $84 million and $86 million in the years ended December 31, 2024 and 2023, respectively.

In 2022, our Board of Directors authorized a stock repurchase program, authorizing the purchase of up to an aggregate of $250 million, which expired in February 2024.

As a result of the program's expiration, on February 26, 2024, our Board of Directors authorized a stock repurchase program to purchase up to an aggregate of $1,000 million of shares of our common stock.

This stock repurchase program will expire when the authorized amount is exhausted, unless otherwise modified or terminated by our Board of Directors at any time in its sole discretion.

During the year ended December 31, 2024, we repurchased 16,260,160 shares of common stock for approximately $600 million.

As of December 31, 2024, we had approximately $400 million of authorized repurchases remaining under the stock repurchase program.

Our capital expenditures were $96 million and $84 million in the years ended December 31, 2025 and 2024, respectively.

During the second quarter of 2025, our Board of Directors authorized a new share repurchase program ("2025 SRP") to purchase up to $1 billion 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 ("2024 SRP").

Prior to the new authorization, we repurchased 3,095,573 shares of common stock for approximately $75 million under the 2024 SRP.

As of December 31, 2025, we had approximately $1 billion of authorized repurchases remaining under the 2025 SRP.

During 2024, our Board of Directors authorized the 2024 SRP to purchase up to an aggregate of $1 billion of shares of our common stock.

During the year ended December 31, 2024, we repurchased 24,390,240 shares of our common stock for approximately $600 million.

Table of Conten t s

The following table summarizes net cash flows with respect to our operating, investing, and financing activities for the periods indicated:

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Net cash used in investing activities (254) (829)

Net cash provided by (used in) financing activities 245 (532)

Net cash (used in) provided by financing activities (121) 245

Effect of foreign currency exchange rate change on cash, cash equivalents, and restricted cash 28 (15)

Net increase (decrease) in cash, cash equivalents, and restricted cash $ 21 $ (127)

Net increase in cash, cash equivalents, and restricted cash $ 412 $ 21

Cash, cash equivalents, and restricted cash, end of period $ 913 $ 501

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Net cash provided by operating activities was $759 million for the year ended December 31, 2025 compared to $620 million of cash provided in 2024.

The increase in cash provided by operating activities was primarily due to an increase in net income in the period.

This increase in cash was also driven by lower working capital needs associated with the various services we provided in 2024 compared to 2023.

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.

The increase in cash provided by operating activities was primarily due to an increase in net income and improvements in working capital efficiencies associated with the various services we provided in 2025 compared to 2024.

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.

Net cash used in investing activities

Net cash used in investing activities was $829 million and $115 million in the years ended December 31, 2024 and 2023, respectively.

During 2024, we completed the Elevated acquisition and several other acquisitions, resulting in the use of $778 million for acquisitions, compared to $83 million in 2023.

Net cash provided by (used in) financing activities

Net cash provided by financing activities was $245 million for the year ended December 31, 2024 compared to $532 million used in financing activities in 2023.

The increase in cash provided by financing activities was primarily driven by equity and debt issuances in 2024.

During 2024, cash provided by financing activities was higher due to $850 million of proceeds from the repricing and upsizing transactions of the 2021 Term Loan and $458 million of proceeds from the issuance of common shares.

The increase in cash used in financing activities in 2024 was partially offset by $437 million of payments on long-term borrowings and $600 million of share repurchases in connection with the conversion of the Series B Preferred Stock.

Net cash used in investing activities was $254 million for the year ended December 31, 2025 compared to $829 million for the same period in 2024.

This decrease is primarily driven by a decrease in net purchase considerations for acquisitions in the current year.

We had cash used in acquisitions, net of cash acquired of $186 million and $778 million in the years ended December 31, 2025 and 2024, respectively.

Net cash (used in) provided by financing activities

Net cash used in financing activities was $121 million for the year ended December 31, 2025 compared to $245 million of cash provided by financing activities in 2024.

The cash used in financing activities for the year ended December 21, 2025, was driven by $75 million of share repurchases, $21 million of restricted shares tendered for taxes, and $18 million of payments of acquisition-related consideration, while in the year ended December 31, 2024, cash provided by financing activities was driven by $850 million of proceeds from the repricing of the 2021 Term Loan, and $458 million of proceeds from the issuance of common shares, partially offset by $437 million of payments on long-term borrowings and $600 million of share repurchases in connection with the conversion of the Series B Preferred Stock.

Year ended December 31, 2024 versus year ended December 31, 2023

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Credit Agreement

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:

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.

In 2023, we completed repricing of our 2019 Term Loan and 2021 Term Loan.

The repricing reduced the applicable margin on all outstanding amounts by 25 basis points.

Additionally, $422 million of the 2019 Term Loan was extended to the 2021 Term Loan and assumed all the same terms as the repriced 2021 Term Loan.

During the first quarter of 2024, we completed the Fifth Amendment to our credit agreement, upsizing our 2021 Term Loan by an aggregate principal amount equal to $300 million.

We have entered into a 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 during 2025) of which up to $250 million can be used for the issuance of letters of credit.

Table of Conten t s

During the first quarter of 2025, we completed the Seventh Amendment to our credit agreement, repricing the 2021 Term Loan.

The repricing reduced the applicable margin on the 2021 Term Loan by 25 basis points.

During 2024, we completed the Fifth Amendment to our credit agreement, upsizing our 2021 Term Loan by $300 million.

The loan proceeds were directed as consideration for a portion of the purchase price for the Series B Preferred Stock Conversion.

During the second quarter of 2024, we completed the Sixth Amendment to our credit agreement, upsizing and repricing the 2021 Term Loan and repaying the 2019 Term Loan.

The repricing reduced the applicable margin on the 2021 Term Loan by 50 basis points and removed the credit spread adjustment ("CSA").

As part of the transaction, we incurred approximately $550 million of incremental principal our 2021 Term Loan.

As of December 31, 2024, the amended interest rate applicable to the 2021 Term Loan was, at our option, either (a) a base rate plus an applicable margin equal to 1.00% or (b) a Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 2.00%.

We also completed the Sixth Amendment to our credit agreement, refinancing the 2021 Term Loan by increasing its principal amount and lowering the interest margin by 50 basis points.

The amendment also removed the credit spread adjustment.

In connection with this transaction, we added approximately $550 million of incremental principal on our 2021 Term Loan.

Additionally, we made a repayment of $100 million on the 2021 Term Loan.

The amended interest rate applicable to the 2021 Term Loan is, at our option, either (a) a base rate plus an applicable margin equal to 0.75% or (b) a Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 1.75%.

The 2021 Term Loan matures on January 3, 2029.

Subject to certain exceptions, the 2021 Term Loan may be subject to mandatory prepayments using (i) proceeds from non-ordinary course asset dispositions, (ii) proceeds from certain incurrences of debt or (iii) a portion of the Company’s annual excess cash flows based upon certain leverage ratios.

Based on the early prepayments we have made, we do not owe any quarterly principal amounts for the remainder of the 2021 Term Loan.

In February 2025, we completed the Seventh Amendment to our credit agreement, repricing the 2021 Term Loan.

The repricing reduced the applicable margin on the 2021 Term Loan by 25 basis points.

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.

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 0.25% or (2) a Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 1.25%.

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;

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Our first lien net leverage ratio as of December 31, 2025 was 1.1:1.0.

During 2024, we made a repayment of $100 million to the 2021 Term Loan.

As a result, as of December 31, 2024, we had no principal outstanding under the 2019 Term Loan and $2,157 million of principal outstanding under the 2021 Term Loan.

As of December 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 $745 million was available after giving effect to $5 million of outstanding letters of credit, which reduces availability.

On June 22, 2021, APi Group DE completed a private offering of $350 million aggregate principal amount of 4.125% Senior Notes due 2029 (the “4.125% Senior Notes”), issued under an indenture, dated June 22, 2021.

The 4.125% Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by us and certain subsidiaries.

The 4.125% Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by us and certain of our subsidiaries.

The 4.125% Senior Notes will mature on July 15, 2029, unless redeemed earlier, and bear interest at a rate of 4.125% per year until maturity, payable semi-annually in arrears.

We used the net proceeds from the sale of the 4.125% Senior Notes to

repay the previously outstanding term loan, prepay a portion of the 2019 Term Loan and for general corporate purposes.

During the year ended December 31, 2022, we repurchased $13 million of outstanding principal amount of the 4.125% Senior Notes and recognized a net gain of $2 million on the debt extinguishment.

We used the net proceeds from the sale of the 4.125% Senior Notes to repay a previously outstanding term loan, prepay a portion of the 2019 Term Loan and for general corporate purposes.

As of December 31, 2025, we had $337 million aggregate principal amount of 4.125% Senior Notes outstanding.

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The 4.750% Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by us and certain of our subsidiaries.

The 4.750% Senior Notes will mature on October 15, 2029, unless earlier redeemed, and bear interest at a rate of 4.750% per year until maturity, payable semi-annually in arrears.

The 4.750% Senior Notes

Table of Conten t s

will mature on October 15, 2029, unless earlier redeemed, and bear interest at a rate of 4.750% per year until maturity, payable semi-annually in arrears.

We used the net proceeds from the sale of the 4.750% Senior Notes to finance a portion of the consideration for the Chubb acquisition.

During the year ended December 31, 2022, we repurchased $23 million of outstanding principal amount of the 4.750% Senior Notes and recognized a net gain of $3 million on the debt extinguishment.

As of December 31, 2025, we had $277 million aggregate principal amount of 4.750% Senior Notes outstanding.

Debt Covenants

As of December 31, 2024 and 2023, we were in compliance with all covenants contained in the indentures governing the 4.125% Senior Notes and 4.750% Senior Notes and the Credit Agreement.

We were in compliance with all covenants contained in the indentures governing the 4.125% Senior Notes, 4.750% Senior Notes, and the Credit Agreement as of December 31, 2025 and 2024.

Issuance and Conversion of Series B Preferred Stock

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The net proceeds from the Series B Preferred Stock issuance were used to fund a portion of the consideration for the Chubb acquisition.

On February 28, 2024, we entered into a Conversion and Repurchase Agreement with Juno Lower Holdings L.P.

During 2024, we entered into a Conversion and Repurchase Agreement with Juno Lower Holdings L.P.

("Juno Lower Holdings"), FD Juno Holdings L.P.

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• Tax Obligations – See Note 14 – "Income Taxes."

• Pension obligations – See Note 16 – "Pension."

We make investments in our properties and equipment to enable continued expansion and effective performance of our business.

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See Note 3 – “Recent Accounting Pronouncements” for further information regarding new accounting standards, including the anticipated dates of adoption and the effects on our consolidated financial position, results of operations or liquidity.

Table of Conten t s

C RITICAL A CCOUNTING E STIMATES

The preparation of financial statements and related disclosures in conformity with U.S.

generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and income and expenses during the periods reported.

The preparation of financial statements and related disclosures in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and income and expenses during the periods reported.

Actual results could materially differ from those estimates.

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We have a right to payment for performance completed to date at any time throughout our performance of a contract, including in the event of a cancellation, and as such, revenue is recognized over time.

These performance obligations use the cost-to-cost input method to measure our progress towards complete satisfaction of the performance

obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on the contracts.

These performance obligations use the cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on the contracts.

Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised on an on-going basis.

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When the current estimate of total costs for a performance obligation indicates a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident.

Table of Conten t s

The timing of revenue recognition may differ from the timing of invoicing to customers.

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Contract liabilities from our long-term construction contracts arise when amounts invoiced to our customers exceed net revenues recognized under the cost-to-cost measure of progress.

Contract liabilities additionally include advanced payments from our customers on certain contracts.

Contract liabilities additionally include advance payments from our customers on certain contracts.

Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation and are recorded as either current or long-term, depending upon when we expect to recognize such revenue.

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Goodwill is required to be evaluated for impairment at the reporting unit level, which represents the operating segment level or one level below the operating segment level for which discrete financial information is available.

We perform our annual goodwill impairment assessment on October 1 each fiscal year, or more frequently if events or circumstances arise which indicate that goodwill may be impaired.

Table of Conten t s

We perform our annual goodwill impairment assessment on October 1st each fiscal year, or more frequently if events or circumstances arise which indicate that goodwill may be impaired.

Accounting standards for testing goodwill for impairment require the application of either a qualitative or quantitative assessment to analyze whether or not goodwill has been impaired.

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If the carrying amount exceeds fair value, then an impairment loss would be recognized in an amount equal to that excess, limited to the amount of goodwill allocated to that reporting unit.

Quantitative testing performed is based on the estimated fair value using a combination of market and income approaches.

Quantitative testing is based on the estimated fair value using a combination of market and income approaches.

Under the market approach, fair values were estimated using published market multiples for comparable companies and applying them to revenue and EBITDA.

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For the year ended December 31, 2025, we performed our annual goodwill impairment assessment as of October 1, 2025.

We had total goodwill of $2,894 million as December 31, 2024.

We had total goodwill of $3,167 million as of December 31, 2025.

Based on the annual test, no goodwill impairment was indicated for any of the reporting units:

North American Life Safety, International Life Safety, Heating, Ventilation and Air Conditioning ("HVAC"), Infrastructure/Utility, Fabrication, and Specialty Contracting.

While we believe we have made reasonable estimates and assumptions to calculate the fair values of the reporting units, it is possible changes could occur.

North American Life Safety, International Life Safety, Infrastructure and Utility, Fabrication and Distribution, and Specialty Contracting.

While we believe we have made reasonable estimates and judgments about the fair values of the reporting units, it is possible changes could occur.

We will continue to monitor reporting units in 2026 for any triggering events or other indicators of impairment.

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During 2024, we entered into a $720 million notional amount forward starting interest rate swap commencing in October 2026 and maturing in January 2029 that exchanges a variable rate of interest (SOFR) for an average fixed rate of interest of approximately 3.13% over the term of the agreement.

The remaining floating rate portfolio will bear interest based on one-month SOFR plus 200 basis points.

As of December 31, 2024, excluding letters of credit outstanding of $6 million, we had no outstanding revolving loans under our Credit Agreement.

The remaining floating rate portfolio bears interest based on one-month SOFR plus 175 basis points.

Table of Conten t s

December 31, 2025, excluding letters of credit outstanding of $5 million, we had no amounts of outstanding revolving loans under our Credit Agreement.

A one percentage point increase in the average interest rate on our floating rate debt at December 31, 2025 would increase future interest expense by approximately $10 million per year.

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Translation gains or losses, which are recorded in accumulated other comprehensive loss in the consolidated balance sheets, result from translation of the assets and liabilities of our foreign subsidiaries into U.S.

Foreign currency translation (losses) gains totaled approximately $(107) million, $61 million, and $(164) million for the years ended December 31, 2024, 2023, and 2022, respectively.

Our exposure to fluctuations in foreign currency exchange rates has increased as a result of our international presence and may continue to increase in the future if we continue to expand our operations outside of the U.S.

Foreign currency translation gains (losses) totaled approximately $176 million, $(107) million, and $61 million for the years ended December 31, 2025, 2024, and 2023, respectively.

We are exposed to fluctuations in foreign currency exchange rates due to our international presence.

Our exposure may continue to increase in the future if we continue to expand our operations outside of the U.S.

We seek to manage foreign currency exposure by minimizing our consolidated net assets and liability positions in currencies other than the functional currency of our foreign subsidiaries.

However, we believe that our exposure to transactional gains or losses resulting from fluctuations 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 order to manage foreign currency risk related to transactions in foreign currencies and the intercompany financing structure, we entered into cross-currency swaps to manage the foreign currency risk of certain intercompany loans.

We also use foreign currency forward contracts as a way to mitigate foreign currency exposure.

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We continually monitor the creditworthiness of our customers and maintain ongoing discussions with customers regarding contract status with respect to change orders and billing terms.

Therefore, management believes it takes appropriate action to manage market and other risks, but there is no assurance management will be able to reasonably identify all risks with respect to the collectability of these assets.

Therefore, management believes it takes appropriate action to manage market and other risks, but there is no assurance we will be able to reasonably identify all risks with respect to the collectability of these assets.

See also “Revenue Recognition from Contracts with Customers” under Critical Accounting Estimates within Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

In addition, we are exposed to various supply chain risks, including market risk of fluctuations or availability of copper, steel, cable optic fiber, and other materials used as components of supplies or materials utilized in our operations.

In addition, we are exposed to various supply chain risks, including the market risk of price fluctuations or availability of copper, steel, cable optic fiber, and other materials used as components of supplies or materials utilized in our operations.

We are also exposed to increases in energy prices, particularly as they relate to gasoline prices for our vehicle fleet.

Disruptions in our supply chain can occur due to market inefficiencies but can also be driven by other events, like cybersecurity breaches, pandemics, or similar disruptive events.

While we believe we can increase our contract prices to

adjust for some price increases in commodities, there can be no assurance that such price increases, if they were to occur, would be recoverable.

While we believe we can increase our contract prices to adjust for some price increases in commodities, there can be no assurance that such price increases, if they were to occur, would be recoverable.

Additionally, some of our fixed price contracts do not allow us to adjust prices and, as a result, increases in material costs could reduce profitability with respect to projects in progress.

Significant declines in market prices for oil and gas and other fuel sources may also impact our operations.

Prolonged periods of low oil and gas prices may result in projects being delayed or canceled and in a low oil and gas price environment, certain of our businesses could become less profitable or incur losses.

Table of Conten t s

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis