Credit losses (CECL, ASC 326): disclosure examples

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as discussed in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Significant assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition; allowance for credit losses; valuation of common stock and redeemable convertible preferred stock warrants; carrying value and useful lives of long-lived assets; loss contingencies; and the provision for income taxes and related deferred taxes. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of industry or financial analysts and investors, resulting in a decline in the market price of our common stock.

Additionally, we regularly monitor our compliance with applicable financial reporting standards and review new pronouncements and drafts thereof that are relevant to us. As a result of new standards, changes to existing standards and changes in their interpretation, we might be required to change our accounting policies, alter our operational policies and implement new or enhance existing systems so that they reflect new or amended financial reporting standards, or we may be required to restate our published financial statements. Such changes to existing standards or changes in their interpretation may have an adverse effect on our reputation, business, financial position and profit, or cause an adverse deviation from our revenue and operating profit target, which may negatively impact our financial results.

We are subject to risks associated with our equity investments, including partial or complete loss of invested capital, and significant changes in the fair value of this portfolio could adversely impact our financial results.

These statements may relate to, among other things, (i) our future plans and results, including our target return on average common shareholders’ equity (ROE), return on average tangible common shareholders’ equity (ROTE), efficiency ratio, CET1 capital ratio, total credit alternative assets, total alternative assets under supervision (AUS), long-term wealth management inflows and percentage growth rate for Management and other fees from alternatives, and how they can be achieved, (ii) trends in or growth opportunities for our businesses, including the timing, costs, profitability, benefits and other aspects of business and strategic initiatives, such as OneGS 3.0, and their impact on our efficiency ratio, (iii) the opportunities and challenges presented by artificial intelligence (AI), (iv) our Investment banking fees backlog and future advisory and capital markets results, (v) expenses we may incur, including the level of future compensation expense, (vi) the projected growth of our deposits and other funding, (vii) our business and expense savings initiatives, including OneGS 3.0, (viii) our planned benchmark debt issuances, (ix) our credit exposures, (x) our expected provision for credit losses and the adequacy of our allowance for credit losses, (xi) the objectives and effectiveness of our business continuity planning (BCP), information security program, risk management and liquidity policies, (xii) our resolution plan and its implications for stakeholders, (xiii) the effect of changes to regulations, and our future status, activities or reporting under banking and financial regulation, (xiv) our expected tax rate, (xv) the future state of our liquidity and regulatory capital ratios, and our prospective capital distributions (including dividends and repurchases), (xvi) our expected SCB and G-SIB surcharge, (xvii) legal proceedings, governmental investigations or other contingencies, (xviii) the asset recovery guarantee and applications for exemptions and authorizations from regulatory authorities related to our 1Malaysia Development Berhad (1MDB) settlements, (xix) the effectiveness of our management of our human capital and changes in headcount, (xx) our sustainability goals, (xxi) future inflation, (xxii) our ability to sell, and the terms of any proposed or pending sales of, Asset & Wealth Management historical principal investments, and our ability to transition the Apple Card program to another issuer, (xxiii) the effectiveness of our cybersecurity risk management process and (xxiv) our completed and announced partnership and acquisitions.

Citi’s total provisions for credit losses and for benefits and claims were $10.3 billion, reflecting net credit losses of $9.1 billion and a net allowance for credit losses (ACL) build of $1.2 billion.

Net credit losses were up 1% from the prior year, driven by increases in Legacy Franchises in All Other , largely offset by decreases in USPB . The net ACL build was driven by changes in the macroeconomic outlook and transfer risk.

Citi’s total provisions for credit losses and for benefits and claims in the prior year were $10.1 billion, reflecting net credit losses of $9.0 billion and a net ACL build of $1.1 billion, driven by changes in credit quality, higher net lending activity and transfer risk, partially offset by changes in the macroeconomic outlook.

For additional information on Citi’s ACL, see “Significant Accounting Policies and Significant Estimates—Citi’s Allowance for Credit Losses (ACL)” below.

For additional information on Citi’s consumer and corporate provisions, see each respective segment’s and All Other ’s results of operations and “Credit Risk” below.

Capital

Citigroup’s Common Equity Tier 1 (CET1) Capital ratio was 13.2% as of December 31, 2025, compared to 13.6% as of December 31, 2024, based on the Basel III Standardized Approach for determining risk weighted assets (RWA). The decrease was primarily driven by common share repurchases, an increase in RWA and the payment of common and preferred dividends, partially offset by net income and net beneficial movements in Accumulated other comprehensive income (AOCI) .

In 2025, Citi repurchased $13.3 billion of common shares and paid $4.3 billion of common dividends (see “Unregistered Sales of Equity Securities, Repurchases of Equity Securities and Dividends” below).

Citigroup’s Supplementary Leverage ratio as of December 31, 2025 was 5.5%, compared to 5.8% as of December 31, 2024. The decrease was driven by an increase in Total Leverage Exposure, partially offset by an increase in Tier 1 Capital. For additional information on Citi’s capital ratios and related components, see “Capital Resources” below. For additional information on capital-related risks, trends and uncertainties, see “Capital Resources—Regulatory Capital Standards and Developments” and “Risk Factors—Strategic Risks,” “—Operational Risks” and “—Compliance Risks” below.

For information on the results of operations for 2025 for each of Citi’s segments and All Other , see “ Services ,” “ Markets ,” “ Banking ,” “ Wealth ,” “ USPB ” and “ All Other —Managed Basis” below.

(in millions, except share and per share amounts)	December 31, 2025	December 31, 2024
Assets
Current assets
Cash and cash equivalents	5,598	5,409
Accounts receivable, net of allowance for credit losses of $ 226 and $ 176	4,874	4,276
Equipment installment plan receivables, net of allowance for credit losses and imputed discount of $ 733 and $ 656	4,997	4,379
Inventory	2,405	1,607
Prepaid expenses	1,215	880
Other current assets	5,372	1,853
Total current assets	24,461	18,404
Property and equipment, net	38,333	38,533
Operating lease right-of-use assets	25,692	25,398
Financing lease right-of-use assets	2,760	3,091
Goodwill	13,678	13,005
Spectrum licenses	98,032	100,558
Other intangible assets, net	3,843	2,512
Equipment installment plan receivables due after one year, net of allowance for credit losses and imputed discount of $ 213 and $ 158	2,683	2,209
Other assets	9,755	4,325
Total assets	219,237	208,035
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued liabilities	10,280	8,463
Short-term debt	5,135	4,068
Deferred revenue	1,533	1,222
Short-term operating lease liabilities	3,814	3,281

The accompanying notes are an integral part of these consolidated financial statements.

Index for Notes to the Consolidated Financial Statements

T-Mobile US, Inc.

Consolidated Statements of Comprehensive Income

We have exposure to credit risk associated with our investments, which are subject to price fluctuations. Loss of value of securities can negatively affect earnings if management determines that such loss of value has resulted from a credit loss. The evaluation of whether a credit loss exists is a matter of judgment, which includes the assessment of multiple factors. If management determines that a security’s decline in fair value is the result of a credit loss, an allowance for credit losses on the security will be recorded and a corresponding loss will be recognized in current earnings. Even if a decline in fair value of a security is not determined to have resulted from a credit loss, if we were ever forced to sell the security sooner than intended prior to maturity due to liquidity needs, we would have to recognize any unrealized losses at that time.

Our bank loans primarily consist of First Mortgages, PALs, and HELOCs. Increases in delinquency and default rates, housing and stock price declines, increases in the unemployment rate, and other economic factors, can result in increases in allowances for credit losses and related credit loss expense, as well as write-downs on such loans.

Heightened credit exposures to specific counterparties or instruments can increase our risk of loss. Examples include:

• Large positions in financial instruments collateralized by assets with similar economic characteristics or in securities of a single issuer or industry;

• Mortgage loans and HELOCs to banking clients which are secured by properties in the same geographic region; and

• Client margins, options or futures, pledged assets, and securities lending activities collateralized by or linked to securities of a single issuer, index, or industry.

As of December 31, 2024 and 2025, there were no allowance for credit losses related to our debt securities. The weighted-average remaining maturity of our debt securities was less than one year as of December 31, 2025.

Fair Value Hierarchy

We measure our cash equivalents and certain investments at fair value. Level 1 instrument valuations are based on quoted market prices of the identical underlying security. Level 2 instrument valuations are obtained from readily available pricing sources for comparable instruments, identical instruments in less active markets, or models using market observable inputs. Level 3 instrument valuations are valued based on unobservable inputs and other estimation techniques due to the absence of quoted market prices, inherent lack of liquidity and the long-term nature of such financial instruments.

As of December 31, 2024 and 2025, our Level 3 non-marketable equity securities and note receivable from a related party primarily consist of common stock investments and convertible secured notes that may be converted into common or preferred stock in privately-held companies without readily determinable fair values.

Depending on the investee’s financing activity in a reporting period, management’s estimate of fair value may be primarily derived from the investee’s financing transactions, such as the issuance of preferred stock to new investors. The price in these transactions generally provides the best indication of the enterprise value of the investee. Additionally, based on the timing, volume, and other characteristics of the transaction, we may supplement this information by using other valuation techniques, including the guideline public company approach. The guideline public company approach relies on publicly available market data of comparable companies and uses comparative valuation multiples of the investee’s revenue (actual and forecasted), and therefore, unobservable input used in this valuation technique primarily consists of short-term revenue projections.

Once the fair value of the investee is estimated, an option-pricing model (“OPM”), a common stock equivalent (“CSE”) method or a hybrid approach is employed to allocate value to various classes of securities of the investee, including the class owned by us. The model involves making assumptions around the investees’ expected time to liquidity and volatility.

Investments – The Company’s investments in debt securities are classified as either held-to-maturity, available-for-sale or trading, in accordance with FASB ASC 320. Held-to-maturity securities are those securities that the Company has the positive intent and ability to hold until maturity. Trading securities are those securities that the Company intends to sell in the near term. All other securities not included in the held-to-maturity or trading category are classified as available-for-sale. Held-to-maturity securities are recorded at amortized cost which approximates fair market value. Trading securities are carried at fair value with unrealized gains and losses charged to earnings. Available-for-sale securities are carried at fair value with unrealized gains and losses recorded within accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. Under FASB ASC 326-30-35, a security is considered to be impaired if the fair value of the security is less than its amortized cost basis. Where the decline in fair value below the amortized cost basis has resulted from a credit loss, the Company will record an impairment relating to credit losses through an allowance for credit losses. The allowance is limited by the amount that the

MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular Dollars in Thousands, Except Per Share Amounts)

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We are actively monitoring and assessing the ongoing global trade environment, particularly with respect to recent changes in tariff regulations. We have assessed the potential impacts of heightened restrictions and tariffs on our allowance for credit losses, the carrying value of our goodwill and other long-lived assets, inventory valuation, and revenue recognition. While we have determined there was not a material impact to our consolidated financial statements as of June 27, 2026 and for the year ended June 27, 2026, import tariffs implemented by the U.S. and other countries, as currently in effect and/or proposed, could have a material impact on our results in the future. The impact of tariffs is dependent on negotiations with customers and suppliers and other mitigation efforts and potential further changes in global trade policies, including higher tariffs in the U.S. or other countries.

Fiscal Years

We utilize a 52-53 week fiscal year ending on the Saturday closest to June 30th. Every fifth or sixth fiscal year will have a 53-week period. The additional week in a 53-week year is added to the third quarter, making such quarter consist of 14 weeks. Our fiscal years 2026, 2025 and 2024 were 52-week years, ending on June 27, 2026, June 28, 2025 and June 29, 2024, respectively. Our fiscal year 2027 ending on July 3, 2027 has a 53-week period.

Principles of Consolidation

The consolidated financial statements are prepared in accordance with GAAP and includes the accounts of Lumentum Holdings Inc. and its wholly owned subsidiaries. Intercompany transactions and balances are fully eliminated in consolidation.

Business Combination

On March 17, 2026, we acquired a manufacturing facility in Greensboro, North Carolina for $ 38.0 million in cash from a third party. The acquired business mainly included land and building, machinery and equipment, and an assembled workforce. We have applied the acquisition method of accounting to account for these transactions in accordance with ASC Topic 805, Business Combinations. Our consolidated financial statements include the operating results of the acquired entities from the acquisition close date. Refer to “Note 4. Business Combination”.

Summary of Significant Accounting Policies

The Company records trade accounts receivable at the invoice value, and such receivables are non-interest bearing. The Company considers receivables past due based on the contractual payment terms. The Company makes estimates of expected credit and collectability trends based on an assessment of various factors including historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment that may affect the Company’s ability to collect from customers. The allowance for credit losses and write offs were not material for each of the periods ended June 30, 2026, 2025 and 2024.

Fair Value Measurements

Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories of inputs:

• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

• Level 2 - Observable inputs (other than Level 1 prices) such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities;

• Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or examination.

Marketable Securities

We maintain an allowance for doubtful accounts for estimated losses in the collection of amounts owed by customers. The allowance for credit losses reflects the best estimate of future losses over the contractual life of outstanding accounts receivable and is determined on the basis of historical experience, specific allowances for known troubled accounts, other currently available information including customer’s financial condition, and both current and forecasted economic conditions. Changes in these factors, among others, may lead to adjustments in our allowance for credit losses. The calculation of the required allowance requires significant judgment by management. If the financial condition of our customers worsens, or economic conditions change, we may be required to make changes to our allowance for credit losses.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined primarily by the LIFO cost method. For certain foreign subsidiaries, cost is determined using the first-in, first-out method. A LIFO charge is recognized when the net effect of price increases on products held in inventory exceeds the impact of price declines, including the effect of products that have lost market exclusivity. A LIFO credit is recognized when the net effect of price declines exceeds the impact of price increases on products held in inventory. On a periodic basis, we also write down inventories that are considered to be excess and obsolete. Our evaluation is based on historical and forecasted sales trends. Rebates received from vendors relating to the purchase or distribution of inventory are considered product discounts and are accounted for as reductions in the cost of inventory.

Impairment of Goodwill and Indefinite-Lived Intangible Assets

We make certain estimates and judgments in impairment assessments of goodwill and indefinite-lived intangible assets. For the qualitative review, we consider the weight of evidence and significance of all identified events and circumstances and most relevant drivers of fair value, both positive and negative, in determining whether it is more likely than not that impairment has occurred.

December 31, 2025	December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	3,556	3,300
Accounts receivables, net of allowance for credit losses of $ 81 million and $ 78 million as of December 31, 2025 and December 31, 2024, respectively	3,709	3,059
Inventories	3,179	3,007
Prepaid expenses	1,122	1,006
Other current assets	539	409
Assets held for sale	1,842	1,771
Total current assets	13,946	12,552
Deferred income taxes	2,191	1,799
Other non-current assets	405	462
Property, plant and equipment, net	4,080	4,581
Operating lease right-of-use assets	345	367
Identifiable intangible assets, net	3,781	4,418
Goodwill	16,000	15,147
Total assets	40,748	39,326
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	1,820	1,781
Sales reserves and allowances	4,143	3,678
Accounts payables	2,531	2,203
Employee-related obligations	739	624
Accrued expenses	2,687	2,792
Other current liabilities	1,182	1,020

Amounts may not add up due to rounding.

The accompanying notes are an integral part of the financial statements.

TEVA PHARMACEUTICAL INDUSTRIES LIMITED

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(U.S. dollars in millions, except share and per share data)

Consolidated Statement of Changes in Shareholders’ Equity	120
Consolidated Statement of Cash Flows	121
Note 1. Summary of Significant Accounting Policies	122
Note 2. Fair Value	124
Note 3. Investment Securities	130
Note 4. Loans and Allowance for Credit Losses	135
Note 5. Goodwill and Other Intangible Assets	140
Note 6. Other Assets	142
Note 7. Deposits	142
Note 8. Short-Term Borrowings	142
Note 9. Long-Term Debt	144
Note 10. Derivative Financial Instruments	145
Note 11. Offsetting Arrangements	149
Note 12. Commitments and Guarantees	152
Note 13. Contingencies	153
Note 14. Variable Interest Entities	154
Note 15. Shareholders’ Equity	156
Note 16. Regulatory Capital	158
Note 17. Net Interest Income	160
Note 18. Equity-Based Compensation	160
Note 19. Employee Benefits	162
Note 20. Occupancy Expense and Information Systems and Communications Expense	162
Note 21. Expenses	163
Note 22. Income Taxes	164
Note 23. Earnings Per Common Share	166

State Street Corporation | 3

Forward-Looking Statements