Insperity's Q3 Loss Drags 9-Month Net Income Down 74%

TL;DR

**NSP is bleeding cash and profits, signaling deep operational issues that investors should seriously scrutinize.**

AI Summary

Insperity, Inc. (NSP) reported a significant decline in net income for the nine months ended September 30, 2025, falling to $26 million from $100 million in the prior year, representing a 74% decrease. This was primarily driven by a net loss of $20 million in the third quarter of 2025, compared to a net income of $3 million in the same period of 2024. Revenues increased modestly to $5,144 million for the nine-month period in 2025 from $4,968 million in 2024, a 3.5% rise, but gross profit decreased to $728 million from $834 million, indicating higher direct costs. Operating income also saw a substantial drop, from $132 million in the first nine months of 2024 to $36 million in 2025. Cash and cash equivalents plummeted from $1,039 million at December 31, 2024, to $422 million at September 30, 2025, with net cash used in operating activities reaching $533 million, a sharp increase from $99 million in the prior year. The company's strategic outlook includes leveraging its partnership with Workday, Inc. and enhancing its Insperity HR 360 solution, but faces risks from increasing health insurance and workers' compensation costs, as evidenced by a $9 million increase in benefits costs for prior period run-off in 2025.

Why It Matters

This filing reveals a concerning financial downturn for Insperity, with a substantial drop in net income and significant cash burn. For investors, the 74% decline in nine-month net income and the negative operating cash flow of $533 million signal potential operational inefficiencies and increased risk, especially given the competitive landscape in the PEO industry. Employees might face uncertainty if these trends continue, impacting future compensation or benefits. Customers could see service adjustments or price increases as the company seeks to restore profitability. In the broader market, this performance could reflect pressures within the human resources services sector, particularly regarding rising healthcare and workers' compensation costs, potentially impacting other PEO providers.

Risk Assessment

Risk Level: high — The risk level is high due to a significant net loss of $20 million in Q3 2025, a 74% decrease in nine-month net income to $26 million, and a substantial negative cash flow from operations of $533 million for the nine months ended September 30, 2025. Furthermore, cash and cash equivalents decreased by over 59% from $1,039 million at December 31, 2024, to $422 million at September 30, 2025, indicating rapid liquidity depletion.

Analyst Insight

Investors should consider reducing exposure to NSP given the sharp decline in profitability and significant cash burn. A deeper dive into the drivers of increased payroll taxes, benefits, and workers' compensation costs, which rose to $4,416 million, is warranted before considering any new positions.

Financial Highlights

debt To Equity

4.24

revenue

$5,144M

operating Margin

0.7%

total Assets

$2,012M

total Debt

$369M

net Income

$26M

eps

$0.69

gross Margin

14.2%

cash Position

$422M

revenue Growth

+3.5%

Revenue Breakdown

Key Numbers

• $26M — Net income for nine months ended Sep 30, 2025 (Decreased 74% from $100 million in 2024)
• $(20)M — Net loss for three months ended Sep 30, 2025 (Compared to $3 million net income in Q3 2024)
• $5,144M — Revenues for nine months ended Sep 30, 2025 (Increased from $4,968 million in 2024)
• $728M — Gross profit for nine months ended Sep 30, 2025 (Decreased from $834 million in 2024)
• $(533)M — Net cash used in operating activities for nine months ended Sep 30, 2025 (Increased from $(99) million in 2024)
• $422M — Cash and cash equivalents at Sep 30, 2025 (Decreased from $1,039 million at Dec 31, 2024)
• $9M — Increase in benefits costs for prior period run-off (Incurred in the first nine months of 2025 related to health insurance)
• 37,704,152 — Shares of common stock outstanding (As of October 27, 2025)

Key Players & Entities

• INSPERITY, INC. (company) — registrant
• Workday, Inc. (company) — strategic partnership
• UnitedHealthcare (company) — primary health insurance carrier
• Chubb Group of Insurance Companies (company) — workers' compensation provider
• New York Stock Exchange (regulator) — exchange where common stock is registered
• SEC (regulator) — filing oversight

FAQ

Risk Factors

• Increasing Health Insurance and Workers' Compensation Costs [high — financial]: The company experienced a $9 million increase in benefits costs for prior period run-off in the first nine months of 2025, primarily related to health insurance. This indicates rising costs associated with managing employee benefits and potential underestimation of past claims.
• Significant Decline in Operating Income and Net Income [high — financial]: Operating income dropped from $132 million to $36 million for the nine months ended September 30, 2025, a decrease of 72.7%. Net income fell 74% to $26 million from $100 million in the same period, largely due to a $20 million net loss in Q3 2025.
• Deterioration in Cash Position and Operating Cash Flow [high — financial]: Cash and cash equivalents decreased from $1,039 million at December 31, 2024, to $422 million at September 30, 2025. Net cash used in operating activities surged to $533 million from $99 million in the prior year's comparable period.
• Gross Profit Margin Compression [medium — operational]: Gross profit decreased to $728 million from $834 million for the nine months ended September 30, 2025, despite a revenue increase. This implies that direct costs, such as payroll taxes, benefits, and workers' compensation costs, are rising at a faster rate than revenue.
• Co-employment Relationship and Compliance [medium — regulatory]: The company operates under a co-employment relationship with its clients for its PEO HR Solutions. This model requires strict adherence to various federal, state, and local employment laws and regulations, posing ongoing compliance risks.

Industry Context

Insperity operates in the HR outsourcing and Professional Employer Organization (PEO) industry, which is characterized by a growing demand for comprehensive HR solutions, particularly among small and medium-sized businesses. Key trends include the adoption of cloud-based HR technology and the increasing complexity of employment regulations. The industry faces challenges related to managing rising healthcare and workers' compensation costs, as well as intense competition from other PEOs and HR software providers.

Regulatory Implications

As a PEO, Insperity is subject to extensive federal, state, and local regulations governing employment, payroll, benefits, and workers' compensation. Compliance with these diverse and evolving rules is critical. Changes in healthcare legislation or workers' compensation laws could significantly impact the company's cost structure and operational model.

What Investors Should Do

1. Monitor the trend of increasing benefits costs and their impact on gross margins.
2. Analyze the drivers behind the sharp increase in net cash used in operating activities.
3. Evaluate the sustainability of the current revenue growth in light of declining profitability.
4. Assess the company's strategy for managing rising health insurance and workers' compensation expenses.

Key Dates

• 2025-09-30: End of Third Quarter and Nine Months — Reporting period for the significant decline in net income, operating income, and cash position, as well as increased benefits costs.
• 2025-10-27: Shares of common stock outstanding reported — Provides the current share count for EPS calculations and market capitalization assessment.
• 2024-12-31: End of Fiscal Year 2024 — Baseline for comparison of cash and cash equivalents, showing a substantial decrease by Q3 2025.

Glossary

PEO HR Solutions

Professional Employer Organization Human Resources Solutions, which involve a co-employment relationship with clients to manage HR functions. (Core business offering of Insperity, impacting revenue and cost structures.)

Worksite Employees (WSEEs)

Employees of client companies who are co-employed by Insperity for HR purposes. (Key to the PEO model; their payroll, benefits, and workers' compensation costs are significant drivers of Insperity's expenses.)

Run-off Claims

Claims that have been incurred in a prior period but are still being processed or settled in a later period. (Changes in estimates for these claims, particularly for health insurance, directly impacted benefits costs in the current period.)

Co-employment

A legal arrangement where two employers have an employer relationship with a worker. In Insperity's case, it shares employer responsibilities with its clients. (Fundamental to Insperity's PEO model and carries significant regulatory and operational responsibilities.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Insperity has seen a modest revenue increase of 3.5% to $5,144 million. However, this top-line growth has been overshadowed by a severe decline in profitability, with net income dropping 74% to $26 million and operating income falling 72.7% to $36 million. Gross profit also decreased, indicating rising direct costs. A significant concern is the dramatic deterioration in cash flow, with net cash used in operating activities increasing from $99 million to $533 million, and cash reserves nearly halving from $1,039 million to $422 million. New risks related to increasing health insurance and workers' compensation costs have emerged, evidenced by a $9 million increase in benefits costs for prior period run-off.

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value per share NSP New York Stock
• $1 million — cipant's annual claim costs that exceed $1 million ("Individual Claims Limit"). Accordingl

Filing Documents

• nsp-20250930.htm (10-Q) — 948KB
• a09302025nsp-ex311.htm (EX-31.1) — 13KB
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Forward Looking Statements

Forward Looking Statements 4

, Item 1. Financial Statements

Part I, Item 1. Financial Statements 6 Consolidated Balance Sheets 6 Consolidated Statements of Income 7 Consolidated Statements of Cash Flows 8 Consolidated Statements of Stockholders' Equity 9

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 11

, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 20

, Item 3. Quantitative and Qualitative Disclosures about Market Risk

Part I, Item 3. Quantitative and Qualitative Disclosures about Market Risk 38

, Item 4. Controls and Procedures

Part I, Item 4. Controls and Procedures 38

, Item 1. Legal Proceedings

Part II, Item 1. Legal Proceedings 39

, Item 1A. Risk Factors

Part II, Item 1A. Risk Factors 39

, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 39

, Item 5. Other Information

Part II, Item 5. Other Information 39

, Item 6. Exhibits

Part II, Item 6. Exhibits 40

FORWARD LOOKING STATEMENTS

FORWARD LOOKING STATEMENTS The statements contained herein that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify such forward-looking statements by the words "anticipates," "expects," "intends," "plans," "projects," "believes," "estimates," "forecasts," "likely," "possibly," "probably," "could," "goal," "opportunity," "objective," "target," "assume," "outlook," "guidance," "predicts," "appears," "indicator" and similar expressions. Forward-looking statements involve a number of risks and uncertainties. In the normal course of business, in an effort to help keep our stockholders and the public informed about our operations, from time to time, we may issue such forward-looking statements, either orally or in writing. Generally, these statements relate to business plans or strategies; including our strategic partnership with Workday, Inc.; projected or anticipated benefits or other consequences of such plans or strategies; or projections involving anticipated revenues, earnings, average number of worksite employees ("WSEEs"), benefits and workers' compensation costs, or other operating results. We base these forward-looking statements on our current expectations, estimates and projections. We caution you that these statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Therefore, the actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: adverse economic conditions; failure to comply with or meet client expectations regarding certain COVID-19 re

FORWARD LOOKING STATEMENTS

FORWARD LOOKING STATEMENTS disruptions of our information technology systems or failure to enhance our service and technology offerings to address new regulations or client expectations; our liability or damage to our reputation relating to disclosure of sensitive or private information as a result of data theft, cyberattacks or security vulnerabilities; failure of third-party providers, such as financial institutions, data centers or cloud service providers; our ability to fully realize the anticipated benefits of our strategic partnership and joint solution with Workday, Inc.; and our ability to integrate or realize expected returns on future product offerings, including through acquisitions, strategic partnerships, and investments. These factors are discussed in further detail in our Annual Report on Form 10-K for the year ended December 31, 2024 under "Item 1A. Risk Factors" in Part I and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, and elsewhere in this report. Any of these factors, or a combination of such factors, could materially affect the results of our operations and whether forward-looking statements we make ultimately prove to be accurate. Any forward-looking statements are made only as of the date hereof and, unless otherwise required by applicable securities laws, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Insperity | 2025 Third Quarter Form 10-Q 5

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (Unaudited) PART I

Financial Statements

Item 1. Financial Statements CONSOLIDATED BALANCE SHEETS (in millions) September 30, 2025 December 31, 2024 Assets Cash and cash equivalents $ 422 $ 1,039 Restricted cash 79 69 Marketable securities 18 16 Accounts receivable, net 894 829 Prepaid insurance and related assets 17 25 Income taxes receivable 35 — Funds held for clients and other current assets 89 107 Total current assets 1,554 2,085 Property and equipment, net of accumulated depreciation 180 192 Right-of-use ("ROU") leased assets 65 65 Prepaid health insurance 9 9 Deposits – health insurance 8 8 Deposits – workers' compensation 147 178 Goodwill and other intangible assets, net 13 13 Deferred income taxes, net 3 34 Other assets 33 13 Total assets $ 2,012 $ 2,597 Liabilities and stockholders' equity Accounts payable $ 8 $ 10 Payroll taxes and other payroll deductions payable 334 901 Accrued worksite employee payroll costs 774 730 Accrued health insurance costs 31 19 Accrued workers' compensation costs 81 71 Accrued corporate payroll and commissions 74 82 Income taxes payable — 18 Client funds liability and other accrued liabilities 80 99 Total current liabilities 1,382 1,930 Accrued workers' compensation costs, net of current 107 135 Long-term debt 369 369 Operating lease liabilities, net of current 67 66 Total noncurrent liabilities 543 570 Common stock 1 1 Additional paid-in capital 244 222 Treasury stock, at cost ( 852 ) ( 864 ) Retained earnings 694 738 Total stockholders' equity 87 97 Total liabilities and stockholders' equity $ 2,012 $ 2,597 See accompanying notes. Insperity | 2025 Third Quarter Form 10-Q 6

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (Unaudited) CONSOLIDATED STATEMENTS OF INCOME Three Months Ended September 30, Nine Months Ended September 30, (in millions, except per share amounts) 2025 2024 2025 2024 Revenues $ 1,623 $ 1,561 $ 5,144 $ 4,968 Payroll taxes, benefits and workers' compensation costs 1,428 1,332 4,416 4,134 Gross profit 195 229 728 834 Salaries, wages and payroll taxes 125 127 396 393 Stock-based compensation 16 17 47 47 Commissions 13 11 34 34 Advertising 10 9 28 28 General and administrative expenses 45 53 154 167 Depreciation and amortization 11 11 33 33 Total operating expenses 220 228 692 702 Operating income (loss) ( 25 ) 1 36 132 Other income (expense): Interest income 7 9 24 28 Interest expense ( 6 ) ( 7 ) ( 18 ) ( 21 ) Income (loss) before income tax (benefit) expense ( 24 ) 3 42 139 Income tax (benefit) expense ( 4 ) — 16 39 Net income (loss) $ ( 20 ) $ 3 $ 26 $ 100 Net income (loss) per share of common stock Basic $ ( 0.53 ) $ 0.07 $ 0.69 $ 2.65 Diluted $ ( 0.53 ) $ 0.07 $ 0.69 $ 2.63 See accompanying notes. Insperity | 2025 Third Quarter Form 10-Q 7

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (Unaudited) CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended September 30, (in millions) 2025 2024 Cash flows from operating activities Net income $ 26 $ 100 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 33 33 Stock-based compensation 47 47 Deferred income taxes 31 1 Changes in operating assets and liabilities: Accounts receivable ( 65 ) ( 71 ) Prepaid insurance and related assets 8 ( 24 ) Other current assets — ( 7 ) Other assets and ROU assets ( 6 ) 13 Accounts payable ( 2 ) ( 5 ) Payroll taxes and other payroll deductions payable ( 567 ) ( 269 ) Accrued worksite employee payroll costs 44 91 Accrued health insurance costs 12 — Accrued workers' compensation costs ( 18 ) ( 13 ) Accrued corporate payroll, commissions and other accrued liabilities ( 23 ) — Income taxes payable/receivable ( 53 ) 5 Total adjustments ( 559 ) ( 199 ) Net cash used in operating activities ( 533 ) ( 99 ) Cash flows from investing activities Marketable securities: Purchases ( 25 ) ( 17 ) Proceeds from maturities 17 17 Proceeds from dispositions 8 — Property and equipment purchases ( 22 ) ( 25 ) Net cash used in investing activities ( 22 ) ( 25 ) Cash flows from financing activities Purchase of treasury stock ( 19 ) ( 52 ) Dividends paid ( 68 ) ( 67 ) Client funds liability and other ( 14 ) ( 44 ) Net cash used in financing activities ( 101 ) ( 163 ) Net decrease in cash, cash equivalents, restricted cash, funds held for clients, and deposits – workers' compensation ( 656 ) ( 287 ) Cash, cash equivalents, restricted cash, funds held for clients, and deposits - workers' compensation beginning of period 1,344 1,035 Cash, cash equivalents, restricted cash, funds held for clients, and deposits - workers' compensation end of period $ 688 $ 748 Supplemental cash flow information: ROU assets obtained in exchange for lease obligations $ 15 $ 24 See accompanying n

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (Unaudited) CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the Nine Months Ended September 30, 2025 and 2024 Common Stock Issued Additional Paid-In Capital Treasury Stock Retained Earnings and AOCI Total (in millions) Shares Amount Balance at December 31, 2024 55 $ 1 $ 222 $ ( 864 ) $ 738 $ 97 Purchase of treasury stock, at cost — — — ( 19 ) — ( 19 ) Issuance of equity-based incentive awards and dividend equivalents — — ( 25 ) 28 ( 3 ) — Stock-based compensation expense — — 46 1 — 47 Other — — 1 2 1 4 Dividends paid — — — — ( 68 ) ( 68 ) Net income — — — — 26 26 Balance at September 30, 2025 55 $ 1 $ 244 $ ( 852 ) $ 694 $ 87 Balance at December 31, 2023 55 $ 1 $ 185 $ ( 831 ) $ 739 $ 94 Purchase of treasury stock, at cost — — — ( 52 ) — ( 52 ) Issuance of equity-based incentive awards and dividend equivalents — — ( 24 ) 27 ( 3 ) — Stock-based compensation expense — — 46 1 — 47 Other — — 1 2 — 3 Dividends paid — — — — ( 67 ) ( 67 ) Net income — — — — 100 100 Balance at September 30, 2024 55 $ 1 $ 208 $ ( 853 ) $ 769 $ 125 Insperity | 2025 Third Quarter Form 10-Q 9

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (Unaudited) CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Continued) For the Three Months Ended September 30, 2025 and 2024 Common Stock Issued Additional Paid-In Capital Treasury Stock Retained Earnings and AOCI Total (in millions) Shares Amount Balance at June 30, 2025 55 $ 1 $ 228 $ ( 853 ) $ 736 $ 112 Stock-based compensation expense — — 16 — — 16 Other — — — 1 1 2 Dividends paid — — — — ( 23 ) ( 23 ) Net loss — — — — ( 20 ) ( 20 ) Balance at September 30, 2025 55 $ 1 $ 244 $ ( 852 ) $ 694 $ 87 Balance at June 30, 2024 55 $ 1 $ 191 $ ( 838 ) $ 788 $ 142 Purchase of treasury stock, at cost — — — ( 15 ) — ( 15 ) Issuance of equity-based incentive awards and dividend equivalents — — — ( 1 ) 1 — Stock-based compensation expense — — 17 — — 17 Other — — — 1 — 1 Dividends paid — — — — ( 23 ) ( 23 ) Net income — — — — 3 3 Balance at September 30, 2024 55 $ 1 $ 208 $ ( 853 ) $ 769 $ 125 See accompanying notes. Insperity | 2025 Third Quarter Form 10-Q 10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation Insperity, Inc., a Delaware corporation ("Insperity," "we," "our," and "us"), provides an array of human resources ("HR") and business solutions designed to help improve business performance. Our most comprehensive HR services offerings are provided through our professional employer organization ("PEO") services, known as our Insperity HR 360 solution (formerly our Workforce Optimization solution) and Insperity HR 360 Select Edition (formerly our Workforce Synchronization TM solution) (together, our "PEO HR Solutions"), which we provide by entering into a co-employment relationship with our clients. Our PEO HR Solutions encompass a broad range of HR 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 solution, the Insperity Premier TM platform. In addition to our PEO HR Solutions, we offer a comprehensive traditional payroll and human capital management solution, known as our Insperity HR Core solution (formerly our Workforce Acceleration solution), which we refer to as our "Traditional HR Solution". We also offer a number of other business performance solutions, including Recruiting Services, Employment Screening, Retirement Services, and Insurance Services. These other products or services are offered separately or with our other solutions. The Consolidated Financial Statements include the accounts of Insperity, Inc. and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS level of claims processed during each quarter; (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. 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 Condensed 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 Condensed 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 September 30, 2025, and is included in deposits - health insurance as a long-term asset on our Condensed Consolidated Balance Sheets. As of September 30, 2025, Plan Costs were less than the net premiums paid and owed to United by $ 19 million, which is $ 10 million in excess of our agreed-upon $ 9 million surplus maintenance level. The $ 10 million difference is therefore reflected as a current asset and $ 9 million is reflected as a long-term asset on our Condensed Consolidated Balance Sheets at September 30, 202

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table provides the activity and balances related to incurred but not paid workers' compensation claims: Nine Months Ended September 30, (in millions) 2025 2024 Beginning balance, January 1, $ 204 $ 220 Accrued claims, net 52 48 Present value discount, net of accretion ( 9 ) ( 10 ) Paid claims ( 61 ) ( 51 ) Ending balance $ 186 $ 207 Current portion of accrued claims $ 79 $ 67 Long-term portion of accrued claims 107 140 Total accrued claims $ 186 $ 207 The current portion of accrued workers' compensation costs on our Condensed Consolidated Balance Sheets at September 30, 2025 and 2024 includes $ 2 million and $ 3 million, respectively, of workers' compensation administrative fees. The undiscounted accrued workers' compensation costs were $ 227 million as of September 30, 2025 and $ 242 million as of September 30, 2024. At the beginning of each policy period, the workers' compensation insurance carrier establishes monthly funding requirements comprised of premium costs and funds to be set aside for payment of future claims ("claim funds"). 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 Condensed Consolidated Balance Sheets. At September 30, 2025, we had restricted cash of $ 79 million and deposits – workers' compensation of $ 147 million, of which $ 226 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 t

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