Slides
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Fourth-Quarter & Full Year 2025 Earnings Webcast February 26th, 2026 1
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Today’s Presenters Bill Cobb Matt Davis Vice President, Investor Relations and Treasurer Jason Bailey Senior Vice President & Chief Financial Officer 2 Chairman & Chief Executive Officer
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Forward Looking Statements Non-GAAP Financial Measures To supplement Frontdoor’s results presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), Frontdoor has disclosed the non-GAAP financial measures of Adjusted EBITDA, Free Cash Flow, and Unrestricted Cash. We define "Adjusted EBITDA" as net income before: depreciation and amortization expense; goodwill and intangibles impairment; restructuring charges; acquisition and integration costs; provision for income taxes; non-cash stock-based compensation expense; interest expense; loss on extinguishment of debt; and other non-operating expenses. We define “Free Cash Flow” as net cash provided from operating activities less property additions. Free Cash Flow is not a measurement of our financial performance or liquidity under U.S. GAAP and does not purport to be an alternative to net cash provided from operating activities or any other performance or liquidity measures derived in accordance with U.S. GAAP. We define “Adjusted Net Income” as net income before: amortization expense; acquisition and integration costs; restructuring charges; loss on extinguishment of debt; other non-operating expenses; and the tax impact of the aforementioned adjustments. We believe Adjusted Net Income is useful for investors, analysts and other interested parties as it facilitates company-to-company operating performance comparisons by excluding potential differences caused by items listed in this definition. We define “Adjusted Diluted Earnings per Share” as Adjusted Net Income divided by the weighted-average diluted common shares outstanding. We define “Unrestricted Cash” as cash not subject to third-party restrictions. For additional information related to our third-party restrictions, see “Liquidity and Capital Resources — Liquidity” under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report on Form 10-K filed with the SEC. See the Appendix attached hereto for additional information and reconciliations of such non-GAAP financial measures. Management believes these non-GAAP financial measures provide useful supplemental information for its and investors’ evaluation of Frontdoor’s business performance and are useful for period-over-period comparisons of the performance of Frontdoor’s business. While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with U.S. GAAP. In addition, these non-GAAP financial measures may not be the same as similarly entitled measures reported by other companies. © 2026 Frontdoor, Inc. All rights reserved. The following terms, which may be used in this presentation, are trademarks of Frontdoor, Inc. and its subsidiaries: Frontdoor®, American Home Shield®, HSATM, 2-10 HBW®, OneGuard®, Landmark Home Warranty® and related logos and designs. All other trademarks used herein are the property of their respective owners. This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, in particular, projected future performance and any statements about Frontdoor’s plans, strategies and prospects. Forward-looking statements can be identified by the use of forward-looking terms such as “believe,” “expect,” “estimate,” “could,” “should,” “intend,” “may,” “plan,” “seek,” “anticipate,” “project,” “will,” “shall,” “would,” “aim,” or other comparable terms. These forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. Such risks and uncertainties include, but are not limited to: changes in macroeconomic conditions, including inflation, tariffs and global supply chain challenges and changing interest rates, especially as they may affect existing or new home sales, consumer confidence, demand for our services, labor availability or our costs; our ability to successfully implement our business strategies; the ability of our marketing efforts to be successful and cost-effective; our dependence on our first-year direct-to-consumer and real estate acquisition channels and our renewal channel for home warranty sales; our dependence on our existing warranty customer base and strategic partners for non-warranty sales; changes in the source and intensity of competition in our market; our ability to attract, retain and maintain positive relations with third-party contractors and vendors; increases in parts, appliance and home system prices, and other operating costs; changes in U.S. tariffs or import/export regulations; our ability to attract and retain qualified key employees and labor availability in our customer service operations; our dependence on third-party vendors, including business process outsourcers, and third-party component suppliers; weather, including adverse conditions, seasonality, along with related environmental regulations; compliance with, or violation of, laws and regulations, including consumer protection laws, or lawsuits or other claims by third parties, increasing our legal and regulatory expenses; cybersecurity breaches, disruptions or failures in our technology systems; our ability to protect the security of personal information about our customers; technological developments in artificial intelligence; negative reputational and financial impacts resulting from acquisitions or strategic transactions; a requirement to recognize impairment charges on goodwill and intangible assets; our ability to underwrite risks accurately and to charge adequate prices to builder members, as well as our ability to effectively re-insure a large portion of those risks; the availability of reinsurance to manage a substantial portion of our potential loss exposure for our new home builder warranty business; evolving corporate governance and disclosure regulations and expectations; inappropriate use of social media by us or other parties to harm our reputation; our ability to protect our intellectual property and other material proprietary rights; third-party use of our trademarks as search engine keywords to direct our potential customers to their own websites; special risks applicable to operations outside the United States by us or our business process outsource providers; risks related to our acquisition of 2-10 Home Buyers Warranty (the “2-10 HBW Acquisition”), including the risk that the 2-10 HBW Acquisition may not achieve its intended results; any liabilities, losses, or other exposures for which we do not have adequate insurance coverage, indemnification, or other protection; a return on investment in our common stock is dependent on appreciation in the price; inclusion in our certificate of incorporation a forum selection clause that could discourage an acquisition of our company or litigation against us and our directors and officers; the effects of our significant indebtedness, our ability to incur additional debt and the limitations contained in the agreements governing such indebtedness; increases in interest rates increasing the cost of servicing our indebtedness and counterparty credit risk due to instruments designed to minimize exposure to market risks; increased borrowing costs due to lowering or withdrawal of the credit ratings, outlook or watch assigned to us or our Credit Facilities; our ability to generate the significant amount of cash needed to fund our operations and service our debt obligations. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of new markets or market segments in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. For a discussion of other important factors that could cause Frontdoor’s results to differ materially from those expressed in, or implied by, the forward-looking statements included in this document, refer to the risks and uncertainties detailed from time to time in Frontdoor’s periodic reports filed with the SEC, including the disclosure contained in Item 1A. Risk Factors in our 2025 Annual Report on Form 10-K filed with the SEC, as such factors may be updated from time to time in Frontdoor’s periodic filings with the SEC. Except as required by law, Frontdoor does not undertake any obligation to update or revise the forward-looking statements to reflect new information or events or circumstances that occur after the date of this presentation or to reflect the occurrence of unanticipated events or otherwise. Readers are advised to review Frontdoor’s filings with the SEC, which are available from the SEC’s EDGAR database at sec.gov, and via Frontdoor’s website at frontdoorhome.com. 3
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Record Financial Performance in 2025 *This financial measure is a non-GAAP financial measure. Refer to “Non-GAAP Financial Measures" in this presentation for a description of this measure and the Appendix for a reconciliation to the nearest GAAP financial measure. ($ millions) $2,093 $280 Million To our shareholders through share repurchases We returned Revenue +14% vs. PY 55% Gross Margin +150bps vs. PY $255 Net Income +9% vs. PY $553 Adjusted EBITDA* +25% vs. PY 4
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Delivered Outstanding Performance in 2025 Stabilized total member count in 2025 Accelerated DTC member count growth to 3% in 2025 Grew RE member count in 2H 2025 Increased renewal rates 150 basis points in 2025 New HVAC sales grew 48% to $128M Launched appliance upgrade pilot Grew Moen partnership to $15M in first full year Realized more than $20M of cost synergies in 2025 Estimate fully synergized purchase price multiple of less than 7x by 2028 Full platform integration in 2026 with a focus on revenue synergies Grow & Retain Home Warranty Members Scale Non-Warranty Integrate 2-10 5
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Stabilized Member Count in 2025 2,120 (in thousands) Highlights Total member count improved in the back half of 2025 and was stable for the full year (vs original outlook of down 2%-4%) First year combined channels showed growth for first time in 5 years Significantly improved renewal rates 2,1102,090 210 200 210 310 310 320 1,600 1,580 1,580 Renewals First-Year DTC First-Year RE 12/31/24 6/30/25 12/31/25 6
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Healthier Real Estate Macro Supported 2H Member Growth 4.0 3.2 2.5 2.7 3.1 3.7 4.2 5.3 5.6 6.1 5.0 4.1 4.1 4.1 0 2 4 6 8 10 12 14 16 18 20 0 1 2 3 4 5 6 2019 2020 2021 2022 2023 2024 2025 Average Months of Supply on Hand (LTM) Existing Home Sales (in millions) Average Months of Supply vs. Existing Home Sales Highlights o While existing home sales remain sluggish, inventory levels improved o Transition to buyer’s market in back half of 2025 improved home warranty sales o Increased direct engagement with real estate agents by expanding partnerships and marketing investments locally o Ended 2025 with 2 consecutive quarters of sequential member growth Source: National Associators of Realtors Target supply is 5+ months 7
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Accelerated DTC Growth to 3% in 2025 Brand Leadership Growing Demand Improving Conversion Highest awareness, interest and trust in category Added value through app and virtual experts Enhanced creative strategy Improved targeting, including reaching younger audiences Improving search outcomes with AI Integrated AI tools to enhance results 8 Strengthened value proposition Website and SEO strategy enhancements Promotional pricing strategy
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Improved Member Experience Driving Higher Renewal Rates Highlights o Renewal rates increased 150 basis points to 75% in 2025: o Innovation and technology o Auto-pay up ~100 bps to 84% o Strong preferred contractor utilization of 84% o Strong onboarding of new members o Record-high 5-star rating o Record-low 1-star rating 73% 79% 72% 29% 75% 81% 74% 29% Total Renewals First-Year DTC First-Year RE 2024 2025 Renewal Rates by Channel 9
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New HVAC Upgrade Fueled Non-Warranty 50.863 86.546 127.801 2023 2024 2025 $51 Highlights o New HVAC upgrade sales to home warranty members grew to $128M o Increased contractor participation o Sizeable opportunity as we have completed ~55k installs since inception across our 2.1M members o Gross margins of ~20% $87 $128 +$36 +$41 New HVAC Upgrade Revenue ($M) 10
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We Have Aggressive Long-Term Goals 1 2 3 4 Drive Member Growth Scale Non-Warranty Revenue Deliver Structurally Higher Margins Maintain Capital Allocation Discipline 11
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#1: Drive Member Growth 12 First Year Channels to Grow ~5% in 2026 o DTC: Continued momentum from media campaign and enhanced targeting and promotional strategy o Real Estate: Improving market environment, increased agent engagement, local investments and promotions Renewals to Turn Positive in 2027 o Renewal member count expected to turn positive in 2027 driven by continued first year channel growth o Expect to maintain strong renewal rates in 2026 Expect Ending Member Count to Grow in 2026 12
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#2: Scale Non-Warranty Revenue 13 Grow Share of Wallet with Members Leverage Contractor Network Unlock Builder Opportunity o Scaling new HVAC upgrades o Expanding appliance upgrade program o Explore product sales across builder relationships o Piloting B2B sales channel o Moen partnership today o Explore additional partnership models to monetize the networkNon- Warranty Strategy 13
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#3: Deliver Structurally Higher Margins as We Scale 14 Increasing Long-Term Adj EBITDA Margin Targets 14 Comprehensive Pricing Actions Continued Operational Excellence Gaining SG&A Leverage o Optimizing price increases through dynamic pricing capabilities o Ability to leverage trade service fee to protect margins o Efficiency through scale and discipline o Enhancing contractor management processes to drive higher preferred contractor usage o Leveraging purchasing power and scale
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#4: Maintain Capital Allocation Discipline 15 Accelerate Growth Maintain Strong Financial Profile Return Excess Cash to Shareholders o Organic investments to drive growth o Selective M&A o Programmatic and opportunistic share repurchases o Ample liquidity o Prudent leverage ratio Driving Long-Term Value Creation 15
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Fourth Quarter and Full Year 2025 Financial Results 16
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Q4 2025 Financial Snapshot *This financial measure is a non-GAAP financial measure. Refer to “Non-GAAP Financial Measures" in this presentation for a description of this measure and the Appendix for a reconciliation to the nearest GAAP financial measure. ($ millions) 49% Gross Margin +70 bps vs. PY Period 17 $433 Revenue +13% vs. PY Period $0.23 Adj Diluted EPS* (15)% vs. PY Period $59 Adj EBITDA* +21% vs. PY Period
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$1,843 $2,093 2024 2025 Delivered Higher Revenues in 2025 ($ millions) +14% o Volume +11%, price +3% o Organic revenues +3.7% o Renewals +10% o Real Estate +13% o DTC revenue +4% o Non-warranty and other revenue +66% 18 Revenue
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$991 $1,157 0 200 400 600 800 1000 1200 2024 2025 Operational Execution Drove Record Margin ($ millions) +17% 54% gross profit margin 55% gross profit margin o Gross margins expanded 150 bps to a record 55% o 3% higher price delivered through dynamic pricing o Lower service requests per customer, including favorable weather of $7M o Low-single digit cost inflation Gross Profit 19
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$235 $255 2024 2025 2025 Net Income & Adjusted EBITDA* ($ millions) $443 $553 2024 2025 Net Income Adjusted EBITDA* +9% +25% * This financial measure is a non-GAAP financial measure. Refer to “Non-GAAP Financial Measures" in this presentation for a description of this measure and the Appendix for a reconciliation to the nearest GAAP financial measure 24% Adj EBTIDA* margin 26% Adj EBITDA* margin 20
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Exceptionally Strong Financial Profile 1.4x $390M $280M Net Debt to Adj EBITDA* Cash returned to shareholders Free Cash Flow * Free Cash Flow o Durable recurring revenue model with strong margins and high cash conversion of 70% o Capital light business model Returning Capital to Shareholders o Repurchased 7% of shares outstanding in 2025 o 4th consecutive year of increased share repurchases Strong Financial Position o Ample liquidity of ~$660M1 o Low net leverage ratio *This financial measure is a non-GAAP financial measure. Refer to “Non-GAAP Financial Measures" in this presentation for a descri ption of this measure and the Appendix for a reconciliation to the nearest GAAP financial measure 1Availbile liquidity includes $414M of Unrestricted Cash and $248M of borrowing capacity on our committed line of credit 21
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Strong History of Share Repurchases $103 $59 $120 $119 $280 $41 2021 2022 2023 2024 2025 Amount left on authorization ~$330 Current Authorization o Completed $321M in repurchases under current authorization of $650M o Record $280M of repurchases in 2025 o On track to complete current authorization by early 2027 Repurchase History o Repurchased 17M shares since 2021 totaling ~$720M of repurchases, reducing total net shares outstanding by ~17% ($ millions) Current Authorization Prior Authorization 22 $160
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Or 2026 Financial Guidance Another strong year with revenue growing to $2.155B to $2.195B Revenue FY2026 SG&A Or Maintain strong margin levels of 54% to 55% Gross Profit Margin Or Flat at $660M to $680M, while gaining leverage SG&A FY2026 SG&A Or Another record year at $565M to $580M and ~26% Adjusted EBITDA margin Adjusted EBITDA FY2026 SG&A Or Capital light business model, with capex at $30M to $35M Capital Expenditures Or Expect ~25% for effective tax rate Effective Tax Rate 23
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$2,093 2025 2026 Guidance 2026 Detailed Revenue Outlook Channel Growth Profile Renewals: Low-single digit increase First-Year DTC: Low-single digit decrease First-Year RE: Relatively flat Non-Warranty and Other: $220M to $240M Total: 3% to 5% Realized Price: 2% to 3% Realized Volume: 1% to 2% Revenue Outlook ($M) 3% to 5% $2,155 to $2,195 24
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26% 26% 2025 2026 Guidance 2026 Detailed Margin Outlook o Expect gross margin of 54% to 55% o Higher realized price o Low-single digit cost inflation o Normalized weather o Higher mix of non-warranty revenue o Adjusted EBITDA margin remains strong at 26% o Gaining SG&A leverage Adjusted EBITDA Margin Outlook 55% Gross Margin 25 54% to 55% Gross Margin Margin Drivers
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Raising our Long-Term Margin Target Metric Prior 2028 Target $2.5B+ Adj EBITDA Margin Low 20% Prior LT Target Revenue Low 20% MSD to HSD* organic growth 26 New LT Target Mid 20% New 2028 Target Mid 20% Unchanged Unchanged *Mid-single digit to High-single digit
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Q1 2026 Financial Guidance Revenue Adjusted EBITDA $440M to $445M $95M to $105M DriversDrivers 27 o Higher price realization, driven by renewals o Slightly higher first-year RE revenue o Lower first-year DTC revenue o Higher non-warranty and other revenue o Higher gross profit from revenue conversion o Lapping favorable claims development of $7M in prior year period o Increased SG&A spend to drive member growth
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2828 Three Key Takeaways: Member Count is Expected to Grow in 2026 Raising our Long-Term Adjusted EBITDA Margin Target Strong Cash Generation and Share Repurchases
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Questions? 29
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Appendix 30
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Q4 2025 Consolidated Results *This financial measure is a non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" in this presentation for a description of this measure and the Appendix for a reconciliation to the nearest GAAP financial measure. 31 $ millions, except per share amounts 2025 2024 Better /(Worse) Revenue 433$ 383$ 50$ YOY Growth 13% Gross Profit 213 186 28 Gross Profit Margin 49% 49% 70 bps Selling and administrative expenses 171 155 (16) Depreciation and amortization expense 23 11 (12) Restructuring charges 2 3 1 Interest expense 20 11 (9) Interest and net investment income (6) (5) 1 Income before Income Taxes 2 6 (4) Provision for income taxes 1 (2) (3) Net Income 1$ 9$ (7)$ Net Income Margin 0% 2% -190 bps Other comprehensive income, net of tax 1 (3) 4 Total Comprehensive Income 3$ 6$ (3)$ Earnings Per Share: Basic 0.02$ 0.11$ (0.09)$ Diluted 0.02$ 0.11$ (0.09)$ Weighted average common shares outstanding: Basic 71.7 75.7 4.1 Diluted 73.3 77.5 4.2 Adjusted EBITDA* 59$ 49$ 10$ Adjusted EBTIDA* Margin 14% 13% 90 bps December 31, Three Months Ended
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FY 2025 Consolidated Results *This financial measure is a non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" in this presentation for a description of this measure and the Appendix for a reconciliation to the nearest GAAP financial measure. 32 $ millions, except per share amounts 2025 2024 Better /(Worse) Revenue 2,093$ 1,843$ 250$ YOY Growth 14% Gross Profit 1,157 991 166 Gross Profit Margin 55.3% 53.8% 150 bps Selling and administrative expenses 669 612 (57) % of revenue 32% 33% -120 bps Depreciation and amortization expense 89 39 (50) Restructuring charges 4 8 4 Interest expense 79 40 (39) Interest and net investment income (22) (20) 2 Income before Income Taxes 338 309 29 Provision for income taxes 84 74 (9) Net Income 255$ 235$ 20$ Net Income Margin 12% 13% -60 bps Other comprehensive income, net of tax (12) (6) (6) Total Comprehensive Income 243$ 229$ 14$ Earnings Per Share: Basic 3.48$ 3.05$ 0.43$ Diluted 3.42$ 3.01$ 0.41$ Weighted average common shares outstanding: Basic 73.1 77.0 3.8 Diluted 74.5 78.0 3.5 Adjusted EBITDA* 553$ 443$ 111$ Adjusted EBTIDA* Margin 26% 24% 240 bps Twelve Months Ended December 31,
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Net Income to Adjusted EBITDA Reconciliation *This financial measure is a non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" in this presentation for a description of this measure and the Appendix for a reconciliation to the nearest GAAP financial measure. 33 ($ millions) Net Income $ 1 $ 9 $ 255 $ 235 Depreciation and amortization expense 23 $ 11 $ 89 $ 39 Restructuring charges 2 $ 3 $ 4 $ 8 Interest expense 20 11 79 40 Non-cash stock-based compensation expense 9 6 34 26 Acquisition and integration related costs 3 $ 8 $ 8 $ 17 Other — — 1 — Provision for income taxes 1 $ (2) $ 84 $ 74 Adjusted EBITDA* $ 59 $ 49 $ 553 $ 443 2025 2024 2025 2024 December 31, December 31, Three Months Ended Twelve Months Ended
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Net Income to Adjusted Net Income Reconciliation *This financial measure is a non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" in this presentation for a description of this measure and the Appendix for a reconciliation to the nearest GAAP financial measure. 34 ($ millions) Net Income $ 1 $ 9 $ 255 $ 235 Amortization expense 15 2 53 4 Acquisition-related costs 3 8 8 17 Restructuring charges 2 3 4 8 Tax Impact of adjustments (5) (4) (15) (6) Loss of exinguishment on debt — 3 — 3 Adjusted Net Income* $ 17 $ 21 $ 305 $ 261 Adjusted Earnings per Share* Diluted $ 0.23 $ 0.27 $ 4.09 $ 3.35 Weighted-average Common Shares Diluted 73.3 77.5 74.5 78.0 Twelve Months Ended December 31, 2025 2024 Three Months Ended December 31, 2025 2024
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Net Cash Provided from Operating Activities to Free Cash Flow Reconciliations *This financial measure is a non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" in this presentation for a description of this measure and the Appendix for a reconciliation to the nearest GAAP financial measure. 35 ($ millions) Net Cash Provided from Operating Activities $ 101 $ 59 $ 416 $ 270 Property additions (6) (8) (26) (39) Free Cash Flow* $ 94 $ 51 $ 390 $ 231 2025 20242025 2024 December 31, December 31, Three Months Ended Twelve Months Ended
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Net Debt and TTM Adjusted EBITDA Reconciliation 36 Note: Amounts presented in the above tables may not sum due to rounding. *LTM Adjusted EBITDA reconciliation is provided on Slide 33 As of and for the Twelve Months Ended December 31, ($ millions) 2025 Term Loan A $397 Term Loan B 792 Total Debt – Face Value (A) $1,189 Discounts and issuance costs (16) Total Debt – Book Value $1,173 LCs Outstanding (B) 2 Available cash and marketable securities (C) 414 Restricted net assets 151 Total cash and marketable securities 566 Net Debt (A+B-C) $776 Leverage Ratio Net Debt 776 LTM Adjusted EBITDA* 553 Net Debt/Adjusted EBITDA 1.4x