What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-01 · 114 added, 78 removed, 194 unchanged (50% of the section changed)

26 unchanged sentences

Funding for our public work projects, which account for approximately 80% of our portfolio, is dependent on federal, state, regional and local revenues.

At the federal level, the continued rollout of the $1.2 trillion Infrastructure Investment and Jobs Act (“IIJA”) has increased federal highway, bridge and transit funding to its highest level in more than six decades with $550 billion in incremental funding over five years.

The increased multi-year spending commitment has improved the programming visibility for state and local governments and has driven an increase in project lettings that started in 2023, continued in 2024 and we believe will carry into 2025 and beyond.

At the federal level, the $1.2 trillion Infrastructure Investment and Jobs Act (“IIJA”) has increased federal highway, bridge and transit funding to its highest level in more than six decades with $550 billion in incremental funding over five years.

The increased multi-year spending commitment improved the programming visibility for state and local governments and drove an increase in project lettings that started in 2023, and has continued through 2025.

With the IIJA ending in September of 2026, discussions are already underway in Congress concerning a replacement bill.

At state, regional and local levels, voter-approved state and local transportation measures continue to support infrastructure spending.

While each market is unique, we see a strong funding environment at the state and local levels aided by the IIJA.

In California, our top revenue-generating state, despite overall budgetary concerns, a significant part of the state infrastructure spend is funded through Senate Bill 1 (SB-1), the Road Repair and Accountability Act of 2017, a 10-year, $54.2 billion program, which may only be used for transportation-related purposes, without any sunset provisions.

In California, our top revenue-generating state, despite overall budgetary concerns, a significant part of the state

infrastructure spend is funded through Senate Bill 1 (SB-1), the Road Repair and Accountability Act of 2017, a 10-year, $54.2 billion program, which may only be used for transportation-related purposes, without any sunset provisions.

Over the last several years, inflation, supply chain and labor constraints have had a significant impact on the global economy including Granite and others in the construction industry in the United States.

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However, where practicable, we have applied proactive measures to mitigate these macro-economic factors, such as fixed forward purchase contracts of oil related inputs, energy surcharges, and adjustment of project schedules for constraints related to construction materials such as concrete.

Our Committed and Awarded Projects (“CAP”) balance continues to be strong with $5.7 billion at the end of the first quarter of 2025.

Our CAP is supported by a positive public funding environment and resilient private market which we believe will provide further opportunities for continued CAP growth.

Our Committed and Awarded Projects (“CAP”) balance continues to be strong with $6.1 billion at the end of the second quarter of 2025.

Our CAP is supported by a positive public funding environment and strength in the private markets we serve, which we believe will provide further opportunities for continued CAP growth.

Warren Paving

On August 5, 2025, we completed the acquisition of Slats Lucas, LLC and Warren Paving, Inc.

(collectively, “Warren Paving”) for $540.0 million, subject to customary closing adjustments.

Warren Paving is a vertically-integrated asphalt contractor and aggregate producer with operations along the Gulf Coast and Mississippi River.

This acquisition aligns with our strategy to expand our presence into new geographies with future growth opportunities while supporting our existing operations, particularly the Materials segment.

Papich Construction

On August 5, 2025, we completed the acquisition of Papich Construction Company, Inc.

(“Papich Construction”) for $170.0 million, subject to customary closing adjustments.

Papich Construction is a provider of construction services and materials in California’s Central Coast and Central Valley regions.

This acquisition aligns with our strategy of enhancing our vertical integration by strengthening our existing home markets.

On August 5, 2025, we entered into the Fifth Amended and Restated Credit Agreement (the “A&R Credit Agreement”), which provides for (1) a $600.0 million senior secured revolving credit facility (the “Revolver”), (2) a $600.0 million senior secured term loan (the “Initial Term Loan”) and (3) an additional $75.0 million senior secured term loan.

The Warren Paving and Papich Construction acquisitions were funded with proceeds from the Initial Term Loan, a $10.0 million draw on our Revolver and from cash on hand.

The results of Warren Paving and Papich Construction will be included in our consolidated results beginning in the third quarter of 2025.

Dickerson & Bowen, Inc.

As previously disclosed, we acquired Dickerson & Bowen, Inc.

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Therefore, the results of operations of a given quarter are not indicative of the results to be expected for the full year.

The following table presents a financial summary for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

The following table presents a financial summary for the three and six months ended June 30, 2025 and 2024:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2025 2024 2025 2024

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Other costs, net $ 13,253 $ 10,225 $ 22,679 $ 21,235

Operating loss $ (39,751) $ (43,300)

Operating income $ 103,565 $ 85,821 $ 63,814 $ 42,521

Total other (income) expense, net $ (3,994) $ 26,271 $ (3,662) $ 21,939

Amount attributable to non-controlling interests $ (8,645) $ (1,962) $ (13,974) $ (3,503)

Net loss attributable to Granite Construction Incorporated $ (33,656) $ (30,983)

Net income attributable to Granite Construction Incorporated $ 71,700 $ 36,895 $ 38,044 $ 5,912

Total Revenue by Segment

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(dollars in thousands) 2025 2024 2025 2024

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Construction Revenue

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(dollars in thousands) 2025 2024 2025 2024

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Total $ 937,426 100.0 % $ 917,954 100.0 % $ 1,552,044 100.0 % $ 1,513,167 100.0 %

Construction revenue for the three months ended March 31, 2025 increased by $19.4 million, or 3.3%, when compared to 2024.

This increase was primarily due to several new projects ramping up in the current year as well as favorable weather conditions in early 2025.

Additionally, D&B contributed $10.1 million of construction revenue during the three months ended March 31, 2025.

Construction revenue for the three and six months ended June 30, 2025 increased by $19.5 million and $38.9 million, or 2.1% and 2.6%, respectively, when compared to 2024.

This increase was primarily driven by $17.1 million and $27.2 million of construction revenue from the recently acquired D&B business during the three and six months ended June 30, 2025, respectively.

Our remaining Construction revenue was consistent year-over-year as increases from new projects were largely offset by projects completed in the second half of the prior year.

With increased CAP as of the end of the second quarter, compared to the same period in the prior year, we expect Construction revenue to accelerate in the second half of the year.

Materials Revenue

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(dollars in thousands) 2025 2024 2025 2024

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Total $ 188,538 100.0 % $ 164,532 100.0 % $ 273,467 100.0 % $ 241,594 100.0 %

Materials revenue for the three months ended March 31, 2025 was $84.9 million, an increase of $7.9 million, or 10.2%, when compared to the three months ended March 31, 2024.

This increase was primarily driven by $5.6 million of revenue from D&B, as well as higher aggregates and asphalt volumes and higher aggregates sales prices.

Materials revenue for the three and six months ended June 30, 2025 increased $24.0 million and $31.9 million, or 14.6% and 13.2%, when compared to 2024.

This increase was primarily driven by higher aggregates and asphalt volumes and higher aggregate sales prices.

Additionally, D&B contributed $5.6 million and $11.1 million of materials revenue for the three and six months ended June 30, 2025, respectively.

Committed and Awarded Projects

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All CAP is in the Construction segment.

(dollars in thousands) March 31, 2025 December 31, 2024

(dollars in thousands) June 30, 2025 March 31, 2025 December 31, 2024

Unearned revenue $ 4,113,553 67.8 % $ 3,833,875 66.8 % $ 3,584,378 67.7 %

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Total $ 6,064,431 100.0 % $ 5,740,015 100.0 % $ 5,296,067 100.0 %

(dollars in thousands) March 31, 2025 December 31, 2024

(dollars in thousands) June 30, 2025 March 31, 2025 December 31, 2024

Customer type:

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Total $ 6,064,431 100.0 % $ 5,740,015 100.0 % $ 5,296,067 100.0 %

CAP of $5.7 billion at March 31, 2025 was $443.9 million or 8.4% higher than at December 31, 2024.

Significant additions to CAP during the three months ended March 31, 2025 included $173 million for three highway projects in California,

$167 million for two federal projects, a $138 million bridge project in Illinois, an $80 million highway project in Texas, and $78 million for a bridge project in California, all of which are for customers in the public sector.

Non-controlling partners’ share of CAP as of March 31, 2025 and December 31, 2024 was $334.7 million and $331.1 million, respectively.

At March 31, 2025, one contract with remaining CAP of $10 million or more per project had total forecasted losses with remaining revenue of $57.7 million, or 1.0%, of total CAP.

CAP of $6.1 billion at June 30, 2025 was $324.4 million or 5.7% higher than at March 31, 2025.

Significant additions to CAP during the three months ended June 30, 2025 included $292 million for three water infrastructure projects in Nevada, $141 million for two airport projects in California, $111 million for a road and bridge rehabilitation project in Utah, $90 million for two road rehabilitation projects in Nevada and $54 million for a highway project in Alaska.

All of these projects are in the public sector.

Non-controlling partners’ share of CAP as of June 30, 2025, March 31, 2025 and December 31, 2024 was $300.1 million, $334.7 million and $331.1 million, respectively.

At June 30, 2025, one contract with remaining CAP of $10 million or more per project had total forecasted losses with remaining revenue of $49.7 million, or 0.8%, of total CAP.

Provisions are recognized in the consolidated statements of operations for the full amount of estimated losses on uncompleted contracts whenever evidence indicates that the estimated total cost of a contract exceeds its estimated total revenue.

The following table presents gross profit (loss) by reportable segment for the respective periods:

Three Months Ended March 31,

The following table presents gross profit by reportable segment for the respective periods:

Three Months Ended

June 30, Six Months Ended

(dollars in thousands) 2025 2024 2025 2024

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Percent of total revenue 17.7 % 15.2 % 15.5 % 12.5 %

Construction gross profit for the three months ended March 31, 2025 increased by $28.6 million, or 50.3%, when compared to 2024 primarily due to higher revenue and improved project execution across our project portfolio resulting in net increases from revisions in estimates in the current period compared to net decreases in the prior period.

Construction gross profit for the three and six months ended June 30, 2025 increased by $18.3 million and $46.9 million, or 13.5% and 24.4%, respectively, when compared to 2024 primarily due to improved project execution across our project portfolio as well as net increases from revisions in estimates due to claim settlements.

For further discussion of projects with revisions in estimates which individually had an impact of $5.0 million or more on gross profit, see Note 4 of "Notes to the Condensed Consolidated Financial Statements."

Materials gross loss for the three months ended March 31, 2025 decreased by $1.0 million, or 37.5%, when compared to 2024.

The decreased loss was primarily due to the newly acquired D&B business.

Materials gross profit for the three and six months ended June 30, 2025 increased by $16.1 million, or 54.9%, and $17.0 million, or 63.6%, respectively, when compared to 2024.

The increased profit was primarily driven by higher aggregates and asphalt volumes and higher aggregate sales prices.

Selling, General and Administrative Expenses

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(dollars in thousands)

Salaries and related expenses $ 45,992 $ 39,981 $ 101,408 $ 86,030

Incentive compensation 6,397 2,220 7,065 3,403

Stock-based compensation 2,126 1,753 32,179 14,104

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As projects are completed or the volume of work slows down, we temporarily redeploy project employees to bid on new projects, moving their salaries and related costs from cost of revenue to selling expenses.

SG&A expenses for the three months ended March 31, 2025 increased $27.9 million compared to 2024, primarily due to a $17.7 million increase in stock-based compensation due to improved financial performance, as well as higher salaries and related expenses due to increased labor costs.

SG&A expenses for the three months ended June 30, 2025 increased $15.8 million compared to the same period in 2024, primarily due to $6.0 million of higher salaries and related expenses due to increased labor costs and a $4.2 million increase in incentive compensation due to improved financial performance.

SG&A expenses for the six months ended June 30, 2025 increased $43.8 million compared to the same period in 2024, primarily due to an $18.1 million increase in stock-based compensation due to improved financial performance, as well as $15.4 million of higher salaries and related expenses due to increased labor costs.

Other Costs, net

The following table presents other costs, net for the respective periods:

Three Months Ended March 31,

Three Months Ended

June 30, Six Months Ended

(in thousands) 2025 2024 2025 2024

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Other costs, net mainly consist of costs related to the defense of a former Company officer in his ongoing civil litigation with the Securities and Exchange Commission, and remained fairly consistent with the prior year.

Other Income, net

Three Months Ended March 31,

The year over year increase was primarily due to acquisition-related costs in the current year.

See Note 1 and Note 3 of the "Notes to the Condensed Consolidated Financial Statements" for information on our recent acquisitions.

Other (Income) Expense, net

The following table presents other (income) expense, net for the respective periods:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2025 2024 2025 2024

Loss on debt extinguishment — 27,824 — 27,824

Interest income $ (5,761) $ (3,600) $ (12,029) $ (10,302)

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Equity in income of affiliates, net (3,698) (4,557) (4,792) (8,527)

Other income, net (63) (1,743)

Other (income) expense, net (2,462) 1,267 (2,525) (476)

Total other (income) expense, net $ (3,994) $ 26,271 $ (3,662) $ 21,939

During the three months ended March 31, 2025, total other income, net decreased $4.7 million compared to prior year.

This decrease was primarily due to a decrease of $2.9 million in Equity in income of affiliates, net due to reduced net income of our affiliates and a $1.7 million decrease from Other income, net primarily due to lower gains on investments held within the rabbi trust related to our non-qualified deferred compensation plan obligations.

The fluctuations in these investments mostly offset variances in our non-qualified deferred compensation plan expense in SG&A.

The following table presents the benefit from income taxes for the respective periods:

Three Months Ended March 31,

During the three and six months ended June 30, 2025, total other income, net improved $30.3 million and $25.6 million, respectively, compared to prior year.

This change was primarily due to the $27.8 million loss on debt extinguishment in 2024 that did not reoccur in 2025.

The following table presents the provision for income taxes for the respective periods:

Three Months Ended

June 30, Six Months Ended

(dollars in thousands) 2025 2024 2025 2024

Benefit from income taxes $ (11,756) $ (9,526)

Provision for income taxes $ 27,214 $ 20,693 $ 15,458 $ 11,167

Effective tax rate 25.3 % 34.7 % 22.9 % 54.3 %

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The effect of changes in enacted tax laws, tax rates or tax status is recognized in the interim period in which the change occurs.

On July 4, 2025, Public Law No.

119-21 known as the “One Big Beautiful Bill Act” (“OBBBA”) was signed into law.

The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act of 2017.

The effects of the new law are not reflected in the consolidated financial statements as of and for the period ended June 30, 2025 because the legislation was enacted in July.

We are currently evaluating the effect of this legislation on our financial statements.

See Note 16 of "Notes to the Condensed Consolidated Financial Statements" for more information.

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The following table presents the amount attributable to non-controlling interests in consolidated subsidiaries for the respective periods:

Three Months Ended March 31,

Three Months Ended

June 30, Six Months Ended

(in thousands) 2025 2024 2025 2024

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The amount attributable to non-controlling interests represents the non-controlling owners’ share of the net (income) or loss of our consolidated construction joint ventures.

During the three months ended March 31, 2025 the increase was primarily due to the impact of new joint venture projects.

During the three and six months ended June 30, 2025 the increase was primarily due to increased profitability on joint venture projects.

Liquidity and Capital Resources

Our primary sources of liquidity are cash and cash equivalents, investments, available borrowing capacity under our credit facility and cash generated from operations.

We may also from time-to-time issue and sell equity, debt or hybrid securities

or engage in other capital markets transactions or sell one or more business units or assets.

See Note 14 of the "Notes to the Condensed Consolidated Financial Statements" for information on our long-term debt.

Our primary sources of liquidity are cash and cash equivalents, investments, available borrowing capacity under our A&R Credit Agreement (See Note 1 and Note 14 of the "Notes to the Condensed Consolidated Financial Statements" for information on our A&R Credit Agreement) and cash generated from operations.

We may also from time-to-time issue and sell equity, debt or hybrid securities or engage in other capital markets transactions or sell one or more business units or assets.

See Note 1 and Note 14 of the "Notes to the Condensed Consolidated Financial Statements" for information on our long-term debt.

Our material cash requirements include paying the costs and expenses associated with our operations, servicing outstanding indebtedness, making capital expenditures and paying dividends on our capital stock.

We may also from time to time prepay or repurchase outstanding indebtedness, repurchase shares of our common stock or acquire assets or businesses that are complementary to our operations.

See Note 3 of “Notes to the Condensed Consolidated Financial Statements” for information on our most recent acquisition.

See Note 1 and Note 3 of “Notes to the Condensed Consolidated Financial Statements” for information on our recent acquisitions.

We believe our primary sources of liquidity will be sufficient to meet our expected working capital needs, capital expenditures, financial commitments, cash dividend payments and other liquidity requirements associated with our existing operations for the next twelve months.

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However, there can be no assurance that sufficient capital will continue to be available or that it will be available on terms acceptable to us.

As of March 31, 2025, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions and marketable securities consisting of commercial paper, corporate notes and bonds, Municipal notes and bonds and U.S.

As of June 30, 2025, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions and marketable securities consisting of commercial paper, corporate notes and bonds, Municipal notes and bonds and U.S.

Government and agency obligations.

As of March 31, 2025, the total unused availability under our Credit Agreement was $330.4 million, resulting from $19.6 million in issued and outstanding letters of credit and nothing drawn under the Revolver.

See Note 14 of “Notes to the Condensed Consolidated Financial Statements.”

As of June 30, 2025, the total unused availability under our Credit Agreement was $330.4 million, resulting from $19.6 million in issued and outstanding letters of credit and nothing drawn under the Prior Revolver.

On August 5, 2025, we entered into the A&R Credit Agreement, which provides for (1) a $600.0 million Revolver, (2) a $600.0 million Initial Term Loan and (3) an additional $75.0 million senior secured term loan.

As of the date of this report, the total unused availability under the Revolver is $570.4 million, resulting from $19.6 million in issued and outstanding letters of credit and $10.0 million of outstanding revolving loans.

As of the date of this report, the $600.0 million Initial Term Loan is outstanding, the proceeds of which were used to fund our acquisitions.

See Note 1 and Note 14 of “Notes to the Condensed Consolidated Financial Statements.”

In evaluating our liquidity position and needs, we also consider cash and cash equivalents held by our consolidated construction joint ventures (“CCJVs”).

The following table presents our cash, cash equivalents and marketable securities, including amounts from our CCJVs, as of the respective dates:

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

Cash and cash equivalents excluding CCJVs $ 145,821 $ 404,436

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(2) All marketable securities were classified as held-to-maturity and consisted of commercial paper, corporate notes and bonds, Municipal notes and bonds and U.S.

Government and agency obligations as of March 31, 2025 and U.S.

Government and agency obligations as of June 30, 2025 and U.S.

Government and agency obligations as of December 31, 2024.

Granite’s portion of CCJV cash and cash equivalents was $101.4 million and $106.0 million as of March 31, 2025 and December 31, 2024, respectively.

Excluded from the table above is $34.5 million and $28.7 million as of March 31, 2025 and December 31, 2024, respectively, of Granite’s portion of unconsolidated construction joint venture cash and cash equivalents.

Granite’s portion of CCJV cash and cash equivalents was $108.9 million and $106.0 million as of June 30, 2025 and December 31, 2024, respectively.

Excluded from the table above is $35.6 million and $28.7 million as of June 30, 2025 and December 31, 2024, respectively, of Granite’s portion of unconsolidated construction joint venture cash and cash equivalents.

Capital Expenditures

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The timing and amount of such expenditures can vary based on the progress of planned capital projects, the type and size of construction projects, changes in business outlook and other factors.

During the three months ended March 31, 2025, we had capital expenditures of $32.2 million, compared to $27.9 million during the three months ended March 31, 2024.

During the six months ended June 30, 2025, we had capital expenditures of $61.0 million, compared to $66.9 million during the six months ended June 30, 2024.

We currently anticipate 2025 capital expenditures to be approximately $140 million to $160 million, including approximately $50 million in planned strategic materials investments.

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands) 2025 2024

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While we typically invoice our customers on a monthly basis, our construction contracts frequently provide for retention that is a specified percentage withheld from each payment by our customers until the contract is completed and the work accepted by the customer.

Cash provided by operating activities of $3.6 million for the three months ended March 31, 2025 represents a $20.4 million decrease in cash provided by operating activities when compared to the same period of 2024.

The change was primarily attributable to a $33.3 million decrease in cash provided by working capital, which includes receivables, net contract assets, inventories, other assets, accounts payable and accrued expenses and other liabilities.

Cash provided by operating activities of $5.4 million for the six months ended June 30, 2025 represents a $16.6 million decrease in cash provided by operating activities when compared to the same period of 2024.

The change was primarily attributable to a $38.5 million decrease in cash provided by working capital, which includes receivables, net contract assets,

inventories, other assets, accounts payable and accrued expenses and other liabilities.

Additionally, distributions from, net of contributions to, unconsolidated construction joint ventures and affiliates decreased $17.5 million when compared to the same period of 2024.

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Investing activities

Cash used in investing activities of $156.3 million for the three months ended March 31, 2025 represents a $145.5 million increase in cash used in investing activities when compared to the same period of 2024.

The change was primarily due to $134.7 million in purchases of marketable securities along with $12.9 million less in maturities of marketable securities.

There was also $4.3 million more in property and equipment purchases compared to the same period in 2024.

Partially offsetting these increases was $6.1 million in cash paid for purchase price adjustments on an acquisition in 2024 that did not occur in 2025.

Cash used in investing activities of $207.3 million for the six months ended June 30, 2025 represents a $157.1 million increase in cash used in investing activities when compared to the same period of 2024.

The change was primarily due to $172.6 million in purchases of marketable securities, partially offset by $13.2 million in cash paid for purchase price adjustments on an acquisition in 2024 that did not occur in 2025.

Financing activities

Cash used in financing activities of $46.6 million for the three months ended March 31, 2025 represents a $62.6 million decrease in cash used in financing activities when compared to the same period of 2024.

The change was primarily due to repayment of the balance drawn on our revolving credit facility in 2024, which had $100.0 million outstanding as of December 31, 2023.

See Note 14 of the “Notes to the Condensed Consolidated Financial Statements” for further information about our credit facility.

This decrease was partially offset by an increase in distributions to non-controlling partners, net of contributions, of $31.5 million and a $7.8 million increase in repurchases of common stock.

Cash used in financing activities of $54.5 million for the six months ended June 30, 2025 represents a $31.6 million increase in cash used in financing activities when compared to the same period of 2024.

The change was primarily due to increased distributions to non-controlling partners, net of contributions of $27.9 million as well as a decrease in proceeds from debt issuances, net of debt repayments and related charges of $8.8 million.

This increase was partially offset by a $5.8 million decrease in repurchases of common stock.

We recognize derivative instruments as either assets or liabilities in the condensed consolidated balance sheets at fair value using Level 2 inputs.

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We are generally required to provide various types of surety bonds that provide an additional measure of security under certain public and private sector contracts.

At March 31, 2025, approximately $3.6 billion of our $5.7 billion CAP was bonded.

At June 30, 2025, approximately $3.9 billion of our $6.1 billion CAP was bonded.

Performance bonds do not have stated expiration dates;

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Covenants and Events of Default

Our Credit Agreement requires us to comply with various affirmative, restrictive and financial covenants, including the financial covenants described below.

Our failure to comply with these covenants would constitute an event of default under the Credit Agreement.

Our A&R Credit Agreement requires us to comply with various affirmative, restrictive and financial covenants, including the financial covenants described below.

Our failure to comply with these covenants would constitute an event of default under the A&R Credit Agreement.

Additionally, the 3.25% Convertible Notes and 3.75% Convertible Notes are governed by the terms and conditions of their respective indentures.

Our failure to pay principal, interest or other amounts when due or within the relevant grace period on our 3.25% Convertible Notes, our 3.75% Convertible Notes or our Credit Agreement would constitute an event of default under the 3.25% Convertible Notes indenture, the 3.75% Convertible Notes indenture or the Credit Agreement.

A default under our Credit Agreement could result in (i) us no longer being entitled to borrow under such facility;

(ii) termination of such facility;

Our failure to pay principal, interest or other amounts when due or within the relevant grace period on our 3.25% Convertible Notes, our 3.75% Convertible Notes or our A&R Credit Agreement would constitute an event of default under the 3.25% Convertible Notes indenture, the 3.75% Convertible Notes indenture or the A&R Credit Agreement.

A default under our A&R Credit Agreement could result in (i) us no longer being entitled to borrow under such facility;

(ii) the termination of such facility;

(iii) the requirement that any letters of credit under such facility be cash collateralized;

(iv) acceleration of amounts owed under the Credit Agreement;

and/or (v) foreclosure on any collateral securing the obligations under such facility.

(iv) the acceleration of amounts owed under the A&R Credit Agreement;

and/or (v) the foreclosure on any collateral securing the obligations under such facility.

A default under the 3.25% Convertible Notes indenture or the 3.75% Convertible Notes indenture could result in acceleration of the maturity of the notes.

The most significant financial covenants under the terms of our Credit Agreement require the maintenance of a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio.

As of March 31, 2025, we were in compliance with the covenants in the Credit Agreement.

The financial covenants under the terms of the Credit Agreement and our A&R Credit Agreement require the maintenance of a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio.

As of June 30, 2025, we were in compliance with the covenants in the Credit Agreement.

Share Repurchase Program

As announced on February 3, 2022, on February 1, 2022, the Board of Directors authorized us to purchase up to $300.0 million of our common stock at management’s discretion (the “2022 authorization”).

There were 200 shares repurchased under the 2022 authorization in the three months ended March 31, 2025 and $189.5 million remained available under the 2022 authorization as of March 31, 2025.

There were 200 shares repurchased under the 2022 authorization in the six months ended June 30, 2025, and $189.5 million remained available under the 2022 authorization as of June 30, 2025.

The specific timing and amount of any future repurchases will vary based on market conditions, securities law limitations and other factors.

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no material change in our exposure to market risk from what was previously disclosed in our Annual Report except as disclosed in Note 9 of “Notes to the Condensed Consolidated Financial Statements” regarding diversification of our investment portfolio.

As of June 30, 2025, there has been no material change in our exposure to market risk from what was previously disclosed in our Annual Report except as disclosed in Note 9 of “Notes to the Condensed Consolidated Financial Statements” regarding diversification of our investment portfolio.

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-Q

Item 2. Management’s Discussion and Analysis