Company: NSP
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001000753-25-000107
Chunk: 49

Company: INSPERITY, INC.
Filing Date: 2025-11-04
Form: 10-Q
Item: Item 7
Chunk 49
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 2025 Third Quarter Form 10-Q36

     MANAGEMENT’S DISCUSSION AND ANALYSIS OF      FINANCIAL CONDITION AND RESULTS OF OPERATIONS

•Workers’ compensation plan funding — During YTD 2025 and YTD 2024, we received $28 million and $38 million, respectively, for the return of excess claim funds related to the workers’ compensation program, which resulted in an increase in working capital.

•Medical plan funding — Our health care contract with United establishes participant cash funding rates 90 days in advance of the beginning of a reporting quarter. Therefore, changes in the participation level of the United plan have a direct impact on our operating cash flows. In addition, changes to the funding rates, which are solely determined by United based primarily upon recent claim history and anticipated cost trends, also have a significant impact on our operating cash flows. 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, 2025. In addition, the premiums owed to United at September 30, 2025, were $26 million, which is included in accrued health insurance costs, a current liability, on our Condensed Consolidated Balance Sheets.

•Operating results — Our adjusted net income has a significant impact on our operating cash flows. Our adjusted net income decreased 54% to $61 million in the first nine months of 2025, compared to $134 million in the first nine months of 2024. Please read “Results of Operations.”

Cash Flows from Investing Activities

Net cash flows used in investing activities were $22 million for the nine months ended September 30, 2025, primarily due to property and equipment purchases.

Cash Flows from Financing Activities

Net cash flows used in financing activities were $101 million for the nine months ended September 30, 2025. We paid $68 million in dividends and repurchased or withheld $19 million in stock. In addition, client funds liability and other financing activities decreased by $14 million.

Insperity | 2025 Third Quarter Form 10-Q37

         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK AND CONT