What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-02-11 compared with 2025-02-11 · 211 added, 133 removed, 915 unchanged (27% of the section changed)

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List of Exhibits

3.1 Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 29, 2018).

3.1 Amended and Restated Certificate of Incorporation of Insperity, Inc.

(incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 23, 2024).

3.2 Amended and Restated Bylaws of Insperity, Inc.

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4.1 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1 (No.

4.2 Description of Registrant’s Common Stock (incorporated by reference to Exhibit 4.2 to the Registrant’s Form 10-K for the year ended December 31, 2019) .

4.2 Description of Registrant’s Common Stock (incorporated by reference to Exhibit 4.

2 to the Registrant’s Form 10-K for the year ended December 31, 2019) .

4.3 Rights Agreement dated as of May 21, 2020 between Insperity, Inc.

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Form of Employee Award Notice and Agreement under LTIP granted on or after January 29, 2024 (incorporated by reference to Exhibit 10.9 to the Registrant’s Form 10-K for the year ended December 31, 2023).

Form of Officer Spe cial Performance Unit Award A greement granted on or after J uly 1, 2025 (incorporated by reference to Exhibit 10.

1 to the Registrant’s Current Report on Form 8 -K filed on July 1, 2025 ).

10.11 † Directors Compensation Plan (incorporated by reference to Exhibit 10.4 to the Registrant’s Form 10-Q for the quarter ended September 30, 2012).

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10.14 † Directors Compensation Plan (as amended and restated April 1, 2017) (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-Q for the quarter ended June 30, 2017).

*† Directors Compensation Plan (as amended and restated January 1, 20 25 )

Directors Compensation Plan (as amended and restated January 1, 2025) (incorporated by refere nce to Exhibit 10.14 to the Regi strant ’ s Form 10-K for the year ended December 31 , 2024).

First Amendment and Appendix A to Directors Compensation Plan (as amended an d restated January 1, 2025) .

10.17 Insperity, Inc.

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Incentive Plan (incorporated by reference to the Registrant’s definitive proxy statement on Schedule 14A filed on April 14, 2023 (No.

10.25 F irst Amendment to the I nsperity, Inc.

Incentive Plan , as amended and restated effective May 22, 2023 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 2 7 , 20 25 ).

10.26 Insperity, Inc.

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Executive Severance Plan (incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-K filed on January 3, 2020 ).

2025 Form 10-K

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(+) Minimum Premium Financial Agreement, amended and restated effective January 1, 2005, by and between Insperity Holdings, Inc.

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(fka Administaff of Texas, Inc.) and United Healthcare Insurance Company (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-Q for the quarter ended June 30, 2005).

2024 Form 10-K

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

10.32 (+) Amendment to Minimum Premium Financial Agreement, as amended effective January 1, 2009, by and between Insperity Holdings, Inc.

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10.42 (+) Amendment to Minimum Premium Financial Agreement (as previously amended effective January 1, 2017) by and between Insperity Holdings, Inc., and United Healthcare Insurance Company entered into as of January 1, 2019 (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 10-Q for the quarter ended March 31, 2019).

2025 Form 10-K

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

10.43 (+) Letter Agreement by and between Insperity Holdings, Inc.

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and United Healthcare Insurance Company entered into as of December 28, 2021 (incorporated by reference to Exhibit 10.55 to the Registrant's Form 10-K for the year ended December 31, 2021).

Letter Agree ment by and between Insperity Holdings, Inc.

and United Healthcare Insurance company entered into as of October 29 , 2024.

2024 Form 10-K

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Letter Agreement by and between Insperity Holdings, Inc.

and United Healthcare Insurance company entered into as of October 29, 2024 (incorporated by reference to Exhibit 10.42 to the Registrant's Form 10-K for the year ended December 31, 2024).

Letter Agreement by and between Insperity Holdings, Inc.

and United Healthcare Insurance company entered into as of March 2 8 , 202 5 (incorporated by reference to Exhibit 10.

2 to the Registrant's Form 10- Q for the quarter ended March 31, 202 5 ).

Letter Agreement by and between Insperity Holdings, Inc.

and UnitedHealthcare Insurance Company entered into as of November 3, 2025 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on November 3, 2025).

10.48 Amended and Restated Credit Agreement dated February 6, 2018 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on February 12, 2018).

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10.54 Sixth Amendment to the Amended and Restated Credit Agreement dated April 26, 2024 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 10-Q for the quarter ended March 31, 2024).

* Policy on the Prevention of Insider Trading

10.55 Seventh Amendment to the Amended and Restated Credit Agreement dated M arch 31 , 202 5 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 10-Q for the quarter ended March 31, 202 5 ).

10.56 E ig h th Amendment to the Amended and Restated Credit Agreement dated December 15 , 2025 (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K file on December 15 , 2025).

Policy on the Prevention of Insider Trading (incorporated by reference to Exhibit 19 of the Registrant's Form 10-K for the year ended December 31, 2024).

21.1 * Subsidiaries of Insperity, Inc.

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101.SCH * Inline XBRL Taxonomy Extension Schema Document.

2025 Form 10-K

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

101.CAL * Inline XBRL Taxonomy Extension Calculation Linkbase Document.

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Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of Operations

Consolidated Statements of Stockholders’ Equity

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We have audited the accompanying consolidated balance sheets of Insperity, Inc.

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2024 , and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2025 , and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 , in conformity with U.S.

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While the policy with United is a fully insured plan, as a result of certain contractual terms, the Company accounts for this plan using a partially self-funded insurance accounting model.

Accordingly, the Company records the cost of the United plan, including an estimate of the incurred claims, taxes and administrative fees, as benefits expense, which is a component of Payroll taxes, benefits and workers’ compensation costs in the consolidated statement of income.

The estimated incurred but not reported claims under the Company’s United insurance policy are based upon:

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025 , based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024 , and the related notes and our report dated February 10, 2025 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025 , and the related notes and our report dated February 10, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

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Prepaid insurance and related assets 6 25

Income taxes receivable 29 —

Funds held for clients and other current assets 119 107

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INSPERITY, INC.

CONSOLIDATED STATEMENTS OF INCOME

CONSOLIDATED STATEMENTS OF OPERATIONS

Year Ended December 31,

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Total operating expenses 910 935 818

Operating income 117 219 250

Operating income (loss) ( 10 ) 117 219

Other income (expense):

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Interest expense ( 24 ) ( 28 ) ( 27 )

Income before income tax expense 126 225 245

Income (loss) before income tax (benefit) expense ( 4 ) 126 225

Income tax expense 3 35 54

Net income $ 91 $ 171 $ 179

Net income per share of common stock

Net income (loss) $ ( 7 ) $ 91 $ 171

Net income (loss) per share of common stock

Basic $ ( 0.19 ) $ 2.44 $ 4.53

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Dividends paid — — — — ( 90 ) ( 90 )

Net income — — — — 91 91

— — — — ( 7 ) ( 7 )

Balance at December 31, 2025 55 $ 1 $ 257 $ ( 850 ) $ 638 $ 46

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Cash flows from operating activities

Net income $ 91 $ 171 $ 179

Adjustments to reconcile net income to net cash provided by operating activities:

Net income (loss) $ ( 7 ) $ 91 $ 171

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization 45 44 43

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Total adjustments ( 271 ) 429 27

Net cash provided by operating activities 520 198 347

Net cash provided by (used in) operating activities ( 278 ) 520 198

Cash flows from investing activities

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Net cash used in financing activities ( 90 ) ( 173 ) ( 155 )

Net increase in cash, cash equivalents, restricted cash, funds held for clients, and deposits – workers’ compensation 309 21 174

Net increase (decrease) in cash, cash equivalents, restricted cash, funds held for clients, and deposits – workers’ compensation ( 399 ) 309 21

Cash, cash equivalents, restricted cash, funds held for clients, and deposits – workers’ compensation beginning of year

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Supplemental cash flow information:

Income taxes, net $ 33 $ 63 $ 57

Federal income taxes, net

$ 34 $ 25 $ 50

State income taxes, net:

Cash paid for interest 23 32 22

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We were organized as a corporation in 1986 and have provided PEO services since inception.

Our most comprehensive HR services offerings are provided through our Workforce Optimization ® and Workforce Synchronization TM solutions (together, our “PEO HR Outsourcing Solutions”), which encompass a broad range of human resources functions, including payroll and employment administration, employee benefits, workers’ compensation, government compliance, performance management and training and development services, along with our cloud-based human capital management platform solution, the Insperity Premier TM platform.

In addition to our PEO HR Outsourcing Solutions, we offer a comprehensive traditional payroll and human capital management solution, known as our Workforce Acceleration TM solution (our “Traditional Payroll Solution”).

We also offer a number of other business performance solutions, including Recruiting Services, Employment Screening, Retirement Services, and Insurance Services.

These other products and services generally are offered only with our other solutions.

We provide our PEO HR Outsourcing Solutions by entering into a co-employment relationship with our clients, under which Insperity and its clients each take responsibility for certain portions of the employer-employee relationship.

Our comprehensive HR services offerings are provided through our Insperity ® HR 360 solution (formerly Workforce Optimization ® ), our Insperity ® HR 360 Select Edition solution (formerly Workforce Synchronization TM ), and our Insperity ® HR Scale solution (together, our “PEO HR Solutions”) which encompass a broad range of HR functions as discussed in Item 1.

Business — Service Offerings — PEO HR Solutions .

Insperity’s HR 360 solution, our largest source of revenue, is offered to small and medium-sized businesses seeking a comprehensive people strategy.

From payroll and employment administration, employee benefits, workers’ compensation, government compliance, performance management to training and development, our HR 360 solution offers a full range of services empowering clients to achieve a sophisticated HR function.

HR 360 provides access to our web-based human capital management platform, Insperity Premier TM .

HR 360 Select Edition.

Insperity’s HR 360 Select Edition solution, which generally is offered only to our middle market client segment, is a lower cost offering with a typically longer commitment that includes the same compliance and administrative services as HR 360 and allows those clients to select, for an additional fee, from the strategic HR products and services that are included with HR 360.

HR 360 Select Edition provides access to our web-based human capital management platform, Insperity Premier.

Insperity’s HR Scale solution is our newest service offering that we jointly developed through our strategic partnership with Workday, Inc.

Insperity’s HR Scale solution is intended for growing and middle market companies and provides access to the advanced capabilities of Workday Human Capital Management (“HCM”).

Our HR Scale solution, which is priced higher than our HR 360 offering, is designed to combine the HR expertise of our HR 360 solution with the advanced capabilities of Workday HCM, with a focus on affordability, ease and speed of deployment, and agility as companies scale.

Insperity’s HR Scale solution is under development and we expect an initial group of clients to begin using our HR Scale solution in the first quarter of 2026.

We also offer a comprehensive traditional payroll and human capital management solution, known as Insperity HR Core TM (formerly Workforce Acceleration TM ), which we refer to as our “Traditional HR Solution” as discussed in Item 1.

Business — Other Product and Services Offerings — Comprehensive Traditional Payroll and Human Capital Management Solution ”.

We also offer a number of other business performance solutions, including Talent Acquisition Services, Retirement Services, Insurance Services, Contractor Management, and Perks+.

These other products and services generally are offered only with our other solutions as discussed in Item 1.

Business — Other Product and Services Offerings .

We provide our PEO HR Solutions by entering into a co-employment relationship with our clients, under which Insperity and its clients each take responsibility for certain portions of the employer-employee relationship.

Insperity and its clients designate each party’s responsibilities through its Client Service Agreement (“CSA”), under which Insperity becomes an employer of the employees who work at the client’s location (“WSEE”) for most administrative and regulatory purposes.

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(1) to compensate our WSEEs through wages and salaries;

(2) to pay the employer portion of payroll-related taxes;

(2) to pay the employer

2025 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

portion of payroll-related taxes;

(3) to withhold and remit (where applicable) the employee portion of payroll-related taxes;

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and (5) to provide workers’ compensation insurance coverage.

In addition to our assumption of employer status for our WSEEs, our PEO HR Outsourcing Solutions also includes other human resources functions for our clients to support the effective and efficient use of personnel in their business operations.

In addition to our assumption of employer status for our WSEEs, our PEO HR Solutions also includes other human resources functions for our clients to support the effective and efficient use of personnel in their business operations.

To provide these functions, we maintain a significant staff of professionals trained in a wide variety of HR functions, including employee training, employee recruiting, employee performance management, employee compensation and employer liability management.

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Revenue and Direct Cost Recognition

We enter into contracts with our customers for human resources services based on a stated rate and price in the contract.

We enter into contracts with our PEO HR Solutions customers for human resources services based on a stated rate and price in the contract.

Our contracts generally establish pricing for a period of 12 months and are generally cancellable at any time by either party with 30-days’ notice.

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Customers are invoiced concurrently with each periodic payroll of its WSEEs.

Revenues that have been recognized but not invoiced

Revenues that have been recognized but not invoiced represent unbilled accounts receivable of $ 810 million at both December 31, 2025 and December 31, 2024, and are included in accounts receivable, net on our Consolidated Balance Sheets.

Pursuant to the “practical expedients” provided under ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers , we expense sales commissions when incurred because the terms of our contracts are cancellable by either party with a 30-day notice.

These costs are recorded in commissions in our Consolidated Statements of Operations.

2025 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

represent unbilled accounts receivable of $ 810 million and $ 669 million at December 31, 2024 and December 31, 2023, respectively, and are included in accounts receivable, net on our Consolidated Balance Sheets.

These costs are recorded in commissions in our Consolidated Statements of Income.

Our revenue for our PEO HR Outsourcing Solutions by geographic region and for our other products and services offerings are as follows:

Our revenue for our PEO HR Solutions by geographic region and for our other products and services offerings are as follows:

Year Ended December 31,

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Total revenue $ 6,812 $ 6,581 $ 6,486

Our PEO HR Outsourcing Solutions revenues are primarily derived from our gross billings, which are based on (1) the payroll cost of our WSEEs;

Our PEO HR Solutions revenues are primarily derived from our gross billings, which are based on (1) the payroll cost of our WSEEs;

and (2) a markup computed as a percentage of the payroll cost.

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The management approach considers the internal organization and reporting used by our chief operating decision maker (“CODM”) for making decisions, allocating resources and assessing performance.

2024 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Our CODM has been identified as our chief executive officer, who reviews results when making decisions about allocating resources and assessing performance, in addition to considering our geographical footprint, which is based in the United States, and the management of our business activities, which is done on a consolidated basis.

Based on management’s assessment, we determined that we have only one operating segment and therefore one reportable segment, HR Solutions, as defined by ASC 280.

2025 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The HR Solutions segment derives revenue from customers by providing various human resource services through professional service contracts.

The accounting policies of the HR Solutions segment are the same as those described in the summary of significant accounting policies.

The measure of segment assets is reported on our Consolidated Balance Sheets as total assets, and the CODM assesses performance and decides how to allocate resources based on net income as reported on our Consolidated Statements of Income.

The CODM reviews revenues and expenses at the consolidated level as disclosed in our Consolidated Statements of Income and uses net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into our HR Solutions segment or into other areas of the entity, such as for acquisitions or to pay dividends.

The CODM reviews revenues and expenses at the consolidated level as disclosed in our Consolidated Statements of Operations and uses net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into our HR Solutions segment or into other areas of the entity, such as for acquisitions or to pay dividends.

Net income is also used to monitor budget versus actual results and in competitive analysis by benchmarking to our competitors.

The competitive analysis and the monitoring of budgeted versus actual results are used in assessing the segment’s performance and in establishing management’s compensation.

Since we have only one operating segment, we do not have intra-segment sales or transfers.

Since we have only one operating segment, we do not have intra-entity sales or transfers.

Principles of Consolidation

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We recognized $ 5 million, $ 11 million, and $ 6 million in amortization of SaaS implementation costs in 2025 , 2024, and 2023, respectively.

These costs are recorded in general and administrative expenses in our Consolidated Statements of Income.

These costs are recorded in general and administrative expenses in our Consolidated Statements of Operations.

Unamortized SaaS implementation costs were $ 31 million and $ 16 million at December 31, 2025 and 2024, respectively.

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We have lease agreements which require payments for lease and non-lease components and have elected to account for these as a single lease component related to our other operating facilities.

Lease expense for 2025 includes $ 3 million of accelerated lease costs related to office closures during the year.

Please read Note 11, “Leases,” for additional information.

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Health Insurance Costs

We provide group health insurance coverage under a single-employer plan that covers both our WSEEs in our PEO HR Outsourcing Solutions and our corporate employees and utilizes a national network of carriers, including UnitedHealthcare (“United”), UnitedHealthcare of California, Kaiser Permanente, Blue Shield of California, HMSA BlueCross BlueShield of Hawaii, and Harvard Pilgrim Health Care, formerly known as Tufts, all of which provide fully insured policies or service contracts.

Approximately 86 % of our costs related to health insurance coverage are provided under our policy with United.

We provide group health insurance coverage under a single-employer plan that covers both our WSEEs in our PEO HR Solutions and our corporate employees and utilizes a national network of carriers, including UnitedHealthcare (“United”), UnitedHealthcare of California, Kaiser Permanente, Blue Shield of California, HMSA BlueCross BlueShield of Hawaii, and Harvard Pilgrim Health Care, formerly known as Tufts, all of which provide fully insured policies or service contracts.

Approximately 85 % of our costs related to health insurance coverage are incurred under our policy with United.

While the policy with United is a fully insured plan, as a result of certain contractual terms, we have accounted for this plan since its inception using a partially self-funded insurance accounting model.

Effective January 1, 2020, under the amended agreement with United, we no longer have financial responsibilities for a participant’s annual claim costs that exceed $1 million (“Individual Claims Limit”).

Accordingly, we record the cost of the United plan, including an estimate of the incurred claims, taxes and administrative fees (collectively the “Plan Costs”), as benefits expense, which is a component of direct costs, in our Consolidated Statements of Income.

Effective January 1, 2020 up through December 31, 2025, our financial responsibility for a participant’s annual claim costs was limited to $1 million (“Individual Claims Limit”).

Beginning January 1, 2026, we have the option to annually elect to limit our responsibility for each participant’s claim costs to $500,000, $750,000, or $1,000,000 per year, which we elect based on the cost of the limit and our estimate of the benefit of that level of limit.

For 2026, we have elected to limit our financial responsibility with United to the first $500,000 of paid claims per claimant per year.

Accordingly, we record the cost of the United plan, including an estimate of the incurred claims, taxes and administrative fees (collectively the “Program Costs”), as benefits expense, which is a component of direct costs, in our Consolidated Statements of Operations.

The estimated incurred but not reported claims are based upon:

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(2) estimated completion rates based upon recent claim development patterns under the plan;

and (3) the number of participants in the plan, including both active and COBRA enrollees.

and (3) the number of participants in the program, including both active and COBRA enrollees.

Each reporting period, changes in the estimated ultimate costs resulting from claim trends, plan design and migration, participant demographics, and other factors are incorporated into the benefits costs, which requires a significant level of judgment.

Additionally, since the plan’s inception, under the terms of the contract, United establishes cash funding rates 90 days in advance of the beginning of a reporting quarter.

If the Plan Costs for a reporting quarter are greater than the premiums paid and owed to United, a deficit in the plan would be incurred and a liability for the excess costs would be accrued in our Consolidated Balance Sheets.

On the other hand, if the Plan Costs for the reporting quarter are less than the premiums paid and owed to United, a surplus in the plan would be incurred and we would record an asset for the excess premiums in our Consolidated Balance Sheets.

If the Program Costs for a reporting quarter are greater than the premiums paid and owed to United, a deficit in the plan would be incurred and a liability for the excess costs would be accrued in our Consolidated Balance Sheets.

On the other hand, if the Program Costs for the reporting quarter are less than the premiums paid and owed to United, a surplus in the plan would be incurred and we would record an asset for the excess premiums in our Consolidated Balance Sheets.

The terms of the arrangement require us to maintain an accumulated cash surplus in the plan of $ 9 million, which is reported as long-term prepaid health insurance.

In addition, United requires a deposit equal to approximately one day of claims funding activity, which was $ 7 million at December 31, 2025, and is included in deposits - health insurance as a long-term asset on our Consolidated Balance Sheets.

As of December 31, 2024, Plan Costs were more than the net premiums paid and owed to United by $ 5 million.

As this amount is less than the agreed-upon $ 9 million surplus maintenance level, the $ 14 million difference is included in accrued health insurance costs, a current liability, in our Consolidated Balance Sheets.

The premiums, including the additional quarterly premiums, owed to United at December 31, 2024 were less than $ 1 million, which is included in accrued health insurance costs, a current liability in our Consolidated Balance Sheets.

Our benefits costs incurred in 2024 included a decrease of $ 29 million for changes in estimated run-off related to prior periods, net of Individual Claims Limit.

As of December 31, 2025, Program Costs were more than the net premiums paid and owed to United by $ 18 million, which is included in accrued health insurance costs, a current liability on our Consolidated Balance Sheets at December 31, 2025.

In addition, the premiums owed to United at December 31, 2025, were $ 7 million, which is also included in accrued health insurance costs, a current liability, on our Consolidated Balance Sheets.

Our benefits costs incurred in 2025 included an increase of $ 11 million for changes in estimated run-off related to prior periods, net of Individual Claims Limit.

Our benefits costs incurred in 2024 included a decrease of $ 29 million for changes in estimated run-off related to prior periods, net of Individual Claims Limit.

Workers’ Compensation Costs

Our workers’ compensation coverage for our WSEEs in our PEO HR Outsourcing Solutions has been provided through arrangements with the Chubb Group of Insurance Companies or its predecessors (the “Chubb Program”) since 2007.

2025 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Chubb Program is fully insured in that Chubb has the responsibility to pay all claims incurred under the policy regardless of whether we satisfy our responsibilities.

Workers’ Compensation Costs

Our workers’ compensation coverage for our WSEEs in our PEO HR Solutions has been provided through arrangements with the Chubb Group of Insurance Companies or its predecessors (the “Chubb Program”) since 2007.

The Chubb Program is fully insured in that Chubb has the responsibility to pay all claims incurred under the policy regardless of whether we satisfy our responsibilities.

Under the Chubb Program, for claims incurred on or before September 30, 2019, we have financial responsibility to Chubb for the first $ 1 million layer of claims per occurrence and, for claims over $ 1 million, up to a maximum aggregate amount of $ 6 million per policy year for claims that exceed $ 1 million.

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Workers’ compensation cost estimates are discounted to present value at a rate based upon the U.S.

Treasury rates that correspond with the weighted average estimated claim payout period (the average discount rate utilized was 4.3 % in both 2024 and 2023) and are accreted over the estimated claim payment period and included as a component of direct costs in our Consolidated Statements of Income.

Treasury rates that correspond with the weighted average estimated claim payout period (the average discount rate utilized was 3.9 % in the 2025 period and 4.3 % in 2024) and are accreted over the estimated claim payment period and included as a component of direct costs in our Consolidated Statements of Operations.

The following table provides the activity and balances related to incurred but not paid workers’ compensation claims:

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Total accrued claims $ 184 $ 204

The current portion of accrued workers’ compensation costs on our Consolidated Balance Sheets at December 31, 2024 and 2023 includes $ 2 million and $ 3 million, respectively, of workers’ compensation administrative fees.

The current portion of accrued workers’ compensation costs on our Consolidated Balance Sheets at both December 31, 2025 and 2024 includes $ 2 million, of workers’ compensation administrative fees.

The undiscounted accrued workers’ compensation costs were $ 227 million as of December 31, 2025 and $ 240 million as of December 31, 2024.

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The level of claim funds is primarily based upon anticipated WSEE payroll levels and expected workers’ compensation loss rates, as determined by the insurance carrier.

Monies funded into the program for incurred claims expected to be paid within one year are primarily held as cash and money market funds (cash equivalents) and are recorded as restricted cash, a short-term asset, while the remainder of claim funds are included in deposits – workers’ compensation, a long-term asset in our Consolidated Balance Sheets.

During 2024, we received $ 39 million for the return of excess claim funds related to the workers’ compensation program, which resulted in a decrease to deposits - workers’ compensation.

At December 31, 2024, we had restricted cash of $ 69 million and deposits – workers’ compensation of $ 178 million, of which $ 241 million was held in trust bank accounts.

2025 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheets.

At December 31, 2025, we had restricted cash of $ 82 million and deposits – workers’ compensation of $ 148 million, of which $ 230 million was held in trust bank accounts.

Our estimate of incurred claim costs expected to be paid within one year is included in short-term liabilities, while our estimate of incurred claim costs expected to be paid beyond one year is included in long-term liabilities on our Consolidated Balance Sheets.

During 2025, we received $ 29 million for the return of excess claim funds related to the workers’ compensation program, which resulted in a decrease to deposits - workers’ compensation.

Stock-Based Compensation

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Matching contributions under the Corporate Plan are immediately vested.

During 2024 , 2023 and 2022, we made matching contributions on behalf of corporate employees to the Corporate Plan of $ 19 million, $ 17 million, and $ 14 million, respectively, and are included in salaries, wages and payroll taxes in our Consolidated Statements of Income.

During 2025 , 2024 and 2023, we made matching contributions on behalf of corporate employees to the Corporate Plan of $ 19 million, $ 19 million, and $ 17 million, respectively, and are included in salaries, wages and payroll taxes in our Consolidated Statements of Operations.

Under our separate 401(k) retirement plan for WSEEs (the “Worksite Employee Plan”), the match percentage for WSEEs ranges from 0 % to 6 %, as determined by each client company.

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Please read Note 7, “Income Taxes,” for additional information .

2025 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recent Accounting Pronouncements

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ASU 2023-09 expands the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.

ASU 2023-09 is effective for fiscal years beginning

2024 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

after December 15, 2024, with early adoption permitted.

We are currently evaluating the guidance, but do not expect this ASU to materially impact our Consolidated Financial Statements.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

We adopted this standard for the year ended December 31, 2025, on a retrospective basis, and the impact of the adoption was not material to our Consolidated Financial Statements.

Please read Note 7, “Income T axes,” for additional information.

In November 2024, the FASB issued ASU No.

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We are currently evaluating the guidance, but do not expect this ASU to materially impact our Consolidated Financial Statements.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting For Internal-Use Software.

ASU 2025-06 removes all references to software development stages and requires capitalization of software costs when management has committed to the software project and it is probable the software will be completed and perform its intended use.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and for interim periods within those annual periods, with early adoption permitted.

We are currently evaluating the guidance, but do not expect this ASU to materially impact our Consolidated Financial Statements.

Other Balance Sheet Information

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Our cash, cash equivalents and marketable securities at December 31, 2025 and December 31, 2024 included $ 468 million and $ 830 million, respectively, of funds associated with federal and state income tax withholdings, employment taxes, and other payroll deductions, as well as $ 135 million and $ 91 million, respectively, in client prepayments.

At December 31, 2024 included in our $ 830 million of funds associated with federal and state income tax withholdings was $ 440 million of funds we received in late December 2024 from the Internal Revenue Service related to employee retention tax credits claimed by our PEO clients under the COVID relief programs, that are expected to be distributed to clients in early 2025.

In addition, $ 440 million of client employee retention tax credits received on their behalf from the Internal Revenue Service during the fourth quarter of 2024 were distributed to clients in early 2025.

2025 Form 10-K

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Deposits – workers’ compensation 148 178 198

Cash, cash equivalents, restricted cash, funds held for clients, and , and deposits – workers’ compensation end of year

Cash, cash equivalents, restricted cash, funds held for clients, and deposits – workers’ compensation end of year

$ 945 $ 1,344 $ 1,035

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(1) Funds held for clients represent amounts held on behalf of our Traditional Payroll Solution customers that are restricted for the purpose of satisfying obligations to remit funds to clients’ employees and various tax authorities.

(1) Funds held for clients represent amounts held on behalf of our Traditional HR Solution customers that are restricted for the purpose of satisfying obligations to remit funds to clients’ employees and various tax authorities.

Please read Note 1.

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As of December 31, 2025 and December 31, 2024, payroll taxes and other payroll deductions payable were $ 544 million and $ 901 million, respectively.

The balance at December 31, 2024 includes $440 million of funds we received in late December 2024 from the Internal Revenue Service related to employee retention tax credits claimed by our PEO clients under the COVID relief programs, that are expected to be distributed to clients in early 2025.

The balance at December 31, 2024 includes $ 440 million of funds we received in late December 2024 from the Internal Revenue Service related to employee retention tax credits claimed by our PEO clients under the COVID relief programs, that were distributed to clients in early 2025.

Fair Value Measurements

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(in millions)

Total Level 1 Level 2 Total Level 1 Level 2

Total Level 1 Total Level 1

Money market funds $ 660 $ 660 $ 1,048 $ 1,048

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“ Other Balance Sheet Information ,” for additional information.

During 2024, we transferred $ 158 million of claim funds previously held with Chubb to a trust account and those funds were subsequently invested in money market funds.

Both before and after the transfer, these funds were included in restricted cash and deposits - workers’ compensation on our Consolidated Balance Sheet.

Our valuation techniques used to measure fair value for these securities during the period consisted primarily of third-party pricing services that utilized actual market data such as trades of comparable bond issues, broker/dealer quotations for the same or similar investments in active markets and other observable inputs.

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Please read Note 6, “ Long-Term Debt ,” for additional information.

2024 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accounts Receivable

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Accounts receivable, net $ 826 $ 829

2025 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Our accounts receivable is primarily composed of trade receivables and unbilled receivables.

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These accruals are included in accrued worksite employee payroll cost and unbilled accounts receivable;

however, these amounts are presented net in the Consolidated Statements of Income.

however, these amounts are presented net in the Consolidated Statements of Operations.

We generally require clients to pay invoices for service fees no later than the same day as the applicable payroll date.

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Please read Note 1, “Accounting Policies,” for a discussion of our accounting policies for health insurance costs and workers’ compensation costs .

2024 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long-Term Debt

We have a revolving credit facility (the “Facility”) with a borrowing capacity of up to $ 650 million.

We have a revolving credit facility (the “Facility”) with a revolving credit commitment of $ 750 million.

The Facility may be further increased to $ 800 million based on the terms and subject to the conditions set forth in the agreement relating to the Facility (as amended, the “Credit Agreement”).

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Our obligations under the Facility are secured by 100 % of the stock of our captive insurance subsidiary and are guaranteed by all of our subsidiaries other than our captive insurance subsidiary and certain other excluded subsidiaries.

At December 31, 2024, our outstanding balance on the Facility was $ 369 million, and we had an outstanding $ 1 million letter of credit issued under the Facility, resulting in an available borrowing capacity of $ 280 million.

The Facility matures on June 30, 2027 .

Borrowings under the Facility bear interest at an annual rate equal to an alternate base rate or Adjusted Term SOFR for term SOFR loans, in either case plus an applicable margin.

Adjusted Term SOFR is a forward-looking term rate based on the secured overnight financing rate plus a spread adjustment, which ranges from 0.10 % to 0.25 % depending on the interest period and type of loan.

At December 31, 2025, our outstanding balance on the Facility was $ 369 million, and we had an outstanding $ 1 million letter of credit issued under the Facility, resulting in unused commitment of $ 380 million.

2025 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Facility contains both affirmative and negative covenants that we believe are customary for arrangements of this nature.

Covenants include, but are not limited to, limitations on our ability to incur additional indebtedness, sell material assets, retire, redeem or otherwise reacquire our capital stock, acquire the capital stock or assets of another business, make investments and pay dividends.

In addition, the Credit Agreement requires us to comply with financial covenants limiting our total funded debt, minimum interest coverage ratio, and maximum leverage ratio.

During 2025, we amended the Facility to exclude dividends from the interest coverage ratio financial covenant and increase the maximum leverage ratio.

We were in compliance with all financial covenants under the Credit Agreement at December 31, 2025.

The Facility matures on December 15, 2028 .

Borrowings under the Facility bear interest at an annual rate equal to an alternate base rate or Term SOFR for term SOFR loans, in either case plus an applicable margin.

Term SOFR is a forward-looking term rate based on the secured overnight financing rate.

Depending on our leverage ratio, the applicable margin varies (1) in the case of SOFR loans, from 1.50 % to 2.50 % and (2) in the case of alternate base rate loans, from 0.50 % to 1.50 %.

The alternate base rate is the highest of (1) the prime rate most recently published in The Wall Street Journal, (2) the federal funds rate plus 0.50 %;

and (3) the Adjusted Term SOFR rate plus 2.00 %.

and (3) the Term SOFR rate plus 2.00 %.

We also pay an unused commitment fee on the average daily unused portion of the Facility at a rate of 0.25 % per year.

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Interest expense and unused commitment fees are recorded in other income (expense).

The Facility contains both affirmative and negative covenants that we believe are customary for arrangements of this nature.

In addition, the Credit Agreement requires us to comply with financial covenants limiting our total funded debt, minimum interest coverage ratio, and maximum leverage ratio.

We were in compliance with all financial covenants under the Credit Agreement at December 31, 2024.

2024 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and the amounts used for income tax purposes.

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Depreciation ( 3 ) ( 5 )

Software development costs ( 2 ) —

Tenant improvements ( 3 ) ( 3 )

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2025 2024 2023

Current income tax expense

Current income tax expense (benefit)

Federal $ ( 7 ) $ 41 $ 49

Total current income tax expense 49 58 77

Deferred income tax benefit

State ( 2 ) 8 9

Total current income tax expense (benefit)

Deferred income tax expense (benefit)

Federal 10 ( 11 ) ( 3 )

State 2 ( 3 ) ( 1 )

Total deferred income tax benefit

Total deferred income tax expense (benefit)

12 ( 14 ) ( 4 )

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Year Ended December 31,

(in millions)

2025 2024 2023

Expected income tax expense at 21 %

(in millions)

Amount Percent Amount Percent

Expected income tax expense (benefit) at U.S.

federal statutory rate

$ ( 1 ) 21 % $ 26 21 % $ 47 21 %

State income taxes, net of federal benefit (1)

Nondeductible expenses 5 5 4

Equity compensation, net 1 ( 4 ) 1

1 ( 14 ) % 4 3 % 7 3 %

Research and development credit

Reported total income tax expense $ 35 $ 54 $ 66

( 3 ) 70 % ( 1 ) ( 1 ) % ( 1 ) ( 1 ) %

Nontaxable or nondeductible Items

Equity compensation

1 ( 33 ) % 1 1 % ( 4 ) ( 2 ) %

Executive compensation limited under 162(m)

2 ( 42 ) % 3 2 % 2 1 %

Qualified transportation benefits

2 ( 40 ) % 1 1 % 1 1 %

Meals and entertainment

1 ( 37 ) % 1 1 % 2 1 %

Effective tax rate

$ 3 ( 75 ) % $ 35 28 % $ 54 24 %

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(1) State and local income taxes in the following states make up the majority (greater than 50%) of the tax effected category:

In 2025 , California.

In 2024, California, New York, New York City, and Illinois.

In 2023, California, New York, and New York City.

At December 31, 2025, we had net operating loss carryforwards totaling $ 1 million that expire from 2029 to 2030 related to an acquisition that occurred in 2010.

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Repurchase Program

2025 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Our Board of Directors (the “Board”) has authorized a program to repurchase shares of our outstanding common stock (“Repurchase Program”).

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As of December 31, 2025, we were authorized to repurchase an additional 1,407,764 shares under the Repurchase Program.

The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposes a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022.

During 2023, we recorded the applicable excise tax in treasury stock of $ 1 million as part of the cost basis of stock repurchased and recorded a corresponding liability for the excise tax payable in other accrued liabilities in our Consolidated Balance Sheets.

2024 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Withheld Shares

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The Incentive Plan is administered by the Compensation Committee of the Board (the “Committee”).

The Committee has the power to determine which eligible employees will receive awards, the timing and manner of the grant of such awards, the exercise price of stock options (which may not be less than market value on the date of grant), the number of shares and all of the terms of the awards.

The Board may at any time amend or terminate the Incentive Plan.

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Stockholder approval of amendments to the Incentive Plan is necessary only when required by applicable law or stock exchange rules.

Assuming all outstanding performance-based awards are paid at maximum achievement of pre-established performance goals, at December 31, 2024, 1.4 million shares of common stock were available for future grants under the Incentive Plan.

Assuming all outstanding LTIP awards are paid at 150% achievement of pre-established performance goals and all outstanding performance-based stock unit awards tied solely to the Company’s stock price are paid at 50% achievement of pre-established performance goals, at December 31, 2025, 1.3 million shares of common stock were available for future grants under the Incentive Plan.

We also maintain the LTIP under the Incentive Plan.

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We granted performance units under the LTIP to our named executive officers and certain other officers in 2025 , 2024 and 2023.

Employees who attain a minimum age of 62 and have provided 15 years or more of continuous service may continue to vest in awards following a qualifying retirement as defined under the Incentive Plan award agreement, as though they were still an employee, provided the grant date of the award is six months or more before the employee’s last day of employment, the employee provides the Company with six months advance notice of retirement, the employee continues to work full-time during such six (6) month period, and the employee signs a waiver and release of claims.

2025 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

services offered by the Company and its subsidiaries and affiliates at the time of the employee’s retirement, including but not limited to PEO services, payroll services, retirement services or insurances services.

Employees who attain a minimum age of 62 and have provided 15 years or more of continuous service may continue to vest in certain awards following a qualifying retirement as defined under the Incentive Plan award agreement, as though they were still an employee, provided the grant date of the award is six months or more before the employee’s last day of employment, the employee provides the Company with six months advance notice of retirement, the employee continues to work full-time during such six (6) month period, and the employee signs a waiver and release of claims.

In addition, in order to avoid forfeiting any outstanding award, a retired employee must refrain from providing any services, including but not limited to, as an employee, director, advisor, or independent contractor to a business engaged in providing any services offered by the Company and its subsidiaries and affiliates at the time of the employee’s retirement, including but not limited to PEO services, payroll services, retirement services or insurances services.

For a termination following a qualifying retirement, time-based awards will continue to vest in the normal course.

For a termination following a qualifying retirement, performance-based awards with completed or in-process performance periods are adjusted for achievement of the performance criteria, prorated through the date of termination and paid in the normal course, while performance-based awards for performance periods that have not started are forfeited.

For a termination following a qualifying retirement, certain performance-based awards with completed or in-process performance periods are adjusted for achievement of the performance criteria, prorated through the date of termination and paid in the normal course, while performance-based awards for performance periods that have not started are forfeited.

Stock-based compensation expense related to time-based and performance-based awards is accelerated over the requisite service period for employees who meet the requirements for continued vesting.

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As of December 31, 2025, unrecognized compensation expense associated with the unvested RSUs outstanding was $ 55 million and is expected to be recognized over a weighted average period of 22 months.

2025 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long-Term Incentive Program Awards

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A performance unit may be comprised of either a performance-based award or a market-based award.

For performance-based awards, performance units have a vesting schedule of three years and compensation expense is recognized based on the number of common shares expected to be issued and the market price per common share on

2024 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the date of grant.

Over the performance period, the number of shares expected to be issued is adjusted upward or downward based upon the probability of achievement of the performance targets.

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Granted 104 98.22

Vested ( 60 ) 98.44

Canceled ( 65 ) 98.79

( 56 ) 106.31

Non-vested — December 31, 2025 221 $ 104.40

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(1) The determination of achievement results and corresponding vesting of the 2022 LTIP awards occurred in February 2025 resulting in recipients receiving approximately 43,000 shares of common stock with a fair value of $ 4 million.

As of December 31, 2024, we estimate that approximately 60,000 , 36,000 and 91,000 shares will vest with less than $1 million, $ 1 million and $ 5 million in unamortized compensation expense related to the 2022, 2023 and 2024 LTIP grants, respectively, and is expected to be recognized over a weighted average period of 18 months.

(2) Includes forfeitures and performance adjustments for outstanding tranches of LTIP awards that were certified in 2025 at less than 100% achievement.

As of December 31, 2025, we estimate that approximately 8,000 , 69,000 and 78,000 shares will vest with less than $ 1 million, $ 2 million and $ 5 million in unamortized compensation expense related to the 2023, 2024 and 2025 LTIP grants, respectively, expected to be recognized over a weighted average period of 19 months.

Additional disclosures for LTIP awards:

Year Ended December 31,

2025 2024 2023

Weighted average grant date fair value of awards granted $ 98.22 $ 97.70 $ 133.08

Fair value of awards vested during the year (in millions)

Performance-Based Stock Units

Each performance-based stock unit (“PSU”) represents the right to receive common shares at a future date based on our performance against specified targets.

The ultimate number of shares issued and the related compensation cost recognized is based on a comparison of the final performance metrics to the specified targets, which can range from 0% to 100% of the targeted amounts.

These PSUs are market-based awards that vest at the end of a five -year period assuming continued employment and achievement of market-based performance goals.

The fair value of market-based performance awards was determined through the use of the Monte Carlo simulation method.

The compensation expense for the PSU awards is recognized on a straight-line basis over the vesting terms.

2025 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of the PSU award activity, at 100% of targeted amount, for 2025 :

Number of Performance Units Weighted Average

Grant Date Fair

(in thousands)

Non-vested — December 31, 2024 — $ —

Granted 500 16.90

Non-vested — December 31, 2025 500 $ 16.90

As of December 31, 2025, we estimate that approximately 250,000 shares will vest with $ 8 million in unamortized compensation expense related to the PSU grants expected to be recognized over a weighted average period of 55 months.

Employee Stock Purchase Plan

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Earnings Per Share

Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding during the period.

Diluted EPS is computed by dividing net income by the weighted average number of common shares outstanding during the period, plus the dilutive effect of time-based and performance-based RSUs.

The following table summarizes the net income and the basic and diluted shares used in the earnings per share computations:

Basic EPS is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period.

Diluted EPS is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period, plus the dilutive effect of time-based and performance-based RSUs.

The following table summarizes the net income (loss) and the basic and diluted shares used in the earnings per share computations:

Year Ended December 31,

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2025 2024 2023

Net income $ 91 $ 171 $ 179

Net income (loss) $ ( 7 ) $ 91 $ 171

Weighted average common shares outstanding 38 38 38

Incremental shares from assumed time-based and performance-based RSU awards — — 1

Adjusted weighted average common shares outstanding 38 38 38

An immaterial number of shares of time-based and performance-based RSU awards were excluded from the calculation of diluted earnings per share due to such shares being anti-dilutive during the years ended December 31, 2024 and 2023, respectively.

2024 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For our time-based and performance-based RSU awards, we excluded an insignificant number of shares from the calculation of diluted earnings per share due to such shares being anti-dilutive during the years ended December 31, 2025 , 2024 and 2023.

We have operating leases for office space, other operating facilities, vehicles and office equipment.

Our fixed operating lease costs for 2024 , 2023 and 2022 were $ 20 million, $ 19 million, and $ 19 million, respectively, and are included in general and administrative expenses on our Consolidated Statements of Income.

Our fixed operating lease costs for 2025 , 2024 and 2023 were $ 24 million, $ 20 million, and $ 19 million, respectively, and are included in general and administrative expenses on our Consolidated Statements of Operations.

Lease costs for 2025 includes $ 3 million of accelerated lease costs related to the consolidation of sales offices during the year.

During 2025 , cash paid for amounts included in the measurement of operating lease liabilities was $ 24 million.

The following table presents the lease balances within our Consolidated Balance Sheets, weighted average lease term and weighted average discount rates related to our operating leases:

The following table presents the lease balances within our Consolidated Balance Sheets, weighted average lease term

2025 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

and weighted average discount rates related to our operating leases:

(dollars in millions)

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Present value of lease liabilities $ 85

As of December 31, 2024 , we have additional operating leases that have not yet commenced of $ 22 million with lease terms between two and eight years .

As of December 31, 2025 , we have additional operating leases that have not yet commenced of $ 5 million with lease terms between six and seven years .

Commitments and Contingencies

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At December 31, 2025, future purchase and service obligations greater than $100,000 and one year were as follows:

2024 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in millions)

Total obligations $ 149

2025 Form 10-K

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We are a defendant in various lawsuits and claims arising in the normal course of business.

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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 9A. Controls and Procedures